State of Wisconsin Local Government Property Insurance Fund v. Lexington Insurance Company et al
ORDER signed by Judge J.P. Stadtmueller on 11/13/2017: DENYING 187 Defendant Lexington Insurance Company's Motion to Bifurcate and GRANTING in part and DENYING in part 141 Plaintiff's Motion to Compel. See Order for further details. (cc: all counsel) (jm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
STATE OF WISCONSIN LOCAL
Case No. 15-CV-142-JPS-JPS
COMPANY and THE CINCINNATI
MOTION TO BIFURCATE
On November 8, 2017, Defendant Lexington Insurance Company
(“Lexington”) filed a motion to bifurcate the trial of this case, such that two
separate trials would be held for it and for Defendant The Cincinnati
Insurance Company. (Docket #187). Lexington makes its request pursuant
to Federal Rule of Civil Procedure 42(b), which permits the bifurcation of a
case for trial “[f]or convenience, to avoid prejudice, or to expedite and
economize.” The Court declines to exercise its discretion as Lexington
requests. Houskins v. Sheahan, 549 F.3d 480, 495 (7th Cir. 2008) (“The
ultimate decision to order a separate trial under Rule 42(b) is at the court’s
discretion and will be overturned only upon a clear showing of abuse.”).
Though the claims presented against each defendant are separate, they
stem from a common nucleus of fact. Having separate trials would result in
substantial repetition of testimony and evidence. The Court cannot
countenance such waste in a matter that has already consumed a great deal
of taxpayer resources. Having another, later trial would also impinge on the
Court’s prerogative to conclude the matter expeditiously, as well as violate
the Court’s prior admonition that no further extensions of the trial date
would be considered. (Docket #140).
MOTION TO COMPEL
On August 29, 2017, Plaintiff State of Wisconsin Local Government
Property Fund (the “Fund”) filed a motion to compel directed at certain
discovery responses from Defendant Lexington Insurance Company
(“Lexington”). As explained below, the motion must be granted in part and
denied in part. In light of the rapidly approaching trial date, and thus the
parties’ need for timely guidance on this matter, the Court’s order is brief
and assumes complete familiarity with facts and arguments addressed in
the underlying motion papers. The Court addresses each subject discovery
request separately. Preliminarily, the Court notes that it takes a broad view
on discoverability in accordance with the rules of procedure. Fed. R. Civ. P.
26(b)(1). Issues of admissibility and ultimate relevance can be decided at
trial. This perspective colors the Court’s disposition below.
Number Four – Lexington has adequately identified a relatively
small portion of its claim file to respond to this request. That this
encompasses about 2,000 pages is not surprising given the size of the claim
and the gravity of the issues at stake. The Fund can learn all it wishes about
Lexington’s investigation (or lack thereof) by examining the documents
Lexington has referenced. This accords with Federal Rule of Civil
Procedure 33(d), and is unlike Derson, where the answering party referred
to 33,000 documents in responding to an interrogatory. Derson Group, Ltd.
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v. Right Mgmt. Consultants, Inc., 119 F.R.D. 396, 396 (N.D. Ill. 1988). The
motion to compel is denied as to Interrogatory Four.
Number Five – As noted in the Court’s summary judgment order,
Lexington has not stated what it believes the value of the loss was from the
July 6, 2013 fire. Certainly, if Lexington has its own valuation of the loss, it
should provide that information. Even if a final figure was never reached,
any information Lexington has on the undisputed amount of loss at the
Courthouse is relevant to the Fund’s claims. The motion to compel is
granted as to Interrogatory Five.
Number Seven – Given the statements in the briefing, it is not clear
whether subsequent depositions have rendered this request moot. If not,
Lexington must provide a straightforward answer to the interrogatory. The
Fund is entitled to use interrogatories to obtain discoverable information,
and Lexington does not argue that this information is not discoverable. The
motion to compel is granted as to Interrogatory Seven.
Number Ten – Lexington is correct that the interrogatory does not
actually seek its internal standards and policies for investigating claims.
Likewise, the Fund is correct that Lexington’s response is inadequate with
respect to industry standards and practices. “Wisconsin law” is not an
insurance industry standard or practice “for the investigation, evaluation,
repair and/or replacement of structures[.]” (Docket #143-2 at 8). Lexington
must appropriately identify the industry standards it used in investigation
of the Fund’s claim. The motion to compel is granted as to Interrogatory
Numbers Twelve, Thirteen, and Seventeen – A mere reference to
documents does not meaningfully respond to these requests. The Fund is
entitled to a prose response to its interrogatories concerning the bases for
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certain of Lexington’s affirmative defenses. Though Lexington complains
of the burden in doing so, it chose to advance the affirmative defenses. If it
cannot identify the factual bases of the defenses, the defenses should be
withdrawn. Finally, Lexington’s reference to privilege is a non-starter;
every claim or defense in a case is (hopefully) developed in consultation
with a party’s legal counsel. That does not bring the factual and legal bases
for the claims or defenses within the confines of a privilege. The motion to
compel is granted as to Interrogatories Twelve, Thirteen, and Seventeen.
Requests for Production
Number Six – Lexington’s response on this point states only that it
produced “its internal claims handling policies and standards in effect
during the 2013 and 2014 time-period.” (Docket #149 at 9). This is not only
less than the full scope of the documents requested, but it also fails to
account for the year 2012 as well. Further, as noted by the Fund, Lexington
must produce entire, complete documents, including the materials that
may be cross-referenced within. See (Docket #154 at 6) (discussing lack of
hyperlinked materials). The motion to compel is granted as to Request for
Numbers Seven, Ten, and Twelve – The documents providing
information on Lexington’s reserves may lead to other relevant and
admissible evidence. Whether or not this is admissible, and what the value
of the evidence is (as Lexington’s brief mentions, reserves are largely an
accounting or business concern), does not render the information nondiscoverable. The motion to compel is granted as to Requests for Production
Seven, Ten, and Twelve.
Request Eight – As with Requests for Production Seven, Ten, and
Twelve, the actual value and admissibility of this evidence is disputable.
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However, the possibility that it may lead to the discovery of admissible
evidence has not been foreclosed. The motion to compel is granted as to
Request for Production Eight.
IT IS ORDERED that Defendant Lexington Insurance Company’s
motion to bifurcate (Docket #187) be and the same is hereby DENIED; and
IT IS FURTHER ORDERED that Plaintiff State of Wisconsin Local
Government Property Insurance Fund’s motion to compel (Docket #141) be
and the same is hereby GRANTED in part and DENIED in part in
accordance with the terms of this Order.
Dated at Milwaukee, Wisconsin, this 13th day of November, 2017.
BY THE COURT:
J. P. Stadtmueller
U.S. District Judge
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