UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

GEORGELYN LANTZ,

Plaintiff,

v. Civil Case No. 14-12813

Honorable Linda V. Parker

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY,

Defendant.

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OPINION AND ORDER REGARDING DEFENDANT’S

DISCOVERY OBJECTIONS

In this diversity action removed from state court, Plaintiff seeks personal

protection insurance benefits pursuant to a no-fault insurance policy issued by

Defendant. Plaintiff’s injuries arose from a motor vehicle accident on November

6, 2013. She claims that Defendant has unreasonably refused to pay or has

unreasonably delayed making payments in violation of Michigan’s “No-Fault Act”,

Michigan Compiled Laws Sections 500.3142 and 500.3148 The matter presently

is before the Court on Defendant’s objections to certain discovery requests by

Plaintiff. (ECF No. 19.) Plaintiff has responded to Defendant’s objections. (ECF

No. 23.)

Defendant objects to information and documentation sought by Plaintiff

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“pertaining to training of its [Defendant’s] claims personnel, its Advancing Claims

Excellence (“ACE”) review (which was conducted in Michigan from November

1995 through 1997), its Auto Claim Manual, [and] its vendor, MES Solutions

(“MES”), which scheduled an independent medical examination (‘IME’) of

Plaintiff that was ultimately performed by Dr. David Carr.” (ECF No. 19 at Pg ID

109.) Specifically, Defendant is objecting to the following discovery requests:

Plaintiff’s First Interrogatories Numbers 6, 7, 9, and 10 (ECF No. 19-1); Plaintiff’s

Requests for Production of Documents Numbers 3-9, 11, and 13 (ECF No. 19-2);

Plaintiff’s subpoena duces tecum issued to Defendant’s representative, seeking

production of Items e, 6 and 7 (ECF No. 19-3); and Plaintiff’s subpoena and

addendum to MES (ECF No. 19-4).1

 (Id.) Defendant argues that the material

sought is relevant only to whether Defendant acted in good or bad faith– which

Defendant contends has no bearing on Plaintiff’s “straightforward claim for the

1

Defendant objects generally to information sought in the addendum to the

subpoena issued to MES. Thus the Court presumes that it is objecting to all of the

items sought. Items 2 and 12, however, do not seek information related to

Defendant. For that reason, it appears to the Court that Defendant lacks standing to

assert an objection to those requests. “A party generally lacks standing to

challenge a subpoena directed to a non-party unless it claims a privilege or

demonstrates a personal interest.” Blumberg v. Ambrose, No. 13-cv-15042, 2014

WL 4988380, at *3 (E.D. Mich. Oct. 7, 2014) (citing cases); see also Langford v.

Chrysler Motors Corp., 513 F.2d 1121, 1126 (2d Cir. 1975) (“In the absence of a

claim of privilege a party usually does not have standing to object to a subpoena

directed to a non-party witness.”). 

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recovery of various no-fault benefits pursuant to [Michigan Compiled Laws

Section] 500.3107.” (Id. at Pg ID 111.)

Plaintiff argues in response that the discovery sought is relevant to

Plaintiff’s theory of the case, which is that Defendant “has handled this claim in an

unreasonable and unfair fashion.” (ECF No. 23 at Pg ID 238.) Plaintiff relies

primarily on the Michigan Court of Appeals’ decision finding such discovery

relevant in Morales v. State Farm Mutual Insurance Company, 761 N.W.2d 454

(2008).

The Court indicates, at the outset, that it has reviewed Morales, as well as

the other cases cited by Plaintiff and Defendant. The decisions reflect varying

conclusions by different judges regarding the discovery of much of the same

information, in similar cases. Notably, none of the decisions are binding on this

Court. Thus the fact that this Court reaches a different holding than the judge in a

case cited by one of the parties does not mean that the Court overlooked that case. 

The parties should assume that the Court simply disagreed with the reasoning in

that case.

Applicable Standard

Federal Rule of Civil Procedure 26 sets forth the scope and limits of

discovery and states, in relevant part, that “[p]arties may obtain discovery

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regarding any nonprivileged matter that is relevant to any party’s claim or defense .

. ..” Fed. R. Civ. P. 26(b)(1). Under the rule, “[r]elevant information need not be

admissible at the trial if the discovery appears reasonably calculated to lead to the

discovery of admissible evidence.” Id. The rule allows the court to limit discovery

if inter alia “the burden or expense of the proposed discovery outweighs its likely

benefit, considering the needs of the case, the amount in controversy, the parties’

resources, the importance of the issues at stake in the action, and the importance of

the discovery in resolving the issues.” Fed. R. Civ. P. 26(b)(2)(C)(iii).

Based on the plain language of Rule 26, an assessment of whether the

discovery sought is relevant must start with the claims and defenses asserted. 

Here, Plaintiff asserts a single cause of action for benefits under an insurance

contract pursuant to Michigan’s No-Fault Act. (See ECF No. 1-2.) To prove such

a claim, the insured must show that he or she “is entitled to benefits ‘for accidental

bodily injury arising out of the ownership, operation, maintenance or use of a

motor vehicle as a motor vehicle’ without regard to fault, and that the insurer is

obligated under an insurance contract to pay those benefits, but failed to do so

timely.” Cooper v. Auto Club Ins. Ass’n, 751 N.W.2d 443, 448 (Mich. 2008)

(quoting Mich. Comp. Laws § 500.3105). Once the insured establishes these

elements, benefits are payable for “[a]llowable expenses consisting of all

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reasonable charges incurred for reasonably necessary products, services and

accommodations for an injured person’s care, recovery, or rehabilitation,” three

years of work loss with a monthly cap, expenses reasonably incurred in obtaining

ordinary and necessary replacement services for a three-year period with a daily

cap, and a survivor’s loss. See Mich. Comp. Laws §§ 500.3107, .3108.

The No-Fault Act requires an insurer to provide personal protection

insurance benefits “within thirty (30) days after an insurer receives reasonable

proof of the fact and of the amount of loss sustained.” Mich. Comp. Laws

§ 500.2142(2). Payments made outside that time frame are subject to mandatory

statutory interest of twelve percent (12%) per annum. Id. § 500.3142(3). “

‘Penalty interest must be assessed against a no-fault insurer if the insurer refused to

pay benefits and is later determined to be liable, irrespective of the insurer’s good

faith in not promptly paying the benefits.’ ” Williams v. AAA Michigan, 646

N.W.2d 476, 483 (Mich. Ct. App. 2002) (quoting Davis v. Citizens Ins. Co. of

America, 489 N.W.2d 214, 216 (Mich. Ct. App. 1992)); see also Cruz v. State

Farm Mut. Auto. Ins. Co., 648 N.W.2d 591, 601 (Mich. 2002) (citing Davis and

stating that “[p]enalty interest begins to accrue when an insurer refuses to pay

benefits for which it is liable . . . It is assessed regardless of the insurer’s good faith

in withholding benefits.”). However, “an insurer’s good faith in withholding

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payment of benefits is relevant in awarding attorney fees under the act[.]” Davis,

489 N.W.2d at 217 (citations omitted); Mich. Comp. Laws § 500.3148(1) (“The

attorney’s fee shall be a charge against the insurer in addition to the benefits

recovered, if the court finds that the insurer unreasonably refused to pay the claim

or unreasonably delayed in making proper payment.”)

Analysis

Discovery Related to Dr. David Carr (Interrogatories Nos. 9 & 10 and

Addendum to MES Subpoena Items 3, 4, & 10)

Defendant referred Plaintiff for an IME with Dr. David Carr through

Defendant’s vendor, MES. Apparently, based on Dr. Carr’s opinion, Defendant

determined that certain incurred charges were not reasonable. Plaintiff now asks

Defendant to indicate how many times it has hired Dr. Carr to conduct evaluations,

write reports, and testify for Defendant in the past five years (ECF No. 19-1,

Interrog. No. 9), as well as the amount of money Defendant has paid Dr. Carr for

his services. (Id., Interrog. No. 10.) Plaintiff also has deposed a representative of

MES, prepared to testify regarding the number of medical evaluations Dr. Carr has

conducted through MES in the last five years, the number he has conducted at the

request of Defendant during that period, and the income Dr. Carr has been paid for

work through MES during that time period. (ECF No. 19-4, Addendum Items 3, 4,

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& 10.) Plaintiff argues that this evidence is relevant to show Dr. Carr’s bias and/or

prejudice. Defendant contends that the information sought would demonstrate

nothing regarding his bias.

To the extent the information sought relates to Dr. Carr’s work for

Defendant, specifically, this Court agrees with Plaintiff and rejects Defendant’s

objections to these discovery requests. “Certainly, a continuing relationship

between the witness and a party in which a witness receives payment for

generating an opinion that may be favorable to the interests of the party seeking the

opinion is a source of bias[]” and is discoverable. Great Lakes Anesthesia, PLLC v.

State Farm Mut. Auto. Ins. Co., Nos. 11-10658, 11-11003, 11-11855, 2011 WL

4507417, at *5 (E.D. Mich. Sept. 29, 2011) (finding similar evidence concerning

medical service provider admissible to show provider’s bias in favor of insurer). 

Information concerning Dr. Carr’s overall relationship with and work for MES,

however, is not relevant here.

Thus the Court is sustaining Defendant’s objections to Items 3 and 10 of the

addendum to the MES subpoena, but is requiring Defendant to respond to

Plaintiff’s First Interrogatories Numbers 9 and 10 and allowing Plaintiff to seek a

response to Item 4 from the MES representative.

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Discovery Related to Defendant’s Vendors, Including MES (Interrogatories

Nos. 6 & 7, Document Requests Nos. 3-5, and Remaining Items in the

Addendum to the Subpoena Issued to MES)

In these requests, Plaintiff asks Defendant and/or MES to indicate how many

times Defendant has asked MES to schedule medical evaluations and/or record

reviews in the past five years and the amount of money Defendant has paid MES

during that period to facilitate medical evaluations, record reviews, and

deposition/trial testimony. (ECF No. 19-1, Interrog. Nos. 6 & 7; ECF No. 19-4,

Addendum Items 1, 5 & 6.) Plaintiff also seeks a copy of any contracts and

agreements between Defendant and MES and “any lists, memoranda, e-mails,

documents, or the like” provided by Defendant to MES “utilized to facilitate the

medical evaluation(s) in Plaintiff’s case, providing any criteria either limiting or

controlling the vendor in its selection of a doctor specifically for State Farm

insureds/claimants.” (ECF No. 19-2, Nos. 4-5; ECF No. 19-4, Addendum Items 7,

8 & 9.) Plaintiff also asks Defendant to “produce a copy of the ‘approved vendor

list’ used by the State Farms Claims Representative assigned to the Plaintiff[‘]

claim.” (ECF No. 19-2, Doc. Requests No. 3.) Similarly from MES, Plaintiff

seeks “[a]ll records of any nature whatsoever concerning the Plaintiff . . .” and

“[t]he record review of Plaintiff.” (ECF No. 19-4, Addendum Items 11 & 14.) 

The only request seeking information relevant to Plaintiff’s claim are those that are

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specific to Plaintiff: Document Request Number 5 and Items Eleven and Fourteen

of the addendum attached to the MES subpoena. The remaining requests do not

seek matters relevant to Plaintiff’s claim.

What Defendant conveyed to MES concerning Plaintiff’s claim, specifically,

before MES referred the claim to Dr. Carr for an IME may prove relevant to

Plaintiff’s cross-examination of Dr. Carr. Similarly, MES documents related to

Plaintiff, specifically, may shed light on Dr. Carr’s evaluation of Plaintiff. The

remaining requests, however, do not relate to Plaintiff’s claim. It does not appear

that MES has provided an opinion to Defendant that impacted or was considered in

the latter’s decision to pay Plaintiff’s claim. Thus the number of times Defendant

utilized MES in the last five years and MES’ financial interest are not relevant to

this case.

Therefore, the Court sustains Defendant’s objections to Plaintiff’s

Interrogatories Numbers 6 and 7, Document Requests Numbers 3 and 4, and Items

1, 5-9, and 13 of the addendum to the subpoena issued to MES. The Court rejects

Defendant’s objection to Document Requests Number 5 and Items 11 and 14 of the

addendum.

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Discovery Related to Defendant’s Training of Claims Personnel, ACE Review,

and Auto Claim Manual (Document Requests Nos. 6-9, 11, 13 & Items e, 6 & 7

to the Subpoena Duces Tecum Issued to Defendant)

Plaintiff’s remaining discovery requests seek information to demonstrate

that Defendant handled Plaintiff’s claim in an unreasonable and unfair fashion, and

that this was consistent with Defendant’s practice and procedure of denying claims

without regard to the actual validity of the claim. Plaintiff believes that the

information sought will demonstrate, relatedly, that Defendant trains its claims

adjusters to follow this practice and procedure. The Court concludes that these

issues and thus the information sought are not relevant to Plaintiff’s claim.

The only issues relevant to Plaintiff’s claim for benefits are whether a

contract exists and whether the expenses sought are compensable under the

contract and Michigan’s No-Fault Act. To be compensable, 

three requirements must be satisfied: (1) the expense

must have been incurred by the insured, (2) the expense

must have been for a product, service, or accommodation

reasonably necessary for the injured person’s care,

recovery, or rehabilitation, and (3) the amount of the

expense must have been reasonable.

Hamilton v. AAA Michigan, 639 N.W.2d 837, 842 (Mich. Ct. App. 2001); see also,

Nasser v. Auto Club Ins. Ass’n, 457 N.W.2d 637, 645 (Mich. 1990). These are

objective questions to which Defendant’s good or bad faith and handling of other

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claims has no bearing. The question of whether Plaintiff submitted reasonable

proof of loss also is governed by an objective standard. See ACME Roll Forming

Co. v. Home Ins. Co., 31 F. App’x 866, 872 (6th Cir. 2002) (construing Michigan

insurance statute). As the Sixth Circuit stated in ACME Roll Forming:

The standards and criteria used to determine whether a proof of loss is

“satisfactory” is a long-standing issue in insurance law. . . . The

default reading should be an objective standard, satisfactory to a

neutral arbiter, rather than satisfactory to one of the two interested

parties. Moreover, “satisfactory” is traditionally limited by the

objective standard, so that the insurance company is not permitted to

reject proof that would be satisfactory to a reasonable person. 

Id. at 872 (internal quotation marks, brackets, and citations omitted).

Documents regarding the ACE program are not relevant for the additional

reason that they relate to claims files from November 1995 through 1997. As

described in another case in which they were sought, the documents “were

generated as part of a self-critical audit of various automobile claim files, handled

exclusively by State Farm’s Michigan Region.”2

 Chauvin, 2011 WL 1810625, at

2

As further described by the Honorable Mark Goldsmith in a different and

unrelated case involving Defendant:

ACE was a comprehensive program employed by State Farm in which

the company initially (in the mid 1990s) performed a study on closed

claims files and then, based at least in part on what it learned from

those files, put in place a comprehensive program, including

(continued...)

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*2 (internal quotation marks and citation omitted). Plaintiff’s accident occurred

and her claims were reviewed more than fifteen years after this audit. Evidence of

how Defendant handled claims fifteen years earlier is not relevant to how it

handled Plaintiff’s claim. While the ACE program may have led Defendant to

adopt a certain philosophy or approach for handling future claims such as

Plaintiff’s, the Court believes other, more direct, evidence is available from which

to glean that information which would be less burdensome to produce.

The Court acknowledges that evidence concerning Defendant’s bad faith

handling of insurance claims may be relevant if Plaintiff prevails and seeks

attorney fees under Section 500.3148. However, whether Plaintiff is entitled to

attorney fees would be decided by the Court in post-judgment proceedings if a jury

has decided that benefits are owing and overdue. Moore v. Secura Ins., 759

2

(...continued)

addressing claims handling practices, designed to make the company

more successful. . . . [T]he program concluded that State Farm could

“capture opportunities” for profit in the claims arm of the business by

settling fewer cases, delaying payment, etc. . . . According to State

Farm, the Michigan ACE study was a review of closed files only with

payments of less than $250,000 and was designed to improve State

Farm’s operations; its documents function as a continuing education

for adjusters.

Akins v. State Farm Mut. Auto. Ins. Co., No. 10-cv-12755, 2011 WL 3204839, at

*5 n.3 (E.D. Mich. July 28, 2011).

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N.W.2d 833, 838 (2008). Plaintiff can seek the requested discovery at that time, if

it still believes the information is needed.

The Court therefore sustains Defendant’s objections to Plaintiff’s Document

Requests Numbers 6-9, 11, and 13, and Items e, 6, and 7 of the subpoena duces

tecum issued to Defendant.

Summary

For the reasons stated, the Court rejects Defendant’s objections to Plaintiff’s

First Interrogatories Numbers 9 and 10, Requests for Production of Documents

Number 5, and Items 4, 11, and 14 of the addendum to the subpoena issued to

MES. Defendant shall respond to those discovery requests within twenty-one (21)

days of this Opinion and Order. Defendant’s remaining objections are sustained

and Plaintiff’s First Interrogatories Numbers 6 and 7, Requests for Production of

Documents Numbers 3, 4, 6-9, 11, and 13, Request for Items e, 6, and 7 in the

subpoena duces tecum issued to Defendant, and Request for Items 1, 3, 5-10, and

13 in the addendum to the subpoena issued to MES are stricken.

SO ORDERED.

S/ Linda V. Parker 

LINDA V. PARKER

U.S. DISTRICT JUDGE

Dated: December 9, 2014

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I hereby certify that a copy of the foregoing document was mailed to counsel of

record and/or pro se parties on this date, December 9, 2014, by electronic and/or

U.S. First Class mail.

S/ Richard Loury 

Case Manager

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