Barcus v. The Phoenix Insurance Co.
Filing
43
MEMORANDUM AND ORDER granting in part and denying in part 24 Motion to Compel. Signed by Magistrate Judge Kenneth G. Gale on 4/16/18. (df)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
WILLIAM LANE BARCUS,
)
)
Plaintiff,
)
)
v.
)
)
THE PHOENIX INSURANCE CO.,
)
)
Defendant.
)
____________________________________)
Case No.: 17-2492-JWL-KGG
MEMORANDUM & ORDER ON MOTION TO COMPEL
In the present action, which was removed from the District Court of Miami
County, Kansas, Plaintiff seeks the proceeds of uninsured motorist coverage from
Defendant insurer. (Doc. 1-1.) Plaintiff also seeks attorney fees pursuant to
K.S.A. §40-256.
Now before the Court is Plaintiff’s Motion to Compel, which primarily
addresses the “discoverability of insurance files and the opinions of the experts the
Defendant consulted before its denial.” (Doc. 24, at 1.) The discovery requests at
issue will be discussed and addressed individually herein. Having reviewed the
submissions of the parties, Plaintiff’s motion is GRANTED in part and DENIED
in part as more fully set forth below.
FACTUAL BACKGROUND
1
The underlying automobile accident occurred on May 30, 2013. Plaintiff
alleges he suffered a brain injury as a result of the accident and claims damages in
excess of $2,000,000. He recovered the policy limits of $100,000 from the
motorist. Thereafter, Plaintiff submitted a demand letter to Defendant on April 30,
2017. (Doc. 24-2.) A subsequent demand letter was submitted on July 10, 2017,
for the available limits of Defendant’s uninsured motorist policy. (Id.)
During the claims process, Defendant contends that “Plaintiff refused to
provide [it] with the information it needed to fully evaluate the nature and extent of
his damages.” (Doc. 27, at 1.) For instance, according to Defendant, Plaintiff
“refused to provide authorizations that would allow Defendant to collect pre- and
post-incident medical records, and also refused to produce Plaintiff for independent
medical examinations by Defendant’s consulting experts.” (Id.)
Defendant refers to the report of a treating physician whose neuropsychological testing of Plaintiff
indicated variable effort during the evaluation. Moreover,
cognitive testing results do not fit typical patterns seen
with traumatic brain injury (e.g., Average Range story
recall with Extremely Low Range list recall), and do not
fit the expected pattern of recovery for concussion/mild
traumatic brain injury, from which full cognitive
recovery can be expected at this point. Though the
reason for inconsistent effort is not clear, reported
depressive symptoms do suggest a possible intervention
point.
2
(Doc. 27-1.) Defendant denied the claim by letter dated July 26, 2017. (Doc. 242.)
Plaintiff’s motion initially encompassed Defendant’s responses to
Interrogatories Nos. 4, 6, 10, 11, 12, 19 (second, misnumbered) 19 and Requests
for Production Nos. 1, 2, 10, 11, and 13. (See generally Doc. 24.) Since the filing
of the present motion, the parties have resolved their differences regarding
Interrogatories Nos. 4, 6, and 11and Requests for Production 11 and 13. This
Order will thus address Interrogatories Nos. 10, 12, 19, 19, and Requests for
Production Nos. 1, 2, and 10.
ANALYSIS
I.
Legal Standards.
Fed.R.Civ.P. 26(b) states that
[p]arties 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 state 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.
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As such, the requested information must be nonprivileged, relevant, and
proportional to the needs of the case to be discoverable. Holick v. Burkhart, No.
16-1188-JTM-KGG, 2018 WL 372440, at *2 (D. Kan. Jan. 11, 2018).
II.
Privilege Log.
Plaintiff argues that “Defendant did not produce a privilege log in the
original responses and did not create one after it was discussed during the
December 21, 2017 ‘meet and confer’ phone call.” (Doc. 24, at 6.) Although
Defendant should have included a privilege log with its original discovery
responses, the parties seemed to have resolved this issue during their meet and
confer session.
Defendant responds that it provided the requested privilege log upon
returning to the office after the New Year. (Doc. 27, at 4; Doc. 27-4.) Defendant
subsequently provided a revised privilege log within a day after Plaintiff
complained the log did not include Bates numbers. (Doc. 27, at 4; Doc. 27-5.)
Considering Plaintiff’s motion was filed less than a week after the meet and confer
session – not to mention that it was the week including the Christmas holiday – the
Court is satisfied that Defendant has complied with its duties as to the provision of
a privilege log. This portion of Plaintiff’s motion is DENIED.
III.
General Objections.
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Plaintiff complains of Defendant’s inclusion of the language “to the extent”
to qualify several of its objections. (Doc. 24, at 9.) Plaintiff argues that this
constitutes a “general objection” which Courts in this District have routinely
overruled. (Id.) Plaintiff’s argument is misplaced.
Plaintiff is correct that Courts in this District find general objections to be
“worthless and improper.” Martin K. Eby Const. Co., Inc. v. OneBeacon Ins.
Co., 08–1250–MLB–KGG, 2012 WL 1080801 (D. Kan. March 29, 2012) (citing
Swackhammer v. Sprint Corp. PCS, 225 F.R.D. 658, 660–61 (D. Kan. 2004)).
The cases addressing “general objections,” however, deal with the situation in
which a party includes one or more overreaching objections, typically enumerated
as an introduction to the discovery responses in their entirety. The party indicates
that the general objections are to be applied to any of the specific discovery
requests included in the set of discovery responses “to the extent” the objection is
applicable to such discovery request. See Camp v. Gregory, No. 12-2083-EMFKGG, 2013 WL 656894, at *1 (D. Kan. Feb. 22, 2013) (stating that the Court
“surmises it is supposed to theoretically apply” the general objection(s) to each
discovery request).
‘‘Such objections are considered mere hypothetical or
contingent possibilities, where the objecting party makes
no meaningful effort to show the application of any such
theoretical objection to any [specific] request for
discovery.’’ At worst, these types of objections leave the
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requesting party ‘unsure whether or not the objection
correlates to withheld information.’
Everlast World’s Boxing Headquarters Corp. v. Ringside, Inc., No. 13-2150-CMKGG, 2014 WL 2815515, at *2-3 (D. Kan. June 23, 2014) (internal citations
omitted).
Defendant’s use of the “to the extent” language does, however, constitute an
improper conditional objection. As such, the Court discusses this language in the
following section of this Order.
IV.
Conditional Objections.
Plaintiff also complains of Defendant’s use of “conditional objections.”
This Court has also specifically indicated its disapproval of “conditional”
discovery responses, such as occurs when “a party asserts objections, but then
provides a response ‘subject to’ or ‘without waiving’ the stated objections.”
Westlake v. BMO Harris Bank N.A., 2014 WL 1012669, *3 (D. Kan. March 17,
2014) (internal citation omitted). This Court has held that such conditional
responses are “invalid,” “unsustainable,” and “violate common sense.” Everlast
World's Boxing Headquarters Corp. v. Ringside, Inc., No. 13-2150-CM-KGG,
2014 WL 2815515, at *3 (D. Kan. June 23, 2014) (internal citation omitted).
The Court GRANTS this portion of Plaintiff’s motion and overrules
Defendant’s use of conditional objections such as “without waiving,” “subject to,”
and/or “to the extent.” This portion of Plaintiff’s motion does not enumerate or
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discuss specific discovery requests to which Defendant has raised such conditional
objections. The Court will thus apply this ruling to the specific discovery requests
addressed in Plaintiff’s motion, discussed infra, where pertinent. In Everlast,
supra, the undersigned Magistrate Judge directed the responding party to provide
supplemental responses that removed the conditional responses. 2014 WL
2815515, at *3; see also Meyer v. United States of America, No. 16-2411-KGG,
2017 WL 735750 (D. Kan. Feb. 24, 2007). The same is ordered of Defendant
herein.
V.
Application of Attorney-Client Privilege and Work Product Doctrine.
This Court has recognized that there is a rebuttable presumption “‘that
neither attorney work product nor attorney-client privilege protects an insurer’s
investigatory file on an insured’s claim from discovery before a final decision is
made’ as to that claim.” AKH Company, Inc. v. Universal Underwriters Ins. Co.,
300 F.R.D. 684, 688-89 (D. Kan. 2014) (quoting Lindley v. Life Investors Ins. Co.
of America, 267 F.R.D. 382, 399 (N.D.Okla.2010)).
Fed.R.Civ.P. 26(b)(3) requires that a document or thing
produced or used by an insurer to evaluate an insured's
claim in order to arrive at a claims decision in the
ordinary and regular course of business is not work
product regardless of the fact that it was produced after
litigation was reasonably anticipated. It is presumed that
a document or thing prepared before a final decision was
reached on an insured's claim, and which constitutes part
of the factual inquiry into or evaluation of that claim, was
prepared in the ordinary and routine course of the
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insurer’s business of claim determination and is not work
product. Likewise, anticipation of litigation is presumed
unreasonable under the Rule before a final decision is
reached on the claim. The converse, of course, is
presumed for documents produced after claims denial.
To overcome these presumptions, the insurer must
demonstrate, by specific evidentiary proof of objective
facts, that a reasonable anticipation of litigation existed
when the document was produced, and that the document
was prepared and used solely to prepare for that
litigation, and not to arrive at a (or buttress a tentative)
claim decision.
Id. (internal citations omitted). “‘[T]he question of whether insurer and adjuster
documents were created in anticipation of litigation depends on whether the party
seeking protection can point to a definite shift made by the insurer or adjuster from
acting in its ordinary course of business to acting in anticipation of litigation.’” Id.,
at 698 (quoting U.S. Fire Ins. Co. v. Bunge North America, Inc., 247 F.R.D. 656,
659 (D.Kan.2007).
Plaintiff argues that “[c]learly, no matter when the deadline to respond might
be, a review by someone with expertise in traumatic brain injury in Travelers or for
Travelers would have been part of the normal claims process.” (Doc. 24, at 12.)
Plaintiff continues that “litigation could not have reasonably been anticipated until
the July 26, 2017[,] denial letter was written.” (Id., at 13.) As such, the
responsibility of these doctors at the time their opinions were initially set forth was
not to “assist in anticipated or ongoing litigation, but to assist the claims
department in evaluating the claim . . . .” (Id.) Plaintiff argues that these opinions
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“go to the heart of whether the Defendant denied the claim ‘without just cause or
excuse’ . . . .” Further, Plaintiff contends that it does not seek to depose the
doctors before expert designations, but that having the information they gave the
claims department “is the only way the Plaintiff can conduct effective depositions
of the claims adjustors.” (Doc. 24, at 14.)
Defendant responds that a clearly delineated shift occurred when Plaintiff
made the demand.
Defendant had been working on Plaintiff’s claim
since the accident in 2013. All documents contained in
the claim file related to Plaintiff’s claim from the date of
the accident through May 12, 2017 were produced,
without redaction. (Entries related to damage claims of
others included in the incident were redacted for
confidentiality reasons; at this time Plaintiff has not
raised an issue as to the discoverability of those entries).
After receiving the policy limit demand from
Plaintiff’s counsel on or about May 1, 2017, the adjustor
handling the case, Geoff Perkins, shifted Defendant’s
investigation in anticipation of likely litigation and
immediately retained counsel to provide legal advice in
connection therewith.
In this case, Plaintiff is seeking the production of
documents from the claim file after May 12th. After
May 12, 2017, however, the investigation of the nature
and extent of Plaintiff’s injuries was conducted by
counsel, and at the direction of counsel. It was
Defendant’s attorneys who contacted the consulting
physicians, and the attorneys who obtained their opinions
related to the records. It was the attorneys who
communicated this information to Travelers. The
Defendant does not dispute that the Plaintiff may
discover from Travelers what information they obtained
from the physicians that was considered in the decision to
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deny Plaintiff’s claims. The problem is that the Plaintiff
is seeking to obtain that information by looking at
protected communications between Travelers and its
defense counsel, and notes that Travelers adjustors made
to the file which summarized those conversations.
(Doc. 27, at 5-6.)
Defendant continues that “the attorney-client communication privilege
protects the bulk of the communications redacted from the claim file and that the
work product doctrine protects the remainder.” (Id., at 6.) Defendant
acknowledges that the consulting experts did not prepare written reports, thus any
such communications are privileged in Defendant’s opinion. (Id.) As such,
Defendant approached Plaintiff with a compromise “wherein the attorney-client
communications and work-product documents would be produced in part, provided
there was an agreement that doing so would not waive privilege for other
communications, opinions conveyed, etc. during the investigation conducted at the
direction of counsel.” (Id., at 7.) According to Defendant, “Plaintiff indicated a
willingness to accept this with respect to certain, but not all at issue
communications.” (Id.) Defendant argues that “[w]ithout this compromise, there
can be no production.” (Id.)
Plaintiff acknowledges that “the usual line to demarcate the work product
privilege in insurance claim files is the denial of the claim. Courts have routinely
applied a rebuttable presumption ‘that neither attorney work product nor attorney10
client privilege protects an insurer's investigatory file on an insured’s claim from
discovery before a final decision is made’ as to that claim.” (Doc. 28, at 5 (citing
Lindley v. Life Investors Ins. Co. of America, 267 F.R.D. 382, 399 (N.D. Okla.
2010)).
The Court notes Defendant’s contention that four years had passed from the
date of the accident until the UIM demand letter was sent. Clearly this was not a
situation in which an insurer is attempting to withhold from production the routine
claims work of its employees that occurred within a few days, weeks, or even
months of a claim being filed. That stated, the Court has some concern as to how
an insurer in this situation would be able to “shift” from its routine, investigatory
work to “anticipation of litigation” mode until after medical reviews regarding
Plaintiff were completed.
The Court finds, however, that Plaintiff’s demand of the UIM policy limits
on April 30, 2017, taken in the context of the prior results of the
neuropsychological testing conducted by Plaintiff’s treating physician (which
occurred in June 2015 and discussed supra; Doc. 27-1) would have been sufficient
to result in a shift by Defendant from routine claims handling to reasonably
anticipating litigation under these fact-specific circumstances. As such,
Defendant’s attorney-client privilege and work product objections regarding the
documents and communications generated after May 12, 2017, are sustained.
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VI.
Specific Discovery Requests.
A.
Interrogatories Nos. 10, 12, 19 and (misnumbered 19).
Interrogatory No. 10 asks if Defendant “contend[s] the Plaintiff’s claim for
loss of future earning capacity . . . was not caused by the accident on May 30,
2013,” and, if so, to “state each and every reason for such contention.” (Doc. 24-3,
at 4.) Interrogatory No. 12 requests that Defendant state the reasons it believes it is
not liable for any of the damage discussed in Plaintiff’s July 10, 2017, demand
letter. (Id.) Interrogatory No. 19 asks Defendant to “identify any symptoms that
contributed to” Defendant’s belief, if any, that “it is more likely than not the
Plaintiff sustained any type of injury” from the underlying accident. (Doc. 24-3, at
6. The second (misnumbered) Interrogatory No. 19 ask Defendant to identify
whether it believes “Plaintiff suffered from post-concussive syndrome before July
26, 2017” and, if so, to state the causes therefore and reasons for said belief. (Id.,
at 7.)
Defendant objects that these interrogatories are “premature” because they
seek “the content of expert opinions.” (Doc. 27, at 9-12; Doc. 24-3, at 4-7.)
Defendant stated it would disclose its experts and their opinions in conjunction
with the Court’s Scheduling Order. (Doc. 24-3, at 4-7.) In response to
Interrogatory No. 12, after stating its conditional objections (which were overruled,
supra), Defendant responded that its “investigation indicated the Plaintiff’s alleged
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injuries and related damages are not of the nature and extent alleged in connection
with the claim; and/or were not causally connected to the accident.” (Id., at 5.) In
response to Interrogatories Nos. 19 and (misnumbered) 19, Defendant refers
Plaintiff to his medical records “[t]o the extent [his] treating physicians rendered
opinions” on this issue. (Id., at 6-7.)
Plaintiff argues that it is “simply seeking to know what injury, if any,
Defendant thought Plaintiff sustained (and post concussive syndrome in
particular.)” (Doc. 24, at 17.) Plaintiff continues that he is “asking what Travelers
believes, not the doctors it used to review the records. Since it was the adjustor
who denied the claim on the basis of lack of medical causation, these answers are
needed for the depositions of the adjustors and directly relate to whether the
Defendant denied the claim without just cause or excuse.” (Id.)
Defendant responds that “given this contention will be supported by expert
opinion testimony, the Defendant respectfully requests that it not be required to
respond until its expert disclosures and reports are due pursuant to this Court’s
scheduling order.” (Doc. 27, at 11, 12.) Defendant continues that
Plaintiff seems to argue that this Interrogatory is seeking
discovery relevant to the reason for denial, but it is not. It
is seeking contentions fundamental to the breach of
contract action. As noted above, if the Plaintiff seeks
information regarding the basis for the denial, it should
request that information rather than making general
inquiries which apply pre- and post-suit, responses to
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which may confuse the jury as the basis for denial and
whether that denial was based on just cause or
excuse is a separate and distinct issue from the proof of
Plaintiff’s damages, including causation and the nature
and extent thereof.
(Id., at 11-12, 12-13.)
The Court is not persuaded by Defendant’s argument. These interrogatories
seek factual information. While the information may be “supported” by expert
testimony, the underlying factual basis for Defendant’s belief that Plaintiff did or
did not sustain injury in the accident and/or suffered post-concussive syndrome
prior to the denial of the claim is discoverable. This is particularly true when
Defendant would have had to have considered these issues in the process of
shifting from its routine claims work to “anticipation of litigation” mode.
Defendant’s discovery responses also state that “to the extent Plaintiff’s
treating physicians rendered opinions in this regard, see the Plaintiff’s medical
records produced to the Defendant by the Plaintiff during the claims period.”
(Doc. 24-3, at 6, 7.) As discussed supra, this conditional response is improper.
Defendant is instructed to provide supplemental responses to these two
interrogatories identifying the specific portions of Plaintiff’s medical records, by
Bates number, that include relevant opinions rendered by Plaintiff’s treating
physicians. This portion of Plaintiff’s motion is GRANTED.
B.
Request for Production No. 1.
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This discovery request seeks all documents, including claims manuals and
electronically stored information, “used or referred to in the handling of personal
injury claims and/or underinsured claims, and which were in effect between
January 1, 2016 and July 26, 2017.” (Doc. 24, at 17.) Plaintiff has limited the
temporal scope of the request to “most (but not all) of the time Defendant was on
notice of the UIM claim to the date of denial.” (Id., at 18.)
Defendant responded with a laundry list of objections, including that the
request was facially overly broad, sought irrelevant information, and implicated the
attorney-client privilege and work product doctrine. (Doc. 24-4, at 1.) Defendant
continues that discovery related to the underlying claim, “including the basis for
the claims denial is relevant and discoverable, but discovery related to claims
policies, procedures, manuals, etc. such as the group of documents requested by
Request No. 1 is not reasonably calculated to lead to the discovery of admissible
evidence herein.”1 (Id., at 1.) Defendant argues that it “is not relying on its
policies or procedures as providing a basis for its denial.” (Doc. 27, at 14.)
The Court is sympathetic to Defendant’s objections as to the breadth of the
request. Plaintiff has not established why all documents used or referred to in the
handling of any personal injury claims and/or underinsured claims are relevant.
Court notes that the “reasonably calculated” standard has been replaced by the
“proportional to the needs of the case” standard. See Fed.R.Civ.P. 26(b).
1
The
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That stated, the Court finds that any documents used or referred to by Defendant –
or applicable to the handling of Plaintiff’s specific, underlying claim (whether or
not ultimately used or referred to by Defendant) – are relevant and discoverable.
Defendant is thus directed to provide Plaintiff will any and all documents
(including but not limited to the formats enumerated in Plaintiff’s request) that
were specifically used or referred to in the handling of the underlying claim at
issue as well as such documents that were in effect for handling uninsured motorist
claims generally from January 1, 2016 and July 26, 2017. This portion of
Plaintiff’s motion is GRANTED in part.
C.
Requests Nos. 2 and 10.
Request No. 2 seeks “all claims files, investigative files, computer files
underwriting files and emails (including case evaluations) regarding” the
underlying claim “and which were created before the filing of this suit.” (Doc. 244, at 2.) Request No. 10 asks for “all documents which relate to the evaluation or
interpretation of medical records and/or medical bills” for the underlying claim.
Defendant again responds with a litany of objections, including the attorneyclient privilege and work product doctrine, even though no privilege log was
provided. (Id.) Defendant also objects that the request seeks information related to
the injury claims made by non-parties, which implicates the confidential medical
information of these individuals. (Id.) Defendant argues that documents
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containing such information “have no relevance to Plaintiff’s claims herein.” (Id.)
Defendant also objects “to the extent the request seeks the underwriting files for
the subject policy.” (Id.) Defendant contends that such documents “are neither
relevant nor reasonably calculated to lead to the discovery of admissible
evidence.”2 (Id.)
In response to Request No. 2, after stating its conditional objections (which
were overruled, supra), Defendant indicates that it produced the claim file with its
Rule 26 disclosures. (Id., at 2.) In response to Request No. 10, after stating its
conditional objections (which were overruled, supra), Defendant indicates that
there are no responsive documents “other than those contained in the nonprivileged portion of the claims file, previously produced.” (Id., at 4.)
As discussed supra, these conditional responses, stating objections “to the
extent” the requests are seeking certain information, are improper. Defendant is
instructed to provide supplemental responses to these two requests removing these
objections and identifying any documents being withheld on the basis of privilege.3
the “reasonably calculated” standard has been replaced by the “proportional to
the needs of the case” standard. See Fed.R.Civ.P. 26(b).
3
Despite inclusion of the “to the extent” language, the Court agrees with Defendant’s
position that medical records constituting “documents related to the injury claims made
by persons involved in the subject incident other than the Plaintiff” are irrelevant and not
discoverable.
2
Again,
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Plaintiff argues that Defendant has not rebutted the presumption that
“neither attorney work product nor attorney-client privilege protects an insurer’s
investigatory file on an insured’s claim file form discovery ‘before a final decision
is made’ as to that claim.” (Doc. 24, at 19 (citation omitted).) As discussed above,
however, the Court does not agree with Plaintiff’s position. Defendant has
adequately explained when its work shifted from routine claims handling to the
“anticipation of litigation.” The documents were redacted by Defendant
accordingly. This portion of Plaintiff’s motion is thus GRANTED in part and
DENIED in part.
IT IS THEREFORE ORDERED that Plaintiff’s Motion to Compel (Doc.
24) is GRANTED in part and DENIED in part as more fully set forth above.
IT IS SO ORDERED.
Dated this 16th day of April, 2018, at Wichita, Kansas.
S/ KENNETH G. GALE
HON. KENNETH G. GALE
U.S. MAGISTRATE JUDGE
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