Katrina insurance litigation – selected Nationwide and State Farm cases

Early in the month I began a somewhat regular “sweep” of Katrina insurance cases in the federal court with new docket entries.    In a single day recently, docket entries were made on approximately 75 different cases.  It would be impossible to estimate exactly how many different cases had one or more docket entry during the month of February; but, I’m willing to guess hundreds.

Obviously, someone has to read every one of those new documents.  I’m not the one.  In this short and busy month, it has been difficult at times  to “sweep” my kitchen, much less the case files – so much so, in fact, this could be called a “lick and a promise” post about cases that caught my eye.

Nationwide, you may recall, is the carrier that prompted Judge Senter’s memorable “illusionary coverage” remark.  At this point, it appears the “illusion” morphed into a  “delusion” with Nationwide thinking he would eventually see things their way.  While he has been “on their side” at times, I’ve seen Judge Senter issue an order in several Nationwide cases that I don’t recall seeing elsewhere.  Consequently, I’ve also seen another first, Notice of Private Mediation:

Pursuant to the Court’s January 12, 2009 Order for Mediation, counsel for Defendants Nationwide Mutual Fire Insurance Company, Ntionwide Mutual Insurance Company, and Nationwide Property and Casualty Insurance Company, on behalf of both parties, hereby advises the Court that the parties will hold a private mediation on or before March 19, 2009, in lieu of participating in the Court-supervised mediation program.

Since I don’t want to commit the logical fallacy of suggesting correlation proves causation, I will simply point out I noted a number of Nationwide cases were settled this week.

However, other Nationwide cases I pulled do not appear to be moving in that direction.  Politz v Nationwide , for example, is a dispute about the plaintiff’s private coverage with Nationwide – although you might think  otherwise.  Nationwide focused on NFIP and other disaster assistance the Politz received and did so in a way that its conduct appears contrary to the NFIP Litigation Philosophy:

Lengthy interrogatories, requests for extensive document production, or multiple and other unnecessary discovery should also be avoided.

For example, Nationwide filed a motion to compel Ms. Politz to sign a Privacy Act Release so the Company could obtain her file from lien holder SBA.  Her Response explains the reluctance:

Plaintiff disputes the relevance of the majority of the documentation contained with the SBA file as it contains personal information, confidential information and financial information that is complete unrelated to the issues in this case.

Nationwide has previously attempted to use every government document that Plaintiff has signed against her; therefore, she objects to the release of the entire contents of the SBA file and will not waive her privacy rights.  The majority of the information sought by Nationwide from the SBA file is irrelevant to this case.

“Requests for extensive document production” were by no means limited to Nationwide.  Take a look at at the Plaintiff’s Emergency Motion filed in O’Keefe v State Farm (ignore reference about moving the case as that issue was resolved)

Since improperly removing this case to Federal Court, Defendants have noticed sixteen (16) Subpoenas Duce Tecum… improper discovery tactics that were never attempted in more than two years of litigation in State Court. Six (6) Notices of Issuance of Subpoena Duces Tecum, two of which are addressed to Plaintiffs’ expert witnesses, were filed on October 1, 2008; three (3) Notices of Issuance of Subpoena Duces Tecum were filed on October 6, 2008; and seven (7) Notices of Issuance of Subpoena Duces Tecum were filed on October 10, 2008. Plaintiffs filed [three (3)]…Motions to Quash…[twelve (12)] on October 9, 2008 and Motions to Quash… and [another] on October 14, 2008…

Plaintiffs submit that the urgent and necessitous relief requested herein is necessary to avoid undue expense and burden on the subpoenaed parties, and to prevent Plaintiffs from suffering irreparable prejudice.

An excerpt from one Motion to Quash fills in more of the picture from the Plaintiff’s perspective.

The subject Subpoena should also be quashed because it seeks information not reasonably calculated to lead to the discovery of admissible evidence in this litigation…

Any and all documents you have in your possession or under your control relating to any real estate owned by Daniel B. O’Keefe and/or Celeste A. Foster O’Keefe, including but not limited to the properties located at the following addresses…

This request includes, but is not limited to, any and all documents in your possession or under your control relating to the above referenced properties, including correspondence, memorandums, photographs, diagrams, checks, inspection reports, investigative reports, appraisal reports, loan closing materials, mortgage information, etc.

Little wonder the Plaintiff’s refer to State Farm’s fishing expedition when stating their objection.

…Plaintiffs object to this request because it is overly broad, in time and scope. This request seeks documents related to personal and confidential financial and loan information for an unlimited period of time, not in any manner restricted to the period of time surrounding Hurricane Katrina…

Plaintiffs also object to this request because it seeks information that would be protected by the collateral source doctrine. None of the information sought in this Subpoena is reasonably calculated to lead to the discovery of admissible evidence to prove or disprove any claim or defense in this litigation. The Subpoena amounts to nothing more than a fishing expedition, and should not be looked upon favorably by this Court.

State Farm’s fishing expeditions are so frequent they’ve become the Bass Pro of the insurance industry.  Take a look at the docket report for Perkins v State Farm and see if you don’t think these Plaintiffs would agree.  Two entries on the docket were particularly noteworthy.  You’ll need a mirror to read the first- Plaintiff’s Opposition to State Farm’s Motion to Quash Plaintiff’s Notice of Deposition and Request for Production of Documents under FRCP30(b)(5 and 6) – as State Farm’s position in Perkins is a reversal of the Company’s position in O’Keefe.

State Farm Fire and Casualty Company’s objections to every single topic in the Plaintiff’s notice further reflects the Defendant’s attempt to avoid making any statement under oath in this matter…Plaintiffs are entitled to take the deposition of Defendants regarding matters relevant to their claims. Plaintiffs have named only one defendant in this action, State Farm Fire and Casualty Company.(emphasis added)

Plaintiffs named three defendants in the original complaint but filed motions to dismiss E.A. Renfroe and Haag Engineering.  There was nothing unusual about the Plaintiff’s motions; however, Judge Senter’s ruling is a different matter.  Depending on the time of day you’re reading, you’ll likely want to sip on a cup of coffee or glass of wine and ponder his decision when you finish reading this Order of Partial Dismissal.

Plaintiffs and Defendant Haag Engineering Co. (Haag) have filed a…Joint Motion to Dismiss Haag. Defendant State Farm Fire and Casualty Company expresses that it has no objection to this relief being granted. Of course, this dismissal relates solely and exclusively to claims between Plaintiffs and Haag.

There is no just reason for delay, and entry of partial dismissal of the referenced claims is appropriate. Accordingly, under the authority of Fed. R. Civ. P. 41(a)(1) and (a)(2), and with Fed. R. Civ. P.54(b) in mind, IT IS ORDERED:

The…Joint Motion to Dismiss Haag is GRANTED only to the extent of all claims between Plaintiff and Haag, and said partial dismissal is WITHOUT PREJUDICE, with each party bearing its own costs with respect hereto;

This cause of action is not terminated as to all other claims among and between the remaining parties (Plaintiffs and State Farm), and this order is subject to revision at any time before the entry of any judgment adjudicating all the claims and the rights and liabilities of all the parties.

Break time.  Sip and ponder.