Naylor et al v. Navigators Insurance Company et al

Filing 46

ORDER Granting in Part and Denying in Part Plaintiff's Motion to Compel re (ECF No. 38 ). Signed by Magistrate Judge William McCurine, Jr on 10/5/2012.(knb)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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CHRISTIAN NAYLOR, an individual; and
CHRISTIAN NAYLOR dba NAYLOR
CONSTRUCTION,

)
)
)
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Plaintiffs,
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v.
)
)
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NAVIGATORS INSURANCE COMPANY, )
a corporation; NAVIGATORS
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MANAGEMENT COMPANY, INC., a
)
corporation; LINCOLN GENERAL
)
INSURANCE COMPANY, a corporation;
)
GEMINI INSURANCE COMPANY, a
)
corporation, W.R. BERKLEY
)
CORPORATION, a corporation and DOES 1 )
through 50, inclusive,
)
)
Defendant.
)

Case No. 12-cv-297 BEN (WMc)
ORDER GRANTING IN PART,
DENYING IN PART PLAINTIFF’S
MOTION TO COMPEL
[ECF No. 38.]

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I. INTRODUCTION AND PROCEDURAL HISTORY

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On September 10, 2012, the Court held a telephonic discovery conference in the above-

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entitled matter. After hearing from counsel of record regarding the status of Defendant Gemini

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Insurance Company’s responses to Plaintiff’s Requests for Production, the Court requested briefing

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on Plaintiffs’ motion to compel.

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Plaintiff Christian Naylor of Naylor Construction is a general contractor. Defendant

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Gemini Insurance is the insurance company of one of Plaintiff's subcontractors, Coast

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Contracting & Development, Inc. Plaintiff contends it is an additional insured under the
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subcontractor's policy with Gemini. As proof of its status as an additional insured, Plaintiff

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argues it was provided with a Certificate of Insurance and Additional Insured Endorsement. In

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the course of discovery, Plaintiff propounded Requests for Production (“RFP”) on Gemini and

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Gemini objected to the RFPs on the following grounds: (1) confidential trade secret; (2)

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privileged under the attorney-client and work product doctrines; (3) relevance; and (4)

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overbreadth. Gemini’s responsive document production consisted only of objections and

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certified copies of Gemini’s insurance policies. Plaintiff’s filed the instant motion to compel to

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obtain Gemini’s claims file and other documents it contends are relevant and needed to respond

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to Gemini’s motion for summary judgment on the issue of whether Plaintiff is an additional

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insured as is required by the Gemini insurance policy. The hearing on Gemini’s motion for

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summary judgment is scheduled for October 15, 2012 at 10:30 a.m. before the Honorable Roger

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T. Benitez. [ECF No.40.]

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A. Gemini Insurance Company’s Objections to Plaintiff’s RFPs
Gemini argues Plaintiff’s discovery requests are irrelevant and boilerplate in light of the
fact that each of its insurance policies includes language defining an “additional insured” as: “an
insured any person or organization for whom you are performing operations when you and such
person or organization have agreed in writing in a contract or agreement that such person or
organization be added as an additional insured on your policy.” (Italics added.) Gemini argues
the Certificate of Liability Insurance provided to Plaintiff by its subcontractor’s insurance broker
does not qualify as a written contract to add an insured as is required under Gemini’s policy, but
is merely a receipt showing that some policy has been issued. Gemini argues the majority of
Plaintiff’s one-size-fits-all production requests are irrelevant to the threshold issue here which is,
does the Certificate of Liability Insurance (“COI”) constitute a written contract or agreement
under the Gemini policy language? Gemini argues that the lack of an actual contract naming
Plaintiff as an additional insured as required by Gemini makes Plaintiff’s document requests on
the issues of what may constitute an agreement or what would constitute a waiver of the
additional insured policy provision irrelevant.

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B. Plaintiff’s Motion to Compel Responses to Its Requests for Production

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Plaintiff argues it has the right to review Gemini’s claims file to determine whether it
contains any information to support Plaintiff’s allegations rather than allowing Gemini to
determine what in the claims file may be likely to lead to relevant evidence. Specifically,
Plaintiff states it might discover information in the claims file pertaining to: (1) Gemini's reasons
for declining coverage; (2) Gemini’s initial interpretation and review of the policy language
such that a waiver argument could be made in support of Plaintiff's claim; and (3)
communications between Gemini and its broker regarding the Certificate of Insurance or the
additional insured provisions. Plaintiff also argues it needs claims file information to oppose
Gemini’s pending motion for summary judgment1 on the issue of whether Plaintiff is an
additional insured under its subcontractor’s policy with Gemini. Plaintiff notes that the standard
of review for a motion to compel is broad-based and designed to assist Plaintiff not only in
proving its contract claim on the issue of whether Plaintiff qualifies as an additional insured, but
Plaintiff’s overall claim for bad faith.

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II. Standard under Rule 26 of the Federal Rules of Civil Procedure

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“Parties may obtain discovery regarding any nonprivileged matter that is relevant to any

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party’s claim or defense.... Relevant information need not be admissible at the trial if the
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discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Fed.
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R. Civ. P. 26(b)(1). This rule is to be considered broadly, to include “any matter that bears on,
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or that reasonably could lead to other matter that could bear on, any issue that is or may be in the
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case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978).
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See Fed. R. Civ. P. 56(d): If a nonmovant shows by affidavit, or declaration that, for specified reasons, it
cannot present facts essential to justify its opposition, the court may:...(2) allow time to obtain affidavits or
declarations or to take discovery;....”

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III. DISCUSSION
The Court has reviewed the parties’ briefing as well as Plaintiff’s RFPs and Gemini’s

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objections and responses. The Court finds many of Plaintiff’s requests are general and overbroad

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(such as RFP Nos. 28-38 on data retention policies) and unlikely to assist Plaintiff in collecting

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facts to support its opposition to the motion for summary judgment on the limited issue of

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whether Plaintiff is an additional insured under the Gemini insurance policy. In its motion to

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compel, Plaintiff acknowledges the time is not yet ripe for discovery on data retention issues and

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requests the Court reserve ruling on RFP Nos. 28 to 38 until, if necessary, a further document

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production and meet-and-confer process have been done. [ECF No. 38 at p. 8.] The Court

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agrees. Therefore, Plaintiff’s motion to compel responses to RFP Nos. 28 to 38 is DENIED

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WITHOUT PREJUDICE. As for requests that pointedly address the policy interpretation and

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claims handling information that Plaintiff contends is vital to support its claim and oppose the

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motion for summary judgment, Plaintiff’s specifically identifies the following RFPs in the chart

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below for the Court’s consideration in its motion to compel. The Court’s ruling appears in the

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third and last column.

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Request for Production
No.

Arguments re: Relevance

Court’s Ruling

#2: Any and all
DOCUMENTS or tangible
things RELATING TO the
underwriting or issuance of
YOUR liability Insurance
POLICY numbers ...
including all Schedules,
Endorsements and Forms
attached and made a part
of the policy.

Plaintiff contends underwriting
information would indicate
whether Gemini included
Plaintiff as a factor in its
assessment of risk.

Risk assessment and the costs
of coverage and/or premiums
is not at issue in this case and
is irrelevant on the issue of
whether the COI qualifies as
a written agreement sufficient
to name Plaintiff as an
additional insured.
Plaintiff’s motion as to RFP
No. 2 is DENIED.

#3: Any and all
DOCUMENTS pertaining
to reinsurance, between
February 26, 2004, and the
present for the subject
POLICY.

Plaintiff contends reinsurance
information would indicate
whether Gemini included
Plaintiff as a factor in its
assessment of risk.

Risk management between
two or more insurance
companies in an insurer/
reinsurer relationship is not at
issue here and is irrelevant as
to whether the COI qualifies
as a written agreement
sufficient to name Plaintiff as
an additional insured.
Plaintiff’s motion as to RFP
No. 3 is DENIED.

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#4: Any and all
DOCUMENTS
RELATING TO reserves
for any CLAIMS made on
the policy.

Plaintiff contends the
establishment of a reserve may
show whether Gemini believed
there was coverage under the
policy for additional insureds.

The threshold issue which
permeates this case and is
presented by Defendant’s
motion for summary
judgment is whether there is
coverage for Plaintiff as an
additional insured. The
establishment of, or amount
of, reserves kept by Gemini
in order to meet its insurance
obligations is not at issue
here and is irrelevant on the
issue of whether the COI
qualifies as a written
agreement sufficient to name
Plaintiff as an additional
insured. Plaintiff’s motion
as to RFP No. 4 is DENIED.

#5 and #6: Any and all
DOCUMENTS...COMMU
NICATIONS....
RELATING TO the costs
of any CLAIMS made on
the POLICY that was
handled by YOU from
February 26, 2004 to
present, including but no
limited to memorandums,
letters and electronic mail.

Plaintiff argues cost information
is typically requested in a bad
faith insurance case and cost
information may suggest
whether Gemini acted as if
there was contract between
Plaintiff and the subcontractor.

The costs incurred by Gemini
as a result of claims made on
the policy has no bearing on
the issue of whether the COI
qualifies as a written
agreement sufficient to name
Plaintiff as an additional
insured. Plaintiff’s motion
as to RFP Nos. 5 and 6 is
DENIED.

#7: The originals of any
and all DOCUMENTS
RELATING TO YOUR
complete underwriting file
for the POLICY, including
all information related to
your investigation for any
CLAIMS made on the
POLICY from February
26, 2004 to the present,
including but no limited to
memorandums, letters and
electronic mail.

Plaintiff contends underwriting
information would indicate
whether Gemini included
Plaintiff as a factor in its
assessment of risk.

Risk assessment and the costs
of coverage and/or premiums
is not at issue in this case and
is irrelevant on the issue of
whether the COI qualifies as
a written agreement sufficient
to name Plaintiff as an
additional insured.
Plaintiff’s motion as to RFP
No. 7 is DENIED.

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#8: The originals of any
and all DOCUMENTS
RELATING TO YOUR
complete claims file for
any CLAIMS made on the
POLICY from February
26, 2004 to the present.

Plaintiff argues claim file
related documents may
demonstrate the applicability of
Gemini’s ‘no contract’ defense.

Plaintiff is entitled to
discover nonprivileged
documents re: claims made
under the additional insured
provision in the
subcontractor’s policy.
Plaintiff’s motion as to RFP
No. 8 is GRANTED as
modified by the Court
above.

#9: Any and all
COMMUNICATIONS
published and/or
transmitted through
DEFENDANTS’
INTRANET and/or
INTERNET RELATING
TO the POLICY.

Plaintiff argues claim file
related documents may
demonstrate the applicability of
Gemini’s ‘no contract’ defense.

Plaintiff is entitled to
discover nonprivileged
documents that refer to the
treatment or coverage of
Plaintiff under the terms of
the subcontractor’s policy.
Plaintiff’s motion as to RFP
No. 9 is GRANTED as
modified by the Court
above.

#10: Any and all
DOCUMENTS
REGARDING,
REFLECTING OR
PERTAINING TO any and
all COMMUNICATIONS,
whether written or oral,
between YOU and the
Plaintiffs.

Plaintiff argues claim file
related documents may
demonstrate the applicability of
Gemini’s ‘no contract’ defense.

Plaintiff is entitled to
discover the correspondence
between it and Gemini as it
pertains to the insurance
policy at issue in this case.
Plaintiff’s motion as to RFP
No. 10 is GRANTED.

#11: Any and all
DOCUMENTS
REGARDING,
REFLECTING OR
PERTAINING TO any and
all COMMUNICATIONS,
whether written or oral,
between YOU and any
other person/entity
regarding the policy.

Plaintiff argues claim file
related documents may
demonstrate the applicability of
Gemini’s ‘no contract’ defense.
In particular, Plaintiff argues
the interactions between Gemini
and its agents or brokers
handling the policies may yield
information on the significance
of the Certificate of Insurance.

Plaintiff is entitled to
discover nonprivileged
documents that refer to the
treatment or coverage of
Plaintiff under the terms of
the subcontractor’s policy.
Plaintiff’s motion as to RFP
No. 11 is GRANTED as
modified by the Court
above.

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Ultimately, it is the province
of the Court to make a
threshold determination as to
whether the language of the
contract is unambiguous.
Curry v. Moody, 40 Cal. App.
4th 1547, 1552 (Cal. Ct.
App.1995). Until such time
as the District Court makes
that decision, Plaintiff is
entitled to discover
nonprivileged documents
bearing on Gemini’s
understanding and handling
of the additional insured
language in the
subcontractor’s policy.
Plaintiff’s motion as to RFP
No. 14 is GRANTED.

#14: Any and all
DOCUMENTS or tangible
things RELATING TO the
interpretation or meaning
of any policy language,
including but not limited
to, grants of coverage
and/or exclusions, relied
upon by YOU to grant,
limit or deny any and all
insurance claims made
under this POLICY.

Plaintiff contends in-house
insurance documents explaining
Gemini’s policy on to how to
interpret, administer or handle
additional insured claims, may
help the Court interpret the
insurance policy language.

#15: Any and all
DOCUMENTS related to
the policy benefits
submitted, requested,
approved or paid under the
POLICY.

Plaintiff argues claim file
related documents may
demonstrate the applicability of
Gemini’s ‘no contract’ defense.

The benefits paid under the
policy is not at issue here and
is irrelevant on the issue of
whether the COI qualifies as
a written agreement sufficient
to name Plaintiff as an
additional insured.
Plaintiff’s motion as to RFP
No. 15 is DENIED.

#16: Any and all
DOCUMENTS or tangible
things RELATING TO the
POLICY for any losses
from February 26, 2004
through present, including
but not limited to
DOCUMENTS from and
to third party adjusters and
any other consultant(s)
YOU used to investigate
claims made under the
POLICY.

Plaintiff argues claim file
related documents may
demonstrate the applicability of
Gemini’s ‘no contract’ defense.

Losses suffered under the
policy are not at issue here
and are irrelevant on the issue
of whether the COI qualifies
as a written agreement
sufficient to name Plaintiff as
an additional insured.
Plaintiff’s motion as to RFP
No. 16 is DENIED.

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Gemini argues no documents on
contract interpretation are
needed because Plaintiff argued
in its opposition to the MSJ that
the “endorsement regarding an
additional insured is policy
language that is clear and
unambiguous.”

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#19: Any and all
DOCUMENTS
RELATING TO YOUR
claims manuals.

Plaintiff contends in-house
insurance documents explaining
Gemini’s policy on to how to
interpret, administer or handle
additional insured claims, may
help the Court interpret the
insurance policy language.

Plaintiff is entitled to
discover nonprivileged
documents bearing on
Gemini’s understanding and
handling of the additional
insured language in the
subcontractor’s policy.
Plaintiff’s motion as to RFP
No. 19 is GRANTED as
modified by the Court
above.

#20: Any and all manuals,
guidelines, bulletins,
directives, booklets,
instruction, or other
DOCUMENTS reflecting
YOUR procedures,
practices and
methodologies for
assessing any and all
claims in good faith and
fair dealing.

Plaintiff contends in-house
insurance documents explaining
Gemini’s policy on to how to
interpret, administer or handle
additional insured claims, may
help the Court interpret the
insurance policy language.

Plaintiff is entitled to
discover nonprivileged
documents bearing on
Gemini’s handling of the
additional insured language
in the subcontractor’s policy.
Plaintiff’s motion as to RFP
No. 20 is GRANTED as
modified by the Court
above.

#21: Any and all manuals,
guidelines, bulletins,
directives, booklets,
instruction, or other
DOCUMENTS reflecting
YOUR procedures,
practices and
methodologies for training
adjusters to handle claims
in good faith and with fair
dealing.

Plaintiff contends in-house
insurance documents explaining
Gemini’s policy on to how to
interpret, administer or handle
additional insured claims, may
help the Court interpret the
insurance policy language.

Requests No. 21 is overbroad
and seeks documents that are
potentially duplicative of
those documents produced in
response to more carefully
tailored RFPs. Fed. R. Civ.
P. 26(b)(2)(C). Plaintiff’s
motion as to RFP No. 21 is
DENIED.

#22: Any and all
DOCUMENTS published
and/or transmitted by
DEFENDANTS regarding
claims handling
procedures for policies
such as the POLICY
issued to Coast
Contracting.

Plaintiff contends in-house
insurance documents explaining
Gemini’s policy on to how to
interpret, administer or handle
additional insured claims, may
help the Court interpret the
insurance policy language.

Plaintiff is entitled to
discover nonprivileged
documents bearing on
Gemini’s understanding and
handling of the additional
insured language in the
subcontractor’s policy.
Plaintiff’s motion as to RFP
No. 22 is GRANTED as
modified by the Court
above.

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#23: Any and all
underwriting manuals,
guidelines, bulletins,
directives, booklets,
instruction or other
DOCUMENTS in use by
YOU in the last ten years
RELATING TO policies
such as the POLICY
issued to Coast
Contracting.

Plaintiff contends in-house
insurance documents explaining
Gemini’s policy on to how to
interpret, administer or handle
additional insured claims, may
help the Court interpret the
insurance policy language.

Risk assessment and the costs
of coverage and/or premiums
is not at issue in this case and
is irrelevant on the issue of
whether the COI qualifies as
a written agreement sufficient
to name Plaintiff as an
additional insured.
Plaintiff’s motion as to RFP
No. 23 is DENIED.

#24: Any and all
DOCUMENTS or tangible
things RELATING TO bad
faith claims against YOU
in the past 10 years
RELATING TO policies
such as the POLICY
issued to Coast
Contracting.

Plaintiff contends this
information would demonstrate
how Gemini interpreted other
additional insured claims under
similar circumstances.

Request 24 is overbroad and
irrelevant to the threshold
issue of whether the COI in
this case qualifies as a written
agreement sufficient to name
Plaintiff as an additional
insured. Plaintiff’s motion
as to RFP No. 24 is
DENIED.

#25: Any and all
COMPLAINTS filed
against YOU in the past 10
years alleging Unfair
Claims
Practices....RELATING
TO policies such as the
POLICY issued to Coast
Contracting.

Plaintiff contends this
information would demonstrate
how Gemini interpreted other
additional insured claims under
similar circumstances.

Request 25 is overbroad and
irrelevant to the threshold
issue of whether the COI in
this case qualifies as a written
agreement sufficient to name
Plaintiff as an additional
insured. Plaintiff’s motion
as to RFP No. 25 is
DENIED.

#26: Any and all
COMPLAINTS filed
against YOU in the past 10
years with a pleading for
relief of Extra Contractual
damages RELATING TO
policies such as the
POLICY issued to Coast
Contracting.

Plaintiff contends this
information would demonstrate
how Gemini interpreted other
additional insured claims under
similar circumstances.

Request 26 is overbroad and
irrelevant to the threshold
issue of whether the COI in
this case qualifies as a written
agreement sufficient to name
Plaintiff as an additional
insured. Plaintiff’s motion
as to RFP No. 26 is
DENIED.

#27: Any and all
DOCUMENTS,
COMMUNICATIONS and
tangible things
RELATING TO prior
versions, prior drafts,
and/or policy language
changes to YOUR
POLICY within the last
ten years.

Plaintiff contends in-house
insurance documents explaining
Gemini’s policy on to how to
interpret, administer or handle
additional insured claims, may
help the Court interpret the
insurance policy language.

Historical changes to policy
language are irrelevant on the
issue of whether the COI
qualifies as a written
agreement sufficient to name
Plaintiff as an additional
insured. Plaintiff’s motion
as to RFP No. 27 is
DENIED.

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#40-41: Exact copies...of
all hard drives on the
desktop computers...,
servers and other
electronic media related to
this action from 2004
through present.

Plaintiff argues this information
is typically requested in a bad
faith insurance case.

Requests Nos. 40 and 41 are
overbroad and burdensome.
Fed. R. Civ. P. 26(b)(2)(C).
Plaintiff’s motion as to RFP
Nos. 40 and 41 is DENIED.

#42: ALL DOCUMENTS
that contain or otherwise
relate to the facts or
information that YOU
contend, refutes, in any
way, the allegations
contained in the Complaint
in this action.

Plaintiff argues this information
is typically requested in a bad
faith insurance case.

Requests No. 42 is overbroad
and seeks documents that are
potentially duplicative of
those documents produced in
response to more carefully
tailored RFPs. Fed. R. Civ.
P. 26(b)(2)(C). Plaintiff’s
motion as to RFP No. 42 is
DENIED.

#43: Any and all
DOCUMENTS including
but not limited to those
documents....RELATING
TO any bonus
plan/variable pay or
incentive programs for
YOUR claims personnel
for the past ten years.

Plaintiff contends information
on variable pay would indicate
whether any factors other than
applicable policy language were
being considered during the
handling of Plaintiff’s claim.

Adjusters’ bonus
compensation structure is not
at issue here and is irrelevant
on the issue of whether the
COI qualifies as a written
agreement sufficient to name
Plaintiff as an additional
insured. Plaintiff’s motion
as to RFP No. 43 is
DENIED.

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Exact copies of all relevant
disks, CDs, DVDs and
other removable media
related to this action.

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IV. CONCLUSION

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In accordance with the Court’s findings expressed above, Defendants are ordered to

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produce documents in response to the relevant RFPs listed above no later than October 10,

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2012.

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IT IS SO ORDERED.
DATED: October 5, 2012

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Hon. William McCurine, Jr.
U.S. Magistrate Judge, U.S. District Court

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