WACO HIPPODROME INC. v. CENTRAL MUTUAL INSURANCE COMPANY

Opinion

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS WACO DIVISION WACO HIPPODROME INC., § § PLAINTIFF, § § v. § CIVIL NO. 6:22-cv-349 § CENTRAL MUTUAL INSURANCE § COMPANY D/B/A CENTRAL § INSURANCE, THE TINES GROUP, INC., § AND NATIONAL INFORMATION AND § COMMUNICATIONS EQUIPMENT § NETWORK, INC. D/B/A NICE § NETWORK, INC., § § DEFENDANTS. §

ORDER ON DISCOVERY HEARING

On August 9, 2024, the Court considered the issues presented in Plaintiff’s Discovery Dispute Chart submitted on July 19, 2024, (attached to this Order as Exhibit A), and the Court, having considered said disputes, and after hearing the arguments of counsel, finds that Plaintiff’s requested relief should be GRANTED in part and DENIED in part as follows. IT IS ORDERED, ADJUDGED AND DECREED that: 1) Central Mutual Insurance Company (“Central”) must produce, by Friday, August 16, 2024: a) The complete training file for Caroline (Veahman) Isenberg, including without limitation all records of training attended or completed by the same.

b) All documents concerning training provided to Caroline (Veahman) Isenberg concerning Central’s Best Practices Guidebook.

c) All documents concerning training provided to Caroline (Veahman) Isenberg concerning the Policy. d) All documents concerning training, if any, contained in Caroline (Veahman) Isenberg’s personnel file All other relief requested in Plaintiff's Discovery Chart #4 is DENIED.

SIGNED this 20th day of August, 2024.

JUDGE hfe

ORDER ON DISCOVERY HEARING Page 2 of 8 Waco Hippodrome, Inc. v. Central Mutual Insurance Company, et al.

EXHIBIT A WACO HIPPODROME, INC.’S DISCOVERY DISPUTE CHART Issue Hippodrome’s Position Central Insurance’s Position 1. Training Plaintiff has made a claim for breach of Central stands by its discovery Materials for contract and bad faith in connection with objections issued on July 15, 2024. Central’s the manner in which the Claim was Central disputes that it provided Claims handled and/or adjusted Central’s claims generic discovery objections and Handler(s) handlers (ECF 1). In connection with maintains its valid objections to on this Claim this claim, Plaintiff proffered an expert Plaintiff’s recent discovery requests. report substantiating Plaintiff’s claim that As an initial matter, Texas courts have Whether Central’s claims handlers actions fell historically rejected requests regarding Central must below the standard of care or otherwise training or personnel files, finding that produce the violate Central’s own internal policies or such requests are an impermissible personnel file, the Policy itself. See Ex.1. fishing expedition. In re Nat’l Lloyds training file Ins. Co., 2014 WL 5785871, at *2 and (Tex. Oct. 31, 2014); documents Plaintiff served discovery requests Gutierrez v. State Farm Lloyds, No. concerning seeking the personnel file of the primary 7:14-CV-430, 2015 WL 13188353, at training claims handler on this Claim, and *7 (S.D. Tex. Jan. 22, 2015). provided to documents concerning the training the Central Further, the Texas Supreme Court has Central provided to all three claims Claims File recognized that requests for materials handlers assigned to this specific Claim. Handler(s) unrelated to the dispute at issue, in the See Ex.2 (RFP1-7). In response, Central working on hope that they might reveal some lodged a litany of generic objections and this specific additional wrongdoing by a defendant, failed to produce any documents, citing Claim are facially overbroad and improper. Dizdar v. State Farm Lloyds, 2015 WL In re Nat'l Lloyds Ins. Co., 449 12780640 at *6-7 (S.D. Tex. Jan. 21, S.W.3d at 488–89; see also Dizdar v. 2015). This case is clearly State Farm Lloyds, No. 7:14-CV-402, distinguishable from the present case. Id. 2015 WL 12780640, at *6 (S.D. Tex. Jan. 21, 2015); Guiterrez v. State Farm Lloyds, No. 7:14-CV-430, 2015 Plaintiff requests these documents in WL 13188353, at *6 (S.D. Tex. Jan. order to evaluate the extent to which the 21, 2015); Reyna v. State Farm subject claims handler(s) were not Lloyds, No. 7:14-CV-420, 2015 WL properly trained or supervised, or 12940021, at *6 (S.D. Tex. Jan. 8, whether the subject claims handler(s) 2015). simply failed or refused to follow Central’s internal policies, procedures Moreover, as a result of Plaintiff’s and the Policy itself. repeated breach of the confidentiality and protective order [ECF No. 16],

resulting in irreparable harm, Central WACO HIPPODROME, INC.’S DISCOVERY DISPUTE CHART Issue Hippodrome’s Position Central Insurance’s Position Requested Relief objects to the production of any additional confidential documents, as

information in a person’s personnel Central Insurance must within three (3) file would include (by its very nature) days of this Order: sensitive, private, and extremely confidential information and 1) Produce the personnel file for Plaintiff’s counsel has demonstrated Caroline (Veahman) Isenberg, that it is incapable of complying with excluding any confidential the protective order in this matter, and financial information in response thus, the production of these materials to Plaintiff’s Request for (as well as any other Confidential Production No. 1. information) should be prohibited.

Relief Requested: 2) Produce the complete training Defendant respectfully requests that files and all documents this Court deny Plaintiff’s requested concerning training provided to relief in its entirety and determine that Caroline (Veahman) Isenberg, Defendant has complied with Steve Hope and Scott Mull, Plaintiff’s discovery requests dated including any training concerning June 14, 2024. Defendant further Central’s Best Practices requests, per its Motion to Enforce, Guidebook previously produced that Plaintiff is precluded from in this case, in response to obtaining and utilizing any Plaintiff’s Request for Production confidential documents in the present Nos. 2-7. litigation for violating the protective order in place in this matter.

2. The level Plaintiff has made a claim for breach of Central stands by its discovery of activity by contract and bad faith in connection with objections issued on July 15, 2024. Claims the manner in which the Claim was The request is patently overbroad and Handlers on handled and/or adjusted Central’s claims is a fishing expedition and will not this Claim handlers (ECF 1). In connection with lead to the discovery of relevant from this claim, Plaintiff proffered an expert materials in this matter. Moreover, January report substantiating Plaintiff’s claim that the discovery request does not meet 2021- Central’s claims handlers actions fell the proportionality requirements of the October 2022 below the standard of care or otherwise Federal Rules of Civil Procedure. violate Central’s own internal policies or Texas courts have routinely found that Whether the Policy itself. See Ex.1. Plaintiff’s information regarding other claims Central must WACO HIPPODROME, INC.’S DISCOVERY DISPUTE CHART Issue Hippodrome’s Position Central Insurance’s Position produce retained, testifying expert indicated that and insureds is irrelevant to the claim information one reason the subject claims handler(s) at issue before a court. See Columbia and failed to properly handler the Claim may Mut. Ins. Co. v. Kerrville Prof’l. documents for have because the subject claims Prop., Ltd., 2017 WL 7805755 at *5 all claim file handler(s) were overwhelmed by the (W.D. Tex. July 12, 2017). log entries number of claims Central assigned to The Western District Court made by the each claims handler during the relevant appropriately noted in Columbia that claims time period. Id. There was also separate claims typically arise out of handler(s) testimony from the primary claims “entirely different factual contents” assigned to handler indicating this Claim was re- and can “involve different policy this Claim assigned to another claims handler due to terms or a different type of policy,” during the volume concerns. See Ex.3. making discovery requests like time period in Plaintiff’s wholly inappropriate for the which this needs of this case. See id. at *5. Claim was Plaintiff served discovery requests Thus, requesting all claim file logs for being adjusted seeking all claim file log entries for the separate, unrelated claims, which claims handlers assigned to this Claim likely include confidential information See Ex.2 (Rog 11, RFP12-14). In regarding Central’s insureds, is an response, Central lodged a litany of impermissible fishing expedition, calls generic objections and failed to produce for irrelevant information, and is not any documents, citing the Columbia Mut. reasonably calculated to lead to the Ins. Co. v. Kerrville Prof’l. Prop., Ltd., discovery of admissible evidence. 2017 WL 7805755 at *5 (W.D. Tex. July Because this discovery issue 12, 2017) case in support. Id. This case, undoubtedly calls for disclosure of and its progeny, is clearly distinguishable confidential and proprietary from the present case. Id. information, and Plaintiff has failed to comply with the Court’s protective order, Central objects to the In connection with its theory in this case, production of any additional Plaintiff needs information concerning confidential documents. the level of activity for each claims handler assigned to this Claim during the Relief Requested: relevant time period. Central maintains a Defendant respectfully requests that database of claim file log entries tracking this Court deny Plaintiff’s requested all activity/access to each claim file by relief in its entirety and determine that user. It appears that a report could be run Defendant has complied with by user in order to produce a document Plaintiff’s discovery requests dated containing each log entry for the subject June 14, 2024. Defendant further claims handler(s) chronologically such requests, per its Motion to Enforce, that Plaintiffs expert could evaluate WACO HIPPODROME, INC.’S DISCOVERY DISPUTE CHART Issue Hippodrome’s Position Central Insurance’s Position whether Central had assigned too many that Plaintiff is precluded from claims to each claims handler. obtaining and utilizing any confidential documents in the present

litigation for violating the protective Requested Relief order in place in this matter.

Central Insurance must within three (3) days of this Order: 1) Provide a complete response to Plaintiff’s Interrogatory No. 11.

2) Produce all demand letters, petitions or complaints sent or filed against Central by any insured identified in CMIC0003801-3838 in response to Plaintiff’s Request for Production Nos. 12-14.

3. Similar Plaintiff has made a claim for breach of Central stands by its discovery Claims or contract and bad faith in connection with objections issued on July 15, 2024. Complaints the manner in which the Claim was Similar to the foregoing issues, this made against handled and/or adjusted Central’s claims Request calls for confidential Central handlers (ECF 1). In connection with information regarding separate and during the this claim, Plaintiff proffered an expert unrelated claims. The demand letters, Relevant report substantiating Plaintiff’s claim that petitions, or complaints that Plaintiff Time Period Central’s claims handlers actions fell seeks are irrelevant to the disputed below the standard of care or otherwise issued in this matter. Central Whether violate Central’s own internal policies or incorporates its response to Issue No. Central must the Policy itself. See Ex.1. Central 2. produce previously produced documents notice of Central further states that the identifying insureds who made some type claims, previously produced documents of property damage/business loss claim demand (CMIC0003801-3838) related to a in connection with the Winter Storm. letters, specific request for information See Ex.4 (CMIC0003801-3838). petitions or related to a subrogation lawsuit WACO HIPPODROME, INC.’S DISCOVERY DISPUTE CHART Issue Hippodrome’s Position Central Insurance’s Position complaint by involving Central, and that by insured(s) producing this document, Central in Plaintiff served discovery requests against no way waived its right to withhold seeking any demand letters, petitions or Central for information of other insureds – per the complaints made or filed against Central losses express terms of the protective order, by any insured identified in incurred and the production was a single CMIC0003801-3838. See Ex.2 (RFP10- similar to document in the subrogation file – it 11, Rog12). In response, Central lodged Plaintiff’s was not the production of each of a litany of generic objections and failed losses due to those insured’s claim files. to produce any documents, citing the the Winter Columbia Mut. Ins. Co. v. Kerrville The request is thus, an overbroad Storm Prof’l. Prop., Ltd., 2017 WL 7805755 at fishing expedition and should be *5 (W.D. Tex. July 12, 2017) case in denied. support. Id. This case, and its progeny, Relief Requested: is clearly distinguishable from the present case. Defendant respectfully requests that this Court deny Plaintiff’s requested

relief in its entirety and determine that Plaintiff is only seeking demand letters, Defendant has complied with petitions or complaints made against Plaintiff’s discovery requests dated Central which have already been linked June 14, 2024. Defendant further to the present case by Central because of requests, per its Motion to Enforce, their similarity and during a very specific that Plaintiff is precluded from period and geographic location. See obtaining and utilizing any Ex.4. Plaintiff has already established confidential documents in the present facts concerning Central’s mis-handling litigation for violating the protective of the present claim and re-assignment of order in place in this matter. the claim from one handler to another due to volume. See Ex.1. Under these specific circumstances, Plaintiff entitled to discovery of any other similar claims for breach of contract and bad faith made against Central related to the handling of similar property damage claims resulting from the same Winter Storm.

Requested Relief WACO HIPPODROME, INC.’S DISCOVERY DISPUTE CHART Issue Hippodrome’s Position Central Insurance’s Position Central Insurance must within three (3) days of this Order: 1) Provide a complete response to Plaintiff’s Interrogatory No. 12.

2) Produce all demand letters, petitions or complaints sent or filed against Central by any insured identified in CMIC0003801-3838 in response to Plaintiff’s Request for Production Nos. 10-11.

Requested Global Relief

1) Plaintiff be provided an opportunity to amend or supplement its expert witness designations and reports following Central’s compliance with document production and interrogatory responses.