Kanellakopoulos v. Unimerica Life Insurance Company

Filing 63

ORDER by Magistrate Judge Howard R. Lloyd re 58 Discovery Dispute Joint Report No. 2. (hrllc2S, COURT STAFF) (Filed on 8/2/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

United States District Court
Northern District of California

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IOANNIS KANELLAKOPOULOS,
Plaintiff,

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Case No.5:15-cv-04674-BLF (HRL)
ORDER RE DISCOVERY DISPUTE
JOINT REPORT NO. 2

v.
UNIMERICA LIFE INSURANCE
COMPANY,

Re: Dkt. No. 58

Defendant.

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Plaintiff sues Unimerica Life Insurance Company (Unimerica) for alleged wrongful denial

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of disability benefits. He says that he developed a debilitating mental disability and that his claim

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for benefits wrongfully was denied based solely on a paper file review of his claim. He also

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alleges, on information and belief, that defendant has a pattern and practice of denying legitimate

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disability claims to frustrate insured’s expectations for the prompt payment of claims. Unimerica

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contends that plaintiff’s policy is a unique one that covers only “catastrophic” disabilities (with

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“disability” reportedly being defined more stringently than in standard policies) and that plaintiff

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failed to prove that he was catastrophically disabled within the meaning of the policy.

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Plaintiff subpoenaed United Healthcare Specialty Benefits, Inc. (UHSB) for a deposition

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and the production of documents. Unimerica and UHSB jointly responded to the subpoena.1 In

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Discovery Dispute Joint Report (DDJR) No. 2, plaintiff seeks an order compelling the production

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of documents called for in Requests for Production 1-10, 12-31, and 34-37. The matter is deemed

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suitable for determination without oral argument. Civ. L.R. 7-1(b). Upon consideration of the

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parties’ respective arguments, this court grants plaintiff’s request for discovery in part and denies

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it in part. For those requests where production is ordered, defendant shall produce all responsive,

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non-privileged documents within 10 days from the date of this order, along with a privilege log (to

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the extent any documents are withheld on the basis of a privilege or other protection).
Preliminarily, plaintiff argues that Unimerica’s objections have been waived because they

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are boilerplate and do not satisfy the specificity required by Fed. R. Civ. P. 34. Insofar as

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United States District Court
Northern District of California

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Unimerica simply incorporated by reference its list of General Objections, wholesale, into its

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response to each request, those objections are waived. Plaintiff’s request for a finding of waiver is

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otherwise denied as to the specific objections Unimerica asserted in response to each request.
The court denies defendant’s request to deny plaintiff’s request to compel this discovery as

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untimely.

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Requests 1-3

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These requests essentially seek information about the California Department of Insurance’s

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approval of the form of plaintiff’s policy (No. 1); marketing and promotional materials re

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plaintiff’s policy (and similar ones) (No. 2); and transcripts, depositions, and sworn statements by

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defendant’s employees, agents, contractors, and anyone acting on its behalf re the marketing, sale,

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underwriting, and claims for catastrophic disability policies (No. 3). Unimerica maintains its

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objections are proper, but now says it agrees to produce any responsive, non-privileged documents

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that may exist. To the extent Unimerica has not already completed its production, it shall do so

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within 10 days from the date of this order.

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This court is told that UHSB is Unimerica’s agent that administered the subject benefits claim.
For convenience, the court refers to UHSB and Unimerica collectively here as “Unimerica” or
“defendant.”
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Requests 4, 5, 29

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These requests seek information about reserves set or modified as to plaintiff’s claims

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(Request 4); all reports showing “the financial impact of disability insurance claims that are

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allowed, terminated, closed, paid, put on claim, reserves set aside for new claims” from January 1,

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2010 to the present (Request 5); and all documents and communications relating to UHSB’s

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“compilation and analysis of data REGARDING and/or RELATING TO disability benefit claim

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submission rates, payment rates, termination rates, and denial rates, including but not limited to

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the total number of disability benefit claims submitted, the total number of claims paid, the total

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number of claims” from January 1, 2007 to the present (Request 29).

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With respect to reserves, plaintiff argues that the requested discovery is relevant to show

United States District Court
Northern District of California

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the reasonableness of defendant’s investigation and evaluation of his claim. In California, insurers

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are required by law to set reserves, and the setting of reserves is not an automatic admission of

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liability on a claim. Lipton v. Super. Ct. of Los Angeles Cnty., 48 Cal. App.4th 1599, 1612-13

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(1996). Even so, reserves information has been found “relevant and discoverable when it may

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shed light on what an insurer actually thought regarding merits of an insured’s claims where there

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is a ‘self-conscious disconnect’ between the insurer’s payment of benefits and its evaluation of the

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scope of the loss.” Flintkote Co. v. Gen’l Accident Assurance Co. of Canada, No. C04-01827

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MHP, 2009 WL 1457974 at *3 (N.D. Cal., May 26, 2009) (citing Bernstein v. Travelers Ins. Co.,

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447 F. Supp.2d 1100, 1108 (N.D. Cal. 2006)). Defendant argues that there can be no question of

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any “self-conscious disconnect” here, stating that its reserves are based on aggregate information,

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limited claim information, and no facts specific to plaintiff’s claim, and are unknown to claims

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and appeal unit managers. However, plaintiff contends that defendant acted in a manner

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suggesting a possible self-conscious disconnect, i.e., that Unimerica intentionally and unjustifiably

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denied benefits that it knew (or should have known) he was entitled to, in order to boost its own

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profits. This court is persuaded that reserves information is discoverable here, and plaintiff’s

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motion to compel as to Request 4 is granted.

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Nevertheless, plaintiff has failed to convince that the very wide-ranging discovery sought
by Requests 5 and 29 are proportional to the needs of the case, Fed. R. Civ. P. 26(b), and his
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motion to compel that information is denied.

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Request 6

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This request asks for all documents made available to Unimerica employees, contractors,

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and agents for the administration of disability benefit claims, including those that refer or relate to

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how the terms of plaintiff’s policy are to be interpreted, construed, or applied. Defendant opposes

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this discovery on the grounds that its policies and procedures are confidential and proprietary, are

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not specific to any plan or plaintiff’s claim, and were not relied on in denying plaintiff’s claim.

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The court is not persuaded by these arguments and concludes that Request 6 seeks information

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falling within the parameters for appropriate discovery under Fed. R. Civ. P. 26(b)(1). The
stipulated protective order is sufficient to address any concerns about confidential or proprietary

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United States District Court
Northern District of California

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information. Plaintiff’s request to compel this discovery is granted.

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Requests 7-10, 12-17, 30, 312

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Broadly speaking, these requests seek information about defendant’s business practices.

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Requests 7-9, 12, and 14 essentially seek information about guidelines and procedures re

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employee/contractor/agent targets, goals, and expectations with respect to disability claims, as

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well as performance reviews, compensation, bonuses, and awards for those who processed or

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administered plaintiff’s claim, their supervisors, and their organizational units. Plaintiff’s request

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to compel this discovery is granted. See, e.g., Saldi v. Paul Revere Life Ins. Co., 224 F.R.D. 169,

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183-85 (E.D. Pa. 2004); Welle v. Provident Life & Accident Ins. Co., No. 3:12-cv-3016 EMC

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(KAW), 2013 WL 6020763 at *1 (N.D. Cal., July 31, 2013). Defendant now argues that such

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records are protected by privacy interests, but it made no such objection in response to these

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requests and, as discussed above, Unimerica’s wholesale incorporation of its General Objections is

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insufficient to preserve that objection. In any event, this court finds that plaintiff has demonstrated

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a compelling need for this discovery and that the stipulated protective order is sufficient to address

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employees’ privacy rights.
Request 10 basically seeks discovery of documents that refer or relate to the training of

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This set of requests includes a misnumbered Request “6.” The parties refer to the requests as
numbered by plaintiff, so this court does the same.
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employees, contractors, and agents with respect to disability claims. Unimerica argues that it does

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not maintain written training materials that are specific to plaintiff’s claim or that tell claims

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personnel to pay or deny claims based on any particular criteria. The court nonetheless finds the

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requested documents appropriate for discovery, and defendant shall produce them. Plaintiff’s

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request for this discovery is granted.

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Requests 13, 15, and 17 ask for job descriptions for employees, contractors, and agents

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who were responsible for handling plaintiff’s claim, as well as the job descriptions for one

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Stephanie M. Foley and one Jeffrey Weeks. Unimerica agreed to produce documents, but plaintiff

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claims it has not yet done so. To the extent Unimerica still has not completed its production, it

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shall do so within 10 days from the date of this order.

United States District Court
Northern District of California

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Request 16 seeks documents and communications referring or relating to the job

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description of one Laura B. Parker. Unimerica responded that it has no responsive documents in

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its possession, custody, or control. Plaintiff has not provided this court with any basis to question

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Unimerica’s representation. His request to compel this discovery is denied.

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Request 30 seeks all documents and communications referring or relating to the “number

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of claims investigated, evaluated, handled, determined, reviewed and/or administered by Stephanie

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M. Foley, and of that number of claims, the number of claims in which benefits were approved

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and paid, and the number of claims in which benefits were denied from 2007 to the present.”

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Request 31 asks for the same information as to Parker. Plaintiff’s request for this discovery is

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granted, but the requests are limited to disability claims and the plan in question.

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Requests 18-28

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These requests seek an array of information about Unimerica’s relationship with its

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medical consultants. SALT Associates, Professional Disability Associates, and University

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Disability Consortium are identified as the consultants who reviewed plaintiff’s claim. Much of

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this discovery, says plaintiff, is relevant to uncover any possible bias by the consultants who

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reviewed his claim. See, e.g., Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998,

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1011 (9th Cir. 2004).

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There are several requests that can be readily disposed of:
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Requests 20 and 22: Unimerica says it agrees to produce its contracts with

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Professional Disability Associates and University Disability Consortium. To the

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extent it has not already done so, Unimerica shall produce all responsive, non-

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privileged documents within 10 days from the date of this order.

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Request 26 seeks documents and communications relating to the review, appraisal,

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or evaluation of any in-house or contracted medical review of plaintiff’s claim,

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including those by a Dr. Melvyn Attfield and a Dr. Stuart Shipko. Unimerica’s

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response states that all non-privileged responsive documents were produced as part

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of its Initial Disclosures. Plaintiff has not provided this court with any basis to

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United States District Court
Northern District of California

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question that representation. His request to compel this discovery is denied.
As for Request 18, plaintiff’s request to compel production of Unimerica’s contracts with

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SALT Associates is granted. It is unclear why defendant agreed to produce contracts with the

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other two consulting companies, but not this one. In any event, the court finds that this discovery

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is relevant and proportional to the needs of this case.

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Requests 19, 21, and 23 seek all Forms 1099 issued to SALT Associates, Professional

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Disability Associates and University Disability Consortium for the period January 2, 2012 to the

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present. Plaintiff’s request for this discovery is granted, with the following limitations: The

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production shall be limited to those individuals who reviewed plaintiff’s claim and to 1099s issued

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in connection with his claim. Unimerica states that it has already produced the 1099s for a Dr.

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Stuart Shipko, and Unimerica need not re-produce documents it has already given plaintiff.

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Unimerica says it has no 1099s for Dr. Melvyn Attfield (identified as an internal salaried

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consultant), and the court cannot compel the production of something that does not exist.

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Requests 24 and 25 seek all documents and communications relating to the number of

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disability benefit claims administered by Unimerica that were referred to Dr. Attfield and to Dr.

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Stuart, for the period January 1, 2007 to the present. Defendant says that for external reviewers, it

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does not refer claims to vendors for evaluation by a specific physician and does not control the

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roster of reviewers that may be assigned to a claim by outside vendors. The court nonetheless

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finds the requested documents appropriate for discovery, and defendant shall produce them.
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However, the request is limited to documents sufficient to show the numbers sought in these

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requests.

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Requests 27 and 28 seek all documents and communications relating to medical reviews

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authored by Dr. Attfield and by Dr. Shipko for Unimerica disability claims, for the period January

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1, 2007 to the present. Unimerica objected to this discovery on a number of grounds, including

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that the requested information is irrelevant, overbroad, and unduly burdensome. Defendant says it

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does not categorize claim files based on the identity of the reviewer, and therefore cannot provide

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a response without conducting a manual search of all potentially responsive claim files. Plaintiff

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has not persuasively demonstrated that this discovery is proportional to the needs of this case, and

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his request for an order compelling this discovery is denied. Fed. R. Civ. P. 26(b)(1).

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Northern District of California

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Requests 34-37

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These requests seek prior testimony (i.e., all affidavits, declarations, depositions, and

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transcribed trial testimony) of Foley, Parker, Dr. Attfield, and Dr. Shipko. Plaintiff posits that

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such documents might reveal “prior inconsistent statements, knowledge of duties, and/or

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knowledge of corporate policies and practices regarding claims handling.” Although he cites

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cases in which other courts have allowed such discovery, plaintiff has not convincingly

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demonstrated that this discovery is proportional to the needs of this case. Fed. R. Civ. P. 26(b)(1).

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His request to compel this discovery is denied.

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SO ORDERED.

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Dated: August 2, 2017

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HOWARD R. LLOYD
United States Magistrate Judge

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