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Probuilders Specialty Insurance Co v. Valley Corp.; et al

November 28, 2012

PROBUILDERS SPECIALTY INSURANCE CO., PLAINTIFF,
v.
VALLEY CORP.; ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Howard R. Lloyd United States Magistrate Judge

*E-FILED: November 28, 2012*

NOT FOR CITATION

ORDER RE: DISCOVERY DISPUTE JOINT REPORTS 6-8, INCLUDING REPORT & RECOMMENDATION [Dkt Nos. 119, 120, 121]

This action for declaratory relief and restitution arises out of a construction defect action in Santa Clara County Superior Court. Plaintiff Probuilders Specialty Insurance Co. ("Probuilders") 18 issued a commercial general liability policy to defendant Valley Corp., f/k/a R.J. Haas Corp. 19 ("Valley"), and its president Ronald J. Haas ("Haas")*fn1 for the construction of a single family home 20 21 of defendants Ty and Karen Levine. Subsequently, the Levines sued Haas for shoddy and incomplete work. Haas blamed the subcontractors. Probuilders provided a "courtesy" defense to Valley and Haas in the Levine suit. Ultimately, the state court awarded the Levines a judgment 24 against Valley and Haas for almost 2 million dollars.

In the current suit, Probuilders contends that Haas and his company made material 26 27 misrepresentations to it with respect to verifying that the subcontractors had insurance and that they had contractually agreed to indemnify Haas. Probuilders seeks relief against Valley, Haas, and the 2 Levines for rescission of the contract, recovery of the costs of defending the suit, and a finding that 3 the insurance policy does not cover the state court judgment. Haas counterclaimed for breach of 4 contract and a failure to act in good faith. The Levine defendants filed their own counterclaim 5 6 against Probuilders for relief under a theory of bad faith.

Probuilders and Haas bring to the Court three discovery disputes. In Discovery Dispute Joint Report ("DDJR") #6, Probuilders complains that Haas did not comply with this Court's prior 9 discovery order, which required Haas to correct insufficient discovery responses. In DDJR #7, 10 first two sets of requests for production, and its first set of requests for admission. Probuilders 17 propounded this discovery over a year and a half ago. Haas acted through counsel until his attorney 18 19 withdrew about a year ago. Haas proceeded pro se through the close of Fact Discovery. About a week after the close of discovery, counsel for the Levines also became counsel of record for Haas. 21 sit for his deposition, it submitted DDJRs #1-5 to this Court. In its order on DDJRs #1-5, this Court 23 outlined Haas's responsibilities under the federal rules for discovery, pointed out the insufficiencies 24 25 of his responses, directed him to provide supplemental responses, and required him to sit for his deposition (Dkt. 103).*fn2 As for the Requests for Admissions, the Court found that they sought 27

Probuilders complains that Haas has tendered yet more insufficient responses to a different set of discovery. DDJR #8 arises from Haas's failure to pay the Court's previous award of sanctions.

The Court addresses each dispute in turn.

1.DDJR #6

At issue in DDJR #6 are Haas's responses to Probuilder's first two sets of interrogatories, its When Probuilders could not extract adequate discovery responses from Haas, or get Haas to admission of "discrete facts," that were "clearly relevant to the plaintiff's claims," and that the terms 2 used in the requests were not vague or ambiguous. The Court subsequently awarded attorney fees 3 against Haas and in favor of Probuilders in the amount of $9,267.00 for the unnecessary work 4 expended trying to obtain routine discovery (Dkt. 109).

Supplement," Ex. F to DDJR #6). Haas did not sign the First Supplement, nor did the First 8

In response to the order on DDJRs #1-5, Haas provided supplemental responses ("First Supplement respond to this Court's admonishment about the type of "quibbling" and evasiveness 9 that "ha[d] frustrated plaintiff's ability to pursue its case and has wasted judicial resources by 10 stalling the case's progress." See DDJR #6, Exs. F-I. Probuilders sent a detailed letter to Haas that outlined the deficiencies of the First Supplement. The parties then met and conferred, and Haas submitted a second set of supplemental responses ("Second Supplement," Ex. K to DDJR #6).

The Second Supplement only created further confusion. Probuilders sent another letter. The parties met 15 and conferred again. Haas then submitted a third round of supplemental responses ("Third 16 Supplement," Ex. P to DDJR #6). 17

and the detailed letters from Probuilders that outline the insufficiencies of the various responses.

Focusing on the latest round of responses, the Court finds them to be inadequate. A survey of the 21 series of supplements shows a pattern of elusive behavior. Instead of using the supplemental 22 responses to correct his initial responses, Haas used them as a vehicle for continued evasion. His 23 changing response to Request For Admission ("RFA") #12 provides a good example:

The Court has again reviewed the underlying discovery requests, the rounds of responses, RFA #12: quest for relevant information parties should not seek to evade disclosure by quibbling and objection. They should admit to the fullest extent possible, and explain in detail why other portions of a request may not be admitted." (Dkt. 103 at 3) (internal quotation marks and citations omitted).

"In the Contractors Application, attached hereto as Exhibit B, R.J. Haas Corp. represented that R.J. Haas Corp. is named as additional insured on its subcontractors' insurance policies." (Ex. A to DDJR #6)

Initial Response:

"Response to Admissions No 1:-14: is objectionable as Exhibits A, B, C, D, & E are not attached to the Set One request." (Ex. F to DDJR #6) First Supplemental Response:

"RFA #12 Response: Records have been reviewed the results are deemed inconclusive regarding the subject admission assertions, therefore it is inappropriate to confirm or deny the request. Further document review and search may reveal additional relevant information that could be conclusive and permit a precise answer to the admission. Do Not Find The Representation in the Application."(Ex. F to DDJR #6) (emphasis in original)

Second Supplemental Response:

"RFA #12 Response: Records have been reviewed the results are deemed inconclusive regarding the subject admission assertions, therefore it is inappropriate to confirm or deny the request. Further document review and search may reveal additional relevant information that could be conclusive and permit a precise answer to the admission. Deny, ...


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