1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Julie-Anne Helms, et al., No. CV-20-01728-PHX-DWL
10 Plaintiffs, ORDER
11 v.
12 Hanover Insurance Group Incorporated, et al., 13 Defendants. 14 15 INTRODUCTION 16 This insurance dispute arises from a bizarre real estate transaction gone wrong. 17 Julie-Anne Helms (a realtor) and Helms & Helms, P.L.L.C. (her realty agency) (together, 18 “Plaintiffs”) were representing a couple interested in purchasing a home in Arizona. When 19 the couple attempted to wire the closing funds (nearly $120,000), they sent it to fraudsters 20 who had used forged emails and payment instructions to impersonate the title company 21 representative. Afterward, the couple sued Plaintiffs in an attempt to recoup the lost 22 money. Plaintiffs, in turn, notified their insurance company, The Hanover Insurance 23 Company (“Hanover”), of the lawsuit and sought a defense, but Hanover declined to 24 provide a defense based on various policy exclusions. In this action, Plaintiffs contend that 25 Hanover’s denial of a defense was improper and made in bad faith. 26 Unfortunately, Plaintiffs’ email-related woes have continued in this case. In 27 December 2020, Hanover emailed its first set of requests for admission (“RFAs”) to 28 Plaintiffs’ counsel. When Plaintiffs did not respond within 30 days, as required by Rule 1 36, Hanover filed a motion for summary judgment that is based, in part, on Plaintiffs’ 2 “deemed” admissions to the RFAs. (Doc. 23.) This motion prompted Plaintiffs to file two 3 motions for discovery-related relief (Docs. 27, 28), which are addressed below.1 4 DISCUSSION 5 I. RFA-Related Relief 6 A. The Parties’ Arguments 7 Plaintiffs and their counsel contend they were unaware, until they reviewed 8 Hanover’s summary judgment motion, of the unanswered-RFA issue. In an effort to 9 address that issue, Plaintiffs have filed a “motion for court to confirm deadlines and 10 alternative motion for extension of time.” (Doc. 28.) In a nutshell, Plaintiffs argue that 11 Hanover’s original attempt to serve the RFAs in December 2020 was invalid because the 12 notice of service states that the RFAs were sent to Plaintiffs’ counsel’s personal email 13 address, rather than to his work email address (which is his registered email address in the 14 CM/ECF system). (Id. at 2-7.) Plaintiffs dispute whether the RFAs were even sent to 15 counsel’s personal email address—Plaintiffs’ counsel has submitted a declaration in which 16 he avows, “I have personally undertaken to review the history of my personal email address 17 . . . and have not found any email service of Defendant’s Written Discovery Requests at 18 any time prior to March 22, 2021” (id. at 12)—but argue that, irrespective of whether they 19 were actually sent to that email address, the only “proper” way to serve them was to mail 20 them via U.S. mail or email them to counsel’s work email address. (Id. at 3-4.) 21 Hanover opposes Plaintiffs’ motion. (Doc. 33.) Hanover argues that its use of 22 counsel’s personal email address when serving the RFAs was appropriate because counsel 23 has repeatedly used that email address when corresponding with Hanover’s counsel during 24 this case and has repeatedly, and without issue, accepted service of other case-related 25 documents via that email address. (Id. at 2-4.) Hanover attaches documentary proof of 26 those other communications (see, e.g., Doc. 33-1 at 2-11, 26-28, 40-43, 49-50) and also 27 1 Hanover requested oral argument on each motion, but those requests are denied 28 because the issues are fully briefed and oral argument will not aid the Court’s decisional process. See LRCiv 7.2(f). 1 attaches proof that it emailed the RFAs to counsel’s personal email address in December 2 2020 (id. at 32, 37-38). In a related vein, Hanover argues that Plaintiffs’ protestations of 3 ignorance regarding the December 2020 email are unavailing because it also filed a “Notice 4 of Service” on the docket at the time it sent the email. (Doc. 20.) Hanover thus argues that 5 even if Plaintiffs’ counsel “did not receive the discovery by way of [his personal email] 6 address, he would have received notice the discovery was served by way of [his official, 7 registered] address.” (Doc. 33 at 3.) Alternatively, Hanover argues that even if its initial 8 attempt to serve the RFAs in December 2020 was invalid, Plaintiffs received notice of the 9 RFAs by no later than January 2021, when the summary judgment motion was filed, yet 10 waited more than 30 days after receiving such notice before seeking relief. (Id. at 4-6.) 11 Finally, Hanover argues that allowing Plaintiffs to belatedly amend their response to the 12 RFAs would be prejudicial because it didn’t retain a bad-faith expert based on its belief 13 that the absence of bad faith had been established through the RFA process. (Id. at 6-7.) 14 In reply, Plaintiffs don’t dispute that their counsel routinely used his personal email 15 address to engage in case-related correspondence with Hanover but argue that Hanover’s 16 attempt to serve the RFAs via email to that address was still deficient under Rule 5(b)(2) 17 because the parties never entered into an express agreement to allow service via that email 18 address. (Doc. 35 at 2-4.) Plaintiffs also contend they weren’t formally served with the 19 RFAs until March 22, 2021, so their response on March 29, 2021 should be deemed timely. 20 (Id. at 7.) Finally, as for prejudice, Plaintiffs contend they would suffer severe prejudice 21 from being deemed to have conceded away large portions of their case, whereas Hanover 22 would suffer no prejudice from allowing the recent RFA responses to stand because (1) 23 Hanover has only itself to blame for not properly serving the RFAs in the first instance and 24 (2) notwithstanding Hanover’s alleged concerns about expert retention, Hanover recently 25 (and timely) disclosed a claim-handling expert. (Id. at 7-8 & n.1.) 26 B. Analysis 27 Neither side has covered itself in glory here. On the one hand, it takes a certain 28 amount of chutzpah for Plaintiffs’ counsel, who repeatedly used his personal email address 1 when corresponding with opposing counsel in this matter, to blame Hanover for using that 2 email address when sending the RFAs to him. Nor has Plaintiffs’ counsel explained why 3 he failed to follow up with Hanover after the “Notice of Service” was filed on the docket 4 in December 2020, which imparted clear notice to him (via his official, registered email 5 address) that RFAs had just been served. 6 On the other hand, Plaintiffs are correct that the service attempt here did not comply 7 with Rule 5(b)(2). Under that rule, there are six authorized methods of service. The first 8 four—”handing it to the person,” leaving it . . . at the person’s office . . . [or] dwelling or 9 usual place of abode,” “mailing it to the person’s last known address,” and “leaving it with 10 the court clerk if the person has no known address,” see Fed. R. Civ. P. 5(b)(2)(A)-(D)— 11 are obviously inapplicable here. The final two are “sending it to a registered user by filing 12 it with the court’s electronic-filing system or sending it by other electronic means that the 13 person has consented to in writing,” see Fed. R. Civ. P. 5(b)(2)(E), and “delivering it by 14 any other means that the person consented to in writing,” see Fed. R. Civ. P. 5(b)(2)(F). 15 Here, the RFAs were not served on Plaintiffs by “filing [them] with the court’s electronic- 16 filing system”—the only document that was filed on the official docket was a “Notice of 17 Service” (Doc.
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Julie-Anne Helms, et al., No. CV-20-01728-PHX-DWL
10 Plaintiffs, ORDER
11 v.
12 Hanover Insurance Group Incorporated, et al., 13 Defendants. 14 15 INTRODUCTION 16 This insurance dispute arises from a bizarre real estate transaction gone wrong. 17 Julie-Anne Helms (a realtor) and Helms & Helms, P.L.L.C. (her realty agency) (together, 18 “Plaintiffs”) were representing a couple interested in purchasing a home in Arizona. When 19 the couple attempted to wire the closing funds (nearly $120,000), they sent it to fraudsters 20 who had used forged emails and payment instructions to impersonate the title company 21 representative. Afterward, the couple sued Plaintiffs in an attempt to recoup the lost 22 money. Plaintiffs, in turn, notified their insurance company, The Hanover Insurance 23 Company (“Hanover”), of the lawsuit and sought a defense, but Hanover declined to 24 provide a defense based on various policy exclusions. In this action, Plaintiffs contend that 25 Hanover’s denial of a defense was improper and made in bad faith. 26 Unfortunately, Plaintiffs’ email-related woes have continued in this case. In 27 December 2020, Hanover emailed its first set of requests for admission (“RFAs”) to 28 Plaintiffs’ counsel. When Plaintiffs did not respond within 30 days, as required by Rule 1 36, Hanover filed a motion for summary judgment that is based, in part, on Plaintiffs’ 2 “deemed” admissions to the RFAs. (Doc. 23.) This motion prompted Plaintiffs to file two 3 motions for discovery-related relief (Docs. 27, 28), which are addressed below.1 4 DISCUSSION 5 I. RFA-Related Relief 6 A. The Parties’ Arguments 7 Plaintiffs and their counsel contend they were unaware, until they reviewed 8 Hanover’s summary judgment motion, of the unanswered-RFA issue. In an effort to 9 address that issue, Plaintiffs have filed a “motion for court to confirm deadlines and 10 alternative motion for extension of time.” (Doc. 28.) In a nutshell, Plaintiffs argue that 11 Hanover’s original attempt to serve the RFAs in December 2020 was invalid because the 12 notice of service states that the RFAs were sent to Plaintiffs’ counsel’s personal email 13 address, rather than to his work email address (which is his registered email address in the 14 CM/ECF system). (Id. at 2-7.) Plaintiffs dispute whether the RFAs were even sent to 15 counsel’s personal email address—Plaintiffs’ counsel has submitted a declaration in which 16 he avows, “I have personally undertaken to review the history of my personal email address 17 . . . and have not found any email service of Defendant’s Written Discovery Requests at 18 any time prior to March 22, 2021” (id. at 12)—but argue that, irrespective of whether they 19 were actually sent to that email address, the only “proper” way to serve them was to mail 20 them via U.S. mail or email them to counsel’s work email address. (Id. at 3-4.) 21 Hanover opposes Plaintiffs’ motion. (Doc. 33.) Hanover argues that its use of 22 counsel’s personal email address when serving the RFAs was appropriate because counsel 23 has repeatedly used that email address when corresponding with Hanover’s counsel during 24 this case and has repeatedly, and without issue, accepted service of other case-related 25 documents via that email address. (Id. at 2-4.) Hanover attaches documentary proof of 26 those other communications (see, e.g., Doc. 33-1 at 2-11, 26-28, 40-43, 49-50) and also 27 1 Hanover requested oral argument on each motion, but those requests are denied 28 because the issues are fully briefed and oral argument will not aid the Court’s decisional process. See LRCiv 7.2(f). 1 attaches proof that it emailed the RFAs to counsel’s personal email address in December 2 2020 (id. at 32, 37-38). In a related vein, Hanover argues that Plaintiffs’ protestations of 3 ignorance regarding the December 2020 email are unavailing because it also filed a “Notice 4 of Service” on the docket at the time it sent the email. (Doc. 20.) Hanover thus argues that 5 even if Plaintiffs’ counsel “did not receive the discovery by way of [his personal email] 6 address, he would have received notice the discovery was served by way of [his official, 7 registered] address.” (Doc. 33 at 3.) Alternatively, Hanover argues that even if its initial 8 attempt to serve the RFAs in December 2020 was invalid, Plaintiffs received notice of the 9 RFAs by no later than January 2021, when the summary judgment motion was filed, yet 10 waited more than 30 days after receiving such notice before seeking relief. (Id. at 4-6.) 11 Finally, Hanover argues that allowing Plaintiffs to belatedly amend their response to the 12 RFAs would be prejudicial because it didn’t retain a bad-faith expert based on its belief 13 that the absence of bad faith had been established through the RFA process. (Id. at 6-7.) 14 In reply, Plaintiffs don’t dispute that their counsel routinely used his personal email 15 address to engage in case-related correspondence with Hanover but argue that Hanover’s 16 attempt to serve the RFAs via email to that address was still deficient under Rule 5(b)(2) 17 because the parties never entered into an express agreement to allow service via that email 18 address. (Doc. 35 at 2-4.) Plaintiffs also contend they weren’t formally served with the 19 RFAs until March 22, 2021, so their response on March 29, 2021 should be deemed timely. 20 (Id. at 7.) Finally, as for prejudice, Plaintiffs contend they would suffer severe prejudice 21 from being deemed to have conceded away large portions of their case, whereas Hanover 22 would suffer no prejudice from allowing the recent RFA responses to stand because (1) 23 Hanover has only itself to blame for not properly serving the RFAs in the first instance and 24 (2) notwithstanding Hanover’s alleged concerns about expert retention, Hanover recently 25 (and timely) disclosed a claim-handling expert. (Id. at 7-8 & n.1.) 26 B. Analysis 27 Neither side has covered itself in glory here. On the one hand, it takes a certain 28 amount of chutzpah for Plaintiffs’ counsel, who repeatedly used his personal email address 1 when corresponding with opposing counsel in this matter, to blame Hanover for using that 2 email address when sending the RFAs to him. Nor has Plaintiffs’ counsel explained why 3 he failed to follow up with Hanover after the “Notice of Service” was filed on the docket 4 in December 2020, which imparted clear notice to him (via his official, registered email 5 address) that RFAs had just been served. 6 On the other hand, Plaintiffs are correct that the service attempt here did not comply 7 with Rule 5(b)(2). Under that rule, there are six authorized methods of service. The first 8 four—”handing it to the person,” leaving it . . . at the person’s office . . . [or] dwelling or 9 usual place of abode,” “mailing it to the person’s last known address,” and “leaving it with 10 the court clerk if the person has no known address,” see Fed. R. Civ. P. 5(b)(2)(A)-(D)— 11 are obviously inapplicable here. The final two are “sending it to a registered user by filing 12 it with the court’s electronic-filing system or sending it by other electronic means that the 13 person has consented to in writing,” see Fed. R. Civ. P. 5(b)(2)(E), and “delivering it by 14 any other means that the person consented to in writing,” see Fed. R. Civ. P. 5(b)(2)(F). 15 Here, the RFAs were not served on Plaintiffs by “filing [them] with the court’s electronic- 16 filing system”—the only document that was filed on the official docket was a “Notice of 17 Service” (Doc. 20), which didn’t include the actual RFAs. See LRCiv 5.2 (“A ‘Notice of 18 Service’ of the disclosures and discovery requests and responses listed in Rule 5(d)(1)(A) 19 of the Federal Rules of Civil Procedure must be filed within a reasonable time after service 20 of such papers.”). The last potential service method was to send the RFAs by electronic or 21 other means “that the person has consented to in writing,” but Hanover has not produced 22 any evidence that Plaintiffs “consented . . . in writing” to receiving service via counsel’s 23 personal email address. Although it is understandable why Hanover could have believed 24 such consent was implied, “[t]he consent to electronic service must be in writing” and 25 “cannot be implied from conduct.” 1 Gensler, Federal Rules of Civil Procedure, Rules and 26 Commentary, Rule 5, at 99-100 (2021). See generally O’Neal Constructors, LLC v. DRT 27 Am., LLC, 440 F. Supp. 3d 1396, 1402 (N.D. Ga. 2020) (“The advisory committee note to 28 the 2001 Amendments makes clear that the consent must be express, and not implied by 1 the parties’ course of conduct. Furthermore, a party routinely exchanging documents by 2 email cannot supply the necessary express consent to electronic service, because consent 3 cannot be implied from conduct.”). 4 Accordingly, Plaintiffs’ motion for RFA-related relief is granted. The responses 5 they provided to Hanover on March 29, 2021 are deemed timely.2 6 II. Rule 56(d) Motion 7 A. The Parties’ Arguments 8 Plaintiffs move under Rule 56(d) for an extension of time to respond to Hanover’s 9 summary judgment motion. (Doc. 27.) Plaintiffs contend they are currently unable to 10 respond to Hanover’s motion, which seeks summary judgment on, inter alia, their claims 11 for bad faith and punitive damages, because they have not yet had a chance to depose Mary 12 Gertsmeier, the claims handler who was involved in the denial of their request for a 13 defense. (Id. at 2-4.) Plaintiffs note that Hanover submitted a declaration from Gertsmeier 14 in support of its summary judgment motion and argue they should be allowed to depose 15 Gertsmeier to explore the statements in her declaration. (Id.) Plaintiffs further note that, 16 because the fact discovery cutoff in this case isn’t until July 2021, they “should be 17 permitted to complete discovery before having to defend dispositive motions.” (Id.) 18 Plaintiffs submitted a declaration from their counsel in support of their motion. (Id. 19 at 5-7.) The only specific statements in counsel’s declaration concerning the need to 20 depose Gertsmeier are as follows:
21 Plaintiffs assert that Ms. Gertsmeier has information related to [Plaintiffs’] interactions with Defendant Hanover in the present litigation. This is 22 evidenced by Defendant providing to the court log notes of Ms. Gertsmeier relating to claims and the decision to deny a defense to Helms. Also, conduct 23 of the claims adjuster, her interaction with claims supervisors and decisions made or evidence relevant to assess [Plaintiffs’] claim for punitive damages. 24 25 2 Alternatively, even if Hanover’s initial service effort were deemed sufficient, the 26 Court would exercise its discretion under Rule 36(b) to allow Plaintiffs to belatedly respond because doing so “would promote the presentation of the merits of the action” and because 27 “the court is not persuaded that it would prejudice the requesting party in maintaining or defending the action on the merits.” Although Hanover suggested in its response that 28 Plaintiffs had interfered with its ability to retain an expert, Hanover appears to have subsequently retained an expert. 1 (Id. at 6.) 2 Hanover opposes Plaintiffs’ motion. (Doc. 32.) Hanover argues that Rule 56(d) 3 requires a movant to “identify the specific facts they are looking to discover, state those 4 facts exist, and/or explain how those facts would be essential in opposing” the pending 5 summary judgment motion, yet Plaintiffs’ counsel’s declaration does none of those things. 6 (Id. at 1-3.) Hanover further contends that, although it did submit a declaration from 7 Gertsmeier in support of its summary judgment motion, that declaration merely lays the 8 foundation for certain exhibits and establishes a few undisputed facts, such as the dates on 9 which certain events occurred. (Id. at 3.) Finally, Hanover argues that because Plaintiffs 10 haven’t served any discovery requests, scheduled any other depositions, or otherwise made 11 any “effort to conduct discovery in this case,” their Rule 56(d) motion related to Gertsmeier 12 should be viewed as “nothing more than an attempt by Plaintiffs to delay inevitable 13 judgment in Hanover’s favor.” (Id. at 1, 4.) 14 In reply, Plaintiffs argue that counsel’s declaration is sufficient under Rule 56(d) 15 because it “do[es] more than simply suggest that meaningful discovery should occur” and 16 “specifie[s] the areas and subject matters of discovery sought, even referring by MSJ 17 Exhibit number to specific numerous log notes and their factual content provided by 18 Hanover’s representative, Mary Gertsmeier, related to the decision to deny Helms a proper 19 defense in litigation.” (Doc. 36 at 2.) 20 B. Analysis 21 Rule 56(d) of the Federal Rules of Civil Procedure provides that “[i]f a nonmovant 22 shows by affidavit or declaration that, for specified reasons, it cannot present facts essential 23 to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) 24 allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other 25 appropriate order.” A party seeking relief under Rule 56(d) “must make clear what 26 information is sought and how it would preclude summary judgment.” Margolis v. Ryan, 27 140 F.3d 850, 853 (9th Cir. 1998). Put another way, “[a] party seeking to delay summary 28 judgment for further discovery . . . must show that: (1) it has set forth in affidavit form the 1 || specific facts it hopes to elicit from further discovery; (2) the facts sought exist; and (3) the 2|| sought-after facts are essential to oppose summary judgment.” Stevens v. Corelogic, Inc., 3|| 899 F.3d 666, 678 (9th Cir. 2018) (citations, internal quotation marks, and brackets omitted). It follows that “[a] general or conclusory assertion that additional discovery is 5|| needed will not suffice.” 2 Gensler, supra, Rule 56, at 173. 6 Plaintiffs have not come close to satisfying these standards here. The declaration 7\| from Plaintiffs’ counsel does not explain, with any specificity, what Plaintiffs expect to 8 || learn during Gertsmeier’s deposition and does not explain, with any specificity, why that 9|| missing information is necessary to avoid summary judgment. Instead, the declaration || merely ticks off the general subject areas in which Gertsmeier may possess relevant 11 || knowledge. Much more is required under Rule 56(d). Naoko Ohno v. Yuko Yasuma, 723 F.3d 984, 1013 n.29 (9th Cir. 2013) (“[I]t is not enough to rely on vague assertions that 13 || discovery will produce needed, but unspecified, facts.”’). 14 Accordingly, 15 IT IS ORDERED that: 16 (1) Plaintiffs’ motion for RFA-related relief (Doc. 28) is granted. 17 (2) Plaintiffs’ Rule 56(d) motion (Doc. 27) is denied. 18 Dated this 26th day of April, 2021. 19 20 Lom ee” 21 f □ _o—— Dominic W. Lanza 22 United States District Judge 23 24 25 26 27 28
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