Toussie et al v. Allstate Insurance Company

Filing 110

MEMORANDUM AND ORDER denying 108 . Plaintiffs motion to quash the subpoena or for a protective order is denied. Allstate is directed to submit its subpoena directed to Christies (and Locksons, should Allstate choose to issue a subpoena) for the Co urt to so order. Plaintiffs, Robert Toussie and Laura Toussie, as well as their agents, employees, or any other person acting on their behalf, are enjoined from removing any boxes or property from the storage units rented located at Christies Fine Ar t Storage Services, 100 Imlay Street, Brooklyn, NY 11231 absent permission from this Court. This prohibition shall remain in place until the earlier of November 6, 2017 or the inspection of the premises by the defendant. See Order for details. So Ordered by Magistrate Judge Cheryl L. Pollak on 10/20/2017. (Blase, Brendan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------- X
ROBERT TOUSSIE,
Plaintiff,

MEMORANDUM AND ORDER
14 CV 2705 (FB) (CLP)

-againstALLSTATE INSURANCE COMPANY,
ALAN RODRIGUEZ INSURANCE AGENCY,
INC., and ALAN RODRIGUEZ,
Defendants.
------------------------------------------------------------ X
ROBERT TOUSSIE and LAURA TOUSSIE,
Plaintiffs,
15 CV 5235 (ARR) (PK)
-againstALLSTATE INSURANCE COMPANY,
Defendant.
------------------------------------------------------------ X
POLLAK, United States Magistrate Judge:
On April 30, 2014, plaintiff Robert Toussie commenced an action against Allstate
Insurance Company (“Allstate” or the “defendant”), Alan Rodriguez Insurance Agency, Inc.,
George J. Schlott, Inc., Alan Rodriguez, and George Schlott (collectively, “defendants”), alleging
that the defendants had improperly adjusted and mishandled his claims for damages caused to his
property, located at 290 Exeter Street, Brooklyn, New York (the “Property”), as a result of
Hurricane Sandy, in violation of an insurance contract between the parties (the “Flood Case”).
On September 10, 2015, in a related action (the “Theft Case”), plaintiffs Robert Toussie
and Laura Toussie alleged that Allstate improperly adjusted and mishandled plaintiffs’ claims for
losses incurred by plaintiffs when thieves allegedly vandalized their Property in the days

following Hurricane Sandy.
The Court held a telephone conference on October 3, 2017, at which the parties and the
Court discussed the defendant’s request to inspect certain premises and items at Christie’s and
Lockson’s used by the plaintiffs. (See Minute Entry, Oct. 3, 2017). On October 17, 2017,
plaintiffs’ counsel filed a letter motion with the Court seeking a protective order and to quash
defendant’s subpoena, dated October 4, 2017, directed to Christie’s Fine Art Storage Services
(“Christie’s”). (See Pls.’ Letter Mot.1 at 1-2).
Plaintiffs argue that the subpoena directed to Christie’s is improper because the Court’s
Minute Entry indicated that “[d]efendant to issue subpoena to be so ordered” to obtain
information from Christie’s and Lockson’s (see Minute Entry, Oct. 3, 2017), but defendant’s
counsel issued the subpoena himself. (See Pls.’ Letter Mot. at 1-2). Plaintiffs also argue that the
subpoena, which directs compliance by October 19, 2017 at 9:00 a.m., does not provide
reasonable time for Christie’s to comply to permit inspection. (Id. at 2). Finally, the plaintiffs
submit that the subpoena is overly broad and “subjects Christie’s and the Toussies to an undue
and unreasonable burden pursuant to Federal Rule of Civil Procedure 45(d).” (Id.)

DISCUSSION
A.

Defendant’s Failure to Submit the Christie’s Subpoena to the Court
The Court’s purpose in directing that defendant submit a subpoena to be “so ordered” was

to remove all doubt about the necessity of compliance by making the subpoena an order of the

1

Citations to “Pls.’ Letter Mot.” refer to plaintiffs’ Letter Motion to Quash and for
Protective Order, dated October 17, 2017.
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Court. Such a procedure seems particularly well-suited to these two cases, which have been
pending for years and in which discovery has progressed slowly. It is not a little ironic, then, that
the procedure intended to expedite these matters prompted the plaintiffs to file a motion that once
again throttles progress. The remedy is simple: the defendant is Ordered to submit its subpoena
directed to Christie’s as an attachment to a letter on ECF for the Court to “so order.”2

B.

Plaintiffs’ Other Objections to the Christie’s Subpoena
1.

Standing

“A party ordinarily lacks standing to quash a subpoena directed at a nonparty unless the
party is seeking to protect a personal privilege or right.” United States ex rel. Ortiz v. Mount
Sinai Hosp., 169 F. Supp. 3d 538, 545 (S.D.N.Y. 2016) (quoting Nova Prods., Inc. v. Kisma
Video, Inc., 220 F.R.D. 238, 241 (S.D.N.Y. 2004)); see also Langford v. Chrysler Motors Corp.,
513 F.2d 1121, 1126 (2d Cir. 1975) (explaining that “[i]n the absence of a claim of privilege a
party usually does not have standing to object to a subpoena directed to a non-party witness”).
“[T]he claim of privilege or right must be personal to the movant, not to the non-party witness on
whom the subpoena was served.” Samad Bros., Inc. v. Bokara Rug Co., 09 CV 5843, 2010 WL
5094344, at *2 (S.D.N.Y. Nov. 30, 2010). “[T]he party invoking a privilege bears the burden of
establishing its applicability,” and the “burden is a heavy one, because privileges are neither
‘lightly created nor expansively construed.’” In re Grand Jury Subpoenas Dated March 19, 2002
and August 2, 2002, 318 F.3d 379, 384 (2d Cir. 2003) (quoting United States v. Nixon, 418 U.S.

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If defendant’s counsel intend to subpoena Locksons, they should follow the same
procedure.
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583, 710 (1974)).
It follows as a straightforward application of these principles that the plaintiffs do not
have standing to seek to quash the subpoena on the basis of the time by which Christie’s must
comply or the burden the subpoena might place on Christie’s. Those are issues that do not
implicate plaintiffs at all.
The only right or privilege that plaintiffs raise in their letter motion that could be personal
to plaintiffs is their privacy interest in the storage space and any items contained therein. (See
Pls.’ Letter Mot. at 2). While plaintiffs may have standing, as a threshold matter, to challenge the
non-party subpoena on the basis of their claimed right to privacy, the Court finds that plaintiffs
have not carried their “heavy burden” of demonstrating that the subpoena should be quashed.
See, e.g., de Venustas v. Venustas Int’l, LLC, No. 07 CV 4530, 2008 WL 619028, at *2
(S.D.N.Y. Mar. 5, 2008).

2.

Right to Privacy

Apart from the fact that this Court has considered these arguments and twice ruled that an
inspection is warranted, the plaintiffs contend that
[t]he defendant can certainly not expect, and Christie’s cannot be
required to allow[,] Allstate at its whims[] to have access to personal
property and other valuables belonging to the Toussies which have no
bearing on the claims asserted by the Toussies herein. Such an
inspection would be a clear invasion of their privacy. It [is] also my
understanding from Mr. Toussie that Christie’s is not in possession
of any items relative to his theft claim.
(Pls.’ Letter Mot. at 2). Plaintiffs’ concerns are not tethered to the realities of these cases.
The defendant argues that an inspection is necessary because although the Toussies claim
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to have lost everything when Hurricane Sandy struck, Allstate discovered evidence that strongly
contradicts that account and which instead suggests “that a significant moving operation took
place” at the plaintiffs’ home. (Def.’s Letter3 at 2). The defendant points to plaintiffs’ evasive
and inconsistent answers regarding (1) whether, when, and by whom items were boxed and
moved from their home, and (2) the location of any such boxes during the course of this
litigation. (Id. at 2-3). Thus, the defendant contends that “the contents of the 190 boxes moved”
from the plaintiffs’ home “at substantial expense are highly relevant,” especially given that the
description of the property that was moved “match[es] the description of both items at issue on
this theft claim and items for which Allstate already made payment under the Toussies’ fine arts
rider.” (Id. at 3). The defendant also suggests that an inspection might reveal whether and to
what extent the Toussies may have violated their preservation obligations and spoliated evidence.
(Id.)
As part of their claims against Allstate in this case, the plaintiffs allege that they
“accumulated a wide array of personal property over the years – some of which is very valuable.”
(Am. Compl.4 ¶ 11). They provide numerous examples of property they claim was destroyed as a
result of Hurricane Sandy, including $350,000 in fine arts, two Rolls Royce vehicles, one
Bentley, and various other items. (See, e.g., id. ¶ 26). The core of plaintiffs’ claims is that they
owned personal property that was covered by the Allstate theft policy and that such property was
lost to them in a manner covered by the policy. Plaintiffs have thus put the existence and

3

Citations to “Def.’s Letter” refers to Allstate Insurance Company’s Letter Motion to
Compel, filed on June 13, 2017, No. 15 CV 5235, ECF No. 94.
4

Citations to “Am. Compl.” refer to the plaintiff’s Amended Complaint, filed on July 25,
2016, No. 15 CV 5235, ECF No. 48.
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location of their personal property at issue by bringing suit. They may not contend that they
suffered losses of personal property that Allstate is obligated to pay and simultaneously object on
the basis of their privacy interests to Allstate’s attempts to investigate that claim by determining
whether the property was actually lost.
The Court is mindful of its obligation to control the course of discovery to “secure the
just, speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1.
Given the delay engendered by the inconsistencies noted by the defendant, and because the issue
of what property remains in the plaintiffs’ possession and what property was lost during
Hurricane Sandy is central to this litigation, the Court reaffirms its earlier rulings permitting an
inspection of Christie’s as described in Allstate’s subpoena.

3.

Relevance and Undue Burden

Despite their contention that the subpoena is overly broad, plaintiffs also contend that it
imposes “an undue and unreasonable burden in having to determine which boxes, if any,
Christie’s may have in its possession that would be appropriately responsive to the subpoena in
question and necessary to produce for purposes of the inspection.” (Pls.’ Letter Mot. at 2). What
plaintiffs describe as an undue burden is actually the procedure required by Rule 34 of the
Federal Rules of Civil Procedure, which allows a requesting party, such as the defendant, to
describe a “category of items to be inspected,” Fed. R. Civ. P. 34(b)(1)(A), and then requires the
party receiving that request, such as the plaintiffs, to produce for inspection any responsive items,
including “tangible things.” Fed. R. Civ. P. 34(a)(1)(B).
Rule 34 speaks of items in the responding party’s “possession, custody, or control.” Fed.
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R. Civ. P. 34(a)(1). “Documents are in a party’s control when the party has the legal right,
authority, or practical ability to obtain the documents.” Leser v. U.S. Bank N.A., No. 09 CV
2362, 2010 WL 1945806, at *1 (E.D.N.Y. May 13, 2010) (collecting cases). It appears likely,
then, that the boxes stored at Christie’s actually are in the plaintiffs’ possession, custody, or
control and should have been disclosed and produced by the plaintiffs without the need for a
subpoena directed to Christie’s. Nonetheless, plaintiffs did not agree to produce the items or to
allow inspection of the premises, but instead required the defendant to seek a subpoena directed
to Christie’s. Plaintiffs have thus disavowed that the storage units and boxes were in their
possession, custody, or control, and they therefore seem to lack standing to challenge the
subpoena directed to Christie’s on the basis of the burden it might impose on them.
The Court has nevertheless considered plaintiffs’ arguments regarding the burden
imposed by the subpoena and rejects them. Given the plaintiffs’ request for millions of dollars,
the burden of this discovery request is properly borne by the plaintiffs. See Fed. R. Civ. P.
26(b)(1) (authorizing discovery that is “proportional to the needs of the case”); Uni-Systems LLC
v. U.S. Tennis Ass’n, No. 17 CV 147, 2017 WL 4081904, at *6 (E.D.N.Y. Sept. 13, 2017)
(explaining that “the importance of the discovery in resolving the issues” in the case is a key
consideration in determining whether a discovery request is proportional).
The storage units are relevant to this litigation and the issue of whether items plaintiffs
claim were lost actually remain in their possession. Plaintiffs effectively concede this point by
arguing that they would need to determine which of the boxes in the storage units are responsive
to the subpoena. (See Pls.’ Letter Mot. at 2).
In the context of a party’s attempt to redact irrelevant information from relevant
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documents, one court astutely observed:
Redaction is an inappropriate tool for excluding alleged irrelevant
information from documents that are otherwise responsive to a
discovery request. It is a rare document that contains only relevant
information. And irrelevant information within a document that
contains relevant information may be highly useful to providing
context for the relevant information. Fed. R. Civ. P. 34 concerns the
discovery of “documents”; it does not concern the discovery of
individual pictures, graphics, paragraphs, sentences, or words within
those documents. Thus, courts view “documents” as relevant or
irrelevant; courts do not, as a matter of practice, weigh the relevance
of particular pictures, graphics, paragraphs, sentences, or words,
except to the extent that if one part of a document is relevant then the
entire document is relevant for the purposes of Fed. R. Civ. P. 34.
This is the only interpretation of Fed. R. Civ. P. 34 that yields “just,
speedy, and inexpensive determination[s] of every action and
proceeding.” Fed. R. Civ. P. 1.
Bartholomew v. Avalon Capital Grp., Inc., 278 F.R.D. 441, 451–52 (D. Minn. 2011). While that
observation arose in the context of documents, the principle it expresses is a useful tool in the
similar context of production of tangible items that is now before the Court. The premises the
defendant seeks to inspect and the storage units thereon are relevant. Plaintiffs concede that at
least some of the boxes within the storage units may be relevant. Absent the existence of a
privilege, or severe prejudice that could not be ameliorated by an appropriate protective order,
the plaintiffs may not prevent inspection of boxes contained at the relevant premises on the basis
of their unilateral determination of irrelevance.
As reflected in the Court’s previous minute entries over the course of the past six months,
the information the defendant seeks to discover by issuing a subpoena directed to Christie’s
remains highly relevant. Neither time nor change of plaintiffs’ counsel alters that conclusion.
Plaintiffs’ motion to quash or for protective order is therefore denied. Specifically, to the extent
the plaintiffs’ letter motion seeks leave for plaintiffs to screen or to allow inspection of only
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certain boxes at the storage units, their motion is denied. Should a specific dispute arise during
the course of the inspection, the parties shall call the Court immediately to resolve any such
dispute.

C.

Preservation Order
The defendant has raised significant concerns regarding the possibility that evidence has

been or will be spoliated. (See, e.g., Def.’s Letter at 2-3). In light of those concerns, and having
considered both that defendant will suffer irreparable harm if evidence is lost and that the burden
on plaintiffs and Christie’s will be minimal, the Court has determined that it is appropriate to
enter a preservation order. See In re Complaint of Specialist LLC, No. 16 CV 5010, 2016 WL
6884919, at *3 (S.D.N.Y. Nov. 22, 2016) (quoting Treppel v. Biovail Corp., 233 F.R.D. 363, 370
(S.D.N.Y. 2006)).
The Court therefore Orders that plaintiffs, Robert Toussie and Laura Toussie, as well as
their agents, employees, or any other person acting on their behalf, are enjoined from removing
any boxes or property from the storage units located at Christie’s Fine Art Storage Services, 100
Imlay Street, Brooklyn, NY 11231 absent permission from this Court. This prohibition shall
remain in place until the earlier of November 6, 2017 or the inspection of the premises by the
defendant.

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CONCLUSION
For the reasons set forth above, the Court denies plaintiffs’ motion to quash the subpoena
or for a protective order regarding defendant Allstate’s subpoena to permit the inspection of
premises and objects thereon directed to Christie’s Fine Art Storage Services. To comply with
the Court’s previous minute entry and to ensure that discovery proceeds expeditiously, Allstate is
directed to submit its subpoena directed to Christie’s for the Court to “so order,” and which
Allstate must serve in place of its earlier subpoena.
Plaintiffs, Robert Toussie and Laura Toussie, as well as their agents, employees, or any
other person acting on their behalf, are enjoined from removing any boxes or property from the
storage units rented located at Christie’s Fine Art Storage Services, 100 Imlay Street, Brooklyn,
NY 11231 absent permission from this Court. This prohibition shall remain in place until the
earlier of November 6, 2017 or the inspection of the premises by the defendant.
The Clerk is directed to send copies of this Order to the parties either electronically
through the Electronic Case Filing (ECF) system or by mail.
SO ORDERED.

Dated: Brooklyn, New York
October 20, 2017
/s/ Cheryl L. Pollak
Cheryl L. Pollak
United States Magistrate Judge
Eastern District of New York

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