Associated Industries Insurance Company v. Ategrity Specialty Insurance Co.

Background

This order addressed a discovery dispute in an insurance-coverage case. Associated Industries Insurance Company, Inc. and Ategrity Specialty Insurance Co., Inc. each issued three successive commercial general liability policies to Veritas Investments, Inc. Veritas was sued in an underlying San Francisco Superior Court case by more than 100 plaintiffs concerning construction projects at residential buildings. Associated was participating in Veritas’s defense and had asked Ategrity to participate. Ategrity had declined to take a position on its defense and indemnity duties.

Associated’s lawsuit sought a declaration about Ategrity’s duty to defend Veritas. Associated also had a partial summary-judgment motion on that duty pending when this discovery dispute arose.

Discovery dispute

Ategrity moved to compel further responses to 12 interrogatories. The interrogatories sought, among other things, the names of underlying plaintiffs who alleged bodily injury, property damage, or personal and advertising injury during the periods covered by Ategrity’s policies, along with documents establishing those injuries.

Associated responded under Federal Rule of Civil Procedure 33(d)(1), which allows a party to answer an interrogatory by identifying business records when the answer can be found in those records and the burden of finding the answer is substantially the same for both parties. Associated referred Ategrity to the underlying plaintiffs’ interrogatory responses, document productions, and deposition transcripts. It said it had produced the discovery in its possession on a plaintiff-by-plaintiff basis, using Bates numbers 00000001 through 00048796.

Ategrity argued that referring it to nearly 50,000 records without identifying particular documents did not comply with Rule 33(d)(1). Associated argued that the records contained the responsive information and that Ategrity was attempting to make Associated analyze the underlying case’s discovery for it.

Court’s analysis

The court explained that a party challenging the use of Rule 33(d) must first make an initial showing that the procedure is inadequate—for example, because the information is not fully contained in the records or is too difficult to extract. The court found that Ategrity had not made that showing. Ategrity had offered only a brief argument and had not established that the information was missing from the documents or too difficult to obtain.

The court further held that, even if Ategrity had made the required initial showing, Associated had demonstrated that the records contained information responsive to the interrogatories and that the burden of deriving the answers was substantially the same for both parties. The court also noted that Associated said the underlying case had settled globally and that only the individual plaintiffs knew what they had collected. Associated had not performed a plaintiff-by-plaintiff damages analysis.

Disposition

Judge Haywood Gilliam denied Ategrity’s motion to compel further responses to Interrogatory Nos. 1 through 12. The order resolved the discovery motion; it did not decide the parties’ underlying insurance-coverage dispute or Associated’s pending partial summary-judgment motion.