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Cardinal Aluminum Co. v. Continental Casualty Co.

United States District Court, W.D. Kentucky, Louisville Division

July 2, 2015

CARDINAL ALUMINUM COMPANY, Plaintiff,
v.
CONTINENTAL CASUALTY COMPANY, Defendant.

OPINION AND ORDER

LANNY KING, District Judge.

Defendant, Continental Casualty Company, moved the Court, pursuant to Rule 26(c) of the Federal Rules of Civil Procedures, for a protective order related to a Rule 36(b)(6) deposition noticed by Plaintiff, Cardinal Aluminum Company. (Docket # 23). Defendant designated a representative to respond to the topics. Nonetheless, Defendant challenges two aspects of the deposition notice-namely, the propriety of six of the thirteen noticed areas of inquiry and the location of the deposition. For the reasons described in this opinion and order, the Court grants Defendant's motion, in part, and denies it, in part. Plaintiff may inquire as to topics 2 and 10 through 13 as contained in its Rule 30(b)(6) deposition notice, subject to the Court's reservation of ruling on objections based on attorney-client privilege and work-product doctrine. The Court stays discovery as to topic nine. The deposition will take place in Louisville, Kentucky.

Background

Plaintiff filed its complaint in Jefferson Circuit Court alleging claims for breach of contract, violation of Kentucky's Unfair Claims Settlement Practices Act, and common-law bad faith as well as seeking declaratory relief. (Docket # 1-5). The claims assert insurance coverage for a crack that formed in a large piece of industrial equipment. Id. Defendant[1] removed the case to federal court on diversity of jurisdiction grounds. (Docket # 1). Plaintiff amended its complaint and Defendant answered shortly after the removal. (Docket ## 6, 7).

District Judge Russell issued a Scheduling Order that bifurcated the bad-faith claims and set a fact-discovery deadline of July 1, 2015, which was later extended to July 15, 2015. (Docket ## 12, 21). On June 8, 2015, Plaintiff sent a proposed notice for a Rule 30(b)(6) deposition of a representative of Defendant. (Docket ## 23-2, 23-3). Defendant disputed the propriety of some of the areas of inquiry listed as well as the location of the deposition. After a telephonic status conference with the Magistrate Judge, the parties agreed to an accelerated briefing schedule. (Docket # 20). Defendant moved for a protective order, Plaintiff responded, and Defendant filed a reply. (Docket ## 23, 24, 25). The matter is now ripe.

Challenged Deposition Topics

In its Cardinal Aluminum Company's Notice of Fed.R.Civ.P. 30(b)(6) Deposition of Continental Casualty Company, Plaintiff listed thirteen areas of inquiry, as matters for examination required by rule. (Docket # 23-3). Defendant objects to six of the listed areas. Generally, the objected-to areas concern payment of insurance premiums, other claims for similar losses, and pleadings and discovery responses previously made by Defendant.

"Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense...." Fed.R.Civ.P. 26(b)(1). The burden of establishing good cause sufficient for the issuance of a protective order rests on the moving party, i.e., Defendant. Nix v. Sword, 11 Fed.App'x 498, 500 (6th Cir. 2001) (per curiam). Defendant must "articulate specific facts showing clearly defined and serious injury' resulting from the discovery sought and cannot rely on mere conclusory statements." Id. (quoting Avirgan v. Hull, 118 F.R.D. 252, 254 (D.D.C. 1987)).

At this juncture, the Court can only rule on the propriety of the matters included in Plaintiff's Rule 30(b)(6) notice. Particularized objections and related motions cannot come before the Court until Plaintiff poses specific questions to the party representative.

I. Plaintiff's payment of premiums

Defendant objects to topic two regarding the payment of premiums. Plaintiff agreed to limit the topic to the amount of premiums paid. (Docket # 24, p. 2).

In a breach of contract case, like the instant matter, consideration provides an element of the cause of action. Ky. Emps. Ret. Sys. v. Seven Cntys. Servs., Inc. ( In re Seven Cntys. Servs., Inc. ), 511 B.R. 431, 475 (Bankr. W.D. Ky. 2014). Plaintiff alleged that policy premiums serve as consideration for the insurance contract. (Docket # 6, para. 15). The amount of premiums paid is reasonably calculated to lead to the discovery of admissible evidence and therefore within the scope of discovery.

Moreover, Defendant failed to demonstrate a clearly defined and serious injury that will result if Plaintiff asks questions related to the amount of premiums paid. Plaintiff may inquire as to ...


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