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D.R. Horton Los Angeles Holding Co v. American Safety Indemnity Co

September 21, 2011

D.R. HORTON LOS ANGELES HOLDING CO., INC., PLAINTIFF,
v.
AMERICAN SAFETY INDEMNITY CO.,
DEFENDANT.
AMERICAN SAFETY INDEMNITY CO., COUNTERCLAIMANT
v.
D.R. HORTON LOS ANGELES HOLDING CO., INC., COUNTERDEFENDANT



The opinion of the court was delivered by: Hon. Bernard G. Skomal U.S. Magistrate Judge United States District Court

ORDER: (1) DENYING AMERICAN SAFETY INDEMNITY COMPANY'S MOTION TO COMPEL DOCUMENTS [Doc. No. 23]

The matter before the Court is American Safety Indemnity Company's Motion to Compel Further Production of Documents. (Doc. No. 23.)

BACKGROUND

On February 26, 2010, a Complaint filed by Plaintiff D.R. Horton Los Angeles Holding Co., Inc. ("D.R. Horton") was removed from state court by Defendant American Safety Indemnity Co. ("ASIC"). (Doc. No. 1). D.R. Horton alleges that it was engaged in a real estate development project and entered into a subcontractor agreement with Ebensteiner Co. for grading work on the project. Id. at 10. Ebensteiner Co. purchased insurance policies from ASIC and named D.R. Horton as an additional insured and third-party beneficiary of ASIC's obligations to Ebensteiner Co. Id. at 10-11.

D.R. Horton alleges that several complaints and cross-complaints were filed against it and it received several notices to builder which were all insured events covered by the ASIC policies ("the underlying actions"). Id. at 11-12. D.R. Horton alleges that it made a timely claim for benefits under the policies regarding the underlying actions but ASIC breached its duty of good faith and fair dealing by failing to provide D.R. Horton with a defense, withholding or delaying payments, failing to properly investigate D.R. Horton's claims, and refusing and failing to respond to D.R. Horton's request for benefits and coverage. Id. at 12. D.R. Horton also alleges that ASIC breached its contractual obligations and seeks declaratory relief "that [ASIC is] obligated to defend and indemnify [D.R. Horton] under said Policies; and, [t]hat [ASIC is] obligated to pay for the cost of [D.R. Horton's] defense in [the underlying actions] and to pay expenses and other settlement costs in connection with the [the underlying actions]." Id. at 14.

ASIC filed a counterclaim seeking a declaratory judgment determining that "there is no potential coverage for Ebensteiner as a Named Insured and/or D.R. Horton as an Additional Insured under [the policies] in connection with claims arising from the Underlying Actions because the requirements for coverage are not satisfied . . . .[and] that [one policy] is exhausted relative to the Underlying Actions . . . ." (Doc. No. 17 at 14.)

DISCUSSION

A. PROCEDURAL BACKGROUND OF DISCOVERY DISPUTE

On July 22, 2010, the Court issued a Case Management Order Regulating Discovery and Other Pretrial Proceedings. (Doc. No. 12.) Pursuant to that order all fact discovery was to be completed no later than March 1, 2011. Id. Four months after the Court held the Case Management Conference-November 23, 2010-ASIC served its Requests for Production of Documents ("RFPs"). (Decl. Blau ISO Mot. to Compel; Doc. No. 23-2 at ¶ 5.) ASIC claims that its RFPs seek what is often referred to as the 'developer's job file.' (Doc. No. 23 at 2.)

ASIC contends that this discovery is relevant to determining the timing of construction of the underlying project, evaluating D.R. Horton's damages, and determining whether D.R. Horton complied with its duties under the policies. Id. ASIC specifically states that this discovery is "relevant to [D.R. Horton's] insurance coverage claims and ASIC's defenses." Id. Put another way, ASIC's requests seek documents relevant to: (1) D.R. Horton's claim that ASIC owes it a duty to defend in the underlying construction defect actions captioned: Chang O. Kim, et al. v. City of Santa Clarita, D.R. Horton Los Angeles Holding Co., Inc., et al., Los Angeles Superior Court Case No. BC407614, Canyon Gate Maintenance Assoc. v. City of Santa Clarita, et al., Los Angeles Superior Court Case No. BC415663, and Chad Warrick, et al. v. City of Santa Clarita, et al., Los Angeles Superior Court Case No. PC046442; and (2) ASIC's defenses that (a) the original insured's work or resultant damage did not occur within policy periods, (b) the applicable occurrence limit in one policy was exhausted, (c) the Total Prior Work exclusion precluded coverage, or (d) D.R. Horton did not qualify as an additional insured

After receiving an extension on the deadline to respond, D.R. Horton served ASIC with responses on January 14, 2011. Id. at ¶ 7. The parties exchanged correspondence in an attempt to meet and confer regarding the adequacy of D.R. Horton's responses and ultimately called the Court to seek assistance in resolving the discovery dispute. Id. at 3-4. On February 17, 2011, D.R. Horton served amended responses to many of ASIC's RFPs. Id. at 5. D.R. Horton also agreed to produce specific documents discussed during the parties' February 11, 2011 meet and confer discussion. (Doc. No. 24 at 2.)

In the present motion ASIC contends that D.R. Horton's responses to RFP Nos. 3-8, 10, and 11 remain "inadequate and evasive because [D.R. Horton] has responded by merely identifying a narrow list of specific documents for which it will allow inspection." Id. at 6. ASIC also seeks to compel D.R. Horton to comply with RFP No. 13. Id.

D.R. Horton states that it has produced all documents responsive to RFP no. 11. (Doc. No. 24 at 6 (citing Decl. Blau. ISO Mot. Compel; Doc. No. 23-2, Ex. N.) In addition, D.R. Horton argues that it properly responded to all of the RFPs by either raising objections or producing documents. D.R. Horton's primary objection to RFP Nos. 3-8, 10 and 13 is that they seek documents that are irrelevant or are not subject to discovery "because they relate to matters at issue in the pending underlying litigation and may prejudice D.R. Horton's rights and defenses in that litigation." (Doc. No. 24 at 3.) D. R. Horton also objects to RFP Nos. 3-8 and 10 because ASIC's requests are overbroad in that they ask for all documents that relate to the Canyon Gate development. ASIC defined 'relate to' as covering:

All documents 'pertaining to directly or indirectly, in whole or in part, referring to, connected with, commenting on, evidencing, impinging, or impacting upon, affecting, responding to, explaining, showing, describing, analyzing, reflecting, or constituting.

Id. at 4 (citing Decl. Blau. ISO Mot. Compel, Doc. No. 23-2, Ex. A.) Finally, D.R. Horton argues that it would be unduly burdensome for it to produce all documents responsive to the overbroad requests. Id. at 5. D.R. Horton asserts that it would be incredibly costly to review all of the documents relating to the Canyon Gate development for privilege and homeowner privacy ...


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