Summary
requiring production of excess insurance policy pursuant to Rule 26
Summary of this case from Lively v. ReedOpinion
No. 3:13-cv-4267-L
02-24-2015
FRANCISCO REGALADO, Plaintiff, v. TECHTRONIC INDUSTRIES NORTH AMERICA, INC., ET AL., Defendants.
Counsel: For Francisco Regalado, Plaintiff: Eric Donovan Pearson, LEAD ATTORNEY, John K Chapman, Heygood Orr & Pearson, Irving, TX; Kathryn Eleanor Childress, Wilson Elser Moskowitz Edelman & Dicker LLP, Dallas, TX. For Techtronic Industries North America Inc, One World Technologies Inc, Ryobi Technologies Inc, Defendants: E Stratton Horres, Jr, LEAD ATTORNEY, Kathryn Eleanor Childress, Tori S Levine, Wilson Elser Moskowitz Edelman & Dicker LLP, Dallas, TX; Rosario M Vignali, PRO HAC VICE, Wilson Elser Moskowitz Edelman & Dicker LLP, White Plains, NY. For ADR Provider, Mediator: Courtenay L Bass, LEAD ATTORNEY, Gilbert Mediation Group, Dallas, TX; Kathryn Eleanor Childress, Tori S Levine, Wilson Elser Moskowitz Edelman & Dicker LLP, Dallas, TX.
Reporter
2015 U.S. Dist. LEXIS 177983 *; 2015 WL 10818616
Prior History: Regalado v. Techtronic Indus. North Am., 2013 U.S. Dist. LEXIS 156479 (N.D. Tex., Oct. 31, 2013)
Counsel: [*1] For Francisco Regalado, Plaintiff: Eric Donovan Pearson, LEAD ATTORNEY, John K Chapman, Heygood Orr & Pearson, Irving, TX; Kathryn Eleanor Childress, Wilson Elser Moskowitz Edelman & Dicker LLP, Dallas, TX.
For Techtronic Industries North America Inc, One World Technologies Inc, Ryobi Technologies Inc, Defendants: E Stratton Horres, Jr, LEAD ATTORNEY, Kathryn Eleanor Childress, Tori S Levine, Wilson Elser Moskowitz Edelman & Dicker LLP, Dallas, TX; Rosario M Vignali, PRO HAC VICE, Wilson Elser Moskowitz Edelman & Dicker LLP, White Plains, NY.
For ADR Provider, Mediator: Courtenay L Bass, LEAD ATTORNEY, Gilbert Mediation Group, Dallas, TX; Kathryn Eleanor Childress, Tori S Levine, Wilson Elser Moskowitz Edelman & Dicker LLP, Dallas, TX.
Judges: DAVID L. HORAN, UNITED STATES MAGISTRATE JUDGE.
Opinion by: DAVID L. HORAN
ORDER GRANTING PLAINTIFF'S MOTION TO COMPEL
Plaintiff Francisco Regalado has filed a Motion to Compel Defendants Techtronic Industries North America, Inc., One World Technologies, Inc., and Ryobi Technologies, Inc. (together, "Defendants") to Produce Insurance Agreement. See Dkt. No. 47. United States District Judge Sam A. Lindsay referred this motion and, prospectively, all related procedural motions, [*2] to the undersigned magistrate judge for determination pursuant to 28 U.S.C. § 636(b). See Dkt. No. 48. Defendants filed a Cross Motion to Stay Plaintiff's Motion to Compel Defendants to Produce Insurance Agreement and Response to Plaintiffs Motion, see Dkt. No. 51, and Plaintiff filed a Response to Defendants' Motion to Stay Plaintiff's Motion to Compel and Reply to Defendants' Response to Plaintiff's Motion to Compel, see Dkt. No. 52. The Court has determined that its decision on Defendants' motion to stay would not be affected by any reply that Defendants might file and that a decision on Plaintiffs' motion to compel should not await the possible filing of any reply.
Plaintiff asks the Court for an order directing Defendants to produce, pursuant to Federal Rule of Civil Procedure 26(a)(1)(A), any and all insurance agreements that may provide insurance coverage for any judgment Plaintiff might obtain against Defendants. See Dkt. No. 47. Defendants made their Rule 26(a)(1) initial disclosures on December 20, 2013. See Dkt. No. 47-1. Defendants' disclosures report that "Defendants are self-insured for purposes of satisfying any reasonable verdict against them in this matter and they have excess insurance available." Id. at 9. But Plaintiff reports that, "[i]n conjunction [*3] with their Rule 26(a)(1) disclosures, Defendants did not produce a single page concerning insurance." Dkt. No 47 at 1.
Federal Rule of Civil Procedure 26(a)(1)(A)(iv) mandates that, "[e]xcept as exempted by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by the court, a party must, without awaiting a discovery request, provide to the other parties: ... (iv) for inspection and copying as under Rule 34, any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment." Rule 26(a)(1) initial disclosures are mandatory, and each party must serve them on the other parties, "without awaiting a discovery
request," "[e]xcept as exempted by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by the court." FED. R. CIV. P. 26(a)(1)(A). This case is not exempt under Rule 26(a)(1)(B), see FED. R. CIV. P. 26(a)(1)(B), and the parties have not agreed, and the Court has not ordered, that Defendants need not make the mandatory Rule 26(a)(1) disclosures, see Dkt. No. 13; Dkt. No. 14. In fact, the parties agreed to exchange Rule 26(a)(1) initial disclosures by January 31, 2014, see Dkt. No. 13 at 4, and Defendants in fact served their disclosures, see Dkt. No. 47-1.
Defendants do not deny that they have not produced any excess insurance agreement, see Dkt. No. 51, and admit that [*4] "they have excess insurance available," Dkt. No. 47-1 at 9. Defendants instead assert that "[t]here is no realistic possibility that the judgment and costs of defending this case will exceed $500,000.00"; that, "[u]nder Rule 26(a)(1)(A)(iv) of the Federal Rules of Civil Procedure, Defendants are required to produce the insurance agreement under which an insurance company 'may be liable' to satisfy all or part of a judgment"; and that "Plaintiff is not entitled to a copy of the excess policy because the value of the case does not exceed $500,000.00." Dkt. No. 51 at 2. Defendants essentially ask the Court to perform at least a partial valuation of the case to determine the likelihood of Plaintiffs' recovery of a judgment that exceeds Defendants' $500,000.00 self-insured retention and to find that, because Defendants believe, based on the analysis and documents that they have submitted, that "there is no evidence that the potential judgment, even combined with the costs of defense for this case, will exceed $500,000.00," Defendants' excess insurance agreement is irrelevant and that, because "Defendants have produced written confirmation of the amount of the primary self-insurance that may be used to satisfy a judgment and defense costs," they "have thus fully [*5] complied with the requirements of Rule 26(a)(1)(A)(iv)." Id. at 6. "In the spirit of discovery," Defendants also have "submit[ted] a copy of the Declaration Sheet for the Excess Policy at issue," which Defendants report "confirms, in writing, Defendants' self insurance in the amount of $500,000.00 and provides details regarding the limits of the Excess Policy." Id.
The Court cannot accept Defendants' approach to and analysis of what they must produce under Rule 26(a)(1)(A)(iv). Defendants' own written disclosures admit that "they have excess insurance available" for a judgment in this case that exceeds their $500,000.00 self-insured retention. Dkt. No. 47-1 at 9. That is the end of the matter as far as Rule 26(a)(1)(A)(iv)'s mandatory production requirement is concerned, although Defendants emphasize Rule 26(a)(1)(A)(iv)'s use of the words "may be liable." Rule 26(a)(1)(A)(iv) requires production of "any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment." FED. R. CIV. P. 26(a)(1)(A)(iv). That requires production of any insurance agreement that could possibly apply to require the insurance business — however unlikely it may be — to satisfy all or part of a possible judgment in a case. [*6] Rule 26(a)(1)(A)(iv)'s production requirement therefore "is absolute, and does not require a showing of relevance," Heights of Issaquah Ridge Owners Ass'n v. Steadfast Ins. Co., No. C07-1045RSM, 2007 U.S. Dist. LEXIS 95213, 2007 WL 4410260, at *4 (W.D. Wash. Dec. 13, 2007), and is not satisfied by production of a declaration pages, see Morock v. Chautauqua Airlines, Inc., No. 8:07-cv-210-T17-MAP, 2007 U.S. Dist. LEXIS 74009, 2007 WL 2875223, at *1 (M.D. Fla. Oct. 3, 2007); see also Imperial Trading Co., Inc. v. Travelers Prop. Cas. Co. of Am., Civ. A. No. 06-4262, 2009 U.S. Dist. LEXIS 41372, 2009 WL 1247122, at *2 (E.D. La. May 5, 2009). Defendants cite no authority to the contrary, and the Court has not located any binding or persuasive authority that would require a different conclusion.
Defendants also "request that consideration of Plaintiff's Motion to Compel be stayed until the resolution of an identical pending motion in the United States District Court for the District of New Jersey regarding precisely the same issue." Dkt. No. 51 at 1-3. That request is denied, regardless of the fact that counsel for Plaintiff here may also be counsel for the separate plaintiffs in cases pending elsewhere. Defendants owe disclosure obligations to Plaintiff Francisco Regalado himself, not his counsel, and owe them in this case that this plaintiff has brought in this Court. The question for this Court is whether this plaintiff is entitled to production of the documents that Rule 26(a)(1)(A) mandates in this case — which is not related to cases [*7] pending in New Jersey or subject to a multidistrict litigation docket or the like. Plaintiff is, as explained above, entitled to the information and documents that Rule 26(a)(1)(A) mandates that Defendants serve and produce. And that entitlement is not changed by the fact that his counsel in this case may have filed similar motions on behalf of other clients in other cases or by how another court may rule on the same issue in another jurisdiction as to another plaintiff to whom these same defendants may owe Rule 26(a)(1)(A) disclosure obligations.
For the reasons explained above, Defendants' Cross Motion to Stay Plaintiff's Motion to Compel Defendants to Produce Insurance Agreement [Dkt. No. 51] is DENIED, and Plaintiff's Motion to Compel Defendants to Produce Insurance Agreement [Dkt. No. 47] is GRANTED. Defendants must produce to Plaintiff, by March 3, 2015, any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in this action or to indemnify or reimburse for payments made
to satisfy the judgment, including the excess insurance agreement disclosed by Defendants in their Rule 26(a)(1) initial disclosures.
Federal Rule of Civil Procedure 37(a)(5)(A) provides that, if a motion to compel is granted, "the court [*8] must, after giving an opportunity to be heard, require the party ... whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees," except that "the court must not order this payment if: (i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust." FED. R. CIV. P. 37(a)(5)(A).
The Court will grant Defendants Techtronic Industries North America, Inc., One World Technologies, Inc., and Ryobi Technologies, Inc. until March 17, 2015 to file a response addressing whether the Court should issue an order requiring Defendants and/or Defendants' counsel to pay Plaintiff, as a sanction as required by Rule 37(a)(5), the expenses, including attorneys' fees, that Plaintiff incurred in making his Motion to Compel Defendants to Produce Insurance Agreement. In their response, Defendants should fully explain whether Defendants contend that Plaintiff filed his motion to compel before attempting in good [*9] faith to obtain the required disclosures without court action, whether Defendants' nondisclosure was "substantially justified," or whether other circumstances make an award of expenses under Rule 37(a)(5) unjust. Plaintiff may file a reply regarding these matters by March 31, 2015. The Court defers ruling on any award of expenses under Federal Rule of Civil Procedure 37(a)(5) pending this additional briefing. If the Court orders an award of Rule 37(a)(5) expenses after receiving (or failing to receive) this briefing, the Court will set a later deadline for any application for the award of expenses, including fees.
SO ORDERED.
DATED: February 24, 2015
/s/ David L. Horan
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE