Liberty Mutual Insurance Company et al v. Guereschi et al

Filing 69

OPINION AND ORDER Granting in part and Denying in part 52 FIRST MOTION for Protective Order filed by Shannon Lebel, LFA Group, LLC, Michael Guereschi, Granting in part and Denying in part 57 CROSS MOTION to Compel Defendant to Answer Third Set of Interrogatories and/or Leave for Such Interrogatories filed by Liberty Mutual Group, Inc., Liberty Mutual Insurance Company. The parties shall bear their own fees and costs with respect to each motion. Signed by Hon. William K. Sessions III on 2/28/23. (SG)

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UNITED STATES DISTRICT COURT
FOR THE
WESTERN DISTRICT OF NEW YORK
LIBERTY MUTUAL INSURANCE
COMPANY and LIBERTY MUTUAL
INSURANCE GROUP, INC.,
Plaintiffs,
v.
MICHAEL GUERESCHI, SHANON
LEBEL, and LFA GROUP, LLC,
Defendants.

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Case No. 17-cv-1152

OPINION AND ORDER
Plaintiffs Liberty Mutual Insurance Company and Liberty
Mutual Group Inc. (collectively “Liberty Mutual”) bring this
action for damages and injunctive relief against Liberty
Mutual’s former sales representative Michael Guereschi, his
business associate Shanon Lebel, and LFA Group, LLC.

The

Complaint alleges an unlawful conspiracy to steal Liberty Mutual
clients/policyholders, and breaches of certain employment
contracts.

Those contracts include non-solicitation and

confidentiality agreements.
Pending before the Court is a dispute about the third set
of interrogatories propounded by Plaintiffs.

The

interrogatories ask Defendant Guereschi to describe his
relationships, and disclose specific communications, with
hundreds of individuals and their family members.

Guereschi

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allegedly sold or attempted to sell insurance to those
individuals after he was terminated by Liberty Mutual.
Guereschi objects to both the number and nature of Plaintiffs’
latest requests.
Guereschi has moved for a protective order shielding him
from a duty to respond (ECF No. 52), and Liberty Mutual has
filed a cross-motion to compel responses to the interrogatories
(ECF No. 57).

For the reasons set forth below, both motions are

granted in part and denied in part.
Factual Background
As alleged in the Complaint, Guereschi began working as a
sales representative for Liberty Mutual in 2003.

Liberty Mutual

claims that he derived substantial benefit from its marketing
and advertising resources, as well as policyholder referrals.
Liberty Mutual also alleges that Guereschi generated information
from its existing or prospective policyholders, which
information the company considers highly confidential and
valuable.
The Complaint claims that Guereschi agreed to ensure the
confidentiality of such information in the event of his
termination.

Specifically, Liberty Mutual required employees to

execute confidentiality agreements, return-of-information
clauses, and restrictive covenants designed to protect against
improper disclosures.

Guereschi also allegedly agreed to
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certain limited non-competition provisions, including agreements
to refrain from selling, attempting to sell, or soliciting the
purchase of products or services of the kind offered by Liberty
Mutual, and agreed not to communicate with any policyholder or
prospective policyholder about reducing or cancelling their
Liberty Mutual insurance policy.
In November 2016, Liberty Mutual terminated Guereschi’s
employment.

After his termination, Guereschi was hired by

Defendant LFA Group, LLC (“LFA”) to serve as an agent for
Allstate, a Liberty Mutual competitor.

Liberty Mutual claims

that after Guereschi joined Allstate, several Liberty Mutual
policyholders cancelled their insurance and bought replacement
policies from Guereschi’s office.

Liberty Mutual asserts, upon

information and belief, that Guereschi induced or assisted with
those cancellations.

Guereschi reports that he worked for LFA

from March 15, 2017 to April 26, 2019, and has not worked in the
insurance industry since that date.
Liberty Mutual’s initial interrogatories asked Guereschi to
disclose all Liberty Mutual customers whom he solicited and/or
to whom he sold policies after his termination.
allegedly responded with a list of 77 names.

Guereschi

Liberty Mutual

reports that records subpoenaed from Allstate and Guereschi’s
phone carrier revealed additional Liberty Mutual customers with
whom Defendants had communications.
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Guereschi contends that

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some of the clients in question were cultivated as a result of
his “independent efforts,” and not as a result of his
relationship with Liberty Mutual.
In light of Guereschi’s “independent efforts” defense,
Liberty Mutual served a third set of interrogatories.

The

document contains six interrogatories, each of which reference
an attached list of 459 people.

The interrogatories essentially

ask Guereschi to describe:
1) his pre-existing business relationship with any of the 459
people at issue;
2) his pre-existing personal relationship with any of those
people;
3) his initial efforts to sell insurance to those people;
4) the “independent efforts” he claims to have employed for
each person he contends was “developed” through such
efforts;
5) the “independent recruitment effort” he claims he employed
for each person who allegedly “came to Liberty Mutual” as a
result of such efforts; and
6) facts supporting his claim that any such person was not
“developed” as a customer at Liberty Mutual “solely through
the goodwill of Liberty.”
ECF No. 57-6.
On November 23, 2022, Guereschi’s attorney sent a letter to
opposing counsel objecting to the interrogatories, arguing that
when combined with Plaintiffs’ first and second sets of
interrogatories, the requests exceed the number of
interrogatories allowed under the Federal Rules of Civil
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Procedure.

Counsel also objected to the interrogatories as

unreasonable and unduly burdensome.

Those letters were followed

by the pending motion for a protective order, and by Plaintiffs’
opposition and motion to compel.
Guereschi’s reply brief reports that Liberty Mutual has
since reduced the number of names from 459 to 344.
at 2.

ECF No. 61

Guereschi submits that the relevant number of clients is

approximately 119, which number represents the 77 customers he
identified initially, plus an additional 42 customers revealed
as a result of Allstate’s subpoena response.

Guereschi asks the

Court to limit the inquiry to those 119 names, arguing that
Liberty Mutual is only entitled to ask about people to whom he
sold policies.

Liberty Mutual contends that the list should not

be limited to sales, and that the additional names are persons
whom Defendants solicited in breach of Guereschi’s various
employment contracts.
Discussion
I.

Motion for Protective Order
Under Federal Rule of Civil Procedure 26(c), “[a] party or

any person from whom discovery is sought may move for a
protective order in the court where the action is pending ....
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).
5

“Rule 26(c) confers

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broad discretion on the trial court to decide when a protective
order is appropriate and what degree of protection is required.”
Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984).

“To

establish good cause under Rule 26(c), courts require a
particular and specific demonstration of fact, as distinguished
from stereotyped and conclusory statements.”

Jerolimo v.

Physicians for Women, P.C., 238 F.R.D. 354, 356 (D. Conn. 2006)
(citations and quotation marks omitted).
A.

The Number of Interrogatories

Rule 33(a)(1) provides that “a party may serve on any other
party no more than 25 written interrogatories, including all
discrete subparts.

Leave to serve additional interrogatories

may be granted to the extent consistent with Rule 26(b)(2).”
Fed. R. Civ. P. 33(a)(1).

Liberty Mutual’s initial discovery

request contained 13 interrogatories directed to Guereschi.

Its

second set propounded an additional five interrogatories.
Without counting subparts, the most recent set of six
interrogatories, when combined with the previous 18 requests,
falls within the limit of 25 set by Rule 33(a)(1).
Guereschi argues that the most recent requests functionally
comprise hundreds of separate interrogatories, as he must recall
each relationship and provide the requested information for each
person.

The advisory committee notes to Rule 33 explain that “a

question asking about communications of a particular type should
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be treated as a single interrogatory even though it requests
that the time, place, persons present, and contents be stated
separately for each such communication.”
advisory committee notes (1990 Amendment).

Fed. R. Civ. P. 33
Accordingly, an

interrogatory asking for detail about a certain type of
communication is a single question.

See, e.g., Concerned

Citizens of Belle Haven v. Belle Haven Club, 223 F.R.D. 39, 47
(D. Conn. 2004) (compelling yacht club to respond to
interrogatories referencing a table with numerous columns, and
declining to consider each item in the table as a separate
interrogatory).
Liberty Mutual’s six interrogatories ask about pre-existing
business and personal relationships, efforts to sell insurance,
and the nature of those efforts to the extent they were
“independent” and/or free from the “goodwill of Liberty” Mutual.
Each interrogatory ties into the list of names, but the
questions themselves consist of single interrogatories.

See id.

Moreover, the latter questions ask Guereschi to characterize the
nature of certain communications (“independent efforts” or
“independent recruitment efforts”), many of which will
presumably be listed and characterized in prior responses.
While the Court acknowledges that the responses may be
voluminous and time-consuming, as addressed below, the questions

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do not constitute hundreds of individual interrogatories and do
not run afoul of the numeric limit set forth in Rule 33.
B.

Unreasonable or unduly burdensome

Guereschi also objects to the interrogatories as
unreasonable and/or unduly burdensome.

Rule 26 provides that

the court must limit the frequency or extent of
discovery otherwise allowed by these rules or by local
rule 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 burden or expense of the proposed
discovery outweighs its likely benefit, considering
the needs of the case, the amount in controversy, the
parties’ resources, the importance of the issues at
stake in the action, and the importance of the
discovery in resolving the issues.
Fed. R. Civ. P. 26(b)(2)(C).
The Court again acknowledges that the third set of
interrogatories require a significant amount of information.
That information is relevant, in large part, because of
Guereschi’s defense that he cultivated customer relationships
through independent efforts, and not because of his access to
Liberty Mutual’s resources.

Given that Guereschi will likely

present such evidence at summary judgment or at trial, the facts
underlying the defense are discoverable.
Guereschi submits that the number of persons at issue
should represent former Liberty Mutual customers to whom

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Defendants actually sold a policy after Guereschi’s departure,
as those sales are the only source of Plaintiffs’ alleged
damages.

Liberty Mutual contends that the number is higher,

since even a mere solicitation may have caused a policyholder to
cancel or decline to renew.

While Liberty Mutual will

ultimately have to prove such damages, the Court will not limit
its inquiry to only those persons to whom Defendants ultimately
sold a policy.
To the extent Guereschi claims that the agreements he
signed are not enforceable, the Court previously determined his
arguments are premature.

ECF No. 26 (denying Defendants’ motion

to dismiss).
Guereschi claims that the requests will result in
significant expenditures of time and excessive legal fees.
Guereschi also argues that the requests are overly broad.

This

last objection is well taken as, in the case of Guereschi’s
father for example, there are persons for whom Guereschi cannot
be expected to list all communications during the requested time
period.

That objection may extend to other individuals, such as

other family members or longtime friends, as well.

The Court

will require only a reasonable response, and in some instances a
simple description of the relationship will be sufficient.
On the issue of time and fee expenditures, Guereschi’s
“independent efforts” defense will be necessarily individualized
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and detailed.

Because his defense may play a significant role

in the outcome of this case, such expenditures are necessary and
justified.

Indeed, courts in this Circuit have held that time

and expense alone are insufficient to avoid the duty to respond
to interrogatories.

See, e.g., Burns v. Imagine Films Ent.,

Inc., 164 F.R.D. 589, 593 (W.D.N.Y. 1996) (“the fact that
answering the interrogatories will require the objecting party
to expend considerable time, effort and expense consulting,
reviewing and analyzing ‘huge volumes of documents and
information’ is an insufficient basis to object”).
The Court therefore finds that Guereschi has shown good
cause for a protective order only to the extent that some of
Plaintiffs’ requests, which may encompass close friends and
relatives, are overly broad and require only reasonable
responses.

With that consideration in mind, Guereschi must

provide responses with respect to the names set forth by Liberty
Mutual in its third set of interrogatories.
II.

Motion to Compel
Plaintiffs’ motion to compel asks the Court to require

Guereschi to respond to the third set of interrogatories.

For

the reasons set forth above, that motion is granted in part and
denied in part, and Guereschi must provide reasonable responses
for each of the names set forth by Liberty Mutual in its six
interrogatories.
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III. Fees and Costs
Plaintiffs ask the Court to award them fees and costs with
respect to the pending motions.

Where, as in this case, a

discovery motion is granted in part and denied in part, Federal
Rule of Civil Procedure 37(a)(5)(C) applies and the Court has
discretion to apportion fees.

Given that the Court is providing

some measure of relief to both parties, it finds that each party
must bear its respective fees and costs.

See Fleming v. City of

New York, No. 18CV4866GBDJW, 2023 WL 1861223, at *5 (S.D.N.Y.
Feb. 9, 2023) (citing cases).
Conclusion
For the reasons set forth above, Defendant Guereschi’s
motion for protective order (ECF No. 52) is granted in part and
denied in part, and Plaintiffs’ cross-motion to compel (ECF No.
57) is granted in part and denied in part.

The parties shall

bear their own fees and costs with respect to each motion.
DATED at Burlington, Vermont, this 28th day of February,
2023.
/s/ William K. Sessions III
William K. Sessions III
U.S. District Court Judge

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