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United Automobile Insurance Co. v. Stucki & Rencher, LLC

United States District Court, D. Utah

May 13, 2019

UNITED AUTOMOBILE INSURANCE COMPANY, Plaintiff,
v.
STUCKI & RENCHER, LLC; MICHAEL J. COLLINS Defendants.

          Robert J. Shelby District Judge

          MEMORANDUM DECISION AND ORDER GRANTING AND DENYING DEFENDANTS' MOTIONS TO COMPEL

          Brooke C. Wells United States Magistrate Judge

         This matter is referred to the undersigned in accordance with 28 U.S.C. 636 (b)(1)(A) from Judge Robert Shelby.[1] Pending before the court are four motions.[2] The court has considered the facts and arguments contained in the briefing submitted by the parties. Pursuant to Local Civil Rule 7-1(f) of the United States District Court for the District of Utah Rules of Practice, the Court elects to determine the motion on the basis of the written memoranda and finds that oral argument would not be helpful or necessary.[3] The Court addresses each of the motions below.

         BACKGROUND

         As noted previously, this case is a malpractice action brought by Plaintiff against Defendants. The facts giving rise to the dispute come from an underlying lawsuit, where following trial, Plaintiff's insured was found at fault and a jury awarded a judgment against the insured for $936, 017.00.[4] United Automobile Insurance Company (UAIC) settled the judgment and discharged it on behalf of their insured for over $700, 000. UAIC also paid the fees and reimbursed Defendants for the costs associated in bringing the defense in the underlying action.[5]Subsequently, Plaintiff filed the instant case against Mr. Collins and the law firm of Stucki & Rencher alleging professional negligence/malpractice, negligence, equitable subrogation and breaches of certain duties and contract.[6]

         Relevant to the instant motions are two prior orders from the Court. First, on October 2, 2017, the Court granted in part and denied in part four motions for discovery filed by Defendants that sought responses to certain interrogatories, production of documents and answers to requests for admission (the October 2nd Order). The Court modified some of the discovery requests finding them overbroad and permitted others, ordering Plaintiff to answer them.[7] In addition, the Court denied without prejudice Plaintiff's motion to quash a subpoena issued to Richard Parillo, the Chief Executive Officer and Chairman of the Board for Plaintiff. Defendants sought Mr. Parillo's deposition and the Court was not convinced his deposition was warranted at that time.[8]Also of note in this discovery order, the Court ordered Plaintiff to “provide affidavits outlining the details of the searches including the methods used” in a search for policies and manuals within UAIC.[9]

         The next order also concerned Mr. Parillo's deposition (February 23rd Order). This time, however, Defendants filed a motion to compel Mr. Parrillo's deposition. The Court considered the apex doctrine as set forth in two cases from this circuit and denied the motion.[10] The Court found that Defendants failed to show Mr. Parillo had any unique personal knowledge of the events in this case or that the information sought by Defendants could not be obtained from other witnesses.[11] The Court permitted Defendants to renew their motion at a future date.

         Now, once again, Defendants bring a series of discovery motions, including another motion concerning the deposition of Mr. Parrillo.

         DISCUSSION

         As set forth in the prior order, Federal Rule of Civil Procedure 26 governs Defendants discovery motions. Rule 26(b) provides in relevant part that

“Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.”[12]

         The court turns to each of the motions.

         I. Defendants' Motion to Compel Discovery Responses Per the Court's Order and an Order to Show Cause[13]

         Defendants seek compliance from UAIC concerning the Court's October 2nd Order. Specifically, Defendants cite to a lack of responses to certain interrogatories and requests for production of documents that allegedly have not been produced. In response, UAIC asserts that these documents “do not exist” or they are being produced.[14] The Court looks at each category specifically.

         A. Request for Production 2, 6, 7 and 13, and Paul Susz's claims file including emails with Sandra Covolo, Jan Cook and Collins

         UAIC claims it has produced all of the responsive documents to these discovery requests, but according to Defendants, “it has refused to identify which documents contain the requested information and there are no documents that appear to be responsive.”[15] Mr. Susz is Plaintiff's General Counsel. During his deposition, he testified that only after the adverse judgment was entered did he review the claims file from the underlying action and have email communications concerning the matter. Plaintiff states that it has only one claims file for the underlying action, which has been produced. Defendants complain, however, that UAIC has failed to complete a privilege log regarding documents in Mr. Susz's file it is withholding. UAIC asserts the “identity of the specific documents in that file is privileged attorney work product.”[16]

         The work product doctrine, as first articulated by the Supreme Court in Hickman v. Taylor, [17] is codified in F.R.C.P. 26(b)(3).[18] It is designed to balance the demands of the adversary system by preserving the privacy of an attorney's preparations for trial while still allowing discovery by the opposing party. In order for materials to be protected under the doctrine, they must be “prepared in anticipation of litigation or for trial . . . .”[19] Materials prepared with mixed purposes, such as a litigation and business purpose, are protected only if “the primary motivating purpose behind the creation of the [materials was] to assist in pending or impending litigation.”[20] Under Rule 26(b)(3) work product includes documents and “tangible things” prepared in anticipation of litigation or trial by a party or its representatives including a “consultant, surety, indemnitor, insurer, or agent. . . .”[21] But, if these representatives are collecting or compiling information that existed in the regular course of business, protections under the work product doctrine are questionable.[22] The party resisting discovery on grounds of privilege or the work product doctrine bears the burden of coming forward with facts that sustain their claim.[23]

         Under these principles, the Court is not persuaded that the identity of documents in Mr. Susz's file are privileged attorney work product. Instead, it his highly likely that they are the collecting or compiling of information that existed in the regular course of business. Perhaps specific content may be privileged, but not their general identity. And, without a privilege log, neither Defendants or the Court can make a determination regarding privilege. UAIC argues that it has “not withheld any documents that Susz kept in his file for the underlying action.”[24] Even if this is true, the Court will still require UAIC to file a privilege log concerning all documents that are subject to these Requests for Production, including Mr. Susz's emails with Sandra Covolo, Jan Cook and Collins. This privilege log is ORDERED to be filed within five business days from the date of this order.

         B. Interrogatories 9 and Request for Production 1, 2, 6, 7, and 13 including payment report, billing records and summary, and any communication with Impact General

         Once again, UAIC claims it has produced all responsive documents, but UAIC has refused to identify which documents are responsive to the requests. In addition, Defendants complain that UAIC has failed to produce any documents concerning communications with Impact General. Impact General is an outside accident reconstruction firm that performed work in the underlying action. Plaintiff argues any communications it had with Impact General would be in the claims file that was already produced. Moreover, Impact General responded to Defendants' subpoena by producing all the documents it had in its file regarding the underlying case.

         The Court is not convinced that UAIC has fully complied with these requests. UAIC cannot solely rely on a third party subpoena to meet its discovery obligations.[25] Based on Defendants representations about the testimony of an employee from Impact General, Lyle Persch, who testified about emails he sent UAIC, it appears there is still some missing information with regard to these requests. Defendants are entitled to a more thorough search and attempt to comply than what it appears UAIC has made to date. The Court ORDERS supplemental responses to these requests.

         C. Interrogatory 7 and Request for Production 6, 7 and 13 including UAIC's email communications regarding limits demand, demand for $30, 000 and settlement recommendations

         According to Defendants, UAIC has “produced virtually no email correspondence from any employee.” In the October 2nd Order, the Court ordered Plaintiff “to provide affidavits outlining the details of the searches including the methods used.”[26] This was to include affidavits about searches made for the alleged missing emails Defendants claim are available, but yet to be produced. Defendant argues the sworn affidavits have not been produced. Instead, Plaintiff points to official deposition testimony. Plaintiff claims it searched the entire universe of email files regarding the underlying action.[27] And, Plaintiff provided 30(b)(6) deposition witnesses who testified about the searches. Such efforts, according to Plaintiff, should be sufficient.

         Although the Court acknowledges UAIC's efforts, there continues to be a misunderstanding. UAIC is to provide written sworn affidavits about its search methods and results. While 30(b)(6) deposition testimony is helpful, affidavits must still be provided in accordance with the Court's prior order. Of note, is Plaintiff's representation that it “has just learned” that certain case files are “not complete.”[28] Items from these files, including emails, will shortly be produced, or listed in an amended privilege log. Such missing information is support for the continued need for sworn written affidavits from UAIC regarding its searches including the methods used. These affidavits are to be provided within fourteen (14) days from the date of this order.

         D. Post-verdict information

         Post-verdict information was not part of the October 2nd Order and the Court made no ruling on such information. Notwithstanding a lack of any ruling, under the broad discovery standards before trial, it seems such information would be relevant or lead to relevant information as long as it was proportional to the needs of this case.[29] The Court makes no ruling on this requested category of information, but ORDERS the parties to use their best efforts in resolving any disputes concerning such discovery requests.

         E. Other requested documents including a current copy of UAIC's claims file and billing information

         As noted by the parties, it is nearly unbelievable that information such as this does not exist. At this time the Court is not going to question UAIC's record keeping practices as strange as they may seem. However, UAIC is to provide a sworn written affidavit regarding this information that everything has been produced as claimed, and if it does not have certain information, such as billing information, then that it does not exist. UAIC is ORDERED to provide an overview of its record keeping procedures as part of this affidavit.

         F. A litigation log and record of consumer complaints, including investigations made by the Utah department of Insurance Defense

         Defendants have sought information regarding litigation that UAIC has been involved in and a record of consumer complaints. Other litigation information was part of the Court's October 2nd Order. As such it is to be produced. Testimony from a 30(b)(6) witness indicating he was not prepared to testify about such information, but that it could be “easily complied by looking at UAIC's litigation log” does not satisfy the Court's order. UAIC is ORDERED to respond to Interrogatories 1, 10 and Response for Production 1 as set forth in the Court's prior order.

         In similar fashion, consumer complaints were also part of the Court's prior October 2nd Order. For example, the Court ordered UAIC to answer Request for Production 19 and 20.[30] UAIC is to comply with the Court's prior order and provide information regarding consumer complaints including investigations made by the Utah Department of Insurance Defense.

         II. Defendants' Motion to Compel Full and Complete Responses to Discovery Requests[31]

         In this motion, Defendants seek responses to certain Interrogatories. Rather than answering the Interrogatories directly, UAIC cited to “hundreds of pages of its officers' deposition testimony.”[32] Defendants argue this “massive designation” does not comply with Rule 33's requirement that each “interrogatory must, … be answered separately and fully in writing under oath.”[33] Defendants assert UAIC's answers are prejudicial and non-responsive.

         In contrast, UAIC argues its answers were proper. Defendants simply seek “information in the interrogatory responses so they won't have to look at the referenced testimony.”[34] UAIC points to Moore's Federal Practice which states:

[T]he incorporation of outside material by reference in responses to interrogatories is evaluated on a case-by-case basis, and, as one district court has held, the judge has discretion to find such a response acceptable. Thus, it may be acceptable for a response to an interrogatory to refer to answers to other interrogatories or other discovery in order to avoid unnecessary repetition, but the referral must be clear and precise.[35]

         Further the cases cited to by Defendants are inapplicable because they did not require an order by the court for a responding party to provide sworn testimony regarding document searches.

         The Court is persuaded that the answers here, which designate numerous pages of deposition testimony, are not responsive or within the intent of the Rules. Even Moore's Federal Practice cited to by UAIC states in part that the “referral must be clear and precise.”[36] Moreover, the fact that the Court required UAIC to provide sworn affidavits regarding its searches does not sufficiently distinguish this case from those cited to by Defendants. “Incorporation by reference to a deposition is not a responsive answer”[37] especially when it includes numerous pages. As such, the Court ORDERS UAIC to answer these Interrogatories “separately and fully in writing under oath.”[38]

         III. Defendants' Motion to Compel Supplemental Responses to Discovery Based on UAIC's Deposition Testimony[39]

         Defendants move to compel UAIC to “supplement interrogatories and requests for production of documents (RFP) with documents identified by UAIC's representatives at its deposition.”[40] According to Defendants, UAIC's witnesses often identified documents responsive to discovery requests during their depositions that have not been produced.

         Specifically, Defendants move for the following information:

         1. Int. 18: Report summarizing all department of insurance complaints made against UAIC.2

         2. RFP. 6, 7, and 13: All files related to the property damage claim for Joanne Cooper.

         3. Int. 7, RFP. 1, 2, 6, and 13: Identification of actuary used in 2011-2014 and any communications with the ...


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