Opinion
4-21-cv-00050
02-28-2022
DOMINO TWO LLC Plaintiff, v. AUTO-OWNERS INSURANCE COMPANY Defendant.
MD KC LAW Megan M. Duma MO #72578 ATTORNEY FOR PLAINTIFF, DOMINO TWO, LLC
MD KC LAW Megan M. Duma MO #72578 ATTORNEY FOR PLAINTIFF, DOMINO TWO, LLC
MOTION TO COMPEL DISCOVERY & LEAVE TO AMEND ONE EXPERT DISCLOSURE
Honorable Greg Kays
COMES NOW by and through undersigned Counsel, Plaintiff, Domino Two, LLC to (1) Move the Court to Compel Defendant Owner's Insurance (aka Auto-Owners Insurance) to produce the insurance company's underwriting file for an insurance policy coverage which is at issue in this case; and (2) For leave to amend their expert disclosures.
Motion To Compel the Underwriting File
This case involves a claim for breach of an Insurance Policy Contract and vexatious refusal to pay a valid insurance claim under Missouri Statues §375.296 and 375.240. In order to prove Vexatious Refusal Claim, Plaintiff must show that the insurance company (1) refused to pay the claim; and (2) is without reasonable cause or excuse as the facts would appear to a reasonable and prudent person.
In a timely manner, Plaintiff requested from Defendant Owner's Insurance “All reports, information, photographs, assessments, or any other documents relied on, taken, produced or used to underwrite the Policy.”
Defendant formally responded “Objection. Defendant objects to this Request on the grounds that it seeks proprietary business information and seeks information that is not reasonably calculated to lead to the discovery of admissible evidence. Defendant further objects on the grounds that it is irrelevant overbroad and unduly burdensome.”
Defendant did not produce any of the underwriting file.
On or about November 2, 2021 Plaintiff's Counsel and Defense Counsel met and conferred via a phone conversation, and discussed the underwriting documents. They agreed to look at some case law on the matter.
On November 14, 2021, Defense Counsel sent an email which stated, :
We intend to stand on our objection with regard to the underwriting file. We contend that the request is overbroad, unduly burdensome, and seeks irrelevant information. It is your burden to show that this file would be relevant and we contend that it is not.
There is no dispute that a policy was issued and full force and effect on the date of loss and we have not asserted as a defense that there was no policy in effect. The dispute comes instead from the amount that AO believes Plaintiff is owed under the policy and turns on the fact that the damage Plaintiff claims is not related to hail and is not covered under the policy. Plaintiff has not argued that the policy requires reformation or that the policy provisions at issue are ambiguous. Given this, the underwriting is wholly irrelevant to this case. See Milinazzo v. State Farm Ins. Co., 247 F.R.D. 691 at 702-704 (S.D. Fla. 2007). (“An insurer's decision to issue insurance is distinct from an insurer's decision to deny a claim.” See also Brighton Crossing Condo. Ass'n v. Am. Family Mut. Ins. Co., 2016 U.S. Dist. LEXIS 119662, *12-13 (holding that underwriting file was not relevant to plaintiff's claims on how adjusters evaluated the hail damage to the thirty-six buildings).
That said, we the only thing in the underwriting file that may be relevant is any inspection done prior to issuing coverage. We will agree to limit the request/response to said inspections. Please let us know if this is agreeable to you. I am available all day for a call to discuss.
Thanks,
Killian
To which Plaintiff's Counsel responded:
Hi Killian,
They could have a note in there saying, “this is a bad deal, and we shouldn't insure it, but who cares let's take the money anyways.”
So I am going to file a motion. If you could send the inspection reports, that would be great.
To which Defense Counsel responded:
Megan,
The offer to limit the request to the inspection reports were an attempt to compromise as my case law indicated that we do not believe you are entitled to the Motion. Since you aren't willing to compromise, we are not going to produce any part of the underwriting file voluntarily. Go ahead and file the Motion and we can see what the judge wants to do.
Thanks,
Killian
At issue here is a claim for Vexatious Refusal to Pay an Insurance Claim. The Insured had been policyholders since 2014. The Claim arose in 2019. Owner's Insurance is denying the Claim based on “wear and tear” as an exception to Policy coverage. The problem is: why did they continue to insure a Property for 5 years that was so “worn and torn?” The underwriting file could contain very relevant information to their bogus defense and to the validity of Plaintiff's Vexatious Refusal to Pay Claim.
As Counsel noted in the email exchange with Defense Counsel, if there is something (or even nothing) in there about the state of the Property (i.e. “wear and tear”), then it could be very relevant to the insurance company's decision not to pay the claim. Where, as here, the Plaintiff-Insured has a claim of bad faith denial, the production of the underwriting file is entirely discoverable. See Westport Insurance Corporation v. Hippo Fleming & Pertile Law Offices, 219 F.R.D. 214, 217 (W.D. Penn. 2017). “Given the bad faith claim and the related allegations, the underwriting may well be relevant.” Id. As such, Plaintiff requests the Court compel Owner's Insurance entire underwriting file for this Property.
Motion For Leave To Amend Expert Designations
On August 1, 2021 Plaintiff filed its Expert Disclosures on time. On September 3, 2021 Plaintiff served an Amended Initial Rule 26 Disclosures, identifying Property Appraiser Matt Woods as a witness but failed to add him to the Expert Disclosures. On September 20, 2021 Plaintiff's Counsel told Defense Counsel of her mistake, and asked for a Stipulation to just admit the Appraiser Matt Wood's Appraisal. Defense Counsel never responded. On November 19, 2021 Plaintiff's Counsel served the official Amended Expert Disclosures, only adding Matt Woods. Defense Counsel indicated they would strike this expert due to the scheduling order timeline. Plaintiff's Counsel seeks leave to amend its Expert Disclosures only to add Matt Woods, who has really been disclosed since September 2021.
Leave to amend shall be freely given when justice so requires. FED. R. CIV. P. 15 (a)(2). Here, Plaintiff's Counsel made a simple mistake of not adding the Appraiser to the Expert Disclosures, but did add him to the Rule 26 Witness List. Shortly after discovering her error, she let opposing counsel know of what was going on. This is a very limited witness whose only purpose is to establish the value of the Property once it was repaired. Plaintiff seeks leave to amend its Expert Disclosures under F.R.C.P. 15 and 16. Because Plaintiff's Counsel let Defense Counsel know of her mistake almost 3 months ago, the Amendment should be allowed.
Plaintiff hereby request the Court:
(1) Compel Owner's Insurance entire underwriting file because it is relevant to the Vexatious Refusal to Pay Claim; and
(2) Allow Plaintiff to add the one Expert Witness to the Disclosures.