Knisely v. Nat'l Better Living Ass'n, Inc.

Decision Date11 February 2015
Docket NumberCIVIL ACTION NO.: 3:14-CV-15
CourtU.S. District Court — Northern District of West Virginia
PartiesDAVID KNISELY, Plaintiff, v. NATIONAL BETTER LIVING ASSOCIATION, INC., AMERICAN MEDICAL AND LIFE INSURANCE COMPANY, and JOHN/JANE DOES, Defendants.

(JUDGE GROH)

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S THIRD MOTION TO COMPEL DISCOVERY RESPONSES FROM NATIONAL BETTER LIVING ASSOCIATION, INC. [NBLA] [129]

I. INTRODUCTION

On February 3, 2015, an evidentiary hearing was held on Plaintiff's Third Motion to Compel Discovery Responses from National Better Living Association, Inc. (NBLA), filed on October 21, 2014. ("Pl.'s Mot.," ECF No. 129). Plaintiff David Knisely appeared by counsel, Laura C. Davis, Esq., in person. Defendant National Better Living Association, Inc. ("NBLA") appeared by counsel, Eric A. Larson, Esq. and Kaitlin Lane Hillenbrand, Esq., in person. Defendant American Medical and Life Insurance Company ("AMLI") nor counsel appeared. As an initial matter, the Court inquired as to whether there was any additional evidence the parties had to offer and neither party presented additional evidence. The Court then closed the evidentiary portion of the hearing and proceeded to hear argument. After argument and a review of the record, the Court makes the following findings of fact and conclusions of law.

II. BACKGROUND

Plaintiff initiated this case against NBLA, AMLI and John/Jane Does in West Virginia state court on December 12, 2013.1 (Compl., ECF No. 6-2). On January 29, 2014, the case was removed to federal court. (Notice of Removal, ECF No. 1). Plaintiff initially alleged that AMLI and NBLA solicited consumers "with pre-existing health conditions to purchase junk insurance on the false assertion that the insurance benefits were comprehensive and covered pre-existing health conditions when the coverage did not."2 (Pl.'s First Mot. to Compel at 1, ECF No. 46). After having his RICO claims against Defendants dismissed by Judge Groh on August 19, 2014, Plaintiff moved to amend his Complaint and now alleges that NBLA is not the true RICO Defendant, but the RICO Enterprise operated the insurance scheme through Allied Health Benefits, Inc. ("AHB"), CorpSavers Healthcare, Inc. ("CorpSavers") and the companies' owner and directors. (Pl.'s Mot. at 1, ECF No. 129). Plaintiff contends that the for-profit CorpSavers sold "junk insurance" to the public directly before reorganizing its subsidiaries, AHB and NBLA, which then sold insurance and solicited customers. (Id.).

Discovery in this case has been ongoing. On August 14, 2014, Plaintiff filed his First Request for Admissions, Second Set of Interrogatories, and Second Request for Production of Documents to NBLA. (ECF No. 75). On September 18, 2014, Plaintiff NBLA filed its Objections to Plaintiff's First Request for Admissions, Second Set of Interrogatories, and Second Request for Production of Documents. (ECF No. 93; NBLA's Resps. to Pl's Second Set of Disc. Reqs., ECFNo. 129-4). Plaintiff filed his Third Motion to Compel on October 21, 2014. (Pl.'s Mot., ECF No. 129). On October 24, 2014, Judge Groh entered an Order staying the case until December 22, 2014. (ECF No. 133). NBLA informally supplemented its response to Plaintiff's Request for Production No. 1 on October 27, 2014. (ECF No. 140-1). After the stay was lifted, NBLA filed its Response in Opposition to Plaintiff's Third Motion to Compel on January 7, 2015. ("Def.'s Resp.," ECF No. 134). On January 14, 2014, Plaintiff filed his Reply in Support of his Third Motion to Compel. ("Pl.'s Reply," ECF No. 140).

III. CONTENTION OF THE PARTIES

Plaintiff moves to compel supplementation for Requests for Admission Nos. 7, 10, 11, 12 and 25; answers to his Second Set of Interrogatories; and documents responsive to Plaintiff's Second Set of Requests for Production of Documents No. 1, 2, 3, 4 and 5. (Pl.'s Mot. at 2-10). Plaintiff also moves for sanctions and requests attorney's fees and costs in having to file the instant Motion. (Id. at 10-11). NBLA argues that Plaintiff's Motion seeks to compel documents NBLA already produced and that NBLA has raised appropriate objections and compiled with its discovery obligations. (Def.'s Resp. at 1). The arguments of the parties as to each discovery dispute are outlined in detail below.

IV. DISCUSSION
A. The Form of the Motion Violates the Local Rules

NBLA argues that Plaintiff's Motion to Compel should be denied for failure to comply with Local Rule of Civil Procedure 37.02(a)(1), which requires a motion to compel to set forth verbatim each discovery request and any response thereto. (Def.'s Resp. at 2). Plaintiff responds that he attached NBLA's discovery responses to the Motion, which set forth verbatim both Plaintiff's requests and NBLA's responses. (Pl.'s Reply at 3; NBLA's Resps. to Pl's Second Setof Disc. Reqs., ECF No. 129-4). Local Rule of Civil Procedure 37.02(a) requires that "motion to compel disclosure or discovery must be accompanied by a statement setting forth...[v]erbatim each discovery request or disclosure requirement and any response thereto to which an exception is taken." As Magistrate Judge Kaull explained:

[t]he reason for [L.R. Civ. P. 37.02] is that the Court no longer receives copies of the discovery served in a case. The Court only receives notice that discovery was served. Accordingly, the Court has no way to know what discovery was requested and at issue unless the aggrieved party sets it forth verbatim in the motion to compel.

Mazza v. Quicken Loans, Inc., No. 1:12 CV 142, 2013 WL 2296657, at *2 n.1 (N.D.W. Va. May 24, 2013). Even though Plaintiff failed to set forth verbatim each discovery request and response within the text of his Motion, the underlying purpose of Local Rule 37.02(a)(1) was served by attaching the requests and responses with the Motion. Accordingly, the Court is able to review the discovery requests and responses at issue and will consider Plaintiff's Motion on the merits.

B. First Set of Requests for Admission Nos. 7, 10, 11, 12 and 25

1. Sufficiency of NBLA's Responses to Plaintiff's Requests for Admissions3

Federal Rules of Civil Procedure Rule 36(a)(4) states "[i]f a matter is not admitted, the answer must specifically deny it or state in detail why the answering party cannot truthfully admit or deny it." Fed. R. Civ. P. 36(a)(4). Moreover, "[t]he answering party may assert lack of knowledge or information as a reason for failing to admit or deny only if the party states that it has made reasonable inquiry and that the information it knows or can readily obtain is insufficient to enable it to admit or deny." Fed. R. Civ. P. 36(a)(4); see also Ball-Rice v. Bd. of Educ. of PrinceGeorge's Cnty., No. CIV.A. PJM-11-1398, 2013 WL 2299725, at *2 (D. Md. May 24, 2013) (citing 8B Charles Alan Wright et al., Fed. Prac. & Proc. Civ. § 2261 (3d ed. 2013) (stating that "[a] general statement that [a party] can neither admit nor deny, unaccompanied by reasons, will be held an insufficient response, and the court may either take the matter as admitted or order a further answer.")). The Advisory Committee's Note to Rule 36(a) further explains that:

[t]he rule requires only that the answering party make reasonable inquiry and secure such knowledge and information as are readily obtainable by him. In most instances, the investigation will be necessary either to his own case or to preparation for rebuttal. Even when it is not, the information may be close enough at hand to be 'readily obtainable.' Rule 36 requires only that the party state that he has taken these steps.

Advisory Committee's Note to Rule 36(a), 48 F.R.D. 531, 533 (1970). Moreover, "[t]he purpose of Rule 36(a) ... is to expedite trial by eliminating the necessity of proving undisputed issues and thus narrowing the range of issues for trial." Fisher v. Baltimore Life Ins. Co., 235 F.R.D. 617, 623 (N.D.W. Va. 2006) (citing Asea Inc. v. S. Pac. Transp. Co., 669 F.2d 1242 (9th Cir. 1981)).

In the present case, NBLA's responses to Requests for Admission Nos. 7, 10, 11, 12 and 25 tracked the language of Rule 36(a) by stating "that it has made reasonable inquiry and that the information it knows or can readily obtain is insufficient to enable it to admit or deny." (NBLA's Resps. to Pl.'s First Reqs. for Admis. at 3-10). The Advisory Committee's Note to Rule 36(a) states that the rule "requires only that the party state that he has taken these steps." 48 F.R.D. 531, 533 (1970).

However, utilizing these "magic words" does not absolve an answering party from complying with Rule 36(a)(4) in good faith. See Louis v. Martinez, No. 5:08-CV-151, 2011 WL 1832808, at *3 (N.D.W. Va. May 13, 2011) (Seibert, M.J.). Moreover, "[w]hat constitutes 'reasonable inquiry' and what material is 'readily obtainable' is a relative matter that depends upon the facts of each case." T. Rowe Price Small-Cap Fund, Inc. v. Oppenheimer & Co., 174 F.R.D.38, 43 (S.D.N.Y. 1997). In addition, "a reasonable burden may be imposed on the parties when its discharge will facilitate preparation for trial and ease the trial process." Advisory Committee's Note to Rule 36(a), 48 F.R.D. at 533; see also Al-Jundi v. Rockefeller, 91 F.R.D. 590, 594 (W.D.N.Y. 1981) (finding that "[b]ecause rule 36 admission requests serve the highly desirable purpose of eliminating the need for proof of issues upon trial, there is strong disincentive to finding an undue burden where the requested party can make the necessary inquiries without extraordinary expense or effort."). Furthermore, other courts in the Fourth Circuit have found that inquiries of a third party may be permissible under Rule 36. See Uniden Am. Corp. v. Ericsson Inc., 181 F.R.D. 302, 304 (M.D.N.C. 1998). With this in mind, the Court makes the following findings of fact and conclusions of law regarding the contested Requests for Admissions:

Request for Admission No. 7: In 2006, Allied Health Benefits, Inc.'s restated articles of incorporation
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