Sparkman v. Liberty Mutual Insurance Company

Filing 37

ORDER granting in part and denying in part 21 Motion to Quash. The Motion to Quash is denied as set forth above. For the reasons set forth herein the Court finds that Defendant has standing to challenge certai n of the topics set forth in the subpoena Plaintiff intends to serve on non-party Haag Engineering and the Court exercises its discretion to consider other issues. The motion, to the extent it seeks a protective order, is granted in part as set forth above, as more fully set out. Signed by Honorable David L. Russell on 4/27/21. (jw)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
W. HARVEY SPARKMAN,
Plaintiff,
v.
LIBERTY MUTUAL FIRE
INSURANCE COMPANY,
Defendant.

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No. CIV-20-710-R

ORDER
Before the Court is Defendant Liberty Mutual Fire Insurance Company’s Motion to
Quash Plaintiff’s Subpoena Duces Tecum to Non-party Haag Engineering. (Doc. No. 21).
Plaintiff responded in opposition to the motion (Doc. No. 24) and Defendant filed a Reply
(Doc. No. 25) in support of its position. The Court conducted a hearing on March 31, 2021
and ordered the parties to confer with Haag in an effort to determine whether Haag would
be willing to produce certain information sought by Plaintiff. The parties filed a notice with
the Court on April 7, 2021 indicating that Haag advised Liberty Mutual that it is willing to
produce its inspection file for Plaintiff’s insurance claims but is otherwise unwilling to
respond. Accordingly, the Court turns to consideration of the parties’ briefs and finds as
follows with regard to Defendant’s motion.
In this action Plaintiff alleges that Defendant breached certain contracts of insurance
by failing to tender adequate payment on Plaintiff’s claims for the repair or replacement of
the roof on each of five buildings that Plaintiff owns. He further alleges that in breaching

those contracts the Defendant violated its duty of good faith and fair dealing. On December
16, 2020, Plaintiff filed a Notice of Subpoena Duces Tecum, in accordance with Federal
Rule of Civil Procedure 45(a)(4), informing Defendant that he intended to issue a subpoena
to Haag Engineering on December 23, 2020.1 In response to the Notice, Defendant filed
the instant motion seeking to quash certain aspects of the subpoena. Alternatively, and
importantly in the context of the Federal Rules of Civil Procedure, Defendant requests that
the Court issue a protective order limiting the scope of the subpoena Plaintiff intends to
issue to Haag Engineering.
Defendant’s motion relies in part on Rule 45 of the Federal Rules of Civil Procedure.
Plaintiff correctly notes that Rule 45(d)(3) provides, in pertinent part:
On timely motion, the court for the district where compliance is
required must quash or modify a subpoena that:
(i)
fails to allow a reasonable time to comply;
(ii)
requires a person to comply beyond the geographical limits specified
in Rule 45(c);
(iii) requires disclosure of privileged or other protected matter, if no
exception or waiver applies; or
(iv) subjects a person to undue burden.
Accordingly, to the extent Defendant is relying on Rule 45(d)(3), this Court is not
the appropriate forum for a motion to quash, because the Rule provides that the district
where compliance is required, here the Northern District of Texas, should consider such a
motion. However, Local Civil Rule 45.1(b) provides:

1

Rule 45(a)(4) provides:

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 on the person to whom it is
directed, a notice and a copy of the subpoena must be served on each party.
2

Within 7 days from the filing of the notice provided in LCvR45.1(a),
any party may file a motion to preclude service of the subpoena, in whole or
in part, on any ground for which a protective order may be sought. If a motion
under this rule is timely filed, the subpoena shall not be served on the person
to whom it is directed until the motion is determined.
Thus, consistent with Federal Rule of Civil Procedure 26, Local Civil Rule 45.1(b),
contemplates that a party may file a motion for protective order in the court where the
action in pending with regard to discovery sought from a non-party, as opposed to seeking
relief via a motion to quash, which is to be filed in the place of production.2
Here, Plaintiff’s subpoena directed Haag Engineering to comply by completing the
production in Dallas, Texas, which is not within the Western District of Oklahoma.
Defendant argues that this applies only when the subpoena has been served on the thirdparty, however, Defendant cites no authority in support of this proposition. Accordingly,
the Court denies Defendant’s Motion to Quash but considers whether a protective order is
appropriate under the facts and circumstances of this case.
The subpoena Plaintiff intends to serve on Haag Engineering requests twelve
documents covering twelve topics; only six are at issue here, Defendant having no
documents sought in topics 7 through 12. The document topics to which Defendant objects
are:
1.

Any and all documents addressing, referencing and/or evidencing Your
relationship with Liberty Mutual in the State of Oklahoma, including, but not
limited to, the following:

2

Local Civil Rule 45.1(c) provides that “[f]ailure to file a motion under LCvR45.1(b) does not preclude any party
or person from invoking other remedies, such as a subsequent motion for protective order or a motion to quash or to
modify the subpoena under Fed.R.Civ.P. 45(d).

3

a.

b.

Any and all documents showing the number of claims in which
Liberty Mutual retained Haag in any state of the United States of
America from January 1, 2010 to the date of Your response to this
subpoena.

c.

Any and all documents evidencing the number of claims in Oklahoma
from January 1, 2010 to the date of Your response to this subpoena,
in which, on behalf of Liberty Mutual, Haag issued an engineering
report.

d.

Any and all documents evidencing the number of claims in any state
in the United States of America from January 1, 2010 to the date of
Your response to this subpoena, in which, on behalf of Liberty
Mutual, Haag issued an engineering report.

e.

2.

Any and all documents showing the number of claims in which
Liberty Mutual retained Haag in Oklahoma from January 1, 2010 to
the date of Your response to this subpoena.3

Any and all documents demonstrating Your knowledge or understanding of Oklahoma state licensing requirements for professional
engineers.

Any and all documents addressing, referencing and/or evidencing Your
professional relationship with Liberty Mutual in any state in the United States
of America, including, but not limited to, the following:
a.

b.

Any and all documents evidencing any solicitations or discounts
offered by Haag to Liberty Mutual from January 1, 2010 to the date
of Your response to this subpoena.

c.

Any and all documents showing any instances, from January 1, 2010
to the date of Your response to this subpoena, in which a moratorium
was placed on Haag from performing engineering services on behalf
of Liberty Mutual, and the circumstances surrounding such
moratorium.

d.

3

Any and all documents showing any workshops, training materials,
speeches, marketing materials or advertising provided by You directly
to Liberty Mutual from January 1, 2010 to the date of Your response
to this subpoena.

Any and all documents demonstrating any instances, from January 1,
2010 to the date of Your response to this subpoena, in which Liberty
Mutual has alleged that Haag or its employees have committed fraud,
negligence, or professional malpractice.

Sparkman agreed in his response to limit the time period for topics 1-6 to January 1, 2010 through February 1, 2020.

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e.

3.

Any and all documents evidencing the contractual terms existing
between You and Liberty Mutual from January 1, 2010 to the date of
Your response to this subpoena.

Any and all documents addressing, referencing and/or evidencing Your
professional relationship with other insurance carriers in the State of
Oklahoma., such as State Farm Insurance Company and Allstate Insurance
Company, including, but not limited to, the following:
a.

b.

4.

Any and all documents showing any instances, from January 1, 2010
to the date of Your response to this subpoena, in which a moratorium
was placed on Haag from performing engineering services on behalf
of any insurance company in Oklahoma, and the circumstances
surrounding such moratorium.
Any and all documents evidencing any instances, from January 1,
2010 to the date of Your response to this subpoena, in which any
insurance company who has retained Haag's professional services on
claims in Oklahoma has alleged that Haag or its employees have
committed fraud, negligence, or professional malpractice.

Any and all documents addressing, referencing and/or evidencing Your
professional relationship with other insurance carriers who write insurance
for any state in the United States of America., such as State Farm Insurance
Company and Allstate Insurance Company, including, but not limited to, the
following:
a.

b.

5.

Any and all documents showing any instances, from January 1, 2010
to the date of Your response to this subpoena, in which a moratorium
was placed on Haag from performing engineering services on behalf
of any insurance company in any state in the United States of
America, and the circumstances surrounding such moratorium.
Any and all documents evidencing any instances, from January 1,
2010 to the date of Your response to this subpoena, in which any
insurance company who has retained Haag's professional services on
claims in any state in the United States of America has alleged that
Haag or its employees have committed fraud, negligence, or
professional malpractice.

Any and all documents how much Haag has been paid by Liberty Mutual
from January 1, 2010 to the date of Your response to this subpoena.

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6.

Any and all 1099s or other tax forms or documents evidencing payments to
Haag by Liberty Mutual from January 1, 2010 to the date of your response
to this subpoena.

Liberty Mutual is defined “Defendant Liberty Mutual Fire Insurance Company and
any parent, subsidiary, or any entity affiliated with Liberty Mutual Insurance Company.”
(Doc. No. 21-1).
At the outset the Court concludes that to the extent Defendant argues that Plaintiff
is improperly seeking discovery directly from Defendant’s expert, the Court disagrees. An
expert witness is a person, separate and distinct from his or her employer. Plaintiff’s
subpoena is directed to Haag Engineering, and Haag Engineering, an entity, cannot perform
the function of an expert witness although clearly Defendant anticipates that one or more
of Haag’s currently unidentified employees will perform such services. The Court finds
that Defendant’s failure to identify a particular Haag employee as an expert cannot be used
to preclude Plaintiff from seeking the discovery sought from the third party.4 Certain of
the documents sought by Plaintiff may be relevant to the credibility of whomever
Defendant ultimately identifies as an expert witness, as Plaintiff indicates the requests are
designed to show “the bias of Haag to find facts in favor of the insurance company that
hires them.” (Doc. No. 34, p. 29). Plaintiff’s counsel argued at the hearing, “I think this is
going to support a position that it was bad faith to use Haag to send them out with
instructions to determine date of loss.” Id. at p. 29.

4

According to the parties’ notice Haag Engineering has agreed to produce the inspection files for Plaintiff’s properties
but is otherwise unwilling to produce documents. Haag will have the opportunity to challenge the subpoena, if served,
in the Northern District of Texas where production is to be completed. Defendant has not made objection to production
of these documents.

6

Plaintiff disputes whether Liberty Mutual has standing to challenge a subpoena to
be served on Haag, a third-party. Liberty Mutual disagrees.
A party has no standing to attempt to quash a subpoena served on a
third party except as to claims of privilege or upon a showing that a privacy
interest is implicated. Windsor v. Martindale, 175 F.R.D. 665, 668 (D.Colo.
1997)(“[a]bsent a specific showing of a privilege or privacy, a court cannot
quash a subpoena duces tecum”); see also Broadcart Capital Corp. v. Flagler
Secs. Inc, 149 F.R.D. 626, 628 (D.Colo. 1993). Courts in the Tenth Circuit
have held that a party has standing to challenge a subpoena served on a third
party only based on privilege or a proprietary interest. Howard v. Segway,
Inc, NO 11-CV-688-GFK-PJC, 2012 WL 2923230, at *2 (N.D.Okla. July 18,
2012)(citing Washington v. Thurgood Marshall Acad., 230 F.R.D. 18
(D.D.C. 2005)). Objections unrelated to a claim of privilege or privacy are
not proper bases upon which a party may quash a third-party subpoena.
Windsor, 175 F.R.D. at 668; see also Oliver B. Cannon & Son, Inc. v. Fidelity
& Cas. Co. of N.Y., 519 F. Supp. 668, 680 (D. Del. 1981) (movant lacks
standing to raise objections unrelated to any right of privilege).
Scott v. Antero Res. Corp., No. 1:17-CV-00693-WJM-SKC, 2020 WL 7212169, at *2 (D.
Colo. Feb. 6, 2020).5 Absent standing by the movant or a valid claim of privilege or
confidentiality, the Court may nevertheless limit the scope of the discovery sought on the
basis of relevance.6
In cases where a moving party lacks standing to challenge a thirdparty subpoena, a court may exercise its inherent authority to limit irrelevant
or non-proportional discovery requests pursuant to Federal Rule of Civil
Procedure 26(b)(2)(C). See Fed. R Civ. P. 26(b)(2)(C)(iii) (explaining that
court “must limit the frequency or extent of discovery” if court determines
that proposed discovery is outside the scope permitted by Rule 26(b)(1));
Gov't Employees Ins. Co. v. Trnovski, No. CV 16-4662 (CCC), 2018 WL
5281424, at *3 (D.N.J. Oct. 23, 2018) (“Although the Court finds that
defendants lack standing to quash the Subpoenas, the Court will nevertheless
address whether the information that Plaintiffs seek is relevant under Rule
26.”).
5

Rule 26(c) allows the court, for good cause, to issue an order to protect a party from annoyance, embarrassment,
oppression, or undue burden or expense. The Court has broad discretion to utilize a protective order to specifically
define or narrow discovery, including the terms, timing, and method of discovery. Id.

6

Plaintiff concedes that Defendant has standing to challenge relevancy. (Doc. No. 24, p. 5 n. 3).

7

Copeland v. C.A.A.I.R., Inc., No. 17-CV-56-4-TCK-JFJ, 2020 WL 972754, at *3 (N.D.
Okla. Feb. 28, 2020).
With regard to topics 1(a)-(d) and 2(a)-(e), 5, and 6, Defendant arguably has
standing. Topics 1(a)-(d) seek documents addressing the relationship between Liberty
Mutual—including its various constituent parts—and Haag Engineering. Topics 5 and 6
seek payment information, specifically how much Liberty Mutual paid to Haag
Engineering between January 1, 2010 and the date of Haag’s response to the subpoena.
Defendant does not assert any privilege, but rather contends the information should be
protected as “confidential” information either because it involves other Liberty Mutual
customers or is proprietary information regarding the relationship between Liberty Mutual
and Haag Engineering. To the extent the information is relevant, the Court finds that
considerations of privacy and confidentiality can be addressed by entering a protective
order limiting the use and dissemination of documents produced by Haag in response to
the subpoena. The Court finds the remainder of Defendants’ objections to these topics
unavailing, but concludes that the ten-plus year period is excessive and that the definition
of Liberty Mutual is too broad to make all of the information sought relevant.
For example, in topic 1(c) Plaintiff seeks documents showing the number of claims
in Oklahoma, since January 1, 2010, in which Haag issued an engineering report on behalf
of Liberty Mutual. This category would of course include all such reports. Plaintiff argues
“[d]iscovery of prior engineering reports should be allowed because they are relevant to
potential bias on the part of Haag. Also engineering reports written by Haag employees in
other claims are discoverable because they are relevant to credibility. In addition, Haag’s
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prior engineering reports should be produced as relevant because they will show Haag’s
previous hail-damage assessment positions.” (Doc. No. 24, p. 8)(citations omitted). Again,
the Court concurs that the documents sought are potentially relevant but the limits on
discovery imposed at the hearing are useful in this context as well.
At the hearing on the Motion to Compel the Court ordered Defendant Liberty
Mutual to provide Plaintiff with payment information as it pertained to Liberty Mutual Fire
Insurance Company, specifically how much it had paid Haag on any type of claim in the
past five years. The Court hereby grants, consistent with this limitation, a protective order,
limiting Plaintiff’s request to Haag for topics 1(a)-1(d) to documents from Liberty Mutual
Fire Insurance Company for the past five years. The Court imposes a similar limitation
with regard to topics 2(a)-2(e). With regard to topics 5 and 6, there would be no logical
basis for restricting the information sought to a shorter timeframe, nor to extending it back
greater than five years and thus the same limits apply. 7 Accordingly, the Court grants
Defendant’s alternative request for a protective order and limits the discovery as set forth
above. At this juncture the evidence sought by Plaintiff appears relevant; applying
Plaintiff’s expansive scope, however, would encompass information that is remote from
the events in question and of dubious relevance.

7
Defendant argues that Plaintiff has made only broad allegations which do not warrant wide-ranging discovery
beyond the propriety of Defendant’s offers on the five buildings owed by Mr. Sparkman. The Amended Complaint
includes allegations that Plaintiff believes Liberty Mutual does substantial business with Haag Engineering and further
that Haag ignored all hail events that occurred in 2019 and declared that damage to the buildings occurred in either
2015 or 2017, permitting Defendant to offer actual cash value rather than replacement cost. (Amended Complaint,
¶¶ 22-23).

9

The Court finds that Defendant lacks standing to challenge topics 1(e), 3, and 4.
Those categories seek information from Haag unrelated to its relationship with Liberty
Mutual. As noted, however, the absence of standing does not preclude the Court from
addressing the propriety of the documents Plaintiff seeks from Haag.
The Court finds that the documents sought in topic 1(e)—documents related to
Haag’s knowledge of Oklahoma licensing requirements for engineers—are not relevant to
the instant case except as to any engineer that actually performed an inspection on the
subject properties. Therefore, the Court grants Defendant’s request for a protective order
limiting Plaintiff’s inquiry to the engineer(s) who inspected and/or completed reports on
Plaintiff’s buildings.
Topics 3 and 4 address Haag’s relationship with insurance carriers other than
Liberty Mutual, both in Oklahoma and in other states. At the hearing counsel for Plaintiff
argued:
The only reason I want to know about other insurance companies, how many
claims they have, how much they might have been paid, is to see how much
of Haag’s income is dependent upon Liberty Mutual. If they’re 75 percent or
50 percent or 20 percent of their income, that could be important. And I asked
about other companies. I know about State Farm, but I don’t know if any
other companies ever put Haag—put a moratorium on their adjusters using
Haag or if any other companies accused them of fraud, negligence, or
professional malpractice.
Doc. No. 34, pp. 34-35. The information requested by Plaintiff regarding other insurers
addresses the second part of counsel’s argument -- moratoriums and accusations of fraud,
negligence or malpractice. Although the requests do not directly address the issue counsel
asserts is relevant -- Haag’s financial reliance on Liberty Mutual—the Court nevertheless
10

finds the topics relevant in this case. The requests are sufficiently broad that responses
presumably will include information regarding payments between other insurers and Haag
Engineering. Additionally, Haag’s reliability in the insurance industry and whether other
insurers stopped using Haag for some period of time because of concerns about the
reliability of its work, is relevant to the issue of whether it was bad faith for Liberty Mutual
to utilize Haag in assessing the damage to Plaintiff’s buildings. The Court finds, however,
that the ten year period is too long and again limits the subpoena to five years. as it
addresses topics 3 and 4.
The Motion to Quash is denied as set forth above. For the reasons set forth herein
the Court finds that Defendant has standing to challenge certain of the topics set forth in
the subpoena Plaintiff intends to serve on non-party Haag Engineering and the Court
exercises its discretion to consider other issues. The motion, to the extent it seeks a
protective order, is granted in part as set forth above.
IT IS SO ORDERED this 27th day of April 2021.

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