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Sedillo Electric v. Colorado Casualty Insurance Co.

United States District Court, D. New Mexico

March 9, 2017

SEDILLO ELECTRIC and TELESFOR SEDILLO, Plaintiffs,
v.
COLORADO CASUALTY INSURANCE COMPANY, LIBERTY MUTUAL INSURANCE COMPANY, PEERLESS INSURANCE COMPANY, and BAKER INSURANCE SERVICES, L.L.C., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR PROTECTIVE ORDER AND PLAINTIFFS' MOTION TO COMPEL

          William P. Lynch United States Magistrate Judge

         The Defendants (collectively “Liberty Mutual”) filed a motion for a protective order. (Doc. 105.) Plaintiffs filed a cross motion to compel. (Doc. 128.) Each motion is opposed and the parties scarcely agree on anything, other than that they have an ongoing dispute. The motions are now fully briefed.[1] To the extent that the parties resolved their disputes prior to this point- specifically with regard to the motion for a protective order as it relates to Request for Production (“RFP”) Nos. 1 and 2 and the corresponding aspects of the subpoena duces tecum- the motion for a protective order is denied as moot. (See Doc. 155 at 2 (After the motion for protective order was filed, Plaintiffs' voluntarily dismissed the vandalism claim, as such, “Liberty Mutual submits that RFP Nos. 1 and 2 are no longer at issue, and that only RFP No. 3 is at issue herein.”).) Having reviewed the briefing, and the record, and being otherwise advised on these matters, I grant in part and deny in part Liberty Mutual's motion for a protective order and Plaintiffs' cross motion to compel, as explained herein.

         Motion for Protective Order

         Liberty Mutual moved for a protective order as it relates to RFP No. 3 and the corresponding aspects of the subpoena duces tecum. Because the RFP and the requests contained in the subpoena duces tecum are nearly identical, I refer to them collectively with reference to the RFP, unless otherwise noted.

         Federal Rule of Civil Procedure 26(c) allows courts, for “good cause, ” to issue a protective order regarding discovery “to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” The “good cause” standard is “highly flexible, having been designed to accommodate all relevant interests as they arise.” Rohrbough v. Harris, 549 F.3d 1313, 1321 (10th Cir. 2008) (quoting United States v. Microsoft Corp., 165 F.3d 952, 959 (D.C. Cir. 1999)).

         “It is the party seeking the protective order who has the burden to show good cause for a protective order.” Dorato v. Smith, 163 F.Supp.3d 837, 869 (D.N.M. 2015) (quoting Velasquez v. Frontier Med. Inc., 229 F.R.D. 197, 200 (D.N.M. 2005)). The party seeking the protective order must provide the court “a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements.” Gulf Oil Co. v. Bernard, 452 U.S. 89, 102 n.16 (1981) (quotation omitted).

         RFP No. 3 reads:

Rachel Berg's testimony established what incentive evidence exists that is relevant to incentive payments made to Steve Harkness, another Liberty Mutual adjuster. At pp. 194:23 to 195:16; 207:18 to 210:25 of her deposition, Rachel Berg testified the employee handbook probably explains how Liberty Mutual's Incentive Program worked. Berg Deposition, pp. 194:23 to 195:7. From January 1, 2013 to date, produce a copy of the relevant employee handbook and all documents relevant to Liberty Mutual's Variable Incentive Program (“VIP”), and any other relevant documents that show and explain how the incentive program worked for a.) Rachel Berg, b.) Steve Harkness, and c.) whoever has been adjusting the Sedillo claim from the date of Rachel Berg's March 22, 2013 denial letter to date (who also must be identified). This request includes but is not limited to actual incentives paid, the basis for the computation of the amount paid, the criteria applied for the payment, performance evaluations, performance reviews and combined ratio computations, the “QCR”, Objective Settings and Performance Evaluation Forms, Financial Objectives, relevant 401k's, quarterly reports, the relevant business unit's earnings and growth targets, outcomes of reviews by quality team or manager of the files at issue, guidelines, customer service scores, teamwork and claim cultural objectives.

(Doc. 105 Ex. 3 at 4-5.)

         Liberty Mutual contends that RFP No. 3 is duplicative of an RFP served and answered in state court, and thus violates the agreement to not re-serve discovery; that the RFP is vague, ambiguous, confusing, overly broad, and unduly burdensome and expensive; that the documents requested are irrelevant; that some of the documents requested are confidential and proprietary; and that the last sentence is a fishing expedition for unrelated material. To the extent that a litigation adjuster has worked on the claim since suit was filed, Liberty Mutual contends that those documents are protected by the work product doctrine and the attorney/client privilege. Additionally, Liberty Mutual asserts that it has no duty to continue investigating a claim after the claim has been denied and litigation has commenced.

         Plaintiffs address only two aspects of this argument: first, Plaintiffs dispute whether an insurer bears an ongoing duty to investigate after a claim has been denied and suit has been filed; and second, Plaintiffs argue that any claim of privilege has been waived. Further, Plaintiffs contend that RFP No. 3 “requested the entire personnel file of Rachel [B]erg and other relevant adjusters.” (Doc. 134 at 9.) Plaintiffs agree that they are “satisfied with the production made as to Liberty training and adjusting program, ” but maintain all other aspects of the RFP. (Id. at 9-10.)

         As an initial matter, I note that Plaintiffs' failure to respond to Liberty Mutual's arguments in the motion for protective order can be considered a concession of that position. See Pueblo of Pojoaque v. New Mexico, --- F.Supp.3d ---, 2016 WL 6405927, *62 n.17 (D.N.M. Sept. 30, 2016). However, under the circumstances presented by this case, I will address the merits and the arguments.

         When this case was pending in state court, Plaintiffs propounded state case RFP No. 28, which reads:

At pp. 194:23 to 195:16; 207:18 to 210:25 of her deposition, Rachel Berg testified the employee handbook probably explains how Liberty Mutual's Incentive Program worked. Berg Deposition, pp. 194:23 to 195:7. From January 1, 2013 to date, produce a copy of the relevant employee handbook and all documents relevant to Liberty Mutual's Variable Incentive Program (“VIP”), and any other relevant documents that show an explain how the incentive program worked for a.) Rachel Berg, b.) Michael Westby, c.) Steve Harkness, d.) whomever was the person(s) who managed and/or evaluated Steve Harkness from June 30, 2012 to his denial letter of August 6, 2015 (who must also be identified), and e.) whomever has been adjusting the Sedillo claim from the date of Rachel Berg's March 22, 2013 denial letter to date (who also must be identified). This request includes but is not limited to actual incentives paid, the basis for the computation of the amount paid, the criteria applied for the payment, performance evaluations, performance reviews and combined ratio computations, the “QCR”, Objective Settings and Performance Evaluation Forms, Financial Objectives, relevant 401k's, quarterly reports, the relevant business unit's earnings and growth targets,, outcomes of reviews by quality team or manger [sic] of the files at issue, guidelines, customer service scores, teamwork and claim cultural objectives.

(Doc. 105 Ex. 4 at 3-4.) Liberty Mutual responded to that RFP in substantially similar fashion as it responded to RFP No. 3 in this case. I agree that the RFPs are nearly identical. Further, the parties “agreed not to reissue any discovery requests which were answered while the case was pending in state court.” (Doc. 77 (Clerk's Minutes for the Initial Scheduling Conference on July 12, 2016).) Plaintiffs essentially reissued this RFP, in violation of the parties' agreement.

         Beyond these obvious deficiencies, it is unclear what documents Liberty Mutual produced in response to the state RFP or RFP No. 3.

         This case arises out of alleged hail damage to a roof that, according to Plaintiffs, would cost $27, 973.44 to repair. (Doc. 128 at 7.) Plaintiffs also assert a claim for punitive damages resulting from the allegedly bad faith handling of the hail claim.

         While I agree that the claims file is relevant and appears reasonably calculated to lead to the discovery of admissible evidence, many of Plaintiffs' requests as stated are overly broad, unduly burdensome, disproportionate, and request information subject to attorney-client privilege and work product doctrine. Therefore, I will limit ...


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