Liberty Mutual Ins. Co. v. Superior Court

• Decision Date: 06 November 1992
• Docket Number: No. A056957,A056957
• Citation: 10 Cal.App.4th 1282,13 Cal.Rptr.2d 363
• Parties: , 61 USLW 2303 LIBERTY MUTUAL INSURANCE COMPANY, Gary L. Countryman and Lawrence Gorchoff, Petitioners, v. SUPERIOR COURT of San Mateo County, Respondent; Gunda FRYSINGER, Real Party in Interest.
• Court: California Court of Appeals Court of Appeals

Page 363

13 Cal.Rptr.2d 363

10 Cal.App.4th 1282, 61 USLW 2303

LIBERTY MUTUAL INSURANCE COMPANY, Gary L. Countryman and Lawrence Gorchoff, Petitioners, v. SUPERIOR COURT of San Mateo County, Respondent;

Gunda FRYSINGER, Real Party in Interest.

No. A056957.

Court of Appeal, First District, Division 5, California.

Nov. 6, 1992.

Rehearing Denied Dec. 3, 1992.

Review Denied Jan. 28, 1993.

Stephen M. Hayes, Pamela E. Cogan, Justice C. McPherson, Ropers, Majeski, Kohn, Bentley Wagner & Kane, Redwood City, for petitioners Liberty Mut. Ins. Co., Gary L. Countryman and Lawrence Gorchoff.

No appearance for respondent San Mateo Superior Court.

Law Offices of Joseph W. Carcione, Jr., Redwood City, for real party Gunda Frysinger.

HANING, Associate Justice.

Petitioners Liberty Mutual Insurance Company and its President and Chief Executive

                Officer, Gary L. Countryman, seek a writ of mandate to compel respondent superior court to grant a protective order prohibiting Countryman's deposition (Code Civ.Proc., § 2025, subd.  (i)) in a lawsuit brought by plaintiff/real party Gunda Frysinger. 1  This case raises an issue of first impression in California:  whether the head of a corporation may be deposed when there is no showing he or she had any involvement in a lawsuit against the corporation, and prior to the plaintiff's exhaustion of less intrusive means of discovery.  We hold that under these circumstances a corporate head may not be deposed, and that the trial court abused its discretion by denying the protective order.  Accordingly, we issue a writ of mandate
                

FACTS ²

Real party's husband, William Frysinger, suffered an industrial injury on May 30, 1980. Mr. Frysinger, a high-rise sheetmetal worker, fell 65 feet down an empty elevator shaft on a jobsite. He sustained multiple trauma to his head, face and extremities, and was periodically hospitalized until 1983. The injury left him physically and mentally disabled, and he requires 24-hour attendant care for the rest of his life.

Mr. Frysinger was injured in the employ of H.H. Robertson Company. Petitioner Liberty Mutual was Robertson's workers' compensation carrier. The compensation policy provided an injured employee with all medical care for an industrial injury, including 24-hour attendant care. For reasons which are not entirely clear, 24-hour care was not provided by Liberty Mutual and real party provided that care herself beginning in August 1980.

In February 1988 the Workers' Compensation Appeals Board (WCAB) held a hearing in Mr. Frysinger's case. With representatives of Liberty Mutual present, real party stated that "after eight years of being a virtual prisoner to Mr. Frysinger's horrific disabilities, she was physically and emotionally unable to provide [the] 24-hour-a-day attendant services for him that he so desperately needed...." The Liberty Mutual representatives promised to dispatch an occupational therapist to the Frysinger home to see if round-the-clock care was actually needed. No therapist ever arrived, but Liberty Mutual did arrange for a physician to meet with Mr. Frysinger. The physician concluded that Mr. Frysinger required "24-hour-a-day supervision," and so reported to Liberty Mutual on March 17, 1988.

Liberty Mutual took no action on the medical report until July 21, 1988, when the company's representatives appeared before the WCAB and agreed to provide 24-hour care. Liberty Mutual had no intention of keeping this promise, and only made it to induce real party to continue to care for her husband herself. She did so at the expense of her own health, and suffered a heart attack in December 1988.

Real party filed the present lawsuit seeking compensatory and punitive damages for fraud (based on a "promise without intent to perform") and for intentional infliction of emotional distress. The complaint alleges generally that "all defendants" committed the tortious acts charged, and names as defendants Liberty Mutual, its President and Chief Executive Officer, Gary Countryman, and its local Claims Manager, Lawrence Gorchoff. ³

Real party noticed the deposition of Countryman at his offices in Cambridge, Massachusetts. In response, Countryman moved for a protective order under section 2025, subdivision (i), to prohibit his deposition on the ground that real party had no legitimate need to depose him and was doing so only for the purposes of annoyance and harassment. Countryman submitted In response to the motion, real party contended that Countryman was "directly implicated" in the "issues presented in the instant litigation." Real party claimed that because Countryman was copied on two letters written by her counsel to Liberty Mutual officials, Countryman thus had "constructive notice" of the alleged fraud and emotional distress committed by Liberty Mutual agents in the handling of her claim. The letters, rather vitriolic complaints on real party's behalf, are written to Liberty Mutual claims adjusters. Each letter shows copies to: "Ms. Linda VanKuren, Liberty Mutual Insurance Co."; "Alfonso J. Moresi, Esquire"; "Manager, Claims Office, Workers' Compensation, Liberty Mutual Insurance Co."; "Manager, Claims Office, Liberty Mutual Insurance Co."; and "President, Liberty Mutual Insurance Co."

a declaration stating that he was not involved in the handling, supervision or management of any claims for Liberty Mutual, and that he had no knowledge of the Frysinger case or any facts alleged in real party's complaint. Countryman's administrative assistant, Janet N. Varley, submitted a declaration stating that she was responsible for screening all of Countryman's correspondence, and that she had no recollection of the Frysinger matter or any legal papers or correspondence relating thereto. Varley further [10 Cal.App.4th 1286] declared that any such materials relating to the Frysinger claim and addressed to Countryman would have been shunted to a lower level employee, as "[s]uch material is not given to Mr. Countryman to review personally."

Thus, Countryman's only link to the handling of the Frysinger claim was counsel's act of copying him, by title only, on two letters which would have been automatically rerouted to a lower level employee and which Countryman never saw. Notwithstanding Countryman's lack of connection to her case, real party seeks to depose him without first attempting either a deposition of the Liberty Mutual corporation itself or of lower-level employees actually involved in the Frysinger claim. Real party has not served interrogatories on Countryman to further explore the issue of his knowledge of the Frysinger case. ⁴

The trial court denied the motion for a protective order, allowing Countryman's deposition to go forward. This petition followed. We stayed the deposition pending resolution of the petition, and now grant a writ of mandate to compel entry of a protective order.

DISCUSSION

Although prerogative writs generally do not issue to review discovery rulings, a writ may issue to review questions of first impression to provide guidance to the bench and bar. (Oceanside Union School Dist. v. Superior Court (1962) 58 Cal.2d 180, 185-186, fn 4, 23 Cal.Rptr. 375, 373 P.2d 439.) Even when subject to prerogative writ review, a trial court's discovery ruling is not to be disturbed unless the court has abused its discretion. (Pacific Tel. & Tel. Co. v. Superior Court (1970) 2 Cal.3d 161, 171, 84 Cal.Rptr. 718, 465 P.2d 854.) We conclude it amounts to an abuse of discretion to withhold a protective order when a plaintiff seeks to depose a corporate president, or corporate officer at the apex of the corporate hierarchy, absent a reasonable indication of the officer's personal knowledge of the case and absent exhaustion of less intrusive discovery methods.

Section 2025, subdivision (i) provides that a party may move for a protective order regarding a deposition. On a showing of good cause the protective order may be granted "to protect any party ... from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense." The statute provides the trial court with an array of less intrusive control mechanisms to limit the impact of the potential burden or oppression of the deposition. The trial court has the ultimate power to enter a protective order directing that "the deposition not be taken at all," and that "the method of discovery be interrogatories No California cases involve the invocation of the statute to prevent a deposition of a corporate president who lacks knowledge or involvement in the litigation. At the outset it would seem sensible to prevent a plaintiff from leap-frogging to the apex of the corporate hierarchy in the first instance, without the intermediate steps of seeking discovery from lower-level employees more involved in everyday corporate operations. The head of a large national corporation will generally not have knowledge of a specific incident or case handled several levels down the corporate pyramid. Surely an insurance company's chief executive will seldom, if at all, be involved in the day-to-day processing of claims. Indeed, in this case not only does Countryman declare a lack of knowledge or involvement, but his administrative assistant establishes that individual case material or correspondence is habitually rerouted away from Countryman and to a lower-level official.

to a party instead of an oral deposition."

Furthermore, "apex" depositions such as the one in this case, when conducted before less intrusive discovery methods are exhausted, raise a tremendous potential for discovery abuse and harassment. Vast numbers of personal injury claims could result in the deposition of the president of a national or international company whose product was somehow involved. It would be unreasonable to permit a plaintiff to begin discovery by deposing, for instance, the chief executive officer of a major automobile manufacturer when suing over a design flaw in a brake shoe--especially if we...