American Automobile Insurance Company, et al v. Hawaii Nut & Bolt, Inc.

Filing 244

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS/COUNTERCLAIM DEFENDANTS AMERICAN AUTOMOBILE INSURANCE COMPANY AND NATIONAL SURETY CORPORATION'S MOTION FOR AN ORDER COMPELLING PRODUCTION OF DOCUMENTS BY SAFEWAY, INC. AND HAWAII NUT & BOL T, INC. re 191 - Signed by MAGISTRATE JUDGE KEVIN S.C. CHANG on 2/16/2017. (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
AMERICAN AUTOMOBILE
INSURANCE COMPANY;
NATIONAL SURETY
CORPORATION,

)
)
)
)
)
Plaintiffs/
)
Counterclaim
)
Defendants,
)
)
vs.
)
)
HAWAII NUT & BOLT, INC.; )
SAFEWAY, INC.,
)
)
Defendants/
)
Counterclaim
)
Plaintiffs,
)
)
and
)
)
DOUGLAS MOORE; MONARCH
)
INSURANCE SERVICES, INC.; )
INSURANCE ASSOCIATES,
)
INC.,
)
)
Additional
)
Counterclaim
)
Defendants.
)
_________________________ )

CIVIL NO. 15-00245 ACK-KSC
ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFFS/
COUNTERCLAIM DEFENDANTS
AMERICAN AUTOMOBILE
INSURANCE COMPANY AND
NATIONAL SURETY
CORPORATION’S MOTION FOR AN
ORDER COMPELLING PRODUCTION
OF DOCUMENTS BY SAFEWAY,
INC. AND HAWAII NUT & BOLT,
INC.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS/
COUNTERCLAIM DEFENDANTS AMERICAN AUTOMOBILE INSURANCE
COMPANY AND NATIONAL SURETY CORPORATION’S MOTION
FOR AN ORDER COMPELLING PRODUCTION OF DOCUMENTS
BY SAFEWAY, INC. AND HAWAII NUT & BOLT, INC.

Before the Court is Plaintiffs/Counterclaim
Defendants American Automobile Insurance Company and
National Surety Corporation’s (collectively “Fireman’s
Fund” or “FF”) Motion for an Order Compelling
Production of Documents by Safeway, Inc. and Hawaii Nut
& Bolt, filed December 14, 2016.

Defendants Safeway,

Inc. (“Safeway”) and Hawaii Nut & Bolt, Inc. (“HNB”)
(collectively “Defendants”) filed an Opposition on
January 23, 2017.1

On January 30, 2017, FF filed its

Reply.
This matter came on for hearing on February 13,
2017.

Stuart Fujioka, Esq., appeared, and Steven

Allison, Esq., appeared by phone on behalf of FF.
Judith Pavey, Esq., and Maile Miller, Esq., appeared on
behalf of Defendants.

Corlis Chang, Esq., appeared on

behalf of Insurance Associates, Inc. and Douglas Moore,
and Kenneth Robbins, Esq., Donna Marron, Esq., and
Sasha Hamada, Esq., appeared on behalf of Douglas Moore

1

Counterclaim Defendants Douglas Moore, Monarch
Insurance Services, Inc., and Insurance Associates,
Inc. filed Statements of no Position.
2

and Monarch Insurance Services, Inc.

After careful

consideration of the parties’ submissions, the
applicable law, and the arguments presented at the
hearing, the Court HEREBY GRANTS IN PART AND DENIES IN
PART the Motion for the reasons set forth below.
BACKGROUND
As the Court and the parties are wellacquainted with the facts and procedural history of
this case, the Court includes only those facts
pertinent to the disposition of the instant Motion.
On August 19, 2016, FF served Defendants with
requests for production of documents (“RPOD”) related
to the mediation, settlement, and resulting stipulated
judgment.

The following RPOD are the subject of the

Motion:
Safeway
•

Request 7: All documents regarding any assignment
of the policies by HNB to Safeway;

•

Request 37: All communications between Safeway and
any person regarding any mediation or settlement
conference in the underlying action;

•

Request 38: All communications between Safeway and
any person regarding any mediation or settlement
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conference in this action;
•

Request 39: All communications between Safeway and
any person regarding settlement or potential
settlement in the underlying action;

•

Request 40: All documents regarding the negotiation
of the stipulated judgment;

•

Request 41: All communications between Safeway and
any person regarding the Settlement Agreement in
the Underlying Action;

•

Request 42: All communications between Safeway and
any person regarding the stipulated judgment in the
underlying action;

•

Request 43: All documents regarding any settlement
demands Safeway made in the underlying action;

•

Request 44: All documents regarding any settlement
offers Safeway received in the underlying action;
HNB

•

Request 38: Documents regarding any agreements
between HNB and Safeway;

•

Request 45: Communications between HNB and any
person regarding any mediation or settlement in the
underlying action;

•

Request 46: Communications between HNB and any
person regarding mediation or settlement conference
in this action;

•

Request 47: Communications between HNB and any
person regarding settlement or potential settlement
of underlying action;

•

Request 48: Communications between HNB and any
4

person regarding Settlement Agreement in the
underlying action;
•

Request 49: Communications between HNB and any
person regarding the stipulated judgment in the
underlying action.
LEGAL STANDARD
Federal Rule of Civil Procedure (“FRCP”) 26

provides:
Parties may obtain discovery regarding any
nonprivileged matter that is relevant to
any party’s claim or defense and
proportional to the needs of the case,
considering the importance of the issues
at stake in the action, the amount in
controversy, the parties’ relative access
to relevant information, the parties’
resources, the importance of the discovery
in resolving the issues, and whether the
burden or expense of the proposed
discovery outweighs its likely benefit.
Information within this scope of discovery
need not be admissible in evidence to be
discoverable.
Fed. R. Civ. P. 26(b)(1).

Relevance “has been

construed broadly to encompass any matter that bears
on, or that reasonably could lead to other matter that
could bear on, any issue that is or may be in the
case.”

Oppenheimer Fund, Inc. v. Sanders, 437 U.S.

340, 351 (1978).

At the same time, it has its
5

“ultimate and necessary boundaries.”

Id.

“District

courts have broad discretion in determining relevancy
for discovery purposes.”

Surfvivor Media, Inc. v.

Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005)
(citing Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir.
2002)).
The 2015 amendment to FRCP 26 added
proportionality as a requirement for obtaining
discovery.

Thus, “relevancy alone is no longer

sufficient to obtain discovery, the discovery requested
must also be proportional to the needs of the case.”
Centeno v. City of Fresno, Case No. 1:16-cv-00653-DADSAB, 2016 WL 7491634, at *4 (E.D. Cal. Dec. 29, 2016)
(citing In re Bard IVC Filters Prod. Liab. Litig., 317
F.R.D. 562, 564 (D. Ariz. 2016)).

Addressing all

proportionality considerations does not rest solely
with the party seeking discovery.

Fed. R. Civ. P.

26(b)(1) advisory committee’s note to 2015 amendment.
Instead, “[t]he parties and the court have a collective
responsibility to consider the proportionality of all
discovery and consider it in resolving discovery
6

disputes.”

Id.

District courts have broad discretion to limit
discovery where the discovery sought is “unreasonably
cumulative or duplicative, or can be obtained from some
other source that is more convenient, less burdensome,
or less expensive.”

Fed. R. Civ. P. 26(b)(2)(C).

Limits also should be imposed where the requesting
party has had ample opportunity to obtain the
information through discovery in the action or the
discovery is outside the scope of permissible discovery
under FRCP 26(b)(1).

Id.

In the event a party fails to respond to a
discovery request, the party who served the discovery
request may file a motion to compel.
37(a)(3)(B)(iii)-(iv).

Fed. R. Civ. P.

An incomplete or evasive answer

or response is deemed a failure to answer or respond.
Fed. R. Civ. P. 37(a)(4).

The motion to compel must

include a certification that the “movant has in good
faith conferred or attempted to confer with the person
or party failing to make disclosure or discovery in an
effort to obtain it without court action.”
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Fed. R.

Civ. P. 37(a)(1); see also Local Rule 37.1(a), (b).
DISCUSSION
Initially, FF requested an order compelling
Safeway to respond to RPOD Nos. 7, 37-44 and HNB to
respond to RPOD Nos. 38, 45-49, and for Defendants to
submit privilege logs identifying the withheld
documents.

At the hearing, the parties informed the

Court that the only documents at issue are the
mediation communications exclusively with the mediator
that took place after July 1, 2013.

Defendants

continue to withhold these documents pursuant to the
Hawaii Mediation Act (“HMA”).
In view of Defendants’ representation that they
have produced all responsive documents other than the
communications with the mediator, the Court DENIES the
Motion as moot with respect to the documents that have
been produced.

If there are any outstanding documents

responsive to the subject requests, they, along with a
corresponding privilege log, should be produced by
March 2, 2017.

8

The limited dispute presently before the Court
concerns the applicability of the HMA to mediation
communications between July 1, 2013 until the
conclusion of the mediation.

Hawaii Revised Statutes

(“HRS”) § 658H-4 provides that “a mediation
communication is privileged as provided in subsection
(b)2 and is not subject to discovery or admissible in
evidence in a proceeding unless waived or precluded as
provided by section 658H-5.”
4(a).

2

Haw. Rev. Stat. § 658H-

A “mediation communication” is defined as “a

Subsection (b) provides:
(1) A mediation party may refuse to
disclose and may prevent any other person
from disclosing a mediation communication;
(2) A mediator may refuse to disclose a
mediation communication, and may prevent
any other person from disclosing a
mediation communication of the mediator;
and
(3) A nonparty participant may refuse to
disclose, and may prevent any other person
from disclosing, a mediation communication
of the nonparty participant.

Haw. Rev. Stat. § 658H-4(b).
9

statement, whether oral, in a record, verbal, or
nonverbal, that occurs during a mediation or is made
for purposes of considering, conducting, participating
in, initiating, continuing, or reconvening a mediation
or retaining a mediator.”

Haw. Rev. Stat. § 658H-2.

The HMA “was enacted in 2013, and became
effective on July 1, 2013.”

Reading Int’l, Inc. v.

Malulani Grp., Ltd., 40 F. Supp. 3d 1312, 1325 (D. Haw.
2014) at 1325 (citing 2013 Haw. Sess. L. Act 284, § 2)
(“This Act shall take effect on July 1, 2013.”)).

With

respect to the HMA’s application to existing mediation
agreements (agreements made prior to July 1, 2013), the
HMA provides:
(a) This chapter shall govern a mediation
pursuant to a referral for mediation or an
agreement to mediate made on or after July
1, 2013.
(b) On or after January 1, 2014, this
chapter shall govern an agreement to
mediate whenever made.
Haw. Rev. Stat. § 658H-13.
Here, the mediation commenced in July 2009.
The parties do not dispute that any mediation
10

communications prior to July 1, 2013 are not
privileged.

Indeed, HRS § 658H-13(a) bars the

application of the HMA to any mediation communications
prior to July 1, 2013.

Reading, 40 F. Supp. 3d at 1325

(concluding that the HMA did not apply to an agreement
to mediate in a July 2009 settlement).
The Court finds that the HMA is likewise
inapplicable to mediation communications from July 1,
2013 to January 1, 2014.

Haw. Rev. Stat. § 658H-13(b)

(designating January 1, 2014 as the date upon which the
HMA governs all agreements to mediate whenever made).
The HMA may have taken effect on July 1, 2013, but in
order for it to govern the mediation communications
from that date on, the referral for mediation or
agreement to mediate had to have been made on or after
July 1, 2013.

Haw. Rev. Stat. § 658H-13(a).

Given

that the mediation began in July 2009, the Court finds
that the HMA does not apply to any mediation
communications from July 2009 to January 1, 2014, and
Defendants must produce all communications falling
within that time frame, if they have not already done
11

so, by March 2, 2017.
Less clear is whether the HMA would protect the
withheld mediation communications after January 1,
2014.

“Section 658H-13(b)’s reference to ‘on or after

January 1, 2014’ does not mean that the [HMA] applies
retroactively to all past mediations.”
Supp. 3d at 1326.

Reading, 40 F.

Even assuming that as of January 1,

2014, the HMA retroactively applied to the underlying
mediation, and correspondingly to all mediation
communications from January 1, 2014, Defendants could
nevertheless be precluded from asserting a mediation
privilege due to their allegations concerning FF’s
conduct related to the mediation.

Id. at 1326 n.10

(finding that if the HMA applied, the plaintiff would
be precluded from asserting a mediation privilege
because the plaintiff made representations about a
mediation communication that would prejudice the
defendant if it was not allowed to respond); see also
HRS §§ 658H-5 & 658H-6 (identifying exceptions to the
privilege).

12

At this time, the Court need not reach the
issue of whether the mediation communications are
protected by the HMA after January 1, 2014, because it
is only compelling the production of mediation
communications up to January 1, 2014.

If the

production reveals a need for and entitlement to
communications beyond January 1, 2014, FF may seek
further relief from the Court.

For these reasons, the

Motion is GRANTED IN PART AND DENIED IN PART as to the
mediation communications.
CONCLUSION
In accordance with the foregoing, Plaintiffs/
Counterclaim Defendants American Automobile Insurance
Company and National Surety Corporation’s Motion for an
Order Compelling Production of Documents by Safeway,
Inc. and Hawaii Nut & Bolt, filed December 14, 2016, is
HEREBY GRANTED IN PART AND DENIED IN PART.

Defendants

are to produce all documents responsive to the subject
RPOD that have yet to be produced, along with a
privilege log.

With respect to mediation
13

communications, Defendants are to produce all
responsive documents for the period July 2009 to
January 1, 2014.

Production shall be completed by

March 2, 2017.
IT IS SO ORDERED.
DATED:

Honolulu, Hawaii, February 16, 2017.

_____________________________
Kevin S.C. Chang
United States Magistrate Judge

CIVIL NO. 15-00245 ACK-KSC; AMERICAN AUTOMOBILE INSURANCE CO., ET
AL. V. HAWAII NUT & BOLT, INC., ET AL.; ORDER GRANTING IN PART
AND DENYING IN PART PLAINTIFFS/COUNTERCLAIM DEFENDANTS AMERICAN
AUTOMOBILE INSURANCE COMPANY AND NATIONAL SURETY CORPORATION’S
MOTION FOR AN ORDER COMPELLING PRODUCTION OF DOCUMENTS BY
SAFEWAY, INC. AND HAWAII NUT & BOLT, INC.

14