Arch Specialty Ins. Co. v HDI Gerling Am. Ins. Co.
Annotate this CaseDecided on January 22, 2021
Supreme Court, New York County
Arch Specialty Insurance Company, Plaintiff,
against
HDI Gerling American Insurance Company, Thyssenkrupp North America, Inc., United Specialty Insurance Company and Wilcox Development Corporation, Defendants.
650203/2019
Connell Foley LLP, New York, NY (William D. Deveau and Mitchell F. Ramirez of counsel), for plaintiff.
Babchik & Young, LLP, White Plains, NY (Melissa C. Cartaya of counsel), for nonparty ThyssenKrupp North America, Inc.
Gerald Lebovits, J.
The following e-filed documents, listed by NYSCEF document number (Motion 004) 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 94, 95 were read on this motion to QUASH SUBPOENA.
This discovery motion arises in an insurance-coverage action for a declaratory judgment. Nonparty Richard Caracciolo was injured on a construction site while employed by nonparty ThyssenKrupp North America, Inc.[FN1] ThyssenKrupp was acting as a subcontractor to general contractor defendant Wilcox Development Corporation. Wilcox was in turn hired by the owner of the site, SHS Ralph LLC.
SHS Ralph is the named insured on a policy issued by plaintiff Arch Specialty Insurance Company. ThyssenKrupp is the named insured on a policy issued by defendant HDI Gerling American Insurance Company; and Wilcox is the named insured on a policy issued by defendant. United Specialty Insurance Company. Arch has alleged that under the terms of the contracts between SHS Ralph and Wilcox, and SHS Ralph and ThyssenKrupp, SHS Ralph was required to be named as an additional insured on the HDI Gerling and United policies.
Caracciolo brought a personal-injury action in Supreme Court, Queens County against [*2]SHS Ralph, which in turn impleaded ThyssenKrupp. (See Caracciolo v SHS Ralph LLC, Index No. 512132/2016 [Sup Ct, Queens County] [the underlying action].) Arch has alleged in the current action that under the terms of the HDI Gerling and United policies, those insurers owe a defense and indemnity obligation to SHS Ralph (and thus to Arch as SHS Ralph's subrogee).
This motion relates to a nonparty subpoena served by Arch on ThyssenKrupp under CPLR 3101 (a) (4). The subpoena demands production of 28 different categories of documents—for the most part broadly construed to seek "all" or "any and all" documents in each category. ThyssenKrupp moves to quash the subpoena under CPLR 2304 and seeks a protective order under CPLR 3103. The motion is granted in its entirety.
DISCUSSION
Under CPLR 3103 (a), a court may—on the motion of a party or sua sponte—"issue a protective order precluding disclosure that is palpably improper in that it seeks irrelevant and/or confidential information, or is overly broad and burdensome." (Arch Ins. Co. v Delric Constr. Co., 174 AD3d 560, 561 [2d Dept 2019].) Here, Arch's subpoena is improper on both counts.[FN2]
First, Arch's subpoena, if enforced, would require extensive production of irrelevant information. For example, Arch seeks the underlying plaintiff's employment records, accident history, and medical history. (See NYSCEF No. 85 at ¶ 12.) It demands ThyssenKrupp's records relating to safety measures undertaken at the work site, responses to worker complaints at the site—including employees of other contractors—and documentation of any accidents that occurred at the site. (Id. at ¶¶ 5, 6, 7.) And it purports to require production of "[a]ny and all documents concerning" when ThyssenKrupp first became aware of the underlying plaintiff's alleged injury, and "any and all documents related to" any post-accident investigation. (See id. at ¶¶ 11, 13.) These categories of information might well be relevant to the underlying personal-injury action; but this court is at a loss to see how such information could be relevant to insurance-coverage question before the court in this case.
Second, Arch's subpoena makes other demands of extraordinary breadth and burden—particularly when one considers that this is an insurance-coverage declaratory judgment action. For example, Arch has subpoenaed "[a]ny and all documents related to ThyssenKrupp's work at the premises" (id. at ¶ 1); "[a]ny and all documents identifying the role of Thyssen Krupp at the Job Site in relation to any other entity" (id. at ¶ 4); and "[a]ll Documents relating to or concerning any contractual agreement or relationship between and/or among ThyssenKrupp, SHS Ralph, and/or Wilcox (id. at ¶ 22). Arch seeks "[a]ny and all documents related to the procurement" of insurance from HDI Gerling (id. at ¶ 15); "[a]ll Documents relating to or concerning any obligation by Wilcox or ThyssenKrupp . . . to indemnify" SHS Ralph "for any liability arising out of the Underlying Claim" (id. at ¶ 27); and "[a]ll Documents relating to or concerning any obligation of any person or entity" to indemnify SHS Ralph for liability arising out of the underlying action (id. at ¶ 26 [emphasis added]). And Arch demands that ThyssenKrupp produce "[a]ny and all documents related to" the underlying action." (Id. at ¶ 14). This court concludes that these demands are overbroad and excessively burdensome, especially [*3]in relation to their potential relevance and probative value in this action.
Moreover, Arch's opposition to the motion to quash does not attempt to defend either the substance or breadth of these demands. In fact, Arch's opposition papers defend the relevance only of a few of the subpoena's 28 items, without addressing the remainder at all. Arch argues that its subpoena is proper and should be enforced because it "seeks material related to a contract entered into by TKE[ ] in which TKE agreed to add Arch's policyholder as an additional insured," which renders the "scope of TKE's work and responsibilities in executing the contract . . . directly relevant to the questions of coverage." (NYSCEF No. 92 at 2-3.) Similarly, Arch emphasizes that "contracts that define scope of work on a job site and the insurance procurement provisions" are relevant to a coverage action. (Id. at 4.)
These principles, though they may be true in the abstract, do not avail Arch here. Arch already has in its possession what it contends to be the SHS Ralph/ThyssenKrupp contract and ThyssenKrupp's insurance policy—indeed, Arch's complaint quotes from the insurance policy and attaches the contract with SHS Ralph. To be sure, the question of exactly which documents in what form constitute the full contract between SHS Ralph and ThyssenKrupp remains a matter of considerable dispute in the underlying action (with obvious potential coverage implications). But for that very reason the underlying action saw extensive motion practice attempting to define the proper set of contractual documents, and thus SHS Ralph's and ThyssenKrupp's respective contractual obligations. And the parties in the underlying action each attached to their e-filed motion papers the documents they were contending represented the "true" contract (along with related extrinsic evidence). (See NYSCEF No. 94 at 4-5 & n 1 [ThyssenKrupp making this point in support of the motion to quash]; see also e.g. Index No. 512132/2016, NYSCEF Nos. 153-166, 252-259, 273-274, 296.)
Further, the parties in the underlying action also e-filed competing dispositive motions that attached as exhibits evidence including numerous deposition transcripts discussing in great detail the work that the underlying plaintiff was performing when he was injured and the circumstances of his accident. (See e.g. Index No. 512132/2016, NYSCEF Nos. 78-91, 119-145.) This e-filed evidence provides Arch extensive information that may bear on whether and how the underlying plaintiff's claims related to the work to be performed by ThyssenKrupp under its contract with SHS Ralph, and thus whether those claims are covered by the HDI Gerling and United insurance policies. This court fails to see why ThyssenKrupp's "duplicative production of these documents is necessary to [Arch's] prosecution of this action." (Liberty Petroleum Realty, 165 AD3d at 405.)
To be sure, even taking into account the improper demands discussed above, there may be some items in the Arch subpoena that seek relevant information without being overbroad and burdensome. But when "discovery demands are palpably improper in that they are overbroad, lack specificity, or seek irrelevant or confidential information, the appropriate remedy is to vacate the entire demand rather than to prune it." (Matter of Cheryl LaBella Hoppenstein 2005 Trust, 186 AD3d 1230, 1233 [2d Dept 2020].) This court does not rule out the possibility that Arch could yet serve a proper subpoena on ThyssenKrupp that would merit enforcement. The task of crafting that subpoena, however, is for Arch—not this court.
Accordingly, for the foregoing reasons, it is
ORDERED that ThyssenKrupp's motion to quash Arch's subpoena under CPLR 2304 and for a protective order under CPLR 3103 against enforcement of the subpoena is granted in full.
Dated: January 22, 2021
Hon. Gerald Lebovits
J.S.C. Footnotes
Footnote 1:ThyssenKrupp was originally named in the action as a nominal defendant, chiefly for notice purposes. It was dismissed from the case by a prior order of this court.
Footnote 2:This court is not persuaded by Arch's accusation that ThyssenKrupp's motion to quash is an attempt "to continue its Three Card Monte game with the contracts" among the parties to this case and the underlying action. (NYSCEF No. 92 at ¶ 12.)
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