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Eastman v. Allstate Insurance Co.

United States District Court, S.D. California

July 15, 2015

WILLIAM EASTMAN and PATRICIA EASTMAN, as individuals, Plaintiffs,
ALLSTATE INSURANCE COMPANY and DOES 1-100, inclusive, Defendants.


WILLIAM V. GALLO, Magistrate Judge.


Before the Court are four documents-Witness Objections to Plaintiff's[1] Subpoena to Testify to Benjamin D. Bausley ("Objection"), (Doc. No. 26); Opposition to Witness Objections to Plaintiff's Subpoena to Testify to Benjamin D. Bausley ("Opposition"), (Doc. No. 28); Reply to Opposition to Objection to Subpoena to Testify ("Reply"), (Doc. No. 29); and Allstate's Response to Plaintiffs' Opposition to Objections to Plaintiffs' Subpoena to Benjamin D. Bausley ("Response"), (Doc. No. 30) - related to a single issue: the deposition subpoena served on Mr. Benjamin D. Bausley, both in his personal capacity and on behalf of his corporation, Bausley & Associates, Inc., ("Bausley"), [2] by counsel for Mr. William Eastman ("Mr. Eastman") and Ms. Patricia Eastman ("Ms. Eastman") (collectively, "Plaintiffs") that ordered him to produce a slew of documents requested by Plaintiffs for purposes of the present action, a suit for breach of contract filed by Plaintiffs against Allstate Insurance Company ("Allstate" or "Defendant"), [3] in accordance with Federal Rule of Civil Procedure 30.[4] In bare essence, Plaintiffs, Bausley, and Defendant dispute the extent to which a specific provision of California law applies, whether the possible breach of a confidentiality agreement provides sufficient grounds for quashing an otherwise proper subpoena, and whether the evidence sought by Plaintiffs from Bausley satisfies the minimal relevance standard or the balancing test governing discovery under the Rules.

For the reasons more fully explicated below, this Court DENIES the Objection IN PART and WITHOUT PREJUDICE. While this Court is generally unconvinced by the Opposition, Reply, and Response, the reasons stated therein do have some cognizable merit, and this Court therefore exercises its power under Rule 26(b)(2)(C) to limit Plaintiffs' requests in some measurable way in light of this case's particular needs. Accordingly, subject to the discrete limitations imposed in this order's final paragraphs, it orders Bausley to provide the requested documents at a date to be mutually determined upon by Bausley and Plaintiffs.


A. Procedural History

This case arose from a complaint filed in the Superior Court of the State of California for the County of San Diego on January 9, 2013. (Doc. No. 1-2 at 73.) Plaintiffs served Defendant on March 10, 2014. (Doc. No. 1 at 2.) The currently operative complaint, an amended one, was filed on March 20, 2014. (Doc. No. 1-2 at 102; Doc. No. 10 at 1.)

This regnant filing tells a simple tale. On May 19, 2009, Plaintiffs purchased an "Allstate Insurance Company Deluxe Plus Homeowners Policy" ("Policy"), coverage commencing on that May date and extending through May 19, 2010. (Doc. No. 1-2 at 87-88.) Merely an extension, this policy insured a house located at 3046 Colley Lane, Escondido, CA 92025-7740 ("Subject Property"). (Id. at 88.) Consistently and without disruption, Plaintiffs paid each and every premium owed for 2009-10. (Id.) On August 30, 2009, a fire struck the Subject Property, purportedly "engulf[ing] the master bedroom and other areas" and "causing extensive damage inside and outside the home." (Id.) Seemingly, this conflagration rendered it "uninhabitable." (Id.) On behalf of Plaintiffs, Ms. Eastman reported this incident to Defendant on August 30, 2009. (Id.) Afterward, as authorized by the Policy, Plaintiffs submitted an insurance claim for the badly damaged Subject Property. (Id.)

From that moment onward, Plaintiffs contend, Defendant performed sundry misdeeds. In Plaintiffs' recounting, Defendant breached its obligation under the Policy by "[f]ailing to conduct a prompt, full and complete investigation into the acts and circumstances of Plaintiffs' claims"; "[c]ontinuing to delay in providing Plaintiffs their contractually bargained-for Policy benefits"; "[u]sing improper standards to deny Plaintiffs' claims"; "[e]ngaging in improper claims handling"; "[a]voiding payment of Plaintiffs' claims by accepting an incorrect version of facts or circumstances or contract interpretation that supported a basis to deny or improperly limit coverage under the [p]olicy"; and "[f]ailing to give at least as much consideration to Plaintiffs' welfare as Defendants gave to their own interests." (Id. at 93.) By these and other alleged actions, Defendant violated more than the Policy's express terms; it defied contract law's omnipresent "implied covenant of good faith and fair dealing." (Id. at 94-95.) Its conduct, Plaintiffs continue, even violated the prohibition on "unfair business practices" in California's Unfair Competition Law ("UCL"). (Id. at 96-97.) Based on the Policy's professed breach, Plaintiffs crafted three other causes of action, including a prayer for declaratory relief and the torts of intentional and negligent infliction of emotional distress.[5] (Id. at 98-100.) The complaint ends by asseverating two causes arising from Defendant's alleged violation of the Parties' Stipulation for the Appointment of a Neutral General Contract to Determine Binding Cost of Repair of the Eastmans' Fire Loss Damages. (Id. at 91.) In particular, even though the mutually selected expert apparently estimated the cost of repair as $718, 613.25, (Id. at 92), Defendant has yet to honor that determination, a refusal from which Plaintiffs' final two causes of action - "Breach of Contract-Stipulation" and "Breach of Covenant of Good Faith and Fair Dealing" - spring, (Id. at 100-01). In the amended complaint's final page, Plaintiffs plead for a panoply of remedies, including: general, compensatory, and punitive damages; restitution; costs; attorneys' fees; a permanent injunction; and all other "economic/non-economic damages in an amount according to proof at trial." (Id. at 102.)

Defendant, naturally, responded. On March 27, 2014, it removed the action to the United States District Court for the Southern District of California. (Doc. No. 1 at 1.) Defendant filed the Motion to Dismiss Plaintiff's First Amended Complaint on April 14, 2014. (Doc. No. 5.) On October 20, 2014, the Honorable William Q. Hayes dismissed Plaintiffs' fifth and sixth claims and their third to the extent they sought an injunction under the UCL ("Order on MTD"). (Doc. No. 10 at 16.) With the amended complaint's range now tapered, Defendant finally answered on November 18, 2014. (Doc. No. 12.) Conceding little-that the Policy was purchased, and that it related to a home later set ablaze, (Id. at 2) - and repeatedly recapping the content of the Order on MTD, (Id. at 6-9), general denials pepper the answer's first nine pages, (Id. at 1-9.) In the remainder, Defendant propounded forty-six (46) affirmative defenses, concluding with a reservation of "additional affirmative defenses." (Id. at 9-23.)

The Parties first appeared before this Court on February 4, 2015, for an Early Neutral Evaluation Conference, (Doc. No. 19), set by an order dated January 15, 2014, (Doc. No. 17). When the Parties proved unable to settle this case at this first colloquy, this Court issued the Order Following Early Neutral Evaluation Conference, Setting Rule 26 Compliance, and Notice of Case Management Conference. (Doc. No. 18.) In accordance with this order's final numbered paragraph, on March 23, 2015, this Court held a telephonic Case Management Conference, (Doc. No. 21), and issued the Case Management Conference Order Regulating Discovery and Other Pretrial Proceedings, (Doc. No. 20). On April 6, 2015, Defendant filed the Joint Motion for Protective Order and the Joint Motion for Discovery re Interrogatories, Depositions, and Counsel. (Doc. Nos. 22, 23.) On April 7, 2015, the Court granted both these motions. (Doc. Nos. 24, 25.)

On April 13, 2015, the relevant subpoena was served on Bausely. (Doc. No. 28 at 2.) Originally, the subpoena sought documents in ten categories:

(1) "[t]he complete file RELATING TO the property located at 3046 Colley Lane, Escondido, California" ("Category One");
(2) "[a]ny and all DOCUMENTS evidencing COMMUNICATIONS between YOU and ALLSTATE INSURANCE COMPANY, at any time" ("Category Two");
(3) "[a]ny and all documents evidencing COMMUNICATIONS between YOU and PLAINTIFFS, at any time" ("Category Three");
(4) "[a]ny and all DOCUMENTS which YOU received from ALLSTATE INSURANCE COMPANY at any ...

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