Vlado v. CMFG Life Insurance Company

Background

The parties submitted a joint letter about a discovery dispute. Plaintiff Nickie Vlado sought documents from CMFG’s file concerning a life insurance policy issued on the life of Frank Vlado, her father. The court referred to those documents as the “Vlado File.” CMFG had agreed to produce the policy and application, but objected to producing the rest of the file.

The underlying case concerns a $300,000 life insurance policy on the life of Sally Green, Vlado’s mother. CMFG contended that the policy was procured through fraud and/or by an impostor. Vlado argued that the Frank Vlado policy was relevant because Frank Vlado and Sally Green allegedly applied for their policies on the same day, used the same address, and submitted the applications from the same device, with Vlado named as beneficiary. Vlado also argued that CMFG’s investigation of the Frank Vlado policy could contain information about Green’s awareness of the policies, communications with Vlado or Green, and witnesses with knowledge of those communications.

Parties’ Positions

Vlado argued that the complete Frank Vlado file was highly relevant to CMFG’s lack-of-consent allegations and that CMFG had not identified any burden or prejudice from producing it. She also argued that the file could contain evidence about CMFG’s investigation into the validity of the Frank Vlado policy during its contestability period.

CMFG argued that the Frank Vlado file was irrelevant to whether Green knew about and consented to the policy on her life. It relied on authorities concerning the limited relevance of other insurance policies and claims and argued that producing additional policy files could create mini-trials about matters outside this case. CMFG also argued that the applications it had agreed to produce were sufficient to address the issues Vlado identified.

Court’s Analysis

Judge Clarke rejected CMFG’s objection to production of the Vlado File. The court stated that CMFG contended the policy in this case was procured by fraud and/or an impostor, while the policy in the Vlado File was allegedly procured on the same day, by the same person, and in the same manner. The court further stated that the Vlado File appeared to include CMFG’s investigation into the policy’s validity and how it was procured.

The court found that the file was therefore highly relevant to CMFG’s fraud allegations and to Vlado’s defense against those allegations. The court also found that CMFG had not demonstrated any burden involved in producing the documents. It concluded that the discovery was proportional to the needs of the case under Federal Rule of Civil Procedure 26(b)(1).

The court also rejected the concern that production would necessarily lead to a mini-trial about another policy. It explained that producing documents in discovery does not mean the evidence will ultimately be admitted at trial or that the court will allow mini-trials about separate policies.

Disposition

The court granted the request to compel production of the Vlado File. The order addressed discovery only; it did not decide whether CMFG’s fraud or impostor allegations were correct, whether Green consented to the policy, or whether the documents would be admissible at trial.