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BURKE v. PRUDENTIAL INSURANCE COMPANY OF AMERICA

January 28, 2004.

BRENDA BURKE, Plaintiff,
v.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant



The opinion of the court was delivered by: MARTIN ASHMAN, Magistrate Judge

MEMORANDUM OPINION AND ORDER

This case is before the Court on Plaintiff Brenda Burke's motion for sanctions.*fn1 For the reasons set forth below, the Court finds that Plaintiff's motion should be granted in part and denied in part.

  I. Background

  Plaintiff filed this action against Defendant Prudential Insurance Company of America alleging that Prudential has denied her the long term disability benefits that she is entitled to under a policy issued by Prudential to AON Corporation, Plaintiffs former employer. The disability policy excludes any disability that is caused even partially by a psychological problem, except for the first 24 months of disability. Prudential claims that the 24 month benefit limitation applied to Plaintiff and that it did not pay Plaintiff beyond the 24 months because she no longer met the qualifications for benefits under the policy. Page 2

  On March 12, 2003, Plaintiff propounded discovery requests on Prudential. Prudential responded on April 23,*fn2 but some of its responses noted: "Prudential repeatedly requested that Plaintiff pro vide psychiatric medical records and history and to date, Plaintiff has failed to comply." (E.g. Prudential Resp. to Interrog. No. 6.) Prudential also objected to "the form of Interrogatory No. 8 [and 9] in that Prudential did not deny Plaintiffs claim, rather, Plaintiff's 24 month Initial Duration expired." The text of the disputed interrogatories will be set forth in the Discussion section below.

  On May 21, Plaintiff sent a letter to Prudential detailing the incompleteness of its responses, and Prudential responded by producing claim notes entries. Next, and of significance to our analysis, Plaintiff sent another letter to Prudential seeking more information on June 20. The letter conceded, with respect to the disagreement over the word "deny," that "it is clear from the nature of this dispute and the discovery propounded upon Prudential that the plaintiffs are referring to Prudential's decision to rely upon the `mental, psychoneurotic or personality disorder" exclusion, which is clearly set forth in Prudential's October 18, 2001, letter."

  Prudential responded seven days later and produced documents relating to its policies regarding Social Security benefit offsets. It also reiterated its position that "Prudential did not deny benefits in this case, rather, based on Plaintiff's failure to cooperate in producing her psychological records, Prudential had no other alternative but to determine that Plaintiff no longer met the qualifications under the plan."

  On My 15, 2003, Plaintiff filed motions to extend discovery, to compel, and for sanctions. The parties appeared before Judge Grady on July 23, 2003, who instructed them to Page 3 meet and work out the discovery issues together. After the parties met in early August, Prudential sent Plaintiff a letter reminding her that she was supposed to memorialize the substance of their meeting. Two days later, on August 28, Plaintiff sent an e-mail to Prudential which reiterated again what discovery was still incomplete. Prudential sent a letter to Plaintiff informing her that "investigation continues" on September 9th.

  Finally, on October 3, a few days before the parties were scheduled to appear for status in front of this Court, Prudential further supplemented its answers to the interrogatories and provided an Affidavit of Completeness that was (inexplicably) dated September 9.

  This Court heard oral argument on the motion for sanctions (the motion to extend discovery having been granted and the motion to compel having been terminated as moot). The parties were given the opportunity to additionally brief this issue after the oral argument and have provided supplemental briefs.

  II. Discussion

  Plaintiff asks this Court for sanctions against Prudential for its failure to respond to discovery which necessitated the motion to compel. Pursuant to Federal Rule of Civil Procedure 37(a)(4)(A), if a motion to compel is granted, or the nonmoving party produces the information sought after the motion to compel is filed, the moving party may be awarded reasonable expenses, including attorney's fees, incurred in bringing the motion. The motion for sanctions will be granted unless the moving party failed to make a good faith effort to obtain the information without court action. Fed.R.Civ.P. 37(a)(4)(A). The nonmoving party may also avoid the sanctions if its position was "substantially justified, or that other circumstances make Page 4 an award of expenses unjust." Fed.R.Civ.P. 37(a)(4)(A); see also Rickels v. City of South Bend, 33 F.3d 785, 787 (7th Cir. 1985) (noting that Rule 37(a)(4) is a fee-shifting rule and the victor is entitled to fees and expenses). If the motion to compel is granted in part and denied in part, the court may apportion the reasonable expenses in a just manner. Fed.R.Civ.P. 37(a)(4)(C).

  The non-moving party cannot avoid sanctions by producing the information after the motion to compel is filed. Illinois Tool Works, Inc. v. Metro Mark Prods., Ltd., 43 F. Supp.2d 951, 960 (N.D. Ill. 1999). Instead, it bears the burden of proving that its initial position was substantially justified. Rickels, 33 F.3d at 787. If the nonmoving party cannot show this, then the moving party is entitled to reasonable incurred costs and fees that were the product of the nonmoving party's failure to provide the requested information and the resulting motion practice. Illinois Tool Works, 43 F. Supp.2d at 962.

  We first note that Plaintiff made the requisite good faith effort to resolve the discovery disputes without court intervention. She sent various letters detailing what she believed was inadequate about Prudential's answers to the interrogatories. We agree with Plaintiff that Prudential's dispute over Plaintiffs use of the word "denial" was merely a question of semantics. This Court agrees with Plaintiff that where an insurance company fails to pay that which a claimant requests, it has denied a claim. And, if there is any legal significance of this ...


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