Government Employees Insurance Company v. Saco et al

Filing 132

ORDER denying (112) Motion to Compel in case 1:12-cv-05633-NGG-CLP. Ordered by Magistrate Judge Marilyn D. Go on 3/28/2017. Associated Cases: 1:12-cv-05633-NGG-CLP, 1:15-cv-00634-NGG-CLP (Go, Marilyn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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GOVERNMENT EMPLOYEES INSURANCE CO.,
Plaintiff,
- against -

ORDER
2012-cv-5633 (NGG)(CLP)

DIANE SACO, et al.,
Defendants.
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SUZANNE KUSULAS,
Plaintiff,

2015-cv-634 (NGG)(CLP)

- against GOVERNMENT EMPLOYEES INSURANCE CO., et
al.,
Defendants.
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In these two consolidated actions, the parties assert claims
involving two insurance policies issued by Government Employees
Insurance Company ("GEICO") to Diane Saco ("Saco"), who was found
liable in a state tort action for injuries sustained by Suzanne
Kusulas ("Kusulas") in an automobile accident.

In the first action

(12-cv-5633, the "GEICO Action"), GEICO seeks a declaration as to
the rights and obligations of the parties under the two policies
and Kusulas has filed a counterclaim for pre-judgment interest from
the date that a state court granted summary judgment in her favor
against Saco.

In the second action (15-cv-634, the "Kusulas

Action"), Kusulas, who now holds claims against GEICO that Saco
assigned to her, asserts a bad faith claim against GEICO and seeks

recovery of damages beyond the limits of the two policies.
Kusulas has moved to compel production of certain entries
contained on GEICO's activity log ("A-log"), which GEICO redacted
and identified on its privilege log.
23 in 15-cv-634.

See DE 112 in 12-cv-5633; DE

For the following reasons, the motion is denied.
BACKGROUND

In her motion, Kusulas seeks production of certain redacted
activity log entries inputted by GEICO employees and listed by
GEICO on its privilege log bearing Bates numbered pages GEICO 44 GEICO 51, which were made between February 2011 and April 2011, and
entries contained on Bates numbered pages GEICO 100 - GEICO 105,
which were made in October 2010.

Many of the those entries were

the subject of an order issued in the GEICO Action in which this
Court granted in large part GEICO's motion for a protective order.
See Order dated Sept. 30, 2014 (GEICO Action, DE 64) (the "Prior
Order").

In the Prior Order, this Court discussed whether work

product protection should be accorded to 72 A-log entries contained
on Bates numbered pages GEICO 44 - GEICO 64 and GEICO 104-GEICO
105.

These A-log entries represented a sampling of disputed

entries from three different time periods which the parties agreed
to submit to the Court for review in connection with the motion for
a protective order.

See id. at 1; Affidavit (of Diane K. Kanca) in

Support of the Motion for a Protective Order and Exhs. A and B, DE
39-1 at ¶¶ 33-39; DE 39-2; DE 30-3.

As to the time periods

corresponding to the two periods at issue in Kusulas's current

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motion, this Court ruled that most of the entries were entitled to
protection as work product because they were records reflecting
steps taken in anticipation of litigation in response to bad faith
letters sent by defendants' attorneys.

See Prior Order at 5, 6.

Specifically, this Court found privileged the A-log entries
numbered from 1 through 43, which were created between April 7,
2011 and April 18, 2011 and contained on GEICO 44 - GEICO 47,
except for 1, 2, 39, 42, and 43 and part of 3; and A-log entries
numbered 65 through 72, except for 66, which were created between
October 18, 2010 to October 19, 20101 and contained on GEICO 104105.

In addition, this Court found that most of the A-log entries

numbered 44 through 64 created between February 21, 2011 and
February 23, 2011 and contained on Bates numbered pages GEICO 58 GEICO 59 were also protectable work product. See id. at 6.

This

Court also found that Kusulas and Saco failed to demonstrate a
"substantial need" for the A-log entries sufficient to overcome
work product protection.

See id. at 5, 6.

This Court thus

required GEICO to produce the entries found not to be protected as
work product and directed GEICO to review the other entries on its
privilege log to determine whether any of those entries should be
disclosed in light of the discussion in the order.

See id. at 6.

After issuance of the Prior Order, discovery proceeded.

No

party filed objections to the Prior Order or subsequently sought

1

This Court incorrectly stated in the Prior Order that
these entries were made between February 21, 2011 and February
23, 2011, contrary to the October 2010 dates reflected in the
partial privilege logs submitted. See DE 39-2 and 39-3.
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consideration of other log entries on GEICO's privilege log.

The

parties reported at a conference on June 23, 2015 that fact
discovery was largely complete and at a conference on November 17,
2015 that all discovery had been completed, except for additional
discovery sought by Kusulas.
6/23/2015 and 11/17/2015.

See minute entries for conferences on

Kusulas followed with a motion (DE 103)

for an extension of discovery with respect to a document previously
produced, which this Court denied by order filed on December 21,
2015.

DE 105.

Judge Garaufis subsequently gave the parties leave to file
cross motions for summary judgment and required that moving papers
be served by March 11, 2016.

Kusulas filed the instant motion to

compel on March 30, 2016.
DISCUSSION
As discussed in two earlier discovery orders in this action,
Rule 26(b)(3)(A) provides that work product can be discovered if it
is (i) otherwise discoverable under Rule 26(b)(1) and (ii) "the
party shows that it has substantial need for the materials to
prepare the case and cannot, without undue hardship, obtain their
substantial equivalent by other means."

Kusulas argues that

although this Court ruled in the Prior Order that she had not
demonstrated a "substantial need" for the redacted A-log entries,
the impeachment value of the redacted portions of the A-log is now
sufficient to pierce the work product privilege.

She argues that

those entries can be used to impeach statements made by Helen

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Indjeyiannis, a GEICO employee.
Kusulas cites Johnson v. Bryco Arms, No. 02 CV 3029, 2005 WL
469612, at *4 (E.D.N.Y. Mar. 1, 2005) for the proposition that
"impeachment material can, in some circumstances, support a claim
of substantial need sufficient to pierce a claim of work-product
protection."

The court also noted that "relevancy alone is not

enough to establish substantial need," but that "substantial need
is shown where the work product material at issue is central to the
substantive claims in litigation."

Id. (quoting Madanes v.

Madanes, 199 F.R.D. 135, 150 (S.D.N.Y. 2001)).

However, in

discussing what circumstances might support a claim of substantial
need, the Johnson court cited Varuzza by Zarrillo v. Bulk
Materials, Inc., 169 F.R.D. 254, 257 (N.D.N.Y. 1996).

In Varuzza,

the court found that plaintiff had demonstrated substantial need
for a prior written statement provided to an investigator by a
central witness since the document would provide plaintiffs with a
critical piece of impeachment material, particularly when the
witness's subsequent depositions suggested inconsistencies or gaps
in the witness's memory.

Id.

Kusulas contends that the entries she seeks can be used to
impeach Helen Indjeyiannis regarding her testimony as to why GEICO
never increased its settlement offer above $300,000 or authority
above $450,000, even though she had requested authority up to
$800,000.

Kusulas claims this testimony is inconsistent with the

statements of Paul Feinman, a claims manager for GEICO, in an
affidavit filed in support of GEICO's motion for summary judgment
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that, at that time, GEICO would only increase its offer of $300,000
if Kusulas lowered her demand.
Aff.").

See DE 112-1 at ¶¶ 26, 72 ("Feinman

In addition, Kusulas claims Ms. Indjeyiannis gave

conflicting deposition testimony when she testified that she
believed the attorney handling negotiations for GEICO (Mr. Nelson)
did not extend an offer of $450,000 because he did not "believe it
would settle the case."

DE 112-2 at 5.

Kusulas maintains that the

statements and testimony are contradictory and that the information
contained in the redacted portions of the A-log could impeach Ms.
Indejeyiannis.

Kusulas also argues that the A-log entries for

October 2010 do not reflect several meetings that Indjeyiannis
stated in her affidavit (DE 112, Ex. C at ¶ 27) occurred after a
meeting in October 2010, and that she needs the A-log to verify
Indjeyiannis' account.
As a preliminary matter, although Kusulas tries to fashion her
motion as one triggered by Feinman's affidavit submitted by GEICO
in connection with the pending motions for summary judgment, this
Court notes that Feinman's statements in his affidavit are hardly
surprising in this sort of case involving insurance coverage.

More

importantly, Kusulas had the opportunity to depose Mr. Feinman, Ms.
Indjeyiannis and other GEICO employees almost a year before her
instant motion.

Thus, even assuming that the redacted entries

contained the impeachment information sought by Kusulas, she has
not provided a persuasive reason why she has been impeded in
discovery so as to require the protected entries.

See Brock v.

Frank V. Panzarino, Inc., 109 F.R.D. 157, 160 (E.D.N.Y. 1986) (fact
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work product material ordinarily should be protected "if the party
seeking discovery is able to obtain the desired information by
taking the deposition of witnesses;"); see also

A.I.A. Holdings,

S.A. v. Lehman Bros., No. 97 CIV. 4978, 2002 WL 31385824, at *9
(S.D.N.Y. Oct. 21, 2002), supplemented sub nom. A.I.A. Holdings v.
Lehman Bro., Inc., No. 97 CIV. 4978, 2002 WL 31556382 (S.D.N.Y.
Nov. 15, 2002).
Importantly, because the parties have previously litigated and
this Court ruled as to whether many of the entries should be
protected from disclosure, the law of the case applies absent a
showing of "an intervening change of controlling law, the
availability of new evidence, or the need to correct a clear error
or prevent manifest injustice."

See Virgin Atl. Airways, Ltd. v.

Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992).
To the extent that Kusulas is claiming that new evidence in
the deposition testimony of Indeyjiannis and affidavit of Feinman
warrants reconsideration, such evidence does not change this
Court's view expressed in the Prior Order that the protected
entries at issue simply do not concern valuation, strategy, or the
substance of any offer by GEICO.

None of the entries from April 7,

2011 to April 18, 2011 even discuss the motivation or strategy for
valuation of any offer or the overall value of the case.

They are

clerical notations that reflect that Feinman approved certain
correspondence to be sent to Kusulas and Saco, and neither discuss
the content of those letters nor mention numbers, valuation, or
strategy.
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Nor does this Court find that the statements of Indjeyiannis
and Feinman are inconsistent.

Feinman states that they (GEICO)

were waiting for Kusulas to lower her demand before increasing
GEICO's offer while Indjeyiannis expressed her belief that Feinman
thought that $450,000 would "not settle the case."

This is

consistent with Feinman's testimony that he believed that an offer
of $450,000 at that time would not be accepted and he wanted to
wait until Kusulas lowered her demand.

This account is supported

by the deposition of Alan Siegelwax, a claims evaluator who GEICO
designated as its corporate representative. See DE 113-2.
Kusulas also claims that the log entries would contradict
Indjeyiannis' statement in her affidavit, DE 112, Ex. C
("Indjeyiannis Aff.") at ¶ 27, that she "met with Feinman and
supervisors at the regional office several times to discuss the
underlying case after the October 2010 meeting."

Again, in that

statement, Indjeyiannis is merely stating there were meetings after
October 2010, not that they all occurred in October 2010, as
Kusulas argues.
Even if Kusulas could demonstrate that the "new evidence"
warrants reconsideration of the Prior Order, she has not
demonstrated that the information contained in the redacted log
entries is "central" to the substantive claims in this action.
Since the entries reviewed contain no discussion of valuation of
the case or other information which would support a bad faith
claim, the material is not "central" to the issues in this case.
Kusulas's interest in the impeachment value of the statement
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in the Indjeyiannis affidavit regarding "multiple" meetings taking
place in October 2010 is misplaced.

The plain meaning of Ms.

Indjeyiannis' statement is not that "multiple" meetings all took
place in October 2010, but after that time.

Even if the redacted

entries provided information about the number and timing of
meetings, such information is not "central" to the substantive
claims in this action and is not sufficient to warrant
reconsideration of the Prior Order.
Given the foregoing findings, the Court need not reach the
issue of whether Kusulas can obtain the substantial equivalent
without undue hardship.

In fact, Kusulas has been able to depose

Indjeyiannis and other GEICO employees, including claims manager
Alan Siegelwax, to verify GEICO's strategy and whether certain
meetings took place.

Thus, Kusulas had ample opportunity to

conduct discovery regarding any matter discussed in the A-log
entries.
In short, this Court finds that Kusulas has presented no
reason to overturn the findings in the Prior Order.
However, this Court has not examined the redacted log entries
contained in Bates numbered pages GEICO 41-GEICO 43, GEICO 48-GEICO
51, and GEICO 100-GEICO 103.

Since the entries for these other

pages appear to be the same time periods covered by the Prior
Order, Kusulas offers no reason why she did not appeal the Prior
Order or move for further rulings by the Court after GEICO produced
the documents and reviewed other entries, as required by the Prior
Order.

She also did not promptly seek review after the depositions
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of GEICO employees were completed in May or June 2015.

In any

event, since the entries sought are for impeachment purposes, this
Court declines to conduct a further review at this juncture in
light of the pending motions for summary judgment.

CONCLUSION
For the foregoing reasons, the motion to compel (DE 112 in the
GEICO, DE 23 in Kusulas Action) of Kusulas is denied.

Denial of

the motion is without prejudice as to the log entries on Bates
numbered pages GEICO 41-GEICO 43, GEICO 48-GEICO 51, and GEICO 100GEICO 103, which this Court did not previously review.

However,

Kusulas is warned that should she file a further motion to compel
after determination of the summary judgment motions, she must be
prepared to explain why she is entitled to disclosure after having
had the opportunity to conduct depositions.
SO ORDERED.
Dated:

Brooklyn, New York
March 28, 2017
_______/s/____________________
MARILYN D. GO
UNITED STATES MAGISTRATE JUDGE

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