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Colony Insurance Co. v. Sanchez

United States District Court, D. Nevada

July 18, 2019

COLONY INSURANCE COMPANY, Plaintiffs,
v.
JUAN M. SANCHEZ, et al., Defendants.

          ORDER [DOCKET NOS. 42, 52]

          NANCY J. KOPPO UNITED STATES MAGISTRATE JUDGE

         Pending before the Court is Defendant Juan Sanchez's motion to compel Plaintiff's deposition pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure. Docket No. 42. Plaintiff filed a response in opposition, and Mr. Sanchez filed a reply. Docket Nos. 50, 51. Also pending before the Court is Plaintiff's motion to strike an exhibit to the reply. Docket No. 52. Mr. Sanchez filed a response in opposition, and Plaintiff filed a reply. Docket Nos. 53, 54. The motions are properly resolved without a hearing. See Local Rule 78-1. For the reasons discussed below, the motion to compel is GRANTED in part and DENIED in part, while the motion to strike is DENIED as moot.

         I. BACKGROUND

         Mr. Sanchez suffered a work-place injury in which he fell from a scaffold. See Compl. (Docket No. 1) at ¶ 6. Mr. Sanchez was an employee of Ace Demolition, an entity owned by Defendant Allen Crumpler. See Id. at ¶¶ 3, 7. The incident was investigated by Ace Demolition's workers' compensation insurer, Travelers Insurance Company. See Id. at ¶¶ 7-9. Mr. Sanchez alleges that Mr. Crumpler made certain misrepresentations to Travelers regarding Mr. Sanchez and the circumstances of the fall. See Id. at ¶ 11. Mr. Sanchez alleges that, based in part on that representation, Travelers denied his workers' compensation claim. See Id. at ¶ 8; see also Docket No. 28 at 7. Following several appeals, Travelers reversed course to accept the workers' compensation claim nearly two years later. See Compl. at ¶ 9; see also Docket No. 28-7. Mr. Sanchez alleges that he was injured by this delay in that it hindered his medical treatment, exacerbating his injuries. See Compl. at ¶ 11.

         Mr. Sanchez brought suit in state court against Mr. Crumpler, alleging negligence, negligent misrepresentation, fraudulent misrepresentation, and intentional interference with a contract. See Id. at ¶ 12.

         This is an insurance dispute arising out of claims asserted in that underlying state-court lawsuit. Plaintiff is an insurer for Mr. Crumpler and Ace Demolition. See Id. at ¶ 13. Plaintiff seeks declaratory relief that its general commercial liability policy does not apply to the events alleged in Mr. Sanchez's state-court action in light of certain exclusions in the policy. See Id. at ¶¶ 19-45. For example, Plaintiff relies on an exclusion to “[b]odily injury” sustained by an employee arising out of his employment or performance of his duties. See Id. at ¶ 14. Plaintiff also highlights that its policy coverage excludes intentional conduct. See Id. at ¶¶ 22, 31, 40. Mr. Sanchez contests that construction and application of the policy terms, arguing that his claims in state court arose out of misrepresentations by Mr. Crumpler and not from bodily injury. See, e.g., Docket No. 28 at 8-9. Mr. Sanchez also asserts that the claims are premised on assertions of negligent conduct, rather than intentional conduct. See, e.g., Docket No. 9 at 7.

         On April 22, 2019, Mr. Sanchez served a Rule 30(b)(6) deposition notice on Plaintiff. Docket No. 42-1. That deposition notice identified eleven topics of inquiry. Id. Plaintiff responded to the notice with objections that culminated in a meet-and-confer. See, e.g., Docket No. 42 at 4-5. On May 1, 2019, Mr. Sanchez served an amended Rule 30(b)(6) deposition notice that dropped one topic, but continued to seek testimony on the remaining ten topics. Docket No. 42-2.[1] Given that the efforts in bridging the gap on those ten topics proved unsuccessful, Mr. Sanchez brought a motion to compel that deposition testimony. Docket No. 42. That motion is the matter currently before the Court.

         II. STANDARDS

         “[B]road discretion is vested in the trial court to permit or deny discovery.” Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002); see also Crawford-El v. Britton, 523 U.S. 574, 598 (1998). The scope of discovery is limited to nonprivileged matter that is relevant to a party's claim or defense and is proportional to the needs of the case. Fed.R.Civ.P. 26(b)(1). The party seeking to avoid discovery bears the burden of showing why that discovery should not be permitted. Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975). The party resisting discovery must specifically detail the reasons why each request is irrelevant or otherwise objectionable, and may not rely on boilerplate, generalized, conclusory, or speculative arguments. F.T.C. v. AMG Servs., Inc., 291 F.R.D. 544, 553 (D. Nev. 2013). Arguments against discovery must be supported by “specific examples and articulated reasoning.” U.S. E.E.O.C. v. Caesars Ent., 237 F.R.D. 428, 432 (D. Nev. 2006). “A strong showing is required before a party will be denied entirely the right to take a deposition.” Blankenship, 519 F.2d at 429 (emphasis added).

         III. ANALYSIS

         The instant dispute arises out of Mr. Sanchez's attempt to obtain Plaintiff's deposition testimony pursuant to Rule 30(b)(6). Plaintiff raises a number of objections to the deposition, which the Court will address in turn below.

         A. Policy Interpretation

         Plaintiff raises an overarching challenge to the deposition notice by asserting that there is no need for discovery because the interpretation of insurance policies is “typically” a legal issue. Resp. at 4. Plaintiff also indicates that there has been no affirmative finding by the Court that the policy language at issue is ambiguous, so there is no clear need for discovery at this time. Id. Mr. Sanchez counters that the discovery is appropriate now as relevant to the interpretation of the contract language. See Reply at 4, 6. Mr. Sanchez has the better argument.

         Discovery is limited to what is relevant to the claims and defenses in the case. Fed.R.Civ.P. 26(b)(1); see also in re Bard Filters IVC Prod. Liab. Litig., 317 F.R.D. 562, 563-64 (D. Ariz. 2016). Even after the 2015 amendments to the discovery rules, this is a “broad” concept. E.g., Fed. Nat'l Mortg. Assoc. v. SFR Invs. Pool 1, LLC, 2016 WL 778368, at *2 n.16 (D. Nev. Feb. 25, 2016). Courts routinely allow discovery into the meaning of insurance policy provisions in breach of contract cases. E.g., Phillips v. Clark Cty. Sch. Dist., 2012 WL 135705, at *4-5 (D. Nev. Jan. 18, 2012) (collecting cases). Moreover, “courts do not generally resolve the issue of ambiguity through a motion to compel and will instead allow the discovery to proceed notwithstanding arguments of a lack of ambiguity.” Riverport Ins. Co. v. State Farm Fire & Cas. Co., 2018 WL 6435883, at *2 (D. Nev. Dec. 6, 2018).

         As this case law makes clear, discovery into the meaning of an insurance policy is relevant in breach of contract cases, and such discovery is generally allowed. The Court discerns no reason to chart a different course here. Moreover, Plaintiff has put the cart before the horse in asserting that such discovery is premature because there has been no judicial finding yet of ambiguity. Whether the provisions will be found to be ambiguous is a merits-based argument that is left for another day. It is proper at this junction to proceed with that discovery in the interim.

         Accordingly, deposition testimony as to the meaning of policy provisions is relevant and appropriate.

         B. Preference for Written Discovery

         Plaintiff also argues that the deposition testimony at issue is unnecessarily burdensome because the information could otherwise be provided through written discovery. See, e.g., Resp. at 4, 7. Mr. Sanchez counters that a party may be required to explain its interpretation of documents and that depositions are an appropriate vehicle for obtaining that information. See, e.g., Reply at 3, 6, 9. Mr. Sanchez has the better argument.

         It has long been clear that written discovery and depositions are not equivalent forms of discovery that may be easily substituted for one another. Great Am. Ins. Co. of N.Y. v. VegasConstr. Co., 251 F.R.D. 534, 539 (D. Nev. 2008) (citing in re Vitamins Antitrust Litig., 216 F.R.D. 168, 174 (D.D.C. 2003)); see also Shoen v. Shoen, 5 F.3d 1289, 1297 (9th Cir. 1983). Written discovery responses are drafted through calm reflection with the aid of attorneys, while depositions probe the facts while witnesses are under the scrutiny of examination. See Cardinali v. Plusfour, Inc., 2018 WL 7502644, at *6 (D. Nev. Oct. 9, 2018); see also Hambleton Bros Lumber Co. v. Balkin Enterps., Inc., 397 F.3d 1217, 1225 (9th Cir. 2005) (“Depositions differ from interrogatories in that regard. A deposition is not a take home examination” (quoting Garcia v. Pueblo Country Club, 299 F.3d 1233, 1242 n.5 (10th Cir. 2002)). As such, ...


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