Court denies appeal of subpoena ruling in insurance coverage for Jung Hotel restoration

By Charmaine Little | May 6, 2019

NEW ORLEANS – The U.S. District Court for the Eastern District of Louisiana denied defendant Starr Surplus Lines Insurance Co.’s appeal against previous rulings that both denied its motion to enforce a subpoena and its motion for reconsideration of the court’s denial to enforce the subpoena.

Judge Jane Triche Milazzo ruled on the case April 4, which concerns an insurance coverage dispute over construction delays caused by water damage of the Jung Hotel in New Orleans.

The ruling states Jung LLC hired plaintiff McDonnel Group to manage the restoration of the Jung Hotel in 2014. Under the agreement, McDonnel had to purchase builder’s risk insurance policies, which it obtained with Starr and co-defendant Lexington Insurance Co. Both policies covered 50 percent of the renovation project. 

"McDonnel alleges that it incurred costs during the hotel renovation covered by its insurance policies with defendants for which defendants have refused to fully reimburse McDonnel," Milazzo wrote. "Intervenor Jung argues that it qualifies as an additional insured under McDonnel’s policies with Defendants and that Defendants also must reimburse Jung delay-related losses it suffered during the renovation."

U.S. District Court Jane Triche Milazzo  

During discovery in the early stages of the lawsuit, defendants served a subpoena on J. Caldarera & Co. concerning the insurance claims and asked a consultant, Joe Caldarera, to distribute the records he had during his consultations with McDonnel. The defendants asked the court to enforce the subpoena in November 2018, which was denied, and they appealed. 

The previous judge, Magistrate Judge Joseph Wilkinson, also of the Eastern District of Louisiana, took issue with the subpoena being too ambiguous. Milazzo agreed. 

“Judge Wilkinson’s rulings were neither clearly erroneous nor contrary to law,” Milazzo wrote. "Judge Wilkinson ruled that the request was overly broad because defendants’ other discovery requests sought the same material, and to the extent such information was discoverable at all, there were other avenues of discovery by which defendants either had already received or could receive the information."

Milazzo added that even if J. Caldarera & Co. did waive objections to the subpoena, which the defendants claim, Wilkinson made clear the information requested was still too broad.

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