Judge: Carolyn M. Caietti, Case: 37-2014-00019212-CU-IC-CTL, Date: 2023-11-17 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - November 16, 2023

11/17/2023  10:30:00 AM  C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

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Civil - Unlimited  Insurance Coverage Discovery Hearing 37-2014-00019212-CU-IC-CTL MCHUGH VS. PROTECTIVE LIFE INSURANCE COMPANY [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Plaintiff Blakely McHugh's Motion to Compel Discovery Responses of Defendant Protective Life Insurance Company is GRANTED IN PART AND DENIED IN PART.

Background The case concerns the application of Insurance Code sections 10113.71 and 10113.72 to a life insurance policy of William McHugh, whose policy was issued before the effective date of these insurance statutes. Plaintiffs are the insured/decedent's beneficiaries. In the first phase of trial, this Court concluded the statutes applied to all life insurance policies issued and delivered in California. A jury found in Defendant's favor on damages. The Fourth District Court of Appeal affirmed the judgment on separate grounds, holding the insurance statutes did not apply. The California Supreme Court reversed, concluding the insurance statutes applied to all California life insurance policies regardless of the date of issuance and remanded the matter. On remand, the Court of Appeal concluded the jury's verdict was 'contradictory and hopelessly ambiguous' and remanded for a new trial. (McHugh v. Protective Life Insurance (Oct. 10, 2022, No. D072863) 2022 WL 6299640 (unpub. opn.).) Preliminary Matters Defendant's request for judicial notice is granted and notice will be taken to the extent permitted. See, Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 ['while courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files.'].) Plaintiff's reply request for judicial notice is granted and notice will be taken to the extent permitted.

Discussion Following remand, Plaintiff propounded: (i) Supplemental Interrogatories, Set Two; (ii) Supplemental Request for Production of Documents, Set Two; (iii) Special Interrogatories, Set One; and (iv) Request for Production, Set Three. (ROA 525 – Declaration of Christopher Rodriguez, at Ex. A-B; ROA 527 – Declaration of Jack Winters, at Ex. A-B.) Defendant does not dispute discovery is 'open.' (See, C.C.P., § 2024.020(a); Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 247 (concluding, in the case of a mistrial, order granting a new Calendar No.: Event ID:  TENTATIVE RULINGS

3019466  34 CASE NUMBER: CASE TITLE:  MCHUGH VS. PROTECTIVE LIFE INSURANCE COMPANY [IMAGED]  37-2014-00019212-CU-IC-CTL trial or remand for a new trial after reversal of a judgment on appeal, the last date for completing discovery is 15 days before the date initially set for the new trial of the action).) Supplemental Discovery Requests As to the Supplemental Interrogatories, Set Two and Supplemental Request for Production, Set Two, the motion is GRANTED. C.C.P. sections 2030.070 and 2031.050 authorize a party to propound supplemental written discovery 'once after the initial setting of a trial date.' As the Court set a new trial date and discovery reopened, Defendant is obligated to respond to supplemental discovery.

Defendant's other objections lack merit. Parties may propound supplemental discovery 'to elicit any later acquired information' or 'discovered documents' bearing on answers previously made. (C.C.P., §§ 2030.070(a), 2031.050(a).) There is no legal authority supporting Defendant's position the supplemental discovery is cumulative or duplicative. That is the nature of supplemental discovery and it is expressly permitted by sections 2030.070 and 2031.050. Further, an insurer's duty to deal in good faith continues after suit is filed on the policy obligations. Evidence of the insurer's settlement behavior after litigation has commenced is admissible to prove the insurer breached the implied covenant. (White v. Western Title Ins. Co. (1985) 40 Cal.3d 870, 885.) An objection based on burden must be sustained by evidence showing the quantum of work required and an objection of oppression must show either an intent to create an unreasonable burden or that the ultimate effect of the burden is incommensurate with the result sought. (West Pico Furniture Co. of Los Angeles v. Superior Court (1961) 56 Cal.2d 407, 417.) Here, there is no evidence of the quantum of work required to respond to the permitted supplemental discovery. Defendant's opinion no further discovery is required to prepare for the new trial is not a valid objection. Reference to all previously produced documents produced, depositions and the Court's records makes the response incomplete as it does not address 'any later acquired information' bearing on the answers previously made.

Thus, an order compelling further responses to the supplemental discovery requests is warranted.

(C.C.P., §§ 2030.300(a)(1), (3); 2031.310(a)(1), (3).) Special Interrogatories Set One Every contract imposes on each party an implied duty of good faith and fair dealing. (Chateau Chamberay Homeowners Ass'n v. Associated Intern. Ins. Co. (2001) 90 Cal.App.4th 335, 345 (Chateau).) A breach of the implied covenant of good faith and fair dealing involves something beyond breach of the contractual duty itself. (Ibid.) As explained in the Fourth District, Division One case of Pulte Home Corp. v. American Safety Indemnity Co. (2017) 14 Cal.App.5th 1086, 1119, the ultimate test of bad faith liability in the first party cases is whether the refusal to pay policy benefits was unreasonable; it must have done so without proper cause. (Ibid.) The issues include the reasonableness of the insurer's policy interpretation, and the effect of its claims handling that resulted in withholding of benefits due under the policy. (Ibid.) Generally, Special Interrogatories Nos. 1-11 seek the identity of witnesses, including employees involved in the decision-making regarding Plaintiff's claim; and regulators, consultants/advisors and trade organizations Defendant interacted with regarding Plaintiff's claim. No. 5 asks for the date Defendant became aware the legislature was enacting the insurance statutes at issue in this case.

Defendant's objections to these interrogatories lack merit. Information concerning Plaintiff's claim file is discoverable. (See, 2,022 Ranch v. Sup. Ct. (2003) 113 Cal.App.4th 1377, 1396, disapproved on other grounds in Costco Wholesale Corp. v. Sup. Ct. (2009) 47 Cal.4th 725, 739.) The identification of witnesses and one date do not ask for privileged information or confidential communications. There is no evidence responding would be unduly burdensome. The terms used are not vague and ambiguous.

Defendant can respond as completely and straightforward as the information is reasonably available. If an interrogatory cannot be answered completely, it can be answered, 'to the extent possible.' (C.C.P., § 2030.220(a)-(b).) Thus, an order compelling further responses to Special Interrogatories, Set One, Nos.

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3019466  34 CASE NUMBER: CASE TITLE:  MCHUGH VS. PROTECTIVE LIFE INSURANCE COMPANY [IMAGED]  37-2014-00019212-CU-IC-CTL 1-11 is warranted. (C.C.P., § 2030.300(a)(1), (3).) Special Interrogatories Nos. 12-14 ask for the identity of similar witnesses sought in Nos. 1-11 that Defendant relied on for advice in 'any action' where Defendant challenged or opposed the insurance statutes. Nos. 15-17 ask for the identity of any consultants or advisors, trade organizations and regulators in connection with Defendant's participation in any administrative proceeding or rulemaking proceedings regarding the statutes. Defendant's objections hold merit. The scope of discovery is not limitless. (Board of Registered Nursing v. Superior Court (2021) 59 Cal.App.5th 1011, 1039, rev. denied (Apr. 21, 2021).) Plaintiff does not provide any legal authority on how the information sought is reasonably calculated to lead to the discovery of admissible evidence and how identification of such individuals 'deals squarely with Protective's efforts to understand the Statutes.' Nos. 15-17 are vague and ambiguous. Thus, a further response will not be ordered.

Nos. 18-19 ask Defendant to identify the names of certain policy owners. Nos. 20-21 ask for the identity of certain regulators Defendant interacted with regarding other policies. Plaintiff does not provide any legal authority on how these interrogatories are reasonably calculated to lead to the discovery of admissible evidence.

Nos. 18-21 also invade the third parties' (other policy owners) reasonable expectation of privacy. (See, County of Los Angeles v. Sup. Ct. (2021) 65 Cal.App.5th 621, 640-657 [applying the Hill v. National

Collegiate Athletic Association (1994) 7 Cal.4th 1, 26 framework].) A person's life insurance policy involves both financial and personal information, as well as, information about the person's named beneficiaries. (See, Look v. Penovatz (2019) 34 Cal.App.5th 61, 73 (concluding individuals have a legally recognized privacy interest in their personal financial information); see also, Ins. Code, § 791.01 et seq (creating a right of privacy with respect to consumer files, including claims files, maintained by insurance companies).) An objectively reasonable expectation that such financial and personal information will remain private exists. Moreover, the threatened intrusion on this privacy right is serious.

Plaintiff has not established nor discussed any countervailing interests that outweigh the serious potential invasion of privacy rights that such disclosure would entail. To conduct this inquiry, courts consider the interests of the requesting party, fairness to litigants in conducting the litigation and the consequences of granting or restricting access to the information. (County of Los Angeles, at p. 653.) Here, Plaintiff does not identify any need for disclosure, nor any legitimate interest. (Look, supra, [the party seeking discovery of the information must show the information is directly relevant to the cause of action, such that disclosure is essential to the fair resolution of the lawsuit].) A party seeking to invade privacy must also show the information is directly relevant, essential to a fair resolution and cannot be obtained through less intrusive means. Plaintiff also has not assessed this information. The identities of other policy owners and regulators Defendant interacted with do not bear on the decedent's policy and Defendant's decision making with regard to his policy. In reply, Plaintiff does not address privacy. Thus, the Court will not compel a further response on Nos. 18-21.

Request for Production of Documents, Set Three Nos. 32 and 33 request documents Defendant considered of any claim under the decedent's policy before and after the McHugh Supreme Court decision. Nos. 34 and 35 request documents regarding analysis of the insurance statutes before and after January 2013. These documents are readily discoverable under the broad scope of discovery. (2,022 Ranch, supra.) Defendant's objections lack merit and any privileged documents can be identified in a privilege log. A further response is ordered.

(C.C.P., § 2031.310(a)(1), (3).) Nos. 36 and 37 request documents regarding Defendant's 'participation' in any administrative proceedings and/or rule making and litigation regarding the insurance statutes. A party seeking to compel discovery must articulate specific facts justifying the discovery sought and may not rely on mere generalities. (See, Board of Registered Nursing; C.C.P., § 2031.310(b)(1).) Plaintiff has not provided specific facts and the requests do not appear reasonably calculated to lead to the discovery of Calendar No.: Event ID:  TENTATIVE RULINGS

3019466  34 CASE NUMBER: CASE TITLE:  MCHUGH VS. PROTECTIVE LIFE INSURANCE COMPANY [IMAGED]  37-2014-00019212-CU-IC-CTL admissible evidence.

Nos. 38 and 39 request life insurance policies terminated for failure to pay premiums between January 1, 2013 and the McHugh Supreme Court decision and the decision to the present. These policies do not appear reasonably calculated to lead to the discovery of admissible evidence and invade the right to privacy of the policy owners as discussed above.

Nos. 40 and 41 request documents regarding any changes in Defendant's policies or procedures relative to the termination of life insurance policies for failure to pay premiums between January 1, 2013, and the McHugh Supreme Court decision and the decision to the present. These requests are discoverable and Defendant's objections lack merit. A further response is warranted.

No. 42 seeks analysis regarding the increased savings and profitability of Defendant's business as a result of expected lapses or lapse termination policies. No. 43 seeks reserves held by Defendant regarding its potential liability under the statutes. Plaintiff does not provide any legal authority supporting discovery of these documents or that reserve information measures what an insurer owes in damages.

(Ins. Code, § 10479 [describing the reserves process].) Defendant's objections hold merit.

No. 44 seeks analysis regarding the 'final impact' of the statutes on Defendant's business. Defendant's vague and ambiguous objection holds merit.

Thus, for these reasons, the motion is GRANTED IN PART AND DENIED IN PART.

Concluding Orders By December 20, 2023, Defendant Protective Life Insurance Company is ordered to serve a further, verified and code-compliant response to Plaintiff's: (i) Supplemental Interrogatories, Set Two; (ii) Supplemental Request for Production of Documents (Set Two); Special Interrogatories, Set One, Nos.

1-11; and (iv) Request for Production of Documents, Set Three, Nos. 32-35 and 40-41.

For any documents Defendant maintains are privileged, Defendant is ordered to serve a privilege log.

The Court expects the privilege log to identify with particularly each document Defendants claim is protected from disclosure by a privilege and provide sufficient factual information for Plaintiff and the Court to evaluate whether the claim has merit. (Catalina Island Yacht Club v. Superior Court (2015) 242 Cal.App.4th 1116, 1130.) Minimally, it must provide: (i) the identity and capacity of all individuals who authored, sent, or received each allegedly privileged document; (ii) the document's date; (iii) a brief description of the document and its contents or subject matter sufficient to determine whether the privilege applies; (iv) and the precise privilege or protection asserted. (Ibid.) If the tentative ruling is confirmed without modification, the Court's minute order will be the Court's final ruling. Plaintiff is ordered to serve written notice of the Court's final ruling on all appearing parties by November 21, 2023.

The parties are reminded to comply with Department 70's Policies and Procedures and to provide courtesy copies of all motion paperwork.

Separately, this motion sought to compel further responses to four different discovery requests. For future motions, the Court asks the parties not to combine several sets of discovery into a consolidated motion. The Discovery Act does not permit this. Plaintiff did not seek and obtain leave to court to file an omnibus motion and calendared only one discovery motion. This greatly impacts the Court's calendar and the way it budgets the time to assess and prepare rulings for each motion.

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