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Park Board Ltd. v. State Automobile Mutual Insurance Co.

United States District Court, E.D. Texas, Sherman Division

December 23, 2019

PARK BOARD LTD. Plaintiff,



         Pending before the Court is Brett Lochridge's Motion to Quash or, in the Alternative, Modify Subpoena (Dkt. #71). Having considered the Motion and the relevant pleadings, the Court finds that the Motion is GRANTED in part and DENIED in part.


         Plaintiff Park Board Ltd. (“Park Board”) purchased an insurance policy (the “Policy”) from Defendant State Automobile Mutual Insurance Company (“State Auto”) in January 2017 for a commercial building in Collin County. The Policy includes a clause entitling the insurer and insured to an “appraisal, ” which determines the amount of loss to damaged property if the Parties disagree on the initial valuation. Either side may demand an appraisal, which prompts each side to select its own appraiser. The chosen appraisers subsequently select a third-an “umpire”-or have one appointed by the Court. Working together, the group will determine the appropriate amount of damage.

         In March and April of 2017, Park Board's property sustained damage from severe wind and hail storms. Park Board reported a claim to State Auto immediately. State Auto's adjuster assessed the claim and found a damage amount of $8, 097.85 (below the policy's $26, 006.00 deductible) (Dkt. #42, Exhibit 1 at p. 1, 3). Because the adjuster determined the damage to be less than the Policy's deductible, State Auto informed Park Board that it would not pay the claim via email on April 7, 2017 (Dkt. #42, Exhibit 1 at p. 1). Park Board contends that State Auto failed to conduct a good faith investigation into the damages and that a reasonable insurer would not have valued the claim so low. Not satisfied with the result from the adjuster, Park Board sought to initiate appraisal pursuant to the Policy in January 2018 (Dkt. #30, ¶ 32). According to Park Board, State Auto denied the request for appraisal in breach of the Policy. In response, Park Board filed suit in April 2018, a year after the storm occurred. The Parties ultimately initiated the appraisal process in August 2018.

         State Auto's appraiser and the umpire signed and issued their findings in April 2019. The appraisers found that it would cost $211, 546.56 to purchase replacement parts for any damages to the property. They also found that, at the time the wind and hail storms hit, the parts of the property that were damaged had already depreciated in value by $80, 165.61. This means that the “actual cash value” of the parts needing repairs amounted to $131, 380.95. State Auto provided Park Board with a check for $49, 531.29 shortly after. Due to the deductible and prior payments State Auto had made to Park Board, this payment ensured that the $131, 380.95 “actual cash value” determination was satisfied.[1] Under some circumstances, the Policy provides Park Board with the full replacement cost for damage to its property-including the amount of depreciation. State Auto informed Park Board that it would pay the $80, 165.16 depreciation amount once repairs were completed. But it also advised that Park Board has “2 years from the date of the loss in which to actually complete the repairs in order to collect the balance of the damages”-a date that has passed. (Dkt. #39, Exhibit 4 at p. 3) (emphasis in original).

         On April 22, 2019, State Auto filed Defendants State Automobile Insurance Company and Daniel Prough's Motion to Dismiss (Dkt. #39). The Court granted in part and denied in part State Auto's Motion. As the Court stated, “Plaintiff's claims [were] dismissed only to the extent they [sought] damages for policy benefits that have been paid following the appraisal process . . . .” (Dkt. #58). Consequently, Park Board's claim for breach of contract, as to the denial of its first request for appraisal, survived (Dkt. #58). “Park Board's extra-contractual claims” were deemed moot by the Court “to the extent they [sought] damages for policy benefits that State Auto paid following the appraisal process” (Dkt. #58). The remainder of Park Board's extra-contractual claims survived. Finally, the Court allowed Park Board's claims under the Texas Prompt Payment of Claims Act (“the PCCA”) to survive after finding that “State Auto's prompt payment of the appraisal award does not immunize it from being in violation of the PCCA” (Dkt. #58).

         On or about October 10, 2019, Park Board served Brett Lochridge “with a subpoena duces tecum to appear at the undersigned counsel's office on November 13, 2019 . . . .” (Dkt. #72). “The purpose of Lochridge's testimony, ” according to Park Board, “is to determine if the [appraisal] award must be set aside” (Dkt. #72). On October 23, 2019, Brett Lochridge filed Brett Lochridge' Motion to Quash or, in the Alternative, Modify Subpoena (Dkt. #71). Lochridge argues that, because of the Court's recent Memorandum Opinion and Order (Dkt. #58), “no claims remain in this action to which Mr. Lochridge has knowledge and his deposition can only be seen as harassment” (Dkt. #71). Accordingly, Lochridge requests that the Court quash the subpoena (Dkt. #71).

         In the alternative, Lochridge argues that the Court should modify the date and scope of the subpoena (Dkt. #71). As to the date, Lochridge argues that he has informed Park Board that he is unavailable for a deposition on November 13 due to prior travel arrangements. Lochridge accordingly requests that the Court “modify the subpoena to allow that Mr. Lochridge [] be deposed on a mutually convenient date” (Dkt. #71). As to the scope of the subpoena, Lochridge first argues that the Court should modify the subpoena duces tecum to exclude document requests 3-10 which “seek materials related to Mr. Lochridge's performance of his duties as an appraiser” (Dkt. #71). Lochridge similarly argues that document request 15 should be excluded because it “asks for documents related to the basis for the award” (Dkt. #71). Lochridge also opposes document requests 11-13 which “ask for Mr. Lochridge to produce all materials regarding his payment for acting as an appraiser and any other documents relating to work done for the Defendants” (Dkt. #71). Finally, Lochridge opposes document request 14 which “asks for every affidavit or deposition that Mr. Lochrdige has ever given” (Dkt. #71). This request, Lochridge continues, is “horrifically overbroad and is not even attempting to be narrowed to relevant information” (Dkt. #71).

         On November 15, 2019, Park Board filed Plaintiff's Response to Brett Lochridge's Motion to Quash or, in the Alternative, Modify Subpoena (Dkt. #72). Park Board argues that Lochridge's Motion to Quash is “groundless” because the purpose of seeking the deposition of Lochridge is “to determine if the award must be set aside” (Dkt. #72). As to Lochridge's opposition to the requested documents, Park Board simply replies that the “deposition must move forward as set in the attached subpoena . . . .” (Dkt. #72). The Court now considers Brett Lochridge's Motion to Quash or, in the Alternative, Modify Subpoena (Dkt. #71).


         Pursuant to Federal Rule of Civil Procedure 26(b)(1), parties “may obtain discovery regarding any non[-]privileged matter that is relevant to any party's claim or defense . . . .” Fed.R.Civ.P. 26(b)(1). Relevance, for the purposes of Rule 26(b)(1), is when the request is reasonably calculated to lead to the discovery of admissible evidence. Fed.R.Civ.P. 26(b)(1); Crosby v. La. Health & Indem. Co., 647 F.3d 258, 262 (5th Cir. 2011). Relevant information includes “any matter that bears on, or that could reasonably lead to other matter that could bear on, any issue that is or may be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). In other words, “[r]elevancy is broadly construed, and a request for discovery should be considered relevant if there is ‘any possibility' that the information sought may be relevant to the claim or defense of any party.” S.E.C. v. Brady, 238 F.R.D. 429, 437 (N.D. Tex. 2006) (quoting Merrill v. Waffle House, Inc., 227 F.R.D. 467, 470 (N.D. Tex. 2005)). Consequently, “[u]nless it is clear that the information sought can have no possible bearing on the claim or defense of a party, the request for discovery should be allowed.” Brady, 238 F.R.D. at 437. The Court has provided guidance in matters of discovery. The Court's scheduling order requires that the parties produce, as part of their initial disclosure, “documents containing, information ‘relevant to the claim or defense of any party.'” (Dkt. #21 at pp. 3-4). Moreover, the Local Rules of the Eastern District of Texas provide further guidance suggesting that information is “relevant to any party's claim or defense [if]: (1) it includes information that would not support the disclosing parties' contentions; . . . (4) it is information that deserves to be considered in the preparation, evaluation or trial of a claim or defense. . . .” Local Rule CV-26(d). It is well established that “control of discovery is committed to the sound discretion of the trial court.” Freeman v. United States, 556 F.3d 326, 341 (5th Cir. 2009) (quoting Williamson v. U.S. Dep't of Agric., 815 F.2d 368, 382 (5th Cir. 1987)).

         Pursuant to Rule 45(d)(3), upon timely motion, “the court for the district where compliance is required must quash or modify a subpoena that, ” inter alia, requires disclosure of privileged or protected matter or subjects a person to undue burden. Fed.R.Civ.P. 45(d)(3)(A). “The court must balance the need for discovery by the requesting party and the relevance of the discovery to the case against the harm, prejudice, or burden to the other party.” RYH Properties, LLC v. West, 2011 WL 13196550, at *2 (E.D. Tex. Feb. 3, 2011) (citing Cmedia, LLC v. LifeKey Healthcare, LLC, 216 F.R.D. 387, 389 (N.D. Tex. 2003)). When determining whether a subpoena is unduly burdensome, a court may consider: “(1) relevance of the information requested, (2) the need of the party for the documents, (3) the breadth of the document request, (4) the time period covered by the request, (5) the particularity with which the party describes the requested documents, and (6) the burden imposed.” West, 2011 WL 13196550, at *2 (citing Wiwa v. Royal Dutch Petroleum Co., 392 F.3d 812, 818 (5th Cir. 2004); Brady, 238 F.R.D. at 437). The Court may also consider whether “the subpoena ...

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