Lima LS plc v. PHL Variable Insurance Company et al

Filing 165

RULING on Plaintiff's First Requests for Production Nos. 60 and 61 and Second Request for Production No. 33. 6 pages. Signed by Judge Holly B. Fitzsimmons on 10/22/14.(Esposito, A.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

LIMA LS PLC
v.
PHL VARIABLE INSURANCE
COMPANY, ET AL

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: CIV. NO. 3:12CV1122(WWE)
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RULING ON PLAINTIFF’S FIRST REQUESTS FOR PRODUCTION NOS.
60, 61 AND SECOND REQUEST FOR PRODUCTION NO. 33
Plaintiff seeks to compel documents responsive to its First
Requests for Production Nos. 60 and 61 and Second Request for
Production No. 33, which relate to other Phoenix lawsuits that
are relevant to Lima’s claims and allegations. The parties
briefed the issue in letters dated July 28, September 16, and
October 7, 2014.
Specifically, Lima’s First Requests Nos. 60 and 61 and
Second Request No. 33 seek the following.
First Request No. 60: All documents produced in or
concerning the litigations described in Paragraphs 70,
80, 84, 212 and 215-216 of the Amended Complaint in
this action.1
Paragraphs 70, 80, 84 and 216 of the Amended Complaint
reference the “Fenton Action.” Alan H. Fenton v. PHL Variable
Ins. Co., Judicial Council Coordination Proceeding No. 4612 (Cal.
Super. Ct.). Paragraph 212 of the Amended Complaint states in
part, “Phoenix was a party in thirty-one cases in which there
was a dispute about whether a life insurance policy issued by
Phoenix lacked an insurable interest.” (Emphasis in original).
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First Request No. 61: All documents produced in or
otherwise relating to the action titled United States
v. Binday, et al, No. 12CR152 (S.D.N.Y).
Second Request No. 33: All documents concerning any
litigation involving alleged STOLI or IOLI policies,
including but not limited to all documents concerning
the Fenton action, defined in Paragraph 70 of the
Amended Complaint.
As a “starting point,” Lima offered to narrow its First
Requests for Production Nos. 60 and 61 and Second Request for
Paragraph 215 of the Amended Complaint states in part, “As of
August 2012, Defendant Phoenix was a party to approximately 86
lawsuits involving around $3.6 billion in Phoenix policies owned
by investors that purchased their policies in the secondary
market.” Paragraph 216 of the Amended Complaint states
Among the many lawsuits filed against Defendant
Phoenix since it began to execute the fraudulent
scheme are: (i) a federal RICO mail and wire fraud
action filed against Phoenix by an investment fund
that owns over $450 million in Phoenix policies
and whose investors include the California Public
Employees’ Retirement System (CalPERS), (ii) the
Fenton Action, involving approximately $300
million in investor-owned policies, alleging fraud
and related claims against Phoenix, (iii) the six
insurance rate lawsuits described in paragraph 137
above, and (iv) over 60 lawsuits in which
Defendant Phoenix is seeking to void or rescind
over $360 million in investor-owned policies while
keeping the premiums.
[Doc. #84, Amend. Compl. ¶¶70, 80, 84, 137, 212, 21516, (emphasis in original) (Paragraph 137 states in
part, “To date, there are at least six lawsuits against
Phoenix asserting breach of contract and related claims
arising from Phoenix’s insurance rate increases,
including a New York class action, a RICO mail and wire
fraud action filed by an investment fund whose
investors include CalPERS, an action by a subsidiary of
an insurance company that purchased nearly $900 million
of Phoenix policies in the secondary market, and three
actions filed by U.S. Bank, as securities intermediary
for Lima LP (two in New York, and one in Delaware).”).
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Production No. 33 to ten lawsuits involving Phoenix: 1) the
Fenton action; 2) the Wilmington Savings RICO/fraud lawsuit; and
3) the Binday action, as well as “other STOLI/insurable interest”
litigation, 4-5) PHL Variable Ins. Co. v. ESF QIF Trust, Nos. 12cv-317-LPS and 12-cv-319-LPS (D. Del.); 6) PHL Variable Ins. Co.
v. Price Dawe 2006 Ins. Trust, No. 10-cv-964-RGA (D. Del); 7) PHL
Variable Ins. Co. v. The Chong Son Pak Life Ins. Trust, No. 12cv-314-RGA (D. Del); 8) PHL Variable Ins. Co. v. The Virginia
Lankow Life Ins. Trust, No. 12-cv-315-RGA (D. Del); 9) Donald E
Ross Irrevocable Life Ins. Trust v. PHL Variable Ins. Co., No.
13-cv-561-RGA (D. Del); and 10) PHL Variable Ins. Co. v. Hudson
Valley EPL, LLC, No. 13-cv-1562-SLR-SFR (D. Del). [Pl. 9/16/14
Let. at 6, 14-17].
Plaintiff argues that Phoenix’s “other litigation” is
“highly relevant” to the discovery in this case and submits that
“all of the materials” sought in Lima’s requests for production
should be produced in this action.
After careful review of the allegations contained in
plaintiff’s Amended Complaint, the letter dated September 16,
2014, and the exhibits appended thereto, the Court sustains
defendants’ objections. While it is true that some of the
allegations in Lima’s complaint are the same or substantially
similar to the allegations, as represented by Lima, in the other
Phoenix litigations, the Court finds that these broad requests
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are simply unwarranted.

Similar allegations and/or potential

witnesses are not a basis for production of all documents
produced in other cases where Phoenix is a party. While
defendants concede that “some documents produced in other cases
may also be relevant here,” they also maintain that “such
documents have already been produced to Lima and its securities
intermediary, and much more will be produced as part of a massive
ongoing production using searches that have been extensively
negotiated and tailored to Lima’s requests.”

[Def. Let. 10/7/12

at 2]. Simply put, “relevant STOLI-related documents will be
produced in this case anyway, regardless of whether previously
produced in” other Phoenix litigation.

Id. at 4. Defendants

assert, and the Court agrees, that “Lima does not explain why its
own discovery requests will not capture all relevant information
. . . .” Id. Nor has Lima identified any additional documents or
testimony relevant to this action that Lima does not already
have.

It is simply too early in the discovery process for Lima

to credibly argue that defendants will not capture and provide
relevant documents responsive to Lima’s discovery requests.

On

this record, Lima’s predictions that defendants will not produce
documents responsive to their discovery requests is speculative
and premature.
The Court notes that in the Wilmington case, defendants
produced deposition transcripts and exhibits to Lima’s securities
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intermediary. Id. at 7.

In Binday, defendants state that the

“few discrete documents . . . that are relevant here have already
been produced, and Lima’s speculations to the contrary are
mistaken.”

Id.; Def. Let 7/28/14 at 2.

In Fenton, defendants

have already provided Lima with copies of ten transcripts of
current and former Phoenix employees deposed in that case.
Let. 7/28/14 at 3.

Def.

Defendants state that “Lima identifies no

documents produced in the ESF QIF cases that should be produced
here.”

Nor, defendants argue, should it be their “burden to

enumerate each document produced in another case and specify why
it need not be produced here.”

Def. Let 10/7/14 at 7. The Court

agrees. In the Price Dawe 2006 Ins. Trust, The Chong Son Pak Life
Ins Trust, The Virginia Lankow Life Ins. Trust, and Donald E.
Ross Irrevocable Life Ins. Trust cases, Phoenix states it has
already produced or will produce documents relevant to this case,
such as claims procedures and underwriting guidelines, and has
already produced the transcripts of Phoenix employees who were
deposed in these cases. Finally, defendants represent that, to
date, no documents have been produced in the Hudson Valley EPL,
LLC, case. See Def. Let 10/7/14 at 7-9.
This is not a recommended ruling.

This is a discovery

ruling and order which is reviewable pursuant to the "clearly
erroneous" statutory standard of review.

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28 U.S.C. '636

(b)(1)(A); Fed. R. Civ. P. 6(a), 6(e) and 72(a); and Rule 2 of
the Local Rules for United States Magistrate Judges.

As such,

it is an order of the Court unless reversed or modified by the
district judge upon motion timely made.
ENTERED at Bridgeport this 22nd day of October 2014.

___/s/_______________________
HOLLY B. FITZSIMMONS
UNITED STATES MAGISTRATE JUDGE

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