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Ellena v. Standard Insurance Co.

United States District Court, Ninth Circuit

December 13, 2013

CASSAUNDRA ELLENA, Plaintiff,
v.
STANDARD INSURANCE COMPANY et al., Defendants.

ORDER REGARDING THE PARTIES' NOVEMBER 19, 2013 JOINT DISCOVERY DISPUTE LETTER BRIEF [Re: ECF No. 63]

LAUREL BEELER, Magistrate Judge.

INTRODUCTION

Plaintiff Cassaundra Ellena worked for the County of Sonoma starting in 2008 until she stopped working in April 2010 based on her medical condition. Second Amended Complaint ("SAC"), ECF No. 6, ¶ 10.[1] She submitted a claim for disability benefits to Defendant Standard Insurance Company, which contracted to provide disability insurance to County employees. Id. ¶ 6. Standard Insurance denied Ms. Ellena's claim and appeal, and this lawsuit challenges that determination. Id. ¶ 12.

The parties now dispute whether Standard must respond to many of Ms. Ellena's discovery requests, and they have filed a joint discovery dispute letter brief asking the court to decide the issues. 11/19/2013 Letter, ECF No. 63. Pursuant to Civil Local Rule 7-1(b), the court finds this matter suitable for determination without oral argument and VACATES the December 19, 2013 hearing. For the reasons stated below, and on this record, the court the court DENIES Ms. Ellena's request for an order compelling Standard to produce another Rule 30(b)(6) witness and respond to Ms. Ellena's Requests for Admissions Nos. 136-160, Requests for Production Nos. 1 and 2, and Interrogatory Nos. 13-14 and 19-20.

STATEMENT

An issue in the case was whether the insurance policy's definitions of what it means to be disabled from one's "own occupation" or "any occupation" violated California law. See 6/24/13 Order Denying Motion to File Third Amended Complaint, ECF No. 36, at 5-6. Ms. Ellena previously sought to depose (1) the Vice President of Standard Insurance Services Group regarding the definition of disability in the policy and (2) a Rule 30(b)(6) witness about the same topic, including the reasons for its adoption. See Motion for Protective Order, ECF No. 38. On August 23, 2013, the court found that the Vice President is an apex employee without unique personal knowledge and issued a protective order preventing his deposition. 8/23/2013 Order, ECF No. 48 at 4. The court also found that the Rule 30(b)(6) testimony was at best premature, and issued a protective order preventing Ms. Ellena from asking the witness about Standard's adoption of the definition of disability. Id. at 4-5. The court noted its concerns about whether addressing questions to a Rule 30(b)(6) witness on this topic is asking a witness to opine about a legal conclusion. Id. It also noted, however, that it is possible that discovery may revealed that Standard had reason to believe that its definition violated California law and that such knowledge could be relevant to bad faith and punitive damages. Id. The court's view at that time was that written discovery, rather than a Rule 30(b)(6) deposition, was a better avenue to dig a little deeper into this issue. Id. Accordingly, the court issued its protective order preventing a Rule 30(b)(6) deposition on this topic without prejudice so that Ms. Ellena, if necessary, could raise her need for the Rule 30(b)(6) testimony after the currently-scheduled Rule 30(b)(6) deposition regarding the claims manual and procedures used to review, evaluate, and decide claims. Id.

On November 19, 2013, the parties filed a joint discovery dispute letter brief. 11/19/2013 Letter, ECF No. 63. In it, the parties dispute whether Standard must respond to many of Ms. Ellena's discovery requests. Most of these requests relate to Ms. Ellena's desire to know more details about how, when, and why Standard adopted the particular definition of disability that it did. Specifically, Ms. Ellena wants Standard to produce another Rule 30(b)(6) witness to testify about "whether it is Standard's established practice to obtain hard copies or electronic copies of" three judicial opinions that she believes are relevant to this action: Hangarter v. Provident Life and Acc. Ins. Co., 373 F.3d 998 (9th Cir. 2004); Erreca v. Western States Life Ins. Co., 19 Cal.2d 388 (1942); and Moore v. Am. United Ins. Co., 150 Cal.App.3d 610 (1984). Id., Ex. A, ECF No. 63-1. She also wants Standard to respond to her Requests for Admissions Nos. 136-160, which together ask Standard whether, at various points in time, it "had knowledge of, " or "knew" that the courts had "issued, " these decisions, and whether it was its "custom and practice" to "keep current" on the "law, " including "case law, " governing disability policies in California. Id., Ex. B, ECF No. 63-2. She also wants Standard to respond to her Requests for Production Nos. 1 and 2, which together ask it to produce "any and all writings" it "generated" that state, mention, or refer to the reasons it adopted its Definition of Disability Policy Form or the definition of disability it uses in its LTD2000 Core Group Policies. Id., Ex. D, ECF No. 63-4. And she also wants Standard to respond to her Interrogatory No. 20, which essentially asks whether from 2003 to the present Standard has sold policies with the same allegedly "unlawful Definition of Disability" to other public entities in California and if so to identify certain information about those entities and policies. Id., Ex. C, ECF No. 63-3.

Her other requests relate to other issues. She wants Standard to respond to her Interrogatory Nos. 13 and 14, which together ask it to identify for her any lawsuits filed against it in California from 2003 to the present in which a person sought benefits under a "disability policy, " including disability policies "sold to a public entity or individual." Id. And finally, she wants Standard to respond to her Interrogatory No. 19, which asks it whether it contends that she has "ever exaggerated or misstated any of her symptoms or limitations to any doctors or other medical professionals, " and if so to state "each and every symptom and limitation" and identify the date on which it occurred and on what page it may be found in the administrative record. Id.

On December 10, 2013, the district court issued an order granting in part and denying in part Standard's motion for summary judgment. 12/10/2013 Order, ECF No. 79. In that order, the district court, among other things, granted Standard's motion and dismissed Ms. Ellena's bad faith claim to the extent that it is predicated on the theory that Standard's definition of disability is contrary to California law. Id. at 19-20. The court noted that California law does not require insurers to quote the exact language from Erreca or Moore when defining "disability"; instead, it is the insurer's application of the definition that matters. Id. at 13. The court also noted that the relevant case law also did not preclude the language Standard used here. Id. at 14. And absent a clear statement from the California courts that Standard's definition of disability is wrong, the court could not find that Standard's use of its definition constitutes bad faith. Id.

ANALYSIS

I. LEGAL STANDARD

Subject to the limitations imposed by subsection (b)(2)(C), under Rule 26, "[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense...." Fed.R.Civ.P. 26(b)(1). "Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Id. However, "[o]n motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that: (i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues." Fed.R.Civ.P. 26(b)(2)(C).

II. MS. ELLENA'S RULE 30(b)(6) DEPOSITION NOTICE, REQUESTS FOR ADMISSION NOS. 136-160, REQUESTS FOR PRODUCTION NOS. 1 AND 2, AND INTERROGATORY NO. 20

As stated above, Ms. Ellena wants to know more details about how, when, and why Standard adopted the particular definition of disability that it did. Her proposed Rule 30(b)(6) deposition and her Requests for Admissions Nos. 136-160, however, are not appropriate. She more or less wants to ask Standard's witness whether it knows about three main insurance opinions and how it "keeps up" with current California law. In the letter, she says that she needs this information because "an insurer's use of an unlawful definition of disability can support a finding of conscious disregard of the rights of its insureds, " and "a finding of conscious disregard supports a verdict for punitive damages." 11/19/2013 Letter, ECF No. 63 at 1 (citing Hangarter, 373 F.3d at 1013-14; Moore, 150 Cal.App.3d at 637-38). But as described above, the district court has dismissed Ms. Ellena's bad faith claim to the extent that it is predicated on the theory that Standard's definition of disability is contrary to California law. 12/10/2013 Order, ECF No. 79 at 19-20. Ms. Ellena's reason for wanting the discovery, then, is no longer relevant. Moreover, as Standard points out, Ms. Ellena's line of inquiry may run afoul of the attorney-client privilege between Standard and its attorneys, see People v. Speedee Oil Change Sys., Inc., 20 Cal.4th 1135, 1146 (1999) ("The attorney-client privilege is a hallmark of our jurisprudence that furthers the public policy of ensuring "the right of every ...


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