Maier v. Belfor USA Grp., Inc.
Maier v. Belfor USA Grp., Inc.
2016 WL 11745953 (N.D. Ga. 2016)
May 24, 2016

Evans, Orinda D.,  United States District Judge

Protective Order
Third Party Subpoena
Failure to Produce
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Summary
The Court granted Belfor's Motion to Quash the Subpoena of Sheldon Yellen, Motion to Compel Production of Settlement Agreement between Plaintiffs and Former Codefendants, and Motion to Compel Production of Documents Related to the Maiers' Basement Remediation. The Court also denied the Maiers' Motion for Leave to File a Supplemental Brief and Motion for Leave to File a Surreply. Discovery was extended by 30 days.
FRANK H. MAIER, JR., and BLANCHETTE C. MAIER, Plaintiffs
v.
BELFOR USA GROUP, INC., Defendant
CIVIL ACTION NO. 1:14-CV-3906-ODE
United States District Court, N.D. Georgia, Atlanta Division
Filed May 24, 2016
Evans, Orinda D., United States District Judge

ORDER

*1 This diversity action alleging, inter alia, negligence and breach of contract arising out of allegedly deficient home repairs, is before the Court on the following:
  • Defendant Belfor USA Group, Inc.'s (“Belfor”) Motion to Quash the Subpoena of Sheldon Yellen [Doc. 140), to which Plaintiffs, Frank H. Maier, Jr. and Blanchette C. Maier (together, “Plaintiffs” or “the Maiers”), have responded [Doc. 145), and Belfor has replied [Doc. 147);
  • the Maiers' Motion for Leave to File a Supplemental Brief in Opposition to Belfor's Motion to Quash [Doc. 181), which Belfor has opposed [Doc. 184);
  • Belfor's Motion to Compel Production of Settlement Agreement between Plaintiffs and Former Codefendants [Doc. 166), to which the Maiers have responded [Doc. 173), and Belfor has replied [Doc. 179);
  • Belfor's Motion to Compel Production of Documents Related to the Maiers' Basement Remediation [Doc. 176), to which the Maiers have responded [Doc. 180), and Belfor has replied [Doc. 183); and
  • the Maiers' Motion for Leave to File a Surreply in Opposition to Belfor's Motion to Compel Production of Documents [Doc. 186).
 
The motions are addressed in turn, with the requests for additional briefing discussed in relation to the substantive motions.
 
I. Motion to Quash Subpoena of Sheldon Yellen [Docs. 140, 145, 147]& Motion for Leave to File Supplemental Brief in Opposition to Defendant Belfor's Motion to Quash Subpoena for Deposition of Sheldon Yellen [Docs. 181, 184]
First, the Maiers' Motion for Leave to File a Supplemental Brief [Doc. 181] with respect to this dispute is DENIED. The Maiers' supplemental argument and authority is not relevant to the Motion to Quash or to the underlying issues in this case.
 
Next, Belfor's Motion to Quash [Doc. 140] the subpoena of its CEO, Sheldon Yellen, is GRANTED based on the apex doctrine. On the one hand, the Maiers correctly note that Belfor already unsuccessfully moved for a protective order for Yellen based on the apex doctrine, and counsel for the Maiers has repeatedly attempted to schedule Yellen's deposition to no avail. However, the deposition testimony identified by Belfor demonstrates that Yellen possesses very little relevant knowledge of the facts surrounding the Maiers' complaint, none of which is unique or superior. See Chik-Fil-A, Inc. v. CFT Dev., LLC, No. 5:07-cv-501-OC-10GRJ, 2009 WL 928226, at *l (M.D. Fla. Apr. 3, 2009).
 
Much of the parties' briefing on this issue discusses Yellen's executive assistant, Sherrie Tuttle, who told Mrs. Maier on the phone that she was keeping Yellen “in the loop” regarding the Maiers' complaints about Belfor's work on their home. Tuttle has repeatedly stated under oath that she has never actually discussed the Maier project or the Maiers' complaints with Yellen, but rather, she screened their complaints and tried to work them out with Belfor's local and regional offices without involving Yellen. Regardless of whether or not Tuttle's testimony is credible, there is nothing in the record demonstrating that Yellen has unique or specialized knowledge of the facts underlying the instant action. Accordingly, the Motion to Quash [Doc. 140] is GRANTED.
 
*2 Moreover, the Court declines to award Belfor reasonable expenses and attorneys' fees under Federal Rule of Civil Procedure 37(a)(5)(A) because the evidence presented in support of its Motion to Quash--Yellen's signed statement stating essentially that he lacks personal knowledge of the issues underlying this suit--could have been produced in support of Belfor's earlier motion for a protective order.
 
II. Motion to Compel Production of Settlement Agreement Between Plaintiffs and Former Codefendants [Docs. 166, 173, 179]
Next, Belfor has moved to compel production of documents related to a settlement agreement between the American Insurance Company (“American”), Fireman's Fund Insurance Company (“Fireman's”),[1] and the Maiers [Doc. 166]. Federal Rule of Civil Procedure 26(b) (1) provides that parties may obtain discovery of “any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.... Information within this scope of discovery need not be admissible in evidence to be discoverable.”
 
Belfor is correct that there exists no rule or precedent that renders settlement agreements per se privileged or undiscoverable. See Kipperman v. Onex Corp., No. 1:05-CV-1242-JOF, 2008 WL 1902227, at *9 (N.D. Ga. Apr. 25, 2008) (Forrester, J.); Jeld-Wen, Inc. v. Nebula Glass Int'l, Inc., No. 05-60860-CIV, 2007 WL 1526649, at *3 (S.D. Fla. May 22, 2007) (“There is nothing magical about a settlement agreement. It ultimately is just a contract between two parties.”). The agreement's own confidentiality provisions do not control its discoverability under the Federal Rules. Thus, the agreement is not confidential for purposes of Federal Rule of Civil Procedure 26(b). Furthermore, while some courts have applied a heightened relevancy standard to settlement agreements, this Court applies the Rule 26(b)(1) standard.[2]
 
In Georgia, evidence may not be admitted that a plaintiff in a tort case has already received some benefits or compensation for his losses or injuries. See Denton v. Con-Way S. Exp., Inc., 261 Ga. 41, 42-46 (Ga. 1991) (finding unconstitutional statute that authorized admission of plaintiff's collateral sources) disapproved on other grounds by Grissom v. Gleason, 262 Ga. 374, 376 (Ga. 1992)[3]. However, collateral source evidence may be admissible in contract cases “if it is relevant to demonstrate the extent of the plaintiff's actual loss that was caused by the breach.”See Amalgamated Transit Union Local 1324 v. Roberts, 263 Ga. 405, 408-09 (Ga. 1993).
 
Here, the Maiers have asserted claims that arise in both tort and contract. Belfor has also counterclaimed for breach of contract against the Maiers, alleging that the Maiers agreed to pay it for its work with their insurance proceeds, but have failed to do so. While the collateral source rule could bar admission of evidence of the Maiers' insurance proceeds at trial with respect to the Maiers' tort claims, that evidence is relevant to Belfor's defense against the Maiers' breach of contract claim, and Belfor's own breach of contract counterclaims. Additionally, material need not be admissible at trial to be relevant and discoverable. See Fed. R. Civ. P. 26(b) (1). Because the documents related to settlement are relevant and nonprivileged and therefore discoverable, the Motion to Compel Production [Doc. 166] is GRANTED. However, Belfor's request for expenses and attorneys' fees under Federal Rule of Civil Procedure 37 is DENIED. Although the Maiers' opposition to the Motion was unsuccessful, it was substantially justified. Fed. R. Civ. P. 37(a) (5) (ii).
 
III. Motion to Compel Production of Documents Related to the Maiers' Basement Remediation [Docs. 176, 180, 183] & Motion for Leave to File Surreply in Further Opposition to Defendant Belfor's Motion to Compel Production of Documents Related to Plaintiffs' Subsequent Basement Flood Remediation [Doc. 186]
*3 First, the Maiers' Motion for Leave to File [a] Surreply [Doc. 186] is DENIED because the issue addressed in the Maiers' surreply is not central to the instant discovery dispute.
 
Next, with respect to the substantive dispute, Belfor states that it has narrowed its request to the following issue: “Is Belfor entitled to discovery of records and communications of the remediation work that took place in the Maiers' basement during 2014-2015 concurrently with the remediation that forms the basis for the Maiers' claims of damages against Belfor?” [Doc. 176 at 2]. However, the actual dispute appears to cover an even narrower range of documents because the Maiers state that they have already produced some responsive material. Specifically, they have produced files from Brian Holland of Holland Construction, Kevin O'Brien of the Culpepper Group,[4] and Bruce Environmental, each of whom performed remediation work on the Maiers' breakfast room (for which the Maiers claim Belfor is responsible in the instant suit) and the Maiers basement (which flooded subsequent to Belfor's work and is not related to the instant suit). Belfor does not request duplicative documents. The main point of contention is whether the Maiers are required to produce Mrs. Maier's emails to these, and possibly other, contractors regarding the basement remediation.
 
Documents, records, and communications related to the basement remediation are relevant to Belfor's claims and defenses in this action under several theories. Belfor should be able to examine the allocation of costs for the breakfast room work and the basement remediation in its own right. That allocation is relevant to expert compensation and bias, as the Maiers have designated some of these contractors as expert witnesses, and to the issue of damages. Moreover, that production of these documents would require a search of Mrs. Maier's email does not render the request disproportional or burdensome under Federal Rule of Civil Procedure 26(b)(1). Accordingly, the Motion to Compel [Doc. 176] is GRANTED. Additionally, Belfor's request for costs and attorneys' fees under Federal Rule of Civil Procedure 37(a) (5) (A) is GRANTED.
 
IV. Conclusion
The motions before this Court are decided as follows:
  • The Maiers' Motion for Leave to File a Supplemental Brief [Doc. 181] is DENIED;
  • Belfor's Motion to Quash the Subpoena of Sheldon Yellen [Doc. 140] is GRANTED, but there shall be no award under Federal Rule of Civil Procedure 37(a)(5)(A);
  • Belfor's Motion to Compel Production of Settlement Agreement [Doc. 166] is GRANTED, but there shall be no award under Federal Rule of Civil Procedure 37(a)(5)(A);
  • the Maiers' Motion for Leave to File a Surreply [Doc. 186] is DENIED; and
  • Belfor's Motion to Compel Production of Documents Related to Subsequent Basement Remediation [Doc. 176] is GRANTED and the Maiers shall pay Belfor's reasonable expenses with respect to this Motion under Federal Rule of Civil Procedure 37(a)(5)(A). 
Additionally, in light of these rulings, discovery is extended by 30 days from the date of entry of this Order.
 
*4 SO ORDERED, this 24 day of May, 2016.
 
Footnotes
American and Fireman's were initially named as defendants; however, they were dismissed with prejudice on September 1, 2015, pursuant to the parties' stipulation [Doc. 131; Docket Entry 09/01/2015].
The Court notes that the Rule setting forth the standard for relevant, discoverable evidence has recently changed, effective December 1, 2015. Fed. R. Civ. P. 26(b) (1) advisory committee's note to 2015 amendment.
“Although Denton was subsequently disapproved ‘to the extent that it suggests a new equal protection analysis [,]’ Grissom v. Gleason, 262 Ga. 374, 376(2), 418 S.E.2d 27 (1992), it was not disapproved to the extent that it declared OCGA § 51-12-1(b) to be unconstitutional.”Amalgamated Transit Union Local 1324 v. Roberts, 263 Ga. 405, 406 n.1 (Ga. 1993).
It appears that Belfor is still waiting on some responsive documents from O'Brien of the Culpepper Group that the Maiers have agreed to produce.