United States District Court, D. South Dakota, Western Division
ORDER ON PLAINTIFFS' MOTION TO COMPEL [DOCKET NO. 43]
VERONICA L. DUFFY, Magistrate Judge.
This matter is before the court on the amended complaint of plaintiffs Carl and Janice Hill, alleging that defendant Auto Owners Insurance Co. breached its insurance contract with the Hills, failed in bad faith to pay insurance benefits to the Hills, and engaged in unfair trade practices in their dealings with the Hills. See Docket No. 19. The Hills seek compensatory damages, punitive damages, and attorney's fees. Id . Jurisdiction is premised on the diverse citizenship of the parties and an amount in controversy in excess of $75, 000. Id . See 28 U.S.C. § 1332.
Plaintiffs filed a motion to compel, seeking an order from the court requiring defendant to disgorge certain documents requested by plaintiffs in discovery. See Docket No. 43. Defendant resists the motion. See Docket No. 47. The district court, the Honorable Karen E. Schreier, referred plaintiffs' motion to compel to this magistrate judge for resolution pursuant to 28 U.S.C. § 636(b)(1)(A) and the court's October 16, 2014 standing order.
A. Background Facts
Plaintiffs Carl and Janice Hill live in a home in Rapid City, South Dakota. They purchased homeowners insurance for that home from defendant Auto Owners in 2006. In May, 2013, the Hills opted to purchase replacement-cost coverage for their roof.
On July 8, 2013, the Hills submitted an insurance claim to defendant for hail damage sustained in a storm two years earlier, on June 24, 2011. Defendant hired Dakota Claims to adjust the Hills' damage and Dakota Claims sent Steve Wolff to inspect the roof on July 10, 2013. Although Wolff acknowledged that the metal vents on the Hills' roof sustained hail damage, he opined that the roof itself sustained no hail damage. Accordingly, defendant's claims handler in charge of the Hills' claim, Daniel Highstreet, sent the Hills a letter notifying them that defendant would not be paying anything on their claim.
Another hail storm occurred on July 20, 2013, which the Hills documented. Two days later, Dakota Claims sent another adjuster, Mike Kirkeby, to inspect the Hills' roof in connection with the Hills' earlier claim. Kirkeby opined that there had not been any damaging hail storms in the Hills' part of town for 14 years, even though defendant replaced the roof of one of the Hills' neighbors due to hail damage. Mr. Highstreet again sent the Hills a letter denying their claim.
On July 31, 2013, the Hills filed a second claim for coverage based on the July 20 hail storm. Apparently, defendant sent another Dakota Claims adjuster, who also opined that the shingles on the Hills' roof had not be damaged. Mr. Highstreet sent the Hills a letter denying any coverage for their second claim.
The Hills asked defendant to reconsider. Thereafter, defendant hired Larry Hermansen, an engineer, to inspect the Hills' roof. Mr. Hermansen filed a report on September 11, 2013, concluding that, although the metal vents on the roof had been damaged by hail, the shingles on the roof were undamaged.
The Hills sued defendant in the instant lawsuit on May 15, 2014. After the filing of the suit, the Hills hired Paul Brenkman, a licensed independent claims adjuster and general building contractor, to inspect the Hills' roof. Mr. Brenkman inspected the Hills' roof and found hail damage to the roof. Mr. Brenkman recommended that defendant replace the Hills' entire roof.
After this lawsuit was underway, defendant hired an expert for the litigation, Richard Herzog of Haag Engineering. Herzog found 100 damaged shingles on the Hills' roof and another 20 damaged shingles on the garage. Herzog opined there had been so many hailstorms in the Rapid City area, including evidence of multiple hail storms at the Hills' residence, that Herzog could not assign the damage it observed on the Hills' roof to any particular storm. Based on Mr. Herzog's findings, defendant paid the Hills' claim for damage to the roof of their house and garage. This payment was made sometime after the instant motion to compel was filed.
B. Disputed Discovery Requests
There are only two discovery requests at issue in the Hills' motion to compel. Request for the production of documents number 2 and number 5. Request number 2 and defendant's response to that request are as follows:
All "personnel files" of all personnel involved with Plaintiffs' claims for hail damage to the roof of their home, and all supervisors in the chain of command above those personnel, up to the head of the claims department.
"Personnel files" here means any and all documents related to the individual's employment relationship with, and job performance for, Defendant. This includes but is not limited to documents concerning the person's: employment application and hiring process; job changes; performance evaluations (formal or informal, whether relayed to the employee or not); quality control audits or reviews; identification of training or training materials received; compensation history; bonus recommendations or evaluations; and information provided to the person concerning compensation or company policies or procedures.
This request includes documents that meet the definition of "personnel files" given here, even if they are contained only in emails or otherwise are not included in a special location designated for a "human resources file" or similar collection of documents.
Response to Request 2:
Personnel files are neither relevant to plaintiffs' contract cause of action for policy benefits for the insurance claims submitted by plaintiffs in July 2013, or a defense to that cause of action, and are not reasonably calculated to lead to the discovery of evidence admissible in connection with that cause of action. Auto-Owners asserts that discovery which may relate to non-contract claims asserted in this action should be stayed pending resolution of the contract claim for policy benefits, and any dispositive motions directed to those non-contract claims. If and when discovery may be appropriate on non-contract claims, Auto-Owners objects as follows:
Auto-owners objects that the request is overbroad because it seeks personnel files for employees who had no knowledge of, or involvement in, the handling of plaintiffs' insurance claims at issue. Dan Highstreet was the only Auto-Owners employee who was involved in the handling of these two insurance claims and who made any decisions in connection with the claims. The request should be limited to the personnel files for Dan Highstreet and Ashley Carswell, his supervisor. The highly personal and private nature of information in a personnel file compels careful consideration of this request and limitation to no more than that clearly material to the claims or defenses asserted. Auto-Owners objects that the request is overbroad because it seeks many documents contained in personnel files or related to an individual's employment which have no arguable relevance to the action: health information, health insurance information, issues or disputes unrelated than [sic] the handling of claims, tax information and elections, and the like. The request should be limited to performance evaluations, any lists of training or training materials received, and compensation (including any bonuses or evaluation for bonuses).
Auto-Owners objects that the request is overbroad in that it is not limited in time. The insurance claims at issue in this case were handled in July, August, and September, 2013. The request should be limited to documents covering or pertaining to the year in which the claims were handled, and at most two years prior-in this case, to the three year period from January 1, 2011, through December 31, 2013.
See Docket No. 43-3 at pp. 17-18.
The other discovery request at issue in the Hills' motion to compel is request for the production of documents number 5. That request and ...