This continues a post begun here on Monday, April 25, 2011.
In Diamond State Insurance Co. v. His House, Inc., Download Diamond State Insurance Co. v. His House Inc. (S.D. Fla. Case No. 10.20039.CIV, Discovery Order, Filed Jan. 18, 2011) PUBLIC ACCESS also published as 2011 WL 146837 (S.D. Fla. January 18, 2011), a United States Magistrate Judge was confronted with competing Rule 30(b)(6) Notice of Deposition of Corporate Representatives. One Notice was served on behalf of a Policyholder-Defendant. The other Notice was served on behalf of a Liability Insurance Company-Plaintiff which had already denied all coverage for defense and for indemnity of an underlying lawsuit filed against the Policyholder.
The Nature of the Case: A Declaratory Judgment Action With No Claim For Bad Faith Alleged.
(For more specific facts of the case, please see the beginning post here of Monday, April 25, 2011.)
Diamond State's Motion to Compel Another Rule 30(b)(6) Deposition of His House, and to Take the Deposition of Ms. Kristen Glaspy, is Granted -- Kind Of.
As was noted in Monday's post, His House's Corporate Representative was already deposed in the Declaratory Judgment Action by Diamond State. She was already deposed in the underlying case as well. Ms. Glaspy was also deposed previously in the underlying case. Further, the Court agreed that the Rule 30(b)(6) Notice was "overly broad". Nonetheless, the Court granted Diamond State's Motion to Compel. Somewhat.
The Court allowed Diamond State to take the depositions, but "on a limited basis" and "severely limited in duration". Id. at *7. Each deposition would be completed within one hour. The Rule 30(b)(6) topics of inquiry for the corporate representative deposition were prescribed in the Court's Order. So were the limited areas of inquiry which Diamond State was allowed to make while deposing Ms. Glaspy. Id. at *8. "If Diamond believes that additional time is needed in either scheduling the depositions and or in completing the depositions," its counsel could get together with His House's counsel and ask for a Hearing. Id. (The Online Docket of this case on Pacer reveals that no such Hearing was requested.)
This was the ruling of the Magistrate Judge after she reviewed "the record as a whole". The reasons given for ruling are not based on "the record as a whole," however. They have implications for other Declaratory Judgment Actions concerning future insurance coverage disputes. The Court ruled in this case as it did for three announced reasons which provide questionable support for these rulings, whether taken alone or together.
"First, it is indisputable" that material can be discovered, said the Court. "Therefore information which may shed light on the nature or the services provided by His House are particularly germane ...." Id. at *7. That may certainly be the case, but the Court did not offer any explanation as to why these "particularly germane" questions were not asked in the first Rule 30(b)(6) deposition of His House in this case, nor as to why "the nature or the services provided by His House" went seemingly undiscovered in the underlying case in which His House was sued for wrongful death.
Second, the Court added that "[i]n addition, ... in the 'duty to indemnify' context, the facts of the underlying tort action adduced at trial or developed in discovery are central to the resolution of that claim.... Thus, facts related to the underlying tort action, and specifically the circumstances surrounding the death of the infant, are also relevant to resolving the 'duty to indemnify' claim and are discoverable in this action." Id. Facts relating to the underlying tort action are ordinarily available in the discovery taken in the underlying tort action. A coverage action is not generally an appropriate forum in which to try the issue of the insured's underlying liability. This is particularly true when, as here, such a determination of the insured's liability would be before any determination of the insured's liability in the underlying case.
Specifically in this case, the circumstances surrounding the death of the infant are precisely the circumstances that prompted the filing of the underlying wrongful death lawsuit and discovery in it, yet the Court in this case made no reference to the discovery already taken in the underlying case in this regard.
Third and finally, "the Court notes that Plaintiff Diamond is not a party in the underlying state action ... and thus was not present for the depositions of either Kristen Glaspy or His House's corporate representative taken in that matter." As a result, said the Court, it would allow His House's deposition to be taken again in this Declaratory Judgment Action because Diamond State was not present to ask questions in the underlying action. That Ms. Glaspy and His House were also previously deposed in the underlying actions did not occasion inquiry into what was asked in those earlier depositions, but instead became a reason to allow them to be deposed again in the Declaratory Judgment Action, "albeit on a limited basis." Id. at *7.
Anyone who has tried a Declaratory Judgment Action arising out of an earlier-filed tort action has experienced the requirements imposed by Judges to show them why the discovery taken in the underlying case is not adequate to provide the answers to the interrogations that are proposed for new depositions of the same persons in the Declaratory Judgment Action. No such inquiry appears from the opinion in this Declaratory Judgment Action concerning Diamond's "limited" depositions of His House and Ms. Kristen Glaspy. The rulings would perhaps be more readily applied by Courts and counsel in other Declaratory Relief Actions if that inquiry had been made in this one.
The Online Docket of this case on Pacer, the Online Docket for Federal Courts, reflects that the District Judge granted the Plaintiff Liability Insurance Company's Motion for Summary Judgment on January 31, 2011 or within two weeks after the U.S. Magistrate Judge entered the Discovery Order which is the subject of this post. Download Diamond State Insurance Co. v. His House Inc. (S.D. Fla. Case No. 10.20039.CIV, Order Granting Summary Judgment, Filed Jan. 31, 2011) PUBLIC ACCESS. To be continued ......
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