Williamson et al v. Liberty Mutual Fire Insurance Company, No. 3:2015cv07812 - Document 33 (S.D.W. Va. 2015)
Court Description: MEMORANDUM OPINION and ORDER granting in part and denying in part Plaintiffs' 21 MOTION to for Order Compelling Discovery, as more fully set forth herein; Defendant Liberty Mutual shall produce the supplemental documents set forth herein withi n twenty (20) days of the date of this Order; granting Defendant's 24 MOTION for Protective Order; the 34 Protective Order to be entered this day may be used when producing the documents. Signed by Magistrate Judge Cheryl A. Eifert on 12/9/2015. (cc: counsel of record) (jsa)
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Williamson et al v. Liberty Mutual Fire Insurance Company Doc. 33 IN TH E U N ITED STATES D ISTRICT COU RT FOR TH E SOU TH ERN D ISTRICT OF W EST VIRGIN IA H U N TIN GTON D IVISION AN D REW W ILLIAMSON an d YOLAN D A W ILLIAMSON Plain tiffs , v. Cas e N o .: 3 :15-cv-0 78 12 LIBERTY MU TU AL FIRE IN SU RAN CE COMPAN Y, D e fe n d an t. MEMORAN D U M OPIN ION an d ORD ER Pending before the Court are two related m otions: Plaintiffs’ Motion for Order Com pelling Discovery, (ECF No. 21), and Defendant’s Motion for Protective Order. (ECF No 24). The m otions arise from Plaintiffs’ first set of requests for the production of docum ents, to which Defendant has provided allegedly insufficient responses. For the reasons that follow, the Court GRAN TS, in part, and D EN IES, in part, Plaintiffs’ Motion to Com pel and GRAN TS Defendant’s request for entry of the Court’s standard protective order. I. Re le van t Facts Plaintiffs own a piece of rental property located in Huntington, West Virginia. (ECF No. 1-2 at 2). On Decem ber 8, 20 0 6, defendant, Liberty Mutual Fire Insurance Com pany (“Liberty Mutual”), issued a fire insurance policy covering Plaintiffs’ rental property. (Id. at 3). On October 6, 20 14, while the fire insurance policy was still in effect, the rental property burned down. (Id.). Plaintiffs prom ptly notified Liberty Mutual of the 1 Dockets.Justia.com loss and m ade a claim for the policy proceeds. As of May 20 15, when the com plaint was filed in the Circuit Court of Cabell County, Liberty Mutual had not paid the policy proceeds to Plaintiffs. Plaintiffs assert four counts against Liberty Mutual, including breach of first-party insurance contract, violations of West Virginia’s Unfair Trade Practices Act, bad faith, and breach of Plaintiffs’ reasonable expectations. (ECF No. 1-2). On J une 17, 20 15, Liberty Mutual rem oved the com plaint to this Court. (ECF No. 1). At the sam e tim e, Liberty Mutual filed an answer to the com plaint, adm itting that it had not paid the insurance policy proceeds to Plaintiffs, but indicating that its actions were justified, because Plaintiffs’ insurance claim was barred, excluded, or limited by the term s, conditions, lim itations, and exclusions of the policy. (ECF No. 4). Thereafter, Plaintiffs served Liberty Mutual with requests for the production of docum ents. Liberty Mutual sought and was given an extension of tim e to serve responses to the requests. The responses were tim ely served pursuant to the extension; however, Plaintiffs found som e of the answers to be insufficient. The parties m et and conferred, but could not resolve all of their differences. Therefore, Plaintiffs filed a m otion to com pel, and Liberty Mutual filed a m otion for entry of the Court’s standard protective order. II. D is cu s s io n The parties have supplied m em oranda addressing the disputes, and have organized their briefs to correspond to the specific requests at issue. Therefore, this Order will follow that structure. A. Re qu e s t N o . 1 ( claim s file ) Plaintiffs requested Liberty Mutual’s file pertaining to Plaintiff’s fire loss claim . Liberty Mutual supplied the claim s file, except for docum ents to which it claim ed an attorney work product protection, or attorney-client privilege. However, at the tim e the 2 response was served, Liberty Mutual failed to contem poraneously provide a privilege log, as required under Fed. R. Civ. P. 26(b)(5). Since the filing of Plaintiffs’ m otion to com pel, Liberty Mutual has subm itted a privilege log to Plaintiffs. Nevertheless, Plaintiffs argue that the log was not tim ely filed; therefore, Liberty Mutual has waived its privilege to the withheld or redacted docum ents. Plaintiffs further contend that Liberty Mutual has waived its privilege by failing to tender the withheld inform ation to the Court for in cam era review. In light of the waiver, Plaintiffs ask the Court to order Liberty Mutual to produce the rem aining docum ents. “When a party provides an inadequate or untim ely privilege log, the Court m ay choose between four rem edies: (1) give the party another chance to subm it a m ore detailed log; (2) deem the inadequate log a waiver of the privilege; (3) inspect in cam era all of the withheld docum ents; and (4) inspect in cam era a sam ple of the withheld docum ents.” Nationw ide Mut. Fire Ins. Co. v. Kelt, Inc., 20 15 WL 1470 971, at *9 (M.D. Fla. Mar. 31, 20 15) (citing N LRB v. Jackson Hospital Corp., 257 F.R.D. 30 2, 30 7 (D.D.C. 20 0 9). In this case, Plaintiffs urge the Court to find that Liberty Mutual has forfeited its claim of privilege as to all of the docum ents identified on the untim ely privilege log. Certainly, that sanction has been used in this circuit. See Mezu v. Morgan State Univ., 269 F.R.D. 565, 577 (D.Md. 20 10 ) (“Absent consent of the adverse party, or a Court order, a privilege log (or other com m unication of sufficient inform ation for the parties to be able to determ ine whether the privilege applies) m ust accom pany a written response to a Rule 34 docum ent production request, and a failure to do so m ay constitute a forfeiture of any claim s of privilege.”). However, waiver of the privilege is not autom atic. See Sm ith v. Jam es C. Horm el Sch. of Va. Inst. of Autism , No. 3:0 8cv0 0 0 30 , 20 10 WL 370 2528, at *4 (W.D. Va. Sept. 14, 20 10 ). “Given the sanctity of the attorney-client privilege and the seriousness of 3 privilege waiver, courts generally find waiver only in cases involving unjustified delay, inexcusable conduct and bad faith.” Id. at *5 (collecting cases); see also W estfield Ins. Co. v. Carpenter Reclam ation, Inc., 30 1 F.R.D. 235, 247-48 (S.D.W.Va. 20 14) (recognizing sam e). Noting that Liberty Mutual’s privilege log was not supplied contem poraneously with its answers to docum ent requests, the Court m ust consider whether the “extrem e sanction of waiver” is appropriate in this case. See W estfield Ins. Co., 30 1 F.R.D. at 248. As noted above, federal courts have typically found waiver appropriate where unjustified delay, inexcusable conduct, or bad faith are present. Id. at 247. Although Liberty Mutual should have known that its privilege log was due at the tim e its responses were filed, the undersigned finds that the current circum stances do not justify application of the harshest rem edy. Accordingly, Plaintiffs’ m otion to compel the privileged and protected docum ents is D EN IED . With respect to Plaintiffs’ contention that the privilege was waived due to Liberty Mutual’s failure to subm it the docum ents to the Court for in cam era review, the m otion to com pel is also denied. The Court does not routinely review docum ents that are withheld as privileged or protected. If certain docum ents identified on the privilege log appear n o t to be privileged or protected, the Court m ay review them upon a party’s request. However, that does not appear to be the case here. B. Re qu e s t N o . 2 ( u n d e rw ritin g file ) Plaintiffs requested a copy of the underwriting file. Liberty Mutual objected to the request, but indicated that it would produce the file upon entry of a protective order. Nonetheless, Liberty Mutual did not m ake an effort at that tim e to supply a proposed protective order. After Plaintiffs filed the motion to com pel, Liberty Mutual apparently produced a redacted copy of the com plete underwriting file and a proposed protective 4 order. However, Plaintiffs argue that Liberty Mutual’s dilatory response should act as a waiver of any privilege or protection attaching to the file. For the reasons set forth above, the Court declines to find that Liberty Mutual waived a privilege or protection available to it under the Rules of Civil Procedure and D EN IES the m otion to com pel production of the withheld inform ation. In addition, the Court has entered concurrently with this Order the District’s approved protective order, which shall apply to all docum ents m arked confidential by any party. C. Re qu e s t N o . 5 ( claim s m an u als ) Plaintiffs asked for “all claim s m anuals, policy m anuals, policy statem ents or other docum ents regarding the processing of claim s for the last five (5) years including any changes or alterations of those m anuals, statem ents or docum ents.” Liberty Mutual objected to producing any m anuals and docum ents “other than those which apply to a first party fire claim in West Virginia in place on October 6, 20 14.” Despite recognizing the relevance of som e of the requested docum ents, Liberty Mutual did not produce a copy of the non-objectionable m anuals, allegedly because no protective order was in place. Now that a protective order is in place, Liberty Mutual is ORD ERED to produce the claim s m anuals, policy m anuals, policy statem ents, or other docum ents regarding the processing of first-party fire loss claim s in West Virginia, which were in effect during the years of 20 13, 20 14, and 20 15. When considering the proportionality factors set forth in Fed. R. Civ. P. 26(b)(1), the burden of producing claim s m anuals and policy docum ents that were not in effect at or near the tim e of Plaintiff’s loss clearly outweighs their anticipated usefulness. D . Re qu e s t N o s . 6 an d 14 ( e d u catio n al m ate rials ) Plaintiffs requested “all m anuals, educational m aterials, and written instructions 5 used for the training of Defendant’s agents and adjusters or other personnel who were involved in the processing of Plaintiffs’ policy and claim s,” as well as any docum entation dem onstrating training provided to said agents, adjusters, or other involved personnel. Liberty Mutual objected on the ground that the request was overly broad inasm uch as it was not lim ited to West Virginia claim s, or fire claim s, or first-party claim s. Plaintiffs agreed to lim it the request to first-party claim s, but Liberty Mutual contended that, even with that lim itation, the request was too broad. Having perform ed a proportionality analysis, the Court ORD ERS Liberty Mutual to produce any educational and training m aterials used by or with the agents, adjusters, or other personnel who were involved in processing Plaintiffs’ fire loss claim , to the extent the m aterials discuss or govern the processing of first-party claim s in West Virginia for real property dam age or destruction, regardless of the cause of the dam age or destruction. Liberty Mutual shall also provide docum entation of training provided to the agents, adjusters, or other personnel who were involved in processing Plaintiffs’ fire loss claim , to the extent the m aterials discuss or govern the processing of first-party claim s in West Virginia for real property dam age or destruction, regardless of the cause of the dam age or destruction. E. Re qu e s t N o s . 8 an d 12 ( fin an cial in fo rm atio n ) Plaintiffs seek production of Liberty Mutual’s financial statem ents and profit and loss statem ents for the years of 20 0 9 through 20 14, and incom e tax returns for the years of 20 10 through 20 14. Liberty Mutual objects, arguing that it should only have to produce inform ation regarding 20 14, as its financial position at the tim e of the loss is the only relevant issue. 6 This Court has previously held that a plaintiff m ust “m ake a prima facie claim for punitive dam ages before being entitled to discovery of a defendant's financial records. To m ake a prim a facie claim for punitive damages ... a plaintiff m ust produce som e factual evidence in support of her claim .” Robinson v. Quicken Loans Inc., No. CIV.A. 3:12-0 981, 20 13 WL 170 4839, at *4 (S.D.W.Va. Apr. 19, 20 13). Surviving a m otion for sum m ary judgm ent, or filing a m otion to com pel “that includes sufficient supporting evidence (i.e., affidavits, docum entary evidence) to dem onstrate a viable claim for punitive dam ages” are two avenues by which Plaintiffs m ay m ake such a showing in this case. Id. at n. 3. Given that the litigation is still in its early stages, Plaintiffs have not m ade a sufficient factual showing to justify an order com pelling Liberty Mutual to produce its financial records. Accordingly, Plaintiffs’ m otion to com pel is D EN IED as prem ature. F. Re qu e s t N o . 13 ( s ale s / in fo rm atio n al/ p ro m o tio n al m ate rial) Plaintiffs request sales, prom otional, and inform ational m aterials generated in the past five years concerning Liberty Mutual’s fire insurance policies. Although Liberty Mutual claim s that these m aterials are irrelevant, the undersigned finds that this type of inform ation is relevant to Plaintiffs’ claim s that Liberty Mutual did not act in good faith and violated representations m ade to Plaintiffs. As Plaintiffs point out, they renewed their policy on an annual basis, thus m aking the years after inception of the policy equally relevant. Moreover, Liberty Mutual does not assert that production of these m aterials would be unduly burdensom e and certainly provides no support for such an argum ent. Accordingly, Liberty Mutual is ORD ERED to produce to Plaintiffs sales, prom otional, and inform ational m aterials pertinent to fire insurance sold by Liberty Mutual in the State of West Virginia during the years 20 10 through 20 14. Materials generated or first circulated after Plaintiffs’ loss are not relevant; therefore, Liberty Mutual need not 7 produce inform ation for 20 15. G. Re qu e s t N o s . 16 an d 17 ( in s u ran ce d e p artm e n t an d bad faith co m p lain ts ) Plaintiffs want copies of all com plaints filed against Liberty Mutual with any state insurance departm ent over the past ten years, as well as a list of any bad faith com plaints filed against Liberty Mutual during the sam e tim e fram e. Liberty Mutual argues that the requests are too broad. The undersigned agrees with Liberty Mutual. From a proportionality standpoint, a request for insurance departm ent com plaints filed in states other than West Virginia about m atters other than first-party claim s related to real property losses is sim ply too broad-based to constitute discovery focused on the claim s and defenses in this case. Plaintiffs argue that they need this inform ation to dem onstrate the “custom ary business practices” of Liberty Mutual. If Liberty Mutual indeed has a business practice of wrongfully delaying or denying claim s related to real property losses, then evidence of such a business practice should be clear from com plaints filed with West Virginia’s insurance departm ent. On the other hand, with respect to the request for inform ation regarding “bad faith” lawsuits, providing a list of sim ilar suits should not be particularly onerous, and the resulting inform ation should be m ore inform ative than generic insurance departm ent com plaints.1 Therefore, Liberty Mutual is ORD ERED to supply Plaintiffs with a list of all first-party bad faith lawsuits filed against it during the past ten (10 ) years, which involve an allegation that Liberty Mutual wrongfully delayed or denied paym ent on a claim for dam age or destruction to real property. In addition, Liberty 1 The Court notes that Liberty Mutual does not argue burdensom eness in its response to the m otion to com pel and does not offer any support for such an argum ent. Nonetheless, requesting copies of insurance departm ent com plaints filed over a ten-year period with all fifty state insurance departm ents regarding an y issue is burdensom e on its face. 8 Mutual shall produce copies of all com plaints filed during the past ten (10 ) years with the West Virginia insurance departm ent involving an allegation that Liberty Mutual wrongfully denied or delayed paym ent on a first-party claim for dam age or destruction to real property. Plaintiffs are granted leave to re-assert their m otion to com pel additional responsive inform ation pertinent to these requests should the inform ation produced by Liberty Mutual provide a factual basis justifying a broader search. H . Re qu e s t N o . 18 ( p e rs o n n e l e valu atio n s ) Plaintiffs requested “all personnel evaluation sum m aries by individual, by unit, by office, by region for all entities having jurisdiction over the claim of the Plaintiffs.” Liberty Mutual objected on the basis that it did not understand the request, and the request appeared to be overly broad, seeking inform ation about all em ployees working in the sam e office or region as the em ployees that were directly or indirectly responsible for processing Plaintiffs’ claim . After a m eet and confer, Plaintiffs lim ited the request to those em ployees actually involved in processing Plaintiffs’ claim . Accordingly, Liberty Mutual is ORD ERED to produce personnel evaluations prepared during the years of 20 10 -20 15 pertaining to those em ployees involved in processing/ handling Plaintiffs’ claim . I. Re qu e s t N o . 19 ( au d it in fo rm atio n ) Plaintiffs initially sought audit inform ation for all em ployees in the sam e office and region as the em ployees who were involved in handling Plaintiffs’ claim . After a m eet and confer, the parties seem to have agreed on som e lim itations. Therefore, Liberty Mutual is ORD ERED to provide the requested inform ation applicable to the em ployees that were actually involved in handling Plaintiffs’ claim , or directly supervised an em ployee who handled the claim . 9 J. Re qu e s t N o . 2 0 ( p e rce n tage o f fire claim s h o n o re d ) Liberty Mutual objects to Plaintiffs’ dem and that it produce “all copies of all reports, m em orandum s [sic], em ails, com puter print-outs or any other docum ents that reflect the percentage of claim s honored” by Liberty Mutual where the claim s involved a fire loss. Liberty Mutual argues that the request is too broad. Once again, the undersigned finds the request too broad, and under the proportionality analysis, to be overly burdensom e on its face. Such a request would require Liberty Mutual to conduct a m assive search of its electronic inform ation without any showing that the inform ation would lead to adm issible evidence. Therefore, to begin, Liberty Mutual is ORD ERED to produce any report or m em orandum or sim ilar docum ent or com pilation showing the percentage of all fire loss claim s involving real property located in West Virginia, or covered by a policy generated in West Virginia, that resulted in paym ent by Liberty Mutual. If the inform ation provides a factual basis for the collection of additional inform ation responsive to this request, Plaintiffs m ay re-assert their m otion to com pel. K. Re qu e s t N o s . 2 1 an d 2 2 ( catch -all re qu e s ts ) Plaintiff offers no particular basis for these requests, which seem duplicative and cum ulative of other requests. Therefore, Plaintiffs’ m otion to com pel m ore com plete answers to these requests is D EN IED . III. Co n clu s io n In sum m ary, Plaintiffs’ m otion to com pel is GRAN TED , to the extent Liberty Mutual is ordered to produce the additional docum ents as set forth above, and is D EN IED as stated. Liberty Mutual shall produce the supplem ental docum ents within tw e n ty ( 2 0 ) d ays of the date of this Order. Liberty Mutual’s m otion for entry of the Court’s standard protective order is GRAN TED , and the protective order m ay be used 10 when producing the supplem ental docum ents. The Clerk is directed to provide a copy of this Order to counsel of record. EN TERED : Decem ber 9, 20 15 11
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