United States District Court, W.D. Washington, Seattle
STAY@HOME DESIGN LLC, BRIAN ROBINSON, JANET ROBINSON, NED CANNON, and MAURA CANNON, Plaintiffs,
FOREMOST INSURANCE COMPANY GRAND RAPIDS, MICHIGAN, a foreign insurance company doing business in the State of Washington, Defendant.
ORDER RE: LCR 37 JOINT SUBMISSION
Alice Theiler United States Magistrate Judge
case involves insurance coverage and bad faith claims brought
by plaintiffs Stay@Home Design LLC, Brian and Janet Robinson,
and Ned and Maura Cannon against defendant Foremost Insurance
Company Grand Rapids, Michigan (“Foremost”).
After conducting an investigation with the assistance of
attorneys at Lether & Associates, PLLC
(“Lether”), Foremost denied coverage for claims
related to vandalism that occurred at a house owned by
parties now seek cross-relief under Local Civil Rule
37(a)(2). (Dkt. 16.) Foremost requests the entry of a
protective order related to documents withheld on the basis
of attorney-client privilege and the work product doctrine.
Plaintiffs contend the documents are not privileged or
protected, and request that the Court compel their
production. Both parties alternatively request an in
camera review of the documents at issue. Having now
considered the joint submission for relief, along with the
remainder of the record, the Court finds some documents not
subject to production and reserves a ruling as to the
remaining documents pending an in camera review.
operate a business “flipping” houses for profit.
(See Dkt. 17 at 6-12 (Ex. 1).) On September 24,
2015, after viewing a photograph from a prior listing and the
location on a map, plaintiffs purchased the house at issue in
this lawsuit at a foreclosure auction. (Id. at
initially purchased an insurance policy with Allstate.
Allstate inspected the exterior of the property on September
30, 2015 and identified items to repair by November 2, 2015.
(Dkt. 18-1 at 45-48 (Ex. E).) The repair items included a
broken front door lock, the absence of a rear deck railing,
moss on the roof, holes in the siding, a boarded-up front
window, debris, trash, and discarded appliances in the back
yard, and trees over-hanging the roof. (Dkt. 17 at 23 (Ex.
2).) Plaintiffs thereafter took out a policy on the property
with Foremost, through an application dated October 30, 2015
and with an effective date of November 2, 2015. (Id.
at 24-29 (Ex. 3).)
house was occupied by tenants at the time of purchase. On
December 1, 2015, following removal of the tenants through
eviction proceedings, plaintiffs entered the house for the
first time. (Dkt. 18-1 at 29-34 (Ex. E).) Plaintiffs observed
that the interior of the house had been gutted, including the
removal of the interior walls, framing, and fixtures, the
back deck torn from the house, and the backyard covered in
debris from the gutted house. (Id. at 34-40).
filed a claim with Foremost in early December 2015 for
vandalism damage occurring sometime after November 2015 and
totaling approximately $185, 000. (Dkt. 17 at 30-32 (Ex. 4).)
Foremost retained Lether and the claim investigation
commenced, including Lether's examinations under oath
(“EUO”) of plaintiffs (see,
e.g., Dkt. 18-1 at 28-59 (Ex. E)), and
Foremost's conversation with Marketa Garrett, a former
tenant of the house (Dkt. 17 at 33 (Ex. 5)). Plaintiffs'
original counsel first raised the possibility of an Insurance
Fair Conduct Act (IFCA) claim in a February 2016 email to
Lether, and plaintiffs submitted their IFCA twenty-day
written notice later that month. (Id. at 34-38 (Exs.
denied plaintiffs' claim in April 2016, concluding they
failed to establish the loss occurred during the policy
period beginning November 2, 2015. (Dkt. 18-3 at 2-4 (Ex.
G).) Foremost noted plaintiffs' testimony they did not
enter the property until December 1, 2015 and that Garrett
indicated the damage to the property began approximately a
year prior to the Foremost policy inception date and ended
prior to that date. (Id. at 3.) (See also
Dkt. 17 at 33 (Ex. 5) (notes from Garrett conversation
reflect her report the former owner began to take down
interior walls nine months to a year prior to the eviction,
either to convert the house for use as a marijuana
“grow house operation and or remodel[, ]” that
“the last wall probably came down in the middle of
October ”, and that the damage occurred before
the month or two preceding the eviction).) Foremost found
plaintiffs misrepresented the extent of the loss by including
pre-existing damage, misrepresented communications with
Allstate and attempted to conceal material and germane
information, and misrepresented information on the policy
application by stating they had not had a policy cancelled,
denied, or not renewed within the past five years. (Dkt. 18-3
at 3-4 (Ex. G).)
for plaintiffs responded to the denial with a description of
evidence supporting their contention the damage occurred
during the policy period. (Id. at 17-18.) For
example, between September and November 2015, looking through
the front door and windows and from photographs of the
backyard, plaintiffs and others observed that the house was
intact and the backyard contained limited debris.
(Id.; Dkt. 18-1 at 28 through Dkt. 18-4 at 29 (Exs.
E-K).) Plaintiffs also challenged the alleged
misrepresentations, noting, inter alia, their prompt
corrections to mistaken testimony and the accuracy of their
application answer given that Allstate had not cancelled
their policy prior to the purchase of the Foremost policy.
(Dkt. 18-1 at 18-21 (Ex. G).) Plaintiffs' current counsel
submitted another IFCA claim in August 2016 (Dkt. 17 at 39-42
(Ex. 8)), and plaintiffs initiated this lawsuit the following
month (Dkt. 1-1).
states it produced some 4, 500 pages of discovery, including
its claim file and related documents and the claim file from
Lether, with the exception of documents withheld on the basis
of attorney-client privilege and/or as work product. (Dkt.
18-1 at 17-25 (Exs. B & C).) Plaintiffs herein seek
production of 113 out of the 123 documents withheld from
discovery (see id. and Dkt. 16 at 3), while Foremost
seeks a protective order relating to those same documents.
Court may issue a protective order limiting discovery for
good cause shown. Fed.R.Civ.P. 26(c)(1). The party seeking
the protective order must show that “specific prejudice
or harm will result if no protective order is granted.”
Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d
1122, 1130 (9th Cir. 2003) (cited sources omitted). The Court
has broad discretion to determine whether a protective order
is appropriate and the degree of protection required.
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