No. 12358 INTHE SUPREME COURT OF THE STATE OF MONTANA 1972

THE STATE OF MONTANA, upon relation of BANKERS LIFE & CASUALTY COMPANY, a corporation, Relator,

ROBERT E. MILLER, and theDISTRICT COURT OF THE EIGHTH JUDICIAL DISTRICT OF THE STATE OF MONTANA, INAND FOR THE COUNTY OF CASE, Respondents.

ORIGINAL PROCEEDING: Counsel of Record: For Relator: Church, Harris, John 6 Williams, Great Falls, Montana. Earl J. Hanson and Douglas Allen argued, Great Falls, Montana. For Respondents: Hoyt, Bottomly and Gabriel, Great Falls, Montana. John C. Hoyt argued, Great Falls, Montana.

Submitted: September 28, 1972 ~ecided : 

### 1

## 7

# 1m
Filed:

## rniil!p$Mr. JusticeWesley Castles delivered the Opirtion of the Court.

This is an original proceeding wherein relator seeks a writ of supervisory control to the end that the respondent district court of the eighthjudicial district, the Honorable Paul G. Hatfield presiding, should vacate itsorder dated August 24, 1972, ordering relator insurance company to answer interrogatory No. 26 of plaintiff's firstinterrogatories. We issued an order to show cause directed to the district court with copies to counsel for plaintiff Miller. Respondents appeared by brief and motion seeking denial of the application for a writand an order sustaining the district court's order. Oral argument was had. No problem concerning procedure is presented. Respondent Miller, hereinafter referred to as the Insured, isplaintiff in the district court action. He commenced the action against relator Bankers Life & Casualty Company, hereinafterreferred to as the Insurance Company, torecover general and punitive damages essentially forbreach of contract by the insurance company. Insured alleged inhis amended complaint thathe purchased two insurance policies from Insurance Company. One of the policies purchased was titled "~ickness and Accident Policy" and the other policy was titled "Accident Policy". Early in 1971, Insured made certain claims under both policies and thereafter instituted the action against Insurance Company on July 30, 1971. ~nsured's amended complaint was filed on December 14, 1971. Insured divided his action into two claims. One claim

concerns the Sickness and Accident Policy and the other the Accident Policy. Inboth claims Insured seeks damages forbreach of contract and exemplary or punitive damages for alleged violations of the insurance code of the stateof Montana. Insuredhas pleaded inboth claims,among other allegations, that the

course of conduct of InsuranceCompanywas deliberately embarked upon and was designed to be,was, and is oppressive, malicious, and fraudulent as to Insured in addition to being a violation of the insurance code. In its amended answer InsuranceCompany alleged that it has made allpayments due Insured under the Sickness and Accident Policy and denied that these payments were late. Furthermore, in InsuranceCompany's amended answer to claim two of lnsuredls complaint, InsuranceCompany alleged that therewas no coverage afforded by the Accident Policy and thereforeno payment was due'Insured. Insurance Company also denied all allegations of wrongdoing including those allegations of malicious or oppressive conduct. Insured thenbegan extensive discovery through the use of interrogatories. Many were objected to by InsuranceCompany. Several objectionswere sustained and several were overruled, 

### In the course of lnsuredlsdiscovery interrogatoryNo. 26 of plaintiff's first interrogatories to defendant was propounded to Insurance Company. InterrogatoryNo. 26, the only one involved in this proceeding, reads: "State thenames and addresses of allpersons within the State of Montana who have made a claim against Bankers Life & Casualty Company for monies they claim owed to them under health and accident or disability policies issued by Bankers Life and Casualty Company and which claim Bankers Life and Casualty Companyhas either refused or has not paid in full in the amount claimed due by the Policy holder during the past three (39 years,11 InsuranceCompany made this objection to interrogatory No, 26: 

### his interrogatory is objectionable on the grounds that the information called for is irrelevant and, further, is confidential business informationwhich the defendant should not be required to disclose unless and until plaintiffshows that it is relevant to the subject matter involved in the pending action. Further, this interrogatory is objectionable on the grounds that it amounts to a cross-examinationof defendant upon immaterialmatter which does not appear to be reasonably calculated to lead to the discovery of admissible evidence.

11

And, further, this interrogatory is objectionable on the ground and for the reason that it is unreasonablyburdensome, oppressive, or vexatious.I1 As statedheretofore, ~nsured'scomplaint indicates that he seeks damages for alleged breach of contract under two

. separatepolicies and thenpleaded and alleged violations of the insurance code, thereby attempting to bring his case within the law of State ex rel. Larsonv. District Court, 149 Mont. 131, 423 P.2d 

### 598. We are not here directly concerned with Larson at this stage. However, the allegation as to violation of the insurance code is what might be termed a general allegation concernedwith the merits of his claims under the two contracts. That is to say, the allegations of insurance code violations are dependent upon whether there has been a breach of the contract sued upon,which has been denied in all particulars, We shall not here attempt to distinguish Larson other than to observe that Larson discussed the "unique facts alleged inpetitioner's complaint". InterrogatoryNo. 26 does notamern itselfwith the ~nsured's insurance contracts or claims in suit, Rather, it seeksnames and addresses of all persons and policyholders ofMontana who have made claims forbenefitswhich were either refused for any reason or not paid in the full amount claimed,which would cover presumably all denials of coverage for whatever reason, all cases of partial coverage,all erroneously submitted claims, and all litigated,adjusted or compromised claims; allwithout regard to the hundreds of different factual contents, or even the private business matters of the thousands of policyholders. Such farreaching results are uncalled for by the issues raised in this litigation. The rules of discoverywere never intended to interferewith contractualrelationships in such a far reachingmanner. We observe in this connection that the district court allowed wide latitude to the Insured inpropounding interrogatorieswhich are not presented as issueshere, although

somewere objected to. The Montana Rules of Civil Procedure require interrogatories to be relevant to the subject matter of the action. Rule 33 provides inpart:

IIInterrogatoriesmay relate to any matters which can be inquired into under Rule 26(b), and the answers may be used to the same extent as provided in Rule 26(d) for the use of deposition of a party.It Rule 26(b), M.R.Civ.P., provides: "(b) SCOPE OF EXAMINATION. Unless otherwise ordered by the court as provided by Rule 30(b) or (d), the deponentmay be examined regarding any matter, not privileged,which is relevant to the subjectmatter involved in the pending action,whether it relates to the claim or defense;£ the examining party or to the claim or defense of any other party, including the existence, description,nature, custody, condition and location of anybooks, documents, 

### or other tangible things and the identity and location of persons having knowledge of relevant facts, It isnot ground for objection that the testimonywill be inadmissible at the trial if the testimony sought appears reasonably calculated to lead to the discovery of admissible evidence." (Emphasis added.) We shall assume for our purpose here that the discovery attempted was relevant and material but whether itwas reasonable to the issues pleaded at this stage is the crux of the matter. Apparently the Insured would search for some "pattern" ofbusiness practices that might somehow relate to his general charge of an oppressive,malicious and fraudulent action towards him. However, in all of the caseswe have searched the subject of reasonableness is consideredby weighing the annoyance and expense involved against the value of the information sought. See: 4A ~oore'sFederal Practice 5 33:20; United Statesv. ImperialChemical Industries, 8F.R.D. 551;United Statesv.Loewfs,Incorporated, 

### 23 F.R,D. 178. Here, it is clear from the affidavits and answers that the

answer to interrogatoryNo. 

### 26 involves multiple and minute factual detailswhich can onlybe compiled aftermany thousands ofhours of work at a considerable cost. Also, counsel for Insured stated thathe intends to write a letter to each and every policyholder disclosed in the answer to interrogatoryNo. 26. The rules of discoverywere never intended to be used to interrupt or interferewith contractual relationships to this extent. We are simply unable to see, even assuming the factual matters sought to be relevant,where, considering the annoyance and expense involved,the value of the information sought has a reasonable relationship under these circumstances. Accordingly,we find the district court abused its discretion in ordering that interrogatoryNo. 26 be answered and that part of its order of August 24, 1972, is set aside.

~ssociakd Justice

Associate Justices.

Mr, Justice.JohnConway Harrison deeming himself disqualified took no part in this Opinion.