Swan Realty Group, LLC v. State Farm Fire and Casualty Company

Swan Realty Group, LLC v. State Farm Fire and Casualty Company (8:24-cv-364)
Position Statements Regarding Disputes Concerning Rule 30(b)(6) Deposition Notice
Plaintiff Issued to Defendant
DEPOSITION TOPIC 	PLAINTIFF’S POSITION 	DEFENDANT’S POSITION
Topic No. 1:
The Names, Job Titles, Annual
Compensation Amounts and
structures, and description of the
positions of State Farm’s employees
within the office or offices responsible
for handling or supervising the Claim.
The designee should be prepared to
testify regarding the hierarchy of the
persons involved in the claim for each
department involved, the specific
responsibility and authority for each
person involved in any manner in the
claim, the roles of each person in any
investigation of the claims, the identity
and scope of supervision, and the
monetary authority for each person,
and the chain of command for State
Farm of all decisions on the Claim,
and how that individual became
involved or assigned to the Claim.
As alleged in Swan’s
Complaint, State Farm
admitted damage to the
interior, roof, and other
structures was covered
under the prior
homeowner’s policy;
however, the estimate
provided was not
commensurate with the
scope of work required to
remediate the damage.
State Farm denied these
allegations and
affirmatively alleged it is
entitled to a credit or offset
for all amounts it was
previously paid. Due to
State Farm’s admission of
coverage then later denial,
the personnel involved, their
decision-making authority,
financial incentives, and
evaluation of performance
is relevant under Fed. R.
Civ. Pro. 26(b)(1) to the
determination of whether
coverage existed, and the
extent of coverage, by the
employees of State Farm in
this case. See Timm
Grandview, LLC v.
AmGUARD Ins. Co., No.
8:20CV197, 2021 WL
1120940, at *7 (D. Neb.
Mar. 23, 2021) (finding
interrogatories seeking
information related to
potential employee
This case involves an alleged
breach of an insurance contract
with respect to alleged storm
damage to a house. Plaintiff is
the purported assignee of the
insurance claim. Because an
assignee lacks standing to
assert a bad faith claim under
Nebraska law, there is no bad
faith claim in this lawsuit.
State Farm has paid Plaintiff in
excess of $80,000 on the claim
to date. Plaintiff is demanding
more. Thus, the lawsuit is
limited to whether State Farm
breached the contract by
denying certain aspects of
Plaintiff’s claim.
Each claim handler’s monetary
settlement authority is not
reasonably calculated to lead
to the discovery of admissible
evidence regarding whether
Plaintiff’s damage claims are
covered by the policy. In
addition information regarding
employee compensation is not
reasonably calculated to lead
to the discovery of admissible
evidence regarding whether the
claimed damage is covered and
is not proportional to the needs
of the case. See Buckley
Towers Condominium, Inc. v.
QBE Ins. Corp., 2008 WL
2645680, at *5 (S.D.Fla.,
2008) (“[I]f the general rule
were that every … insurance
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incentives was relevant to
breach of contract claim
asserted against the insurer
because such information
could be used to undercut
the insurers assertion that it
conducted a proper
investigation and it could
also be used to attack the
credibility of the claims
adjuster’s damage
assessments); see also
Rounds v. Hartford, No.
4:20-CV-04010-KES, 2021
WL 4150838, at *6 (D.S.D.
Sept. 13, 2021) (“Bonus
programs may provide some
evidence of the motivation
of claims personnel in
evaluating a claim.”);
Pochat v. State Farm
Mutual Automobile Ins. Co.,
No. Civ. 08-2015-KES,
2008 WL 5192427 at *5
(D.S.D. Dec. 11, 2008)
(holding “information
[regarding employee award
and financial bonus
programs is] ... relevant to
plaintiff's bad-faith
insurance and breach of
contract claims”).
This topic is also expressly
tailored to the Claim and
claim adjusters. Plaintiff is
willing to enter a reasonable
protective order to address
any confidentiality
concerns.
adjuster's financial or
contractual documents with an
insurer were subject to
production in a breach of
contract coverage dispute, the
scope of discovery in these
cases would be materially
increased. The litigation cost
and time required to address
that broadened discovery
would undermine the essential
purpose of this case-
adjudicating whether coverage
applies at all and the amount
that the insured is due under
the policy. That targeted
process should not become
unwieldy and should not
consume unnecessary
resources.”). Both of the cases
Plaintiff relies on involved bad
faith claims and are therefore
inapplicable.
State Farm will produce a
witness who will testify about
the names and job titles of
those employees who handled
or supervised this Claim and
what each person’s role was in
the claim.
Topic No. 2:
The details surrounding the
assignment of the various claim
owners or handlers on the Claim. This
includes information regarding the
Same position as for Topic
No. 1 above.
The issue in this case is
whether State Farm breached
the policy by denying
Plaintiff’s claims for damages.
The process of how claim
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process of claim assignments, other
employees who were available to
adjust the Claim, and the education
and work history along with any
training State Farm provided or paid
for each employee.
handlers are assigned to
claims, and whether other
claim handlers who were
available to handle the claim is
not reasonably calculated to
lead to the discovery of
admissible evidence and is not
proportional to the needs of the
case.
Topic No. 3:
Financial incentives, bonuses,
including short term incentive
programs (however called) that State
Farm claim adjusters, claim managers
or other employees may be eligible
for, and the criteria, process, or
metrics used (however called) to
determine whether a claim
adjuster/claim managers/employee is
eligible to receive the incentive,
bonuses, including short term
incentive programs (however called).
Same position as for Topic
No. 1 above.
There is no allegation of bad
faith in this lawsuit. Because
there is no claim of bad faith, a
claim handler’s financial
motive, if any, is irrelevant.
The sole issue is whether the
contract was breached.
Information regarding
employee compensation
amounts and structures is not
reasonably calculated to lead
to the discovery of admissible
evidence and not proportional
to the needs of the case. See
Buckley Towers
Condominium, Inc. v. QBE
Ins. Corp., 2008 WL 2645680,
at *5 (S.D.Fla., 2008) supra.
Topic No. 4:
Criteria and process used to evaluate
employee performance for the
employees involved in the Claim.
Same position as for Topic
No. 1 above.
There is no allegation of bad
faith in this lawsuit, so what
criteria State Farm uses to
evaluate employee
performance for the employees
involved in this case is not
reasonably calculated to lead
to the discovery of admissible
evidence. See Bay Point
Turtlegrass Villas Association
v. Lexington Insurance
Company, 2021 WL 12135389,
at *3 (N.D.Fla., 2021)
(“Several courts have held that
policies, procedures,
guidelines, and other
documents relating to the
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handling or adjusting of claims
are relevant only to bad faith
claims and, therefore, are not
discoverable in actions solely
for breach of contract.”)
Topic No. 5
All training, applicable to claims
handling, provided to State Farm
employees handling the Claim,
concerning: (a) first party
homeowner’s damages, (b) evaluation
of structural property damages, (c)
evaluation of structural property
homeowner's damages, (d) evaluation
of personal property damages (e) types
of evidence/proof, (f)
weighing/evaluating evidence/proof,
(g) types of information/evidence that
reduces the value of a claim; (h) types
of information/evidence that reduces
the value of a claim; (i) how to assess
damages; (j) quantum of
evidence/documents/information/proof
necessary to prove a 1st party claim,
(k) payment of undisputed amounts in
a 1 st party claim; claim handling,
claim investigation, (l) tool to
use/tools available to an adjuster when
questions or concerns arise regarding
the claim, such as questions or
concerns arise regarding he claim,
such as questions or concerns
regarding damages, (m) Xactimate or
Xact Contents training.
As alleged in Swan’s
Complaint, State Farm
admitted coverage under the
policy for the Claim. State
Farm later denied coverage
for Swan’s damaged
property. The process by
which State Farm handles
homeowner’s claims and
makes determinations of
coverage, including the
manner and method State
Farm’s employees of are
trained, is relevant. This
topic is limited to the
training provided to the
employees handling the
Claim at issue in this case
and sets forth particular
items of training. 	Plaintiff
is willing to enter a
reasonable protective order
to address any
confidentiality concerns.
There is no allegation of bad
faith in this lawsuit, so the
training provided to the claim
handlers involved in this case
is not reasonably calculated to
lead to the discovery of
admissible evidence. See Bay
Point Turtlegrass Villas
Association v. Lexington
Insurance Company, 2021 WL
12135389, at *3 (N.D.Fla.,
2021) (“Several courts have
held that policies, procedures,
guidelines, and other
documents relating to the
handling or adjusting of claims
are relevant only to bad faith
claims and, therefore, are not
discoverable in actions solely
for breach of contract.”). The
issue is what claim decision
was made in this case, not
what training is provided in a
generic first party insurance
claim. Moreover, Plaintiff has
requested the depositions of
the claim handlers involved in
this case, who are in a better
position to testify as to how
they handled the claim.
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