UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

SOUTH BEND DIVISION

FIRST SPECIALTY INSURANCE CORP.,

Plaintiff,

v.

SUPREME CORPORATION, A SUBSIDIARY

OF SUPREME INDUSTRIES, INC.,

Defendant.

Case No. 3:12-CV-186

Consolidated cases

SUPREME INDIANA OPERATIONS, INC.

Plaintiff,

v.

FIRST SPECIALTY INSURANCE CORP.,

Defendant.

Case No. 3:14-CV-1613

Consolidated cases

RESPONSE IN OPPOSITION TO

MOTION TO COMPEL

The Court should not compel Supreme Corporation n/k/a Supreme Indiana 

Operations, Inc. (“Supreme”) to search on every server and in every file cabinet to 

overturn every scrap of data that pertains to its litigation and settlement of an 

underlying multi-million dollar lawsuit that its insurer, First Specialty Insurance 

Corp. (“First Specialty”), refused to defend. Supreme has fully answered the 

disputed discovery requests, and First Specilaty’s motion to compel should therefore 

be denied.
2

I. BACKGROUND

This is an insurance coverage dispute. In February 2012, King County 

Washington sued Supreme alleging various defects and problems with 35 medium 

duty buses Supreme manufactured and sold to King County for public transit 

vehicles. The Complaint filed by King County was a sweeping, 18-page document 

alleging a host of claims and damages, including “eye and throat irritation, as well 

as nausea and headaches” allegedly suffered by drivers and passengers of the buses. 

Supreme tendered defense of the matter to First Specialty, who denied coverage and 

initiated a declaratory judgment in this Court (the first of these consolidated 

actions).

On cross-motions for summary judgment, Supreme prevailed, and this Court 

ruled that First Specialty breached its duty to defend. See [DE 34]. In the 

meantime, Supreme had settled the underlying King County case. It filed the 

second of these consolidated actions to recover its damages from First Specialty. 

Including recoverable interest and legal fees, those damages are estimated at more 

than $5.7 million. According to Rule 26, Supreme disclosed its damages 

computation and provided supporting records. See Supplemental Disclosures 

(EXHIBIT 1).

Supreme has also responded to interrogatories and requests for production. 

The requests served by First Specialty, along with Supreme’s original responses,

were filed with the Court as exhibits to First Specialty’s motion. First Specialty did 

not file Supreme’s supplemental responses, but with its motion and brief, First 

Specialty does acknowledge that Supreme supplemented its responses to provide 
3

attorney billing records from the underlying King County litigation. This 

production was made as a compromise growing out of informal efforts to resolve the 

dispute embodied in First Specialty’s motion to compel. Details about those 

informal efforts—along with copies of some of the associated correspondence—are 

also described in First Specialty’s filings. Further background details will be 

addressed below.

II. LAW AND ANALYSIS

According to First Specialty, there are three issues in this case.1 Viewed 

through the lens of those issues, Supreme has fairly responded to all outstanding 

requests that are “relevant to any party’s claim or defense and proportional to the 

needs of the case.” FED. R. CIV. P. 26(b)(1).

The motion concerns nine requests for production: Requests 2-7, 11-12, and 

14. See [DE 42-1 at 5 & DE 42-5]. For unknown reasons, First Specialty also 

submitted its interrogatories and Supreme’s answers to them as exhibits to its 

motion. But it does not seek any relief concerning the interrogatories, so Supreme 

will not discuss them in this response. Instead, Supreme will address the nine 

contested requests in connection with the three case issues identified by First 

Specialty.

 

1 Supreme does not necessarily agree with First Specialty’s description or listing of the issues, but 

First Specialty’s own analysis is an appropriate measuring stick for the permissible scope of its 

discovery requests. It identifies the issues as (1) costs of defense, (2) number of “occurrences,” and 

(3) how much of the settlement was paid for “bodily injury.” [DE 42 at 2].
4

A. The costs of defense are not at issue in this motion to compel.

The Court has already ruled that First Specialty owed Supreme a duty to 

defend, but First Specialty’s motion identifies “the costs of defending the underlying 

litigation” as an issue that remains. Supreme has disclosed those costs—both 

through the disclosures attached as Exhibit 1 and supporting records. See Response 

to Request No. 8 (DE 42-7). Further, as First Specialty concedes, it provided even 

more supporting records in order to compromise a potential discovery dispute. 

There is no need for further discovery on this subject.2

B. The disputed discovery requests do not address the number of 

“occurrences” in a proportional way.

First Specialty claims the next important issue is “the number of 

‘occurrences’ in the underlying litigation and thus the number of Self-Insured 

Retentions (‘SIR’s’) Supreme must satisfy before it can recover any indemnity or 

costs of defense.” In other words, First Specialty intends to argue the King County 

lawsuit was more than one “occurrence” under the controlling insurance policy. As 

it was one lawsuit, defended as one and settled as one—all arising out of one sale 

transaction to one party, who was the one and only plaintiff—Supreme believes it 

should be treated as one “occurrence.” The Court may have to pass on that dispute 

in the future because it does make a difference in computing the amount of 

 

2 In fact, Supreme questions whether the discovery dedicated to it thus far is proportional to the 

needs of the case. After all, in measuring duty-to-defend damages, the Seventh Circuit has 

specifically rejected a “detailed, hour-by-hour review after the fashion of a fee-shifting statute.” 

Medcom Holding Co. v. Baxter Travenol Labs., Inc., 200 F.3d 518, 521 (7th Cir. 1999). Instead, courts 

should look to the fees as a whole and determine if they are commercially reasonable, noting that 

when an indemnitee pays fees with its own funds and no guarantee of recovery, those fees are 

presumptively reasonable. Id; see also Taco Bell Corp. v. Cont’l Casualty Co., 388 F.3d 1069, 1075-76 

(7th Cir. 2004).
5

Supreme’s recoverable damages. But that legal dispute has no real bearing on the 

discovery requests.

None of the disputed requests ask anything about “occurrences,” so it’s not as 

if Supreme refused to provide this information. In fact, even if First Specialty had 

expressly requested records relating to the number of “occurrences,” it would be 

unlikely for a manufacturer defending itself in a product liability lawsuit to create, 

posses, or obtain any records that speak directly to the issue of how to count 

“occurrences” for insurance purposes. Instead, First Specialty would have to look at 

raw data concerning the underlying lawsuit, such as its pleadings (which are 

publicly available) or discovery exchanged in it (which has not been requested), or 

its settlement agreement (which has been produced). That’s not what First 

Specialty asked for. Instead, it asked for everything under the sun.

1. Most of the requests are overbroad.

Request No. 2 is emblematic of First Specialty’s overly broad requests. It 

seeks “[a]ny and all Documents or Communications with King County related to the 

Claim.” First specialty defined the terms used in that request as follows:

5. "Communication" means all discussion, conversations, interviews, 

meetings, negotiations, letters, memoranda, cablegrams, mailgrams, 

telegrams, telexes, cables, electronic mail or transmission or other 

forms of written or verbal intercourse, however transmitted, including

reports, notes, memoranda, lists, agendaand other Documents and 

records of Communications, and when used herein shall require a 

statement of the name of the individual who made the Communication, 

the Person(s) to whom it was made, the date it was made, and the form 

in which it was made.

6. "Document" means anything on which any information is fixed and 

can be perceived, reproduced or otherwise communicated, with or 
6

without the aid of any machine or device, and regardless of the 

medium of expression in which any information is fixed (e.g.,

electronic, print, video, audio or other medium), including but not 

limited to material in the form of reports, studies, statements, 

testimony, minutes, speeches, notebooks, agreements, appointment 

calendars, working papers, graphs, drawings, computer models and 

programs, spreadsheets, books, manuals, brochures, memoranda, 

notes, correspondence, emails, diaries, bookkeeping entries and 

unpublished material, and shall also include, but not be limited to,

originals, copies (with or without notes or changes thereon) and drafts.

This is a classic “fishing expedition” request. It is not a measured and 

appropriate request for information relevant to any issue, much less to the issue of 

occurrences. Rule 34 requires that requests for production describe the requested 

information “with reasonable particularity.” FED R. CIV. P. 34(b)(1)(A). And if even 

if something that might fall under an overly broad request could be relevant to a 

claim or defense, courts will not compel a response when the request is not tailored 

to those relevant matters. See, e.g., Ye v. Cliff Viessman, Inc., 2016 U.S. Dist. 

LEXIS 28882, at *14 (N.D. Ill. March 7, 2016) (denying motion to compel).

Furthermore, it bears repeating that this Court has already found First 

Specialty liable. All of the case issues identified by First Specialty—and the only 

issues that could possibly be relevant—go to computing the amount of Supreme’s 

damages. In light of the limited scope of this litigation, Request No. 2 simply asks 

too much to be “proportional to the needs of the case.” FED. R. CIV. P. 26(b)(1). 

Request No. 7—which asks for all of Supreme’s internal “Documents” and 

“Communications”—suffers from the same defects. In fact, this Request is so overly 

broad that First Specialty did not even limit it to the King County lawsuit. The 

suggestion that Supreme should open up its file rooms and computer servers to copy 
7

every single one of its internal “Documents” and “Communications” would not make 

sense in any lawsuit. It is preposterous in a case where liability has already been 

determined. And, of course, it has nothing to do with “occurrences.”

Request No. 5 is more of the same. It asks for all “Documents or 

Communications with any person or entity . . . . related to the Claim.” In a case 

where only damages are left to be litigated, this also asks too much to be 

proportional to the case. The same is true for Request No. 11, which seeks, “all 

Documents or Communications related to Supreme’s claim for indemnity. . . ,” and

Request No. 12, which asks for largely the same things in another way. 

The recent Ye decision from a sister court in this Circuit explained the 

concept of proportionality when it comes to social media discovery. It denied a 

motion to compel, explaining it could “imagine a request more narrowly tailored to 

relevant content . . . . Perhaps one that is limited to a reasonable period of time and 

. . . that bears on the issues of liability and damages in this case. But it is not the 

Court’s role to tailor or re-write the discovery.” 2016 U.S. Dist. LEXIS at * 13. In 

the same way, this Court cannot re-write First Specialty’s overly broad requests and 

should deny its motion to compel.

2. Supreme responded to portions of requests that are not too broad.

Requests 3 and 6 ask for settlement agreements from the King County case, 

and Request 4 asks for “contracts . . . related to the claim,” which would include 

contracts of settlement. Those categories of documents probably do not help unpack 

the issue of “occurrences.” But they are relevant discovery, and Supreme responded 
8

to them by providing all settlement agreements. Still, First Specialty is not 

satisfied. It wants draft settlement agreements, e-mails, letters, and phone records 

evidencing settlement negotiations, along with any number of other settlementrelated records that fall under its broad definition of “Documents” and 

“Communications.” In fact, it wants “all contracts between Supreme and any 

person or entity,” not just settlement agreements. (Requ. No. 4). Supreme objected 

to providing more than the settlement agreements for a variety of reasons, 

including the fact that any communications with its attorneys on such matters are 

privileged. 

First Specialty dedicates most of its brief to arguing the privilege has been 

waived, but even if the Court could agree with this strained position, that does not 

require Supreme to open up its confidential attorney-client communications or any 

of the other swarms of documents that might fall under these broad requests. Rule 

26(b)(1) still defines the scope of discovery. And on that score, this case is similar to 

Equal Rights Ctr. v. Archstone-Smith Trust, 251 F.R.D. 168 (D. Md. 2008). It 

involved an underlying settlement and consent decree from Archstone-Smith Trust, 

which had also filed cross-claims against another defendant, Niles Bolton’s 

Associates, Inc. Niles Bolton’s sought to discover all records that “concern or relate 

to the negotiation, execution and substantive terms of the settlement reached 

between [Archstone] and Plaintiffs.” Id. at 169. The court granted a protective 

order forbidding this discovery. 
9

The Equal Rights Center court found that the narrowing of issues caused by 

other litigation events affected the scope of discovery. It explained: “The issues 

between Archstone and NBA remaining in this case are limited. . . . NBA has failed 

to establish how a wholesale exploration of the settlement process between 

plaintiffs and Archstone falls within the scope of permissible discovery. The court is 

not willing to open the gate to expansive and costly discovery.” Id. at 171-72. The 

same should be true here. The Court’s declaratory judgment narrows the issues, 

and the settlement agreements have been produced. Any records that may reflect 

haggling over the settlement before it was reached will do nothing to illuminate the 

issue of “occurrences.” In other words, First specialty “has not adequately 

established how what [the parties] said or were thinking during the course of its 

settlement discussions with plaintiffs will lead to admissible evidence.” Id. at 171.

3. The remaining requests indisputably invade the privilege

Request 14 rounds out First Specialty’s motion. In it, First Specialty asks for 

documents that itemize the indemnity portion of the damage claim. Supreme has 

provided its itemization of damages through its Rule 26 disclosures and 

supplements to them. (See Ex. 1). If First Specialty seeks still more with this 

request, then all that would remain are communications between Supreme and its 

attorneys or attorney work product outlining legal positions. No one argues 

Supreme should lose its privilege with the coverage counsel representing it in this 

case, even if minds could differ regarding the scope of Supreme’s privilege with its 

attorneys in the underlying case. In fact, First Specialty’s memorandum of law 
10

specifically concedes that it is not seeking “any privileged materials or 

communications that pertain to coverage under the First Specialty policies.” [DE 

42-1 at 11 n.3]. As such, there is nothing more to be compelled in response to 

Request 14.

Requests 11 and 12—in addition to being objectionably overbroad—suffer 

from the same defect. In order to literally produce “all Documents or 

Communications” relating to Supreme’s claims in this lawsuit, it would have to 

disclose its attorneys’ mental impressions and its communications with counsel. 

These materials are not discoverable. In fact, none of these requests appropriately 

seek any non-privileged matter that would address the “occurrences” issue First 

Specialty has identified as central to this case. 

C. Supreme has already informed First Specialty it has no records 

regarding the allocation of settlement sums.

The final issue identified by First Specialty is the allocation of settlement 

sums to different damage claims, which may affect the availability of insurance 

coverage for those sums. In two requests that are not subject to First Specialty’s 

motion, it asked Supreme to produce documents “relating to the allocation by 

Supreme of settlement amounts paid by it to types or categories of damages” (No. 

15) and “relating to the allocation by King County” of the settlement to damages 

claims. (No. 16). Supreme responded that is possesses no responsive documents. 

[DE 42-7]. Those were fair requests. But because Supreme has no records relating 

to them, there is no way any records it might have in connection with the disputed 

requests could possibly be relevant to this allocation issue.
11

Thus, for many of the same reasons that the disputed requests are not 

relevant or proportional to the number of “occurrences” issue, they cannot be 

relevant or proportional to this final issue, either. Consider the Equal Rights Ctr. 

case, which also involved questions about indemnity for an underlying settlement 

and how to allocate the settlement funds. Id. at 171. Because Archstone-Smith 

revealed its position on allocation, the court was “not willing to open the gate to

expansive and costly discovery.” Id. at 171-72. Likewise, Supreme has already 

responded that it does not have records concerning allocation, and First Specialty 

has access to other evidence addressing the matter of how King County computed 

its damages claims. See [DE 25-1 at 5]. Although allocation may be an important 

issue for further discussion in this case, it does not justify any further response to 

the disputed discovery requests.

III. CONCLUSIONS

First Specialty has employed a kitchen-sink approach to discovery. It used 

expansive definitions for the terms in its requests; it served requests asking for 

everything imaginable; and it attached exhibits and made arguments in its motion 

relating to matters that are not even disputed. Rules 26 and 34 require a more 

tailored approach. After considering the issues that remain in this case where 

liability has already been decided—and factoring in the discovery Supreme has 

already provided—there is nothing to be compelled under the disputed requests. 

First Specialty’s motion should be denied. 
12

Respectfully submitted,

 /s/ Michael J. Hays

James M. Lewis (#15784-71)

Michael J. Hays (#23606-71)

TUESLEY HALL KONOPA, LLP

212 E. LaSalle Avenue, Suite 100

South Bend, IN 46617

Tel.: (574) 232-3538

jlewis@thklaw.com

mhays@thklaw.com

Attorneys for Supreme

CERTIFICATE OF SERVICE

I hereby certify that on March 31, 2016, I electronically filed this document 

with the Clerk of the Court using the ECF system, which system sent notice of filing 

to all counsel of record.

 /s/ Michael J. Hays