Great American Insurance v. Vegas Construction Co.

251 F.R.D. 534, 2008 U.S. Dist. LEXIS 108488, 2008 WL 818947
CourtDistrict Court, D. Nevada
DecidedMarch 24, 2008
DocketNo. 2:06-cv-00911-BES-PAL
StatusPublished
Cited by77 cases

This text of 251 F.R.D. 534 (Great American Insurance v. Vegas Construction Co.) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Great American Insurance v. Vegas Construction Co., 251 F.R.D. 534, 2008 U.S. Dist. LEXIS 108488, 2008 WL 818947 (D. Nev. 2008).

Opinion

ORDER

PEGGY A. LEEN, United States Magistrate Judge.

Before the court is plaintiffs’ (“Great American”) Motion for Sanctions and to Compel (# 92) filed October 25, 2007. The court has considered the motion (# 92), Loosvelt’s Declaration (#93) in support of the motion, Distinctive Homes’ opposition (# 102), and plaintiffs’ Reply (# 104).

BACKGROUND

This is an action brought by Great American to recover a portion of settlement proceeds paid by Great American to settle a lawsuit against Distinctive Homes in an underlying construction defect case. Great American filed this declaratory relief action seeking a judgment that a portion of the settlement proceeds it paid to settle the underlying litigation was for damages not covered under its policies. Specifically, Great American asserts some of the defects or damages alleged in the underlying action which it paid to settle (1) do not constitute “property damage” within the meaning of the policies; and/or (2) are excluded from coverage by the ‘Tour Work” exclusion in the policies. In the underlying action (the “Villa Pacifica” litigation), Great American and other insurers of Distinctive Homes retained the law firm of Lee & Russell to defend the insured against construction defect claims brought by the Villa Pacifica Homeowners Association and homeowners.

On June 18, 2007, Great American served Distinctive Homes with a Notice of Deposition (#92 at Exh. “1”) pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, setting the deposition for July 24, 2007. The notice contained 23 subjects of examination mostly related to the work Distinctive Homes performed on the Villa Pacifica construction project, its participation in settlement negotiations and payments in the Villa Pacifica case, and its discovery responses in the instant case. Distinctive Homes did not object to or seek a protective order regarding any of the examination topics. Distinctive Homes informed Great American that its 30(b)(6) representative, Anthony Musso, was out of the country during the discovery period, which ended on July 30, 2007. The parties therefore agreed to depose Musso on September 19, 2007.

In its motion (# 92), Great American claims Musso was completely unprepared to testify at his deposition. According to Great American, Musso admitted on the record that he had done nothing to prepare for the deposition and had not even read the subjects of deposition contained in the notice. Counsel for Distinctive Homes Robert Martin stated at the deposition that the company’s only obligation was to designate and produce a 30(b)(6) representative, which it had done. Great American asserts Musso was unable to recall many of the documents Distinctive Homes had produced relating to the topics of examination or testify about 16 of the topics. Great American offered to postpone the deposition to allow Distinctive Homes to desig[537]*537nate a different 30(b)(6) witness, but the offer was rejected. Counsel for the parties met and conferred by telephone following the deposition, but Distinctive Homes refused to produce another 30(b)(6) witness or pay Great American’s expenses incurred in deposing Musso even though counsel for Distinctive Homes acknowledged it had a duty to prepare its representative for the deposition. Great American now seeks monetary sanctions equivalent to its reasonable expenses incurred in preparing for and conducting Musso’s deposition and bringing this motion. Great American also requests an order precluding Distinctive Homes from offering evidence at trial on the subjects of examination Musso could not testify upon, including the scope of work Distinctive Homes d/b/a Nevada Shelter did or did not perform on the construction project.

In response (# 102), Distinctive Homes asserts Great American has failed to produce discovery concerning how it allocated $135,000 of the $540,000 it paid to settle the Villa Pacifica lawsuit as non-covered items of damages. Great American’s Rule 30(b)(6) designee, Glenn Isom, reportedly testified that no one at Great American had ever calculated the damages plaintiffs seek to recover in this lawsuit, and was unable to testify about the factual bases for the damages alleged in this case. Distinctive Homes accuses Great American of trying to divert attention from its “wholesale lack of evidence regarding its damages” by waging “a war of attrition against its insured.”

Distinctive Homes also argues Musso adequately prepared for the deposition by discussing the scope of the deposition with counsel prior to the deposition and reviewing the documents and discovery responses Distinctive Homes produced during discovery. Musso’s preparation enabled him to provide deposition testimony sufficient to bind Distinctive Homes. Distinctive Homes argues that Musso answered Great American’s questions to the extent he could recall, and that his responses were reasonable given the scope of the questioning about 168 townhouse units constructed over a decade ago. Counsel for Distinctive Homes also points out that he stipulated to the authenticity of the documents placed in the document repository during the underlying litigation in writing prior to the deposition, and confirmed that stipulation at the onset of Mr. Musso’s deposition on the record.

Distinctive Homes argues that compelling a further 30(b)(6) deposition would not result in the discovery of any additional information not already provided by Mr. Musso’s testimony and Distinctive Homes’ written discovery responses. Distinctive Homes contends that it met its obligation under Rule 30(b)(6) to produce a prepared designee for deposition because the rule only requires the corporation to provide a witness concerning matters known or reasonably available to the corporation. In this case, nearly 100,000 documents were placed in the document repository in the underlying case and available to all parties, including Great American. Mr. Musso cannot be expected to recall the contents of these 100,000 documents, and Distinctive Homes affirmatively represents that it has no reason to dispute the information contained in the documents themselves. Thus, additional deposition testimony “would only place Great American in the exact same position that it currently stands” and a further Rule 30(b)(6) deposition is, therefore, unnecessary. The documents it produced are the most reliable source of information regarding the work performed on the construction project. Finally, Distinctive Homes contends there is no factual dispute concerning Distinctive Homes’ participation in settlement conferences or contribution toward settlement and therefore no additional deposition is necessary on this topic. Distinctive Homes therefore argues sanctions are not warranted under the circumstances.

In reply, (# 104) Great American argues Musso’s admission that he had done nothing to prepare for the deposition and his inability to offer testimony regarding any of the topics of examination are evidence of his lack of preparation. Great American claims Distinctive Homes still had the duty to prepare Musso to testify on the topics of examination despite the fact that the documents Distinctive Homes produced during discovery might contain this information. Moreover, Distinctive Homes’ failure to address Great Ameri[538]*538can’s request for issue preclusion sanctions admits that such sanctions are warranted.

DISCUSSION

A. Fed.R.Civ.P.

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251 F.R.D. 534, 2008 U.S. Dist. LEXIS 108488, 2008 WL 818947, Counsel Stack Legal Research, https://law.counselstack.com/opinion/great-american-insurance-v-vegas-construction-co-nvd-2008.