National Frozen Foods Corporation v. Berkley Assurance Company

Filing 122

ORDER granting in part Plaintiff's 65 Motion to Compel Discovery. Defendant Berkley shall respond to the Interrogatories listed in this order without objection, within seven (7) days of the entry of this Order. Signed by Judge Ricardo S. Martinez. (PM)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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Case No. C17-339 RSM

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NATIONAL FROZEN FOODS
CORPORATION, A WASHINGTON
CORPORATION,,

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ORDER GRANTING IN PART
PLAINTIFF’S MOTION TO COMPEL
DISCOVERY

Plaintiff,

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v.
BERKLEY ASSURANCE COMPANY, an
Iowa Corporation,

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Defendant.
This matter comes before the Court on Plaintiff National Frozen Foods Corporation
(“NFF”)’s Motion to Compel Discovery. Dkt. #65. NFF moves to compel Defendant Berkley

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Assurance Company (“Berkley”) to produce discovery concerning its underwriting practiseces

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of similarly-situated insureds. Berkley opposes this Motion. Dkt. #68.

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“Parties may obtain discovery regarding any nonprivileged matter that is relevant to
any party’s claim or defense and proportional to the needs of the case, considering the

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importance of the issues at stake in the action, the amount in controversy, the parties’ relative

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access to relevant information, the parties’ resources, the importance of the discovery in

ORDER GRANTING IN PART PLAINTIFF’S MOTION TO COMPEL DISCOVERY - 1

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resolving the issues, and whether the burden or expense of the proposed discovery outweighs

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its likely benefit.” Fed. R. Civ. P. 26(b)(1). If requested discovery is not answered, the

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requesting party may move for an order compelling such discovery. Fed. R. Civ. P. 37(a)(1).

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The party that resists discovery has the burden to show why the discovery request should be

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denied. Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975).
The background facts of this case have previously been set forth by this Court in its

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Order on September 12, 2018, and are incorporated by reference here. See Dkt. #105. NFF’s

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causes of action against Berkeley in this case are for declaratory judgment, breach of contract,

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negligence, and equitable reformation.

Dkt. #45.1

Defendant Berkeley has brought a

counterclaim of rescission. Dkt. #51. NFF alleges it provided a “loss run” to Defendant

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AmWINS that identified the prior recall. Dkt. #65 at 3 (citing Dkt. #45 ¶ 20). NFF alleges that

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AmWINS negligently failed to provide that loss run to Berkley. Dkt. #45 at ¶ 21. NFF further

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argues that “Berkley failed to request the loss run during the underwriting process even though

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an insured’s loss history is among – if not the – most critical underwriting consideration,” and

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that this was commercially unreasonable. Dkt. #65 at 3; Dkt. #45 at ¶ 36.
NFF seeks the following discovery from Berkley:

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Interrogatory No. 13: Identify the number of new Contaminated
Products Insurance Policies underwritten by Berkley between May
1, 2013 and May 1, 2016.

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Interrogatory No. 14: Of those policies that you identified in
Interrogatory No. 13, how many of those Policies were issued to
insureds who previously had a Contaminated Products Insurance
Policy issued through another insurance carrier?

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Interrogatory No. 15: Of those policies that you identified in
Interrogatory No. 14, how many of those policies were
underwritten without a loss run?

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NFF also alleges several causes of action against Defendant AmWINS. See Dkt. #45.

ORDER GRANTING IN PART PLAINTIFF’S MOTION TO COMPEL DISCOVERY - 2

Request for Production No. 28: Produce copies of the
underwriting files that you identified in your response to
Interrogatory No. 15.

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Dkt. #66-2.

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information not relevant to any claim or defense, further arguing that they are overbroad and

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On May 4, 2018, Berkeley objected to these discovery requests as seeking

seek confidential and proprietary information. Id.
NFF argues that its requested discovery of similarly-situated insureds is relevant to the

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materiality and reasonable reliance elements of Berkley’s rescission counterclaim, and that the

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requested discovery is proportional to the needs of this case. Dkt. #65 at 2.

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Under Washington law, the elements of rescission of an insurance contract are: (1) the
insured represented certain information as truthful to the insurer during negotiation of the

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insurance contract; (2) those representations were untruthful; (3) the misrepresentations were

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material; and (4) they were made with intent to deceive the insurer. Cutter & Buck, Inc. v.

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Genesis Ins. Co., 306 F.Supp.2d 988, 997 (W.D. Wash. 2004) (citing RCW 48.18.090(1)). A

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representation made in conjunction with an insurance policy application or negotiation is

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material if, inter alia, “the representation influenced the insurance company’s decision to issue
the coverage.” Id. at 1003.

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The Court finds that the information requested in Interrogatories 13 through 15 is

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arguably relevant to NFF’s defense of Berkley’s rescission counterclaim, because such

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information could assist NFF in arguing that Berkley did not tend to materially rely on the
applications of its insureds as to this issue and instead relied on loss runs. See Dkt. #65 at 8.

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Furthermore, as NFF points out, “[i]f Berkley had a practice of requesting loss runs from

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similarly-situated insureds before issuing policies, then it would be unreasonable for Berkley to

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have relied solely on NFF’s Application without securing a copy of the loss run.” Id. at 11.

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ORDER GRANTING IN PART PLAINTIFF’S MOTION TO COMPEL DISCOVERY - 3

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The Court does not imply that such arguments would be meritorious, only that Berkley has

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failed to meet its burden of demonstrating that the above requested information is not relevant

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to this case.

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interrogatories would be overly burdensome, require it to produce confidential and proprietary

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Furthermore, Berkeley has failed to demonstrate that responding to these

information, or that such information could not be protected by a protective order.
Turning to Request for Production No. 28, the Court agrees with Berkley that producing

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copies of these underwriting files would not be proportional to the needs of this case and that

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the privacy of the other insureds outweighs the relevance of such documents. Berkley has

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already produced its relevant underwriting guidelines, and produced underwriting files for other
policy holders with a loss history similar to NFF. Dkt. #68 at 10 (citing Dkt. #70 at 5). Berkley

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credibly establishes the high burden of searching for and redacting these requested records. See

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id.; Dkt. #70 at ¶ 21. The Court will thus deny this portion of the Motion.

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Having reviewed the relevant briefing and the remainder of the record, the Court hereby
finds and ORDERS that Plaintiff National Frozen Foods Corporation’s Motion to Compel

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Discovery (Dkt. #65) is GRANTED IN PART.

Defendant Berkley shall respond to the

Interrogatories listed above, without objection, within seven (7) days of the entry of this Order.
DATED this 22 day of October 2018.

A

RICARDO S. MARTINEZ
CHIEF UNITED STATES DISTRICT JUDGE

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ORDER GRANTING IN PART PLAINTIFF’S MOTION TO COMPEL DISCOVERY - 4