Judge Theresa M. Traber, Case 21STCV05412 2022-08-25 Tentative Ruling

Judge: Theresa M. Traber, Case: 21STCV05412, Date: 2022-08-25 Tentative Ruling

Case Number: 21STCV05412 Hearing Date: August 25, 2022 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: August 25, 2022 TRIAL DATE: March 20, 2023

CASE: Jennifer Gerard, et al. v. John Haubrich, Jr., et al.

CASE NO.: 21STCV05412

MOTION TO COMPEL FURTHER RESPONSES TO INTERROGATORIES x3

MOVING PARTY: (1) (2) (3) Plaintiffs Jennifer Gerard and Gerard Cosmetics, Inc.

RESPONDING PARTY(S): (1) Defendant Travelers Casualty and Surety Company of America; (2) Defendants Pettit Kohn Ingrassia Lutz & Dolin, Tom Ingrassia, and Tristan Mullis; (3) Defendants John Haubrich, Jr., John L. Barber, Armine Antonyan, and Lewis Brisbois Bisgaard & Smith, LLP

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an action for declaratory and injunctive relief against a liability insurer and the attorneys retained by the insurer to defendant Plaintiffs in an underlying employment discrimination lawsuit.

Plaintiffs move to compel a further response to a special interrogatory propounded to each of the three sets of remaining Defendants.

TENTATIVE RULING:

Plaintiffs’ motion to compel further responses to interrogatories from Defendant Travelers Casualty and Surety Company of America is DENIED.

Plaintiff’s Motion to Compel Further Responses from Defendants Pettit Kohn Ingrassia Lutz & Dolin, Tom Ingrassia, and Tristan Mullis is DENIED.

Plaintiff’s Motion to Compel Further Responses from Defendants John Haubrich, Jr., John L. Barber, Armine Antonyan, and Lewis Brisbois Bisgaard & Smith, LLP is DENIED.

DISCUSSION:

Motion to Compel Further Responses From Travelers Casualty and Surety Co. of America

Analysis of Motion

Plaintiffs move to compel further responses to Interrogatory No. 17 of their second set of special interrogatories from Defendant Travelers Casualty and Surety Company of America (“Travelers”). Alternatively, they seek an order requiring Travelers to follow the discovery procedure approved in Colonial Life & Accident Ins. Co. v. Superior Court (1982) 31 Cal.3d 785, under which their clients would be given notice of the discovery request by Plaintiffs and would have an opportunity to assert their privacy rights by opting out of providing the information sought.

Interrogatory 17 asks Defendant to “identify all insureds you have agreed to defend under any reservation of rights in California between 2/6/2020 and the present.” (Plaintiffs’ Separate Statement, at p. 2.) In addition to seeking the contact information for insureds Defendant has agreed to defend under a reservation of rights, the defined term “identify” seeks information as to law firms hired to defend insureds in civil actions but excludes “workers compensation, homeowners, automobile insurance, surety, collection cases, and limited civil court cases seeking no more than $25,000.” (Plaintiffs’ SS, at p. 2.) “Reservation of rights” is defined as “any reservation of rights or controversy or coverage dispute that exists between any policyholder and any insurer.” (Ibid.)

In opposition to Plaintiffs’ motion, Defendant raises a series of arguments, including that the information sought is expressly protected from disclosure, that its production would violate the privacy rights of Travelers’ clients, that the burden of production outweighs any marginal relevance, and that discovery about Traveler’s challenged practices has shown that the names and contact information of Travelers’ clients is irrelevant to Plaintiffs’ claims. As explained below, the Court concludes that the relevance of the information sought is minimal, particularly in light of the substantial burden that would be imposed on Travelers if it were compelled to produce the sought-after information.

In its initial opposition, Travelers argued that the information sought is not relevant because “Plaintiffs never had a ‘right’ to independent counsel.” (Opp., at p. 12.) The Court has made no such finding, and Plaintiffs’ allegations are otherwise. Plaintiffs’ allegations determine whether information is relevant – that is, whether the information “might reasonably assist” Plaintiffs in “evaluating the case, preparing for trial, or facilitating settlement.” (Gonzalez v. Superior Court (1995) 33 Cal.App.4th 1539, 1546.) Here, Plaintiffs contend that the information sought is directly relevant, inter alia, to their claim that Travelers has engaged in unfair business practices. (1AC ¶¶ 58-61, 67-72.)

On February 3, 2022, the Court ordered Plaintiff to notice and take depositions of all defendants’ Person(s) Most Qualified as to issues regarding the challenged business practices. Specifically, the Court directed discovery on Defendants’ practices regarding the assignment of defense counsel, their evaluation of their responsibilities to provide a defense to insureds, and their assessments of whether a conflict exists, whether independent counsel should be appointed and who conducts such an analysis. (Waxler Decl., Exh. A.) The purpose of these depositions was to cut to the heart of the matter of the case, that is, the nature and extent of each Defendant’s business practices regarding the assignment of independent counsel when the insurance company issues a reservation of rights. In the Court’s view, discovery of such information would allow for a more clear-sighted assessment of whether the type of client information sought by Plaintiffs would be relevant to their claims in this case and, if so, how critical the sought-after information is to the effective prosecution of those claims.

Plaintiffs contend in supplemental briefing that the deposition testimony is inconclusive because it reveals that the Defendants have no standard business practices for handling conflicts of interest, and instead, assert that every case is different and treated separately. However, as detailed in Plaintiff’s supplemental brief and revealed in the interrogatory answers and deposition transcripts filed with the Court, the discovery ordered by the Court does in fact reveal Defendants’ standard business practices for dealing with the assignment of defense counsel in cases where Travelers has issued a reservation of rights letter. (Plaintiffs’ Supplemental Brief pp 7-8.)

According to its responses to Plaintiffs’ discovery, Travelers has a general practice of analyzing whether it should issue a reservation of rights in every case by reviewing the claim, policy and complaint or charge against the insured and often consults the insured and a Travelers’ manager before making a decision. (Plaintiffs’ Exh. B, Response to Interrogatory No. 21 & 22.) Travelers issues a coverage letter in virtually every action where it is asked to defend a claim and includes in that letter any reservations of rights it is asserting with respect to the claim. (Id., Response to Interrogatory No. 20; Travelers’ Exh. D (“Travelers PMK”), p. 13.) While such a letter is usually available, Travelers has no regular practice of providing it to defense counsel and regards defense counsel’s responsibilities to be limited to defense of the claim, rather than extending to any coverage analysis. (Id., pp. 76-77 [hired counsel are not to provide coverage advice to the client], 79-80; Plaintiffs’ Exh. B, Response to Interrogatory No. 32.)

Travelers evaluates the existence of a conflict that requires appointment of independent counsel by asking “whether or not defense counsel can steer coverage toward an uncovered claim.” (Travelers PMK, pp. 25, 29, 30, 45.) Travelers makes a disclosure about the right to independent counsel to its insured only if it has already determined that appointment of independent counsel is required. (Id., pp. 65-67.) If Travelers concludes that no independent counsel is necessary, it does not suggest it to the insured. (Id., pp. 83-87.) After Travelers’ initial assessment of the need for independent counsel, it simply relies on its hired defense counsel to raise any conflicts that may exist but does not ask defense counsel to perform an focused analysis of the issue. (Plaintiffs’ Exh. B, Response to Interrogatory No. 23-24.) Travelers expects hired counsel to comply with their ethical obligations and includes this general expectation in its Guidelines, Business Practices, and Litigation Guidelines. (Id.¸Response to Interrogatory No. 31; Travelers PMK, pp, 77-87.)

Plaintiffs’ recent discovery unearthed several business practices that could be challenged. Plaintiffs might argue that Travelers engages in unlawful business practices when, for example, it fails to notify its insureds about the circumstances when the hiring of independent counsel is required, or fails to provide the reservation of rights letters to defense counsel to allow for a meaningful evaluation of the existence of conflicts, or makes no affirmative request for an ongoing analysis by defense counsel of the need for independent counsel during the defense of the case against the insured. Plaintiffs can attack these business practices employed by Travelers without securing any information from specific insured parties who may have been harmed by these practices. Indeed, the client information sought by Plaintiffs through Interrogatory 17 appears to be wholly irrelevant to such challenges. To the extent Plaintiffs seek to mount a legal challenge to the practices revealed in discovery, their motion to compel must be denied.

Turning to the unlawful business practices alleged in the Complaint, the Court finds that few, if any, of them will be advanced by obtaining the names and contact information of Travelers’ insureds. If Plaintiffs pursue their contention that Travelers fails to provide timely and adequate notice of its reservation of rights (Complaint, ¶¶ 16-18), the factual basis for such a claim would likely derive from an analysis of Travelers’ documents, including its insureds’ notices to Travelers of their claims and Travelers’ coverage letters, not from the client information being sought through Plaintiffs’ motion. As noted above, Travelers’ admitted practice of not disclosing any information to its insured about the right to independent counsel in the absence of a determination that one is required may be challenged without any of the client information Plaintiffs seek. (Complaint, ¶¶ 27, 29.)

To the extent that Plaintiffs intend to demonstrate that Travelers engaged in a pattern of faulty application of the Cumis rule or the standards in Civil Code § 2860, the Court is unclear how the disclosure of client information would advance such an effort. Second-guessing Travelers’ decision-making on conflict-of-interest issues cannot be meaningfully advanced by disclosure of Travelers’ client list. Such an inquiry would require the disclosure not only of the underlying policies held by each insured and the complaints or charges against them, but also the specifics of Travelers’ basis for its reservation of rights. These are the underlying documents that would need to be examined to undertake a preliminary analysis of whether there was a disqualifying conflict of interest that required appointment of independent counsel in each case. The identity and contact information of the specific insureds does not appear to be a necessary step in pursuing the analysis Plaintiffs propose.

Travelers argues that the client information sought by Plaintiffs is not reasonably calculated to lead to the discovery of admissible evidence, because even if it were provided, it could not lead to the discovery of relevant information because reservation of rights letters are not discoverable. (Travelers’ Opp., p. 12.) To advance its argument that such letters are privileged, Travelers relies first on Code of Civil Procedure § 2017.210, which allows for discovery of whether an insurance carrier is disputing coverage, but not “the nature and substance of that dispute.” (Code Civ. Proc. § 2017.210.) Travelers’ reliance on § 2017.210 is misplaced, however, because that statute grants a limited discovery right to secure information about insurance that that may be available “to satisfy in whole or in part a judgment that may be entered in the action or to indemnify or reimburse for payments made to satisfy the judgment.” Thus, although the insurance information described in § 2017.210 is presumed to be irrelevant to the underlying claims and defenses in action in which the discovery is sought, the statute grants a limited right to secure it through discovery. Here, by contrast, the insurance documents Plaintiffs would seek are directly relevant to their contentions that Travelers is engaged in unlawful business practices.

At the June 6, 2022 hearing on Plaintiffs’ motion, Travelers argued that even the identification of insureds who received reservation letters was barred because those letters and their contents are protected from disclosure by the attorney-client privilege. As support for this argument, Travelers’s counsel urged the Court to apply the holding of Soltani-Rastegar v. Superior Court (1989) 208 Cal. App. 3d 424, to rule that any discovery that would reveal the contents of its reservation of rights letters or its insureds’ association with such letters is privileged and must be shielded from discovery. In Soltani-Rastegar, the Court of Appeal considered the circumstances under which statements given to the insurance company by an insured were considered privileged communications between a client and its attorney. The Soltani-Rastegar court followed the weight of authority in holding that “a report or other communication made by an insured to his liability insurance company, concerning an event which may be made the basis of a claim against him covered by the policy, is a privileged communication, as being between attorney and client, if the policy requires the company to defend him through its attorney, and the communication is intended for the information or assistance of the attorney in so defending him.” (Id., at p. 427 [Citation omitted; emphasis added].) Where the statements are offered to the insurance company “for the sole purpose of defending” against claims, “[t]he fact that litigation was only a threat on the horizon and that attorneys had not yet been selected to try to avert or meet that threat does not convert the purpose of the transmission.” (Id., at p. 428.)

The Court finds that the Soltani-Rastegar rule does not cloak Travelers’ reservation letters with an attorney-client privilege. By its own account, Travelers has a regular practice of withholding such letters from its defense counsel, whom it regards as providing services only for defending the insured and not for offering any coverage advice. (Travelers’ Exh. D, pp. 76-77, 79-80; Plaintiffs’ Exh. B, Response to Interrogatory No. 32.) Based on this evidence, the Court cannot conclude that Travelers’ reservation-of-rights letters are prepared for the purpose of defending its insured and, therefore, are not protected from disclosure by the attorney-client privilege. (See, e.g., Hooke v. Foss Mar. Co. (N.D. Cal. April 10, 2014) No. 13-CV-00994-JCS, 2014 WL 1457582, at *5 [finding certain reports given to insurer to fall outside attorney-client privilege where they had an independent safety purpose that “eclipses any litigation purpose”].) Accordingly, while they are not being sought in Plaintiffs’ pending motion to compel, these letters may be discoverable in a case like this one where their contents is directly relevant to Plaintiffs’ claim.

In summary, the Court rejects Travelers’ argument that the client information Plaintiffs seek will not lead to the discovery of admissible evidence because it finds that the reservation letters are not protected from disclosure by any privilege. That said, the Court is skeptical that the information sought by way of Interrogatory 17 has any utility in Plaintiffs’ quest for evidence of Travelers’ alleged failure to pay for independent counsel where actual conflicts of interest may arise.

In addition to urging the irrelevance of the client information sought by Plaintiffs, Travelers’ supplemental opposition reiterates its position that the discovery sought is an undue burden. It contends that Plaintiffs’ discovery request would impose an undue burden because its files would have to be manually reviewed on an individual basis to determine if they included a reservation of rights letter. As part of this argument, Defendant cites federal case law rejecting “fishing expeditions,” despite the fact that fishing expeditions are explicitly permissible under California law. (E.g., Colonial Life, supra, 31 Cal.3d at 790.)

Defendant raises legitimate concerns as to the burden of Plaintiffs’ request, noting that more than 2,500 claims were filed during the relevant time period in the business unit that issued Plaintiffs’ policy alone. (Opp., at pp. 17-18.) Defendant estimates that the review of these files alone would require 1.5 to 2 hours each, or 3,750 to 5,000 hours. (Opp., at p. 18.) Unlike Mead Reinsurance Co. v. Superior Court (1986) 188 Cal.App.3d 313, upon which Defendant relies, Defendant has not indicated that this would “effectively shut down” its operations or “cost thousands of dollars to hire personnel to perform.” (Id. at 318.) Nevertheless, Defendant’s calculations involve significantly more hours than those at issue in Mead.

In reply, Plaintiff proposes a method by which to narrow this interrogatory: “Travelers may simply poll its own personnel with one single request: ‘Please identify all California claims you are handling in which you have issued any reservation of rights and provide a copy of the case caption and the reservation of rights letter.’” (Reply, at p. 12.) The Court concludes, however, that this suggestion does not eliminate the undue burden that would have to be borne by Travelers; it would only spread it out to be shouldered by a multitude of claims handlers who would have to scour their own files for the sought-after information. Even if the burden were reduced somewhat by this strategy, it would still sharply outweigh the minimal relevance of the sought-after information.

Plaintiffs suggest that the Court could order a “representative, random sampling of instances when Travelers agreed to defend a California policyholder under a reservation of rights that created a disqualifying conflict of interest and then improperly appointed dependent counsel to defend the policyholder.” (Reply, at p. 12.) Phrased in this manner, Plaintiffs’ suggestion would “impose the oppressive burden upon defendants of formulating a case against themselves.” (Mead, supra, 188 Cal.App.3d at 318.) The Court would also require additional information, including the testimony of experts, before it could approve of any sampling method in this case.

The Court concludes, therefore, that the information Plaintiffs seek through Interrogatory 17 is not reasonably calculated to lead to the discovery of admissible evidence and that any minimal relevance it may have is dwarfed by the huge burden Travelers would have to bear to identify the insureds whose names and contact information Plaintiffs seek. Accordingly, the Court denies Plaintiffs’ motion to compel Travelers to answer the interrogatory. In light of the Court’s conclusions regarding relevance and burden, it does not address Travelers’ other objections that disclosure would violate Insurance Code § 791.13 and/or the privacy rights of Travelers’ insureds.

Accordingly, Plaintiffs’ motion to compel further responses to Special Interrogatory No. 17 from Defendant Travelers is DENIED.

Motion to Compel Responses from the Pettit Defendants

Plaintiffs move to compel further responses to Interrogatory No. 17 from Defendants Tom Ingrassia, Tristan Mullis, and Pettit Kohn Ingrassia Lutz & Dolin (jointly “the Pettit Defendants”).

Interrogatory 17 asks the Pettit Defendants to identify all clients represented between February 26, 2020 and the present where they were hired by an insurance company to defend the clients under a reservation of rights. By agreement, Plaintiff has limited its request to cases where the representation arose from insurance policies other than workers compensation, homeowners, automobile, or surety insurances, and excluding collection and limited civil cases. The parties have also agreed to a definition for “reservation of rights.” In addition, Plaintiff has narrowed its interrogatory to include only clients whom the Pettit Defendants represented under a reservation of rights in California.

While Pettit Defendants initially raised a long list of objections, the primary ones asserted in opposition to this motion are that the interrogatory seeks information that is protected by the attorney-client privilege, that disclosure would violate the Pettit Defendants’ duties of confidentiality to their clients, that the interrogatory invades the clients’ privacy rights, and that it seeks information that is not relevant to Plaintiffs’ claims. In their supplemental opposition, after wasting many pages on overblown expressions of outrage and ad hominem attacks on Plaintiffs and their counsel, Pettit Defendants focus on their relevance objection arguing that their responses to Plaintiffs’ recent discovery show that an answer to Interrogatory 17 is not reasonably calculated to lead to the discovery of admissible evidence. They also reiterate their position that the discovery sought is an undue burden and an impermissible intrusion on the attorney-client privilege and their clients’ right to privacy.

As with the Motion to Compel Further Responses from Defendant Travelers, the Court ordered Plaintiff to notice and take depositions of the Pettit Defendants’ Person(s) Most Qualified as to issues regarding the challenged business practices. The purpose of these depositions was to reveal the exact nature and extent of each Defendant’s business practices in connection with cases where a liability insurer has retained the firm but issued a reservation of rights letter. Plaintiff’s contention is that this information is relevant because, according to Plaintiff, the Pettit Defendants had a legal obligation to investigate whether a reservation of rights was issued so they could avoid a conflict of interest but failed to do so.

Plaintiffs dismiss the utility of the recent Court-ordered discovery arguing that the deposition testimony reveals that Defendants have no standard business practices to handle conflicts of interest and instead contend that each case is different and treated as such. However, as detailed later in Plaintiffs’ supplemental brief and in interrogatory answers and deposition transcripts submitted to the Court, the testimony offered on behalf of the Pettit Defendants does lay out the firm’s standard business practices in connection with the issues raised by the Court in previous hearings. (Plaintiffs’ Supp. Brief pp 7-8.)

According to the discovery responses provided by the Pettit Defendants, they always conduct a standard “conflict check in relation to the parties to the case, attorneys involved in the case, and key witnesses/individuals involved in the case to identify conflicts,” but have no regular practice of evaluating the potential for any conflict that might give rise to a need for independent counsel in an insurance defense case, before accepting an assignment to defend such a case. (Plaintiffs’ Exh. L, Response to Interrogatory No. 21; Pettit Exh. A, pp. 75-76.) The Pettit Defendants have no regular practice of asking the insurer if it has reserved its rights or for requesting the reservation of rights letter or the applicable policy. (Id., pp. 7-11, 51; see also Pettit Exh. C, Mullis Depo, pp. 8-9 [consistent with firm practice, Mullis usually does not request or obtain the insurer’s reservation of rights letter].) Nor do they have a business practice of regularly conducting a conflict-of-interests analysis in cases where the assigning insurance company has reserved its rights. (Pettit Exh. A, p. 19.) Further, the Pettit Defendants’ view is that the scope of their representation in such cases does not involve any coverage issues. (Plaintiffs’ Exh. L, Response to Interrogatory No. 23; Pettit Exh. A, pp. 33-34.) The Pettit Defendants have a general practice of complying with the rules of professional responsibility to test for potential conflicts of interest and provide training for their lawyers to ensure their compliance. (Id., pp. 14-15; Plaintiffs’ Exh. L, Response to Interrogatory No. 42.)

The Court concludes that Plaintiffs’ discovery to the Pettit Defendants has cemented the existence of several business practices that could be challenged under the theories advanced by Plaintiffs in this case. Included among these business practices are the Pettit Defendants’ practice of not conducting any analysis of the need for independent counsel before accepting an assignment in an insurance defense case, the practice of not asking insurers assigning them cases for any reservation of rights letters or insurance policies, and the practice of eschewing any involvement in coverage issues or in regular evaluation of any potential conflicts between the insurance company and its insured. As with the Travelers’ standards described above, Plaintiffs plainly can attack these Pettit business practices without obtaining any information from specific insured parties who may have been harmed by these practices. As a result, the client information sought by Plaintiffs through Interrogatory 17 appears to be wholly irrelevant to such challenges. To the extent Plaintiffs seek to mount a legal challenge to the practices revealed in discovery, their motion to compel must be denied.

Turning to the unlawful business practices alleged in the Complaint, the Court finds that few, if any, of them will be advanced at all by obtaining the names and contact information of Travelers’ insureds. Plaintiffs contend, inter alia, that the Pettit Defendants have maintained unlawful business practices by failing to thoroughly investigate and analyze potential conflicts of interest between Travelers and its insureds, failing to obtain informed written consent to represent Travelers’ insureds whose cases were referred to the Pettit Defendants under a reservation of rights, and failing to provide notice to Travelers’ insureds whom the Pettit Defendants represented that they have a right to independent counsel upon a finding of a conflict of interest. (Complaint, e.g., ¶¶ 60-68, 89-98.) Pursuit of these claims would be grounded largely on the Pettit Defendants’ admissions and other statements about their practices and potentially based on documents in their files, not on testimony or documents from the clients whose contact information is sought by Plaintiffs.

To the extent that Plaintiffs intend to demonstrate that the Pettit Defendants engaged in a pattern of faulty application of the Cumis rule or the standards in Civil Code § 2860, the Court is unclear how the disclosure of client information would advance such an effort. Second-guessing the Pettit Defendants’ decision-making on conflict-of-interest issues cannot be meaningfully advanced by disclosure of their client list. As explained above, such an inquiry would require the disclosure of each client’s underlying insurance policies, the complaints or charges against them, and the specifics of Travelers’ reservation of rights. Asking for the names and contact information of the Pettit Defendants’ clients will do little to advance this inquiry, especially since Pettit Defendants deny possessing Travelers’ reservation letters or their clients’ insurance policies. The likelihood of securing meaningful information from the Pettit Defendants via an answer to Interrogatory 17 seems very slim.

Pettit Defendants also urge the Court to recognize the substantial burden they would have to bear to answer Plaintiffs’ Interrogatory 17. Pettit Defendants estimate that Pettit Kohn’s paralegal would have to review approximately 1,000 cases to review all cases open during the relevant time period to determine if an insurer was involved and determine if there was a reservation of rights letter. (Declaration of Douglas A. Pettit ISO Supp. Opp. ¶ 6.) Pettit Defendants estimate that it would take Pettit Kohn 200 hours of paralegal time at $135/hour, and 150 hours of shareholder attorney time at $515/hour to review all the relevant case files, plus three hours of paralegal time to compile a final list and a final hour of shareholder time to review the list to provide it to Plaintiff’s counsel. (Id. ¶¶ 13-16, 21-22.) The total estimated cost, according to Pettit Defendants, is therefore $105,170. (Id. ¶ 23.)

Although Plaintiff offers various solutions to ameliorate the expense and burden that would be imposed on Pettit Defendants, the Court concludes for the reasons explained above that these proposals will not solve the problems raised by Defendants. The Court holds, therefore, that the information Plaintiffs seek through Interrogatory 17 is not reasonably calculated to lead to the discovery of admissible evidence and that any minimal relevance it may have is starkly outweighed by the substantial burden and expense that would be imposed on the Pettit Defendants if they were ordered to identify the insureds whose names and contact information Plaintiffs seek. Accordingly, the Court denies Plaintiffs’ motion to compel on the Pettit Defendants to answer the interrogatory. In light of the Court’s conclusions regarding relevance and burden, it does not address on the Pettit Defendants’ other objections, inter alia, that the issuance of a reservation letter is a client secret and that disclosure would violate Insurance Code §791.13, Code of Civil Procedure §2017.210, and/or the privacy rights of the Pettit Defendants’ clients.

Accordingly, Plaintiffs’ Motion to Compel Further Responses from the Pettit Defendants is DENIED. Pettit Defendants’ request that the Court require Plaintiffs to pay for the costs of production of the requested discovery is DENIED AS MOOT.

Motion to Compel Further Responses from LBBS Defendants

Plaintiffs move to compel further responses to Interrogatory No. 17 from Defendants John Haubrich, Jr., John L. Barber, Armine Antonyan, and Lewis Brisbois Bisgaard & Smith, LLP (jointly “the LBBS Defendants”).

Interrogatory 17 asks LBBS Defendants to “identify all insureds you have agreed to defend under any reservation of rights in California between 2/6/2020 and the present.” (Plaintiffs’ Separate Statement, at p. 2.) In addition to seeking the contact information for any insureds Defendant has agreed to defend under a reservation of rights, the defined term “identify” seeks information as to law firms hired to defend insureds in civil actions but excludes “workers compensation, homeowners, automobile insurance, surety, collection cases, and limited civil court cases seeking no more than $25,000.” (Plaintiffs’ SS, at p. 2.) “Reservation of rights” is defined as “any reservation of rights or controversy or coverage dispute that exists between any policyholder and any insurer.” (Ibid.)

In response to the Court’s order that Plaintiffs conduct discovery on the LBBS Defendants’ business practices, the following information was revealed. The LBBS Defendants have no practice of ascertaining whether an insurance company that has retained them has issued a reservation of rights letter or requesting that such a letter be provided to them. (Supplemental Declaration of David D. Samani, Exh. 1, pp. 12, 28, 38.) Nor do the LBBS Defendants have a regular practice of analyzing reservation of rights letters to determine if there is a disqualifying conflict of interest that requires the hiring of independent counsel. (Id., pp. 38-39.) As they explain in their supplemental briefing, LBBS Defendants admit that their practice is not to “request[ ] a reservation of rights, analyz[e] insurance coverage issues, and report[ ] the results of this analysis.” (LBBS Supp. Brief, p. 5.)

For the same reasons explained at length with respect to Travelers and the Pettit Defendants, the Court concludes that Plaintiffs can challenge these practices and others identified in their Complaint without securing the names and contact information of LBBS Defendants’ clients. Indeed, it is the Court’s view that the LBBS clients will have little to no information about their attorneys’ practices so there would be little utility in making contact with them.

In addition, LBBS Defendants raise legitimate concerns as to the burden of responding to Plaintiffs’ request, noting that more than 7,000 files were opened in LBBS’s California offices during the relevant period. (Opp. at p. 12.) LBBS estimates that the review of these files alone would require between 550 and 830 hours. (Supp. Samani Decl., ¶ 6.) While LBBS Defendants have not calculated the total cost of conducting this endeavor, it is fair to say that it would result in the expenditure of “thousands of dollars to [assign] personnel to perform” the required review. (Mead Reinsurance Co. v. Superior Court, 188 Cal.App.3d at p. 318.)

As noted above, the Court does not find that Plaintiffs’ proposed fixes adequately address the enormous burden described by the LBBS Defendants, and it concludes that there would be little benefit conferred on Plaintiffs even if the LBBS Defendants were to perform the herculean task of answering Interrogatory 17. The Court holds, therefore, that the information Plaintiffs seeks is not reasonably calculated to lead to the discovery of admissible evidence and that any minimal relevance or benefit it may have is starkly outweighed by the substantial burden and expense that would be imposed on the LBBS Defendants if they were ordered to identify the insureds whose names and contact information Plaintiffs seek. Accordingly, the Court denies Plaintiffs’ motion to compel on the LBBS Defendants to answer the interrogatory. Given the Court’s conclusions regarding relevance and burden, it does not address on the LBBS Defendants’ other objections.

Accordingly, Plaintiffs’ Motion to Compel Further Responses from the LBBS Defendants is DENIED.

Plaintiffs’ Additional Requested Relief

In supplemental briefing, Plaintiffs request that the Court order all Defendants to find out whether each case that each Defendant is defending is burdened by any reservation of rights, that the Court order each Defendant to obtain copies of all reservations of rights letters so that they may be produced, and require Travelers to actively identify from its own personnel all liability claims it is currently defending in which it has issued any reservation of rights, and obtain copies of them for all “business units” which adjust claims for Travelers.

Plaintiffs did not request this relief in their original moving papers and cite no law authorizing this relief as an alternative to the single interrogatory they seek to enforce. For these reasons, the Court declines to award the additional relief requested by Plaintiffs. This ruling is without prejudice to an effort by Plaintiffs to secure the relevant underlying documents from Defendants based on a properly tailored request for production of documents or other written discovery.

CONCLUSION

Plaintiffs’ Motions to Compel Further Responses to Interrogatory 17 are DENIED for the reasons outlined above.

Plaintiffs to give notice, unless waived.

IT IS SO ORDERED.

Dated: August 25, 2022 ___________________________________

Theresa M. Traber

Judge of the Superior Court