Liberty Mutual Insurance Company et al v. Guereschi et al

Filing 71

OPINION and ORDER granting in part and denying in part 60 Motion to Compel; that the parties shall bear their own costs and fees with respect to this motion. Signed by Hon. William K. Sessions III on 4/14/2023. (JLV)

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.

Pending before the Court is Plaintiffs’ motion to

compel responses to their first set of interrogatories.

For the

reasons set forth below, the motion to compel is 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

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
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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.

Guereschi

allegedly responded with a list of approximately 70 names.
Liberty Mutual reports that records subpoenaed from Allstate and
Guereschi’s phone carrier revealed over 250 additional Liberty
Mutual customers with whom Defendants had communications.
The disputes at issue in the pending motion to compel arise
out of Liberty Mutual’s claim that Defendants’ actions,
including contacting Liberty Mutual clients (“Restricted
Persons”) after Guereschi left Liberty Mutual violated
Guereschi’s non-solicitation, non-disparagement and
confidentiality agreement (“Agreement”).

Defendants allege that

their actions did not violate the Agreement.

Defendants have

also argued that the agreements are unenforceable, although the
Court has denied those arguments as premature.

ECF No. 26.

The motion to compel pertains to seven requests propounded
upon Guereschi and LFA.

Those requests seek information about:

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(1) the identity of Restricted Persons and communications
with those people after Guereschi left Liberty Mutual;
(2) all communications between Guereschi and anyone else
after his departure from Liberty Mutual concerning (a) his
leaving Liberty Mutual, (b) Defendant Lebel or LFA, (c)
Guereschi’s new contact information, and (d) insurance,
including specifically Guereschi’s quoting or sale of insurance;
(3) the Agreement;
(4) documents Guereschi took with him when he left Liberty
Mutual, including customer information;
(5) policies quoted to Liberty Mutual customers after
Guereschi left Liberty Mutual;
(6) policies sold to those customers; and
(7) compensation received by Defendants as a result of
those sold policies.

Liberty Mutual contends that Defendants’

responses on these items are inadequate.

Liberty Mutual also

argues that Defendants cannot assert general objections without
tying them to individual interrogatories, that Guereschi’s
assertions should be attested to under oath, and that any
information not disclosed in the course of discovery should be
barred from admission in the case.
Discussion
Motions to compel are “entrusted to the sound discretion of
the district court,” United States v. Sanders, 211 F.3d 711, 720
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(2d Cir.), cert. denied, 531 U.S. 1015 (2000), and “[a] trial
court enjoys wide discretion in its handling of pre-trial
discovery,” In re Fitch, Inc., 330 F.3d 104, 108 (2d Cir. 2003)
(citations and quotation marks omitted).

Rule 26 of the Federal

Rules of Civil Procedure allows parties to obtain “any
nonprivileged matter that is relevant to any party’s claim or
defense and proportional to the needs of the case.”

Fed. R.

Civ. P. 26(b)(1).
I.

Communications with Restricted Persons
Defendants’ responses pertaining to communications with

Restricted Persons were initially called into question when
Liberty Mutual, after issuing subpoenas to third parties,
identified an additional 250 such persons.

Defendants do not

contest the additional names, but have reportedly provided
little information about communications with those persons.
Guereschi contends that he did not keep records on people to
whom he did not sell insurance policies, and that he did not
retain any records from either Allstate or LFA.

He therefore

attests that he has provided the requested information to the
best of his knowledge.
The Court is aware that there is likely significant overlap
between these interrogatories and Defendants’ third set of
interrogatories, which asked Guereschi to provide details about
his communications with each Restricted Person.
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The Court

recently compelled Guereschi to supplement his responses to that
third set of interrogatories, ECF No. 69, and Guereschi may
refer Liberty Mutual to those responses if the information
sought does, in fact, overlap.
As to responses to the first set of interrogatories,
Liberty Mutual claims they lack detail.

Such details include,

for example, the last known address and place of employment for
each Restricted Person.

Defendants may not be in possession of

such information, and the Court only expects them to respond to
the best of their knowledge.
Liberty Mutual focuses in part on its request for recorded
information.

Guereschi responds that any such recordings would

not be in his possession, and if none was produced by Allstate
then the parties should infer that the recordings do not exist.
Part of the question, however, is whether such communications
were recorded.

If Guereschi knows of such recordings, or knows

that no such recordings were made, he must supplement his
response to reflect such knowledge.
Liberty Mutual also reports that Guereschi has supplemented
his responses without withdrawing his initial answers.
two sets of answers apparently gives rise to confusion.

Having
To the

extent the supplemental answers are inconsistent with the
initial responses, those answers supersede the prior answers.

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LFA submits that it is unaware of Guereschi’s contacts with
any Restricted Persons.

As Liberty Mutual’s interrogatory asks

LFA about its own communications with Restricted Persons, LFA
must clarify its response on that point.
Finally, the parties question whether the interrogatory
responses need to be attested to under oath.

Guereschi has, on

at least one occasion, attested to the answers set forth in the
interrogatories as true.

ECF No. 60-5 at 21.

If Liberty Mutual

requires additional attestations, the parties can confer and
resolve that issue.
II.

Communications About Four Specific Topics
Plaintiffs asked Guereschi and LFA to identify all

communications on the four specific topics listed above.

Those

topics include communications about Guereschi’s departure from
Liberty Mutual and his subsequent sale of insurances policies.
Defendants refer to their general objections and argue that
those interrogatories are overly broad.
The objection is sustained, although Defendants will note
that the use of general objections as to all responses is not
preferred.

With respect to the substance of the

interrogatories, it is unreasonable to ask an insurance
salesperson who obtained a new job to set forth all
communications thereafter about his old job, his new colleagues,
and perhaps most significantly, his sale of insurance policies.
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III. Communications Regarding the Agreement
The next dispute centers on Liberty Mutual’s request for
the disclosure of communications regarding the Agreement.
Guereschi and LFA provided responses, yet their responses were
not entirely consistent.
those inconsistencies.

Plaintiffs now ask them to explain
That sort of follow-up questioning,

however, is most appropriate in the context of a deposition.
Moreover, because inconsistent responses from separate parties
can be the result of different recollections or information, and
is therefore not unexpected, the Court will not compel the two
parties to reconcile their answers.
To the extent that Defendants’ responses lack detail,
Defendants submit that they have answered to the best of their
knowledge and ability.

Again, follow-up may be accomplished

during depositions.
There is a question about whether Guereschi and LFA
disclosed communications that occurred after receiving a ceaseand-desist letter.

To the extent that any such requested

communications are known and have not been disclosed, the
responses must be supplemented.
IV.

Retention of Contact Information for Restricted Persons
Liberty Mutual asks Guereschi and LFA to identify any

documents existing prior to Guereschi’s departure from Liberty
Mutual concerning, for example, Restricted Persons, which
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documents were also in their possession after Guereschi’s
departure.

In other words, did Guereschi take any information

about Restricted Persons with him when he left Liberty Mutual?
The interrogatory responses state that there are no such
documents.
Liberty Mutual now contends that Verizon phone records show
Guereschi initiated phone contact with Restricted Persons after
he left Liberty Mutual.

Liberty Mutual therefore asks for

supplementation and, in essence, an explanation as to how those
phone numbers were obtained/retained.

It is a reasonable

question, does not amount to an entirely new interrogatory, and
the answer should be supplemented if such documents exist.

If

there are no responsive documents, the explanation will have to
come at a future point in discovery.
V.

Policies Quoted to Restricted Persons
When asked to produce documents showing persons to whom

policies were quoted after Guereschi left Liberty Mutual,
Defendants responded that they have no such documents.

Liberty

Mutual subsequently sent a subpoena to Allstate, which produced
the relevant documents.

Because Defendants are now in

possession of the Allstate documents, Liberty Mutual contends
that they must supplement their response.
To the extent that Defendants’ supplemental production
would only duplicate what was already provided by Allstate, the
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Court will not compel such a duplicative effort.

Nonetheless,

the Allstate information does not confirm that insurance quotes
were provided.

To the extent Defendants are able to confirm

that any person was offered a quote, that person must be
identified.
VI.

Policies Sold to Restricted Persons
As with the policy quotes, the policies sold are apparently

reflected by the documents produced by Allstate.

Those

documents do not need to be re-produced by Defendants, but what
they represent (policies sold by Defendants) must be either
confirmed or denied.
VII. Compensation to Defendants from Policy Sales
The Allstate subpoena response appears to have provided
documents relevant to the question of compensation paid as a
result of policy sales.

Once again, all that is required is

confirmation that those documents do, in fact, represent
compensation from the sale of policies after Guereschi left
Liberty Mutual.
Conclusion
For the reasons set forth above, Liberty Mutual’s motion to
compel (ECF No. 60) is granted in part and denied in part.

The

parties shall bear their own costs and fees with respect to this
motion.

See Fed. R. Civ. P. 37(a)(5)(C).

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DATED at Burlington, Vermont, this 14th day of April, 2023.

/s/ William K. Sessions III
William K. Sessions III
U.S. District Court Judge

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