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Keith Warkentin v. Federated Life Insurance Company

January 13, 2012

KEITH WARKENTIN,
PLAINTIFF,
v.
FEDERATED LIFE INSURANCE COMPANY,
DEFENDANT.



The opinion of the court was delivered by: Dennis L. Beck United States Magistrate Judge

ORDER DENYING DEFENDANT'S APPLICATION FOR AN ORDER TO SHOW CAUSE (Document 26)

On November 23, 2011, Defendant Federated Life Insurance Company ("Federated") filed the instant application for an order to show cause why non-party Certified Automotive ("Certified") and Plaintiff Keith Warkentin ("Warkentin") should not be held in contempt pursuant to Federal Rule of Civil Procedure 45. The matter was heard on January 6, 2012, before the Honorable Dennis L. Beck, United States Magistrate Judge. D. Egge appeared on behalf of Defendant Federated. David Hollingsworth appeared on behalf of Plaintiff Warkentin.

INTRODUCTION

Plaintiff Warkentin filed this action on December 22, 2009, in Merced County Superior Court claiming that Federated unreasonably denied him benefits under two disability insurance policies. Federated removed the action to this Court on February 10, 2010.

On November 23, 2011, Federated filed the instant application for an order to show cause ("OSC") why non-party Certified Automotive and Plaintiff Warkentin should not be held in contempt pursuant to Federal Rule of Civil Procedure 45 for Certified Automotive's failure to respond to a subpoena for production of documents. Neither Certified Automotive nor Plaintiff Warkentin filed a response to the OSC application.

On December 9, 2011, the parties filed a stipulation to extend discovery deadlines, with non-expert discovery to close on February 14, 2012.

On December 28, 2011, Federated filed a supplemental brief regarding the OSC application, stating that it received documents from Certified Automotive. Although documents were produced, Federated now requests that Certified Automotive and Plaintiff Warkentin pay the expenses incurred for the OSC application.

FACTUAL BACKGROUND

On October 12, 2011, Federated served a subpoena for records on non-party Certified Automotive, which set the date for production as November 2, 2011. The requested records relate to Plaintiff Warkentin, who is an owner of Certified Automotive. Federated served a copy of the subpoena on Warkentin's counsel on October 6, 2011. Exhibit A to Declaration of Sheila Tatayon ("Tatayon Dec.").

Federated did not receive any objections to the subpoena by November 2, 2011. Federated, through its counsel, attempted to set a date for production of documents. Jackie LaBine, a paralegal, contacted Certified Automotive to arrange a time to view and mark documents for copying. Ms. LaBine arranged with Certified Automotive employee Carl Smith to inspect the documents on November 14, 2011. Tatayon Dec. ¶¶ 4-7. By letter dated November 11, 2011, Ms. LaBine notified Warkentin's attorney that she intended to inspect the documents and asked him to confirm whether he represented Certified Automotive. Tatayon Dec. ¶ 8 and Exhibit B.

On November 11, 2011, Warkentin's attorney, David Hollingsworth, contacted Ms. LaBine, who directed him to defense counsel Sheila Tatayon. Mr. Hollingsworth informed Ms. Tatayon that he could not attend the document inspection. He also expressed concerns regarding the subpoena, including that the documents to be produced contained personal financial information, the subpoena was vague and the sheer volume of the records made production burdensome. Mr. Hollingsworth indicated that he had expressed these concerns to defense counsel, Daniel P. Costa. Mr. Hollingsworth clarified that Warkentin, as CEO and owner of Certified Automotive, was rasing the objections and concerns. Based on the statement, Ms. Tatayon expressed her understanding that Mr. Hollingsworth represented Certified Automotive with respect to the subpoena. She asked Mr. Hollingsworth to submit his objections and concerns in writing by close of business on November 11, 2011. Tatayon Dec. ¶¶ 9-18. Ms. Tatayon confirmed the telephone conversation in writing and sent it via facsimile to Mr. Hollingsworth. In her letter, she notified Mr. Hollingsworth that the time for objections to the subpoena had passed pursuant to Fed. R. Civ. P. 45. She also noted that the documents were necessary to complete depositions of Certified Automotive employees scheduled for November 17, 2011. Tatayon Dec. ¶ 19 and Exhibit C.

The parties exchanged a series of phone calls and letters to address the discovery dispute. Mr. Hollingsworth sent a letter stating his objections on November 11, 2011. In the letter, he also objected to the last-minute notice of Ms. LaBine's request to view documents on November 14 and clarified that he did not represent Certified Automotive. Tatayon Dec. ¶¶ 20-21 and Exhibit D.

As no resolution had been reached, Federated's counsel decided not to inspect documents at Certified Automotive on November 14, 2011. However, on the morning of November 14, Ms. LaBine received a voice mail message from Jeff Joines of Mr. Hollingsworth's office stating that she could go and view the documents, but that Mr. Hollingsworth would not attend the document inspection. Tatayon Dec. ¶¶ 22-23. Federated's counsel then sent a letter to Mr. Hollingsworth notifying him that Ms. LaBine would inspect the documents on November 15, 2011. Tatayon Dec. ¶ 24 and Exhibit E.

Ms. LaBine inspected documents at Certified Automotive on November 15, 2011. However, Certified Automotive failed to produce any documents response to items 10 through 16 of ...


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