Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Transcap Associates, Inc. v. Euler Hermes American Credit Indemnity Co.

June 3, 2009

TRANSCAP ASSOCIATES, INC., PLAINTIFF,
v.
EULER HERMES AMERICAN CREDIT INDEMNITY COMPANY AND ROBERT M. FRANCISCO, DEFENDANTS.



The opinion of the court was delivered by: Michael T. Mason United States Magistrate Judge

Hon. Judge John W. Darrah

Mag. Judge Michael T. Mason

MEMORANDUM OPINION AND ORDER

Plaintiff Transcap Associates, Inc. ("Transcap") moves this Court to compel defendant Euler Hermes American Credit Indemnity Company ("Euler") to provide a complete response to discovery requests served on or around November 26, 2008 [40]. Discovery closes on June 30, 2009. Having reviewed the parties' briefs and related filings [40, 41, 52, 54 and 56], this Court grants Transcap's request to compel Euler to produce additional documents and amend its responses to the discovery requests; denies without prejudice Transcap's request for a finding that Euler has waived all objections, including any objections on the basis of the attorney client or work product privilege, to the discovery requests; and denies the request for costs and fees. Consistent with the instructions set forth below, Euler is to produce additional documents and serve amended discovery responses by 6/12/09.

This case involves Euler's denial of coverage for claims made under a domestic markets business credit insurance policy (the "Policy"). Transcap purchased the Policy with an initial term of August 15, 2004 through August 14, 2005. The parties renewed the Policy on an annual basis, extending coverage through August 14, 2007. In its complaint, Transcap alleges that Euler and defendant Robert M. Francisco ("Francisco") fraudulently misrepresented the scope of the Policy and that Euler denied its claim for coverage in bad faith.

Transcap served its First Set of Interrogatories (the "Interrogatories") and First Set of Request for Production (the "RFP's") on or around November 26, 2008. Euler did not respond to Transcap's discovery requests within the time allotted under the Federal Rules of Civil Procedure. On February 17, 2009, Euler produced certain documents that are responsive to Transcap's RFP's, specifically the underwriting and claim files. Euler did not provide a written response to the Interrogatories or RFP's at any time prior to the filing of Transcap's motion.

The parties appeared for a preliminary hearing on Transcap's motion on April 18, 2009. At that time, Euler's counsel represented that it had additional responsive documents to produce, but objected to certain discovery requests as "overbroad." Subsequently, Euler's counsel informed this Court that it did not intend to produce any additional documents. We then entered a briefing schedule on Transcap's motion. On April 27, 2009, almost five months after Transcap served its discovery requests, Euler provided written responses to the Interrogatories and RFP's. Transcap submitted those responses to this Court on April 29, 2009 [52-3].

As an initial matter, Transcap asks this Court to find that Euler has waived any objections to the Interrogatories and RFP's. See Fed. R. Civ. P. 33(b)(4) ("The grounds for objecting to an interrogatory must be stated with specificity. Any ground not stated in a timely objection is waived unless the court, for good cause, excuses the failure."); Poulos v. Naas Food, Inc., 959 F.2d 69, 74 (7th Cir. 1992) (reasoning that the responding party "had probably already waived any objection to production by failing to object when disclosure was due."). Euler does not directly address this issue in its response, but rather argues that it has raised valid objections to certain requests and that compiling the requested information "would be impossibly burdensome." [54]. With limited exceptions, Euler's arguments are not well taken. Accordingly, there is no need for this Court to reach the issue of Transcap's request for a waiver. Furthermore, we find that waiver of Euler's ability to assert the attorney client and/or work product privilege is inappropriate in light of Transcap's questionable compliance with Local Rule 37.2 discussed below. We also note that the District Court reset the pre-trial conference to 2/18/10, the trial date to 3/1/10, and the date for entry of a briefing schedule on dispositive motions to 10/22/09 [38], and therefore Transcap is not unduly prejudiced by Euler's conduct. Transcap's request for a finding of waiver is denied at this time.

Transcap seeks discovery regarding claims made by similarly situated insureds. Interrogatory No. 10 asks Euler to "identify each claim for an insured other than Transcap where Euler provided insurance coverage under a domestic markets business credit insurance policy for a sale of goods or products by an insured that drop shipped such goods or products." Interrogatory No. 11 asks Euler to identify each claim "where Euler denied coverage under a domestic markets business credit insurance policy for a sale of goods or products by an insured on the basis that the insured did not have physical possession of the goods or products prior to sale." RFP No. 23 seeks documents pertaining to Euler's "acceptance or denial of coverage under any domestic markets business credit insurance policy for any claim other than the Transcap Claims where such claim involved an insured drop shipping products or goods directly to the buyer of such goods or products." Euler characterizes these requests as "Other Insured Discovery."

Euler argues that Other Insured Discovery is not relevant to any claim or defense at issue in this case. In support, Euler cites a number of cases involving breach of contract or other unrelated fact patters. See, e.g. American Roller Co., LLC v. Foster-Adams Leasing, LLP, 2006 U.S. Dist. LEXIS 34075, **1-2 (N.D. Ill. May 16, 2006) (precluding discovery of unrelated transaction, dispute and settlement in breach of contract case); Piacenti v. General Motors Corp, 173 F.R.D. 221, 225-26 (N.D. Ill. Apr. 23, 1997) (denying request to compel discovery of unrelated car models and distinguishing cases where discovery allowed on grounds that those cases involved substantially similar models). In response, Transcap cites a number of cases holding, in the insurance coverage context, that other insured information is discoverable [56-9]. Transcap's argument is persuasive. See Nestle Foods Corp. v. Aetna Cas. & Sur. Co., 135 F.R.D. 101, 106-07 (D.N.J. Aug. 31, 1990) (holding that information regarding the claims of other insureds with identical policy language "is relevant for purposes of discovery since it may show that identical language has been afforded various interpretations by the insurer.").

Euler also objects to Other Insured Discovery as overly broad and burdensome and states that it "would require Euler to review every domestic policy it has ever issued and the circumstances of every claim under such policies, which is impossible to do." However, Transcap is not seeking information related to "every domestic policy" but rather information regarding coverage claims made by other insureds under domestic markets business credit insurance policies. Transcap persuasively argues, in its reply, that other insureds' information is discoverable and relevant to the interpretation of policy language. See, e.g. American Colloid Co. v. Old Republic Ins. Co., 1993 U.S. Dist. LEXIS 8417, **4-5 (N.D. Ill. June 21, 1993) (permitting discovery regarding similar claims by other insureds). In order to limit the burden of production, and unless otherwise agreed or ordered by the District Court, Euler's response to Interrogatory Nos. 10 and 11 and RFP No. 23 is limited to domestic markets business credit insurance policies and a claim period or occurrence date between January 1, 2003 and December 31, 2008. Transcap's request to compel a response to these requests is otherwise granted.

Transcap also moves to compel a complete response to Interrogatory Nos. 12 and 13 which ask Euler to identify the facts that support its denial of Transcap's allegations and its assertion of affirmative defenses and counterclaims in various pleadings filed in this case. Euler does not address these Interrogatories in its response. However, Euler objected to these Interrogatories on the grounds that they are overly broad and burdensome and seek information protected by the work product doctrine. The work product privilege generally precludes discovery of "tangible things that are prepared in anticipation of litigation or for trial." Fed. R. Civ. P. 26(b)(3). The privilege only extends to documents and tangible things, not to underlying facts. Id.; see also Loctite Corp. v. Fel-Pro Inc., 667 F.2d 577, 582 (7th Cir. 1981); Caremark, Inc. v. Affiliated Computer Servs., Inc. 195 F.R.D. 610, 613-14 (N.D. Ill. Aug. 10, 2000). It also does not extend to documents prepared for business purposes. See Denari v. Genesis Ins. Co., 2002 U.S. Dist. LEXIS 12041, *16 (N.D. Ill. July 3, 2002) ("In analyzing documents prepared by insurance companies, courts have uniformly found that documents that are prepared for business purposes, as opposed to those prepared solely in anticipation of litigation, are not protected by the work product doctrine.") (quotations omitted). Accordingly, Euler cannot rely on the work product privilege to avoid responding to these Interrogatories.

Euler also asserts, in its response to Interrogatory No. 12, that "[t]o the extent discoverable, the information sought . . . may be derived or ascertained from the business documents [it] produced." Pursuant to Fed. R. Civ. P. 33(d), a party who relies on business records in responding to an interrogatory must specify the records "in sufficient detail to enable the interrogating party to locate and identify them as readily as the responding party could" or provide the interrogating party with "a reasonable opportunity to examine and audit the records." Here, Euler did not provide any information that would enable Transcap to identify the specific documents it relied on in responding to the Interrogatories. Accordingly, Euler's Fed. R. Civ. P. 33(d) response is inadequate and Transcap's request to compel a response to Interrogatory Nos. 12 and 13 is granted. To the extent that they have been ascertained at this point in the litigation, Euler must identify the underlying facts that support its allegations and/or sufficiently identify the documents it relied upon for its answer and counterclaim. Euler must also provide sufficient detail to enable Transcap to identify the records it relied on in responding to Interrogatory Nos 1 and 3-8.

Next, Transcap moves to compel a response to RFP Nos. 15-18. These RFP's seek documents pertaining to the drafting, interpretation, application and construction of Transcap's policies. Transcap alleges that Euler changed its interpretation of the Policy provisions during the policy period. To the extent that these requests seek information related to the Policy provision(s) Euler relied on in denying coverage, Transcap's motion to compel is granted. See Mach. Movers v. Fid. & Deposit Co., 2007 U.S. Dist. LEXIS 78376, ** 7-10 (N.D. Ill. Oct. 19, 2007) (allowing discovery of documents and information that relate ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.