*1 Pending before the Court is Plaintiff's Expedited Opposed Motion to Compel Corporate Representative Deposition(s) and Production of Documents. (Dkt. No. 29). The Court held a hearing on the motion on June 30, 2020 (Min. Entry dated June 30, 2020) and ordered the parties to confer further and to file a joint advisory identifying any unresolved issues. (Dkt. No. 37). In response, the parties filed a joint advisory (Dkt. No. 39), Plaintiff filed its Partially Opposed Motion to Compel Corporate Representative Deposition(s) and Production of Documents (Dkt. 41), and Defendant filed a supplemental response (Dkt. No. 40).

As an initial matter, the Court finds that Plaintiff's recently filed Partially Opposed Motion to Compel Corporate Representative Deposition(s) and Production of Documents (Dkt. No. 41) supersedes Plaintiff's original motion to compel (Dkt. No. 29) addressing the same matters. Any matters not resolved by agreement between the parties are incorporated into, and made the subject of, Plaintiff's subsequent motion to compel (Dkt. No. 41 at 1). Therefore, Plaintiff's Expedited Opposed Motion to Compel Corporate Representative Deposition(s) and Production of Documents (Dkt. No. 29) is DENIED as moot.

I. Background

This suit involves an insurance claim for damages to Plaintiff Brabo International Group Inc.'s commercial warehouses in Laredo, Texas after a hailstorm in 2017. (Dkt. No. 1 at 2). According to Plaintiff, the buildings' exteriors and metal roofs were damaged extensively by the storm. (Id. at 3). Plaintiff subsequently submitted a claim with Defendant United Fire & Casualty Company. (Id. at 5). Plaintiff claims that Defendant mishandled the claim and offered Plaintiff inadequate compensation for the loss. (Id. at 13).

II. Legal Standards

Federal Rule of Civil Procedure 34 allows a party to request the production of “any designated documents or electronically stored information” or “tangible things” within the scope of Rule 26. Fed. R. Civ. P. 34(a)(1). Rule 26 in turn provides, “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. P. 26(b)(1). “Discovery requests are relevant when they seek admissible evidence or evidence that is reasonably calculated to lead to the discovery of admissible evidence.” Wiwa v. Royal Dutch Petroleum Co., 392 F.3d 812, 820 (5th Cir. 2004) (internal quotation marks omitted). Thus, “[t]he threshold for relevance at the discovery stage is lower than at the trial stage.” Rangel v. Gonzalez Mascorro, 274 F.R.D. 585, 590 (S.D. Tex. 2011). “Relevancy 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.” DAC Surgical Partners P.A. v. United Healthcare Servs., Inc., No. 4:11-CV-1355, 2014 WL 585750, at *3 (S.D. Tex. Feb. 14, 2014).

*2 “For each item or category, the response must either state that inspection and related activities will be permitted as requested or state with specificity the grounds for objecting to the request, including the reasons.” Fed. R. Civ. P. 34(b)(2)(B). “The burden is on the party who opposes its opponent's request for production to show specifically how ... each [request] is not relevant or how each [request] is overly broad, burdensome or oppressive.” S.E.C. v. Brady, 238 F.R.D. 429, 436 (N.D. Tex. 2006) (internal quotation marks omitted). “[B]oilerplate objections are not acceptable; specific objections are required in responding to a Rule 34 request.” Enron Corp. Sav. Plan v. Hewitt Assocs., L.L.C., 258 F.R.D. 149, 159 (S.D. Tex. 2009) (internal quotation marks omitted).

Federal Rule of Civil Procedure 37(a) governs motions to compel discovery responses. A party seeking discovery may move for an order compelling production or answers against another party when the latter has failed respond to an interrogatory submitted under Rule 33 or has failed to produce documents requested under Rule 34. Fed. R. Civ. P. 37(a)(3)(B). “A party may move to compel production of materials that are within the scope of discovery and have been requested but not received.” Crosswhite v. Lexington Ins. Co., 321 F. App'x 365, 368 (5th Cir. 2009) (citing Fed. R. Civ. P. 37(a)). “A party who has objected to a discovery request must, in response to a Rule 37(a) motion to compel, urge and argue in support of its objection to an interrogatory or request, and, if it does not, it waives the objection.” Harper v. City of Dallas, Texas, No. 3:14-CV-2647-M, 2017 WL 3674830, at *6 (N.D. Tex. Aug. 25, 2017) (citations omitted).

III. The Discovery Requests

Plaintiff's requests can be largely categorized as (1) requests to compel the production of documents and (2) requests to compel the deposition of Defendant's corporate representative on certain topics. (Dkt. No. 41 at 4). With respect to the documents requested, Plaintiff seeks to compel an unredacted version of Defendant's claim file/activity log.[1] With respect to the deposition topics requested, Plaintiff asks the Court to compel deposition testimony of eight topics, listed more specifically in Plaintiff's motion. (Dkt. No. 41 at 4). Plaintiff then categorizes the deposition topics as (1) topics intended to uncover the overall compensation and retention by Defendant of its primary experts since 2017, CC Consulting and Matt Spiekerman; (2) Defendant's guidelines, procedures, or policies in place addressing the appraisal process within the policy, including Defendant's ability to invoke appraisal to efficiently resolve a dispute with its insured; and (3) Any loss reserves that were determined, set, or discussed by Defendant in relation to the claim prior to the initiation of litigation. (Id. at 5–9). The Court utilizes Plaintiff's categorization of these requests for the purposes of its analysis in this Order.

*3 In response, Defendant contends that the previously redacted portions of its claim file are protected under the work-product and attorney-client privileges. (Dkt. No. 34 at 5). Defendant suggests that an in-camera inspection by the Court will demonstrate that its redactions are consistent with these privileges. (Id.). Defendant further argues that the deposition topic of expert compensation is not relevant to the instant lawsuit. (Id. at 6). Specifically, Defendant asserts that Plaintiff has failed to demonstrate that the expert compensation can establish a bad faith case. Defendant also states that submitting the annual compensation for an expert may result in prejudice and privacy violations. (Id. at 8).

A. Deposition Topics

Plaintiff categorizes five of the disputed deposition topics as those relating to the overall compensation and retention of CC Consulting and expert Matthew Spiekerman by Defendant. (Dkt. No. 41 at 5). Plaintiff argues that uncovering the names and compensation rates of engineering companies retained by Defendant may cast doubt on the reliability of Defendant's expert Spiekerman. (Id. at 6). Plaintiff further contends that such evidence may be used to support their bad faith claim. (Id.). Plaintiff relies on State Farm Lloyds v. Nicolau to support this proposition. (Id. citing 951 S.W.2d 444, 448 (Tex. 1997).

Defendant argues that such questions are not appropriate for the deposition of Defendant's corporate representative. (Dkt. No. 40 at 5). Instead, Defendant suggests that the “usual method” for obtaining discovery about an expert's alleged bias is to ask the expert in their deposition. (Id.). Defendant takes issue with the applicability of Nicolau, as relied upon by Plaintiff. (Id. at 6). Defendant contends that, under Nicolau, numerous factors go into the analysis of whether bad faith arises out of retaining a particular expert. (Id.). Defendant states that Plaintiff has provided no evidence of other factors and standing alone, an expert's percentage of work relative to other experts is not relevant or discoverable. (Id.).

The Court is not persuaded by Nicolau because, as Defendant correctly asserts, the Court in Nicolau contemplated a myriad of factors not present in this case. The Court instead balances the relevance of each individual topic with the burden imposed on Defendant. See Fed. R. Civ. P. 26(b)(1). The Court applies these legal standards, and makes the following rulings individually on each of the five topics relating to the overall compensation and retention of CC Consulting and expert Matthew Spiekerman by Defendant (Dkt. No. 41 at 5):

In their motion, Plaintiff states that “the Court is well aware of Brabo's position that UF has made a concerted effort to hide the ball” on the issue of Defendant's appraisal practices. (Dkt. No. 41 at 9). Plaintiff further states that Defendant's appraisal process falls “squarely within Brabo's allegations of various claims handling violations and delays.” (Id.). Plaintiff concludes that “internal guidelines on when and how to invoke appraisal, including the selection of appraisers, are potentially relevant.” (Id.).

Defendant argues that Plaintiff's request is merely cumulative of other efforts by Plaintiff to force Defendant to invoke appraisal. (Dkt. No. 40 at 7). Defendant specifically contends that its appraisal process is not relevant to any matter in dispute. (Id.).

While Plaintiff has stated its position throughout the proceedings in this case that it is unhappy with Defendant's position on its right to invoke its contractual right to appraisal, such as its recent motion to declare impasse, Plaintiff's complaint is devoid of any allegation stemming from appraisal in this case or Defendant's appraisal procedures in general. (Min. Entry dated Mar. 10, 2020); (Min. Entry dated Nov. 19, 2020); (Min. Entry dated Aug. 22, 2019); (Dkt. Nos. 12, 13, 22). In fact, Plaintiff's pleadings lack any reference to appraisal or Defendant's position on invoking appraisal. Additionally, to the Court's knowledge, as of the date of this Order, neither party has even invoked appraisal. Accordingly, the Court finds that Defendant's guidelines for appraisal are not relevant to any claim or defense being asserted in this case. As such, the Court DENIES Plaintiff's request to compel deposition testimony as to Defendant's guidelines for appraisal.

Plaintiff seeks to compel deposition testimony of Defendant's corporate representative to discuss the internal setting of loss reserves assigned by Defendant. (Dkt. No. 41 at 9–13). Plaintiff argues that Defendant has waived any privilege claims relating to this topic. (Id. at 9–11). Plaintiff contends that loss reserves are relevant in bad faith claims. (Id. at 13).

Defendant asserts that it “has been unable to find a reported case where the setting of reserves in a first-party claim actually factored into a bad faith finding against an insurer.” (Dkt. No. 40 at 8). Secondarily, Defendant argues that the reserves were based on anticipated litigation and thus are not discoverable. (Id.).The Court disagrees with Defendant. Multiple courts have found that an insurance company's reserves are relevant to a bad faith claim. In cases where a party has brought a bad faith insurance claim, courts have determined that reserve evidence is relevant, in particular, to show the insurer's state of mind in relation to its claim settlement practices. First Nat'l Bank of Louisville v. Lustig, CIV. A. 87-5488, 1993 WL 411377 (E.D. La. Oct. 5, 1993); Culbertson v. Shelter Mutual In. Co., CIV.A. 97-1609, 1998 WL 743592 (E.D. La. Oct. 21, 1998) (stating that discovery of reserve information may lead to admissible evidence with respect for the thoroughness with which defendant investigated and considered the plaintiff's complaint); Athridge Aetna Cas. & Surety Co., 184 F.R.D. 181, 192 (D.D.C. 1998) (stating that where a case involves fiduciary duties by the insurance company on behalf of the insured evidence of a reserve is relevant); Bernstein v. The Travelers Insurance Company, 447 F.Supp.2d 1100, 1107 (N.D. Cal. 2006) (“what [the insurer] actually knew and thought, and what motives animated its conduct,” which are “critical areas of inquiry in bad faith cases” and “fully fair game for discovery.”). Therefore, the Court GRANTS Plaintiff's request to compel testimony from Defendant's designated representative on this topic.

B. Requests for Production

*5 Plaintiff seeks to compel the production of any redacted information or documents from the claim log/activity notes on any entries before Defendant received a notice of representation from Plaintiff's counsel on October 19, 2018, including the production of any entries related to the setting of reserves of this claim. (Dkt. No. 41 at 3). According to Plaintiff, Defendant has only produced a redacted version of the claim manual in effect during the adjustment of the claim at issue. (Id. at 4).

Defendant objects on the basis of work product and attorney client privileges. (Dkt. No. 34 at 3). Defendant contends that it anticipated litigation as of September 15, 2017 because of the “involvement of a roofing company that routinely refers its claims to attorneys.” (Id. at 5). Defendant avers, “Thereafter, the file notes are redacted as it concerns additional work product and attorney-client communications.” (Id.). Defendant also provided a copy of Plaintiff's counsel's initial letter of representation (Dkt. No. 40-1) and a sworn declaration by Patrick Peden, the general adjuster assigned to the claim (Dkt. No. 40-2) to support the basis for asserting the work product privilege.

Defendant argues that it did sufficiently assert privileges in its responses to Plaintiff's discovery requests. Although Defendant failed to serve Plaintiff with a privilege log, it is within the Court's discretion to decide whether this should result in the waiver of an asserted privilege. Blackard v. Hercules, Inc., No. 12–cv–175, 2014 WL 2515197, at *4 (S.D. Miss. June 4, 2014);

However, the Court deems it appropriate and necessary to review the materials made the subject of the claimed privileges before ruling on Plaintiff's motion to compel the production of those materials. As such, the Court reserves ruling on this portion of Plaintiff's motion to compel and ORDERS Defendant to file, under seal, its unredacted claim log/activity notes, including the production of any entries related to the setting of reserves of this claim for an in-camera inspection by August 24, 2020.

IV. Conclusion

As set forth above, the Court DENIES as moot Plaintiff's Expedited Opposed Motion to Compel Corporate Representative Deposition(s) and Production of Documents (Dkt. No. 29). The Court GRANTS in part and DENIES in part Plaintiff's Partially Opposed Motion to Compel Corporate Representative Deposition(s) and Production of Documents (Dkt. 41), reserving its ruling on Plaintiff's motion as it pertains to the production of documents.

It is so ORDERED.