Smith v. Shelter Mutual Insurance Company
Filing
63
ORDER granting in part and denying in part 54 Motion to Compel Discovery and Sanctions. It is ordered that Shelter must provide supplemental responses to Interrogatory Nos. 1, 3, 5, 7, 8, 11, 12, 13, and Request for Production Nos. 1, 5, 6, 7, 8, 9 and 10, including any privilege log consistent with Rule 26(b)(5)(A) and Local Rule 26(c), on or before July 24, 2017. It is further ordered that the parties shall bear their own costs. Signed by Magistrate Judge Richard L. Bourgeois, Jr. on 7/13/17. (DCB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
BRADLEY W. SMITH
CIVIL ACTION
VERSUS
NO. 15-357-JJB-RLB
SHELTER MUTUAL INSURANCE CO.
ORDER
Before the Court is Plaintiff’s Reurged Motion to Compel Discovery and Sanctions (R.
Doc. 54) filed on June 1, 2017. The Motion is opposed. (R. Doc. 58). Plaintiff has filed a Reply.
(R. Doc. 61).
I.
Factual and Procedural History
This is an insurance action arising out of an automobile-pedestrian accident on August
13, 2001 involving Bradley W. Smith (“Smith” or “Plaintiff”) and Paul Babin (“Babin”). After
the accident, Smith filed a state court lawsuit against Babin and his insurance company, Shelter
Mutual Insurance Company (“Shelter” or “Defendant”). After conducting a bifurcated trial, the
trial judge dismissed with prejudice Babin’s cross-claims against Shelter for alleged bad faith in
refusing to provide Babin with a legal defense, misrepresenting the coverage under the Shelter
policy, and failure to indemnify Babin. Thereafter, Babin sought review of the trial court’s
finding that Shelter did not have a duty to defend Babin. The Louisiana First Circuit Court of
Appeal affirmed. Babin also sought review of the trial court’s dismissal of his claims of
misrepresentation and for failure to indemnify. The Louisiana First Circuit held the issue was
not properly before the court on appeal because Shelter had admitted coverage and paid its
policy limits after the jury trial portion of the bifurcated trial.
On June 3, 2015, Smith filed the instant lawsuit, under an assignment of rights from
Babin, seeking to collect from Shelter the excess amount of the state trial court judgment beyond
the policy liability amount of $10,000 per person, and for bad faith damages pursuant to La. R.S.
22:1892 and La. R.S. 22:1973. (R. Doc. 1).
On June 24, 2016, Smith served his First Set of Interrogatories and requests for
Production of Documents and Things on Shelter. (R. Doc. 54-3).
On July 1, 2016, Shelter filed a Motion for Summary Judgment, arguing that Smith’s
claims were barred by res judicata. (R. Doc. 20).
On August 19, 2016, the district judge granted in part and denied in part Shelter’s Motion
for Summary Judgment. (R. Doc. 27). In short, the district judge held that Smith’s claims for
bad faith damages were barred by res judicata, but allowed Smith to proceed on his excess
judgment liability claims. Both parties appealed this ruling to the Fifth Circuit Court of Appeals.
(R. Doc. 36; R. Doc. 39).
On August 25, 2016, Shelter filed a second Motion for Summary Judgment, arguing that
Smith’s excess judgment liability claims should also be dismissed. (R. Doc. 28). That same day,
Shelter provided its responses to Smith’s outstanding discovery requests. (R. Doc. 54-5).
On September 14, 2016, Smith opposed Shelter’s Motion for Summary Judgment on the
issue of excess judgment liability (R. Doc. 32) and also sought an order requiring discovery
pursuant to Rule 56(d) of the Federal Rules of Civil Procedure (R. Doc. 33). The district judge
granted the request for Rule 56(d) discovery, and dismissed Shelter’s Motion for Summary
Judgment on the issue of excess judgment liability (R. Doc. 32) without prejudice to refiling
following the conclusion of discovery. (R. Doc. 37).
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On September 21, 2016, defense counsel sent a letter to Plaintiff’s counsel stating that
they were requesting additional materials from their client and would provide the responses as
soon as received, hopefully by September 30, 2016. (R. Doc. 42-6).
On October 7, 2016, Shelter filed his initial Motion to Compel Discovery and Sanctions.
(R. Doc. 42). The undersigned denied that motion without prejudice to refile within 30 days
after the issuance of a ruling by the Fifth Circuit on the pending appeals. (R. Doc. 49).
On May 2, 2017, the Fifth Circuit dismissed the parties’ appeal for lack of jurisdiction.
(R. Doc. 52). That same day, Shelter moved for partial reconsideration of the August 19, 2016
Ruling to the extent it did not dismiss Smith’s claims for excess judgment liability. (R. Doc. 50).
On May 5, 2017, the parties held a conference regarding Smith’s discovery requests and
Defendant’s responses. (R. Doc. 54-1 at 2).
On May 18, 2017, Shelter provided its “Updated Responses” to Smith’s Interrogatories
and Requests for Production. (R. Doc. 54-8).
On June 1, 2017, Smith filed the instant Reurged Motion to Compel Discovery and
Sanctions. (R. Doc. 54). Smith seeks an order compelling supplemental responses to
Interrogatory Nos. 1, 2, 3, 5, 7, 8, 11, 12, 13, and Request for Production Nos. 1, 5, 6, 7, 8, 9 and
10. (R. Doc. 54-2 at 4-12).
On June 8, 2017, the district judge denied Defendant’s Motion for Partial
Reconsideration of his August 19, 2016 Ruling. (R. Doc. 55). In so doing, the district judge
upheld his dismissal of “Plaintiff’s bad faith claims of failing to provide a legal defense to Paul
Babin (failure to defend), misrepresenting coverage under the Shelter policy, and for failure to
indemnify Babin arising under La. R.S. 22:1892 and La. R.S. 22:1973” on the basis of res
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judicata, and clarified that Smith’s “only remaining claim is one for excess judgment liability
under La. R.S. 22:1973.” (R. Doc. 55 at 5).
On June 29, 2017, the undersigned held a conference with the parties and set new
deadlines in this action, including a new trial date. (R. Doc. 62).
II.
Arguments of the Parties
In support of his motion, Smith argues that despite Shelter’s objections, Interrogatory
Nos. 1, 2, 3, 5, 7, 8, 11, 12, 13, and Request for Production Nos. 1, 5, 6, 7, 8, 9 and 10 seek
relevant information within the scope of discovery in light of the remaining excess liability
claim. (R. Doc. 54-2 at 4-12). Smith further argues that because Shelter has not provided a
privilege log pursuant to Rule 26(b)(5)(A) of the Federal Rules of Civil Procedure, it has waived
any objections to the discovery requests on the basis of attorney-client privilege and/or work
product immunity. (R. Doc. 54-2 at 13-14). Smith further argues that Shelter’s “refusal to
participate in good faith” and its “evasive answers and inapplicable objections” to the foregoing
discovery requests constitutes sanctionable conduct pursuant to Rule 37, meriting a finding that
Shelter has waived attorney-client privilege and/or work product immunity where asserted, or,
alternatively, an award of costs and attorney’s fees. (R. Doc. 54-2 at 20). Finally, Smith asserts
that Shelter has waived any objections not raised in its original responses in light of the
requirements of Rule 26(g). (R. Doc. 54-2 at 20).
In opposition, Shelter asserts that it has properly asserted the attorney-client privilege
and/or work product immunity where asserted, and that its “general objections” to the discovery
requests on those bases constitutes a “privilege log” as required by Rule 26(b)(5)(A). (R. Doc. 58
at 1-5). Shelter further argues that discovery regarding the dismissed bad faith claims is
irrelevant and that certain responses to the discovery requests are sufficient. (R. Doc. 58 at 6-7).
4
Finally, Shelter argues that sanctions are not merited given the importance of attorney-client
privilege and work product immunity, and the procedural history of this action. (R. Doc. 58 at 89).
In reply, Smith raises additional arguments regarding the insufficiency of Shelter’s
objections based on attorney-client privilege and work product immunity, including the
sufficiency of its “privilege log.” (R. Doc. 61).
III.
Law and Analysis
A.
Legal Standards
“Unless otherwise limited by court order, the scope of discovery is as follows: Parties
may obtain discovery regarding any non-privileged 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). The court must limit the frequency or extent of discovery if it determines that: “(i) 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; (ii) the party seeking
discovery has had ample opportunity to obtain the information by discovery in the action; or (iii)
the proposed discovery is outside the scope permitted by Rule 26(b)(1).” Fed. R. Civ. P.
26(b)(2)(C).
“When a party withholds information otherwise discoverable by claiming that the
information is privileged or subject to protection as trial-preparation material, the party must: (i)
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expressly make the claim; and (ii) describe the nature of the documents, communications, or
tangible things not produced or disclosed--and do so in a manner that, without revealing
information itself privileged or protected, will enable other parties to assess the claim.” Fed. R.
Civ. P. 26(b)(5)(A).
“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)’s “good cause” requirement indicates that the party seeking a protective order has the
burden “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, Inc., 134 F.3d 302, 306 (5th Cir. 1998) (quoting United States v. Garrett, 571 F.2d 1323,
1326 n.3 (5th Cir. 1978)).
Rules 33 and 34 provide a party with 30 days after service of the discovery to respond or
object. See Fed. R. Civ. P. 33(b)(2) and 34(b)(2)(A). If a party fails to respond fully to discovery
requests made pursuant as to Rules 33 and 34 in the time allowed by the Federal Rules of Civil
Procedure, the party seeking discovery may move to compel disclosure and for appropriate
sanctions under Rule 37. An “evasive or incomplete disclosure, answer, or response must be
treated as a failure to disclose, answer or respond.” Fed. R. Civ. P. 37(a)(4).
B.
Analysis
1.
Attorney-Client Privilege and/or Work Product Immunity
Shelter raised the objection of attorney-client privilege to Interrogatory Nos. 7, 8, 11, 13,
and Request for Production Nos. 1, 3, 5, 8. Shelter also raised the objection of work product
immunity to Interrogatory No. 13.
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In addition to the requirements set forth in Rule 26(b)(5)(A) and mentioned above, this
Court’s Local Rule 26(c) provides the following: “A party withholding information claimed
privileged or otherwise protected must submit a privilege log that contains at least the following
information: name of the document, electronically stored information, or tangible things;
description of the document, electronically stored information, or tangible thing, which
description must include each requisite element of the privilege or protection asserted; date;
author(s); recipient(s); and nature of the privilege.” LR 26(c); see also Cashman Equip. Corp. v.
Rozel Operating Co., No. 08-363, 2009 WL 2487984, at *2 (M.D. La. Aug. 11, 2009) (“[A]
privilege log . . . should not only identify the date, the author, and all recipients of each
document listed therein, but should also describe the document’s subject matter, the purpose for
its production, and a specific explanation of why the document is privileged or immune from
discovery.”) (quoting Peacock v. Merrill, No. 08-01, 2008 WL 687195, at *3 (M.D. La. Mar. 10,
2008)).
Shelter’s objections to Smith’s discovery requests on the basis of attorney-client privilege
and work product immunity are insufficient. Shelter has not described the withheld information
in a manner consistent with Rule 26(b)(5)(A) and Local Rule 26(c).1 Accordingly, the Court will
determine whether Shelter has waived the attorney-client privilege and/or work product
immunity where asserted in light of its failure to comply with Rule 26(b)(5)(A) and Local Rule
26(c).
1
Shelter argues that “Rule 26(b)(5)(A) does not require[] separate itemization of every item over which
privileged is claimed.” (R. Doc. 58). In support of this proposition, Shelter relies on Muro v. Target
Corp., 250 F.R.D. 350, 363 (N.D. Ill. 2007). The relevant part of that decision, which is not binding on
this Court, merely stands for the proposition that a privilege log is not necessarily “inadequate for failure
to separately itemize each individual e-mail quoted in an e-mail string.” Id. Here, Shelter has not
identified any documents withheld on the basis of attorney-client privilege at all. Accordingly, the Muro
decision is inapposite.
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It is within the Court’s discretion to find a waiver of an asserted privilege for failing to
timely produce a privilege log. Janko v. Fresh Mkt., Inc., No. 13-648, 2015 WL 4656694, at *3
(M.D. La. Aug. 5, 2015) (citing Blackard v. Hercules, Inc., No. 12-175, 2014 WL 2515197, at *4
(S.D. Miss. June 4, 2014)). Failure to produce a privilege log pursuant to Rule 26 “is, on its
own, sufficient to warrant a finding that any privilege, even if it had been established . . ., has
been waived.” Janko, 2015 WL 4656694, at *3 (citing Agee v. Wayne Farms, L.L.C., No. 06268, 2007 WL 2903208, at *3 (S.D. Miss. Oct. 1, 2007); see also Onebeacon Ins. Co. v. Forman
Int'l Ltd., No. 04-2271, 2006 WL 3771010, at *7 (S.D.N.Y. Dec. 15, 2006) (“The unjustified
failure to list privileged documents on the required log of withheld documents in a timely and
proper manner operates as a waiver of any applicable privilege.”).
Considering the arguments of the parties, the importance of the attorney-client privilege
and work product immunity, and the record as a whole, the Court concludes that Shelter has not
waived the attorney-client privilege and work product immunity. Foremost, for each of the
written discovery requests to which Shelter raised an objection based on attorney-client privilege
or work product immunity, it also raised an objection as to relevance. Considering the
procedural history of this action, the Court will not penalize Shelter for not fully explaining the
basis of its privilege objections (through a privilege log or otherwise) until the Court issued a
finding that the information sought is relevant.
Furthermore, Smith has not indicated that the parties held a Rule 37 conference that
specifically discussed Shelter’s lack of compliance with Rule 26(b)(5)(A) and Local Rule 26(c).
(See R. Doc. 54-1). Under these circumstances, the Court concludes that Shelter should be
provided an opportunity to correct its deficiencies with regard to Rule 26(b)(5)(A) and Local
Rule 26(c) rather than find a blanket waiver of privilege. See U.S. Sec. & Exch. Comm'n v.
8
Commonwealth Advisors, Inc., No. 12-700, 2015 WL 10990241, at *2 (M.D. La. Dec. 16, 2015)
(noting that district judge found “across-the-board waiver” of the attorney-client privilege by the
magistrate judge without providing the defendants “an opportunity to correct the deficiencies” to
be “unduly harsh”); see also Cashman Equip. Corp., 2009 WL 2487984, at *2 n.4 (“Waiver of
privilege objections is not required as a result of the production of a deficient privilege log.”)
(citing cases).
Accordingly, the Court will require Shelter to produce explanations of its assertions of
attorney-client privilege and work product immunity in accordance with Rule 26(b)(5)(A) and
Local Rule 26(c) on or before July 24, 2017. Shelter shall produce a privilege log and shall
identify documents required to be produced consistent with this Order, but withheld pursuant to
the attorney-client privilege and/or the work product doctrine. If Shelter fails to identify on its
privilege log documents and/or communications otherwise found to be within the scope of
discovery as detailed in this Order, it will be subject to sanctions, including, but not limited to, a
finding that it has waived the attorney-client privilege and/or work product doctrine with regard
to the documents and/or communications not identified on the privilege log.
2.
Shelter’s “Full Faith and Credit” Objection
Shelter raised the following objection to Interrogatory Nos. 3, 5, 7, 8, 11, 12, 13, and
Request for Production Nos. 1, 5, 6, 7, 8, 9, 10:
Objection. The requested information will is (sic) not relevant to the case at hand
and is not important to the discovery in resolving the issues pursuant to Federal
Rule of Civil Procedure 26(b)(l). The federal courts are bound to give to the
judgments of the state courts the same faith and credit that the courts of one State
are bound to give to the judgments of the courts of her sister States. Kremer v.
Chem. Const. Corp., 456 U.S. 461, 481, 102 S.Ct. 1883, 1898, 72 L.Ed.2d 262
(1982). There has been a state court judicial determination that Shelter “was not
arbitrary, capricious, or in any way in bad faith making its decision that it did not
have coverage, nor did it have a duty to defend.” Any investigation into the
requested material is implicitly and impermissibly seeking ruling in the federal
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court otherwise, which is impermissible under Full Faith and Credit. 28 U.S.C.A.
§ 1738.
It appears that the foregoing “full faith and credit” objection is premised on the argument that the
dismissal of Smith’s bad faith claims on the basis of res judicata forecloses discovery on the
remaining excess liability claim.
Shelter dedicates just over a page of its Opposition to discuss the scope of discovery in
general and its relevance argument in particular. (R. Doc. 58 at 5-6). Shelter does not address its
“full faith and credit” objection at all. Shelter’s “full faith and credit” objection appears to be
premised on the Louisiana First Circuit Court of Appeal’s ruling on whether Shelter acted in bad
faith.
The district judge has upheld his dismissal of “Plaintiff’s bad faith claims of failing to
provide a legal defense to Paul Babin (failure to defend), misrepresenting coverage under the
Shelter policy, and for failure to indemnify Babin arising under La. R.S. 22:1892 and La. R.S.
22:1973” on the basis of res judicata, and clarified that Smith’s “only remaining claim is one for
excess judgment liability under La. R.S. 22:1973.” (R. Doc. 55 at 5). Accordingly, to the extent
Smith’s discovery requests are relevant to his remaining claim for “for excess judgment liability
under La. R.S. 22:1973,” and are otherwise proportional to the needs of the case, then the
information sought falls within the scope of discovery as defined by Rule 26(b)(1).
3.
Relevance and Proportionality
While it is not completely clear, it appears that Shelter also objects to Interrogatory Nos.
3, 5, 7, 8, 11, 12, 13, and Request for Production Nos. 1, 5, 6, 7, 8, 9, 10 on the basis of
irrelevance and disproportionality outside of the “full faith and credit” objection described
above. In addition, Smith has challenged the sufficiency of Shelter’s responses despite its
objections.
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As stated above, Shelter has chosen not to address the issue of relevancy in much detail
in its Opposition. At most, Shelter briefly states, in conclusory fashion, that Interrogatory No. 7
and Request for Production Nos. 9 and 10 seek information that is “presently irrelevant.” (R.
Doc. 58 at 6). Shelter does not specifically argue anywhere in its Opposition why and to what
extent the information sought in Interrogatory Nos. 3, 5, 7, 8, 11, 12, 13, and Request for
Production Nos. 1, 5, 6, 7, 8, 9, 10 is irrelevant to Smith’s claim for excess judgment liability
under La. R.S. 22:1973 and/or Shelter’s defenses to that claim.
Smith, on the other hand, argues in extensive detail that the information sought pursuant
to these discovery requests is relevant in light of the Louisiana Supreme Court decision Smith v.
Audubon Ins. Co., 679 So.2d 372 (La. 1996). (R. Doc. 54-2 at 3-13). The Smith decision
pronounced various factors in determining whether an insurer fails to settle a claim in bad faith,
subjecting it to excess judgment liability:
[T]he determination of whether the insurer acted in bad faith turns on the facts
and circumstances of each case. Of course, an insurer is not obliged to
compromise litigation just because the claimant offers to settle a claim for serious
injuries within the policy limits, and its failure to do so is not by itself proof of
bad faith. The determination of good or bad faith in an insurer’s deciding to
proceed to trial involves the weighing of such factors, among others, as the
probability of the insured’s liability, the extent of the damages incurred by the
claimant, the amount of the policy limits, the adequacy of the insurer’s
investigation, and the openness of communications between the insurer and the
insured. Nevertheless, when an insurer has made a thorough investigation and the
evidence developed in the investigation is such that reasonable minds could differ
over the liability of the insured, the insurer has the right to choose to litigate the
claim, unless other factors, such as a vast difference between the policy limits and
the insured’s total exposure, dictate a decision to settle the claim.
Smith, 679 So. 2d at 377; see also Kelly v. State Farm Fire & Cas. Co., 169 So. 3d 328, 340 (La.
2015) (“Smith does not stand for the proposition that a ‘firm settlement offer’ is required as a
condition for an insured’s bad-faith failure-to-settle claim against an insurer”). In seeking
discovery pursuant to Rule 56(d) to respond to Shelter’s motion for summary judgment on the
11
issue of excess liability, Smith relied on the same factors to argue that the discovery requests
seek relevant information. As stated above, the district judge granted that motion and dismissed
Shelter’s motion for summary judgment on the issue of excess liability with leave to refile after
the conclusion of discovery. (R. Doc. 37).
Having reviewed Smith’s arguments and the district judge’s rulings, as well as
considering Shelter’s lack of any argument in support of a finding that the discovery requests at
issue seek information irrelevant to Smith’s claim for excess judgment liability under La. R.S.
22:1973 and/or Shelter’s defenses to that claim, the Court will overrule Shelter’s “relevancy”
objection in full.
Shelter also asserts that the foregoing discovery requests are “not important to the
discovery in resolving the issues” remaining in this action. This objection appears to assert that
even if the discovery sought is relevant to the excess liability claims, it is disproportional to the
needs of the case because the discovery sought is not important for resolving the excess liability
claims. Shelter does not elaborate on this objection in its Opposition.
The Court will overrule Shelter’s proportionality objection. Smith is seeking to recover
over $1,215,485.54 plus legal interest and costs. The information sought is in Shelter’s
possession. Smith is an individual plaintiff; Shelter is an insurance company. The district judge
has ruled that the discovery is important for addressing Shelter’s motion for summary judgment
on the issue of excess liability. Shelter has provided no argument regarding the burden or
expenses involved in responding to the discovery requests. Accordingly, the Court concludes
that the discovery is proportional to the needs of the case.
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4.
The Individual Discovery Requests
Having globally addressed Shelter’s objections to certain discovery requests, the Court
will briefly address the individual discovery requests at issue.
i.
Interrogatory No. 1
Interrogatory No. 1 requests Shelter to identify individuals who provided information or
assisted in answer the interrogatories by providing their full name, address, telephone number,
and occupation. (R. Doc. 54-3 at 4). Shelter’s updated response provides the contact information
for Plaintiff’s counsel and identifies an individual named Vickie Davis as an in-house attorney
for Shelter, but does not provide an address or telephone number or otherwise object to the
interrogatory. (R. Doc. 54-8 at 1-2).
The interrogatory seeks information within the scope of discovery. In its Opposition,
Shelter identifies its corporate address as “1817 W. Broadway, Columbia, MO 65218.” (R. Doc.
58 at 7). Shelter also mentions the names of two other individuals not identified in its updated
response—Jacquie Spry and Rhonda Landy. (R. Doc. 58 at 7). It is unclear to the Court whether
these individuals are being identified as “persons who provided any information or otherwise
assisted in providing information or whom answered or assisted in the preparation of the
responses” to Smith’s interrogatories.
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Interrogatory No. 1 on or before July 24, 2017. The supplemental response shall
identify all individuals involved in the preparation of responses to Smith’s interrogatories,
including each individual’s “full name, current address, current telephone number, and current
occupation.” The response may provide a current business address and telephone number where
the individual can be reached.
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ii.
Interrogatory No. 2
Interrogatory No. 2 requests Shelter to provide the names and contact information of
potential witnesses, including identifying which witnesses will be called to testify as experts. (R.
Doc. 54-3 at 4). Shelter’s response identified certain individuals and provided a catch-all to
include any other witnesses listed by any other party to the litigation or identified in discovery.
(R. Doc. 54-8 at 2).
The Court’s deadlines control when witnesses must be disclosed. Shelter’s deadline to
identify expert witnesses expired on October 28, 2016. (R. Doc. 19). The deadline to disclose all
witnesses is set by the district judge through the filing of the Pre-Trial Order. The Court will not
compel a discovery response that conflicts with its current deadlines.
Based on the foregoing, IT IS ORDERED that Smith’s Motion is DENIED with regard
to Interrogatory No. 2.
iii.
Interrogatory No. 3
Interrogatory No. 3 requests Shelter to identify the date, recipient, and author of any
written correspondence to Babin or his agents issued by Shelter, or to produce the underlying
documents. (R. Doc. 54-3 at 5). Shelter responded by stating that it wrote to Babin to inform
him of the intentional act exclusion in his liability policy, and attached a letter dated June 30,
2005 “where Shelter informed Mr. Babin that it was not obligated to provide coverage for the
incident nor a defense.” (R. Doc. 54-8 at 2-3).
This interrogatory seeks information within the scope of discovery. It is unclear whether
Shelter has failed to identify any documents in its possession, custody, or control responsive to
the interrogatory.
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Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Interrogatory No. 3 on or before July 24, 2017. The supplemental response shall
respond in full to Interrogatory No. 3, either through identification or production of the
information sought to be identified. If Shelter has no additional information to produce, it must
state so in its supplemental response.
iv.
Interrogatory No. 5
Interrogatory No. 5 requests Shelter to identify any written or recorded statements taken
or caused to be taken by Shelter prior to or during the underlying state court litigation, including
identification of the person from whom the statement was taken, the date of the statement, the
method of recording, and other information. (R. Doc. 54-3 at 5-6). In its updated response,
Shelter stated that it does not have any written or recorded statement of any witness other than
those taken via deposition. (R. Doc. 54-8 at 4).
Smith argues that the response is insufficient in that the interrogatory requests Shelter “to
identify any written or recorded statements obtained in connection with plaintiff’s claims.” (R.
Doc. 54-2 at 5-6). Smith then goes further and represents to the Court that the “interrogatory
asked whether any written or recorded statements were obtained.” (R. Doc. 54-2 at 6) (emphasis
in original).2
The word “obtained” does not appear anywhere in Interrogatory No. 5. In fact, the
Interrogatory specifically asks whether Shelter did “take or cause to be taken any written or
recorded statements.” (R. Doc. 54-8 at 4). Whether Shelter “obtained” any such statements from
any third party is broader than the scope of the Interrogatory. While there may in fact be
2
Smith continues with this same argument – “As noted, the interrogatory inquired into whether a
recording or statements was obtained not whether Shelter had possession of the recording or statement.”
(R. Doc. 54-2 at 6).
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responsive material that was not identified in Shelter’s response, that does not justify an attempt
to rewrite the Interrogatory in the context of a Motion to Compel or to mispresent such to the
Court. Counsel is advised that this will not be tolerated in the future.
Based on the Court’s review, Shelter’s updated response does not expressly indicate that
it does not have any responsive documents in its possession, custody, or control to identify in
response to this interrogatory. For clarification, the Court will require Shelter to supplement its
response.
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Interrogatory No. 5 on or before July 24, 2017. The supplemental response shall
respond in full to Interrogatory No. 5, either through identification or production of the
information sought to be identified. If Shelter has no additional information to produce, it must
state so in its supplemental response.
v.
Interrogatory No. 7
Interrogatory No. 7 requests Shelter to identify whether it knew, at any time during the
underlying state court litigation, that the exclusionary language in the policy at issue “relied upon
for a denial of coverage required a showing that the injuries caused must have been expected or
intended from the standpoint of the insured” and, if so, to state when Shelter first became “aware
of this fact.” (R. Doc. 54-3 at 6).
In its updated response, Shelter asserts that the interrogatory “seeks a legal conclusion
from the attorneys representing Shelter and as such is protected by attorney-client privilege.” (R.
Doc. 54-8 at 6). Shelter does not identify any communications between it and its counsel that
would constitute a privileged communication. In the Memorandum in Support, Smith
specifically states that he is not seeking any conclusion from counsel for Shelter, rather the
16
knowledge of Shelter as to how their policy language is interpreted by the courts. (R. Doc. 54-2
at 7). This could simply be an awareness of court decisions and results of litigation. Even if
known by an attorney, Shelter has not made a showing as to how awareness of the fact that a
court has ruled a particularly way would fall within the privilege. While a legal conclusion from
counsel could be an example of a responsive answer covered by privilege, that does not
necessarily mean that this would be the only such response.
Accordingly, Shelter must provide a supplemental response to Interrogatory No. 7. To
the extent Shelter maintains that privileged advice of counsel is the only source of any
responsive information, it must provide a supplemental response (without identifying the
substance of the communication) describing the nature of the communications being withheld as
privileged as required by Rule 26(b)(5)(A).
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Interrogatory No. 7 on or before July 24, 2017 as detailed above.
vi.
Interrogatory No. 8
Interrogatory No. 8 requests Shelter to “identify by name, current address, current
telephone number and current employer each and every adjuster, team member, employee, agent,
independent contract[or] or other person who was assigned to, assisted with, or otherwise
substantively handled the adjustment or valuation of the claim and/or claims file” for the
underlying litigation in state court. (R. Doc. 54-3 at 6-7). In its updated response, Shelter states
that Babin first reported the claim to Rhonda Landry and that Jacquie A. Spry and Vickie Davis
were involved in the claims handling process. (R. Doc. 54-8 at 6-7).
This interrogatory seeks information within the scope of discovery. Accordingly, the
Court will require Shelter to provide a supplemental response identifying the employees and
17
independent contractors as requested. The supplemental response shall identify all individuals,
whether an employee of Shelter or an independent contractor, who “was assigned to, assisted
with, or otherwise substantively handled the adjustment or valuation of the claim and/or claims
file” for the underlying state court litigation. The supplemental response shall provide each
individual’s full name, current address, current telephone number, and current occupation. The
response may provide a current business address and telephone number where the individual can
be reached.
In its updated response, Shelter also states that any correspondence between Shelter and
Vickie Davis and/or Shelter’s counsel is protected by the attorney-client privilege. (R. Doc. 54-8
at 7). The interrogatory does not require production of any correspondence. It merely requires
the identification of individuals involved in the claims handling and adjustment process.
Accordingly, it is unclear why Shelter makes an assertion of privilege in response to this
interrogatory. To the extent Shelter is withholding information responsive information pursuant
to this objection, it must provide a supplemental response describing the nature of the
communications withheld pursuant to the attorney-client privilege pursuant to Rule 26(b)(5)(A).
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Interrogatory No. 8 on or before July 24, 2017 as detailed above.
vii.
Interrogatory No. 11
Interrogatory No. 11 requests Shelter to identify its “efforts” to investigate Smith’s claim,
and for Shelter to identify the individuals and dates involved with regard to these efforts and
investigation. (R. Doc. 54-3 at 8). In its updated response, Shelter states that Babin first reported
the claim to Rhonda Landry and that Jacquie A. Spry and Vickie Davis were involved in the
claims handling process. (R. Doc. 54-8 at 9).
18
This interrogatory seeks information within the scope of discovery. That said, the Court
finds the interrogatory to be so vague and overly broad that the Court will limit Shelter’s
required response despite the lack of an objection on that basis. The Court will limit the
interrogatory to identification of any written records of Shelter’s investigations by author,
recipient, date, and identification of the individual or entity who has custody and/or control of
the identified records. To the extent such records themselves have been provided in response to
other discovery requests, Shelter may indicate such in its supplemental response.
Shelter also states that any correspondence between Shelter and Vickie Davis and/or
Shelter’s counsel is protected by the attorney-client privilege. (R. Doc. 54-8 at 9). The
interrogatory does not require production of any correspondence. It merely requires the
identification of individuals involved in the claims handling and adjustment process.
Accordingly, it is unclear why Shelter makes an assertion of privilege in response to this
interrogatory. To the extent Shelter maintains this objection on the basis that it is refusing to
identify a particular responsive written record on the basis of privilege, it must provide a
supplemental response describing the nature of the communications withheld pursuant to the
attorney-client privilege pursuant to Rule 26(b)(5)(A).
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Interrogatory No. 11 on or before July 24, 2017 as detailed above.
viii.
Interrogatory No. 12
Interrogatory No. 12 requests Shelter “to identify each and every policy, procedure,
manual, guideline, document, industry standard or other method by which Shelter Mutual
Insurance Company determines the potential value of a claim asserted against one of its
insureds” and, for each identified policy or procedure, to state whether Shelter complied with the
19
policy or procedure in valuing the claims in the underlying state court litigation. (R. Doc. 54-3 at
8). In its updated response, Shelter states that it is searching for the requested materials and will
supplement the discovery response. (R. Doc. 54-8 at 10).
This interrogatory seeks information within the scope of discovery. Shelter has agreed to
identify responsive documents, and otherwise does not object to stating whether it followed the
guidelines in those documents in this particular instance.
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Interrogatory No. 12 on or before July 24, 2017 as detailed above.
ix.
Interrogatory No. 13
Interrogatory No. 13 requests Shelter to identify all documents by date and custodian
information that bears or makes reference to claim number 17-1-4373679-2-ZD in the possession
of Shelter or on its behalf by an agent. (R. Doc. 54-3 at 8-9). In its updated response, Shelter
provides that Vickie Davis has in her possession certain claim notes and excerpts from
correspondence and conversations with Shelter’s attorneys, but that this litigation file is
privileged. (R. Doc. 54-8 at 11).
Shelter’s updated response only references documents in Vickie Davis’s possession that
constitute her litigation file. The information sought by this interrogatory is not limited to
documents in Vickie Davis’s possession. Shelter must identify any additional responsive
information in a supplemental response.
Again, the interrogatory does not request for the production of any correspondence or
documents. It merely requires the identification of written records. Accordingly, it is unclear
why Shelter makes an assertion of privilege in response to this interrogatory. To the extent
Shelter maintains this objection, it must provide a supplemental response describing the nature of
20
the communications withheld pursuant to the attorney-client privilege pursuant to Rule
26(b)(5)(A).
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Interrogatory No. 13 on or before July 24, 2017 as detailed above.
x.
Request for Production No. 1
Request for Production No. 1 seeks the entire claims file for claim number 17-14373679-2-ZD. (R. Doc. 54-3 at 12). In its updated response, Shelter asserts that any
correspondence between Shelter and Vickie Davis or Shelter’s counsel is protected by the
attorney-client privilege. (R. Doc. 54-2 at 9-10).
This request seeks information within the scope of discovery. To the extent Shelter is
claiming that any documents within the claims file is protected pursuant to the attorney-client
privilege, it must produce an appropriate privilege log as discussed above.
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Request for Production No. 1 on or before July 24, 2017 as detailed above.
xi.
Request for Production No. 5
Request for Production No. 5 seeks production of any claims adjusting data used in the
valuation of the underlying claims. (R. Doc. 54-3 at 12-13). Shelter responded that any and all
evaluations on Smith’s damages in the underlying litigation “came from defense counsel” and
that “those communications are protected by attorney-client privilege.” (R. Doc. 54-8 at 13-14).
This request seeks information within the scope of discovery. It is unclear whether
Shelter’s reference to “defense counsel” in support of its attorney-client defense refers solely to
Shelter’s outside counsel. Regardless, to the extent Shelter is withholding any documents
21
containing privileged communications, Shelter must produce an appropriate privilege log as
discussed above.
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Request for Production No. 5 on or before July 24, 2017 as detailed above.
xii.
Request for Production No. 6
Request for Production No. 6 seeks production of written correspondence made at the
direction of Shelter or its agents advising Babin of his potential exposure to a money judgment in
excess of his liability insurance limits. (R. Doc. 54-3 at 13). Shelter responded by stating that it
wrote to Babin to inform him of the intentional act exclusion in his liability policy, and attached
a letter dated June 30, 2005. (R. Doc. 54-8 at 18).
This request seeks information within the scope of discovery. It is unclear whether
Shelter has produced all responsive documents in its possession, custody, or control.
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Request for Production No. 6 on or before July 24, 2017 as detailed above. To the
extent Shelter has no additional responsive documents to produce, it must state so in its
supplemental response.
xiii.
Request for Production No. 7
Request for Production No. 7 seeks production of any investigative reports, recordings,
photographs, or other materials produced by Shelter or at its direction regarding the underlying
incident. (R. Doc. 54-3 at 13). In its updated response, Shelter asserts that any correspondence
between Shelter and Vickie Davis or Shelter’s counsel is protected by the attorney-client
privilege. (R. Doc. 54-8 at 19-20).
22
This request seeks information within the scope of discovery. To the extent Shelter is
claiming that any responsive investigative reports, recordings, photographs, or other materials
are protected pursuant to the attorney-client privilege, it must produce an appropriate privilege
log as discussed above.
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Request for Production No. 7 on or before July 24, 2017 as detailed above.
xiv.
Request for Production No. 8
Request for Production No. 8 seeks production of any investigative reports, recordings,
photographs, or other materials produced by Shelter or at its direction regarding the underlying
claims asserted by Smith in the state court litigation. (R. Doc. 54-3 at 13-14). In its updated
response, Shelter asserts that any correspondence between Shelter and Vickie Davis or Shelter’s
counsel is protected by the attorney-client privilege. (R. Doc. 54-8 at 20-21).
This request seeks information within the scope of discovery. To the extent Shelter is
claiming that any responsive investigative reports, recordings, photographs, or other materials
are protected pursuant to the attorney-client privilege, it must produce an appropriate privilege
log as discussed above.
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Request for Production No. 8 on or before July 24, 2017 as detailed above.
xv.
Request for Production No. 9
Request for Production No. 9 seeks production of insurance policy form A-256-A, any
previous or subsequent version of the form, and any revised or replacement versions of the form
if it is no longer in use. (R. Doc. 54-3 at 14). In its updated response, Shelter argues that the
23
actual policy issued “is the best evidence of the insurance coverage provided by Shelter to Paul
Babin at the time of the collision.” (R. Doc. 54-8 at 21-22).
Smith argues that this information is relevant to determining Shelter’s understanding of
the current policy language and to access how Shelter conducted an investigation on their
Babin’s potential exposure to excess judgment. (R. Doc. 54-2 at 12). Shelter has provided no
argument in support of a finding that the information sought is irrelevant to the remaining claims
and defenses in this litigation. At most, Shelter reasserts its objection of irrelevance in its
opposition in a conclusory fashion. (R. Doc. 58 at 6). In the absence of any argument to the
contrary, the Court agrees the information sought is relevant for the reasons provided by Smith.
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Request for Production No. 9 on or before July 24, 2017 as detailed above.
xvi.
Request for Production No. 10
Request for Production No. 10 seeks production of “any and all written or electronically
stored memoranda, internal correspondence, or other documentation regarding any and all
changes, amendments, revisions or supplementations made to policy of insurance form A-256A.” (R. Doc. 54-3 at 14). In its updated response, Shelter produced a copy of the certified policy
issued to Babin and stated that “any previous, and subsequent, amended, revised or replacement
versions of said policy are irrelevant.” (R. Doc. 54-8 at 22-23).
Smith argues that this information is relevant to determining Shelter’s understanding of
the current policy language and to access how Shelter conducted an investigation on Babin’s
potential exposure to excess judgment. (R. Doc. 54-2 at 12). Shelter has provided no argument
in support of a finding that the information sought is irrelevant to the remaining claims and
defenses in this litigation. At most, Shelter reasserts its objection of irrelevance in its opposition
24
in a conclusory fashion. (R. Doc. 58 at 6). In the absence of any argument to the contrary, the
Court agrees the information sought is relevant for the reasons provided by Smith.
Based on the foregoing, IT IS ORDERED that Shelter must provide a supplemental
response to Request for Production No. 10 on or before July 24, 2017 as detailed above.
5.
Sanctions and Awardable Expenses
Smith moves for an award of sanctions, including an award of attorney’s fees and costs,
pursuant to Rule 26(g) and Rule 37 of the Federal Rules of Civil Procedure.
Rule 26(g) provides that parties who do not make a reasonable inquiry before conducting
or opposing discovery in federal court are subject to sanctions. Fed. R. Civ. P. 26(g)(3) (“If a
certification violates this rule without substantial justification, the court, on motion or on its own,
must impose an appropriate sanction on the signer, the party on whose behalf the signer was
acting, or both. The sanction may include an order to pay the reasonable expenses, including
attorney’s fees, caused by the violation.”).
Rule 37 provides that sanctions are available where a party fails to comply with a court
order, fails to provide information required by Rules 26(a) or (e), or fails to serve answers to
interrogatories or responses to requests for inspection. Fed. R. Civ. P. 37(b), (c), and (d). It
appears that Smith is seeking sanctions pursuant to Rule 37(d)(1)(ii) on the basis that Shelter
failed “to serve its answers, objections, or written response” to the Interrogatories and Requests
for Production at issue. (R. Doc. 54-2 at 18-20).
For the reasons provided in the body of this Order, the Court concludes that Shelter’s
opposition to Smith’s discovery on the basis of relevance and protections governed by the
attorney-client privilege and/or work product doctrine was substantially justified. Furthermore,
given the record, the Court concludes that Shelter provided timely updated responses to the
25
discovery requests at issue. Accordingly, the Court finds no basis for issuing sanctions pursuant
to Rule 26(g) or Rule 37.
Smith also asks the Court to find that Shelter has “waived” objections not raised in its
responses with any particularity. As discussed above, the Court will not conclude that Shelter
has waived its objections on the basis of attorney-client privilege and/or work product immunity.
With the exception of any applicable privileges and/or immunities, however, any objections that
were not raised in Shelter’s responses have been waived. See In re United States, 864 F.2d 1153,
1156 (5th Cir. 1989) (“[A]s a general rule, when a party fails to object timely to interrogatories,
production requests, or other discovery efforts, objections thereto are waived.”); B&S Equip. Co.
v. Truckla Servs., Inc., No. 09-3862, 2011 WL 2637289, at *6 (E.D. La. July 6, 2011) (finding
waiver of all objections to “discovery requests based on relevance, unduly burdensome, over
broad, or any other objection not grounded on the attorney client or the work product
privilege.”).
Finally, the Court considers whether the payment of expenses is merited pursuant to Rule
37(a)(5). As the Court will grant Smith’s motion to compel in part and deny the motion to
compel in part, it “may, after giving an opportunity to be heard, apportion the reasonable
expenses for the motion. Fed. R. Civ. P. 37(a)(5)(C). Having considered the record as a whole,
and the relief provided by the instant Order, the Court concludes that the parties must bear their
own costs related to the instant motion.
IV.
Conclusion
IT IS ORDERED that Plaintiff’s Reurged Motion to Compel Discovery and Sanctions
(R. Doc. 54) is GRANTED IN PART and DENIED IN PART as provided in the body of this
Order.
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IT IS FURTHER ORDERED that Shelter must provide supplemental responses to
Interrogatory Nos. 1, 3, 5, 7, 8, 11, 12, 13, and Request for Production Nos. 1, 5, 6, 7, 8, 9 and
10, including any privilege log consistent with Rule 26(b)(5)(A) and Local Rule 26(c), on or
before July 24, 2017.
IT IS FURTHER ORDERED that parties shall bear their own costs.
Signed in Baton Rouge, Louisiana, on July 13, 2017.
S
RICHARD L. BOURGEOIS, JR.
UNITED STATES MAGISTRATE JUDGE
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