Hunting v. American Family Mutual Insurance Company

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA JAMI HUNTING, CASE NO. C19-5783MJP Plaintiff, ORDER v. AMERICAN FAMILY MUTUAL Defendant.

THIS MATTER is before the Court on two Motions: (1) Defendant American Family Mutual Insurance Company’s Motion to Compel Discovery of Plaintiff Jami Hunting’s medical records [Dkt. # 26]; and (2) Third Parties Jack Thomas and Casualty Loss Consultants’ (CLC’s) Motion to Quash or Modify American Family’s subpoena to Verizon, seeking all of Thomas’ cell phone records for the past two years. [Dkt. # 35]. The case arises from American Family’s denial of Hunting’s claim for damages under her insurance policy. Hunting seeks coverage and bad faith damages. I. BACKGROUND In 2014, Hunting purchased a “Businessowners” commercial property insurance policy from American Family, to provide coverage for her Puyallup rental property. In September 2014, Hunting rented the home to the Gonzales family. The Gonzales’ stopped paying the rent, and Hunting terminated the lease effective May 1, 2017. Hunting inspected the property on May 3 and discovered that the Gonzalez family had vandalized the property, damaging the walls, ceilings, doors, windowsills, carpet, appliances, and plumbing. Hunting notified American Family of the loss and made a claim for vandalism under her

policy. American Family retained a third-party adjuster, Frontier Adjusters, to handle the claim. Frontier’s adjuster, Erik Boe, hired an inspector, James Gomez, to investigate. Gomez did so on May 17. Based on Gomez’s June 2017 report, American Family denied the bulk of Hunting’s claim, determining that the damage was the result of (excluded) “wear and tear,” not (covered) vandalism. Boe forwarded Gomez’s report to Hunting on June 12, 2017. Hunting’s complaint [Dkt. # 1-2] alleges that she sought to negotiate her claim directly with American Family from June 2017 until November 2018. She then hired a public adjuster, Jack Thomas of CLC, to assist in her claim. In January 2019, Thomas submitted a Proof of Loss claiming that replacement repairs would cost almost $100,000, based on an estimate prepared by a contractor, Prime NW Construction.

On February 6, 2019, American Family responded, claiming that the vandalism damages totaled $1879.94, less than the $2500 Deductible in Hunting’s policy. It denied the remainder of Hunting’s claim. Hunting and Thomas claim they continued pursuing and unsuccessfully negotiating her claim through June 2019. Hunting sued in July 2019, asserting breach of contract and extracontractual bad faith (Washington Consumer Protection Act and Insurance Fair Conduct Act) claims. [Dkt. # 1-2]. Hunting seeks the actual cash value of the repairs and lost rental income. She also claims American Family failed to timely and reasonably investigate and resolve her claim, and unfairly valued it. She seeks extracontractual damages (trebled), fees, and costs. Hunting’s Initial

Disclosures articulated a claim for $600,000, including her bad faith claims. [See Wenzel-Grette Dec. Dkt. # 28-2 at Ex. B, p. 3]. At her deposition, Hunting declined to answer questions about the delay between June 2017 (when American Family sent her the Gomez report describing most damages as wear and

tear) and November 2018, when Thomas informed American Family that Hunting had engaged CLC to pursue the claim. Hunting claims that she is on long term disability and that her health issues precluded her from pursing the matter during that 17-month period. She would not answer any questions about her medical condition or when and how it affected her claim. Nevertheless, she reiterated her claim that the delays in obtaining an estimate and performing the repairs are part of her claim against American Family. [Dkt. # 28-1 at Ex. A, p. 96]. After the deposition, Hunting’s attorney conceded the delay was Hunting’s fault, not American Family’s, and agreed that she would not seek damages based on it. Hunting’s attorney also informed American Family that if it sought and obtained her medical records, Hunting “WILL resume her claims for damages during the stated time period.” He claimed that would be

an additional $30,000. [Dkt. # 28-4 at Ex. D, p. 1]. American Family now seeks to compel Hunting’s medical records. It argues they are relevant to her claim it unreasonably delayed its investigation and improperly handled her vandalism claim. It demonstrates that Hunting’s disability began in 2014, and that it appears to have continued past 2018. It argues that Hunting’s health and its impact on the 17-month delay is relevant to her claims and to its own defenses. American Family also seeks discovery sanctions under Fed. R. Civ. P. 37(a)(3)(B). It argues that the material is clearly discoverable (and relevant) and purports to demonstrate that

Hunting’s attorney obstructed her deposition, made speaking objections, held inappropriate private conferences while a question was pending, and improperly coached her. Hunting denies any improper deposition conduct, and argues that her medical records are “privileged” under RCW 5.60.60(4). Hunting claims that given her “express waiver” of damages

based on the delay, her health during that period is not relevant. She too seeks sanctions, based on what she claims are “reckless misstatements of the law and facts, coupled with an improper purpose.” [Dkt. # 30 at 10 (citing Fink v. Gomez, 239 F.3d 989, 994 (9th Cir. 2001))]. American Family argues and demonstrates that Hunting has expressly not so agreed. [Dkt. # 38 at 1 (citing counsel’s email, attached to the Wenzel-Grette Dec., Dkt. # 28-4 at Ex. D) (“We will not agree to waive the extra contractual fees or to a limited dismissal of the remaining contractual claims.”)] Meanwhile, American Family also sent a subpoena to Verizon, seeking all of Jack Thomas’s cell phone records, including calls and texts, from October 31, 2018, to the present. Thomas and CLC ask the Court to quash or modify that subpoena under Rule 45 45(d)(3), because only calls and texts to and from Hunting (and perhaps other players in this case), made

during Thomas’s involvement in the case, could even be marginally relevant. Thomas and CLC claim they frequently work on insurance claims with American Family and its current law firm, do not trust them, and should not be required to share with them texts and calls in unrelated cases (and personal matters) under the guise of discovery in this case. American Family’s Response accuses Thomas of failing to meet and confer, and of making unsupported accusations about its conduct in other cases to incite the Court. It moves to Strike portions of his Response as improper and without evidence. It describes his objections to the Verizon subpoena as “baseless,” and explains why Thomas’s communications with Hunting and others related to this case are relevant. But it makes no serious attempt to explain why it

should have access to data wholly unrelated to this dispute. Instead, it points to boilerplate authority generally describing the discoverability of non-privileged material, and suggests Thomas should seek a protective order. It does not cite any authority for allowing it unfettered access to its adversary’s cell phone.

Under the Civil Rules, a party may obtain discovery on “any nonprivileged matter that is relevant to any party’s claim or defense.” Fed. R. Civ. P. 26(b)(1). However, discovery also must be “proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Id. A party may move to compel discovery after certifying their good faith attempt to resolve the dispute with the other party. Fed. R. Civ. P. 37(a)(1). “Although the party seeking to compel discovery has the burden of establishing that its requests are relevant, see Fed. R. Civ. P. 26(b)(1), ‘[t]he party who resists

discovery has the burden to show that discovery should not be allowed, and has the burden of clarifying, explaining, and supporting its objections’ with competent evidence.” Doe v. Trump, 329 F.R.D. 262, 270 (W.D. Wash. 2018) (quoting Blemaster v. Sabo, No. 2:16-CV-04557 JWS, 2017 WL 4843241, at *1 (D. Ariz. Oct. 25, 2017)). A. Hunting has placed her medical records at issue. Hunting argues that her medical records are privileged under RCW 5.60.60(4). She conditionally offers to waive some of the damages she seeks in exchange for keeping her medical records out of the case. But her complaint and her deposition testimony make clear that her extracontractual bad faith claims rely on her allegation that American Family handled her

claim unreasonably, partly because it waited so long to deny it. She also asserts a breach of contract claim for lost (monthly) rent. She admits that 17 months—the bulk—of the delay she complains about are not American Family’s fault. American Family argues that RCW 5.60.60(4)’s “privilege” does not apply in federal court, even where the court exercises supplemental jurisdiction over pendent state law claims1.

[Dkt. # 38 at 3, notes 8 and 9 (citing Gilson v. Evergreen at Talbot Rd. L.L.C., 2005 U.S. Dist. LEXIS 41152, *5-7 (citing Religious Tech. Center v. Wollersheim, 971 F.2d 364, 367 n.10 (9th Cir. 1992) (refusing to apply California litigation privilege in copyright action with pendent state law claims); Hancock v. Hobbs, 967 F.2d 462, 466-67 (11th Cir. 1992) (courts confronting issue have uniformly held federal privilege law applies in federal question cases with pendent state law claims)]. These authorities are not directly on point. More importantly and more persuasively, American Family argues that Hunting has waived her right to conceal her medical history because her claims have placed it at issue. [Dkt. # 38 at 5, (citing Carson v. Fine, 123 Wn.2d 206, 213-14, 867 P.2d 610 (1994); Randa v. Bear, 50 Wn.2d 415, 421, 312 P.2d 640, 644 (1957)( the privilege is that of the patient, and by the

terms of the statute it may be waived by plaintiff-patient.)]. Hunting alleges that American Family’s unreasonable delay in handling her insurance claim is central to her claim for bad faith damages. Hunting’s medical history is also likely relevant to American Family’s affirmative defenses that Hunting caused some or all her own damages, and that she failed to mitigate any damages. [See Dkt. # 29 at 17-19]. That history is therefore discoverable, and requiring her to produce her records in this case is proportional to its needs.

1 This may be true, but it is not the situation here. This is a § 1332 diversity jurisdiction case. [See Notice of Removal, Dkt. # 1]. American Family’s Motion to Compel [Dkt. # 26] is GRANTED. Hunting is ORDERED: (1) To respond and provide testimony regarding her medical and health issues at her continued deposition; (2) To respond to requests for production seeking her medical and health records

including American Family’s Requests for Production No. 13, 14, and 18; and (3) To authorize the retrieval of SSA records by completing and executing the SSA Consent for Release of Information Form (OMB No. 0960-0566), attached as Appendix B to Defendant American Family’s Second Requests for Production. She should do so within 20 days. B. American Family’s Subpoena to Verizon is overbroad. The answer to the second discovery dispute is at least a clear as the answer to the first. American Family has demonstrated that Thomas’ cell phone records and the communications he had with Hunting and other witnesses in this case are likely to be relevant, and they are discoverable.

American Family’s claim for unfettered access to Thomas’ cell phone and all his communications with anyone over the past two years—more than a year past his involvement in Hunting’s claim—is patently overbroad, and it cites no authority for it. The Court is not going to grant American Family permission to “rifle through private, irrelevant files.” Bush v. Pioneer Human Servs., No. C09-518 RSM, 2010 WL 11682489, at *4 (W.D. Wash. Jan. 8, 2010). Thomas and CLC’s Motion to Quash American Family’s subpoena to Verizon Wireless is DENIED. Their Motion to Modify that subpoena is GRANTED, as follows: American Family is entitled to subpoena Thomas’ text and call data for only a limited time period: November 18, 2018 to June 30, 2019.

American Family is entitled to subpoena data related to only a limited range of cell phone numbers during that period. American Family can subpoena from Verizon data reflecting calls and texts to and from the cell phone numbers associated with the following people: (1) Plaintiff Jami Hunting;

(2) Adjuster Erik Boe; (3) Inspector James Gomez; (4) Robert Robinson of Prime NW Construction. * * * These motions present plain vanilla discovery disputes that are resolved by reference to the Federal Civil Rules of Procedure, common practice, and common sense. The filings reflect that Hunting, American Family, and Thomas have each been guilty of sharp discovery practice and have become entrenched in untenable positions. Nevertheless, the Court is not inclined to award sanctions in what, to it, is a new case. The various Motions for Sanctions are DENIED. American Family’s Motion to Strike is DENIED. The “Motion to Compel” other discovery

imbedded in American Family’s Response [Dkt. # 43] is improper and it is DENIED. Dated this 13th day of October, 2020. A

Marsha J. Pechman United States Senior District Judge