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Progressive Northwestern Insurance Co. v. Gant

United States District Court, D. Kansas

August 16, 2017

PROGRESSIVE NORTHWESTERN INSURANCE COMPANY, Plaintiff/Counterclaim Defendant,
v.
GABRIEL GANT, et al., Defendants/Counterclaim Plaintiffs.

          ORDER ON PLAINTIFF'S MOTION TO COMPEL

          KENNETH G. GALE, UNITED STATES MAGISTRATE JUDGE.

         Now before the Court is Plaintiff's Motion to Compel. (Doc. 214.) For the reasons set forth below, Plaintiff's motion is GRANTED in part and DENIED in part.

         BACKGROUND

         This is a declaratory judgment action brought by Plaintiff Progressive Northwestern Insurance Company (“Plaintiff” or “Progressive”) resulting from a head-on vehicle accident between Justin Birk and Katie Gant that resulted in Ms. Gant's death. Plaintiff requests a finding that its handling of an underlying claim and lawsuit, resulting from a fatal automobile accident, “was appropriate, in good faith, and consistent with the Progressive Policy and all duties imposed upon it by law or otherwise.” (See Doc. 1, at 5; Doc. 14, at 7.) Issues with the handling relate specifically to counsel (Kevin McMaster) retained by Plaintiff for its insured, who were defendants in the underlying action. McMaster is alleged to have engaged in conduct described as “obstructionist, ” “highly prejudicial, ” and “to the extreme detriment” of the defendants in the underlying lawsuit. (See generally Doc. 6-5.) Additional facts relating to this case, as well as to the underlying lawsuit, were summarized in the District Court's Memorandum and Order granting Defendants leave to answer out of time, Plaintiff's motion to strike, and Plaintiff's motion to dismiss. (See Doc. 92, at 1-3.) That summary, which accepted as true the well-pleaded facts from Gant's Counterclaim, is excerpted in relevant part:

The Birk Defendants were insured by Progressive, which hired attorney Kevin M. McMaster to investigate claims arising from the Fatality Collision and to represent its insureds in a potential lawsuit. The underlying case (the “Birk Lawsuit”) was highly contested and spanned several years. As a result of McMaster's actions and inactions throughout the Birk Lawsuit, the court entered sanctions against the Birk Defendants, including (1) deeming over 500 Requests for Admission admitted as a result of failure to respond; (2) finding an alter-ego relationship between Edward and Linda Birk and Birk Oil Company; and (3) striking the only comparative fault expert on behalf of the Birk Defendants. Additionally, both before and during the Birk Lawsuit, Progressive and McMaster affirmatively misrepresented the existence of additional insurance available through another carrier, which prevented an early settlement.
Before trial, the Birk Defendants entered into the Agreement and Assignment of Rights (the ‘Agreement'), assigning to Gant any rights they had against Progressive in exchange for Gant's covenant not to execute against the personal assets of the Birk Defendants. The parties agreed to a contested bench trial before Judge Goddrez, and the case went to trial in June 2015. The court granted judgment in favor of Gant in the amount of $6, 723, 021; all of the Birk Defendants were liable for some or all of the judgment. The court apportioned no fault to Katie Gant. Pursuant to the Agreement, the judgment amount was partially satisfied with certain insurance proceeds. An unpaid balance of the judgment remains in the amount of $5, 473, 021, plus $7, 114.42 in costs and post-judgment interest that continues to accrue.
On September 15, 2015, Progressive filed this action for declaratory judgment, requesting this Court to find that ‘its handling of the underlying claim and lawsuit was appropriate, in good faith, and consistent with the Progressive Policy and all duties imposed upon it by law or otherwise.' Progressive sought a declaration that it is not liable to Gant for damages in excess of its policy limits. Gant, as assignee of the Birk Defendants' rights against Progressive, filed an Answer and Counterclaim asserting eight causes of action: 1) Assignment; 2) Vicarious Liability; 3) Breach of Contract; 4) Breach of Duty of Good Faith; 5) Negligence; 6) Negligent Misrepresentation; 7) Fraudulent Misrepresentation; and 8) Fraud Through Silence. In addition to the unpaid balance of the judgment and costs of the Birk Lawsuit, Gant seeks interest, lost profits, and attorney's fees.

(Doc. 92, at 2-3.)

         The present motion relates to various of Gant's responses to Progressive's First Requests for Admission, Second Requests for Production, and Second Interrogatories that generally relate to Gant's awareness of the existence of other insurance policies. (See Doc. 215; see also Doc. 215-1, 215-2, 215-3.) Progressive contends that the discovery requests at issue seek “information and documentation concerning efforts to investigate the existence of insurance coverage for the Birks and/or Birk Oil performed by Gant's counsel, prior to filing the underlying Gant v. Birk wrongful death suit against the Birks and Birk Oil.” (Doc. 215, at 5-6.) Progressive has summarized the allegations in Gant's Counterclaim relating to the existence of other insurance policies as follows:

In the Amended Counterclaim, Gant brings claims on his own behalf as well as claims as assignee of the Birks. Gant's own claims are premised basically entirely on the allegation that the Birks' defense attorney Kevin McMaster, and/or Progressive itself, untimely disclosed the Bitco policy, thereby allegedly subjecting Gant to allegedly extraneous litigation. Gant's claim presented as assignee of the Birks is the primary claim in this action, and is in essence a “bad faith” claim against Progressive for alleged breaches of various duties it owed to the Birks centered on Progressive's hiring of Kevin McMaster to represent them. The Birks' bad faith claim, asserted by Gant, is also substantially premised upon the alleged untimely disclosure of the Bitco policy by McMaster and/or Progressive. The thrust of Gant's putative claim is that, had the Bitco policy been disclosed earlier, then Gant could have submitted a claim to Bitco and Bitco would have tendered its $1 million liability limit earlier, obviating or circumscribing litigation.

(Doc. 215, at 4.)

         DISCUSSION

         Fed.R.Civ.P. 26(b) states 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 state 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. Information within this scope of discovery need not be admissible in evidence to be discoverable.

         As such, the requested information must be nonprivileged, relevant, and proportionate to the needs of the case to be discoverable. Within this framework, the Court will review the contested discovery responses.

         As stated above, Progressive contends that the discovery requests at issue seek “information and documentation concerning efforts to investigate the existence of insurance coverage for the Birks and/or Birk Oil performed by Gant's counsel, prior to filing the underlying Gant v. Birk wrongful death suit against the Birks and Birk Oil.” (Doc. 215, at 5-6.) Progressive enumerates various categories of Requests for Admission for which it seeks supplemental responses: 1) whether Gant or his counsel “investigated the existence of other insurance” for Birk Oil prior to “April 2013 when the Underlying Action was filed” (Requests for Admission Nos. 5-8, 27-30); 2) whether Gant hired an “investigator to investigate the existence of other insurance which could provide coverage for the accident between June 2012 and April 2013” (RFA Nos. 25, 26); and 3) whether Gant or his counsel searched public records to investigate the existence of Birk Oil insurance policies before February 26, 2014 (“the date the existence of the BitCo policy was disclosed by the Birks to Gant in supplemental discovery responses in the Underlying Action”) (RFA Nos. 44-47). (See Doc. 215, at 6.)

         Progressive's Second Requests for Production and Second Interrogatories correspond to these RFAs. (See generally Docs. 215-1, 215-2, 215-3.) Progressive moves the Court to compel supplemental responses to RFPs Nos. 1-3, which seek documents relied upon in answering the interrogatories and RFAs. (Doc. 215, at 6; Doc. 215-2, at 2.) Progressive also moves to compel Gant to provide a supplemental response to RFP No. 4, which requests “a privilege log compliant with District of Kansas requirements listing any documents or tangible materials concerning which Gant asserts attorney-client privilege or work product protection.” (Id.) Finally, Progressive seeks a supplemental response to Interrogatory No. 1, “which requests factual bases in support of requests for admission which were not fully admitted, concerning the items discussed herein.” (Doc. 215, at 7; Doc. 215-3.)

         A. Efforts to Investigate ...


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