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Levin v. Menard, Inc.

United States District Court, N.D. Illinois, Eastern Division

June 10, 2014




Before the court is plaintiffs Ronald and Michelle Levin's motion to compel certain discovery, including the re-deposition of Travis Hoover, an insurance adjuster for Zurich North America ("Zurich"). (Pls.' Mot.) [Dkt 67.] Defendant Menard, Inc. ("Menard") opposes the motion (Def.'s Resp.) [dkt 69], and plaintiffs have replied (Pls.' Reply) [dkt 88]. For the following reasons, plaintiffs' motion is granted in part and denied in part.


Plaintiffs seek damages from Menard and Fields Fire Protection, Inc. ("Fields") for injuries Mr. Levin allegedly sustained when he slipped on water in a Menard's store in Matteson, Illinois, on June 28, 2010. (Second Am. Compl. ¶¶ 1, 12.) [Dkt 71.] Plaintiffs maintain that the water leaked from a spigot being repaired on the day of the incident by Fields employees. ( Id. ¶¶ 11-12.) Mr. Levin alleges that he reported the accident to Menard's customer-service personnel and later discovered that they had known about the leak for several hours. ( Id. ¶ 14.)

Plaintiffs also allege that, shortly after Mr. Levin reported the accident, Menard's customer-service personnel photographed the area of the fall and the source of the water, and refused to let Mr. Levin take his own pictures of the accident site. ( Id. ¶ 100-03.) The pictures of the scene are now missing, and questions about what happened to them are at the heart of plaintiffs' motion to compel. During discovery, Menard's employee Tammie Sarek testified in a deposition that she took the pictures with a digital camera and that store manager Donovan Burney then uploaded the photographs to a computer and sent them to Menard's insurance company, Zurich. (Pls.' Mot., Ex. 1, Dep. of Tammie Jo Sarek, at 73-74.) In contrast, according to Menard, Mr. Burney said that he did not send the photographs and thought Ms. Sarek did. (Def.'s Resp. at 3.)[1]

In August 2013, plaintiffs' counsel deposed Travis Hoover, one of two Zurich insurance adjusters assigned to this matter. (Def.'s Resp., Ex. 2, Dep. of Travis Hoover, at 4-6.) Mr. Hoover testified that Ms. Sarek told him about the photographs of water on the floor during his investigation of the accident and that he requested them from Menard's corporate office on July 13, 2010, but a corporate representative denied receiving any photographs. ( Id. at 19-23.) Mr. Hoover said that he followed up with Ms. Sarek, who promised to send the photographs to corporate again. ( Id. at 21.) Mr. Hoover stated that he then sent a follow-up email about the photographs to Menard's corporate representative on July 30, 2010, but never received the photographs. ( Id. at 21-23.)

Throughout Mr. Hoover's deposition, counsel for Menard objected that communications between Menard's employees and the insurance company were privileged. ( Id. at 11-21.) Based on that objection, Menard's counsel directed Mr. Hoover not to answer a general question about what he was told by Menard's employees when he asked about the facts of the claim. ( Id. at 11-12.) Counsel did, however, allow Mr. Hoover to answer questions about his conversations with Menard's employees with respect to the disputed photographs, though counsel repeatedly confirmed that he was not otherwise waiving the insurer-insured privilege. ( Id. at 15, 19.) Menard's counsel claimed to represent both Zurich and Menard in this litigation. ( Id. at 12.)

In addition to directing Mr. Hoover not to answer certain questions, Menard refused to produce claim notes, photographs, and electronic communications exchanged between Zurich and Menard on the basis that they are privileged and that plaintiffs' requests for production were vague and overbroad. (Pls.' Mot., Ex. 7 ¶¶ 7, 15; Ex. 9 ¶ 6.) Menard's response to plaintiffs' request for records asserts privilege as to four specific documents: (1) a one-page "Notice of Occurrence/Claim" that a Zurich employee drafted on June 28, 2010, based on information from Ms. Sarek; (2) a three-page document of "Care Center Notes" that a Zurich employee drafted on June 28, 2010, based on information from Ms. Sarek; (3) a two-page "Claim Reporting Guide" that Ms. Sarek drafted on June 28, 2010, and submitted to Zurich; and (4) claim notes based on communications with Menard's managers and defense counsel that were entered into an electronic database that Zurich maintains. (Pls.' Mot., Ex. 7 ¶ 15.)[2]

Around the same time, on August 12, 2013, plaintiffs' attorney issued a Notice of Deposition under Fed.R.Civ.P. 30(b)(6) for a Menard's representative who could testify about the company's document retention policies and computer and data systems. (Pls.' Mot., Ex. 6.) On September 3, 2013, two days before the deposition was set to occur, Menard offered Bryan Araque, who had been the general manager of the Matteson store since July 2011, as a representative to discuss general policies at his store. (Pls.' Mot., Ex. 10.) Menard objected, however, to producing a representative to address Menard's overall computer and data systems, challenging that topic area as vague and overbroad. ( Id. ) Mr. Araque was deposed on September 5, 2013, and testified that the information on the hard drives of the computers at the Matteson store had been put on disks and sent to Menard's corporate office in April and May of 2013, where they were erased. (Pls.' Reply, Ex. 12, Dep. of Bryan Araque.) Mr. Araque also stated, however, that he did not have specific knowledge about how Menard's computer and data systems operate or the corporate office's retention policy for electronic information. ( Id. at 45, 49, 51-52.) Plaintiffs' attorney says that he tried to confer with Menard's counsel about its objections after Mr. Araque's deposition, but Menard's attorney refused to discuss the matter. (Pls.' Mot. ¶ 24.)

On September 10, 2013, plaintiffs moved to compel the production of all field notes and insurances files relating to their claims, and the re-deposition of Mr. Hoover with instructions that Menard's counsel not claim to represent or assert attorney-client privilege regarding Zurich. (Pls.' Mot. ¶ 9.) Plaintiffs also argued Menard had unreasonably delayed the litigation by (1) not producing a reasonably knowledgeable person to discuss the matters described in the 30(b)(6) notice, (2) erroneously asserting attorney-client privilege, and (3) improperly refusing plaintiffs' requests for production. ( Id. ¶ 27.) Plaintiffs challenged Menard's counsel's assertion of the insurer-insured privilege, an offshoot of the attorney-client privilege under Illinois law, on the basis an attorney representing both Menard and Zurich has a conflict of interest. ( Id. ¶ 9.) (The parties agree that state law governs the assertion of privilege. Fed.R.Evid. 501.) Even if the privilege applied, plaintiffs contended, it was waived when Menard put the communications at issue by destroying the photographs. ( Id. ¶¶ 13-19.)

Menard responded, defending its actions during discovery. First, it argued that it had properly asserted, and did not waive, the insurer-insured privilege under Illinois law. (Def.'s Resp. ¶¶ 19-42.) Menard also contended that there is no conflict of interest in its attorney representing both Menard and Zurich because Illinois law allows an attorney to represent an insured and its primary insurer if hired to represent the insured in litigation. ( Id. ¶¶ 43-53.) Additionally, Menard defended its refusal to produce a Rule 30(b)(6) representative regarding computer and data systems by arguing that plaintiffs' request was overbroad, asserting that "there is no evidence that the photographs taken by Tammie Sarek ever left the digital camera in the Matteson Menard store." ( Id. ¶¶ 56-58.) Finally, Menard argued that sanctions would be inappropriate because it was substantially justified in asserting privilege and plaintiffs' attorney did not properly confer before moving to compel. ( Id. ¶¶ 62-65.)

On September 12, 2013, plaintiffs filed a second amended complaint adding a count of spoliation of evidence. (Second Am. Compl. ¶¶ 96-114.) In the added claim, plaintiffs allege that Menard breached its duty to preserve the pictures its employee took of the scene of the accident. ( Id. ¶¶ 113-14.) Plaintiffs contend that the loss of these pictures, combined with Menard's employees' refusal to let Mr. Levin take his own pictures, has prevented them from proving the size and source of the water. ( Id. ¶ 108.)

On September 13, 2013, at the parties' request, the court deferred further briefing on the motion to compel and struck the fact discovery cutoff so that the parties could focus on gathering evidence related to medical expenses and lost wages for the purpose of potentially settling this case. [Dkt 72.] On May 9, 2014, the court reinstated briefing after the parties were ...

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