NEW ORLEANS – A federal magistrate judge has partially granted and partially denied a motion to compel from a Louisiana law firm litigating with its insurance carrier over who will pay to defend it from a poaching lawsuit in California.
U.S. Magistrate Judge Eva J. Dossier issued an order on June 25, which granted plaintiff Peiffer Wolf Carr Kane Conway & Wise’s request for attorney’s fees, in connection with filing its motion to compel versus Valley Forge Insurance Company.
The matter began with an underlying lawsuit filed in California’s San Francisco County Superior Court in May 2023 by the Levin Simes law firm, versus Rachel Abrams, fellow counsel Brian Perkins and the Peiffer Wolf law firm.
Levin Simes alleged that Abrams, a longtime member of that firm and name partner, sought to poach members of the firm in connection with her own imminent and planned departure to Peiffer Wolf, which was seeking to build a San Francisco office to supplement its headquarters in New Orleans.
As a result, Levin Simes brought claims for breach of contract, breach of fiduciary duty, conversion, unfair competition and others, against Abrams, Perkins and Peiffer Wolf.
In response to the lawsuit, Peiffer Wolf turned to its commercial general liability insurance policy with Valley Forge and asserted that the policy requires Valley Forge to defend it against the California lawsuit.
However, since October 2023, Peiffer Wolf has been litigating with Valley Forge.
A January response motion confirmed that Valley Forge has agreed to defend the lawsuit, subject to a reservation of rights. But the parties had differences over costs related to defending the underlying suit from California.
“In the above-captioned matter, Peiffer Wolf alleges three causes of action against Valley Forge: (1) Declaratory Judgment: Peiffer Wolf is entitled to a declaratory judgment that Valley Forge must pay and/or reimburse the law firm for its defense costs in the California matter, including by paying ‘reasonable hourly rates’ rather than rates subject to a cap Valley Forge uses for its panel counsel; (2) Breach of Contract: Valley Forge has breached the insurance policy contract by artificially limiting its payment of defense costs; (3) Bad Faith: Valley Force has violated [Louisiana state law] by failing to reimburse Peiffer Wolf for defense costs, despite having had satisfactory proof of loss for more than the statutory periods and by acting arbitrarily and capriciously. Valley Forge’s statutory violations include misrepresenting relevant facts and coverage, failing to adjust claims in good faith, and attempting to condition payment on misinformation,” Dossier stated.
“Peiffer Wolf’s motion maintains that Valley Forge’s responses to requests for production and interrogatories are untimely and deficient. Peiffer Wolf maintains that, despite the passage of four months, it has not received a single document in response to the Discovery Requests. Peiffer Wolf also maintains that Valley Forge’s use of boilerplate and untimely objections has resulted in the waiver of all objections, including as to privilege. Peiffer Wolf seeks attorney’s fees in connection with its motion.”
Dossier stated that “Peiffer Wolf’s critique of Valley Forge’s vague, boilerplate objections is well-founded.”
“Valley Forge must supplement its responses and objections to provide greater specificity as to the basis for each objection and to disclose whether any responsive documents are being withheld. To the extent privilege or work product protection is claimed, a log must be produced contemporaneously. If Peiffer Wolf believes the responses-as-supplemented remain deficient, it may confer with Valley Forge and then request a status conference with the Court to address whether a second motion to compel is necessary,” Dossier said.
As to Peiffer Wolf’s requested interrogatories and Valley Forge’s related objections, Dossier sustained three of those objections and overruled the remaining three.
“Interrogatory No. 1: This interrogatory seeks information as to the issuance of the policy. Peiffer Wolf has not demonstrated why this information is relevant. Thus, Valley Forge’s objections are sustained without prejudice to Peiffer Wolf’s right to revisit this request should developments in discovery illustrate its relevance. Interrogatory No. 2: This interrogatory seeks information on individuals involved in the adjustment of the claims. This information is relevant to Peiffer Wolf’s claims. Valley Forge’s response is deficient because it does not state whether responsive information is being withheld. Accordingly, Valley Forge must supplement its response to either provide additional responsive information or explain why responsive information is being withheld. Interrogatory No. 3: This interrogatory seeks information about Valley Forge’s reserves. There is no bright line rule or clear consensus in the jurisprudence relative to the discovery of reserves information in first-party claims alleging bad faith. Peiffer Wolf has not met its burden of showing how the reserve information is relevant to the claims or defenses in this case. Accordingly, Valley Forge’s objection to Interrogatory No. 3 is sustained,” Dossier stated.
“Interrogatory No. 4: This request asks for the facts supporting Valley Forge’s position that $305/hour is an appropriate maximum reimbursement rate. Valley Forge’s objection states, without explanation, that the request is ‘overly broad and unduly burdensome’ and seeks proprietary information. This objection does not suffice to meet Valley Forge’s burden of demonstrating why the request is broad or burdensome nor whether any responsive information is being withheld. Thus, this objection is overruled. Interrogatory Nos. 5-6: These interrogatories seek information as to how Valley Forge maintains its files and emails relative to Peiffer Wolf’s claims. Valley Forge’s sole objection is to relevance. But how Valley Forge maintains its records is relevant to Valley Forge’s assertion that certain documents are privileged, as well as Valley Forge’s objection that certain document requests are unduly burdensome. Thus, these objections are overruled. Valley Forge must supplement its response to provide the requested information.”
Furthermore, Peiffer Wolf had requested attorney’s fees in the amount of $5,000 in connection with its motion – and Dossier found they were entitled to that cost.
“The Court finds that Valley Forge’s withholding of its claim file until shortly before this ruling was not substantially justified. The sole authority cited by Valley Forge in opposition to Peiffer Wolf’s motion expressly contemplated that a claims file would be discoverable when, as here, a bad faith claim was at issue. And the authority in this District is overwhelming relative to the impropriety of boilerplate or ‘general’ objections. Thus, the Court finds that Valley Forge’s remaining objections lack legitimate support, and Peiffer Wolf is entitled to the fees incurred in bringing its motion. The lodestar method provides an appropriate mechanism to determine the amount of an award. The materials submitted by Peiffer Wolf, however, are not sufficient for the Court to undergo a lodestar analysis at this stage. Accordingly, unless the parties agree on the fee amount, Peiffer Wolf may submit a separate fee motion.”
Dossier issued the following order in conclusion:
• “Valley Forge must supplement its interrogatory and document request responses as detailed above, including relative to the production of a privilege log, on or before July 8, 2024. To the extent Valley Forge maintains information is confidential, any such information must be produced within five days of the entry of an appropriate protective order,” Dossier said;
• “The parties are to work together to attempt to reach an agreement on a proposed protective order. If no agreement can be reached, the parties are to schedule a telephone status conference to discuss any disputed terms”;
• “Peiffer Wolf is entitled to an award of the reasonable attorney’s fees and costs incurred in bringing its motion to compel, including fees and costs incurred up until the date that Valley Forge agreed to respond to Request for Production No. 2”; and
• “If the parties agree on a reasonable amount of attorney’s fees and costs, Valley Forge must pay that amount. If the parties do not agree on an amount, Peiffer Wolf may, within 14 days of this order, file a motion for fees and costs pursuant to Rule 37. The fee and cost motion must include (a) an affidavit attesting to the attorneys’ education, background, skills and experience; (b) sufficient evidence of rates charged in similar cases by other local attorneys with similar experience, skill and reputation; and (c) a verified, contemporaneous report reflecting the date, time involved, and nature of the services performed.”
U.S. District Court for the Eastern District of Louisiana case 2:23-cv-06235
From the Louisiana Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com