McBride et al v. Acuity, A Mutual Insurance Company

Filing 21

MEMORANDUM OPINION & ORDER denying 15 Motion to Compel. Signed by Chief Judge Thomas B. Russell on 9/21/2011. cc:counsel (KJA)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
PADUCAH DIVISION
CASE NO. 5:10-CV-173
DUSTY MCBRIDE and
MCBRIDE CONSTRUCTION, LLC

PLAINTIFF

V.
ACUITY, A MUTUAL INSURANCE
COMPANY

DEFENDANT

MEMORANDUM OPINION AND ORDER
This matter is before the Court upon Plaintiffs’ Motion to Compel Discovery and To
Require Defendant to Produce a Privilege Log (DN 15). Defendant has responded (DN 18).
Plaintiffs have replied (DN 19). For the foregoing reasons, Plaintiffs’ motion is DENIED.
BACKGROUND
Plaintiffs were insured under a Commercial General Liability (CGL) policy issued by
Defendant Acuity Insurance Company (“Acuity”). Plaintiffs were sued in McCracken County
Circuit Court by Gary and Holly Holder, purchasers of a home constructed by Plaintiffs. The
law suit alleged property damage as a result of a footer/foundation allegedly installed on
expansive soils causing the home to experience differential settlement. The Plaintiffs then
sought coverage and a defense from Acuity. Acuity notified counsel for Plaintiffs that Acuity
was denying coverage and a defense. Plaintiffs then filed this declaratory judgment action
against Acuity seeking a declaration of rights and duties under the terms of the CGL policy.
Plaintiffs’ first set of interrogatories and requests for production of documents was served
on Acuity on May 4, 2011. Acuity responded on June 21, 2011. In the requests for production
of documents, Plaintiffs sought discovery of (1) any document which “addresses, discusses, or

relates to the claims;” (2) the entire claims file and any claims investigation file or any
documents “regarding plaintiffs’ request for coverage and defendant’s denial of coverage for the
claims asserted by the Holders;” and (3) any correspondence or communications related to
plaintiff’s request for coverage and defendant’s denial of coverage. Defendant’s Answers to
Plaintiffs’ First Set of Interrogatories and Requests for Production of Documents, DN 15-2,
Requests 4, 6-7. In response, Acuity claimed that such materials were protected by attorneyclient privilege and/or the work product doctrine. Acuity did provide a certified copy of an
insurance policy and two court decisions apparently supporting its decision to deny coverage.
DISCUSSION
Plaintiffs claim they are entitled to materials that are in the possession, control or custody of
Acuity that relate to its internal interpretation and analysis of the policy, its claims investigation,
and its denial of coverage that pre-dates the actual denial. Defendants have asserted that
discovery related to why Acuity made the decision to deny coverage is irrelevant and immaterial.
Defendant also asserts that such documents are privileged under the attorney-client privilege and
the work product doctrine.
Determining “the scope of discovery is within the sound discretion of the trial court.”
Chrysler Corp. v. Fedders Corp., 643 F.2d 1229, 1240 (6th Cir. 1981). Under Rule 37(a)(1), “a
party may move for an order compelling disclosure or discovery.” Fed. R. Civ. Pro. 37(a)(1). In
doing so, “the motion 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.” Id. Motions to compel discovery responses are authorized
where a party fails to provide proper responses to interrogatories under Rule 33 or requests for
production of documents under Rule 34. Fed. R. Civ. Pro. 37(a)(3)(B)(iii), (iv).

Discovery requests are not limitless. “Although a plaintiff should not be denied access to
information necessary to establish her claim, neither may a plaintiff be permitted ‘to go fishing
and a trial court retains discretion to determine that a discovery request is too broad and
oppressive.’” Surles v. Greyhound Lines, Inc., 474 F.3d 288, 305 (6th Cir. 2007) (quoting
Marshall v. Westinghouse Elec. Corp., 576 F.2d 588, 592 (5th Cir. 1978)). “Parties may obtain
discovery regarding any non-privileged matter that is relevant to any party’s claim or defense . . .
.” Fed. R. Civ. Pro. 26(b)(1). Relevant information does not need to be admissible so long as
the “discovery appears reasonably calculated to lead to the discovery of admissible evidence.”
Id.
In this declaratory judgment action, the only issue is that of the availability of coverage under
the CGL policy. This is a purely legal question which may be settled by dispositive motion
without resort to extrinsic evidence. To make this determination, the Court must compare the
allegations in the Holders’ underlying complaint against the language contained in the CGL
policy. The evidence sought by Plaintiffs relating to Acuity’s internal interpretation and
analysis of the policy, the claims investigation, and the communications and documents relating
to the request and denial of coverage have no bearing on this Court’s determination of whether
coverage exists under the language of the CGL policy. Because the Court agrees with
Defendant’s relevancy objections, it is not necessary to rule on any privilege objections at this
time.
CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED that Plaintiffs’ Motion to Compel
(DN 15) is DENIED.

September 21, 2011