Ranburn Corporation v. Argonaut Insurance Company et al

Filing 151

OPINION AND ORDER: The Court DENIES Non-Party Elliot Gross' Emergency Motion to Quash or For Protective Order 131 . Based on the agreement of State Auto, the Court ORDERS that Gross shall not be required to produce documents that have previously been produced in this litigation. Signed by Magistrate Judge Paul R Cherry on 8/24/2018. (lhc)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION AT LAFAYETTE
RANBURN CORPORATION d/b/a
RANBURN CLEANERS,
Plaintiff,
v.
ARGONAUT GREAT CENTRAL
INSURANCE COMPANY, et al.,
Defendants.
NATIONAL FIRE AND INDEMNITY
EXCHANGE,
Counterclaimant,
v.
RANBURN CORPORATION d/b/a
RANBURN CLEANERS,
Counterclaim Defendant.
MERIDIAN MUTUAL INSURANCE
COMPANIES n/k/a STATE AUTO
INSURANCE COMPANIES,
Counterclaimant,
v.
RANBURN CORPORATION d/b/a
RANBURN CLEANERS,
Counterclaim Defendant.

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) CAUSE NO.: 4:16-CV-88-RL-PRC
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OPINION AND ORDER
This matter is before the Court on Non-Party Elliot Gross’ Emergency Motion to Quash or
For Protective Order [DE 131], filed on July 19, 2018. On July 20, 2018, the Court received
telephonic notification that the motion was no longer an emergency motion. Briefing on the motion
was conducted according to the usual schedule. Defendant Meridian Mutual Insurance Companies,

now known as State Auto Insurance Companies (“State Auto”), filed a response on August 2, 2018.
Gross filed a reply on August 8, 2018.
This litigation was brought by an insured party, Ranburn Corporation, doing business as
Ranburn Cleaners (“Ranburn”), against its insurers, regarding the rights and duties of the insured
and insurers, especially in regard to an underlying environmental claim brought by the Indiana
Department of Environmental Management (IDEM) against Ranburn regarding property at which
Ranburn operated a laundry facility.
On March 28, 2018, the Court issued an Opinion and Order granting partial summary
judgment in favor of Defendants, and entered a declaratory judgment that Defendants “have the right
to select and retain the environmental consultant to assist in the defense of the underlying IDEM suit
and conduct the response action at no cost to Ranburn Corporation.” (J. Civil Action 1-2, ECF No.
113). The Court reset discovery deadlines for the remaining claims and counterclaims.
State Auto noticed Gross for a non-party deposition to be held on July 23, 2018, in Carmel,
Indiana. Document requests were also attached to the subpoena. Gross objected to the subpoena on
July 9, 2018. State Auto and Gross were unable to completely resolve the dispute, so Gross filed the
instant motion on July 19, 2018, arguing that the subpoena imposes an undue burden on him.
Pursuant to Federal Rule of Civil Procedure 45(a)(1)(A)(iii), a party may serve a subpoena
commanding a nonparty to testify at a deposition and produce designated documents. Rule
45(d)(3)(A)(iv) requires a court to quash or modify a subpoena based on a timely motion if the
subpoena subjects a person to an undue burden. Factors considered in determining whether a
subpoena is unduly burdensome include non-party status, relevance, the issuing party’s need for the
discovery, and the breadth of the request. Uppal v. Rosalind Fraklin Univ. of Med. & Sci., 124 F.

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Supp. 3d 811, 813 (N.D. Ill. 2015). The party seeking to quash the subpoena bears the burden of
proving that it is unduly burdensome. Malibu Media, LLC v. John Does 1-14, 287 F.R.D. 513, 516
(N.D. Ind. 2012).
The broad scope of discovery, which applies to discovery requests sent to nonparties as well
as parties, permits a party to seek information
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 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); Noble Roman’s Inc. v. Hattenhauer Distrib. Co., 314 F.R.D. 304, 307 (S.D.
Ind. 2016) (“The limits and breadth of discovery expressed in Rule 26 are applicable to non-party
discovery under Rule 45.”). When a party seeks discovery that is “unreasonably cumulative or
duplicative, or can be obtained from some other source that is more convenient, less burdensome,
or less expensive” or is outside of the scope of discovery, the Court must limit discovery. Fed. R.
Civ. P. 26(b)(2)(C).
The underlying IDEM matter began on November 4, 2009. At that time, Gross was a
shareholder of Ranburn. State Auto states—and Gross does not refute—that Gross is a former
president and principal shareholder of Ranburn. He sold his shares in the company in the spring of
2015. Ranburn listed Gross in its initial disclosures as an individual likely to have discoverable
information, specifying that “Mr. Gross possesses knowledge concerning Ranburn’s interaction with
the insurers and the reasons and circumstances surrounding the decision to sell Ranburn.” (Resp. Ex.
1 at 2, ECF No. 143-1).

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The claims that remain pending in this litigation include Ranburn’s claim for declaratory
judgment that the insurers must honor Ranburn’s selection of defense counsel, Ranburn’s claim for
declaratory judgment “regarding Ranburn’s rights and obligations concerning the subject insurance
policies, policy limits and any other issues in dispute,” (Compl. 12, ECF No. 1), and counterclaims
for declaratory judgment regarding Ranburn’s obligations to cooperate with the insurers in regard
to the IDEM claim and to provide access to the property in question.
Gross asserts that State Auto’s subpoena does not seek relevant information and causes an
undue burden. Gross argues that he has no personal knowledge of any facts relevant to the pending
claims. He also represents that he has no documents for the period after he sold his shares in
Ranburn, that all documents that he possesses for the period prior to selling his shares have already
been the subject of discovery requests, and that he has no new documents or information relevant
to the remaining issues in the case.
In response, State Auto states that it withdrew the only document request specifically
objected to and agreed that Gross need not produce documents already produced by others in the
litigation. State Auto notes that Gross and Ranburn share counsel, which should facilitate
determining which documents have already been produced. State Auto also points out that it
scheduled the deposition to occur in the county in which Gross resides and indicated a willingness
to consider locations even closer to Gross’s home.
State Auto rejects Gross’s blanket assertion that he has nothing relevant to offer, noting the
subjects of which Gross has knowledge identified in the initial disclosures, the pending claims, and
Gross’s involvement in Ranburn at the time the insurance policies were purchased.

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Gross replies that State Auto has not shown why it needs to depose Gross, but that shifts the
burden to the wrong party. Gross bears the burden of showing that the subpoena is unduly
burdensome. For the first time in his reply, Gross identifies particular document requests that he
considers to be overly burdensome. Arguments raised for the first time in a reply are waived,
Mendez v. Perla Dental, 646 F.3d 420, 423-24 (7th Cir. 2011), so the Court will not analyze the
propriety of specific document requests here.
Though Gross maintains that WM High Yield v. O’Hanlon, 460 F. Supp. 2d 891 (S.D. Ind.
2006), is on point and indicates that the present subpoena should be quashed, that case is
distinguishable. There, the nonparty had a much more tangential connection to the litigation: the
nonparty investment advisor managed a funding corporation that was a former plaintiff in the
underlying securities fraud litigation, and the nonparty’s management of the former plaintiff began
after the purchase of certain bonds. Id. at 892, 896. Here, Gross is the former president and principal
shareholder in Ranburn, the current plaintiff, and held these roles at times relevant to this litigation.
Further, it is reasonable to conclude that an individual listed in an initial disclosure as likely
having discoverable information on a particular subject area relevant to the litigation will have
information relevant to the litigation. See Nw. Univ. v. City of Evanston, No. 00 C 7309, 2001 WL
743756 *2 (N.D. Ill. June 29, 2001) (finding, pursuant to a previous version of Fed. R. Civ. P. 26,
that “[w]hile listing [in intial disclosures] these two [nonparty] witnesses as likely to have
discoverable information is not a guarantee that they possess any of the information sought by [the
issuing party], it is reasonable to conclude that they could have some information that would likely
‘produce or lead to admissible evidence,’ and it is only fair to allow [the issuing party] to seek this
information through depositions.”). Gross has not shown that his knowledge and other discoverable

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information was connected only to the resolved claims. On the arguments presented, the Court
cannot find this information to be irrelevant to the pending claims.
The discovery sought is relevant and not overly broad in light of the pending issues and
representation of Gross’s knowledge in Ranburn’s initial disclosure. Though Gross is a non-party
to this litigation, State Auto has made efforts to ease the burden placed on Gross by agreeing that
duplicate documents need not be produced and by scheduling the deposition to occur close to
Gross’s home. Though Gross will undoubtedly bear some burden in complying with the subpoena,
Gross has not shown that the subpoena is unduly burdensome.
Based on the foregoing, the Court hereby DENIES Non-Party Elliot Gross’ Emergency
Motion to Quash or For Protective Order [DE 131]. Based on the agreement of State Auto, the Court
ORDERS that Gross shall not be required to produce documents that have previously been
produced in this litigation.
SO ORDERED this 24th day of August, 2018.
s/ Paul R. Cherry
MAGISTRATE JUDGE PAUL R. CHERRY
UNITED STATES DISTRICT COURT

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