American National Property and Casualty Company v. Campbell Insurance, Inc et al

Filing 471

MEMORANDUM AND ORDER: For the reasons stated within this Order, this Motion to Compel 375 is Granted In Part and Denied In Part. Signed by Magistrate Judge John S. Bryant on 6/6/11. (dt)

UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
AMERICAN NATIONAL PROPERTY,

)
)
Plaintiff,
)
)
v.
)
)
CAMPBELL INSURANCE, INC., et al.)
)
Defendants.
)

NO. 3:08-0604
Judge Trauger/Bryant
Jury Demand

MEMORANDUM AND ORDER
Plaintiff American National Property and Casualty Company
(“ANPAC”) has filed its motion to compel (Docket Entry No. 375)
accompanied by a memorandum in support (Docket Entry No. 376).
This motion, which seeks an order compelling certain discovery from
the

Campbell

defendants

and

from

defendant

Liberty

Mutual/Montgomery Mutual Insurance Company (hereinafter “Liberty
Mutual”), has prompted a fusillade of filings, including the
following:
1. Response of Campbell defendants to plaintiff’s motion
to compel (Docket Entry No. 383);
2.

Defendant Liberty Mutual’s response to motion to

compel (Docket Entry No. 385);
3. Plaintiff’s reply to Campbell defendants’ response to
motion to compel (Docket Entry No. 387-1);
4.

Plaintiff’s reply to Liberty Mutual’s response to

motion to compel (Docket Entry No. 387-2);
5.

Campbell

defendants’

supplemental

plaintiff’s motion to compel (Docket Entry No. 415);

response

to

6.

Defendant Liberty Mutual’s response to plaintiff’s

reply to Liberty Mutual’s response to motion to compel (Docket
Entry No. 417);
7.

Plaintiff’s

reply

to

supplemental

response

of

Campbell defendants to motion to compel (Docket Entry No. 419); and
8. Plaintiff’s reply to supplemental response of Liberty
Mutual to motion to compel (Docket Entry No. 420).
This

motion

has

been

Magistrate Judge for disposition.

referred

to

the

undersigned

For the reasons stated below,

the Court GRANTS in part and DENIES in part plaintiff’s motion to
compel.
Discussion
The undersigned Magistrate Judge will deal first in this
memorandum with the items of discovery sought from the Campbell
defendants and, thereafter, with those items of discovery sought
from defendant Liberty Mutual.
Discovery Sought From Campbell Defendants1
Cancellation notices. Plaintiff seeks an order compelling the
Campbell defendants to produce “all the cancellation notices sent
by Campbell Insurance, Inc. or A 2 Z Insurance, Inc. to American
National.”

In response to this item, the Campbell defendants make

several arguments: (1) this request is not appropriately limited to

1

ANPAC’s motion to compel also seeks discovery of materials provided to, and
communications with, the Campbell defendants’ expert witnesses. The motion papers indicate
that this information has been provided by agreement; therefore, this aspect of plaintiff’s motion
is not addressed in this memorandum and order.
2

policies at issue in this case or otherwise in terms of time; (2)
the cancellation notices sought, by definition, have already been
sent to ANPAC in the regular course of business; (3) ANPAC has been
granted access to the electronic files of the Campbell defendants
as those files existed in April 2009, and, to the extent such
cancellation

notices

exist,

they

will

be

found

within

those

electronic files; and (4) given the foregoing, it would be unduly
burdensome in terms of time and cost to require the Campbell
defendants

to

go

through

these

voluminous

electronic

files

searching for cancellation notices already provided to ANPAC both
in the normal course of business and during discovery through
production of defendants’ electronic files.
In reply, ANPAC argues that (1) it has looked for the
subject
produced

cancellation
by

the

notices

Campbell

in

the

defendants

electronic
and

has

office

not

files

found

the

cancellation notices therein, and, in any event, the produced
electronic files do not include notices sent after April 2009; (2)
the

actual

cancellation

notices

“may”

include

reasons

for

cancellation that contradict the reasons now offered for the
subject policyholders’ leaving ANPAC; and (3) it would be less
burdensome for the Campbell defendants to locate and produce the
subject cancellation notices from their own files because their
access to their computer system is not limited to a single computer
terminal located in defense counsel’s office.

Finally, plaintiffs

in their reply to supplemental response of Campbell defendants
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(Docket Entry No. 419 at 1) agree to limit this request to any
cancellation notices dated before July 2009.
The undersigned Magistrate Judge finds that plaintiff’s
motion to compel further production of the subject cancellation
notices should be DENIED.

As grounds for this finding, the Court

relies on the fact that, by definition, the Campbell defendants
have already sent these cancellation notices to ANPAC in the normal
course of business, and ANPAC has offered no explanation why it
cannot obtain these notices from its own files.

In addition, the

Campbell defendants have stated repeatedly that all their business
records were maintained electronically, and they have granted ANPAC
access to their electronic office records as those records existed
in April 2009. Moreover, the Campbell defendants have stated under
oath that if such cancellation notices exist, they exist only in
such electronic records.

Finally, the complaint in this case was

filed on June 17, 2008.

Certainly by that date ANPAC knew or had

reason to know of the potential evidentiary significance of any
cancellation notices received from the Campbell defendants, which
reasonably would have required ANPAC to exercise a heightened
degree of care in maintaining such records.
Post-2008 Tax Records.

Plaintiff seeks an order compelling

the Campbell defendants to produce post-2008 W-2s and 1099s issued
by Campbell Insurance, Inc. and tax returns of Campbell Insurance,
Inc.,

A

2

Z

Insurance,

Inc.

and

Tommy

Campbell

and

Colleen

Campbell. In response, the Campbell defendants state that all such
4

tax documents through the 2008 tax year have been produced.

In

addition, they assert that Campbell Insurance, Inc. ceased doing
business in June 2008; therefore, there are no more tax records for
that company beyond what has already been produced.

Further, the

Campbell defendants argue that the post-2008 tax records for A 2 Z
Insurance, Inc. and Mr. & Mrs. Campbell are not relevant to any
issues in this case including compensatory or punitive damages.
In response, plaintiff argues that the requested tax
records are relevant to claims for compensatory and punitive
damages and that defendants previously have agreed to produce the
subject records.
Without deciding at this time whether the requested tax
records ultimately will be admissible for any purpose at trial, the
undersigned Magistrate Judge finds that these tax records are
relevant or may lead to the discovery of admissible evidence.
Accordingly, the Court finds that plaintiff’s motion to compel
production of the subject post-2008 tax records should be GRANTED.
Files Of Customers On The Nonsolitication List.

Plaintiff

moves for an order compelling the Campbell defendants to produce
complete

copies

of

the

“nonsolicitation list.”

files

of

all

customers

on

the

In response, the Campbell defendants

assert (1) that the files for all such customers, as of April 2009,
have previously been provided to the plaintiff in electronic form;
(2) that any additions to these customers’ files after April 2009
are not relevant to any issue in this case; and (3) the requested
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production would be unduly burdensome because technical limitations
in the existing electronic files would require that paper copies of
such files be made for production and, that these files as of April
2009

exceeded

40,000

considerably larger.
these

customers

pages.

The

current

files

would

be

In its reply, ANPAC argues that certain of

have

provided

statements

and/or

deposition

testimony regarding their reasons for terminating their ANPAC
policies, and that it appears that the Campbell defendants are
preparing to argue that the loss experience of certain of these
customers has created a “saving” for ANPAC by no longer having them
as policyholders when the losses occurred, and that this saving
should be considered in mitigation of damages.
In response, the Campbell defendants state that they
already have provided statements of approximately 130 policyholders
regarding their reasons for changing insurance carriers, and that
the testimony of their computer expert, Steve Kozy (Docket Entry
No. 415-2), supports these defendants’ claim of undue burden.
Following due consideration of the record in the case and
the arguments of the parties, the undersigned Magistrate Judge
finds that plaintiff’s motion to compel production of customer
files should be GRANTED subject to the following limitations and
conditions.

First, with respect to any customer whose loss

experience the Campbell defendants contend created a “savings” for
ANPAC in mitigation of damages, these defendants shall produce a
complete copy of these customers’ files at defendants’ expense.

6

Second, with respect to the files of any other customers on the
nonsolicitation list, the Campbell defendants shall produce copies
of their files, as requested by ANPAC, at ANPAC’s expense.

The

expense of such production shall include the reasonable cost
incurred by the Campbell defendants in locating, copying and
producing such customers’ file records. Within ten days from entry
of

this

order,

ANPAC

shall

identify

any

customers

on

solicitation list whose files ANPAC desires to be copied.

the
The

Campbell defendants thereafter shall copy and produce the requested
files as soon as reasonably possible, and shall maintain accurate
records of all costs incurred in such production.
Discovery Sought From Defendant Liberty Mutual
Plaintiff’s motion to compel as filed seeks an order
requiring Liberty Mutual to respond to ANPAC’s second set of
interrogatories and requests for production. Apparently, defendant
Liberty Mutual served responses, including objections, within a few
days after plaintiff’s motion to compel was filed.

Plaintiff in

its reply papers argues that Liberty Mutual’s failure to file
timely responses or objections should be construed as a waiver of
all objections.

Although it appears that Liberty Mutual sought an

extension of time neither from the Court nor from plaintiff, it
does appear that telephone conversations about Liberty Mutual’s
efforts and intentions to serve its responses did occur between
counsel.
inferring

Therefore, the undersigned Magistrate Judge finds that
a

waiver

of

all

objections

7

by

Liberty

Mutual

is

excessively drastic and unwarranted under these circumstances. The
undersigned Magistrate Judge will deal with plaintiff’s motion to
compel insofar as it addresses alleged deficiencies in Liberty
Mutual’s discovery responses.
Interrogatory No. 1.

Plaintiff seeks an order requiring a

complete response to Interrogatory No. 1 in its second set of
discovery served on Liberty Mutual.

Interrogatory No. 1 reads as

follows:
Identify each document in the range LM-MM1-000043
through LM-MM1-000347, including without limitation
by describing in detail when you received the
document, from whom you received the document, the
circumstances leading to your receipt of the
document, where and how you have maintained the
document, and for what purpose you have used the
document.
The Court has been provided neither Liberty Mutual’s
response to this interrogatory nor copies of any of the 304
documents at issue.

However, from the briefs of the parties, it

appears that these documents were the subject of questioning of
Liberty Mutual witness Greg Quante in a deposition taken on March
24, 2010. Portions of his testimony are quoted in Liberty Mutual’s
response to plaintiff’s reply (Docket Entry No. 417 at 4-5).

From

the testimony, it appears as if at least some of these documents
were copies of ANPAC policy documents obtained from defendants
Tommy and Colleen Campbell.
filings

has

stated

“that

it

Liberty Mutual in its responsive
simply

cannot

provide

any

more

information about these documents than has already been provided,”

8

and that its witnesses do not remember additional specifics beyond
what they have testified to in deposition.
The Court finds that plaintiff’s motion to compel should
be GRANTED and that Liberty Mutual should serve a supplemental
response to this interrogatory.

It may rely upon the testimony of

its witnesses in formulating its supplemental response, but Liberty
Mutual shall state affirmatively that no additional information is
known by the company, if that is true.
Interrogatory
Plaintiff

seeks

No.

an

2

order

and

Request

compelling

for
a

Production

further

No.

1.

response

to

Interrogatory No. 2 and the related Request for Production No. 1.
Interrogatory No. 2 reads as follows:
Identify all documents that were referenced or used
to produce the Spreadsheet labeled LM-MM1-00380
through LM-MM1-00382, and describe in detail how
said Spreadsheet was compiled.
Request for Production No. 1 requests production of all documents
referenced or used to produce the subject spreadsheet.
Again, the Court has not been provided Liberty Mutual’s
formal response nor a copy of the documents referenced in this
interrogatory.

However, from the filings of the parties it is

clear that the referenced spreadsheet consists of a list of former
ANPAC policyholders who are believed by Liberty Mutual to have
obtained replacement insurance policies from Liberty through the
Campbell defendants.

Apparently, Liberty Mutual has produced some

documents that were used in preparation of the subject spreadsheet,
but plaintiff is uncertain whether it has received all documents
9

responsive to its request.

Liberty Mutual in its response to

plaintiff’s reply (Docket Entry No. 417 at 6-9) offers information
about how the spreadsheet was compiled and references certain
deposition testimony of Liberty Mutual’s corporate representative,
Donna Egyed.

Liberty Mutual further states in its reply that it

has produced in discovery a list containing the name of every
single person or entity to whom Liberty Mutual quoted or sold an
insurance policy to or through A 2 Z Insurance, Inc. between
January 1, 2008, and June 10, 2009.

Liberty Mutual argues that

ANPAC, therefore, can compare the customers on this list with a
list of its customers in order to identify any former ANPAC
customers who purchased policies from Liberty Mutual.

While the

production of this list is praiseworthy, the Court finds that it
fails to constitute a direct response to Interrogatory No. 2 and
Request for Production No. 1.

The Court, therefore,

GRANTS

plaintiff’s motion to compel with respect to Interrogatory No. 2
and Request for Production No. 1, and ORDERS defendant Liberty
Mutual to serve a supplemental response that will include a
statement that all responsive documents have been produced.
Requests for Production Nos. 2 and 3. Requests for Production
Nos. 2 and 3 seek production of all correspondence between Liberty
Mutual, including its attorneys, and Safeco Insurance or the
Campbell defendants, including their attorneys.
From the motion papers, it appears that Liberty Mutual
objected to these requests on grounds that they sought information

10

that was neither relevant nor likely to lead to the discovery of
admissible

evidence

and

then

further

stated

that

the

only

potentially responsive documents consisted of emails from Liberty
Mutual’s

counsel

defendants.
although

the

and

counsel

for

Safeco

and

the

Campbell

In its motion papers, Liberty Mutual states that
vast

majority

of

the

subject

emails

involved

logistical aspects of this case upon which plaintiff’s counsel have
been copied, there are some emails between defense counsel that
contain “the defense attorneys’ thoughts and impressions of the
legal aspects of this case and the validity of ANPAC’s claims.”
(Docket Entry No. 417 at 9).

Liberty Mutual further argues that

plaintiff “has no need to see these emails and would be unfairly
advantaged if it could.”
Mutual

asserts

that

Although citing no authority, Liberty

“[e]mails

between

the

defense

lawyers

discussing those documents and the legal basis of ANPAC’s claims
are not discoverable and ANPAC is not entitled to them.”
ANPAC asserts that, in the absence of any joint defense
agreement between these defendants, emails between the lawyers for
the several defendants are not privileged and are subject to
discovery.
The undersigned Magistrate Judge finds that Liberty
Mutual

should

produce

the

subject

emails

Magistrate Judge for an in camera inspection.

to

the

undersigned

Counsel for Liberty

Mutual shall deliver a paper copy of all responsive emails to the
undersigned Magistrate Judge’s chambers on or before Monday, June

11

13, 2011.

Following an in camera inspection, the undersigned

Magistrate Judge will render a decision whether these emails must
be produced to plaintiff.
Request for Production No. 5.

Request for Production No. 5

seeks all lists of policies that were issued for A 2 Z Insurance
that Liberty Mutual provided to its attorneys, as referenced in the
deposition of Liberty Mutual’s Rule 30(b)(6) deposition at page
228, lines 1-5.

In response to this request, Liberty Mutual

apparently has produced a list containing the name of every person
or entity who was quoted a price and/or purchased a Liberty Mutual
policy through A 2 Z Insurance between January 1, 2008, and July
2009 (Docket Entry No. 417 at 10). Plaintiff in its motion papers,
however, states that it is unclear from Liberty Mutual’s response
whether the list produced is the same list as that referenced on
page 228 of the Liberty Mutual deposition.

If the list is the same

list, plaintiff seeks to require Liberty Mutual to say so.

If the

list is not the same list, however, plaintiff seeks production of
the specific list referenced in the deposition.
The undersigned Magistrate Judge finds that plaintiff’s
motion to compel a further response to Request for Production No.
5 should be GRANTED.

Liberty Mutual shall provide a supplemental

response stating plainly whether the list it has already produced
is

the

same

deposition.

list

as

that

referenced

in

the

Rule

30(b)(6)

Further, if the list is not the same list, the list

referenced in the deposition should be produced.

12

Unless

otherwise

specifically

provided

above,

supplemental responses ordered in this memorandum shall be served
on or before June 17, 2011.
It is so ORDERED.

s/ John S. Bryant
JOHN S. BRYANT
United States Magistrate Judge

13