Gunn et al v. WCA Logistics, LLC et al

Filing 79

ORDER granting in part and denying in part 55 Defendants and Third Party- Plaintiffs WCA Logistics, LLC and WCA Logistics II, LLCs (collectively, WCA) Motion to Compel Disclosure of Insurance Information, by Magistrate Judge Michael E. Hegarty on 7/30/2014.(evana, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 13-cv-02197-WJM-MEH
BEN GUNN, and
JENNIFER GUNN,
Plaintiffs,
v.
WCA LOGISTICS, LLC, and
WCA LOGISTICS II, LLC,
Defendants/Third-Party Plaintiffs,
WILLIAM C. CARTER,
Defendant,
v.
JOHN E. BREEN,
Third-Party Defendant.

ORDER ON MOTION TO COMPEL

Michael E. Hegarty, United States Magistrate Judge.
Before the Court is Defendants and Third Party-Plaintiffs WCA Logistics, LLC and WCA
Logistics II, LLC’s (collectively, “WCA”) Motion to Compel Disclosure of Insurance Information
[filed June 18, 2014; docket #55]. The Motion has been referred to this Court for disposition [docket
#56]. The matter is fully briefed, and the Court finds that oral argument will not assist in
adjudication of the motion. For the reasons that follow, the Court grants in part and denies in part
the Motion to Compel.
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BACKGROUND
Plaintiffs, Ben and Jennifer Gunn, initiated this action in state court against Defendants WCA
on June 28, 2013. Docket #1-1. The case was removed to the District of Colorado on August 15,
2015. Docket #1. The Gunns’ claims arise from WCA’s purchase and management of Plaintiffs’
freight brokerage business.

See docket #1-1.

On December 5, 2013, WCA asserted five

counterclaims arising from the Gunns’ relationship with WCA’s former attorney John Breen.
Docket #19. In response, Third-Party Defendant Breen filed a Motion to Dismiss and eleven
counterclaims against WCA. Docket #20.
When WCA had not received Breen’s initial disclosures by January 8, 2014 pursuant to the
30-day deadline under Fed. R. Civ. P. 26(a)(1)(D), WCA sent Breen a letter on January 20, 2014.
Docket #55-2.

The letter demanded Breen’s initial disclosures, and, specifically, relevant

information regarding his legal malpractice insurance coverage. Id. Breen’s January 27, 2014 initial
disclosure statements included the following with regard to insurance:
Defendant Breen upon information and belief does not carry
insurance coverage outside the statute of limitations for such a claim,
even assuming any such claim is not frivolous. Pending before the
Court is Breen’s motion to dismiss the complaint against him as well.
Breen will amend said disclosure at the appropriate juncture in
accordance with the Court’s ruling.
Docket # 55-3 at p. 5.
On February 21, 2014 WCA served its First Set of Discovery to Breen. Docket # 55-4.
Breen responded to the discovery on April 7, 2014, and admitted that he had legal malpractice
insurance on December 5, 2013 (the date WCA filed its counterclaims against him). Docket #55-4
at p.7 (WCA’s Requests for Admissions); docket # 69-1 at p.4 (Breen’s Admissions). WCA called
Breen on April 18, 2014 to request his insurance information; WCA informed Breen that if he did
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not notify his insurance carrier of this lawsuit, WCA would put the insurance carrier on notice itself.
Docket #55 at p. 4.
After a June16, 2014 settlement conference with this Court, WCA sent an email to Breen
requesting the insurance information and informing him it would file the present motion if it did not
receive the information by the next day. Docket #55-1. WCA did not receive the information and
filed this Motion to Compel on June 18, 2014.
Breen delivered the insurance information to WCA on June 26, 2014 and filed a response
to the Motion to Compel on June 30, 2014. Docket #59. Breen argues that he is not obligated to
pay WCA’s expenses incurred in filing the Motion, because WCA failed to confer with him under
D.C. Colo. LivR. 7.1(a), and the Motion to Compel was premature because his Motion to Dismiss
has not been ruled upon. WCA’s reply argues that it is entitled to attorney’s fees and costs pursuant
to Fed. R. Civ. P. 37(a)(5).
Because the requested discovery has been served, WCA’s Motion to Compel is denied in part
as moot. The Court need only address whether WCA is entitled to reasonable expenses incurred in
filing the Motion.
DISCUSSION
Fed. R. Civ. P. 37(a)(5) provides:
[I]f the disclosure or requested discovery is provided after the motion
was filed[,] the court must, after giving an opportunity to be heard,
require the party or deponent whose conduct necessitated the motion,
the party or attorney advising that conduct, or both to pay the
movant’s reasonable expenses incurred in making the motion,
including attorney’s fees. But the Court must not order this payment
if:
(i)
the movant filed the motion before attempting in good
faith to obtain the disclosure or discovery without
court action;
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(ii)
(iii)

the opposing party’s nondisclosure, response, or
objection was substantially justified; or
other circumstances make an award of expenses
unjust.

First, Breen contends that WCA did not attempt in good faith to obtain the discovery and did
not comply with the duty to confer under D.C. Colo. LCivR 7.1(a). Breen argues that the June 16,
2014 email was intended to “blind side” him because he thought the parties had agreed, based on
a conversation about discovery issues after the settlement conference, that the disclosure of the
insurance information was premature. See docket #59 at pp. 203. However, Breen admits that the
issue of the insurance policy was not raised in that conversation, and he does not deny that WCA
requested the information in January, February, and April. The Court finds that, even assuming
Breen’s belief that WCA no longer sought the disclosure was a reasonable one (which is doubtful
based on the facts before this Court), the June 16, 2014 email constituted a good faith effort to
confer under D.C. Colo. LCivR 7.1(a). The email requested the information by noon on June 17,
2014. When WCA had not received it by June 18, 2014 - and in light of WCA’s numerous other
unsuccessful requests for the disclosure - it had reason to believe that the dispute could not be
resolved without the Court’s assistance. Indeed, Breen continues to argue that his nondisclosure was
justified.
Breen argues that he was not required to disclose his insurance information because the
Court had not yet ruled on his Motion to Dismiss. There is no legal support for his position. Fed.
R. Civ. P. 26(a)(1)(A) provides:
Except as exempted by Rule 26(a)(1)B) or as otherwise stipulated or
ordered by the court, a party must, without awaiting a discovery
request, provide to the other parties . . . any insurance agreement
under which an insurance business may be liable to satisfy all or part
of a possible judgment in the action or to indemnify or reimburse for
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payments made to satisfy the judgment.
None of the disclosure exemptions under Rule 26(a)(1)(B) apply here. Thus, the law clearly
required Breen to disclose the insurance information, and his pending Motion to Dismiss did not
exempt him from that requirement. Breen also asserts that WCA’s allegations are absurd and
frivolous. These arguments go to the merits of his Motion to Dismiss and do not provide
justification for his failure to disclose his insurance information. Pursuant to Fed. R. Civ. P.
26(a)(1)(D)’s 30-day initial disclosure deadline for parties served after the Rule 26(f) Scheduling
Conference, Breen was required to disclose his insurance information by January 8, 2014, and he
failed to do so despite WCA’s repeated requests.
Accordingly, the Court finds that payment of reasonable expenses is mandated by the law
and ORDERS that Defendant/Third-Party Plaintiffs WCA Logistics, LLC and WCA Logisitcs II,
LLC shall have reasonable costs and attorney’s fees incurred in filing the Motion to Compel by
filing an affidavit supporting such expenses no later than August 7, 2014. Any response by Breen
is due on August 18, 2014.
The Motion to Compel Disclosure of Insurance Information (filed June 18, 2014; docket #55)
is denied in part as moot and granted in part as specified herein.
Dated at Denver, Colorado, this 30th day of July, 2014.
BY THE COURT:

Michael E. Hegarty
United States Magistrate Judge

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