North American Insurance Agency Inc et al v. Bates

Filing 134

ORDER denying #123 Bates and CIB's Renewed Motion to Quash Subpoenas Duces Tecum (as more fully set out in order). Signed by Honorable Vicki Miles-LaGrange on 8/27/2013. (ks)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
NORTH AMERICAN INSURANCE
AGENCY, INC., d/b/a Insurica,
ROBERT C. BATES, L.L.C., and
COMMERCIAL INSURANCE
SERVICES L.L.C.,
Plaintiffs,
vs.
ROBERT C. BATES, JOEY D. DILLS,
and COMMERCIAL INSURANCE
BROKERS, L.L.C., WALT PETTIT,
KIM BUKER, W. SAM PETTIT,
DEBBIE MORRIS, WALT PETTIT
CPCU, INC., and COMMERCIAL
BROKERAGE SERVICES, INC.,
Defendants.

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Case No. CIV-12-544-M

ORDER
Before the Court is defendants’ Renewed Motion to Quash Subpoenas Duces Tecum, filed
July 19, 2013. On August 9, 2013, plaintiffs filed their response, and on August 15, 2013,
defendants filed their reply. Based upon the parties’ submissions, the Court makes its determination.
I.

Background
On June 7, 2013, plaintiffs served subpoenas duces tecum on the following entities: Aetna,

Bituminous Insurance Company, Blue Cross & Blue Shield of Oklahoma, CNA, Community Care,
CompSource of Oklahoma, Coventry Healthcare, National American Insurance Company, Travelers,
and United Healthcare. Each of the subpoenas commanded the production of the following:
Commission statements, statements of accounts, or other similar
records reflecting the payment or allocation of commissions for
Commercial Insurance Brokers, L.L.C. and/or its producers issued to
Commercial Insurance Brokers, L.L.C. for the time period beginning
May 1, 2012 to the present date.

Subpoenas Duces Tecum, attached as Exhibit 1 to Defendants’ Renewed Motion to Quash
Subpoenas Duces Tecum. Copies of the original subpoenas were not received by defendants’
counsel until June 13, 2013.1
II.

Discussion
Defendants Robert C. Bates (“Bates”) and Commercial Insurance Brokers, LLC (“CIB”) now

move the Court to quash the subpoenas duces tecum. Bates and CIB assert that the subpoenas
should be quashed for the following reasons: (1) plaintiffs failed to provide timely notice of the
subpoenas; (2) the subpoenas improperly seek the disclosure of privileged or other confidential
documents and information; (3) the subpoenas are patently overreaching and overly broad; (4) the
subpoenas improperly command production of information not relevant to the issues in this action;
and (5) the subpoenas constitute harassment of the third parties whose confidential business
accounts information the subpoenas seek to obtain.
A.

Notice

Because defendants did not receive notice of the subpoenas duces tecum before they were
served as required by Federal Rule of Civil Procedure 45(b)(1), Bates and CIB contend that the
subpoenas should be quashed. Rule 45(b)(1) provides, in pertinent part:
If the subpoena commands the production of documents,
electronically stored information, or tangible things or the inspection
of premises before trial, then before it is served, a notice must be
served on each party.

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In response to defendants’ previous motion to quash, plaintiffs contemplated issuing
amended subpoenas to resolve defendants’ concern and provided notice to defendants’ counsel of
the prospective issuance of amended subpoenas. However, in light of the outcome of counsels’
“meet and confer,” plaintiffs decided not to issue the amended subpoenas. Therefore, there are no
amended subpoenas at issue.
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Fed. R. Civ. P. 45(b)(1). “[T]he 1991 Advisory Committee Notes to Rule 45 indicate that the
purpose of the notice requirement is to provide opposing parties an opportunity to object to the
subpoena.” Butler v. Biocore Med. Techs., Inc., 348 F.3d 1163, 1173 (10th Cir. 2003).
While plaintiffs did not provide notice prior to service of the subpoenas, Bates and CIB
clearly have had ample opportunity to object to the subpoenas – filing not one but two motions to
quash. Because the purpose of Rule 45(b)(1)’s notice requirement fully has been met in this case,
the Court finds the subpoenas should not be quashed on the basis of lack of notice.
B.

Disclosure of privileged or protected matter

Bates and CIB contend that the subpoenas should be quashed because they improperly seek
the disclosure of privileged or other confidential documents and information. Specifically, Bates
and CIB assert that the information sought by the subpoenas, both as to CIB and the other
unidentified “producers,” is absolutely proprietary to “Commercial Insurance Brokers, L.L.C. and/or
its producers.” Bates and CIB further assert that the information requested would not only
improperly identify those third parties’ commissions, but also their accounts, their customers, their
incomes, and other proprietary business and commercial information.
On August 23, 2013, this Court entered a Joint Protective Order [docket no. 132] in this case.
In their response, plaintiffs state that they will treat the records produced according to the terms of
the protective order. Because a Joint Protective Order has been entered in this case and the
documents sought by the subpoenas are subject to the Joint Protective Order, the Court finds that
the subpoenas should not be quashed on the basis that they seek the disclosure of privileged or other
confidential documents and information.

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C.

Scope of subpoenas

Bates and CIB contend that the information commanded to be produced is wholly irrelevant
to the claims asserted in this action. Bates and CIB further contend that the subpoenas seek
documents covering a period of time after and wholly unrelated to the “wrongful acts” alleged in
either the First Amended Complaint or the Second Amended Complaint. Additionally, Bates and
CIB assert that the subpoenas are patently vague and entirely open-ended, commanding production
of the account information presumably for any and all producers who might in any way be or have
been affiliated with CIB. Further, Bates and CIB assert that to the extent the subpoenas seek
information relating to persons not parties to this action or to persons not even identified in the
subpoenas, the subpoenas are patently overreaching and overly broad and should, therefore, be
quashed.
Federal Rule of Civil Procedure 26(b)(1) provides, in pertinent part:
Unless otherwise limited by court order, the scope of discovery is as
follows: Parties may obtain discovery regarding any nonprivileged
matter that is relevant to any party’s claim or defense – including the
existence, description, nature, custody, condition, and location of any
documents or other tangible things and the identity and location of
persons who know of any discoverable matter. For good cause, the
court may order discovery of any matter relevant to the subject matter
involved in the action. Relevant information need not be admissible
at the trial if the discovery appears reasonably calculated to lead to
the discovery of admissible evidence.
Fed. R. Civ. P. 26(b)(1).
Plaintiffs’ claims in the case at bar include, among others, breach of contract, breach of
fiduciary duties, unjust enrichment, unfair competition, and intentional interference with prospective
economic advantage. Plaintiffs assert that the documents sought by these subpoenas are relevant
because these records will help establish when Robert C. Bates, L.L.C.’s (“RCB”) clients were
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solicited by agents of CIB, and when CIB became the agent of record for those individuals and
entities. Plaintiffs further assert that the time frame – May 2012 to present – is appropriate both to
establish liability, including but not limited to their unfair competition claim, as certain of
defendants’ conduct extended into August 2012, and damages, which continue to accrue to date.
Additionally, plaintiffs contend that they are seeking the records of CIB, which is a party to this
case. Finally, plaintiffs contend that the producers are agents of CIB.
Having carefully reviewed the parties’ submissions, the Court finds that the information
sought through the subpoenas is relevant to plaintiffs’ claims in this action and/or is reasonably
calculated to lead to the discovery of admissible evidence. Specifically, the Court finds that, at a
minimum, the information sought is relevant to plaintiffs’ claims of unjust enrichment, unfair
competition, and intentional interference with prospective economic advantage. The Court further
finds that the subpoenas are not vague, overreaching, or overly broad. Specifically in relation to the
time frame of the information requested, the Court finds that the time frame is relevant to the
damages plaintiffs are seeking, as well as to plaintiffs’ unfair competition claim. Accordingly, the
Court finds that the subpoenas should not be quashed on this basis.
D.

Harassment of third parties

Finally, Bates and CIB contend that the subpoenas constitute harassment of the third parties
whose confidential business accounts information the subpoenas seek to obtain. Having carefully
reviewed the parties’ submissions, the Court finds no indication that plaintiffs are using the
subpoenas to harass the third parties whose confidential business accounts information the
subpoenas seek to obtain. Accordingly, the Court finds that the subpoenas should not be quashed
on this basis.

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III.

Conclusion
For the reasons set forth above, the Court DENIES Bates and CIB’s Renewed Motion to

Quash Subpoenas Duces Tecum [docket no. 123].
IT IS SO ORDERED this 27th day of August, 2013.

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