Companion Property and Casualty Insurance Company v. US Bank NA

Filing 138

ORDER AND OPINION granting 113 Motion to Compel. Signed by Honorable J Michelle Childs on 6/24/2016. (mbro, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
COMPANION PROPERTY &
CASUALTY INSURANCE COMPANY
(n/k/a SUSSEX INSURANCE
COMPANY),

)
)
)
)
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Plaintiff,
)
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v.
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U.S. BANK NATIONAL ASSOCIATION, )
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Defendant and Third)
Party Plaintiff,
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v.
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REDWOOD REINSURANCE SPC, LTD., )
)
SOUTHPORT LANE ADVISORS,
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SOUTHPORT SPECIALTY FINANCE,
ADMINISTRATIVE AGENCY
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SERVICES, and ALEXANDER
)
)
CHATFIEELD BURNS,
)
)
Third-Party Defendants. )
)

Civil Action No. 3:15-cv-01300-JMC

ORDER AND OPINION

This matter is before the court on the Motion to Compel of Defendant and Third-Party
Plaintiff U.S. Bank National Association (“Defendant”) (ECF No. 113). Plaintiff Companion
Property & Casualty Insurance Company (“Plaintiff”) filed a Response in Opposition (ECF No.
122).
Fed. R. Civ. P. 26 states that parties must provide “a computation of each category of
damages claimed by the disclosing party–who must also make available for inspection and copying
as under Rule 34 the documents or other evidentiary material, unless privileged or protected from

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disclosure, on which each computation is based.” Fed. R. Civ. P. 26(a)(1)(A)(iii). The precise
meaning of “computation” is not defined within the rule, however courts interpret the requirement
to include providing “disclosure of evidentiary material upon which the category of damages is
based, including materials bearing on the nature and extent of the injuries suffered.” Stemrich v.
Zabiyaka, No. 1:12-CV-1409, 2013 WL 4080310, at *1 (M.D. Pa. Aug. 13, 2013) (citing Gomez
v. Markley, Civ. No. 07–cv–0868, 2011 WL 112886, at *2 (E.D. Pa. Jan. 13, 2011). To this end,
courts also require more than a mere dollar amount to satisfy the computation requirement. Id.
(citing cases); accord In re Oakwood Homes Corp., 340 B.R. 510, 541 (Bankr. D. Del. 2006)
(citing cases).
“If a party fails to make a disclosure” required by Fed. R. Civ. P. 26, “any other party may
move to compel disclosure and for appropriate sanction” after it has “in good faith conferred or
attempted to confer with the person or party failing to make disclosure or discovery in an effort to
obtain it without court action.” Fed. R. Civ. P. 37(a). Specifically, a party “may move for an order
compelling an answer, designation, production, or inspection.” Fed. R. Civ. P. 37(a)(3)(B).
Defendant’s primary contention is that Plaintiff’s initial and supplemental disclosures thus
far are deficient. (See ECF No. 113 at 8.) Defendant asserts that Plaintiff failed to satisfy its
mandatory obligations required by Fed. R. Civ. P. 26(a)(1)(A)(iii) by not providing “information
in its possession showing how it calculated [its disclosed minimum damage amount]” and by not
“produc[ing] the underlying records supporting [its disclosed minimum damage amount]. (Id.)
Defendant rejects Plaintiff’s assertion that “its Rule 26(a)(1)(iii) disclosures are sufficient because
[Plaintiff] may supplement them with an expert report.” (Id. at 9.) Defendant specifically requests
that the court compel Plaintiff to “provide a computation of each category of damages claimed
based on the best information now available to it, including the amount of Grantors’ obligations

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under the reinsurance trust agreement it had to pay from its own funds due to a shortfall of
collateral in the trust accounts.” (Id. at 11.)
Plaintiff, however, contends in its Response that Defendant’s Motion to Compel is both
contrary to law and mooted by Plaintiff’s Second Supplemental Initial Disclosure. (ECF No. 122
at 4–7.) Specifically, Plaintiff argues that where the method of damages calculation is the subject
of expert evidence, “initial disclosure of the amount of damages the party allegedly suffered may
be sufficient even though the disclosing party failed to disclose the precise method by which it
calculated the specified amount.” (Id. at 4 (citing Moore’s Federal Practice § 26.22[4][c][ii]).)
Further, Plaintiff cites Silicon Knights, Inc. v. Epic Games, Inc., No. 5:07-CV-275-D, 2012 WL
1596722 (E.D.N.C. May 7, 2012) for the proposition that an expert report may “satisf[y plaintiff’s]
obligation under Rule 26(a)(1)(A)(iii)” as a supplement under Fed. R. Civ. P. 26(e). (Id. at 5.)
Plaintiff also notes that it has provided U.S. Bank with “the composition of its damages claim, the
categories of documents it would rely on to determine those damages, and [Plaintiff] expressly
stated that those documents would be produced at the appropriate time.” (Id. at 6.)
Broad discretion is afforded to a district court’s decision to grant or deny a motion to
compel. Erdmann v. Preferred Research Inc., 852 F.2d 788, 792 (4th Cir. 1988). Exercising that
discretion here, this court finds Plaintiff has not adequately satisfied its obligation under Fed. R.
Civ. P. 26(a)(1)(A)(iii). Generally, an expert report may not simply stand in the place of Plaintiff’s
required 26(a)(1)(A)(iii) disclosures. See Frontline Med. Associates, Inc. v. Coventry Health Care,
263 F.R.D. 567, 569–70 (C.D. Cal. 2009) (ruling that future expert analysis did not relieve the
Plaintiff of its obligations under Fed. R. Civ. P. 26(a)(1)(A)(iii)). But see City & Cty. of San
Francisco v. Tutor-Saliba Corp., 218 F.R.D. 219, 221 (N.D. Cal. 2003) (citing Pine Ridge
Recycling, Inc. v. Butts Cty., Ga., 889 F. Supp. 1526, 1527 (M.D. Ga. 1995)) (“[D]isclosing a

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precise figure for damages without a method of calculation may be sufficient in cases where other
evidence is developed e.g. in the context of a preliminary hearing, and it is appropriate to defer
further specification to e.g. development of expert testimony.”). While this court recognizes that
Plaintiff intends to supplement its damages computation in its expert report, it is appropriate at this
time for Plaintiff to provide an initial estimate as to each damage category 1 and a general analysis
as to how it computed the figure. See In re Oakwood Homes Corp., 340 B.R. 510, 541 (Bankr. D.
Del. 2006). Such computation is also necessary for the parties’ evaluation of the case.
For these reasons, this court GRANTS Plaintiff’s Motion to Compel (ECF No. 113).
Plaintiff is ordered to use the best of its ability, based on the best information available to it, to
produce a computation of each category of its damages, excluding punitive damages, as addressed
in Defendant’s Motion to Compel (ECF No. 113) no later than July 8, 2016. Plaintiff’s disclosure
is to be made with both parties’ understanding that the computation of damages may be
supplemented by Plaintiff and/or its expert(s).
IT IS SO ORDERED.

United States District Judge
June 24, 2016
Columbia, South Carolina

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Plaintiff is not required to provide a computation of its punitive damages at this time. See
E.E.O.C. v. Wal-Mart Stores, Inc., 276 F.R.D. 637, 639 (E.D. Wash. 2011) (compiling cases where
district courts denied motions to compel computations of emotional distress and punitive
damages).
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