Timm Grandview, LLC v. AmGUARD Ins. Co.

TIMM GRANDVIEW, LLC, a Nebraska Limited Liability Company; Plaintiff, v. AMGUARD INSURANCE COMPANY, a Pennsylvania Company; and WESTGUARD INSURANCE COMPANY, a Pennsylvania company; Defendants.

No. 8:20CV197

United States District Court, D. Nebraska

August 9, 2021

MEMORANDUM AND ORDER

Cheryl R. Zwart, United States Magistrate Judge

This case is before the court on the motion for sanctions filed by Plaintiff Timm Grandview, LLC. (hereinafter “Grandview” or “Plaintiff”). (Filing No. 84). Plaintiff claims that Defendant AmGUARD Insurance Company (hereinafter “AmGUARD†) obstructed the discovery process by failing to comply with the court's progression order and discovery orders.

As a sanction, Plaintiff requests the court impose the following sanctions: order AmGUARD's answer be stricken; order that AmGUARD's liability be admitted; award attorney fees and costs to Plaintiff; and order any further relief as is just. The court has considered the parties' briefing and evidence. The motion will be granted in part as outlined below.

BACKGROUND

On August 19, 2017, a significant hailstorm passed through Kearney, Nebraska, causing damage to two apartment buildings owned by Plaintiff. (Filing No. 11 at CM/ECF p. 8, ¶ 14). One complex is located at 1319 East 45th Street the other is located at 4010 Avenue R, (“the Subject Properties”). When Plaintiff discovered the damage, it notified AmGUARD, who, at all relevant times, provided property insurance to Plaintiff for the Subject Properties. (Filing No. 1-1 at CM/ECF p. 7-8, ¶¶ 11, 15).

AmGUARD then opened claims and began an investigation into the nature and extent of the hail damage. After conducting its investigation, AmGUARD issued payment for covered damages as to both Subject Properties. However, Plaintiff contends that AmGUARD inappropriately prolonged its investigation for more than a year, and then “grossly underpaid” Plaintiff for those covered damages. (Filing No. 40 at CM/ECF p. 2). On December 16, 2019, Plaintiff filed the instant action. This court entered progression deadlines, (Filing No 19), and the parties began discovery. Plaintiff served its First Set of Discovery Requests to AmGUARD on August 5, 2020. (Filing No. 40 at CM/ECF p. 2). On September 9, 2020, AmGUARD submitted its Answers to Plaintiff's Interrogatories and its Responses to Plaintiff's Requests for Admissions. (Filing Nos. 41-4 and 41-5). Plaintiff's counsel agreed to extend AmGUARD's deadline for responding to Plaintiff's Requests for Production, and AmGUARD ultimately provided its Responses on October 5, 2020. (Filing No. 41-6).

A dispute related to the foregoing discovery arose, and the court issued an order compelling supplemental responses from AmGUARD on March 23, 2021 (“the March 23, 2021 Order”). AmGUARD was ordered to make the required supplemental responses and related production of documents by no later than May 7, 2021. (Filing No. 58 at CM/ECF p. 27). On May 5, 2021, AmGUARD requested a three-week extension by email to the court. On May 13, 2021, the Court entered an Amended Progression Order, which extended the deadline for AmGUARD “to provide the supplemental production ordered in Filing No. 58” to May 21, 2021. (Filing No 73 at CM/ECF p. 1). The supplemental production was not completed by May 21, 2021.

Plaintiff requested a discovery conference with the Court on May 25 2021, and the conference was held on June 3, 2021. (Filing No. 77 (audio file)). As of June 3, 2021, AmGUARD had not supplemented its responses to the disputed written discovery or made a supplemental production of documents consistent with the March 23, 2021 Order. Following the discovery conference, the court extended the discovery deadline in the March 23, 2021 Order to June 11, 2021 and ordered AmGUARD to “comply with the common sense meaning and stated purpose of the order, and such compliance must be full, complete, and nonevasive.” (Filing No. 78).

AmGUARD produced supplemental responses and related documents on June 11, 2021, with an additional production provided to Plaintiff on June 15, 2021. However, upon review, Plaintiff claims that AmGUARD failed to fully comply as ordered in the March 23, 2021 Order. Specifically, Plaintiff claims that there are eight categories of documents that AmGUARD has improperly failed to provide. Below is a description of each category and AmGUARD's response to production status of each:

1. Screenshots and/or print-outs of the Diaries Tabs, Plan of Action Tabs, and the General Information Tabs, relating to Plaintiff's claims, which William Ardoline, the primary claims adjuster, testified on March 24, 2021 are part of the electronic claim file (as AmGUARD defines that term) in AmGUARD's and/or WestGUARD's IIS system and are thus responsive to Request for Production No. 3 (Filing No. 85 at CM/ECF p. 3)

AmGUARD Response: AmGUARD will produce documents representing the contents of the tabs, but cannot produce screenshots from the program due to proprietary, copyright, and trademark issues with the IIS program. (Filing No. 92 at CM/ECF p. 6)

2. Reserve history for the Avenue R Property generated prior to September 4, 2019, which is responsive to Request for Production No. 11 (Filing No. 85 at CM/ECF p. 3).

AmGUARD Response: The reserve history for the Avenue R property is in Counsel's possession and will be produced. (Filing No. 92 at CM/ECF p. 6).

3. Applications for insurance, which are responsive to Request for Production No. 35 (Filing No. 85 at CM/ECF p. 3).

AmGUARD Response: The entire underwriting file has been produced, and no applications exist in these files. Plaintiff did not complete an application and Counsel was advised of this on July 6, 2021. AmGUARD will supplement its discovery responses accordingly. (Filing No. 92 at CM/ECF pp. 6-7).

4. Underwriting Rating Detail and Underwriting Coverages/Locations screens for the Avenue R property like those produced for the East 45^th Street Property at ¶ 005895-AG005904, which are responsive to Request for Production No. 4 (Filing No. 85 at CM/ECF p. 3)

AmGUARD Response: Counsel is checking to see if such documents exist and if they do, they will be produced. (Filing No. 92 at CM/ECF p. 7).

5. Underwriting Rating Detail screen showing information for building numbers 005, 006, 007, 008, 009, 010, 011, 012, 013, 014, 015, 016, 017, 018, and 019 and Underwriting Coverages/Locations screens for building numbers 002, 003, 004, 005, 006, 007, 008, 009, 010, 011, 012, 013, 014, 015, 016, 017, and 018 at the East 45th Property, which were insured by the subject policy [Doc. 65-1, East 45th Street Policy at 1-20]. The information contained on those screens is responsive to Request for Production No. 4. (Filing No. 85 at CM/ECF pp. 3-4)

AmGUARD Response: Counsel is checking to see if such documents exist and if they do, they will be produced. (Filing No. 92 at CM/ECF p. 7).

6. Claim audit forms specific to claims adjuster William Ardoline and his supervisor, Nona Loftus, which form part of the bases for their interim and annual reviews and are responsive to Request for Production No. 30^[1] and, depending upon where AmGUARD stores these documents, Request for Production Nos. 28 & 29. (Filing No. 85 at CM/ECF p. 4).

AmGUARD Response: Audit forms are not part of an employee's personnel files. “The Court did not address Plaintiff's request for production No. 30, which purportedly covers the claims audit forms. AmGUARD otherwise completely complied with the Court's Order regarding production of the personnel files of Ardoline and Loftus.” (Filing No. 92 at CM/ECF p. 7).

7. Amounts of money paid to Engle Martin and/or Rimkus between January 1, 2017 and April 29, 2020 unrelated to a specific claim (i.e. for trainings conducted by Rimkus or Engle Martin for AmGUARD's claim adjusters), which is responsive to Requests for Production Nos. 21 and 24 (Filing No. 85 at CM/ECF p. 4)

AmGUARD Response: AmGUARD will supplement its discovery responses to reflect that it did not pay Rimkus or Engles Martin any monies to host any type of training seminars, webinars, etc. (Filing No. 92 at CM/ECF p. 7).

8. Page 2 of Nona Loftus' Employee Information Form, which is responsive to Request for Production No. 29. (Filing No. 85 at CM/ECF p. 4). Plaintiff asserts there appear to have been redactions made which were not clearly marked

AmGUARD Response: AmGUARD is checking to see if such a page exists, and if it was omitted by a copying error. (Filing No. 92 at CM/ECF p. 7).

Additionally, AmGUARD produced a loss control report by York Risk Control relating to a visual inspection of the East 45th Street Property. Plaintiff asserts that if a similar report exists for the Avenue R property it is discoverable, and responsive to Request for Production No. 4.

ANALYSIS

I. Authority to Sanction:

Plaintiff moves for sanctions based upon Federal Rule of Civil Procedure 37. Sanctions are meant to deter future sanctionable conduct, to reimburse the moving party for its reasonable expenditures related to the sanctionable conduct, and to control litigation and preserve the integrity of the judicial process. Vallejo v. Amgen, Inc., No. 8:14CV50, 2017 WL 3037391, at *3 (D. Neb. May 30, 2017), aff'd, 903 F.3d 733 (8th Cir. 2018).

Rule 37 of the Federal Rules of Civil Procedure allows the court to sanction a party that fails to comply with the court's discovery orders. Specifically Fed.R.Civ.P. 37(b)(2)(A) provides:

If a party or a party's officer, director, or managing agent--or a witness designated under Rule 30(b)(6) or 31(a)(4)--fails to obey an order to provide or permit discovery, including an order under Rule 26(f), 35, or 37(a), the court where the action is pending may issue further just orders. They may include the following:

(i) directing that the matters embraced in the

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