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United Fire and Casualty Co. v. Caskey Drywall NM, LLC

United States District Court, D. New Mexico

November 8, 2018

UNITED FIRE AND CASUALTY COMPANY, an Iowa corporation, Plaintiff,
CASKEY DRYWALL NM LLC; a Texas limited liability company; CENTEX CONSTRUCTION OF NEW MEXICO, LLC, a Delaware limited liability company; CENTEX HOMES, a Nevada general partnership; CENTEX REAL ESTATE CORPORATION, a Nevada corporation; PULTE DEVELOPMENT NEW MEXICO, INC, a Michigan corporation; THE PRESIDIO CONDOMINIUM ASSOCIATION, INC., a New Mexico nonprofit corporation; and THE PRESIDIO HOMEOWNER ASSOCIATION, INC., a New Mexico nonprofit corporation, Defendants.



         This matter comes before the Court on Plaintiff United Fire and Casualty Company's (“United Fire's”) First Motion to Compel Discovery Responses from Defendants the Presidio Condominium Association, Inc. and the Presidio Homeowner Association, Inc. [Doc. 33');">33], filed June 15, 2');">2018, and Defendants Presidio Condominium Association, Inc., and Presidio Homeowner Association, Inc.'s (“Presidio's”) Response to Motion to Compel and Cross-Motion for Protective Order [Doc. 36], filed July 2');">2, 2');">2018. Having considered the parties' briefing on the matter and all pertinent authority, the Court will grant in part and deny in part the Motion to Compel and deny the Motion for Protective Order, for the following reasons.

         I. BACKGROUND

         This declaratory judgment action was initiated by United Fire, a liability insurer, to determine whether it has a duty to defend or indemnify Defendants Caskey Drywall and the associated group of Defendants referred to as “Centex” in the Complaint, against claims brought by Defendant Presidio in an underlying state court lawsuit. [See Doc. 1, pp. 1-2');">2]. In the underlying lawsuit, Presidio claims that Centex, and its subcontractor, Caskey, “[d]amaged and/or [d]efectively installed [the] drywall system, ” in constructing the Presidio condominium and townhome complex as evinced by “[d]rywall system failure, cracking, corner bead separations and nail pops … [d]rywall ceiling stains from roof related water intrusion … [and] unsealed penetrations through ceilings and/or wall.” [Doc. 1-2');">2, p. 9]. The underlying state lawsuit is still pending and was ordered to arbitration. [Doc. 13-1].

         Meanwhile, this Court entered a Scheduling Order and the parties engaged in discovery. [Doc. 2');">23]. On April 2');">26, 2');">2018, United Fire served its First Set of Interrogatories, Requests for Production, and Requests for Admission to Presidio. [Doc. 2');">26 (Certificate of Service)]. Presidio served allegedly deficient answers and responses, prompting United Fire to issue a good faith letter under Federal Rule of Civil Procedure 37. [Docs. 33');">33-2');">2, 33');">33-3]. After the parties met and conferred, and Presidio responded in writing to United Fire's letter [see Doc. 36-2');">2], they reached an impasse, prompting United Fire to file the present Motion.

         In the Motion to Compel, United Fire moves the Court to compel Presidio to verify its interrogatory answers as required by the Federal Rules of Civil Procedure, overrule Presidio's objections to United Fire's first interrogatory and request for production, and compel “Presidio to provide full discovery responses.” [Doc. 33');">33, p. 5]. Pursuant to Rule 37(a)(5)(A), United Fire also requests its reasonable expenses in bringing the Motion. [Id.]. While it concedes that United Fire is “entitled to a verification of the discovery responses that Presidio has served” and that it will proffer such verification “[a]s soon as practicable, ” Presidio asks the Court to deny the Motion to Compel and cross-moves for a protective order. [See generally Doc. 36]. As grounds, Presidio explains that it has no further information to offer than stated in its interrogatory answer and response to United Fire's request for production [see id., pp. 4-5], and that it had a then-pending motion for judgment on the pleadings, warranting a stay of further discovery until resolution of the motion. [Id., pp. 5-6]. In its Reply in Support of the Motion to Compel, United Fire reasserts its entitlement to an order in its favor and an award of costs. [See generally Doc. 38');">38]. Specifically, United Fire points to Presidio's concession of the need for a verification (yet failure to serve it as of July 13, 2');">2018), and “[t]o be clear, United Fire does not ask this Court to compel Presidio to produce information it does not possess. United Fire simply asks the Court to compel Presidio to verify, without qualification, that it does not possess responsive information.” [Id., p. 2');">2]. As such, “United Fire asks that this Court strike Presidio's objection, triggering Presidio's obligation to supplement its Response if and when responsive materials become available.” [Id., p. 3');">p. 3]. United Fire also filed a Response in Opposition to Presidio's Motion for a Protective Order, arguing that it should be denied because Presidio failed to comply with this Court's Local Rules when bringing it, and because Presidio has failed to demonstrate good cause. [See generally, Doc. 39].


         Federal Rule of Civil Procedure 2');">26(b)(1) governs the scope of discovery, providing that:

[p]arties 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 importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.

Fed. R. Civ. P. 2');">26(b)(1). Relevant evidence is that which “has any tendency to make a fact more or less probable than it would be without the evidence; and the fact is of consequence in determining the action.” Fed.R.Evid. 401. However, “[i]nformation within [the] scope of discovery need not be admissible in evidence to be discoverable.” Fed.R.Civ.P. 2');">26(b)(1).

         Parties may issue interrogatories pursuant to Federal Rule of Civil Procedure 33');">33, which “may relate to any matter that may be inquired into under Rule 2');">26(b).” Fed.R.Civ.P. 33');">33(a)(2');">2). “Each interrogatory must, to the extent it is not objected to, be answered separately and fully in writing under oath.” Fed.R.Civ.P. 33');">33(b)(3). A responding party may object to an interrogatory; however, the grounds for an objection “must be stated with specificity.” Fed.R.Civ.P. 33');">33(b)(4). Pertinent here, “[t]he person who makes the answers must sign them, and the attorney who objects must sign any objections.” Fed.R.Civ.P. 33');">33(b)(5). A party may move to compel the answer to an interrogatory under Rule 33');">33 if good faith attempts to secure the answer are unsuccessful. Fed.R.Civ.p. 3');">p. 37(a)(3)(B)(iii).

         Parties may issue requests for production pursuant to Federal Rule of Civil Procedure 34 “within the scope of Rule 2');">26(b)[.]” Fed.R.Civ.p. 3');">p. 34(a). Each request must be stated with “reasonable particularity, ” Regan-Touhy v. Walgreen Co., 2');">26 F.3d 641');">52');">26 F.3d 641, 649 (10th Cir. 2');">2008) (quoting Fed.R.Civ.p. 3');">p. 34(b)(1)(A)), and be responded to or addressed by specific objection. Fed.R.Civ.P. 34(b)(2');">2). “Though what qualifies as ‘reasonably particular' surely depends at least in part on the circumstances of each case, a discovery request should be sufficiently definite and limited in scope that it can be said ‘to apprise a person of ordinary intelligence what documents are required and to enable the court to ascertain whether the requested documents have been produced.'” Regan-Touhy, 52');">26 F.3d at 649-50 (quoting Wright & Miller, 8A Federal Practice and Procedure § 2');">22');">211, at 415). “[A]n evasive or incomplete disclosure, answer, or response must be treated as a failure to disclose, answer or respond.” Fed.R.Civ.P. 37(a)(4). A party may move to compel a response to a request for production if good faith attempts to secure the answer are unsuccessful. Fed.R.Civ.p. 3');">p. 37(a)(3)(B)(iv).

         Parties are under a continuing duty to supplement responses to discovery “in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been known to the other party during the discovery process.” Fed.R.Civ.P. 2');">26(e)(1)(A). The failure to supplement a discovery response may result in sanctions “unless the failure was substantially justified or is harmless.” Fed.R.Civ.P. 37(c)(1).

         “The rules should deter the abuse implicit in carrying or forcing a discovery dispute to court when no genuine dispute exists.” Centennial Archaeology, Inc. v. AECOM, Inc., 688 F.3d 673, 680 (10th Cir. 2');">2012');">2) (quoting 1970 committee notes to Rule 37(a)(4)). As a consequence, Federal Rule of Civil Procedure 37 contains provisions that “allow, and often ...

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