williams et al v. illinois union insurance company defendant answer to motion to compel docs
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8/7/2019 WILLIAMS et al v. ILLINOIS UNION INSURANCE COMPANY Defendant Answer to Motion to Compel Docs
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
Case No.: 3:10-cv-518-TJC-JBT
HEBERT WILLIAMS
and FLORIDA HYDRO, INC.,
Plaintiffs,
v.
ILLINOIS UNION INSURANCE COMPANY,
Defendant.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _ /
DEFENDANT'S RESPONSE IN OPPOSITION TO PLAINTIFFS' MOTION TO
COMPEL PRODUCTION OF DOCUMENTS IN RESPONSE TO THEIR FIRST
REQUEST FOR PRODUCTION AND BETTER ANSWERS TO THEIR FIRST SET OF
INTERROGATORIES
Defendant, Illinois Union Insurance Company ("Illinois Union"), files this Response in
Opposition to Plaintiffs' Motion to Compel [DE 12], together with a memorandum of legal
authority, and statesas
bases for relief requested:
RELIEF REQUESTED
Illinois Union received a request for production and interrogatories from the Plaintiffs.
Illinois Union responded with timely responses and objections on August 5, 2010. Illinois Union
respectfully requests that this Court enter an Order: (1) sustaining its objections where applicable
on the grounds that the discovery sought is protected by the work product doctrine and/or
attorney-client privilege and permit Illinois Union to file a privilege log within 30 days; (2)
denying Plaintiffs' Motion to Compel and Plaintiffs' request that Illinois Union "immediately
produce all documents Responsive to Request Nos. 2-6 and 8-12"; and (3) denying Plaintiffs
Motion to Compel better answers to Plaintiffs' Interrogatory Nos. 2-3 and 5-8.
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Certain portions of Illinois Union's claim file may be discoverable in response to
Plaintiffs "claim file" discovery requests pursuant to the cases cited by Plaintiffs in their Motion
to Compel. Illinois Union will, within the next 30 days, present a privilege log for materials
responsive to "claim file" discovery requests. However, Illinois Union maintains its objection to
producing its "entire" claim file on the grounds that: (1) certain documents contained in the
claim file would have been prepared in anticipation of this coverage litigation and thus work
product; (2) certain documents were prepared by Illinois Union's attorneys in their capacity as its
legal advisor and thus attorney-client privileged; and (3) documents and communications
contained in the claim file created after June 1, 2007 are not discoverable because Plaintiffs
have, in effect, file a verified submission, informing this Court and Florida's Department of
Financial Services that June 1,2007 was the date coverage was denied.
FACTS
This is an insurance coverage dispute. Plaintiffs' Complaint alleges that Illinois Union
"failed, however, to issue a defense and coverage position until June 1,2007. Illinois refused to
provide a defense and denied coverage." Exhibit A, Plaintiff's Complaint [D.E. 1], -014, filed on
June 17, 2010. Prior to filing this coverage action, Plaintiffs filed a civil remedy notice with the
Florida Department of Financial Services which alleges that Illinois Union violated Fla. Stat.
§624.155 and §626.9541 when "[O}n June 1, 2007, almost three months after receiving notice of
the [underlying] suit, the insurer sent a letter refusing to provide a defense and denying
coverage." ExhibitB,
Plaintiff 's Civil Remedy Notice filedon
May 27, 2010.
In the underlying matter, Michael Hoover sued Florida Hydro on February 23, 2007 in
federal court in Louisiana. Hoover's complaint alleged breach of an oral employment contract,
fraud, and alternative theories of misfeasance against Florida Hydro. The underlying matter
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arises from a broken promise by Herbert Williams, the owner of Florida Hydro, to compensate
Hoover with 484,250 shares of company stock. Instead, Williams offered Hoover only 6,000
shares after Hoover had performed the oral employment contract.
Williams tendered the claim against Florida Hydro to Illinois Union on March 8, 2007.
Williams was insured under an indemnity only, claims-made, directors & officers' policy issued
by Illinois Union. Florida Hydro was insured under the same policy, but not with respect to
claims concerning employment related matters, which were expressly excluded from coverage.
On March 14, 2007, Illinois Union informed Williams it was reviewing coverage regarding the
claim against Florida Hydro and advised him by letter about his obligations not to settle the
matter without Illinois Union's written prior consent. On June 1, 2007, Illinois Union sent a
reservation of rights letter directing Williams' attention to Endorsement #2, Exclusions 2.c.,
which excluded coverage for claims against Florida Hydro for employment or employment
related matters. The letter also pointed out that under Endorsement #2, it was Florida Hydro's
duty to retain counsel and defend itself.
Endorsement #2, Section FA of the policy at issue obligated Illinois Union to reimburse
costs incurred by Plaintiffs in defending a potentially covered claim, and obligated Plaintiffs to
submit those costs to Illinois Union on a quarterly basis. Williams later became a named party to
the underlying matter and reported the claim to Illinois Union on or about July 2, 2009. The
reporting of this claim triggered Section FA. On August 20, 2009, Williams and Florida Hydro
settled the underlying matter for $2.5 million without Illinois Union's prior written consent. On
the same date, Illinois Union made the first of numerous written requests to Williams and his
attorneys to provide invoices to substantiate the costs expended in defending the underlying
matter pursuant to Section FA. After the underlying matter settled, Williams tendered the $2.5
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million settlement to Illinois Union. On September 1, 2009 Illinois Union informed Williams
that the settlement was not covered because it was concluded without Illinois Union's prior
written consent. To date, Williams and Florida Hydro have not adequately responded to Illinois
Union's requests for clarification of invoices for defense costs they provided to Illinois Union.
These communications between Illinois Union and Plaintiffs representatives, the last of
which occurred on June 24, 2010, do not have any bearing on the parties' coverage dispute as to
whether Illinois Union had a duty to defend or indemnify Plaintiffs for the settlement of the
underlying matter.
MEMORANDUM OF LAW AND ARGUMENT
I. Illinois Union's Objections to Plaintiff's Request for Production 2 - 6
Request No.2: Your entire claim and/or investigative file(s) pertaining to the Claims, whether
local, field, regional or home office, including files held by any entity affiliated, contractually or
otherwise, with You. This Request includes but is not limited to the claim file jacket(s), notes,
daily diaries, statistical and coding information, letters, reports, photographs with original
negatives, invoices and billing, records ofphone calls, emails, or other Documents.
Objection. Plaintiff 's request is irrelevant, immaterial, overbroad, premature, violative of
attorney-client and/or work product privileges. Plainti ff is not entitled to request such materialsuntil the merits of the claim for benefits (i.e. - Plaintiff's breach of contract claim) have been
fully and finally adjudicated. See, for example, Allstate Insurance Company v. Shupack. 335 So.
2d 620 (Fla. 3d DCA 1976). See also, Allstate Indemnity Company v. Ruiz. 899 So. 2d 1121
(Fla. 2005); XL Specialty Insurance Company v. Aircraft Holdings. LLC, 929 So. 2d 578 (Fla.
1st
DCA 2006); and Old Republic National Title Insurance Company v. Homeamerican Credit.
Inc .. 844 So. 2d 818 (Fla. 5th
DCA 2003).
Request No.2
This Court recognizes that attorney-client privilege and work product doctrine protect
privileged documents within an insurer's claim file. See St. Joe. Co. v. Liberty Mut. Ins. Co.,
2006 WL 3391208 at *2 (M.D.Fla.)(citing Connecticut Indem. Co. v. Carrier Haulers, Inc., 197
F.R.D. 564, 571-72 (W.D.N.C. 2000)(finding various communications, between attorney and
Plaintiff, in insurer's claim file were protected by both the attorney-client privilege and the work
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product doctrine)); see also BG Real Estate Serv., Inc. v. Am. Equity Ins. Co., 2005 WL1309048
at *8 (E.D.La.)(" .. . a privileged document does not necessarily lose its privilege simply by being
housed in a claim file.")).
Certain non-privileged documents Illinois Union's claim file may be discoverable
pursuant to the cases cited by Plaintiffs. Discovery of Illinois Union's claim file should not be
unlimited however. "Rule 26(b) is not a discovery blank: check. It requires balancing and
imposes upon the court the obligation to rein in overly broad, potentially abusive discovery like
plaintiffs' discovery requests in this case." BG, 2005 WL1309048 at *3. Plaintiffs have twice
asserted that Illinois Union wrongfully denied coverage on June 1, 2007. Documents from
Illinois Union's claim file created after June 1, 2007 broadens the scope of discovery beyond
what should be permissible under Fed.R.Civ.P. 26(b) and Florida law.
Florida courts recognize that claim file documents created after the date coverage is
denied are presumed created in anticipation of this coverage litigation and thus work product.
Milinazzo v. State Farm Ins. Co., 257 F.R.D. 691 (S.D.Fla. 2007)(citing Harper v. Auto-Owners
Ins. Co., 138 F.R.D. 655 (S.D.Ind. 1991)(documents produced after the denial of a claim are
presumed to have been prepared in anticipation of litigation)). Plaintiff cites numerous federal
cases where, under similar circumstances, the work product privilege does not attach until the
time the insurer makes its "final decision" on coverage. Royal Bahamian Assoc., Inc. v. QBE
Ins. Corp., 2010 WL 3452368 (S.D. Fla.)("There is a rebuttable presumption that documents or
things prepared before the "final decision on an insured's claim are not work product, and that
documents produced after claims denial are work product."); Cutrale Citrus Juices USA, Inc. v.
Zurich Am. Ins. Co., 2004 WL 5215191 (M.D. Fla.)("The date coverage has been denied by the
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insurer has been recognized by a number of courts as the proper date after which it is fairly
certain there is an anticipation of litigation.").
Plaintiffs now argue Illinois Union still had not made a "final decision" on the claims
until June 17, 2010, when this coverage suit was filed and, therefore, Illinois Union's claims file
as it exists through that date is discoverable. Plaintiffs proffer written communications between
the parties about reimbursement of defense costs to demonstrate Illinois Union has not made a
"final decision" on coverage. This implication is factually incorrect. The communications
attached to Plaintiffs Motion to Compel as "Composite Exhibit F" establish that, as of July 2,
2009, when Williams first reported the claim against him, Illinois Union was then obligated to
allocate and reimburse Plaintiffs' defense costs pursuant to Endorsement #2, Sec. F.4. This
endorsement requires Plaintiffs to submit to Illinois Union on a quarterly basis, invoices from
Plaintiffs' attorneys defending them in the underlying suit. The August 20, 2009 e-mail to
Plaintiffs requested "copies of invoices incurred." The April 28, 2010 letter from J. Adler to R.
Hugh Lumpkin asks Plaintiffs to "provide us with copies of defense fees and costs invoices
related to this matter." The June 4, 2010 letter from J. Adler to R. Hugh Lumpkin requested
clarification about invoices submitted, specifically asking Plaintiffs to explain why two law firms
were required to defend them, "so the carrier can make an appropriate determination for
purposes of allocating defense costs."
These letters do not demonstrate any doubt by Illinois Union whether Plaintiffs had a
covered claim under the policy. As of June 1,2007, Plaintiffs knew that either the employment
related matters exclusion or an unauthorized settlement would preclude coverage. The purpose
of the September 1, 2009 letter, which came on the heels of an unauthorized settlement, was to
reiterate there was no coverage for unauthorized settlement agreements. The September 1, 2009
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letter shows Illinois Union was performing the limited obligation under the policy to reimburse
defense costs. The request for additional information does not show that Illinois Union was still
considering whether there was coverage for the settlement entered into on August 19,2009. As
of June 1, 2007, there was no duty to defend Plaintiffs (since the policy plainly required the
insured to defend). Nor would there ever have been coverage for an unauthorized settlement
based upon the policy provisions Plaintiffs were directed to review on March 14, 2007.
Plaintiffs brush these facts aside in arguing Illinois Union "continues to actively evaluate
the Plaintiffs' claims." Motion to Compel, p. 12. This mischaracterization, according to
Plaintiffs, makes Illinois Union's "entire claim file" discoverable through the date of this suit.
Yet, Plaintiff alleges what amounts to a verified pleading and, later, filings with the State of
Florida that coverage was denied on June 1, 2007. See Exhibits A and B. If Plaintiff is going to
stand by this date when coverage was denied, then none of the documents in the claim file
created by Illinois Union after June 1,2007 should be discoverable.
Moreover, Plaintiffs should be estopped from asserting this unfair, inconsistent position
inasmuch as their complaint and civil remedy notice recite that coverage was denied on June 1,
2007. The essence of estoppel is that a person should not be permitted to unfairly assert
inconsistent positions. See Inman v. Rowsey, 41 So.2d 655 (Fla. 1949). Accordingly, the
doctrine of "equitable estoppel" precludes a person from maintaining a position inconsistent with
another position which is sought to be maintained at the same time or which was asserted at a
previous time. Baileyv.
State FarmMut.
Auto.Ins. Co.,
789 So.2d 1181 (Fla. 4th DCA 2001).
Florida's federal courts also apply the doctrine of equitable estoppel, also known as "judicial
estoppel." Allapattah Servs., Inc. v. Exxon Corp., 372 F.Supp.2d 1344, 1366-71 (S.D.Fla.
2005)( doctrine of judicial estoppel prevents litigant from taking inconsistent positions at
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different stages of suit); Sullivan Props., Inc. v. City of Winter Springs, 899 F.Supp.2d 587, 591
(M.D.Fla. 1995)(doctrine of judicial estoppel ensures a party will not argue inconsistent
positions to gain unfair advantage, which protects "courts from being manipulated by
chameleonic litigants who seek to prevail, twice, on opposite theories.").
Plaintiffs' Complaint and communications with the State of Florida that coverage was
denied was June 1, 2007 are the equivalent of sworn statements for purposes of judicial estoppel.
Gosman, 382 B.R. 826 at 843 (S.D. Fla. 2007) (citing Allapattah Servs., 372 F.Supp.2d at 1368,
n. 12)(finding that the Eleventh Circuit has recognized that by filing pleadings and later
advocating positions consistent therewith, an attorney makes representations to the court
equivalent to an oath for purposes ofjudicial estoppel).
Having now sworn a "final decision" on coverage was rendered on June 1, 2007,
Plaintiffs cannot be permitted to change this date to procure privileged matters in the claim file
beyond that date. To permit otherwise would be unfair. It also invites Plaintiffs to engage in
chameleonic shifting of the date of Illinois Union's "final decision" on coverage to gain an unfair
advantage later in the proceedings.
Request No.3: All Documents relating to the Claims and/or to the Policy and/or to the
Plaintiffs in the possession, custody and/or control ofYou or Insurer Counsel.
Objection. Plaintiff's request is neither clear, concise nor reasonably particularized. Plaintiff's
request is overly broad. See, Section IIIA.1., Middle District Discovery (2001) at 10.
Additionally, Plaintiff's request is vague, irrelevant, immaterial, premature, violative of
attorney-client and/or work product privileges. Plaintiff seeks the same materials included
within those requested in Request 2 above. And, for the same reasons, is not entitled to same.
Without waiving such objections, Defendant attaches as Composite Exhibit "B" (IU-000027
through IU-000076) correspondence in its possession regarding unprivileged or unprotected
communications by and between the insured, its agent and counsel and the carrier
Request No.3
. See argument for Request No.2.
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Request No.4: All notes, logs, minutes, memoranda, emails, or other Documents reflecting any
decisions, meetings, discussions or deliberations by or on behalf of You concerning the Claims
and/or the Policy and/or to the Plaintiffs.
Other than documents produced in response to Request 3 above, Defendant adopts andincorporates by reference the same objections as set forth in its responses to Request for
Production 2 and 3.
Request No.4
See argument for Request No.2 and 3.
Request No.5: All Documents Relating to Communications by and between You and the
Plaintiffs Relating to the Policy and/or to the Claims.
See, Defendant's response and objections to Request for Production 3, above.
Request No.5
See argument for Request No.2, 3, and 4.
Request No.6: All Documents Relating to Communications by and between You and any other
Person or entity, including, but not limited to, Plaintiffs' Defense Counsel, regarding the
Plaintiffs and/or the Policy and/or the Claims.
Defendant adopts and incorporates by reference its response to Request 3 above. Moreparticularly, Defendant objects to the production ofdocuments relating to "any other person or
entity" because the only such documents in Defendant's possession involve communications with
counsel and/or documents that were created in connection with communications with counsel
and, therefore, those documents are protected by the attorney-client and/or work product
privileges.
Request No.6
See argument for Request No.2, 3, 4 and 5.
RequestNo.8:
All Documents in Your possession, custody, or control that You relied on indenying coverage in whole or in part for the Claims.
See, Defendant's response to Request for Production 1, above.
Request No.8
See argument for Request No.2, 3,4, 5 and 6.
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Illinois Union supplements its response to this Request by stating that Illinois Union
relied upon the policy of insurance with Plaintiffs in addition to the complaint and the amended
complaint provided by the Plaintiffs in denying coverage.
II. Illinois Union's Objections to Plaintiffs' Request for Production Nos. 9 - 12
Request No.9: All communications between You and the Florida Department of Insurance, or
any Florida government agency or official, at any time between 1980 and 2006 Relating to the
adoption, interpretation, approval for use, or application of the Employment Exclusion.
Objection. Overboard, harassing, irrelevant, immaterial, not appropriately limited in time or
scope inasmuch as Plaintiff's request spans 26 years and the policy form and endorsements at
issue in this proceeding were not printed for circulation and use until June and July, 2005.
Request No. 10: All Communications between You and any insurance trade association,
including, but not limited to, the National Bureauof
Casualty Underwriters, Mutual InsuranceRating Bureau, American Mutual Insurance Alliance, Insurance Services Office, Inc., American
Insurance Association, the Insurance Information Institute, the Insurance Rating Board, the
Insurance Rating Bureau, and any of their predecessors, between 1980 and 2006 relating in
whole or in part to the Employment Exclusion.
Defendant adopts and incorporates by reference its objections to Request for Production 9,
above.
Request No. 11: All underwriting manuals or guidelines relating in whole or in part to the
Employment Exclusion in use between 2006 and the present, including any modifications
thereto.
Objection. Defendant's manuals, guidelines and other similar materials, if any, are not subject
to discovery in a proceeding of this nature until the merits ofPlaintiff's claim for benefits have
been fully and finally determined. See, Allstate Indemnity Company v. Ruiz, 899 So. 2d 1121
(Fla. 2005) and Old Republic National Title Insurance Company v. Homeamerican Credit Inc.,
844 So. 2d 818 (Fla. 5th DCA 2003).
Request No.12: All home or regional office bulletins or directives relating to the use,
interpretation, pricing for and/or interpretation of the Employment Exclusion.
Objection. Defendant's bulletins, directives or other similar materials,if
any, are not subject todiscovery in a proceeding of this nature until the merits of Plaintiff's claim for benefits have
been fully and finally determined. See, Allstate Indemnity Company v. Ruiz, 899 So. 2d 1121
(Fla. 2005) and Old Republic National Title Insurance Company v. Homeamerican Credit Inc.,
844 So. 2d 818 (Fla. 5th DCA 2003).
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Requests Nos. 9 - 12
Illinois Union is reviewing the requested materials related to the use of the Employment
Exclusion as it existed in July 2005 through June 1, 2007 and will produce those documents
responsive to these requests shortly. Illinois Union will present a privilege log for materials
responsive to these requests reserving the right to continue to object if the responsive materials
were prepared in anticipation of this coverage litigation and thus work product and/or (2) the
documents were prepared by Illinois Union's attorneys in their capacity as its legal advisor to
this coverage litigation and thus attorney-client privileged. For the same reasons explained in
response to Request No. 2-6, Illinois Union will not produce the documents responsive to these
requests created after June 1, 2007 in light of the fact that those documents would be irrelevant
inasmuch as they would have been created after the date of the coverage denial, as contended by
the Plaintiffs, that gives rise to this coverage litigation.
III. Illinois Union Has Not Waived Privilege Objections to Plaintiffs' Discovery
The cases cited by Plaintiffs do not hold that failure to provide a privilege log
automatically results in a waiver of the privilege objections. In Consumer Elec. Ass 'n v.
Compras and Buys Magazine, Inc., 200S WL 4327253 at *3 (S.D.Fla.), the defendant lodged
generalized objections asserting attorney-client privilege and work product doctrine. The court
in that case, however, did not deem that the defendant's claims of privilege were automatically
waived when defendant did not file a privilege log. Rather, the court believed "that it is more
appropriate to permit the defendant to lodge specific objections, including claimsof
privilege."
Id. at *2. Likewise, in Capital Corp. Mergers & Acquisitions, Inc. v. Arias Co., 2006 WL
120S012 (M.D.Fla.), the plaintiffs responses to defendant's discovery requests were untimely
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and the plaintiff did not produce a privilege log. The court granted the defendant's motion to
compel and ordered the plaintiff to produce a privilege log. See id. at *3.
In Pitts v. Francis, 2008 WL 2229524 (N.D.Fla.), the court held that "[f]ailure to provide
a privilege log does not result in an automatic waiver of the privilege." Rather, courts apply a
holistic analysis taking into account several factors to determine whether the privilege has been
waived." Id. at *4 (citing Universal City Dev. Partners, Ltd. v. Ride & Show Eng'g, 230 F.R.D.
688, 695 (M.D.Fla. 2005)). The court in Pitts set forth the factors a court should consider in
applying a "holistic analysis":
the degree to which the objection or assertionof
privilege enables the litigantseeking discovery to evaluate whether each of the withheld documents is
privileged (where providing particulars typically contained within a privilege log
is presumptively sufficient and boilerplate objections are presumptively
insufficient); the timeliness of the objection and accompanying information about
the withheld documents (where service within 30 days, as a default guideline, is
sufficient); the magnitude of the document production; and any other particular
circumstances of the litigation that make responding to the discovery unusually
easy (such as, here, the fact that many of the same documents were the subject of
discovery in an earlier action) or unusually hard. Id. at *5.
A "holistic analysis" in this case does not justify waiver. Illinois Union's assertionof
work product and attorney-client privileges and supportive precedent in responding to a request
for the "entire claim file" enabled Plaintiffs to evaluate whether the "entire claim file" was
privileged. Plaintiffs needed nothing other than Illinois Union's "boilerplate objections" to
explain to this Court why the objections were without merit. Plaintiffs certainly had enough
information available to them to evaluate Illinois Union's claims of privilege insofar as Plaintiffs
know precisely which documents contained in Defendant's claim file are discoverable.
"Documents created up until the date the Plaintiffs filed suit - June 17, 2010 - are accordingly
not work product protected ... " Plainti ffs Motion to Compel, p. 10. Thus, Plaintiffs' belief that
"without a privilege log, there is simply no information available to a requesting party (or a
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court) to determine the nature of the allegedly protected documents being withheld" is not
supported by the record in this case.
Illinois Union's privilege objections to Plaintiffs' August 5, 2010 discovery requests were
timely. Timely privilege objections are not waived. Florida courts hold that a party failing to file
timely objections can waive them, including those based on privilege or work product. See
Reliance Ins. Co. v. Core Carriers, Inc., 2008 WL 2414041 at *2 (M.D. Fla. 2008); Third Party
Verification, Inc. v. Signature Link, Inc., 2007 WL 1288361 at *3 (M.D. Fla. 2007). In Reliance,
the defendant served plaintiff with a request for production in April 2007. In March 2008, nearly
a year after being served with the request, plaintiff responded and objected to all of the requests
on the grounds the requested documents were privileged. The court held that the objections were
waived for untimely service. See id. at *2. Here, Illinois Union's responses and privilege
objections were served on September 20,2010 pursuant to an extension granted by the Plaintiff.
They were thus were timely and not waived.
Finally, the fact the claim file documents were not subject to any prior discovery requests
militate against finding that Illinois Union waived its work product and attorney client privileges
for not filing privilege log. The claim file has not been produced or subject to production in any
prior actions. This is the first attempt by the Plaintiff to seek production of the claim file. Under
the circumstances, the Illinois Union has not waived its right to assert important privileges and
should not be compelled to produce all withheld discovery without first having the opportunity to
prepare a privilege log. The importance of the privileges asserted by Illinois Union justifies
permitting it to submit the necessary materials rather than have the privileges deemed
automatically waived.
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IV. Illinois Union's Responses and Objections to Interrogatory Nos. 2-3 and 5-8
Interrogatory No.2: Identify everyone of Your employees or Agents, former or current, who
participated in the offer, negotiation, sale, assembly, underwriting, drafting or preparation of the
Policy, and with respect to each such Person, describe the nature of his or her involvement, the
Date(s) of that involvement, position held at the time of his or her involvement and presently, hisor her full name, the name of the Person's present employer, and his or her current business
address. If the person is no longer employed by You, and You do not know the Person's current
whereabouts, please provide the Person's last known address, telephone number, and date of
birth.
Illinois Union objects to the instant interrogatory on the grounds that it is irrelevant, immaterial,
unduly burdensome, requires undue time, labor and expense for compliance and is beyond the
scope of the issues framed by the Plaintiff's Complaint, to wit: whether the Defendant breached
a duty to defend and indemnifY under the policy issued to the Plaintiff. (See Paragraph 31 of
Plaintiff 's Complaint.) Plaintif f's Complaint raises no issue regarding the "offer, negotiation,
sale, assembly, underwriting, drafting, or preparation of the policy." Accordingly, Defendantshould not be required to respond and/or Plaintiff's Interrogatory should be limited in scope to
address the issues actually raised in the Complaint.
Interrogatory No.2
The scope of this interrogatory seeks information about Defendant's employees that is
not relevant to the construction of an insurance policy. Fed. R. Civ. P. 26(b) allows parties to
"obtain discovery regarding any matter not privileged which is relevant to the subject matter
involved in the pending action." The scope of discovery is limited however. The information
sought must be relevant and not overly burdensome to the responding party. Johnson v. GEICO
Gen. Ins. Co., 2007 WL 3343086 at *1 (S.D.Fla.) (citing Washington v. Brown & Williamson
Tobacco, Corp., 959 F.2d 1566, 1570 (11 th Cir. 1992). "Discovery should be tailored to the
issues involved in the particular case." Id.
Interrogatory No. 2 seeks irrelevant information beyond the scope of permissible
discovery in a case centering on the interpretation of an insurance policy. In Johnson, 2007 WL
3343086 at *2-3, the court held that a carrier did not have to answer an interrogatory which
requested the identity of employees who handled an uninsured motorist claim, where the dispute
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between the parties was whether a bodily injury claim was handled in bad faith because
information regarding the UM claim was not relevant or reasonably calculated to lead to the
discovery of admissible evidence.
Information about Illinois Union's employees who offered, negotiated, sold, assembled,
underwrote, drafted, and/or set the premiums for the policy at issue is not relevant to the matters
before the court. Plaintiffs one-count complaint for breach of insurance contract focuses solely
on whether Illinois Union breached its duties to defend and pay for the unauthorized settlement
of Plaintiffs' claims. These issues relate to the performance under the policy, not whether there
was valid and enforceable contract or how it was priced.
Illinois Union previously disclosed those individuals with knowledge addressing the
issues actually raised in the Complaint when it served its Rule 26(a) initial disclosures. To the
extent Interrogatory No. 2 requests disclosure of information about additional individuals, the
interrogatory is overbroad, touching upon the responsibilities of numerous Illinois Union
employees. As the court did in Johnson, this Court should recognize such an interrogatory is
harassing because the job functions of these Illinois Union employees have no bearing on Illinois
Union's contractual obligations.
Interrogatory No.3: Identify everyone of Your employees or Agents, former or current, who
was or is involved, directly or indirectly, in the investigation, handling, review, adjustment
and/or analysis of the Claims, and with respect to each such Person, please identify that person,
describe the nature of his or her involvement, the Date(s) of that involvement, and position held
at this time of his or her involvement and presently. If the person is no longer employed by You,
and You do not know the Person's current whereabouts, please provide the Person's last known
address, telephone number, and date ofbirth.
George T Glavas, Esq., Natalia Ron, Esq. As described in Defendant's Rule 26 Initial
Disclosure, Mr. Glavas responded on behalf of the insurer to the initial notice received on or
about 3/8/07. Ms. Ron responded on behalf of the carrier following the notification received
from Attorney James Middleton.
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Interrogatory No.3
Illinois Union has sufficiently identified the individuals involved in the investigation,
handling, review, adjustment and/or analysis of the Claims.
Interrogatory No.5: Please quote verbatim any provision of the Policy upon which you rely to
limit or exclude coverage in this matter. With respect to each such provisions, identify who
drafted that provision, and state the date when it was first used by You.
Please refer to the at issue policy, Endorsement #2, Paragraph 2a and 3. See, also, Section C,
"Exclusions, " Paragraphs fi. and fii. Illinois Union is unable to identifY the person or persons
who drafted the provisions referenced above and likewise, is unable to provide the date these
provisions were first used in an Illinois Union policy. Illinois Union can state, however, that the
policy form and the endorsement were not available for inclusion in insurance policies, in
general, until June and July, 2005 respectively.
Interrogatory No.5
Illinois Union conducted a "reasonable inquiry" in responding to this interrogatory.
Illinois Union consulted individuals within its regulatory and compliance divisions, who were
unable to identify any individuals who may have drafted the provisions relied upon to limit or
exclude coverage in this matter.
Interrogatory No.6: Identify everyone of Your employees or Agents, former or current, who
has been deposed or who has otherwise testified in the past five (5) years concerning the
construction, interpretation, meaning or application of any Policy provisions that You intend to
rely on in support of any ofYour affirmative defenses
Illinois Union is not aware of the identities of the former or current agents who may have
testified in the past five (5) years regarding the subject matter described in this Interrogatory.
Illinois Union does not maintain records that would permit it to identifY such employees or
agents as described in this Interrogatory. Despite the foregoing, as the construction,
interpretation, meaning and application of the policy terms at issue herein are questions of law
for the Court, and therefore, the testimony ofsuch individuals regarding their understanding ofthe construction, interpretation, meaning or application of the policy terms is irrelevant and
immaterial to this proceeding.
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Interrogatory No.6
Interrogatory No. 6 seeks irrelevant information beyond the scope of permissible
discovery. Interrogatory No.6 is similar to an interrogatory where the insurer's relevance and
burden objections were sustained in a recent federal district court case. In Marook v. State Farm
Mut. Auto Ins. Co., 259 F.R.D. 388 (N.D.Iowa 2009), the insured tried to discover the identities
of employees who denied coverage decades earlier based on the same policy provision. The
court held" .. . the outcomes of the earlier State Farm cases will not control the outcome here.
Not only are the facts in the earlier cases distinguishable from those from the instant action, the
cases were determined under the law which existed at the time" in different states. 259 F.R.D. at
395-96.
Assuming that Illinois Union was even able, which it clearly stated it is not, to identify
Illinois Union employees who may have testified in other cases regarding the coverage
limitations relied upon in this case, any information gleaned from their testimony would be
irrelevant. The applicationof
the employment-matters exclusion or any other policy provision is
a question oflaw for the Court. Illinois Union's relevance objections should be sustained, and it
should not be necessary for Illinois Union provide a better response to Interrogatory No.6.
Johnson, 2007 WL 3343086 at *2-3.
Interrogatory No.7: Identify any appraiser, adjuster, accountant, consultant, or other
professional retained, retained contacted, or used by You in connection with the Claims, and
include the name of any entity that employed that Person at the relevant time. Also state whether
the Person provided You with any reports, draft reports, photographs, diagrams, sketches,estimates, videotapes, renderings, measurements, or other information, Documents or
calculations. If so, describe the nature of the information provided and provide the Dates on
which these Documents were provided to You.
Claims professionals used by Illinois Union in connection with the notice and the claim were
George T. Glavas, Esq. and Natalia Ron, Esq.
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Interrogatory No.7
Illinois Union is preparing a privilege log for materials responsive to these requests.
Illinois Union reserves to object if the responsive materials: (1) were prepared in anticipation of
this coverage litigation and thus work product, and if (2) the documents were prepared by Illinois
Union's attorneys in their capacity as its legal advisor to this coverage litigation and thus
attorney-client privileged. Based on reasoning explained in response to Request No.2, Illinois
Union will not produce claim file documents created after June 1, 2007. Those documents
would be protected because they are presumed prepared in anticipation of this coverage litigation
Interrogatory No.8: Identify every third party with whom You communicated regarding thePlaintiffs and/or Policy and/or the Claims, and describe the subject and substance of those
Communications.
Prior to the denial of coverage for the claim, Illinois Union had received and transmitted
communications with the Plaintiff/insured, Herbert Williams, his insurance agent and attorneys
for the Plaintiff/insured in the underlying litigation including, but not limited to, James
Middleton and Deb Kurcher. The subject matter of such communications generally, included
matters relating to the filing of the initial complaint, the second amended complaint, notification
of the settlement, the insured's obligation to defend and an allocation of defense expenses.
Subsequent to the 8120109 denial of the claim for coverage, Illinois Union communicated with
counsel, Joel Adler. The subject and substance of those communications is protected by theattorney-client and work product privileges. The nature of the communications took the form of
e-mails, telephone conversations, and correspondence, all of which were performed in the
anticipation of litigation relative to the denial ofcoverage for the underlying claim.
Interrogatory No.8
See argument for Request No.2, Interrogatory Nos. 2 and 6.
CONCLUSION
Illinois Union respectfully requests that this Court enter an Order: (1) sustaining its
objections where applicable on the grounds that the discovery sought is protected by the work
product doctrine and/or attorney-client privilege and/or permit Illinois Union to file a privilege
log within 30 days; (2) denying Plaintiffs' Motion to Compel and Plaintiffs' request that Illinois
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Union "respond immediately to Request Nos. 2-6 and 8-12"; and (3) denying Plaintiffs Motion
to Compel better answers to Plaintiffs' Interrogatory Nos. 2-3 and 5-8.
Respectfully submitted,
By: lsi Robert Scott Newman
Joel D. Adler (FBN: 283223)
E-mail: jadlcr(iv.marlowconnell.com
Robert Scott Newman (FBN: 466670)
E-mail: s n e w m l : ! n ( a ~ m a r l o w c o n n c l 1 . c o m MARLOW, CONNELL, ABRAMS,
ADLER, NEWMAN & LEWIS, P.A.
4000 Ponce de Leon Boulevard, Suite 570
Coral Gables, Florida 33146
Telephone Direct Line: 305) 460-6513Facsimile: 305) 446-3667
Attorneys for Defendant, Illinois Union
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on November 8,2010, I electronically filed the foregoing
document with the Clerk of Court using CMIECF andlor also on all parties identified in the
attached Service List in the manner specified, in some other authorized manner for those counsel
or parties who are not authorized to receive electronically Notice ofElectronic Filing.
Attorneys for Plaintiffs
R. Hugh Lumpkin, Esq.
Ashley B. Hacker, Esq.
VER PLOEG & LUMPKIN, P.A.
100 Southeast Second Street
13th
FloorMiami, Florida 33131-2151
By: lsi Robert Scott Newman
SERVICE LIST