Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-00372/USCOURTS-azd-2_12-cv-00372-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:2201 Declaratory Judgment (Insurance)

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Metropolitan Life Insurance Company, a 

New York corporation, 

Plaintiff/Counter-Defendant, 

v. 

Inna Ogandzhanova, M.D., 

Defendant/Counter-Claimant. 

No. CV-12-372-PHX-GMS

ORDER 

 The Court held an informal discovery conference with the Parties on March 21, 

2013. (Doc. 131.) During that conference, the Court instructed the Parties to “brief the 

issue as to whether Dr. Ogandzhanova is entitled to reserve information relating to her 

claims.” (Id.) That briefing was completed on April 4, 2013. (Docs. 153, 168.) After 

review, the Court denies Defendant Inna Ogandzhanova’s request for reserve 

information. 

BACKGROUND

 Plaintiff Metropolitan Life Insurance Company (“MetLife”) brought this action 

seeking a declaration that Ogandzhanova was not disabled under MetLife’s relevant 

policies after July 1, 2011. (Doc. 1.) MetLife also seeks a declaration that it was under no 

obligation to provide disability benefits after July 1, 2011, and that it is entitled to recover 

all benefits paid, among other things. (Id.) Ogandzhanova counterclaimed for breach of 

contract and bad faith. (Doc. 12.) Discovery is underway. During discovery, 

Case 2:12-cv-00372-GMS Document 177 Filed 04/09/13 Page 1 of 5
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Ogandzhanova requested that MetLife provide her with reserve information relating to 

her claims. MetLife has objected, claiming that such information is irrelevant to the 

claims at issue in this case. 

DISCUSSION

I. LEGAL STANDARD

 A district court enjoys broad discretion in controlling discovery. Harper v. Betor, 

95 F.3d 1157 (9th Cir. 1996) (internal citation omitted). The scope of discovery is 

governed by Rule 26, which allows “discovery regarding any nonprivileged matter that is 

relevant to any party’s claim or defense.” Fed. R. Civ. P. 26(b)(1). Relevance is construed 

broadly to encompass any matter that bears on, or that reasonably could lead to other 

matter that bears on, any issue that is or may be in the case. See id.; Oppenheimer Fund, 

Inc. v. Sanders, 437 U.S. 340, 351 (1978). Further, “[f]or good cause, the court may order 

discovery of any matter relevant to the subject matter involved in the action.” Fed. R. 

Civ. P. 26(b)(1). District courts have broad discretion in determining relevance for 

discovery purposes. Hallet v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). 

II. ANALYSIS

 In an insurance context, the term “reserve” refers to “a fund of money set aside by 

a bank or an insurance company to cover future liabilities.” Black’s Law Dictionary (9th 

ed. 2009). Ogandzhanova asserts that information about MetLife’s reserves on her claim 

is relevant for a number of reasons, all of which concern MetLife’s knowledge and 

beliefs regarding Ogandzhanova’s claim. For example, the amount of and fluctuations in 

reserve totals may reveal when MetLife had sufficient notice of her claim, what effect 

MetLife’s issuance of a reservation of rights might have had, what effect filing the suit 

had, and so forth. In short, Ogandzhanova claims the reserve information would allow her 

a glimpse into what MetLife thought about the factual basis and legality of her claim to 

disability benefits. That, in turn, would assist her in analyzing her bad faith claim, 

because “bad-faith actions against an insurer, like actions by client against attorney, 

patient against doctor, can only be proved by showing exactly how the company 

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processed the claim, how thoroughly it was considered and why the company took the 

action it did.” Brown v. Super. Ct., 137 Ariz. 327, 336, 670 P.2d 725, 734 (1983). 

 Ogandzhanova’s request for reserve information therefore appears relevant on its 

face. MetLife, as the party resisting that discovery, now has the burden to establish that 

the information falls outside the broad scope of discovery contemplated by Rule 26. 

District courts have come out both ways on this question. See, e.g., U.S. Fire Ins. Co. v. 

Bunge N. Am., Inc., 244 F.R.D. 638, 644 (D. Kan. 2007) (relevant); Bernstein v. 

Travelers Ins. Co., 447 F. Supp. 2d 1100, 1105 (N.D. Cal. 2006) (same). But see, e.g.,

Imperial Textiles Supplies Inc. v. Hartford Fire Ins. Co., 6:09-CV-03103-JMC, 2011 WL 

1743751 at *4 (D.S.C. May 5, 2011) (irrelevant); Leksi, Inc. v. Fed. Ins. Co., 129 F.R.D. 

99, 106 (D.N.J. 1989) (same). 

 Central to the relevance (or lack thereof) of reserve information in a given case is 

the method of calculation. If the insurers can show their calculations do not include 

analysis of the factual or legal merits of the insured’s specific claim, but instead rely on 

automatic factors, then the relevance of reserve information diminishes significantly. See 

Leksi, 129 F.R.D. at 106 (“[T]he setting of reserves is performed by claims personnel 

who know little about Leksi’s policies. I find that the reserve information is only 

tenuously relevant to whether insurance coverage exists in this matter.”). On the other 

hand, courts have granted motions to compel production of reserve information when the 

insurers have failed to produce evidence that the reserve arithmetic does not include 

analysis of the claim’s merit. See U.S. Fire, 244 F.R.D. at 644 (“[T]he Insurers assert 

(without reference to supporting evidence) that their loss reserves, which are required by 

law, are not evaluations of the particular claims, but instead depend on various 

assumptions and business considerations.”) (emphasis added); Bernstein, 447 F. Supp. 2d 

at 1106 (“Travelers does not contend, however, that the reserves it sets in response to 

individual claims are determined only (or even primarily) by such generic considerations. 

Nor does Travelers suggest that circumstances quite specific to individual claims do not 

play a significant role when Travelers’ adjusters decide what the amount of the reserves 

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for given claims should be, or at which junctures and under which criteria those amounts 

should be changed.”) In short, when calculation of the reserve amount “‘entail[s] an 

evaluation . . . based upon a thorough factual . . . consideration”, the information will be 

relevant, and vice versa. Gen. Elec. Capital Corp. v. DIRECTV, Inc., 184 F.R.D. 32, 35 

(D. Conn. 1998) (quoting Independent Petrochemical Corp. v. Aetna Cas. & Sur. Co., 

117 F.R.D. 283, 288 (D.D.C. 1986)). 

 MetLife has shown that it does not analyze the factual and legal merit of a claim 

when it sets and adjusts the reserve amount, and did not do so with Ogandzhanova. Enid 

Reichert, a Vice President and Actuary at MetLife, stated that the reserve calculation is a 

factor of assumed average claim termination rates determined by MetLife actuaries from 

multi-year studies and limited claim profile information, such as the date of disability, 

monthly benefit amount, policy terms, and the age of the claimant. (Doc. 168-1, Ex. 1 ¶¶ 

2-4.) The reserves “do not take into account any facts specific to the claim . . . . 

Specifically, the reserve does not take into account the merits of the claim, that is whether 

the claim for benefits is strong or weak.” (Id. ¶ 5.) Claims personnel are not involved in 

the calculation of claim reserves. (Id. ¶ 6; Doc. 168-2, Ex. 2 ¶¶ 2-4.) It is an automatic 

calculation divorced from the merits of a specific claim. This is a case where the method 

of MetLife’s reserve calculation takes reserve information out of the realm of relevancy. 

 Ogandzhanova requested reserve information related to her claims. The Court has 

determined that such information is irrelevant to the claims at issue. To the extent 

Ogandzhanova sought information about the reserve methodology and that information 

was relevant, MetLife appears to have provided it in its Response and attachments. (Doc. 

168.) Beyond that, the reserves would not shed further light on the issues in this case. 

MetLife has shown that the documents pertaining to loss reserves did not “‘entail an 

evaluation . . . based upon a thorough factual . . . consideration.’” Gen. Elec. Capital, 184 

F.R.D. at 35 (quoting Independent Petrochemical, 117 F.R.D. at 288). 

/ / / 

/ / / 

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IT IS THEREFORE ORDERED that Ogandzhanova’s request for reserve 

information relating to her insurance claims is DENIED. 

 Dated this 9th day of April, 2013. 

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