Hunt v. Safeco Insurance Company Of America

Opinion

2 3 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 ZACHRY HUNT et al., 7 Case No. 2:25-cv-00434-GMN-NJK Plaintiffs, 8 Order v. 9 [Docket No. 19] SAFECO INSURANCE COMPANY OF 10 AMERICA, 11 Defendant. 12 Pending before the Court is Plaintiffs’ motion for protective order. Docket No. 19. 13 Defendant filed a response in opposition. Docket No. 21. Plaintiffs filed a reply. Docket No. 23. 14 The motion is properly resolved without a hearing. See Local Rule 78-1. 15 I. BACKGROUND 16 Plaintiffs’ suit alleges a breach of contract, breach of the duty of good faith and fair dealing, 17 and breach of Nevada’s Unfair Trade Practices Statute, arising from an insurance claim dispute 18 with Defendant. See generally Compl., Docket No. 1. Plaintiffs, who at all relevant times had a 19 homeowner’s insurance policy with Defendant, were out of town attending a graduation. See id. 20 at 18; Docket No. 19 at 2. Upon returning home, Plaintiffs discovered that their home (“the 21 Property”) had suffered extensive water damage. See Docket No. 1 at 18; Docket No. 19 at 2. 22 Plaintiffs submitted a claim to Defendant for the damage. See Docket No. 1 at 18. Defendant sent 23 an independent contractor, American Leak Detection, to the Property to determine the cause of 24 damage. See id. at 19; Docket No. 19-1 at 2–9. The independent contractor determined that the 25 cause of damage was a leaking toilet water line, and that there was “water damage in the master 26 bedroom, master bathroom, closet, a/c closet, and exterior of home.” Docket No. 19-1 at 8. 27 Thereafter, a third-party restoration company, Servpro of St. George, obtained approval 28 from Defendant to remediate the Property, and did so. See Docket No. 19 at 2; 19-1 at 11–31. 1 Then, Plaintiffs selected a third-party repair company, BRL Construction Services, to submit an 2 estimate to Defendant for the cost of repairs. See Docket No. 19 at 2; 19-1 at 33. After receiving 3 the estimate, Defendant retained an adjuster, Jason Mercer Claims, to inspect the Property. See 4 Docket No. 19 at 2; 19-1 at 50–52. The adjuster attributed the origin of the cause of loss to a 5 “long-term leak and seepage at the master bedroom toilet water supply line.” Docket No. 19-1 at 6 51. Based on Mercer’s assessment, Defendant largely denied the claim. This litigation ensued 7 following the dispute over the insurance claim for damage to the Property. 8 On June 20, 2025, Defendant served a request to inspect the Property pursuant to Federal 9 Rule of Civil Procedure 34. Docket No. 19-1 at 54–56. On June 26, 2025, Plaintiffs’ counsel 10 objected to Defendant’s request for inspection of the Property via email. See id. at 58–61. On 11 July 2, 2025, counsel met and conferred over the phone regarding the inspection request, but were 12 not able to resolve the dispute. See Docket No. 19 at 3, 14–15. Plaintiffs now seek a protective 13 order preventing Defendant from inspecting the Property. Docket No. 19. Plaintiffs submit that 14 the requested inspection of the Property is not relevant to the facts at issue in the litigation and not 15 proportional to the needs of the case. See Docket Nos. 19, 23. 16 II. STANDARDS 17 “[B]road discretion is vested in the trial court to permit or deny discovery.” Hallett v. 18 Morgan, 296 F.3d 732, 751 (9th Cir. 2002); see also Crawford-El v. Britton, 523 U.S. 574, 598 19 (1998). 20 Parties are permitted to seek discovery of any nonprivileged matter that is relevant and 21 proportional to the needs of the case. Fed. R. Civ. P. 26(b)(1). District courts enjoy wide discretion 22 in deciding relevancy for discovery purposes.1 E.g., Shaw v. Experian Info. Solutions, Inc., 306 23 F.R.D. 293, 296 (S.D. Cal. 2015). To be permissible, discovery must be “relevant to any party's 24 claim or defense.” In re Bard IVC Filters Prods. Liab. Litig., 317 F.R.D. 562, 563-64 (D. Ariz. 25 2016) (discussing impact of 2015 amendments to definition of relevance for discovery purposes). 26 1 The reliance on the relevance standard for trial encompassed in Rule 401 of the Federal 27 Rules of Evidence is misplaced. Material may be discoverable even if not admissible at trial, Fed. R. Civ. P. 26(b)(1), and relevance for discovery purposes is broader than relevance for trial 28 purposes, see, e.g., F.T.C. v. AMG Services, Inc., 291 F.R.D. 544, 552 (D. Nev. 2013). 1 Relevance for the purposes of discovery is defined broadly. See, e.g., V5 Techs. v. Switch, Ltd., 2 334 F.R.D. 306, 309 (D. Nev. 2019). 3 “Proportionality focuses on the marginal utility of the discovery being sought.” Guerrero 4 v. Wharton, No. 216CV01667GMNNJK, 2017 WL 7314240, at *2 (D. Nev. Mar. 30, 2017) (citing 5 In re Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig., 180 F. Supp. 3d 273, 280 n.43 6 (S.D.N.Y. 2016)). Proportionality is judged based on: (1) the importance of the issues at stake in 7 the action; (2) the amount in controversy; (3) the parties’ relative access to relevant information; 8 (4) the parties’ resources; (5) the importance of the discovery in resolving the issues; and (6) 9 whether the burden or expense of the proposed discovery outweighs its likely benefit. Fed. R. Civ. 10 P. 26(b)(1). “At bottom, proportionality is a ‘common-sense concept’ that should be applied to 11 establish reasonable limits on discovery.” Guerrero v. Wharton, No. 216CV01667GMNNJK, 12 2017 WL 7314240, at *2 (D. Nev. Mar. 30, 2017) (quoting Sprint Comm's Co. v. Crow Creek 13 Sioux Tribal Court, 316 F.R.D. 254, 263 (D.S.D. 2016)). 14 A party from whom discovery is sought may move for a protective order. See Fed. R. Civ. 15 P. 26(c). For good cause shown, courts may issue a protective order to protect a party from 16 annoyance, embarrassment, oppression, or undue burden or expense. See id. “The party seeking 17 issuance of a protective order bears the burden of explaining why discovery should be denied.” 18 Swenson v. GEICO Cas. Co., 336 F.R.D. 206, 208 (D. Nev. 2020), objections overruled, No. 19 219CV01639JCMNJK, 2020 WL 8871311 (D. Nev. Aug. 26, 2020). To meet this burden, the 20 party seeking the protective order must demonstrate a particular need for protection supported by 21 specific facts. See id. (citing U.S. E.E.O.C. v. Caesars Entm’t, Inc., 237 F.R.D. 428, 432 (D. Nev. 22 2006) (citing Cipollone v. Liggett Grp., 785 F.2d 1108, 1121 (3d Cir. 1986)). Courts insist “on a 23 particular and specific demonstration of fact, as distinguished from conclusory statements.” 24 Swenson, 336 F.R.D. at 208–09 (citing Twin City Fire Ins. Co. v. Emps. Ins. of Wausau, 124 F.R.D. 25 652, 653 (D. Nev. 1989)). “Broad allegations of harm, unsubstantiated by specific examples or 26 articulated reasoning, are insufficient.” Swenson, 336 F.R.D. at 208–09 (citing 27 Caesars Entm’t, Inc., 237 F.R.D. at 432). Further, merely showing that discovery may involve 28 some inconvenience or expense is insufficient to obtain a protective order. See Swenson, 336 1 F.R.D. at 209 (citing Turner Broad. Sys., Inc. v. Tracinda Corp., 175 F.R.D. 554, 556 (D. Nev. 2 1997)). 3 If a motion for protective order is denied, the court may, on just terms, order that any party 4 or person provide or permit discovery. Fed. R. Civ. P. 26(c)(2). 5 III. ANALYSIS 6 This dispute concerns Defendant’s request for entry upon Plaintiffs’ home “for the purpose 7 of inspection, surveying, and photographing the Property.” Docket No. 19-1 at 54. Plaintiffs argue 8 that a protective order is warranted on several grounds, including that: (1) the Property has 9 previously been inspected by Defendant; (2) the request is not proportional to the needs of the 10 case; and (3) the inspection will not result in the discovery of relevant evidence. See Docket Nos. 11 19, 23. Defendant argues that the prelitigation inspections are immaterial, that the inspection seeks 12 relevant information, and that the inspection is proportional. See Docket No. 21. Defendant has 13 the better argument. 14 First, Plaintiffs submit that Defendant has waived the right to inspect the Property by virtue 15 of its denial of coverage after the previous inspections. See Docket No. 19 at 5–6. The Court finds 16 no merit in this argument. Previous inspections conducted by Defendant, or by third parties on 17 behalf of Defendant, have no bearing on Defendant’s right to inspect the Property during 18 discovery. See also Campbell v. Mercury Cas. Co., No. 17CV618SJFARL, 2018 WL 2869083, at 19 *1 (E.D.N.Y. Apr. 17, 2018) (finding no merit in the argument that defendants waived the right to 20 inspect a home by virtue of their denial of casualty coverage). Defendant correctly asserts that 21 “[t]he purpose of the inspection at issue … is not to process an insurance claim, but to gather 22 evidence for the trial of this matter.” Docket No. 23 at 7. While the prelitigation inspections were 23 meant to “determine the amount [Defendant] would pay pursuant to the insurance policy,” the 24 inspection at issue “involves a determination of whether the amount [Defendant] paid was correct 25 and, if the amount was incorrect, whether [Defendant] arrived at that amount reasonably.” Id. 26 Further, Plaintiffs cite to no authority suggesting that claim-handling inspections, whether 27 conducted reasonably or not, bar subsequent inspections during discovery. 28 1 Second, Plaintiffs submit that inspection of the Property is not proportional to the needs of 2 the case because Defendant “already determined the value of the loss” and thus “cannot change 3 how it views the amount in controversy.” Docket No. 19 at 8. Further, Plaintiffs contend that an 4 additional inspection of the Property amounts to a “means to harass.” Docket No. 23 at 5. While 5 the Court is sensitive to the fact that the Property at issue is Plaintiffs’ home, Plaintiffs fail to 6 convince the Court that an inspection of the Property is not proportional to the needs of the case. 7 Plaintiffs filed the instant action, thus necessarily subjecting their home to some level of 8 inspection. Abrogast v. A.W. Chesterton Co., No. CV WDQ-14-4049, 2015 WL 13604262, at *2 9 (D. Md. Oct. 15, 2015). Additionally, in its discretion, the Court finds the burden to Plaintiffs is 10 minimized by limiting the scope of the inspection appropriately. See Dolezal v. Starr Homes, LLC, 11 No. 18-2524-JAR-GEB, 2019 WL 2613096, at *4 (D. Kan. June 26, 2019). The parties will be 12 required to meet and confer to establish a convenient date for the inspection, as well as a reasonable 13 time limit for the inspection. Additionally, Plaintiffs submit that the inspection is not proportional 14 because Defendant’s resources far exceed theirs. See Docket No. 23 at 8. While this may be true, 15 Plaintiffs do not put forth a sufficiently “particular and specific demonstration of facts” to explain 16 why the inspection is not proportional. Swenson, 336 F.R.D. at 208–09 (citing Twin City Fire Ins. 17 Co. v. Emps. Ins. of Wausau, 124 F.R.D. 652, 653 (D. Nev. 1989)). A bald assertion of 18 disproportionality is not sufficient to obtain a protective order. See On Demand Direct Response, 19 LLC v. McCart-Pollak, No. 215CV01576MMDNJK, 2018 WL 2014067, at *3 (D. Nev. Apr. 30, 20 2018) (citing Lima LS PLC Nassau Reinsurance Grp. Holdings, L.P., 160 F. Supp. 3d 574, 579 21 n.1 (S.D.N.Y. 2015)). Plaintiffs have failed to demonstrate how Defendant inspecting, surveying, 22 and photographing the Property is burdensome or unreasonable. See also Abrogast v. A.W. 23 Chesterton Co., No. CV WDQ-14-4049, 2015 WL 13604262, at *2 (D. Md. Oct. 15, 2015) 24 (finding that plaintiffs did not demonstrate how taking measurements, recording observations, or 25 taking photographs and/or videos of areas accessible through existing access points creates an 26 undue burden.”). Accordingly, the Court finds the requested inspection proportional to the needs 27 of the case. 28 ] Third, Plaintiffs submit that the inspection will not result in the discovery of relevant information for Plaintiffs’ claims or Defendant’s affirmative defenses. See Docket No. 19. at 8- 3] 12. Both arguments fail to persuade the Court. As to Plaintiffs’ claims, the existence and amount 4|| of damages suffered are important issues. An inspection of the Property during discovery may 5] reveal information regarding whether the previous inspections and cost estimates of the Property 6|| were accurate. This is true whether the Property has been repaired or remains damaged. The 7| inspection may result in evidence showing the extent of any damages or repairs, which is relevant 8|| to assessing the cost of such repairs or damages. The inspection also seeks relevant information 9] as it pertains to Plaintiffs’ breach of contract and bad faith claims, as well as Defendant’s 10] affirmative defenses, because each of these issues involves questions as to whether Defendant 11] properly performed under the insurance policy and during the initial investigation. While Plaintiffs 12|| contend that these claims are to be adjudicated based on what Defendant did, or did not do, during 13] the pendency of the claims, an inspection of the Property may reveal information which allows 14] both parties to evaluate the reasonableness of Defendant’s performance and investigation. The 15|| inspection may provide evidence as to the extent of damages or repairs to the Property, allowing 16|| Defendant to compare what it considered, or did not consider, during the previous inspections with 17| the information it uncovered during the inspection. This comparison of evidence goes directly to 18] the question of the reasonableness of previous inspections. Accordingly, the Court finds that the 19] inspection requested is relevant to the issues presented. 20) 1V. CONCLUSION 21 For the reasons discussed above, the Court DENIES Plaintiffs’ motion for protective order. 22|| Docket No. 19. The parties are INSTRUCTED to meet and confer no later than September 5, 2025, to establish a convenient date and time limit for the inspection. 24 IT IS SO ORDERED. 25 Dated: August 29, 2025. 26 7. Ses on 27 Unite Stare apis rate Judge 28