Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-01548/USCOURTS-casd-3_13-cv-01548-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

BITA TRADING, INC.,

Plaintiff,

v.

NATIONWIDE MUTUAL

INSURANCE COMPANY, et al.,

Defendants. 

 

 

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Civil No. 13-CV-1548-JM (WVG)

ORDER FOLLOWING

DISCOVERY HEARING

I. INTRODUCTION

A. BACKGROUND

Plaintiff Bita Trading, Inc. (“Plaintiff”) alleges that Defendant Nationwide Mutual

Insurance Company (“Defendant Nationwide”) breached an insurance policy by denying

Plaintiff’s claim related to a loss that occurred at a car wash property. On August 22, 2013,

after an August 21, 2014, ENE Conference, the Court set a schedule for the parties to file

cross-Motions for Summary Judgment (“MSJs”). (Doc. No. 11.) On September 19, 2013,

Plaintiff lodged a letter with the Court, requesting a modification of the Order After ENE

Conference to allow additional discovery, and to continue the date for filing an MSJ. On

September 23, 2013, at the Court's request, Defendants lodged a letter in response to

Plaintiff’s request. In their response, Defendants objected to Plaintiff’s request for an

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extension of time to file cross-MSJs. On October 1, 2013, this Court denied Plaintiff’s

request as set forth in the September 19, 2013, letter brief. (Doc. No. 13.)

On January 6, 2014, the Honorable Jeffrey T. Miller, United States District Judge,

issued an Order Granting Defendants’ MSJ, and Denying Plaintiff’s MSJ. (Doc. No. 25.) 

Judge Miller concluded that the Property Form did not provide coverage for the property

losses and business interruption losses suffered by Plaintiff because it was not an additional

insured under the Property Form. Id. at 12. As a result of Judge Miller’s rulings, this case

was closed on January 7, 2014. (Doc. No. 26.)

On January 13, 2014, Plaintiff filed a Motion to Vacate the Judgment and for

Reconsideration of Judge Miller’s Order Granting Defendants’ MSJ. (Doc. No. 27.) In its

Motion, Plaintiff argued that Defendants’ MSJ was really a partial MSJ because the only

relief sought was a coverage determination under the Sorrento policy, and the Bita policy

was the subject of the first cause of action in the Complaint. Id. at 2. Plaintiff also sought

reconsideration of the grant of partial summary judgment on the Sorrento policy. Id. at 3. 

On March 4, 2014, Judge Miller Granted in Part and Denied in Part Plaintiff’s Motion

for Reconsideration. (Doc. No. 32.) In his Order, Judge Miller noted that Defendant

specifically acknowledged that the Court’s Order on the MSJs dealt only with the Sorrento

policy, and not the Bita policy. Id. at 1. Both parties agreed that there were outstanding

issues concerning the Bita policy, and the Court granted reconsideration on that claim and

vacated the Clerk’s judgment. Id. However, the Court found that Plaintiff failed to identify

any newly discovered evidence, clear error, or an intervening change in controlling law, and

therefore denied Plaintiff’s motion for reconsideration concerning the Sorrento policy. Id.

at 2. 

B. INSTANT DISPUTES

On July 9, 2014, Plaintiff notified this Court of a discovery dispute, and on July 10,

2014, this Court held a telephonic Discovery Conference with counsel for all parties. The

Court ordered that, by July 18, 2014, Defendant Nationwide must respond to Plaintiff’s

discovery requests that were served on June 30, 2014. (Doc. No. 41.) On July 22, 2014,

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Plaintiff’s counsel informed the Court that the discovery dispute had not been resolved. On

July 23, 2014, the Court issued an Order for counsel to meet and confer in person no later

than July 25, 2014, in an attempt to resolve the ongoing dispute regarding Defendant

Nationwide’s discovery responses. (Doc. No. 42.) 

On July 23, 2014, Defense counsel informed the Court of another discovery dispute. 

On July 24, 2014, the Court Ordered the parties to meet and confer in good faith in an

attempt to resolve both of the pending discovery disputes. (Doc. No. 43.) The Court

Ordered the parties to file a Joint Statement for Determination of Discovery Dispute (“Joint

Statement”) no later than August 1, 2014, at 12:00 p.m., and set a Discovery Hearing for

August 7, 2014, at 7:30 a.m., if any disputes remained after in person good faith meet and

confer efforts. Id.

On July 31, 2014, Plaintiff filed a Second Motion for Relief from Order Granting

Summary Judgment based on newly discovered evidence. (Doc. No. 44.) In its Motion,

Plaintiff alleged that, in granting Defendants’ MSJ, the Court found that the policy did not

cover Plaintiff for property damage even though the certificate of insurance issued to

Plaintiff by the insurance agent represented that Plaintiff was covered. Id. at 2. Plaintiff

claimed that, at the time of the original Motion, it was unaware that the insurance agent twice

transmitted this certificate of insurance to Defendant Nationwide with instructions to add

three parties, including Plaintiff, to the property damage coverages. Id. Plaintiff also stated

that after these instructions, Defendant Nationwide amended the policy to add the two other

parties to the property coverage but, according to the newly discovered evidence, mistakenly

omitted Plaintiff. Id.

On August 1, 2014, in compliance with this Court’s Order, the parties filed a Joint

Statement, and represented that counsel for both parties had met and conferred in person

regarding both discovery disputes on July 25, 2014. (Doc. No. 45 at 2.) On August 6, 2014,

due to circumstances beyond counsel’s control, Defense counsel requested to continue the

August 7, 2014, Discovery Hearing. (Doc. No. 46.) The Court granted Defense counsel’s

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request, and the August 7, 2014, Discovery Hearing was vacated. (Doc. No. 47.) The

Discovery Hearing was reset for August 12, 2014, at 3:00 p.m. Id.

On August 12, 2014, at 3:00 p.m., the Court held a Discovery Hearing. Mr. Matthew

Herron appeared on behalf of Plaintiff, and Mr. Roger Raphael appeared on behalf of

Defendants. After reviewing the Joint Statement filed by the parties, along with all other

relevant documents filed in this case, and listening to the arguments presented by both parties

during the Discovery Hearing, the Court issues the rulings below.

II. DISPUTE NO. 1

Plaintiff argues that Defendant Nationwide’s Responses to Plaintiff’s Requests for

Production of Documents (“RFPs”) and Special Interrogatories (“ROGs”) are insufficient.

A. PLAINTIFF'S ARGUMENT

Plaintiff argues that Defendant’s response to its RFPs and Special ROGs are evasive,

laden with objections, and fail to respond to the basic question of whether the insurance

agent instructed Defendant Nationwide to add Plaintiff as an insured under the property

damage coverages. (Doc. No. 45 at 2.) Plaintiff argues that discovery that it received from

Defendant shows that Defendant’s failure to add Plaintiff to the insurance coverage was the

result of Defendant’s own clerical error, and that Defendant Nationwide’s failure to disclose

its error only came to light as a result of discovery taken in a case against the agent. Id. at

4. Plaintiff contends that Defendant’s underwriting file proves that the agent instructed

Defendant Nationwide to add Plaintiff to the property damage coverage, providing the reason

to do so, and the certificate of insurance which confirmed this coverage. Id.

Plaintiff argues that, nearly a year ago, Defendant Nationwide vigorously opposed

Plaintiff’s request for discovery into the formation of the policy. (Doc. No. 45 at 4.) 

Plaintiff notes that the Court accepted Defendant’s representations about the lack of any

issue on that subject matter, and sustained Defendant’s objection, and that Defendant

Nationwide was allowed to conceal the fact that it was denying coverage because of its own

clerical error in the policy endorsements. Id.

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Plaintiff now seeks remedies for the alleged delay, expense, and waste of judicial

resources caused by litigating a case over a policy which it argues only omitted Plaintiff for

coverage because of Defendant’s own mistake. (Doc. No. 45 at 4.) However, Plaintiff notes

in the Joint Statement that “[t]his would probably be best addressed after the Court rules on

the motion for reconsideration.” Id. at 4-5. 

B. DEFENDANT’S ARGUMENT

Defendant agrees with Plaintiff’s statement that its concerns would best be addressed

at a later date. (Doc. No. 45 at 5.) Defendant contends that none of Plaintiff’s grievances

are properly before the Court, as they do not constitute discovery disputes. Id. Defendant

also disputes Plaintiff’s allegation that it concealed information from Plaintiff or the Court. 

Id. at 6. 

Further, Defendant argues that Plaintiff’s position is based on a mistaken interpretation

of the facts. (Doc. No. 45 at 5.) Defendant states that a request to add an additional insured

is dramatically different from a request to add Plaintiff as a loss payee for property coverage

under the Sorrento Policy. Id. Defendant argues that the newly discovered information

changes nothing about the issues already briefed and decided. Id. at 6.

C. RULING

The Court agrees with both parties that the issue of remedies for an alleged delay,

expense, and waste of judicial resources is best addressed after Judge Miller issues a ruling

on Plaintiff’s pending motion for reconsideration. Therefore, the Court will take this matter

under advisement, pending a ruling by Judge Miller on Plaintiff’s Second Motion for Relief

from Order Granting Summary Judgment based on newly discovered evidence. (Doc. No.

44.) Plaintiff’s counsel shall contact the Court within two business days of a ruling by Judge

Miller.

III. DISPUTE NO. 2

Defendant Nationwide requests that the fact discovery deadline be continued by 90

days, and requests that the Court Order Plaintiff to identify previously undisclosed witnesses.

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A. DEFENDANT’S ARGUMENT

Defendant Nationwide requests that (1) Plaintiff join in a motion to continue the

discovery cut-off date by 90 days;1/

 and (2) that Plaintiff identify, by providing names and

addresses, the witnesses who performed work and/or repairs at the subject property. 

On April 15, 2014, Plaintiff served its initial disclosures. (Doc. No. 45 at 7.) 

Defendant argues that the information provided in Plaintiff’s initial disclosures was

inaccurate, and that Plaintiff misidentified its witnesses. Id. at 3. Defendant states that

Plaintiff’s claimed damages allegedly arose out of repairs performed in order to restore the

property to its pre-loss condition. Id. at 7. Defendant argues that Plaintiff identified several

individuals in its initial disclosures that did not actually provide the repair work or services

as represented by Plaintiff. Id. at 7-8.

Defendant claims that it relied upon Plaintiff’s initial disclosures in serving subpoenas

on witnesses and conducting depositions, and that, over the past month, Defendant deposed

each of the individuals/entities listed in Plaintiff’s initial disclosures and learned that none

of them provided the work and/or services as represented by Plaintiff. (Doc. No. 45 at 8.) 

Defendant argues that Plaintiff’s inaccuracies and omissions led Defendant to expend

substantial resources deposing witnesses who had no knowledge of the repair work. Id. at

7. 

Defendant contends that partial corrected information was not provided until the

afternoon of July 9, 2014, when Plaintiff served a “First Supplement to Initial Disclosure

Statement.” (Doc. No. 45 at 8.) Defendant argues that this was the first time it received 279

pages of the actual records of the work and/or repairs performed at the subject property. Id.

Defendant asserts that Plaintiff’s Supplement identified numerous companies and/or

individuals who had never previously been disclosed by Plaintiff, and that all of the

documents pre-dated the April 15, 2014, initial disclosure date. Defendant also contends that

Plaintiff’s Supplement does not identify many of the relevant companies and/or individuals

1/

At the time of the Discovery Hearing, the fact discovery deadline was set for August 15, 2014. (Doc. No. 38 at 2.)

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in sufficient detail to enable it to subpoena them for deposition, and to date, Plaintiff has

failed to provide a useable list of names and contact information for those persons/entities

who actually performed work/repairs at the subject property. Id.

Defendant has identified at least seven individuals that were not identified in

Plaintiff’s initial disclosures from whom it intends to take a deposition and request

documents. (Doc. No. 45 at 8-9.) Defendant seeks a 90 day continuance of the fact

discovery deadline, and identification of previously undisclosed witnesses so that it can

depose the witnesses who were disclosed on July 9, 2014. Id. at 9.

Further, Defendant argues that, by signing the initial disclosures, Plaintiff’s counsel

was certifying that the disclosures were “complete and correct as of the time [they were]

made.” (Doc. No. 45 at 10.) Thus, Defendant seeks evidentiary and monetary sanctions

against Plaintiff. Id.

B. PLAINTIFF’S ARGUMENT

Plaintiff argues that there is no basis to extend the fact discovery deadline. (Doc. No.

45 at 10.) Further, Plaintiff asserts that Defendant conducted the depositions after being

fully informed that the contractors listed in Plaintiff’s initial disclosures did not perform the

repair work. Id.

Plaintiff notes that its initial disclosures omitted the phrase “an estimate” for the

particular item of work so that the description of the witnesses’ testimony would be better

stated if it indicated the contractor “provided an estimate for [the particular area] as listed in

the proof of loss.” (Doc. No. 45 at 10.) Plaintiff argues that this omission is implicit in the

description because the proof of loss is itself an estimate and does not reflect any actual

repair work. Id. at 10-11.

Plaintiff contends that, on July 3, 2014, Plaintiff’s counsel made clear to Defense

counsel that the tenant repaired the property and used its own resources to do so. (Doc. No.

45 at 11.) Plaintiff notes that Defense counsel attended the tenant’s representative’s

deposition on July 11, 2014, where the witness described in detail the work the tenant

performed or supervised. Id. Plaintiff asserts that the deposition covered each item of the

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cost of repair and all of the supporting documents which the tenant had assembled. Id.

However, Plaintiff argues, knowing full well that the tenant repaired the property and the

contractors had only provided estimates used for the proof of loss, Defendant still took the

contractors’ depositions the following week. Id. Plaintiff argues that Defendant already

knew that these depositions would be of limited utility. Id.

Plaintiff notes that it requested that Defendant simply notice the depositions which it

wanted to take before the discovery deadline, and Plaintiff offered to agree to extend that

date on a witness-by-witness basis if for some reason a particular deposition could not be

taken as scheduled. (Doc. No. 45 at 11.) However, Plaintiff contends that Defendant instead

decided to bring this request to the Court. Id. Plaintiff argues that Defendant still has not

identified: (a) what witnesses it wants to depose; (b) how those witnesses might relate to the

issues in the case not earlier explained by the tenant’s representative; or (c) why the

depositions could not be taken before the discovery cut off. Id. at 11-12. 

C. RULING

Defendant Nationwide’s request to extend the fact discovery deadline is GRANTED

IN PART and DENIED IN PART. Defendant Nationwide seeks to extend the fact discovery

deadline by 90 days from August 15, 2014. However, Defendant Nationwide received the

partial corrected witness information from Plaintiff on July 9, 2014. (Doc. No. 45 at 8.) 

Therefore, Defendant Nationwide was aware of the corrected information for more than 30

days before the Discovery Hearing. Moreover, Defendant Nationwide has identified only

seven witnesses to be deposed, with one deposition already scheduled to be taken and

another likely to be scheduled in the days following the Discovery Hearing. Given that

Defendant Nationwide has had access to the relevant discovery for over a month and was

aware that the contractors revealed in Plaintiff’s initial disclosures were likely of little

benefit, and the relatively few identified witnesses to be deposed, 90 days is simply too much

time.

The Court hereby extends the fact discovery deadline for both parties by 60 days, to

October 15, 2014, solely for the purpose of conducting discovery related to the 279 pages

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of documents that were disclosed on July 9, 2014. No party shall be permitted to depose any

witnesses that are not related to the 279 pages of documents disclosed on July 9, 2014. All

other fact discovery closed on August 15, 2014. (Doc. No. 38 at 2.)

This extension provides Defendant Nationwide with sufficient time to review the 279

pages of documents that it received more than one month ago, and to schedule the remaining

depositions. Defendant Nationwide plans to depose approximately seven additional

witnesses, although the Court does recognize that it is having some difficulty contacting

some of the witnesses. In an effort to quickly schedule the depositions, Plaintiff shall assist

Defendant in locating the witnesses that it has identified.

IT IS SO ORDERED.

DATED: August 19, 2014

 Hon. William V. Gallo

 U.S. Magistrate Judge

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