Opinion
Civil Action No. 01-2570, SECTION "I" (1)
May 13, 2002
HEARING ON MOTIONS
APPEARANCES: Submitted on briefs
MOTIONS:
HARTMAN'S MOTION FOR HEARING (MOTION FOR LEAVE TO FILE SECOND SUPPLEMENTAL AND AMENDING PETITION) (Rec. doc. 19)
DENIED
HARTMAN'S EX PARTE CROSS-MOTION TO COMPEL INTERROGATORIES, REQUEST FOR PRODUCTION OF DOCUMENTS AND 30(b)(6) DEPOSITION (Rec. doc. 29)
GRANTED IN PART AND DENIED IN PART
MINUTE ENTRY
Before the undersigned are: (1) the motion of the plaintiffs, Hartman Engineering, Inc. and Stephen Hartman and Janet L. Evans as Trustees of the employee benefit pension plan for Hartman Engineering, Inc. (collectively referred to as "Hartman"), for leave to file second supplemental and amending petition; and (2) Hartman's ex parte cross-motion to compel interrogatories and request for production of documents and deposition pursuant to Fed.R.Civ.P. 30(b)(6). Rec. docs. 19 and 29. Hartman filed this action on August 21, 2001. Rec. doc. 1. The defendant, Metropolitan Life Insurance Life Company ("Metropolitan"), filed its answer on October 15, 2001. Rec. doc. 7. There was a preliminary conference during which the trial was set for May 6, 2002 and the deadline for amendments to pleadings was December 3, 2001. Rec. doc. 7. Hartman was permitted to file a supplemental and amended complaint to add additional plaintiffs. Rec. docs. 8 and 9. Metropolitan filed an unopposed motion to continue the trial and in support showed that it had been unable to comply with Hartman's written discovery and Hartman had been unable to schedule Metropolitan's deposition pursuant to Fed.R.Civ.P. 30(b)(6). Rec. doc. 15. The Court continued the trial to July 8, 2002. Rec. doc. 16. This order did not set a new deadline for amendment of pleadings.
Hartman's motion to compel is captioned as a "cross-motion" and paragraph IV of the motion refers to a motion to compel by the defendant, Metropolitan Life Insurance Company ("Metropolitan") that was allegedly set for May 8, 2002. The record does not show that Metropolitan filed a motion to compel. Metropolitan did file a motion in limine to exclude testimony of the fact and expert witnesses for Hartman and a motion for summary judgment. Rec. docs. 24 and 25.
Motion to Amend
Hartman alleged that on November 16, 1998, Metropolitan, the alleged administrator of Hartman's pension plan, was instructed to transfer certain funds to a State Street Research account. Hartman alleges that in September 1999 it was reported that Metropolitan acted in accord with the November 16, 1998 instruction, while on December 6, 1999 Metropolitan reported it did not comply with the November 16, 1998 instruction. Hartman alleges that by letter dated December 14, 1999, Metropolitan reported that it had no indication that the November 16, 1998 instruction was transmitted to it. Hartman contends that the December 6 and 14, 1999 letters were conflicting and misleading. Hartman contends that, because Metropolitan failed to follow the November 16, 1998 instruction, it lost more than $88,000 in its pension plan. Hartman alleges causes of action based upon ERISA ( 29 U.S.C. § 1001, et. seq.), La. Civ. Code Ann. art. 2315, breach of contract, detrimental reliance and negligent misrepresentation. Rec. doc. 1.
In the proposed second supplemental and amending complaint Hartman renews the allegations described above. It also alleges that Metropolitan attempted to deceive Hartman concerning the alleged November 16, 1998 instructions by contending that: (1) the instructions were not followed because they would have triggered a penalty; (2) Metropolitan's agent, Charles Giardina, directed it not to act on the instructions; and (3) Hartman never issued the November 16, 1998 instructions. Hartman alleges that Metropolitan's conduct was in violation of La. Rev. Stat. Ann. § 22:1220 (1995), which provides that an insurer owes an insured a duty of good faith and fair dealing with its insured. Hartman's original complaint sought damages, legal interest and costs. The proposed second supplemental and amending complaint adds a demand for attorneys' fees and penalties consisting of double damages pursuant to La. Rev. Stat. Ann. § 22:1220C.
Metropolitan argues that Hartman's motion to amend is not timely and the second supplemental and amended complaint would be futile. Whether leave to amend should be granted is entrusted to the sound discretion of the district court, and that court's ruling is reversible only for an abuse of discretion. Quintanilla v. Texas Television Inc., 139 F.3d 494, 499 (5th Cir. 1998). When an amendment would be futile, it is appropriate to deny it. Avatar Exploration, Inc. v. Chevron, U.S.A. Inc., 933 F.2d 314, 321 (5th Cir. 1991).
Hartman's second supplemental and amended complaint attempts to state a cause of action pursuant to La. Rev. Stat. Ann. § 22:1220 (1995):
A. An insurer . . . owes to his insured a duty of good faith and fair dealing. The insurer has an affirmative duty to adjust claims fairly and promptly and to make a reasonable effort to settle claims with the insured or the claimant, or both. . . .
B. Any one of the following acts, if knowingly committed or performed by an insurer, constitutes a breach of the insurer's duties imposed in Subsection A:
(1) Misrepresenting pertinent facts or insurance policy provisions relating to any coverages at issue.
(2) Failing to pay a settlement within thirty days after an agreement is reduced to writing.
(3) Denying coverage or attempting to settle a claim on the basis of an application which the insurer knows was altered without notice to, or knowledge or consent of, the insured.
(4) Misleading a claimant as to the applicable prescriptive period.
(5) Failing to pay the amount of any claim due any person insured by the contract within sixty days after receipt of satisfactory proof of loss from the claimant when such failure is arbitrary, capricious, or without probable cause.Id. Metropolitan correctly notes that § 22:1220 is a penal statute and must be strictly construed. See Clausen v. Fidelity Deposit Co. of Maryland, 660 So.2d 83 (La.App. 1St Cir. 1995), writ denied, 666 So.2d 320 (La. 1996). In Clausen the court said,
[A] plaintiff attempting to base her theory of recovery against an insurer on these statutes [R.S. 22:658 or 22:1220] must first have a valid, underlying, substantive claim upon which insurance coverage is based. The penalties authorized by these statutes do not stand alone; they do not provide a cause of action against an insurer absent an valid underlying, insurance claim.Id. at 85. In Theriot v. Midland Risk Ins. Co., 694 So.2d 184 (La. 1997), the Louisiana Supreme Court rejected the argument that Subsection A of § 22:1220 created "a cause of action for all manner of breaches of a broad duty. . . ." Id. at 188. It held that the conduct specified in Subsection B of § 22:1220 were the only intended targets of the damages and penalties provided in the statute. Id.
Hartman does not allege the existence of a policy of insurance issued by Metropolitan to it. All of the allegations are to the contrary. Because Hartman has no claim for coverage or benefits under any policy of insurance, its claims under § 22:1220 are futile and Hartman's motion for leave to file its supplemental and amending complaint is denied. There is no need to consider whether the motion is timely.
Motion to Compel
Hartman's motion to compel contends that Metropolitan's response to interrogatory nos. 2, 3, 4, 7, 11, 14 and 16 are incomplete.
Interrogatory No. 2.
To the extent not otherwise provided in Defendant's answers to these interrogatories, identify each individual who has witnessed, or who has knowledge of any facts regarding or relating to any allegation set forth in the Complaint and, for each such individual, state the facts, action, or conduct of which the individual has knowledge.
Response.
MetLife objects to this Interrogatory as it is vague. Further answering, Plaintiff, not Defendant, would have knowledge of the facts alleged in the complaint.
Metropolitan also shows that, in accord with the initial disclosure requirements of Fed.R.Civ.P. 26, it produced a copy of its file containing all documents relative to the alleged November 16, 1998 request and this file discloses the names of all Metropolitan representatives participating in the communications with Hartman concerning the alleged November 16, 1998 request. Metropolitan is not required to make a further response to interrogatory no. 2.
Interrogatory No. 3.
Please . . . [identify] all witnesses you intend to call at trial and the nature of their anticipated testimony.
Response.
MetLife has not yet determined who it will call at trial.
Metropolitan also shows that it served a list of exhibits and witnesses in accord with the Court's scheduling order. No further response is required to interrogatory no. 3.
Interrogatory No. 4
Please . . . [identify] all employees of Metropolitan who have any knowledge whatsoever of any of the facts or occurrences leading to the Plaintiffs' assertions alleged in this lawsuit.
Response.
MetLife objects to this Interrogatory inasmuch as it seeks facts which would be known to Plaintiff, not to MetLife.
Hartman says it is seeking the identity of the individuals who decided not to process the November 16, 1998 instruction, and those individuals who made representations to Hartman concerning why the instructions were not followed. Metropolitan contends that Hartman did not communicate any instruction on or about November 16, 1988. Hartman received Metropolitan's initial disclosures, the file with the names of its representatives who communicated with Hartman concerning the alleged November 16, 1998 instruction and its witness list. No further response to the interrogatory is required.
Interrogatory No. 7.
Please state with particularity and specificity the terms and conditions of Charles Giardina's affirmation with MetLife from 1996-2000.
Response.
MetLife objects to this Interrogatory as it seeks information that is not relevant to this litigation and will not lead to the discovery of information admissible at trial.
Metropolitan's objection is overruled and it shall answer the interrogatory. Pursuant to Fed.R.Civ.P. 26(b)(1) the parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party. Based upon all the information provided, Mr. Giardina's relationship to Metropolitan appears relevant.
Interrogatory No. 11.
Please . . . [identify] all employees of MetLife who have processed transfers of funds, trades and/or withdrawals for the account at issue on behalf of the Plaintiffs from 1995-2000.
Response
MetLife objects to this Interrogatory as it is overbroad, unduly burdensome, seeks confidential information about individuals who are not parties to this litigation, and seeks information which is irrelevant and will not lead to the discovery of evidence admissible at trial.
Hartman contends it needs this information to show that Metropolitan executed other transactions for Hartman when it received instructions similar to the alleged November 16, 1998 instructions. Execution of prior transactions is not relevant to whether instructions were received and executed for the transaction at issue here. Hartman has not shown that the requested information is relevant to its claims and no further response is required.
Interrogatory No. 14.
Please state with great particularity and specificity the date, time, medium and substance of any and all communications by and between Charles Giardina and defendant pertaining to the issues raised in Exhibit "A". In doing so, please . . . [identify] all employees of MetLife involved in the communications.
Response:
MetLife objects to Interrogatory No. 14 as it seeks information which is confidential and/or protected by the work product privilege.
Metropolitan shows that, after serving its response, it produced all documents responsive to this interrogatory, including documents that it previously thought were protected from disclosure by the work product doctrine. Metropolitan shall supplement its response to show whether there were any oral communications responsive to the interrogatory and if so, it shall provide the information concerning those oral communications.
Interrogatory No. 16.
Please state with great particularity and specificity the date, time, medium and substance of any and all communications by and between Charles Giardina and defendant pertaining to the issues raised in Plaintiff's Complaint herein. In doing so, please . . . [identify] all employees of MetLife involved in the communications.
Response:
See response to Interrogatory No. 14.
Metropolitan shall supplement its response to this interrogatory in the same manner as is required for Interrogatory No. 14.
Hartman's motion to compel contends that Metropolitan's response to document request nos. 6 and 11 are deficient and improper.
Document Request No. 6.
Please produce any and all documents generated as a result of the allegations contained in plaintiffs' Complaint herein.
Response.
MetLife objects to this Request to the extent that it requests documents protected by attorney-client privilege or work product doctrine.
Metropolitan's response indicates that it has produced documents responsive to the request that are not privileged. Where a party asserts a claim of privilege the undersigned normally requires the party to prepare a privilege log in conformity with Fed.R.Civ.P. 26(b)(5). Hartman's document request so clearly calls for privileged documents, for example all letters between Metropolitan and its counsel in this action, that no further response is required. Hartman should have more narrowly drafted its request.
Document Request No. 11.
Please provide any and all contracts by and between Charles Giardina and MetLife in any way referencing him serving as an agent and/or serving in an agency relationship with MetLife.
Response.
MetLife objects to this Request as it seeks information which is not relevant to this litigation and will not lead to the discovery of information admissible at trial, and seeks information which is confidential and proprietary.
Interrogatory No. 7 sought related information and the undersigned overruled Metropolitan's objection. The undersigned found that Mr. Giardina's relationship to Metropolitan is relevant to plaintiffs' claims. Accordingly, Metropolitan's objection to document request no. 11 is overruled. If Metropolitan contends that any documents responsive to the request contain confidential or proprietary information, it may produce such documents for in camera inspection. If only a portion of the document contains confidential or proprietary information, it shall redact the documents and produce redacted copies. For the in camera inspection it shall highlight the confidential and proprietary information.
Hartman raises two issues with respect to the deposition of Metropolitan, pursuant to Fed.R.Civ.P. 30(b)(6): first, the refusal of Metropolitan to cooperate in the scheduling of such a deposition; and second, the unwillingness of Metropolitan to produce its corporate representatives in New Orleans. Hartman sent a letter to Metropolitan on February 19, 2002 that included a request for a deposition of a corporate representative. Exhibit C to Rec. doc. 29. Hartman did not include a form of notice with the areas of examination, but the letter briefly described areas of examination. Hartman sent a second letter on April 3, 2002 that included nineteen requests for production, pursuant to Fed.R.Civ.P. 30 (b)(5), but no areas of examination were identified pursuant to Fed.R.Civ.P. 30(b)(6). Exhibit D to Rec. doc. 29. Metropolitan submits a letter dated April 9, 2002, where it noted that Hartman had not identified any areas of examination pursuant to Fed.R.Civ.P. 30(b)(6). Metropolitan's letter also shows it was willing to produce one representative in New Orleans if that representative could respond to all of Hartman's areas of examination. It could not make this determination until it received Hartman's areas of examination. Exhibit 2 to Rec. doc. 32. On April 23, 2002, Hartman sent a letter with twenty "items" of examination. The first nineteen of these items are virtually the same as the nineteen requests for production made in Harman's letter of April 3, 2002. Exhibit 9 to Rec. doc. 32. Metropolitan contends that Hartman has not complied with Rule 30(b)(6). In response to Hartman's April 23, 2002 letter, Metropolitan advised that it would produce representatives in New York because it was impossible for only one person to respond to Hartman's twenty areas of examination. Metropolitan also reported it would file a motion to quash to certain areas of examination.
Hartman contends that any deposition of Metropolitan, pursuant to Fed.R.Civ.P. 30(b)(6), must be conducted in New Orleans. Hartman cites no authority for requiring Metropolitan to bring its corporate representatives to New Orleans. The authority is to the contrary.
The party noticing the deposition usually has the right to choose the location. However, certain ground rules may create obligations or limitations regarding deposition location. For example, if the party deposed is a plaintiff or its agent, deposition is generally appropriate at the litigation forum. The deposition of a nonresident defendant is generally conducted at the defendant's "place of residence."
The deposition of a corporation through its officers or agents normally must be taken at its principal place of business, at least when the corporation is not the plaintiff and did not choose the forum for the lawsuit or was not forced to commence at a location away from its headquarters.
7 James Wm. Moore, et al., Moore's Federal Practice ¶ 30.20[1][b] [ii] (3d ed. 1997). If Metropolitan will only produce its corporate representatives in New York, presumably its principal place of business, then Hartman will have to take the deposition in New York. Hartman may elect to proceed with a telephone deposition and Metropolitan will be required to produce its corporate representatives by telephone. If Hartman elects to proceed by telephone, it will pre-mark all exhibits it will use during the deposition and provide those to Metropolitan prior to the deposition so that the witness has the exhibits in hand during the deposition. Hartman will not be able to refer the witness to documents that were not pre-marked and furnished to Metropolitan prior to the deposition.
The parties shall treat Hartman's letter of April 23, 2002, as a notice of Metropolitan's deposition pursuant to Fed.R.Civ.P. 30(b)(6). Within three (3) working days of the entry of this order, counsel for Metropolitan and Hartman shall confer by telephone or in person to schedule the corporate deposition of Metropolitan. The deposition shall be set no later than Wednesday, May 29, 2002. If the parties are unable to agree on the scheduling the corporate deposition of Metropolitan, Hartman shall initiate a telephone conference with the undersigned within three (3) working days of the issuance of this minute entry.
During the telephone conference between counsel, they shall confer on each of the areas of examination in light of the ruling on interrogatories and document requests. If the parties are unable to resolve any issues with respect to the areas of examination, Metropolitan shall file a motion to quash within two working days of the telephone conference with a request for expedited hearing. Hartman shall file its opposition within two working days of its receipt of the motion to quash. These pleadings shall be faxed to counsel and the undersigned (589-4994). The motion to quash shall address each area of examination that remains in dispute and show the results of the conference with respect to that area of examination. Hartman's opposition shall address each area of examination that remains in dispute.
Metropolitan shall supplement its response to Hartman's interrogatories and document requests in accord with this minute entry within seven (7) working days of its issuance. Any documents to be produced for in camera inspection shall be provided to the undersigned within the same period of time.
IT IS ORDERED that the plaintiffs' motion for leave to file second supplemental and amended complaint for damages (Rec. doc. 19) is DENIED. IT IS FURTHER ORDERED that plaintiffs' ex parte cross-motion to compel interrogatories and request for production of documents and deposition pursuant to Fed.R.Civ.P. 30(b)(6) (Rec. doc. 29) is GRANTED in PART and DENIED in PART.