LaBrier v. State Farm Fire and Casualty Company

Filing 266

ORDER entered by Judge Nanette Laughrey. Defendant State Farm Fire and Casualty Company's motion to vacate, Doc. 194 , the Special Master's Order No. 8 is denied. (Barragan-Scott, Alana)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION
AMANDA M. LABRIER, individually,
and on behalf of all others similarly
situated,
Plaintiff,
vs.
STATE FARM FIRE AND CASUALTY
COMPANY,
Defendant.

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No. 2:15-cv-04093-NKL

ORDER
Defendant State Farm Fire and Casualty Company moves to vacate Special Master Order
No. 8. Doc. 194. In that order, Doc. 190, the Special Master denied State Farm’s motion to find
it had “substantially complied” with State Farm’s obligation to answer Plaintiff’s Second Set of
Interrogatories. For the reasons discussed below, the Court concludes no abuse of discretion
occurred and State Farm’s motion to vacate Special Master Order No. 8 is denied.
I.

Background
Special Master Order No. 4 directed State Farm to answer Plaintiffs’ Second Set of

Interrogatories. Docs. 117 and 125. State Farm moved to vacate that order, Doc. 135, and the
Court denied the motion, Doc.176 (Order dated 5/9/2016).
Plaintiffs’ Second Set of Interrogatories consisted of four questions. The first two
requested the claim number of structural damage claims upon which ACV payments had been
made, the total amount of labor depreciation withheld, the date of the first withholding, and the
dates of any subsequent withholdings. The third and fourth interrogatories involved State Farm’s
affirmative defenses, asking State Farm to identify the claim number, date of repayment of labor

depreciation, and amount repaid, and any applicable affirmative defenses and facts supporting a
defense. 1

1

For its “Supplemental Responses,” State Farm reproduced a spreadsheet it had

Plaintiff’s Second Set of Interrogatories specifically asked as follows:

INTERROGATORY NO. 1: Separately for each structural damage claim upon
which you made one or more actual cash value ("ACV") payments to Missouri
policyholders, and for which some amount of depreciation of labor was
withheld from at least one of those ACV payments, please state the total,
principal amount of labor depreciation that was actually withheld by you for
each claim, subject to the applicable deductibles and policy limits. The criteria
for this interrogatory are as follows:
a.

b.
c.
d.

The temporal scope of this interrogatory includes claims for which
the first ACV payment was between March 30, 2005 and the
present and
Excluded from this interrogatory is any structural damage claim
that is or was subject to appraisal and
Excluded from this interrogatory is any structural damage claim
that is or was the subject of an individual lawsuit and
By the terms of this interrogatory, excluded from this interrogatory
is any claim for which State Farm paid its full limits of available
coverage, without regard to the withholding of labor depreciation.

INTERROGATORY NO. 2: Separately state, for each structural damage claim
within the scope of Interrogatory No. 1 (including its criteria) and for which you
withheld labor depreciation of any amount from a Missouri policyholder, state the
date that labor depreciation was first withheld. If multiple labor depreciation
withholdings took place for a particular claim, state both the date(s) and
amount(s) of the withheld labor depreciation.
INTERROGATORY NO. 3: Separately state, for each structural damage claim
within the scope of Interrogatory No. 1 (including its criteria) and for which you
withheld labor depreciation of any amount from a Missouri policyholder,
whether you contend you subsequently paid a portion or all of the withheld labor
depreciation for such claim, and, if so, set forth the date and amount of the
withheld labor depreciation that was later paid. If you contend that payment of
withheld labor depreciation took place on multiple dates for a particular claim,
state both the date(s) and amount(s) of payment(s) of the withheld labor
depreciation.
INTERROGATORY NO. 4: Separately state, for each structural damage claim
within the scope of Interrogatory No. 1 (including its criteria) and for which you
withheld labor depreciation of any amount from a Missouri policyholder, which
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previously produced, to which it added a column disclosing what was on the memo line of
checks sent to policyholders on the claims listed in the report. State Farm provided more
information with respect to a sample of claims (398), for which it had its adjusters manually
search for data and type it into spreadsheets. In its request to the Special Master, State Farm then
summarized its position as follows:
State Farm respectfully submits that it has substantially complied
with Order No. 4. It has attempted full response to the Second
Interrogatories in all respects where such compliance can be made
by way of analyzing State Farm’s available computer data, rather
than by individualized review of each putative class member’s
claim. To the extent that such individualized review is needed,
State Farm performed such a review for 398 claim files, and has
shown that a like review for the remaining 149,600 or so putative
class members cannot reasonably be required or accomplished in
the time remaining before discovery closes in this action. Finally,
much of the information State Farm needs for its affirmative
defenses can only be obtained from records and information solely
in the possession of putative class members themselves. State
Farm will be seeking leave to issue discovery to the putative class,
including a survey directed to a subset of putative class members,
and will supplement its answers to the Second Interrogatories with
any responsive information gathered. Pending that, State Farm
requests a finding that it owes no further response to the Second
Interrogatories at this time.
Doc. 210-215, pp. 5-6.
In rejecting State Farm’s request for a finding of substantial compliance, the Special
Master stated that State Farm’s motion was “in many ways a rehash” of its previous objections to
the interrogatories, and briefs and exhibits it filed with this Court in connection with its motion
to modify Order No. 4:
Basically, [State Farm] is arguing it cannot answer the
interrogatories because the answers to them are not reflected in the
electronic data available to it but must be located through a review

of your affirmative defenses apply to such claim and the facts supporting your
affirmative defense(s) for such claim.
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of each putative class member’s claim file. Although these claim
files are stored in computerized form, [State Farm] maintains that
the interrogatory answers in many cases cannot be determined
without actually looking at the notes and correspondence, images
of which are within the computerized claim file. [State Farm]
claims that this review will take so much time, and result in so
much expense, that it need not do more than it has already done in
order to comply with its obligation to answer these interrogatories.
[State Farm] claims that its supplemental response, which crossreferenced certain spreadsheets containing columnar data relative
to 398 of the approximately 150,000 putative class of claims
substantially complied with its requirement to fully answer the
interrogatories.
Doc. 190, pp. 1-2.
The Special Master also discussed the data State Farm produced for the 150,000 claims
and how it analyzed that data with respect to a sample of 398 of those claims for purposes of
supplementing its responses to the first and second interrogatories. State Farm suggested its
methodology “should have been expected to reliably identify those claims which involved a
payment that was calculated by deducting depreciation (including labor-depreciation component
of such depreciation). State Farm [then] sought to demonstrate that this test did not, in fact,
reliably identify such claims.” Id., p. 2. But, the Special Master explained, State Farm did not
use an original repair estimate and instead selected data that could have included the actual cost
of repairs if such repairs had been made. Since the cost of actual repairs eventually made was
not used by State Farm when it calculated a class member’s ACV payment, the data gathered by
State Farm would necessarily be corrupted.
While State Farm argued that the outcome of its methodology showed the burdensome
nature of the task it was being forced to undertake in responding to the interrogatories, the
Special Master concluded State Farm had not provided any direct answers to the first or second

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interrogatories with respect to any claims, even the 398 sample claims that State Farm subjected
to review by its adjustors.
As for the third and fourth interrogatories, State Farm argued it did not possess
information with respect to a significant portion of such facts. The Special Master pointed out
that State Farm’s burden was to provide such information as was known to it or reasonably
available to be provided, although a duty to supplement might arise when and if such information
did become known or reasonably available to it. Id., p. 5.
The Special Master also noted that the interrogatory answers were not properly verified
on behalf of the corporate entity. The affiants stated that their verifications were not based
entirely on their personal knowledge and that such information was provided only to the best of
their knowledge, information and belief. But, the Special Master noted, Fed. R. Civ. P. 33(a)
expressly permits a corporate party to verify its answers without personal knowledge of every
response by furnishing such information as is available to the party. Id., p. 5. The corporation
may accomplish this through whatever internal process the corporate representative has chosen.
Id. (citing Shepherd v. American Broadcasting Companies, Inc., 62 F.3d 14369, 1482 (D.C. Cir.
1995)).
The Special Master denied State Farm’s motion for a finding of substantial compliance,
and ordered it to provide a detailed written plan of how it intended to proceed to fully answer the
interrogatories, and that the interrogatories must be answered within 90 of the filing of the plan,
with sworn partial answers provided every two weeks. The Special Master did not order State
Farm to provide the answers in the exact format requested by Plaintiff, but noted that the “basic
information” requested did not require State Farm to provide numerous columns of data and that
a “rather simple format” should suffice. Doc. 190, p. 6.

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II.

Discussion
A.

Standard of review

Because the Order appointing the Special Master in this case was silent as to the standard
of review, his discovery orders are reviewed by this Court for abuse of discretion. See Fed. R.
Civ. P. 3(f)(5) (a “court may set aside a master’s ruling on a procedural matter only for an abuse
of discretion” unless the order of appointment “establishes a different standard”); and, see, e.g.,
In re. Hardieplank Fiber Cement Siding Litig., 2014 WL 5654318, at *1 (D. Minn. Jan. 28,
2014) (special master’s discovery orders are procedural and subject to review for abuse of
discretion).
State Farm argues the standard is de novo, because the Special Master’s conclusions in
Order No. 8 “regarding relevance, substantial compliance, and proportionality—all of which are
challenged herein in this Objection—are legal conclusions.” Doc. 210, pp. 13-14 of 20. The
Special Master did not make legal conclusions in Order No. 8.

State Farm asked the Special

Master to enter a finding that it had substantially complied with Order No. 4, a prior discovery
order that was upheld by the Court. To the extent the Special Master addressed relevance or
proportionality, it was in the context of reiterating Order No. 4, and the Court’s Order upholding
it which the Special Master of course did not have authority to contravene. The Special Master’s
Order No. 8 addressed State Farm’s responsiveness to the Second Set of Interrogatories, to-date.
Such matter is a procedural matter, not a legal conclusion, and accordingly, the order is reviewed
for abuse of discretion.
B.

The Special Master did not abuse his discretion

State Farm argues that it cannot be faulted for answering the way it did because it was
tracking an approach the Special Master previously endorsed, and that the Special Master’s

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criticism of its selection of categories of information is unclear.

These arguments are

unpersuasive.
State Farm says that part of the reason for its approach is that it was “track[ing] the
Special Master’s own suggestions regarding a means for at least partially answering the Second
Interrogatories through computer queries.” Doc. 210, p. 14 of 20. State Farm cites Special
Master Order No. 4, Doc. 117, pp. 2-3. In that order, the Special Master rejected State Farm’s
argument that the only way to obtain the relevant, requested information was to perform a fileby-file analysis. By way of example to explain that conclusion, the Special Master highlighted
categories of computerized information that were identified in State Farm’s own briefing as
being available to it, including incremental amounts paid on a claim; total amounts paid on a
claim; the amount of the relevant deductible; the amount of relevant policy limits; the amount of
the calculated actual cash value; and the amount of labor depreciation deducted in the course of
calculating ACV. Id., p. 3. The Special Master stated, “It appears … that the withheld labor
deprecation amounts called for in the Interrogatories could be determined from [State Farm’s]
own computerized records, at least with respect to a certain subset of” the universe of claims.
Id. 2 The Special Master did not, in Order No. 4, identify a specific methodology that might
apply to a subset of claims or all claims, let alone any methodology State Farm must use with
respect to a subset of claims or all claims.
Furthermore, the methodology State Farm did use in preparing its supplemental responses
2

T he Special Master concluded that even if that rationale was incorrect, State Farm
should be required to answer the interrogatories for additional reasons. State Farm was being
ordered to answer interrogatories in lieu of producing documents, which State Farm had
described as a substantial burden. To the extent State Farm’s computerized data was not readily
accessible, it is because of State Farm’s purported inability to access the data, notwithstanding
that State Farm itself uses the same categories of information pertinent to the calculation of
amounts owed its insureds. “At the very least, [State Farm’s] failure to keep such records should
not constitute justification to withhold relevant discovery from [LaBrier].” Doc. 117, p. 4.
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incorporated actual-cost-of-repair data, which is not what was asked for in the first and second
interrogatories. While State Farm’s methodology is consistent with its theory of the case, this
methodology was not reasonably calculated to produce data responsive to the interrogatory that
State Farm was ordered to answer. That interrogatory asked for the total amount of labor
depreciation actually withheld by State Farm from any ACV payments, for each structural
damage claim upon which State Farm made an ACV payment and some labor depreciation was
withheld from the ACV payment. It did not ask what amount of depreciation would have been
deducted if State Farm had used an actual repair cost rather than an estimated repair cost.
In addition, State Farm acknowledged in its motion to vacate that the ACV estimate it
uploaded was only “the last uploaded estimate for the claim[.]” Doc. 210, p. 11. But State Farm
explains on the next page of its motion that part of the task its adjusters performed in reviewing
the 398 claim samples was to go back into the claim file and record the “originally applied labor
depreciation for the first payment on a claim[.]” Id., pp. 11-12 of 20, and n.10. 3 The record
supports the Special Master’s conclusion that State Farm did not substantially answer the
interrogatories.
Furthermore, State Farm was not and has not been permitted to provide discovery with
respect to only a sample of the class claims. Therefore, its continued insistence that this is a
satisfactory way to substantially answer the interrogatories is obviously incorrect.
Nor does it appear State Farm answered the third and fourth interrogatories with respect
to any class members. As the Special Master pointed out, it was State Farm’s burden to provide
3

In oral argument before the Special Master, State Farm disclosed that Xactware
wrote programming “to get the labor depreciation out…for all 150,000 claims already for the last
uploaded estimate.” State Farm does not appear to have requested programming for all
estimates, explaining to the Special Master that Xactware would “have to go back to them to try
to do calculations for iterative estimates, like interim ones[.]” Doc. 210-28, p. 19 of 39
(Tr. p. 65).
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such information as was known to it or reasonably available to it, although a duty to supplement
might arise when and if such information did become known or reasonably available to it. There
is no evidence that State Farm complied with that directive.
The Special Master did not abuse his discretion in concluding State Farm had failed to
substantially comply with its obligation to answer the Second Set of Interrogatories.
State Farm also argues that Special Master Order No. 8 should be vacated because the
third interrogatory rests on a faulty premise. That interrogatory asks, with respect to claims
identified in Interrogatory No. 1 and for which State Farm withheld labor depreciation, “whether
[State Farm] contend[s it]subsequently paid a portion or all of the withheld labor depreciation for
such claim, and, if so, set forth the date and amount of the withheld labor depreciation that was
later paid. If [State Farm] contend[s] that payment of withheld labor depreciation took place on
multiple dates for a particular claim, state both the date(s) and amount(s) of payment(s) of the
withheld labor depreciation.” State Farm argues that the policy caps its payment obligation by
an insured’s actual cost of repair, so full replacement cost is all that is owed, regardless of
whether an initial ACV payment was correctly calculated, and a class member who has received
full replacement payment cannot establish a breach of contract or contractual damages.
Doc. 210, p. 15. Thus, State Farm argues, Plaintiff’s “demand that State Farm identify the
amounts of labor depreciation ‘repaid’ in subsequent replacement cost payments, or labor
depreciation supposedly still ‘owed’ after an insured’s full cost to repair has been paid, … is
based on an artificial construct and asks state Farm to create theoretical and irrelevant
information.” Id.
Special Master Order No. 8 did not change the third interrogatory which was previously
approved by the Special Master and the Court. A reasonable litigant at this stage of the dispute

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would understand what this interrogatory asks for and why it is being asked. Indeed, this
information is needed to address State Farm’s argument that it owes no more than the full cost to
repair or replace the damaged property. The information requested is neither theoretical nor
irrelevant. More importantly, as discussed below, any dispute about the meaning of
Interrogatory 3 could have been raised in State Farm’s motion to vacate Special Master Order
No. 4. To the extent it was not raised there, it is too late to seek reconsideration here.
State Farm also argues at length that the discovery is burdensome and not proportional.
The Court has previously addressed and rejected the same argument in connection with State
Farm’s motion to vacate Special Master Order No. 4. Again, this argument is a request to
reconsider the Court’s prior ruling. A request to reconsider an interlocutory order requires the
movant to demonstrate it “did not have a fair opportunity to argue the matter previously” and that
“granting [the requested relief] is necessary to correct a significant error.” Disc. Tobacco
Warehouse, Inc. v. Briggs Tobacco and Specialty Co., Inc., 2010 WL 3522476, at *2 (W.D. Mo.
Sept. 2, 2010) (and citations therein). See also Tussey v. ABB, Inc., 2012 WL 5512389, at *1
(W.D. Mo. Nov. 14, 2012). A motion for reconsideration “is not a vehicle for simple reargument
on the merits[.]” Tussey, 2012 WL 5512389, at *1 (quoting Broadway v. Norris, 193 F.3d 987,
990 (8th Cir. 1999)). State Farm cannot meet this standard.
Much of the material to which State Farm points duplicates material on which it
previously relied in objecting to Plaintiff’s Second Set of Interrogatories and seeking to vacate
Special Master Order No. 8. To the extent State Farm supplies new material, nothing suggests
State Farm could not have produced it earlier. State Farm had a fair opportunity to make this
argument earlier.
More fundamentally, however, State Farm cannot demonstrate a significant error that

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justifies reconsideration. State Farm conceded that information about labor depreciation is
available to it in ECS or Xactimate, it simply argues that the process of gathering it is so
burdensome that it should not be required to answer the interrogatories. Doc. 210-28, p. 18 of 39
(Tr. of Proceedings of 5/16/2016, p. 61). This is an argument the Court previously considered
and rejected. Further, and as discussed above, most recently State Farm has approached the
discovery in a way that appears to have been inefficient, both by including irrelevant data in a
data query, and excluding information that appears relevant, then tasking adjusters to manually
enter data from existing databases into a new one and go back through the results, showing that
the results were difficult to work with. 4 State Farm even identified, to the Special Master,
programming that captures data that appears relevant. LaBrier also argued before the Special
Master that data that appears to be available to State Farm, and that could streamline answering
the interrogatories, has never been provided, such as claim notes; payee on the check (if the
payee is not the policyholder, the payment is unlikely to be an ACV payment); number of
estimates; dates of estimates; and net ACV payment. Doc. 210, p. 32 of 39 (Tr. of Proceedings,
pp. 117-18). The Special Master told the parties that State Farm’s “methodology in providing its
answers is its own business[,]” Doc. 215-2, p. 24 (teleconference of 6/13/2016). But State
Farm’s choice to use a methodology that does not produce the information that a person in good
faith would understand was being requested, does not demonstrate that the Court should
reconsider its prior order, let alone that the Special Master abused his discretion in denying State
Farm’s request for a finding of substantial compliance.
Lastly, State Farm argues that 90 days after submission of a plan for substantial
compliance is not sufficient time in which to provide the discovery answers. The Court cannot
4

Plaintiff points to an example in which an adjuster spent 240 minutes working on
a claim involving a single ACV payment. Doc. 209-2.
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conclude, based on the record before it and as discussed above, that the Special Master abused
his discretion in setting that deadline.
III.

Conclusion
State Farm’s motion to vacate Special Master Order No. 8, Doc. 194, is denied.

/s/ Nanette K. Laughrey
NANETTE K. LAUGHREY
United States District Judge
Dated: August 9, 2016
Jefferson City, Missouri

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