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Estate of Haeuser v. Westchester Surplus Lines Insurance Co.

United States District Court, E.D. Louisiana

March 10, 2015



DANIEL E. KNOWLES, III, Magistrate Judge.

On February 25, 2015, the Motion for Protective Order [Doc. #88] came on for oral hearing before the undersigned. Present were Robert Murphy on behalf of plaintiffs and Leah Engelhardt on behalf of defendant. After the oral hearing, the Court took the motion under advisement and allowed defendant to file a supplemental affidavit on February 27, 2015. Having reviewed the motion, the opposition, the reply, and the case law, the Court rules as follows.

I. Background

The complaint alleges as follows. Plaintiffs herein, The Estate of Louis D. Haeuser and The Estate of Lucille S. Haeuser d/b/a Louis D. Haeuser Investment Account; Louis D. Haeuser Deckbar Account, L.L.C., Albert Mintz Deckbar Account, L.L.C., Estate of Richard B. Montgomery, Jr. Deckbar Account, L.L.C. d/b/a Haeuser, Montgomery, Mintz d/b/a Deckbar Company; and The Estate of Louis D. Haeuser, The Estate of Lucille S. Haeuser, Daniel L. Haeuser, and Lucille Haeuser-Brian d/b/a Haeuser Realty ("Plaintiffs"), filed this breach-of-contract and bad-faith insurance claim against their insurer, Westchester Surplus Lines Insurance Company ("defendant"), in order to recover insurance proceeds due as a result of property damage to multiple properties owned by plaintiffs caused by Hurricane Isaac on August 28, 2012.

Plaintiffs maintain that the cost to repair the damage to their properties caused by Hurricane Isaac totals over $1, 000, 000. Plaintiffs further allege that Westchester grossly undervalued the full extent of plaintiffs' replacement-cost covered losses and damages and has to date only agreed to pay plaintiffs an aggregate of $208, 848.35. Plaintiffs contend that Westchester misrepresented its policy provisions by adamantly and repeatedly, but incorrectly, maintaining to plaintiffs that the $100, 000 minimum per occurrence windstorm deductible applied separately ("per location") to each of plaintiffs' scheduled properties damaged by Hurricane Isaac. Plaintiffs also allege that Westchester delayed in paying undisputed covered losses. Plaintiffs seek penalties and attorneys' fees because Westchester breached its duty to properly adjust this insurance claim by misrepresenting its policy provisions, by purposefully minimizing the scope and extent of the physical damage to the properties caused by Hurricane Isaac, and by failing to pay the amount of the claim within 60 days of receipt of satisfactory proof of loss.

II. The Parties' Contentions

A. The Motion for Protective Order

On February 16, 2015, plaintiffs served a Rule 30(b)(6) Notice of Deposition on defendant, unilaterally setting the deposition on February 19, 2015. Plaintiffs had served defendant with a draft of the notice on December 10, 2014. Defendant objected to several areas of discovery but tentatively identified February 19, 2015 as a possible date. Defendant never heard from plaintiffs.

On February 16, 2015, defendant contacted plaintiffs, assuming that the deposition would not occur. Plaintiffs immediately responded and issued the notice of deposition, identical to the draft notice.

Citing Rule 30, defendant contends that three days is not a "reasonable" time to respond to a subpoena. Citing case law, defendant notes that this Court has held that four days is clearly unreasonable.

Defendant also renews its objections to the areas of inquiry that this Court has already ruled irrelevant. For example, Topic No. 1 asks for a corporate representative to testify as to the underwriting files from July 1, 2010 through July 1, 2013. This Court has already held this time frame overbroad. Without specifics, defendant also contends that many topics are so overbroad that it can not identify a corporate representative to testify to them.

B. Plaintiffs' Opposition

The parties have agreed to a revised scope of the Rule 30(b)(6) deposition notice, and defendant has agreed to designate a corporate representative. The only issue still in dispute are Topic Nos. 18-23. These topics seek to discuss defendant's relationship with several corporations and individuals who it has hired in the past to investigate claims. Defendant included Richard Haggis on its witness list and listed Patrick Heil, David Schifani, and Terry Wolfe as expert witnesses.

Citing case law, plaintiffs contend that evidence between a witness and a party is discoverable to demonstrate the possible bias of the witness. Plaintiffs maintain that the number of claims assigned to the individuals and the income derived from those ...

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