In a recent decision in California, a United States Magistrate Judge was confronted with numerous discovery requests in a case involving issues both of Insurance Coverage and of alleged Bad Faith claims. Three of the discovery requests, one of which concerned a set of interrogatories and two of which concerned document requests, deservedly draw attention here.
The first such discovery request was a set of interrogatories concerning a phrase used in the Insurance Company's Disclaimer of Coverage in that case. The case involved Ocean Marine Cargo claims based on movements of large transformers over the ocean. Century Aluminum Company served a Motion to Compel when the Defendant AGCS Marine Insurance Company refused to answer interrogatories concerning other Policies under which AGCS in essence denied Coverage, as in this case, on the ground that shipments were not "sufficiently packed to withstand the voyage". Although he did not quote the interrogatories in full in this opinion, the U.S. Magistrate Judge granted Century's Motion to Compel as the Court limited the interrogatories to AGCS Policies "that involve ocean marine movements (as opposed to inland movement)" and to the movement of "transformers, not other large pieces of industrial electrical equipment." Century Aluminum Co. v. AGCS Marine Insurance Co., 2012 WL 3647484 *2 (N.D. Cal.August 23, 2012)(Cousins, USMJ), Download Century Alum. Co. v. AGCS Marine Ins. Co. (N.D. Cal. August 23, 2012)(Cousins, USMJ) HIGHLIGHTED COPY. PACER, the online docket of the Federal Courts, reflects that AGCS filed a Motion for Relief from this Order of the Magistrate Judge, which was denied by Order of the United States District Judge filed on September 18, 2012.
The second discovery issue concerned a pair of document requests relating to two other transformer damage claims "that AGCS transformer expert Opperman testified he handled." Century Aluminum Co. v. AGCS Marine Insurance Co., 2012 WL 3647484 *2 (N.D. Cal. August 23, 2012)(Cousins, USMJ). As will be addressed later in this article, Mr. Opperman is an Expert who was retained by the Insurance Company to assist in the Insurance Company's investigation of this particular transformer damage claim. The Magistrate Judge granted Century's Motion to Compel production in response to these two document requests, without limitations, giving two reasons for this ruling. "First," said the Magistrate Judge, "the requests are limited to two damage claims and thus are readily retrievable and therefore not unduly burdensome. Second, the claims files," even though they were claims submitted to other companies in the Allianz Group to which AGCS belonged and not to AGCS, "may be relevant as they connect to Opperman's opinions, which are relevant to Century's bad faith case." Century Aluminum Co. v. AGCS Marine Insurance Co., 2012 WL 3647484 *3 (N.D. Cal. August 23, 2012)(Cousins, USMJ).
The third and final discovery request to be addressed here, was a single document request paraphrased by the Court as follows: "Century seeks the time and billing records of surveyors and contractors ... that AGCS retained to assist in the investigation of the claim." These were Experts "engaged by AGCS to investigate the transformer damage claim." In other words, these persons are "surveyors and contractors that AGCS retained to assist in the investigation." Century Aluminum Co. v. AGCS Marine Insurance Co., 2012 WL 3647484 *3 (N.D. Cal. August 23, 2012)(Cousins, USMJ). The Court granted Century's Motion to Compel the requested production of "the time and billing records" of these particular "surveyors and contractors" who were retained by the Insurance Company to assist in performing the Insurance Company's investigation of the claim, finding that the requests for these "billing records are relevant and not unduly burdensome." Century Aluminum Co. v. AGCS Marine Insurance Co., 2012 WL 3647484 *3 (N.D. Cal. August 23, 2012)(Cousins, USMJ).
In requiring the production of "time and billing records" of persons it previously described in the same opinion as Experts, the Court did not support its ruling with any citation of authority. On its face, the ruling of the U.S. Magistrate Judge in this case is contrary to the settled rule in many jurisdictions, including in Florida, that discoverability of the billing records of Experts is very limited. See generally 1 Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 8:17 (Third Edition 2011, 2012 Supplement West Publishing Co); 2 id. § 12:18.
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