Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_14-cv-02885/USCOURTS-caed-2_14-cv-02885-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Contract Default

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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ST. PAUL FIRE & MARINE 

INSURANCE COMPANY,

Plaintiff,

v.

CENTEX HOMES,

Defendant.

No. 2:14-cv-2885-JAM-KJN

ORDER

Presently before the court is defendant Centex Homes’ (“Centex”) motion to compel 

plaintiff St. Paul Fire & Marine Insurance Company (“Travelers”) to produce the named insured 

claim notes developed in connection with an insurance claim concerning an underlying 

construction defect action tendered under an insurance contract to which Centex is an additional 

insured. (ECF No. 26.) Centex also seeks discovery sanctions against Travelers in the amount of 

$10,000.00 for refusing to produce the claim notes in this case after being ordered to do so in 

several similar matters. (Id.) 

The court heard this matter on its December 10, 2015 law and motion calendar. Attorney 

Seaton Tsai appeared on behalf of Travelers. Attorney Jeffrey Hayes appeared on behalf of 

Centex. The undersigned has fully considered the parties’ briefs, the parties’ oral arguments, and 

appropriate portions of the record. For the reasons that follow, the court denies Centex’s motion 

Case 2:14-cv-02885-JAM-KJN Document 35 Filed 12/18/15 Page 1 of 9
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to compel without prejudice to later renewal and directs Travelers to provide Centex with an 

updated privilege log concerning the named insured claim notes at issue.

I. Background

This case is one of many between Travelers and Centex currently pending in this district 

and other courts throughout the state of California. Centex was sued, along with its 

subcontractor, Ad Land Venture (“Ad Land”) for alleged construction defects in an action filed in 

California State court (the “Willow Bend Action”). Travelers had issued an insurance policy to 

Ad Land as a named insured that also insured Centex as an additional insured for liability arising 

out of Ad Land’s work. On December 4, 2014, Centex tendered a claim to Travelers under the 

policy for the Willow Bend Action. Travelers filed suit in this case over a dispute that arose 

between Travelers and Centex regarding their respective duties in handling the Willow Bend

Action. In particular, Travelers asserts that it has a right to control the defense of Centex in the 

Willow Bend Action and Centex objects to Travelers’ attempts to appoint David Lee of Lee, 

Hernandez, Landrum, Garofalo & Blake as counsel to Centex in that action. 

Centex contends that Mr. Lee has previously engaged in unethical conduct and will focus 

Centex’s defense in the Willow Bend Action on an outcome that is favorable to Travelers at the 

expense of Centex. More specifically, it argues that because another Travelers insured under the 

policy, Ad Land, is involved in the Willow Bend Action, and is, in fact, the target of a crosscomplaint filed by Centex in that action, Travelers could dictate that Mr. Lee attempt to show that 

liability resulted from the work of a subcontractor other than Ad Land, while Centex’s interest 

lies with demonstrating that any damage in that action was caused at least in part by Ad Land. 

Centex claims that if it were to have independent counsel, it could freely argue that Ad Land 

should bear the bulk of the liability in the Willow Bend Action.

In furtherance of its defense in the present case, Centex served document requests on 

Travelers requesting, among other things:

Any and all DOCUMENTS and COMMUNICATIONS that RELATE TO YOUR 

coverage decision on Ad Land Venture’s tender to YOU for defense and 

indemnity of the WILLOW BEND ACTION, including but not limited to YOUR 

claim file and claim notes.

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(Declaration of Jeffrey M. Hayes In Support of Joint Statement Re: Discovery Disagreement 

(“Hayes Decl.”) Exh. A, ECF No. 32-1 at 11.)

On May 29, 2015 Travelers responded to this request with the following boilerplate 

objection:

The foregoing General Objections are incorporated herein by reference. This 

Request is also objected to on the grounds that the request is vague and 

ambiguous. Responding Party further objects to the Request on the basis that it is 

vague, ambiguous, overbroad and unduly burdensome to Responding Party, as 

Responding Party utilizes hundreds of different applications in order to view, store 

or recover DOCUMENTS and COMMUNICATIONS. Responding Party objects 

to this request to the extent such documents are already in the possession, custody 

or control of Propounding Party and/or are equally available to the Propounding 

Party. Responding Party objects to this Request to the extent it seeks documents 

neither relevant to the subject matter nor reasonably calculated to lead to the 

discovery of admissible evidence. Responding Party objects to this Request to the 

extent that it seeks information which is protected from disclosure by the trade 

secret, proprietary, litigation, mediation and/or other applicable privileges, or that 

are immune from disclosure. Moreover, Responding Party objects to this Request 

to the extent it seeks documents protected by the attorney client privilege and/or 

the attorney work product doctrine. Finally, this request calls for a legal conclusion 

and the premature disclosure of expert opinion information.

(Id. at Exh. B, ECF No. 32-1 at 36.) On June 15, 2015, Travelers provided Centex with a 

privilege log stating that it was withholding, among other documents, the named insured (Ad 

Land) claim notes relating to the Willow Bend Action. (Id. at Exh. C, ECF No. 32-1 at 45-50.) 

Travelers later provided Centex with a revised privilege log on October 16, 2015 concerning the 

remaining responsive documents it was withholding, including the named insured claim notes.1 

(Id. at Exh. I, ECF No. 32-3 at 4-5.) In response, Centex filed the present motion to compel 

production of the named insured claim notes. (ECF No. 26.)

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This privilege log lists the claim notes at issue in the parties’ present discovery dispute as item 5 

on the list of withheld documents. (Hayes Decl. at Exh. I, ECF No. 32-3 at 4). A copy of this 

privilege log is attached below.

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II. Requests for Judicial Notice

As an initial matter, both Travelers and Centex request that the court take judicial notice 

of a number of orders that have been issued in other cases between the parties. (ECF Nos. 29, 

31.) Neither request is opposed.

Travelers requests judicial notice of: (1) Order Granting in Part and Denying in Part 

Plaintiff’s Motion for Summary Judgment in Travelers Property Casualty Company of America v. 

Centex Homes, N.D. Cal. Case No. C 10-02757 CRB; (2) Order Granting in Part and Denying in 

Part Cross-Motions for Partial Summary Judgment in Travelers Property Casualty Company of 

America, et al. v. Centex Homes, N.D. Cal. Case No. 11-3638-SC; (3) Minute Order Ruling on 

Demurrer filed on November 5, 2013 in Centex Homes v. Accelerated Waterproofing, Inc., 

Superior Court of California, County of Riverside, Case No. RIC 1306704; (4) Order on 

Submitted Matters filed on December 3, 2013 in Nello Mazzoni, et al. v. Centex Homes, Superior 

Court of California, County of Placer, Case No. SCV 031148; (5) Order Granting Summary 

Adjudication, filed on March 28, 2014 in Afsari v. Centex Homes, Alameda County Superior 

Court Case No. RG11593529; (6) Order Denying Centex’s Motion for Summary Adjudication, 

filed on March 10, 2014 in Deusenberry v. Centex, Riverside County Superior Court Case No. 

RIC 1105565; (7) Minute Order, filed on April 24, 2014 in Humphreys v. Centex, San Bernardino 

County Superior Court Case No. CIVDS 1302259; (8) Law and Motion Minute Order, filed on 

April 21, 2014 in Centex Homes v. Windows by Advanced, Fresno County Superior Court Case 

No. 13CECG02959; (9) Order Denying Special Motion to Strike First Amended Complaint filed 

on January 16, 2013 in Travelers Property Casualty Company of America v. KB Home Coastal, 

Inc., et al., United States District Court, Central District of California, Case No. CV 12-7198 DSF 

(JCx); (10) Order re Travelers’ Motion for Partial Summary Judgment filed on July 7, 2014, in 

Fidelity and Guaranty Insurance Company v. KB Home Coastal, Inc., et al. (“FGIC v. KB”), 

United States District Court, Central District of California, case No. CV13-00946 JAK (DTBx); 

(11) Statement of Decision, filed on April 24, 2015 in the trial of consolidated Tulare County 

Superior Court cases Centex Homes v. Alan Crane dba A.L. Drywall, et al. (Case No. 252502), 

Diaz, et al. v. Centex Homes, et al. (Case No. 248289), Centex Homes, et al. v. A.L. Drywall, 

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Inc., et al. (Case No. 252974), Centex Real Estate Corp. v. A.L. Drywall, Inc., et al. (Case No. 

252823), Centex Homes, et al. v. Adam Alan Spano dba California Countertops, et al. (Case No. 

253964), and Scott, et al. v. Centex Homes, et al. (Case No. 250840); (12) Law and Motion 

Minute Order, filed on June 2, 2014 in Castro v. Centex Homes, Fresno County Superior Court 

Case No. 11CECG03485 JH; (13) Notice of Ruling, filed on July 17, 2014 in O’Neil v. Centex 

Homes, San Bernardino County Superior Court Case No. CIVDS 1109835; (14) Order Granting 

Plaintiff’s Motion for Partial Summary Judgment Denying Defendants’ Motion for Partial 

Summary Judgment filed on February 11, 2015 in Travelers Property Casualty Company of 

America v. Kaufman & Broad Monterey Bay, Inc, et al., Northern District of California case No 

5:13-cv-04745-EJD; (15) Court’s Ruling Following Court Trial filed on April 1, 2015 in Centex 

v. Ad Land Venture, Sacramento County Superior Court case No. 34-2011-00112151; and (16) 

American Bar Association Standing Committee on Ethics and Professional Responsibility Formal 

Opinion 282. (ECF No. 29.)

Travelers requests judicial notice of: (1) Order re: Joint Ex Parte Application re: 

Outstanding Discovery Disputes, dated April 21, 2015 in Travelers Indemnity Company of 

Connecticut, et al. v. Centex Homes, et al., Central District of California Case No. EDCV 14-965 

FMO (PJWx); (2) Order Submitting and Vacating Hearing on Pending Discovery Motions, 

Granting in Part and Denying In Part Defendants’ First Motion to Compel, and Denying 

Defendants’ Second Motion to Compel, dated June 3, 2015 in St. Paul Fire and Marine Insurance 

Company, et al. v. Centex Homes, et al., Central District of California, Case No. EDCV 14-1216 

AB (JCx); (3) Order Granting Motion to Compel, in Travelers Indemnity Company of 

Connecticut v. Centex Homes, et al., Central District of California, Case No. EDCV 14-2590 

JAK (JCGx); (4) Motion to Compel, Transcript of Proceedings, held on July 16, 2015, before 

Magistrate Judge Jay C. Gandhi in Travelers Indemnity Company of Connecticut v. Centex 

Homes, et al., Central District of California, Case No. EDCV 14-2590 JAK (JCGx); (5) Order re: 

Travelers’ Motion for Partial Summary Judgment, filed July 7, 2014, in Fidelity and Guarantee 

Insurance Company et al. v. KB Home Coastal, Inc., et al., Central District of California, Case 

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No. LACV 13-00946 JAK (DTBx); (6) Order Granting Motions to Compel, filed Oct. 2, 2015, in 

Fidelity and Guaranty Insurance Company et al. v. Centex Homes et al., Eastern District of

California, Case No. 1:14-cv-00826-LJO-GSA; and (7) Order, filed November 19, 2015, in St. 

Paul Fire and Marine Insurance Company v. Centex Homes, Eastern District of California, Case 

No. 2:14-cv-2640 WBS-CKD. (ECF No. 31.)

A judicially noticed fact must be one not subject to reasonable dispute in that it is either 

“(1) generally known within the territorial jurisdiction of the trial court or (2) can be accurately 

and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. 

Evid. 201(b). “A court shall take judicial notice if requested by a party and supplied with the 

necessary information.” Fed. R. Evid. 201(d). Judicially noticed facts often consist of matters of 

public record, such as prior court proceedings, see, e.g., Emrich v. Touche Ross & Co., 846 F.2d 

1190, 1198 (9th Cir. 1988); administrative materials, see, e.g., Barron v. Reich, 13 F.3d 1370, 

1377 (9th Cir. 1994); or other court documents, see, e.g., Rothman v. Gregor, 220 F.3d 81, 92 (2d 

Cir. 2000) (taking judicial notice of a filed complaint as a public record). Federal courts may 

“take notice of proceedings in other courts, both within and without the federal judicial system, if 

those proceedings have a direct relation to the matters at issue.” U.S. ex rel Robinson Rancheria 

Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992). While the court may take 

judicial notice of the fact of filing or existence and the general meaning of words, phrases, and 

legal expressions, documents are judicially noticeable only for the purpose of determining what 

statements have been made, not to prove the truth of the contents. Cactus Corner LLC v. U.S. 

Dept. of Agric., 346 F. Supp. 2d 1075, 1100 (E.D. Cal. 2004) (citing Hennessy v. Penril 

Datacomm Networks, Inc., 69 F.3d 1344, 1354-55 (7th Cir. 1995)).

The court grants the parties’ requests for judicial notice to the extent they demonstrate that 

the respective orders have been issued in other cases. The documents are not, however, properly 

judicially noticeable for the facts or legal conclusions stated therein. Missud v. Nevada, 861 F.

Supp. 2d 1044, 1054 (N.D. Cal. 2012) (“While many of these documents (i.e., filing and order in 

other court proceedings) are judicially noticeable for certain purposes, such as to demonstrate the 

existence of other court proceedings, they are not judicially noticeable for Mr. Missud’s purpose, 

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which is to demonstrate that his arguments and allegations against Defendants are true.”).

However, the court finds Travelers’ request for judicial notice number 16, American Bar 

Association Standing Committee on Ethics and Professional Responsibility Formal Opinion 282, 

to be inconsequential to the court’s determination of the present motion. Therefore, the court 

declines to take judicial notice of that document at this time.

III. Discussion

As of December 1, 2015, Federal Rule of Civil Procedure 26(b)(1) was amended to 

provide the following standards regarding the scope of discovery:

Unless otherwise limited by court order, the scope of discovery is as follows: 

Parties may obtain discovery regarding any nonprivileged matter that is relevant to 

any party’s claim or defense and proportional to the needs of the case, considering 

the importance of the issues at stake in the action, the amount in controversy, the 

parties’ relative access to relevant information, the parties’ resources, the 

importance of the discovery in resolving the issues, and whether the burden or 

expense of the proposed discovery outweighs its likely benefit. Information within 

this scope of discovery need not be admissible in evidence to be discoverable.

“A party seeking discovery may move for an order compelling an answer, designation, 

production, or inspection. This motion may be made if: . . . (iv) a party fails to produce 

documents or fails to respond that inspection will be permitted -- or fails to permit inspection -- as 

requested under Rule 34.” Fed. R. Civ. P. 37(a)(3)(B).

Here, the named insured claim notes Centex seek to compel could bear on Centex’s 

claimed need for independent counsel. The central thrust of Centex’s allegations in this action is 

that there was a conflict of interest between Centex and Ad Land and that Travelers was aware of 

that conflict. Accordingly, information pertaining to Travelers’ coverage of Ad Land is relevant 

to determine the scope and nature of that conflict.

Despite the apparent relevance of the discovery sought by Centex, Travelers maintains 

that the named insured claim notes have been withheld on the basis of numerous privileges. 

However, Travelers has failed to make a prima facie showing that the claim notes it is 

withholding are privileged. Travelers’ single entry for the claim notes in its updated privilege log 

provided to Centex on October 16, 2015, fails to provide Centex and the court with a sufficient 

foundation on which to determine whether the privilege grounds asserted by Travelers actually 

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apply to the claim notes it is withholding. Indeed, the log provided to Centex lumps all of the 

withheld named insured claim notes, which Travelers claims were developed over the course of a 

nine month period, into a single entry that does not provide any information that would allow the 

court to meaningfully determine whether the privileges asserted with respect to these notes 

actually apply. (See Hayes Decl., Exhibit I.) Accordingly, the court cannot at this time determine 

whether all, some, or none of the named insured claim notes Travelers is currently withholding 

are privileged or should be produced in response to Centex’s discovery requests. Therefore, the 

court orders Travelers to provide Centex with an updated privilege log that includes for each 

individual named insured claim note withheld: (1) the Bates stamp numbers for each page;(2) 

the name(s) of the author(s) and recipient(s), if any; (3) a description of the document that 

provides a sufficient context to discern the privilege(s) asserted; (4) and a brief description of the 

basis on which Travelers is claiming a privilege.2 Travelers shall provide this updated privilege 

log within 30 days of the date of this order.

IV. Conclusion

Based on the foregoing, IT IS HEREBY ORDERED that:

1. Within 30 days of the date of this order, Travelers shall provide Centex with an 

updated privilege log regarding the named insured claim notes it has withheld. The updated 

privilege log shall include for each individual named insured claim note withheld: (1) the Bates 

stamp numbers for each page;(2) the name(s) of the author(s) and recipient(s), if any; (3) a 

description of the document that provides a sufficient context to discern the privilege(s) asserted; 

(4) and a brief description of the basis on which Travelers is claiming a privilege.

 

2

It appears that Travelers has previously been able to provide Centex with an updated privilege 

log that reveals at least this much information in other similar cases where Travelers has withheld 

named insured claim notes on the basis of the privileges asserted here. Indeed, Centex has 

attached as “Exhibit P” to the declaration of Gregory Hayes in support of its motion to compel a 

copy of an updated privilege log regarding the named insured claim notes at issue in another 

similar action between the parties that appears to address Travelers’ privilege claim on a note-bynote basis and provides additional information with regard to each withheld note, such as the

author(s) and recipient(s) and a basic description of each note’s contents. (Hayes Decl., Exh. P.) 

The court fully expects that Travelers should be able to provide at least as much information in its 

updated privilege log in this case, and if it cannot, that it makes its reasons why it cannot do so 

clear in its updated privilege log.

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2. Centex’s motion to compel (ECF No. 26) is denied without prejudice to later 

renewal. If after reviewing the updated privilege log provided by Travelers pursuant to this order 

Centex believes Travelers is still withholding any named insured claim notes on an improper 

basis, then it may renew its motion to compel and specifically identify which note or notes it 

believes Travelers is improperly withholding.

3. Centex’s request for discovery sanctions is denied without prejudice to later 

renewal. Centex may renew its request upon a showing that Travelers’ updated privilege log 

continues to provide insufficient information on which to discern the privileges asserted therein.

IT IS SO ORDERED.

Dated: December 18, 2015

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