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Christian Naylor, An Individual; and v. Navigators Insurance Company

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA


October 5, 2012

CHRISTIAN NAYLOR, AN INDIVIDUAL; AND
CHRISTIAN NAYLOR DBA NAYLOR CONSTRUCTION, PLAINTIFFS,
v.
NAVIGATORS INSURANCE COMPANY, A CORPORATION; NAVIGATORS MANAGEMENT COMPANY, INC., A CORPORATION; LINCOLN GENERAL INSURANCE COMPANY, A CORPORATION; GEMINI INSURANCE COMPANY, A CORPORATION, W.R. BERKLEY CORPORATION, A CORPORATION AND DOES 1 THROUGH 50, INCLUSIVE, DEFENDANT.

The opinion of the court was delivered by: Hon. William McCurine, Jr. U.S. Magistrate Judge, U.S. District Court

ORDER GRANTING IN PART, DENYING IN PART PLAINTIFF'S ) MOTION TO COMPEL ) [ECF No. 38.]

I. INTRODUCTION AND PROCEDURAL HISTORY

On September 10, 2012, the Court held a telephonic discovery conference in the above- entitled matter. After hearing from counsel of record regarding the status of Defendant Gemini Insurance Company's responses to Plaintiff's Requests for Production, the Court requested briefing on Plaintiffs' motion to compel. Plaintiff Christian Naylor of Naylor Construction is a general contractor. Defendant Gemini Insurance is the insurance company of one of Plaintiff's subcontractors, Coast Contracting & Development, Inc. Plaintiff contends it is an additional insured under the subcontractor's policy with Gemini. As proof of its status as an additional insured, Plaintiff argues it was provided with a Certificate of Insurance and Additional Insured Endorsement. In the course of discovery, Plaintiff propounded Requests for Production ("RFP") on Gemini and Gemini objected to the RFPs on the following grounds: (1) confidential trade secret; (2) privileged under the attorney-client and work product doctrines; (3) relevance; and (4) overbreadth. Gemini's responsive document production consisted only of objections and certified copies of Gemini's insurance policies. Plaintiff's filed the instant motion to compel to obtain Gemini's claims file and other documents it contends are relevant and needed to respond to Gemini's motion for summary judgment on the issue of whether Plaintiff is an additional insured as is required by the Gemini insurance policy. The hearing on Gemini's motion for summary judgment is scheduled for October 15, 2012 at 10:30 a.m. before the Honorable Roger T. Benitez. [ECF No.40.]

A. Gemini Insurance Company's Objections to Plaintiff's RFPs Gemini argues Plaintiff's discovery requests are irrelevant and boilerplate in light of the fact that each of its insurance policies includes language defining an "additional insured" as: "an insured any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy." (Italics added.) Gemini argues the Certificate of Liability Insurance provided to Plaintiff by its subcontractor's insurance broker does not qualify as a written contract to add an insured as is required under Gemini's policy, but is merely a receipt showing that some policy has been issued. Gemini argues the majority of Plaintiff's one-size-fits-all production requests are irrelevant to the threshold issue here which is, does the Certificate of Liability Insurance ("COI") constitute a written contract or agreement under the Gemini policy language? Gemini argues that the lack of an actual contract naming Plaintiff as an additional insured as required by Gemini makes Plaintiff's document requests on the issues of what may constitute an agreement or what would constitute a waiver of the additional insured policy provision irrelevant.

B. Plaintiff's Motion to Compel Responses to Its Requests for Production Plaintiff argues it has the right to review Gemini's claims file to determine whether it contains any information to support Plaintiff's allegations rather than allowing Gemini to determine what in the claims file may be likely to lead to relevant evidence. Specifically, Plaintiff states it might discover information in the claims file pertaining to: (1) Gemini's reasons for declining coverage; (2) Gemini's initial interpretation and review of the policy language such that a waiver argument could be made in support of Plaintiff's claim; and (3) communications between Gemini and its broker regarding the Certificate of Insurance or the additional insured provisions. Plaintiff also argues it needs claims file information to oppose Gemini's pending motion for summary judgment*fn1 on the issue of whether Plaintiff is an additional insured under its subcontractor's policy with Gemini. Plaintiff notes that the standard of review for a motion to compel is broad-based and designed to assist Plaintiff not only in proving its contract claim on the issue of whether Plaintiff qualifies as an additional insured, but Plaintiff's overall claim for bad faith.

II. Standard under Rule 26 of the Federal Rules of Civil Procedure "Parties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense.... Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Fed. R. Civ. P. 26(b)(1). This rule is to be considered broadly, to include "any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case." Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978).

III. DISCUSSION

The Court has reviewed the parties' briefing as well as Plaintiff's RFPs and Gemini's objections and responses. The Court finds many of Plaintiff's requests are general and overbroad (such as RFP Nos. 28-38 on data retention policies) and unlikely to assist Plaintiff in collecting facts to support its opposition to the motion for summary judgment on the limited issue of whether Plaintiff is an additional insured under the Gemini insurance policy. In its motion to compel, Plaintiff acknowledges the time is not yet ripe for discovery on data retention issues and requests the Court reserve ruling on RFP Nos. 28 to 38 until, if necessary, a further document production and meet-and-confer process have been done. [ECF No. 38 at p. 8.] The Court agrees. Therefore, Plaintiff's motion to compel responses to RFP Nos. 28 to 38 is DENIED WITHOUT PREJUDICE. As for requests that pointedly address the policy interpretation and claims handling information that Plaintiff contends is vital to support its claim and oppose the motion for summary judgment, Plaintiff's specifically identifies the following RFPs in the chart below for the Court's consideration in its motion to compel. The Court's ruling appears in the third and last column.

Request for Production Arguments re: Relevance Court's Ruling No.

#2: Any and all Plaintiff contends underwriting Risk assessment and the costs DOCUMENTS or tangible information would indicate of coverage and/or premiums things RELATING TO the whether Gemini included is not at issue in this case and underwriting or issuance of Plaintiff as a factor in its is irrelevant on the issue of YOUR liability Insurance assessment of risk. whether the COI qualifies as POLICY numbers ... a written agreement sufficient including all Schedules, to name Plaintiff as an Endorsements and Forms additional insured. attached and made a part Plaintiff's motion as to RFP of the policy. No. 2 is DENIED.

#3: Any and all Plaintiff contends reinsurance Risk management between DOCUMENTS pertaining information would indicate two or more insurance to reinsurance, between whether Gemini included companies in an insurer/ February 26, 2004, and the Plaintiff as a factor in its reinsurer relationship is not at present for the subject assessment of risk. issue here and is irrelevant as POLICY. to whether the COI qualifies as a written agreement sufficient to name Plaintiff as an additional insured. Plaintiff's motion as to RFP No. 3 is DENIED.

#4: Any and all Plaintiff contends the The threshold issue which DOCUMENTS establishment of a reserve may permeates this case and is RELATING TO reserves show whether Gemini believed presented by Defendant's for any CLAIMS made on there was coverage under the motion for summary the policy. policy for additional insureds. judgment is whether there is coverage for Plaintiff as an additional insured. The establishment of, or amount of, reserves kept by Gemini in order to meet its insurance obligations is not at issue here and is irrelevant on the issue of whether the COI qualifies as a written agreement sufficient to name Plaintiff as an additional insured. Plaintiff's motion as to RFP No. 4 is DENIED.

#5 and #6: Any and all Plaintiff argues cost information The costs incurred by Gemini DOCUMENTS...COMMU is typically requested in a bad as a result of claims made on NICATIONS.... faith insurance case and cost the policy has no bearing on RELATING TO the costs information may suggest the issue of whether the COI of any CLAIMS made on whether Gemini acted as if qualifies as a written the POLICY that was there was contract between agreement sufficient to name handled by YOU from Plaintiff and the subcontractor. Plaintiff as an additional February 26, 2004 to insured. Plaintiff's motion present, including but no as to RFP Nos. 5 and 6 is limited to memorandums, DENIED. letters and electronic mail.

#7: The originals of any Plaintiff contends underwriting Risk assessment and the costs and all DOCUMENTS information would indicate of coverage and/or premiums RELATING TO YOUR whether Gemini included is not at issue in this case and complete underwriting file Plaintiff as a factor in its is irrelevant on the issue of for the POLICY, including assessment of risk. whether the COI qualifies as all information related to a written agreement sufficient your investigation for any to name Plaintiff as an CLAIMS made on the additional insured. POLICY from February Plaintiff's motion as to RFP 26, 2004 to the present, No. 7 is DENIED. including but no limited to memorandums, letters and electronic mail.

#8: The originals of any Plaintiff argues claim file Plaintiff is entitled to and all DOCUMENTS related documents may discover non-privileged RELATING TO YOUR demonstrate the applicability of documents re: claims made complete claims file for Gemini's 'no contract' defense. under the additional insured any CLAIMS made on the provision in the POLICY from February subcontractor's policy. 26, 2004 to the present. Plaintiff's motion as to RFP No. 8 is GRANTED as modified by the Court above.

#9: Any and all Plaintiff argues claim file Plaintiff is entitled to COMMUNICATIONS related documents may discover non-privileged published and/or demonstrate the applicability of documents that refer to the transmitted through Gemini's 'no contract' defense. treatment or coverage of DEFENDANTS' Plaintiff under the terms of INTRANET and/or the subcontractor's policy. INTERNET RELATING Plaintiff's motion as to RFP TO the POLICY. No. 9 is GRANTED as modified by the Court above.

#10: Any and all Plaintiff argues claim file Plaintiff is entitled to DOCUMENTS related documents may discover the correspondence REGARDING, demonstrate the applicability of between it and Gemini as it REFLECTING OR Gemini's 'no contract' defense. pertains to the insurance PERTAINING TO any and policy at issue in this case.all COMMUNICATIONS, Plaintiff's motion as to RFP whether written or oral, No. 10 is GRANTED. between YOU and the Plaintiffs.

#11: Any and all Plaintiff argues claim file Plaintiff is entitled to DOCUMENTS related documents may discover non-privileged REGARDING, demonstrate the applicability of documents that refer to the REFLECTING OR Gemini's 'no contract' defense. treatment or coverage of PERTAINING TO any and In particular, Plaintiff argues Plaintiff under the terms of all COMMUNICATIONS, the interactions between Gemini the subcontractor's policy. whether written or oral, and its agents or brokers Plaintiff's motion as to RFP between YOU and any handling the policies may yield No. 11 is GRANTED as other person/entity information on the significance modified by the Court regarding the policy. of the Certificate of Insurance. above.

#14: Any and all Plaintiff contends in-house Ultimately, it is the province DOCUMENTS or tangible insurance documents explaining of the Court to make a things RELATING TO the Gemini's policy on to how to threshold determination as to interpretation or meaning interpret, administer or handle whether the language of the of any policy language, additional insured claims, may contract is unambiguous. including but not limited help the Court interpret the Curry v. Moody, 40 Cal. App. to, grants of coverage insurance policy language. 4th 1547, 1552 (Cal. Ct. and/or exclusions, relied App.1995). Until such time upon by YOU to grant, as the District Court makes limit or deny any and all Gemini argues no documents on that decision, Plaintiff is insurance claims made contract interpretation are entitled to discover under this POLICY. needed because Plaintiff argued non-privileged documents in its opposition to the MSJ that bearing on Gemini's the "endorsement regarding an understanding and handling additional insured is policy of the additional insured language that is clear and language in the unambiguous." subcontractor's policy.

Plaintiff's motion as to RFP

No. 14 is GRANTED.

#15: Any and all Plaintiff argues claim file The benefits paid under the DOCUMENTS related to related documents may policy is not at issue here and the policy benefits demonstrate the applicability of is irrelevant on the issue of submitted, requested, Gemini's 'no contract' defense. whether the COI qualifies as approved or paid under the a written agreement sufficient POLICY. to name Plaintiff as an additional insured. Plaintiff's motion as to RFP No. 15 is DENIED.

#16: Any and all Plaintiff argues claim file Losses suffered under the DOCUMENTS or tangible related documents may policy are not at issue here things RELATING TO the demonstrate the applicability of and are irrelevant on the issue POLICY for any losses Gemini's 'no contract' defense. of whether the COI qualifies from February 26, 2004 as a written agreement through present, including sufficient to name Plaintiff as but not limited to an additional insured. DOCUMENTS from and Plaintiff's motion as to RFP to third party adjusters and No. 16 is DENIED. any other consultant(s)

YOU used to investigate claims made under the POLICY.

#19: Any and all Plaintiff contends in-house Plaintiff is entitled to DOCUMENTS insurance documents explaining discover non-privileged RELATING TO YOUR Gemini's policy on to how to documents bearing on claims manuals. interpret, administer or handle Gemini's understanding and additional insured claims, may handling of the additional help the Court interpret the insured language in the insurance policy language. subcontractor's policy.

Plaintiff's motion as to RFP

No. 19 is GRANTED as modified by the Court above.

#20: Any and all manuals, Plaintiff contends in-house Plaintiff is entitled to guidelines, bulletins, insurance documents explaining discover non-privileged directives, booklets, Gemini's policy on to how to documents bearing on instruction, or other interpret, administer or handle Gemini's handling of the DOCUMENTS reflecting additional insured claims, may additional insured language YOUR procedures, help the Court interpret the in the subcontractor's policy. practices and insurance policy language. methodologies for Plaintiff's motion as to RFP assessing any and all No. 20 is GRANTED as claims in good faith and modified by the Court fair dealing. above.

#21: Any and all manuals, Plaintiff contends in-house Requests No. 21 is overbroad guidelines, bulletins, insurance documents explaining and seeks documents that are directives, booklets, Gemini's policy on to how to potentially duplicative of instruction, or other interpret, administer or handle those documents produced in DOCUMENTS reflecting additional insured claims, may response to more carefully YOUR procedures, help the Court interpret the tailored RFPs. Fed. R. Civ. practices and insurance policy language. P. 26(b)(2)(C). Plaintiff's methodologies for training motion as to RFP No. 21 is adjusters to handle claims DENIED. in good faith and with fair dealing.

#22: Any and all Plaintiff contends in-house Plaintiff is entitled to DOCUMENTS published insurance documents explaining discover non-privileged and/or transmitted by Gemini's policy on to how to documents bearing on DEFENDANTS regarding interpret, administer or handle Gemini's understanding and claims handling additional insured claims, may handling of the additional procedures for policies help the Court interpret the insured language in the such as the POLICY insurance policy language. subcontractor's policy. issued to Coast Contracting. Plaintiff's motion as to RFP

No. 22 is GRANTED as modified by the Court above.

#23: Any and all Plaintiff contends in-house Risk assessment and the costs underwriting manuals, insurance documents explaining of coverage and/or premiums guidelines, bulletins, Gemini's policy on to how to is not at issue in this case and directives, booklets, interpret, administer or handle is irrelevant on the issue of instruction or other additional insured claims, may whether the COI qualifies as DOCUMENTS in use by help the Court interpret the a written agreement sufficient YOU in the last ten years insurance policy language. to name Plaintiff as an RELATING TO policies additional insured. such as the POLICY Plaintiff's motion as to RFP issued to Coast No. 23 is DENIED. Contracting.

#24: Any and all Plaintiff contends this Request 24 is overbroad and DOCUMENTS or tangible information would demonstrate irrelevant to the threshold things RELATING TO bad how Gemini interpreted other issue of whether the COI in faith claims against YOU additional insured claims under this case qualifies as a written in the past 10 years similar circumstances. agreement sufficient to name RELATING TO policies Plaintiff as an additional such as the POLICY insured. Plaintiff's motion issued to Coast as to RFP No. 24 is Contracting. DENIED.

#25: Any and all Plaintiff contends this Request 25 is overbroad and COMPLAINTS filed information would demonstrate irrelevant to the threshold against YOU in the past 10 how Gemini interpreted other issue of whether the COI in years alleging Unfair additional insured claims under this case qualifies as a written Claims similar circumstances. agreement sufficient to name Practices....RELATING Plaintiff as an additional TO policies such as the insured. Plaintiff's motion POLICY issued to Coast as to RFP No. 25 is Contracting. DENIED.

#26: Any and all Plaintiff contends this Request 26 is overbroad and COMPLAINTS filed information would demonstrate irrelevant to the threshold against YOU in the past 10 how Gemini interpreted other issue of whether the COI in years with a pleading for additional insured claims under this case qualifies as a written relief of Extra Contractual similar circumstances. agreement sufficient to name damages RELATING TO Plaintiff as an additional policies such as the insured. Plaintiff's motion POLICY issued to Coast as to RFP No. 26 is Contracting. DENIED.

#27: Any and all Plaintiff contends in-house Historical changes to policy DOCUMENTS, insurance documents explaining language are irrelevant on the COMMUNICATIONS and Gemini's policy on to how to issue of whether the COI tangible things interpret, administer or handle qualifies as a written RELATING TO prior additional insured claims, may agreement sufficient to name versions, prior drafts, help the Court interpret the Plaintiff as an additional and/or policy language insurance policy language. insured. Plaintiff's motion changes to YOUR as to RFP No. 27 is POLICY within the last DENIED. ten years.

#40-41: Exact copies...of Plaintiff argues this information Requests Nos. 40 and 41 are all hard drives on the is typically requested in a bad overbroad and burdensome. desktop computers..., faith insurance case. Fed. R. Civ. P. 26(b)(2)(C). servers and other Plaintiff's motion as to RFP electronic media related to Nos. 40 and 41 is DENIED. this action from 2004 through present.

Exact copies of all relevant disks, CDs, DVDs and other removable media related to this action.

#42: ALL DOCUMENTS Plaintiff argues this information Requests No. 42 is overbroad that contain or otherwise is typically requested in a bad and seeks documents that are relate to the facts or faith insurance case. potentially duplicative of information that YOU those documents produced in contend, refutes, in any response to more carefully way, the allegations tailored RFPs. Fed. R. Civ. contained in the Complaint P. 26(b)(2)(C). Plaintiff's in this action. motion as to RFP No. 42 is DENIED.

#43: Any and all Plaintiff contends information Adjusters' bonus DOCUMENTS including on variable pay would indicate compensation structure is not but not limited to those whether any factors other than at issue here and is irrelevant documents....RELATING applicable policy language were on the issue of whether the TO any bonus being considered during the COI qualifies as a written plan/variable pay or handling of Plaintiff's claim. agreement sufficient to name incentive programs for Plaintiff as an additional YOUR claims personnel insured. Plaintiff's motion for the past ten years. as to RFP No. 43 is DENIED.

IV. CONCLUSION

In accordance with the Court's findings expressed above, Defendants are ordered to produce documents in response to the relevant RFPs listed above no later than October 10,

IT IS SO ORDERED.


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