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Mid-State Automotive, Inc. v. Harco National Insurance Co.

United States District Court, S.D. West Virginia, Charleston Division

January 2, 2020

MID-STATE AUTOMOTIVE, INC., et al., Plaintiffs,
v.
HARCO NATIONAL INSURANCE CO., Defendant.

          ORDER

          DWANE L. TINSLEY UNITED STATES MAGISTRATE JUDGE.

         Plaintiffs Mid-State Automotive, Inc., Rodney LeRose II, Jonathan LeRose, Mid-State Properties, LLC, and Mid-State Ford, LLC (collectively, “Plaintiffs”) bring this action against their insurance company, Defendant Harco National Insurance Co. (“Defendant”), and allege breach-of-contract and bad-faith claims stemming from a fire loss at their car dealership that occurred on June 9, 2017. (ECF No. 1.) Before this Court is Defendant's motion for protective order to limit the scope of its Federal Rule of Civil Procedure 30(b)(6) deposition. (ECF No. 50.) For the reasons explained more fully herein, Defendant's motion is GRANTED IN PART and DENIED IN PART.

         A. Topics 1-4 and Requests 1, 2, & 4

         These deposition topics and the corresponding document requests deal with IAT Insurance Group's (“IAT”) use of the services of three companies-Unified Investigations and Sciences, Inc., VeriClaim, Inc., and Sedgwick-to investigate fire loss claims on behalf of IAT's companies over the past ten years. (ECF No. 51-1 at 3-4, 6.) Defendant argues that the topics and requests are overbroad because they seek information about non-party insurance companies, they seek information from as far back as 2009 when the fire loss at issue occurred in 2017, and they are not limited geographically to West Virginia. (ECF No. 51 at 6-9.) Plaintiffs respond that the requested information is relevant to their bad-faith claims and argue that the information is known to Defendant and is accessible through computerized search tools. (ECF No. 53 at 3-7.)

         The topics and requests sweep far too broadly. First and foremost, Plaintiffs have not named IAT-or any of its affiliated companies aside from Defendant-as parties to this action, nor have they alleged that Defendant's actions were in any way directed by IAT. (See ECF No. 1.) Moreover, Plaintiffs have not explained how the conduct of IAT or any of its affiliated companies aside from Defendant bears on Defendant's alleged failure to properly pay Plaintiffs' claims under the insurance policy issued by Defendant. (See id.; ECF No. 53 at 3-7.) Plaintiffs are entitled to the requested information insofar as it relates to Defendant, but discovery about the other entities appears is not relevant to Plaintiffs' claims.

         The topics and requests at issue should be further narrowed to claims for fire loss under a Commercial - Special Form insurance policy, which is the type of policy under which Plaintiffs' claims arise. (See ECF No. 1 at 3.) At this time, the undersigned also finds it appropriate to limit the topics and requests geographically to West Virginia, where Plaintiffs' fire loss occurred. (See id.)

         Finally, the ten-year time period in the topics and requests is significantly longer than necessary for a fire loss that occurred on June 9, 2017. The undersigned finds it appropriate for Defendant to provide the requested information dating back to June 9, 2015.

         In sum, with respect to Topics 1-4 and Requests 1, 2, and 4, Defendant's motion for protective order is GRANTED IN PART and DENIED IN PART as set forth above.

         B. Topic 10

         This topic proposes questioning about “[t]he number of loss of business income and increased expenses claims made by [Defendant's] insureds in the State of West Virginia over the past five (5) years and whether any of those claims were paid in whole or in part.” (ECF No. 51-1 at 5.) Defendant argues that the topic seeks irrelevant information and would require Defendant to reveal its policyholders' information. (ECF No. 51 at 9.) Plaintiffs respond that they do not seek details about other policyholders or their claims, but rather information about the number of claims and whether the claims were paid. (ECF No. 53 at 7-8.) Plaintiffs assert that this information is relevant to their bad-faith claims. (Id. at 8.)

         Plaintiffs are entitled to the requested information because it would allow them to determine whether Defendant paid the exact types of claims that Plaintiffs allege were denied in this case. (See ECF No. 1 at 4, 13.) Further, the topic, as written, plainly does not ask for details about Defendant's policyholders, and there appears little chance that the policyholders' identifying information could be revealed unless Defendant chose to reveal it. Defendant's motion for protective order is DENIED as to Topic 10.

         C. Topic 12 and Requests 6, 9, & 10

         This topic and the related requests seek information about the policies and procedures Defendant uses to investigate fire loss claims under a Commercial - Special Form insurance policy. (ECF No. 51-1 at 5, 7.) As to Topic 12, which requests information about Defendant's policies and procedures “in the past five (5) years” (id. at 5), Defendant argues that the five-year period is overbroad. (ECF No. 51 at 10.) Indeed, only those policies and procedures applicable to Defendant's investigation of Plaintiffs' fire loss claim-i.e., the policies and procedures in place at the time of the fire loss on June 9, 2017-are relevant to Plaintiffs' claims here. Previously existing policies that were not in place at that time have no bearing on whether Defendant acted in bad faith when handling Plaintiffs' claims. However, any material, substantive changes to Defendant's policies and procedures that have occurred since June 9, 2017, are an appropriate subject of discovery. In other words, Plaintiffs are entitled to the requested information dating back to June 9, 2017.

         With respect to Request 6, which requests “[c]opies of any and all written directives, memos, procedures, etc. which were followed by any of the individuals involved in the handling of Plaintiffs' claim” (ECF No. 51-1 at 7), Defendant argues that it “cannot reasonably ascertain what ‘etc.' refers to.” (ECF No. 51 at 10.) Defendant's contention is without merit. The request is not at all vague when viewed in context. Plaintiffs clearly seek written manifestations of the policies and procedures Defendant followed in handling Plaintiffs' insurance claims. Defendant's argument causes the undersigned to question whether the parties complied with the meet-and-confer obligation laid out in Local Rule of Civil ...


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