Stratford Ins. Co v. Shorewood Forest Utils.
| Docket Number | 2:20-CV-372-PPS-JEM |
| Decision Date | 01 May 2023 |
| Parties | STRATFORD INSURANCE CO., Plaintiff, v. SHOREWOOD FOREST UTILITIES, INC., et al., Defendants, CARLOTTA HOLMES and GREG SCHAFER, Counterclaim Plaintiffs, v. STRATFORD INSURANCE CO., Counterclaim Defendant. |
| Court | U.S. District Court — Northern District of Indiana |
This matter is before the Court on a Motion to Quash Deposition [DE 94], filed by nonparty David C. Jensen on November 15 2022, Defendant/Counterclaim Plaintiffs' Third Motion to compel Discovery from Stratford Insurance Company and Richard Pretti [DE 107], filed by Greg Schafer and Carlotta Holmes on December 6, 2022, a Motion to Quash Subpoena to NonParty Attorney Larry G. Evans, for a Protective Order, and for Attorney's Fees [DE 120], filed December 28, 2022, and Defendant/Counterclaim Plaintiffs' Motion to Strike Larry Evans' Affidavit in Support of Motion to Quash Subpoena [DE 121] filed by Schafer and Holmes on January 10, 2023.
Stratford Insurance Company issued an insurance policy to Shorewood Forest Utilities (SFU). The board of SFU (“Former Board”) investigated the possibility of expanding its subdivision to add homes with Rex Properties. SFU and Rex Properties formed an agreement to expand the sewer system to support the new development. Community members who were opposed to the development, including named plaintiffs Greg Schafer and Carlotta Holmes (“S&H”), filed a class action suit in state court. After the suit was filed, a number of those class action members, including Schafer and Holmes, were elected to the SFU board in an election (the “New Board”). The New Board voted to rescind the sewer agreement. Eventually, a consent judgment was entered between the class action plaintiffs and SFU, one of the defendants in the case, but not with the Former Board defendants. The consent judgment included a covenant promising that the class action plaintiffs would only seek enforcement of payment of the judgment against Stratford as SFU's insurer and not against any other parties. The class action is still proceeding against the Former Board in state court. A number of other lawsuits were also filed in state court, some of which were removed to federal court.
In the instant Complaint, filed October 15, 2020, Stratford claims it did not agree to the consent judgment in the state court class action suit filed by S&H on behalf of SFU and seeks a declaration that it has no obligation regarding the consent judgment. After a motion to dismiss was granted in part on September 27, 2021, the declaratory judgment claims regarding the extent of Stratford's insurance obligations remain as do counterclaims against Stratford for bad faith, breach of contract, and abuse of process, arising out of the consent judgment and other state court suits.
On September 2, 2022, the Court denied S&H's previous motion to compel, finding that it was premature and warning the parties of the need to work together to resolve their discovery disputes without involving the Court. Non-party Attorney Jensen filed the instant motion to quash deposition on November 16, 2022, requesting that the Court quash a notice of deposition served on him by S&H. S&H filed a response (titled “objection”) on November 30, 2022, and on December 7, 2022, Jensen filed a reply.
The instant motion to compel was filed by S&H on December 6, 2022, seeking to obtain discovery from non-party Attorney Richard Pretti. Pretti filed a response on December 20, 2022, and no reply was filed by S&H.
Attorney Evans filed his motion to quash on December 28, 2022, requesting that the Court quash a subpoena served on him by S&H. On January 10, 2023, S&H filed a response to the motion (again titled “objection”) and the instant motion to strike, requesting that Evans's affidavit included in support of the motion to quash be stricken. Also on January 10, 2023, SFU filed a response to the motion to quash. Attorney Evans filed a response to the motion to strike and a reply in support of his motion to quash on January 17, 2023. On February 3, 2023, Stratford filed a document including objections to arguments made by S&H and SFU in the briefing on the motion to quash. S&H did not file a reply in support of its motion to strike, and the time to do so has passed.
“Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1). Relevancy is “construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) (citing Hickman v. Taylor, 329 U.S. 495, 501 (1947)).
“On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed . . . if it determines that . . . the discovery sought is unreasonably cumulative or duplicative . . . or . . . the proposed discovery is outside the scope permitted by Rule 26(b)(1).” Fed.R.Civ.P. 26(b)(2)(C)(i), (iii).
“The scope of material obtainable by a Rule 45 subpoena is as broad as permitted under the discovery rules.” Graham v. Casey's Gen. Stores, 206 F.R.D. 251, 253 (S.D. Ind. 2002). However, the Court “must quash or modify a subpoena that . . . requires a disclosure of privileged or other protected matter, if no exception or waiver applies; or [] subjects a person to undue burden.” Fed.R.Civ.P. 45(d)(3)(A). Federal Rule of Civil Procedure 26(c) allows the Court, for good cause, to issue an order to protect a party from discovery “from annoyance, embarrassment, oppression, or undue burden or expense,” including “forbidding inquiry into certain matters.” Fed.R.Civ.P. 26(c)(1)(D). Rule 26(c) “essentially operates to balance the public's interest in open proceedings against an individual's private interest in avoiding annoyance, embarrassment, oppression, or undue burden or expense.” Felling v. Knight, 211 F.R.D. 552, 554 (S.D. Ind. 2003) (quotations omitted). “The party moving for a protective order must establish that good cause exists for the Court to exercise its discretion in entering a protective order.” Nieves v. OPA, Inc., 948 F.Supp.2d 887, 891 (N.D. Ill. 2013).
S&H move to strike the affidavit Evans filed in support of his motion to quash as well as every reference to “settlement” in his motion. Evans filed a response, but S&H did not file a reply in support of its motion to strike. Motions to strike are generally disfavored because they unnecessarily consume scarce judicial resources, Custom Vehicles, Inc. v. Forest River, Inc., 464 F.3d 725, 727 (7th Cir. 2006), and “disserve the interest of judicial economy.” Redwood v. Dobson, 476 F.3d 462, 471 (7th Cir. 2007). Much of the motion to strike includes complaints that Evans's affidavit is inadmissible hearsay, but the affidavit not being offered as proof at trial. S&H also move to strike the individual word “settlement” each time it appears in Evans's motion. The Court is mindful of its responsibility to carefully review evidence and will disregard unsupported arguments and conclusions but will not strike the affidavit or specific individual words within a document.
S&H issued a notice of deposition to Attorney David Jensen, counsel of record for the Former Board, who are defendants in the state court class action. He also has a relationship with Stratford, who insures his clients, and therefore Jensen has coordinated with Stratford regarding the ongoing litigation. Jensen argues that he has answered interrogatories and provided documents in the state litigation and is willing to do so in this case as well but asks that the deposition be quashed. He argues that S&H have alternative means to seek the information they desire, that anything that could be asked about the class action and his relationship with his client is privileged, and that a previous subpoena was quashed by the judge in the state court class action, such that allowing it in federal court violates the doctrine of Younger abstention.
S&H issued a subpoena to non-party Attorney Larry Evans, attorney for Rex Properties. They want to depose Evans and seek information from Attorney Evans about all of his communications with other parties in this and the related state court cases. Evans argues that the subpoena subjects him to an undue burden, asks him to produce materials that could be obtained from parties to the suit, and requires him to disclose privileged information. He also argues that the material being sought is duplicative of that from a subpoena that was previously quashed in state court, thereby violating the Rooker-Feldman doctrine, and that the information sought is not relevant to the instant case.
Factors considered in determining whether a subpoena is unduly burdensome include nonparty status, relevance, the issuing party's need for the discovery, and the breadth of the request. Uppal v. Rosalind Fraklin Univ. of Med. & Sci., 124 F.Supp.3d 811, 813 (N.D. Ill. 2015). The party seeking to quash the subpoena bears the burden of proving that it is unduly burdensome. Malibu Media, LLC v. John Does 1-14, 287 F.R.D. 513, 516 (N.D. Ind. 2012).
In response to Jensen's motion, S&H argue that Jensen has failed to produce copies of law firm records or other information about his alleged collusion with Rex Properties and argue that there are unique facts pled in the instant suit that are not also in the state suit. They argue that communications about enforcement of the sewer agreement are not privileged and argue that Jensen should attend the...
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