Cedar Ridge, LLC v. Landmark American Insurance Company et al

Filing 72

ORDERED that 51 Motion for Protective Order to Limit Scope of Rule30(b)(6)Deposition and Accompanying Request for Production of Documents is GRANTED IN PART and DENIED IN PART as stated herein. Signed by Magistrate Judge Karen Wells Roby. (clm, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CEDAR RIDGE, LLC

CIVIL ACTION

VERSUS

NO:

LANDMARK AMERICAN INSURANCE
COMPANY, ET AL.

SECTION: "I" (4)

13-672

ORDER
Before the Court is a Motion for Protective Order to Limit Scope of Rule30(b)(6)
Deposition and Accompanying Request for Production of Documents (R. Doc. 51), filed by
Defendants, Landmark American Insurance Company, (“LAIC”) and RSUI Indemnity Company,
(“RSUI”), seeking a Protective Order to Limit the Scope of the Corporate Deposition scheduled to
take place on December 11, 2013. (R. Doc. 51-1, p. 1). Plaintiff, Cedar Ridge, LLC, (“Cedar Ridge”)
has opposed the motion. (R. Doc. 60). The motion was heard by oral argument on December 4,
2013. I.

Background

Cedar Ridge instituted the instant action for damages which were sustained to its commercial
property in the Riverlands Shopping Center in Laplace, Louisiana, on or around August 29, 2012,
from the aftermath of Hurricane Isaac. (R. Doc. 1). Landmark allegedly issued a commercial
property insurance policy, No. LHD387065, on these properties to Cedar Ridge. (R. Doc. 51-1, p.

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1).
Following Hurricane Isaac, Cedar Ridge hired Roof Tech Technologies, Inc., (“Roof Tech”)
to make temporary repairs to the shopping center’s roof. Id. On September 14, 2012, Cedar Ridge
retained Mr. Ray Gonzales of Property Damage Consultants, LLC, (“PDC”), to determine the repair
costs of the roof damage, as well as the cost of replacing the entire roof. (R. Doc. 17-2, p. 5; R. Doc.
51-1, p. 2).
Shortly thereafter, LAUI retained its own alleged expert, Engle Martin & Associates, Inc.,
(“Engle”) to adjust Cedar’s claim of loss at Riverlands. (R. Doc. 1, p. 3). On behalf of Engle,
Unified Building Services (“UBS”) and Unified Building Sciences & Engineering (“UBSE”)
inspected the roof and the temporary repairs by Roof Tech. (R. Doc. 17-2, p. 5; see also R. Doc. 511, p. 2). UBSE issued an investigative report that allegedly “opined the splits in the roof caused by
Hurricane Isaac were minimal and could have been repaired, but additional damage was caused by
Roof Tech’s installation of the tarps with nailing strips, screws and asphalt roof cement.” Id. at 5.
Furthermore, when UBSE returned in October 2012, LAUI alleges that UBSE observed a
“peel and stick” type material that was installed by Roof Tech had “multiple installation related
deficiencies throughout the temporary repair locations which allowed moisture intrusion.” (R. Doc.
51-1, p. 2). Based on this report and its purported policy exclusions, LAUI was advised that its
liability was approximately $378,000.00, which is less than the policy deductible. Id. Therefore,
LAUI argues that no payment is owed under the policy.
Cedar Ridge filed the instant action in federal court on April 10, 2013, alleging that it paid
$772,079.00 for roof repairs, and that it faced an additional $1,000,000 in repair costs, as well as
seeking damages against LAUI & RSUI for breach of contract, breach of the duty of good faith and

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fair dealing pursuant to La. R.S 22:1973, and for breach of its statutory duty owed under La. R.S
22:1892. Id. LAUI subsequently filed a third-party demand against Roof Tech on September 10,
2013. (R. Docs. 31, 36).
As to the instant motion, LAUI argues that on September 19, 2013, counsel for Cedar Ridge
served on it a draft of the 30(b)(6) deposition of Landmark with two attached exhibits allegedly
containing thirty-seven (37) areas of inquiry to be examined during the deposition. (R. Doc. 51-1,
p. 3). On October 14, 2013, LAUI contends that it discussed with counsel for Cedar Ridge areas of
the draft notice for which it objected. Id. LAUI represents that most of these areas were resolved,
however, several areas of inquiry remain in conflict as to the scope and breadth of the requests. Id.
Specifically, LAUI objects to the requests listed below on the basis of vagueness, overbreadth, and
irrelevancy to the instant action. As such LAUI filed the instant motion seeking this Court issue a
protective order limiting the scope of the 30(b)(6) deposition which has been noticed for December
11, 2013, in Atlanta, Georgia. Id.
II.

Standard of Review
Rule 26(b)(1) provides that “[p]arties may obtain discovery regarding any non-privileged

matter that is relevant to any party’s claim or defense.” Fed. R. Civ. P. 26(b)(1). The Rule specifies
that “[r]elevant information need not be admissible at the trial if the discovery appears reasonably
calculated to lead to the discovery of admissible evidence.” Id. The discovery rules are accorded
a broad and liberal treatment to achieve their purpose of adequately informing litigants in civil trials.
Herbert v. Lando, 441 U.S. 153, 176 (1979). Nevertheless, discovery does have “ultimate and
necessary boundaries.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) (quoting
Hickman v. Taylor, 329 U.S. 495, 507 (1947)). Furthermore, “it is well established that the scope

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of discovery is within the sound discretion of the trial court.” Coleman v. American Red Cross, 23
F.3d 1091, 1096 (6th Cir.1994).
Under Rule 26(b)(2)(C), discovery may be limited if: (1) the discovery sought is
unreasonably cumulative or duplicative, or is obtainable from another, more convenient, less
burdensome, or less expensive source; (2) the party seeking discovery has had ample opportunity
to obtain the discovery sought; or (3) the burden or expense of the proposed discovery outweighs
its likely benefit. Id. In assessing whether the burden of the discovery outweighs its benefit, a court
must consider: (1) the needs of the case; (2) the amount in controversy; (3) the parties’ resources;
(4) the importance of the issues at stake in the litigation; and (5) the importance of the proposed
discovery in resolving the issues. Id. at 26(b)(2)(C)(iii).
The decision to enter a protective order is within the Court’s discretion. Thomas v. Int’l Bus.
Mach., 48 F.3d 478, 482 (10th Cir. 1995). Federal Rule of Civil Procedure 26(c) governs the issuance
of protective orders. It provides in pertinent part:
A party or any person from whom discovery is sought may move for a protective
order in the court where the action is pending-or as an alternative on matters
relating to a deposition, in the court for the district where the deposition will be
taken. The motion must include a certification that the movant has in good faith
conferred or attempted to confer with other affected parties in an effort to resolve
the dispute without court action. The court may, for good cause, issue an order
to protect a party or person from annoyance, embarrassment, oppression, or
undue burden or expense.

Fed.R.Civ.P. 26(c)(1). Rule 26(c), however, contains a requirement that good cause be shown to
support the issuance of a protective order, providing that “the burden is upon the movant to show
the necessity of its issuance, which contemplates a particular and specific demonstration of fact as
distinguished from stereotyped and conclusory statements.” In re Terra Int’l, 134 F.3d 302, 306

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(5th Cir.1998); see also Baggs v. Highland Towing, L.L.C.,No., No. 99-1318, 1999 U.S. Dist.
LEXIS 11450, at *6-7, 1999 WL 539459, at *2 (E.D. La. July 22, 1999) (Rule 26(c)(2) orders may
be issued only when the moving party makes “a particular and specific demonstration of fact as
distinguished from stereotyped and conclusory statements.”).
III.

Analysis
During oral argument on the underlying motion, the Court struck “exhibit B” of the notice

of deposition as unwieldy and entirely too broad and cumbersome for the Defendants’ to comply
with. See R. Doc. 51-2, p. 10-11. As such, the remainder of the Court’s analysis focuses on the
topical areas of “exhibit A” of the notice of deposition for which LAUI objected.
LAUI argues in support of its motion for protective order that the following areas of inquiry
(“AOI”) are objected to:
AOI 9:

The method utilized to estimate or calculate the damages and losses
(including repair costs) claimed byor paid to Louisiana residents who
made Isaac-related property damage claims. If any computer
software was utilized in estimating or calcuating any such claims, the
name, version and developer/manufacturer of each such software
(including changes of versions from time to time).

AOI 10:

With respect . . . to software referenced above. . . the method by
which its price data base (reflecting repair costs) was established and
updated from time to time, the guidelines, protocols and or efforts
established or undertaken . . .”

LAUI argues that these two areas bear no relevance whatsoever to the allegations made by
Cedar Ridge in this matter as Cedar Ridge has not alleged that damages were improperly calculated,
faulty or out of date, as part of its complaint. (R. Doc. 51-1, p. 6).
In opposition, Cedar Ridge argues that it may depose LAUI about “any area” that be relevant
to or reasonably calculated to lead to the discovery of relevant evidence. (R. Doc. 60, p. 4). Cedar
Ridge argues that these two areas of inquiry cover methods used to calculate damages relative to

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Hurricane Isaac claims, and the software used to calculate those damages. Id. at 5. Cedar Ridge also
argues that because LAUI has received in excess of $1,000,000, in receipts it paid in roof repair,
Cedar Ridge believes that this information is relevant, as LAUI contends that the damages to the roof
are only $378,000, and therefore under the policy limits. (R. Doc. 60, p. 5-6).
During oral argument, the Court found that as stated, areas of inquiry (“AOI”) Nos. 9 and
10 posed fair questions that may be asked regarding insurance claims. Therefore, the Court overruled
LAUI’s objection in part. However, the Court found that the scope of these AOI’s were overbroad
and not narrowly tailored, as the request seemed to seek information regarding both residential and
commercial claims, even though this action pertains only to a commercial claim. As such, the Court
finds that LAUI’s objections are sustained in part, and limits these AOI’s to only commercial claims
which occurred after Hurricane Isaac.
AOI 11:

All training routinely provided to (or undertaken at your request by) adjusters
who performed services on your behalf in connection with Hurricane Isaac,
specifically including in your response any training such persons received
with respect to any adjusting software referred to in your responses to either
of the two preceding interrogatories.

LAUI argues that this area is over broad as it seeks testimony and documents related to the
training of all adjusters performing services during the storm and includes the training related to
adjusting software, which has not been alleged in Cedar Ridge’s complaint. (R. Doc. 51-1, p. 7).
In opposition, Cedar Ridge addresses No. 11 with Nos. 23, 33, and 34. (R. Doc. 60, p. 6).
Specifically, it argues that LAUI represents that it made efforts to process Cedar Ridge’s claim by
hiring Engle Martin & Associates, an independent adjuster; and UBSE, an independent engineering
firm. Because it has sued LAUI for bad faith adjustment, Cedar Ridge contends that it must prove
the “arbitrariness of or absence of probable cause for [LAUI’s] failure to make payment on the
claim.” Id. at 7. Therefore Cedar Ridge argues that to the extent LAUI seeks “to attribute any

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actions, mistakes or errors to its independent adjusters and vice versa, Cedar Ridge is conduct
discovery to determine Landmark’s training (AOI 11), the contents of its claims handling manuals
(AOI 23), and the nature and content of written and oral communications made directly to its
adjusters working specifically on Hurricane Isaac claims (AOI 33, 34).” Id.
Cedar Ridge also argues that LAUI’s adjusters previously evaluated its loss at $1.5 million”
dollars, but then later determined the covered loss was less than $378,000, therefore there is a
disconnect between the adjusters and LAUI officials. As such, Cedar Ridge argues that whether or
not LAUI “gave any directives to their adjusters, promulgated any best practices or customs relative
to adjustment, or furnished any training to its adjusters,” is probative to its claim of bad faith against
LAUI for its adjuster overruling his initial findings. Id.
During oral argument, counsel for LAUI stated that an outside adjuster did not make the
estimate here, and any questions regarding the training, background and experience can be delved
into when the deposition of that adjuster / expert is taken. Therefore, the Court recommended that
AOI No. 11 be amended to keep with the facts and confines of this case. Specifically the Court stated
that AOI No. 11 should be amended to include training provided to staff or in-house adjusters for
Hurricane Isaac claims, and how their training compares or relates to outside adjusters who adjusted
Hurricane Isaac claims. Therefore, the objection to No. 11 is sustained and overruled in part.
AOI 12:

All other methods, in addition to the information provided in response to
inquiry No. 10, by which you established, updated, and communicated repair
costs to be used in calculating damage estimates for your insureds’
properties, and all guidelines, protocols, and/or efforts established or
undertaken by you to ensure that repair costs reflected current repair costs.

LAUI argues that because Cedar Ridge has alleged breach of contract, breach of duty and
bad faith pursuant to La. R.S. 22:1973 and La. R.S. 22:1892, and a violation of its obligations to pay
Cedar Ridge according to the insurance agreement, the current topic presents no evidentiary value

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in this matter whatsoever. (R. Doc. 51-1, p. 7).
Cedar Ridge argues that this area of inquiry directly relates to Nos. 9 and 10, which covers
the methods used and alternate methods of maintaining the accuracy of repair costs, in addition to
those covered in No. 10. Cedar Ridge argues that because LAUI has received in excess of
$1,000,000, in receipts from it’s costs paid in roof repair, it believes that this information is relevant,
as LAUI contends that the damages to the roof are only $378,000, and therefore under the policy
limits. (R. Doc. 60, p. 5-6).
During oral argument, the Court found that this topical area should be stricken in its entirety
from the notice of deposition, as it is not probative, nor would it produce information that is likely
to lead to the discovery of relevant evidence in this case.
AOI 15:

Every coverage form you utilized in Louisiana as of August 29, 2012, with
respect to commercial properties, and identify every coverage form for which
you sought or intended to seek approval for use in Louisiana as of that date.

LAUI objects to this inquiry on the area of inquiry and document production on the basis that
the coverage forms utilized for commercial properties are not relevant, nor reasonably calculated to
lead to admissible evidence as to Cedar Ridge’s claims for beach of contract or for bad faith
damages. (R. Doc. 51-1, p. 7). LAUI also argues that Cedar Ridge has not alleged that the insurance
coverage forms in its policy were not approved for Louisiana. Id. Therefore, this is irrelevant,
overbroad and burdensome to require LAUI to produce all of this information.
In opposition, Cedar Ridge argues that LAUI has raised the defense that tarps fastened to the
roof by Roof Tech caused the damages to its roof, which is an exclusion under its liability insurance
policy. (R. Doc. 60, p. 7-8). It contends that this AOI will permit Cedar Ridge to determine if LAUI
used any definitions expanding the term “repair” or limiting the term “mitigation” were used, or
attempted to be utilized, prior to Hurricane Isaac, which would help foster its bad faith and breach

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of contract arguments. Id.
During oral argument, the Court found that this topical area should be stricken in its entirety
from the notice of deposition, as it is not relevant to the merits of this case.
AOI 21:

Any legal opinions from either in house counsel or outside counsel regarding
claims asserted as a result of Hurricane Isaac, and whether any of these
opinions were used or rejected in formulating general policy or any specific
policy regarding the Riverlands claim. (This area of inquiry will be limited
to non-privileged opinions).

LAUI argues that this area is vague, overbroad, unclear and unduly burdensome as it fails
to define what would be considered “non-privileged.” (R. Doc. 51-1, p. 8). LAUI argues that any
legal opinions from either its in house counsel or outside counsel regarding Hurricane Isaac is
privileged and not discoverable.
In opposition, Cedar Ridge contends that it “seeks non-privileged opinions produced in
connection with Hurricane Isaac, and whether those opinions were utilized in shaping policy, and
provides by its own terms broad privilege limitations.” (R. Doc. 60, p. 8). Cedar Ridge argues that
it is entitled to depose LAUI on this area because it bears directly on Landmark’s bad faith defenses.
Id.
During oral argument, the Court struck this area of questioning because LAUI could not
point to a possible area that would not be subject to the attorney client privilege.
AOI 23:

Your claims handling manuals or guidelines, including additions, deletions
and other revisions from previous versions and any other materials used to
train claims handlers for use in handling of the kind at issue, including but
not limited to broad settlement policies or any changes of policy.

LAUI requests that the Court limit this AOI and document request to claims handling
manuals and guidelines relative to the Hurricane Isaac claims, as the request for what is stated above,
is unduly burdensome and overly broad.

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In opposition, Cedar Ridge addresses its opposition with No. 11, 33, and 34 as provided
above. (R. Doc. 60, p. 6); see supra, AOI 11.
During oral argument, the Court found that this topical area should be stricken in its entirety
from the notice of deposition, as it is not relevant to the merits of this case.
AOI 26:

Your document retention policy.

LAUI argues that the agreement between counsel during the October 14, 2013 discovery
conference was that this item would be limited to document retention in the claim for this loss. As
such, LAUI requests this AOI be limited as per the parties agreement. (R. Doc. 51-1, p. 8).
In opposition, Cedar Ridge represents to the Court that it has already advised LAUI of its
intent to ask only about retention on the instant file, but that LAUI should not be entitled to a
protective order from “an area of inquiry as innocuous as AOI 26. For example, should any other
document become known through Landmark’s deposition, Cedar Ridge should not be precluded
from sending discovery to Landmark inquiring into their document retention policy beyond the claim
file.” Id.
During oral argument, the Court found struck this area noting that it is not relevant.
AOI 33:

The nature and content of any written communication disseminated to your
adjusters and others working on your behalf generally and working
specifically in connection with claims asserted as a result of Hurricane Isaac.
LAUI argues that the agreement between counsel during the October 14, 2013 discovery

conference was that this AOI would be limited to written communications to adjusters related to
policy procedures and method in connections with claims asserted as a result of Hurricane Isaac. As
such, LAUI requests this AOI be limited as per the parties agreement. (R. Doc. 51-1, p. 9).
In opposition, Cedar Ridge argues that this area of inquiry was addressed specifically in its
opposition to AOI 11. During oral argument, Cedar Ridge couched its objection as one based on

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overbreadth and that the topical area encompasses irrelevant information.
The Court amended this request and AOI 34 below, to include only instructions given to
adjusters regarding the adjustments of Hurricane Isaac claims, which may include both verbal and/or
written communications.
AOI 34:

The nature and content of any oral communication disseminated to your
adjusters and others working on your behalf generally and working
specifically in connection with claims asserted as a result of Hurricane Isaac.

LAUI argues that the agreement between counsel during the October 14, 2013 discovery
conference was that this AOI would be limited to written communications to adjusters related to
policy procedures and method in connections with claims asserted as a result of Hurricane Isaac. As
such LAUI requests that this AOI be limited as per the parties agreement. (R. Doc. 51-1, p. 9).
The Court addressed this argument in its ruling on AOI 33.
AOI 35:

All litigation matters in which a corporate representative has testified by
deposition or at trial during past 5 years as a corporate representative for you.

LAUI objects to this AOI on the grounds that prior cases in which a corporate representative
has testified bears no relevance to the present matter, and requiring it to produce all documents
associated with any 30(b)(6) deposition taken in the past five years in unduly burdensome and
overbroad. (R. Doc. 51-1, p. 9).
Cedar Ridge contends that it has already advised LAUI that it did not seek production of
documents applicable to this area of inquiry, but that it reserves its rights to seek transcripts of other
corporate depositions. Specifically, Cedar Ridge argues that it is entitled to conduct this discovery
because an alternative or inconsistent position taken by Landmark in other litigation is direct
evidence of arbitrariness, capriciousness, and absence of probable cause in their handling of the

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instant claim. (R. Doc. 60).
During oral argument, the Court found that this topical area should be stricken in its entirety
from the notice of deposition, as it is irrelevant and overbroad.
IV.

Conclusion:
IT IS ORDERED that the Motion for Protective Order to Limit Scope of Rule30(b)(6)

Deposition and Accompanying Request for Production of Documents (R. Doc. 51), filed by
Defendants, Landmark American Insurance Company, (“LAIC”) and RSUI Indemnity Company
(“RSUI”) be GRANTED IN PART and DENIED IN PART.
IT IS GRANTED as to Exhibit B in its entirety.
IT IS GRANTED as to Exhibit A as to area of inquiry numbers: 12, 15, 21, 23, 26, and 35.
IT IS GRANTED IN PART as to Exhibit A, area of inquiry numbers: 9, 10, 11, 33, 34; as
set forth in detail above.
IT IS DENIED IN PART as to Exhibit A, area of inquiry numbers: 9, 10, 11, 33 and 34 as
stated in the notice of deposition that was propounded on Defendants. Plaintiff is hereby ordered to
amend the notice to effectuate the limitations imposed by this order to areas of inquiry numbers 9,
10, 11, 33, and 34 as set forth in full detail above.
New Orleans, Louisiana, this 6th day of December 2013.

______________________________________________
KAREN WELLS ROBY
UNITED STATES MAGISTRATE JUDGE

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