Raab v. New England Financial et al

Filing 66

ORDER granting 62 Motion to Compel to the extent that Defendant Unum, when the deposition of its Fed.R.Civ.P. 30(b)(6) representative is taken, is ORDERED to provide testimony concerning Topics 2 and 4 of Plaintiff's Notice of Deposition covering the years 1999, 2001, 2003, 2005, and 2009. Plaintiff's motion is otherwise DENIED. Signed by Magistrate Judge Mark R. Abel on 8/08/2011. (sr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Robert Raab,

:
Plaintiff

Unum Group, et al.,
Defendants.

Civil Action 2:10-cv-186

:

v.

:

Judge Economus

:

Magistrate Judge Abel

:
ORDER

This matter is before the Court pursuant to Plaintiff’s motion to compel a
Fed. R. Civ. P. 30(b)(6) deposition (Doc. 62.)
On January 7, Plaintiff served a notice of deposition upon Defendant Unum
Group. (Doc. 62-1.) This notice required the testimony of a representative of Unum
pursuant to Fed. R. Civ. P. 30(b)(6) concerning five topics: (1) any changes in
Unum’s claim handling policies and procedures resulting from the Multistate
Conduct Examination Settlement (“RSA”), California Settlement Agreement
(“CSA”), or Unum Group Actuarial Analysis of the Northwind Individual Disability
Block; (2) claims training, policy, and procedures on or after June 1999; (3) any
changes in Unum’s compensation programs resulting from the RSA or CSA; (4) all
actions taken by Unum to ensure compliance with Ohio’s Unfair Claims Practices
Act; and (5) the business relationship between Unum and any other defendant with
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respect to claims handling procedures.1 (Id. at 3.)
Unum apparently agreed at first to produce a representative to testify about
topics 1-4, so long as topic 5 was withdrawn.2 However, Defendants later sent
Plaintiff comprehensive responses to the notice of deposition. They objected to
Topic 1 on grounds that the CSA was irrelevant because it applied only to
California policies, and that the Northwind agreement only involved a reinsurance
treaty, not claims management operations. Defendants objected to Topics 2 and 4
to the extent that information was sought from before 2003. Finally, they objected
to Topic 3 on grounds that the CSA was irrelevant, and that they had already
affirmatively stated that there had been no changes to Defendants’ compensation
programs as a result of the RSA, rendering a deposition on the question
superfluous. (Doc. 62-3; Doc. 65-1.) Plaintiff now requests that the Court order
Defendants to attend the deposition and testify on these topics. The Court will
address them separately.
Topic 1. The Court previously found, in its order of April 8, 2011, that
information concerning Unum’s implementation of the RSA was relevant to the
question of claims handling practices. (Doc. 48 at 2.) Defendants do not object to
producing a witness to testify on this subject. (Doc. 65 at 4; Doc. 62-3 at 3.)

The notice of deposition referred only to Defendant Unum Group as the
subject of the Rule 30(b)(6) examination, although the parties generally refer to the
respondent Defendants in the plural.
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The parties do not appear to dispute that Topic 5 is no longer at issue.
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However, they argue that “the CSA has no bearing on any unit handling Plaintiff’s
claims because the two policies issued to Plaintiff are not California policies.” (Doc.
65 at 4.) Defendants cite another court’s explanation that the CSA is simply a
parallel to the RSA applying only to California claimants. Torres v. Unum Life Ins.

Co. of Am., 2009 WL 69358 at *6 (N.D. Cal. 2009). Plaintiff does not effectively
rebut Defendants’ argument that the CSA is irrelevant; he states that portions of
the RSA are incorporated by reference into the CSA, and that Unum often refers to
them both collectively as “regulatory settlement agreements”. However, his
assertion that the CSA is “equally applicable” to Plaintiff’s non-California claim
determination simply because “any broad changes made to claims handling would
necessarily have needed to comply with the provisions of the CSA as well as the
RSA” is not persuasive. (Doc. 62 at 4-5.) The Court does not find the CSA, a
regulatory settlement not applicable to Plaintiff’s policy, relevant to Plaintiff’s
claims in this action.
Although the parties have supplied little information concerning the nature
of the “Unum Group Actuarial Analysis of the Northwind Individual Disability
Block”, Defendants objected to testifying about it on grounds that “it is Defendants’
understanding that the Northwind agreement only involved a reinsurance
agreement, and did not affect Defendants’ claims management operations”. (Doc.
62-3 at 2.) “This statement,” Plaintiff argues, “drastically underestimates the
importance of reinsurance arrangements and their effect on operations.” (Doc. 62 at
5.) He quotes the following statement from Unum’s president in a press release:
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The Northwind transaction is another important step in our ongoing
efforts, which began in 2004, to improve the returns associated with
our Individual Income Protection – Closed Block business. This securitization
creates a more efficient, market-validated capitalization for this business and
creates capital which can be directed to other uses. The deployment of excess
capital from on-going operations and this transaction will benefit our policyholders,
shareholders, and creditors.
(Doc. 62 at 5, emphasis in original.) Plaintiff argues:
The sentence in bold says that Unum created capital from the Closed
Block. This is unusual to say the least. Apparently through financial
engineering Unum turned liabilities into capital. Plaintiff seeks to
discover how Unum was able to take money set-aside to pay liabilities
(claims) into capital for use in Unum’s operations rather than to pay
claims, such as the Plaintiff’s.
(Id.)
Plaintiff brought this suit alleging that Defendants had breached their
insurance contract with him by refusing to pay him total disability. (Doc. 16 at 3-4.)
The Court has previously found relevant questions of whether Defendants engaged
in claims-handling practices which encouraged the denial of claims in bad faith
and/or linked employee compensation to the denial of claims. Plaintiff is not,
however, conducting an audit or regulatory investigation of Unum Group and its
capital management strategy. He has offered no plausible basis for finding that the
reinsurance arrangement between Unum Group and Northwind Holdings, LLC is
relevant to his claims.
Topics 2 and 4. Defendants’ objections to these topics were based upon a
dispute as to the time period relevant to Plaintiff’s claims. In its order of June 6,
2011, the Court found that discovery concerning claims determinations in the years

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1999, 2001, 2003, 2005, and 2009 was relevant, as these comprised years in which
Defendants actively reviewed Plaintiff’s claims and made either favorable or
unfavorable determinations. (Doc. 57 at 2-3.) Plaintiff in the motion at bar states
that his notice of deposition likewise limits Topics 2 and 4 to 1999, 2001, 2003,
2005, and 2009. However, “Defendants maintain that the cited ‘active review’ years
are relevant only for claim determinations generally, as opposed to adverse
determinations specifically. As such, the years 1999 and 2001 – when Defendants
did not make adverse decisions regarding Plaintiff’s benefits – are not relevant for
purposes of this topic.” (Doc. 65 at 8.) Defendants state that they are willing to
produce a deponent for the years 2003, 2005, and 2009.
Plaintiff, in Topics 2 and 4, seeks information on “[c]laims training, policy
and procedures in administration and adjudication of individual disability claims...”
and “[a]ll actions... used by Defendant to ensure compliance with Ohio’s Unfair
Claims Practices Act”. The Court has already found that “[i]nformation from years
in which Plaintiff received favorable claim or coverage determinations are relevant
to compare with years in which he did not, to determine whether salary and bonus
incentives might have affected the outcome.” (Doc. 57 at 3.) Accordingly, the years
1999 and 2001 are relevant to Plaintiff’s claims, and Defendants must provide
deposition testimony concerning these years as well.
Topic 3. This topic seeks, as noted above, information concerning any
changes to Defendants’ bonus or other incentive compensation programs resulting
from the CSA or RSA. Defendants have already represented that no responsive
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information exists, because “there were no changes to Defendants’ variable
Compensation & Bonus Incentive Programs as a result of the RSA”.3 (Doc. 65-1 at
4.) Plaintiff states that, in this case, preparing a witness for deposition on this topic
should be easy. However, its “burden or expense” would also outweigh “its likely
benefit”. Fed. R. Civ. P. 26(b)(2)(C)(iii). Little would be accomplished by asking a
Rule 30(b)(6) representative to again give the same response.
Plaintiff suggests also that Unum has made inconsistent statements on this
matter in the past, as one corporate officer stated in a June 8, 2010 deposition that,
under the RSA, compensation is “not appropriately based on denials of claims or
targets”. (May 14, 2010 Deposition of Laura Kilmartin in Kelly v. Provident Life

and Accident Ins. Co., et al., District of Vermont Case No. 1:09-cv-70, Doc. 62-5 at
112.) However, “[i]f Unum is saying that they have, in fact, made no changes as a
result of the RSA, this would lead to the conclusion that bonuses were being based
upon denials of claims during the period in which Plaintiff’s claim determination
was made.” (Doc. 62 at 8.) Plaintiff’s conclusion is illogical. Ms. Kilmartin’s
testimony, and Unum’s statements now, would lead to the conclusion that, if
implementation of the RSA resulted in no change in Unum incentive compensation
policy, and basing bonuses upon denials of claims was barred by the RSA, then
Unum did not base bonuses upon denials of claims before the RSA either. In any
case, Plaintiff has received the information he asked for – that Defendants’ position

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As noted above, the CSA is not relevant to Plaintiff’s claims.
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on post-RSA changes in compensation policies is that none occurred. A deposition
to further reiterate this conclusion would appear to be unproductive and
burdensome.
Conclusions. Plaintiff’s motion to compel (Doc. 62) is GRANTED to the
extent that Defendant Unum, when the deposition of its Fed. R. Civ. P. 30(b)(6)
representative is taken, is ORDERED to provide testimony concerning Topics 2 and
4 of Plaintiff’s Notice of Deposition covering the years 1999, 2001, 2003, 2005, and
2009. Plaintiff’s motion is otherwise DENIED.
Under the provisions of 28 U.S.C. §636(b)(1)(A), Rule 72(a), Fed. R. Civ. P.
and Eastern Division Order No. 91-3, pt. F, 5, either party may, within fourteen
(14) days after this Order is filed, file and serve on the opposing party a motion for
reconsideration by the District Judge. The motion must specifically designate the
order, or part thereof, in question and the basis for any objection thereto. The
District Judge, upon consideration of the motion, shall set aside any part of this
Order found to be clearly erroneous or contrary to law.
s/Mark R. Abel
United States Magistrate Judge

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