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Frught MTN To Compel Memo
Frught MTN To Compel Memo
*
STEVEN FRUGHT AND *
CHERILYN FRUGHT * Civil Action No. 07-5069
Plaintiffs *
* Judge Stanwood Duval
Versus * Sec. “K”
*
STATE FARM FIRE AND *
CASUALTY COMPANY * Magistrate (2)
*
**************************************
___________________________________________________________________________
STATEMENT OF FACTS
On March 27, 2009, plaintiffs, Stephen Frught and Cherilyn Frught (“Frughts”)
propounded Second Request for Production of Documents to defendant, State Farm Fire and
Casualty Company (“State Farm”) seeking very specific documents related to the Frughts’ initial
homeowner’s adjuster, Roger Melzer (“Melzer”). The Court may recall Melzer concluded flood
waters alone damaged the entirety of the Frughts’ home despite the fact Mr. Frught watched as
rain water poured into his home through a gaping hole that was created when Katrina’s winds
ripped a turbine, also known as a “whirly bird”, from his roof. The State Farm Activity Log kept
in connection with the Frughts’ homeowner’s claims shows that Mr. Frught contacted State Farm
at approximately 7:40 a.m. on August 29, 2005 and related his eye-witness account of the
damage Katrina’s wind and rain was causing his family’s home.
Subsequently, on May 7, 2009, State Farm responded to the Frughts’ Second Request
for Production by producing none of the requested documents, asserting meritless objections and
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providing highly questionable responses regarding documents State Farm asserts it does not
possess.1 Consequently, the Frughts file the present Motion to Compel and for Sanctions based
All of the information and documents sought are relevant and thus, discoverable. Federal
In the instant case, all of the information and documents sought are unquestionably
relevant and will likely lead to the discovery of admissible evidence. Accordingly, State Farm
State Farm responded in pertinent part that Roger Melzer took and passed the basic tests
required of any person seeking to adjust State Farm homeowner’s claims; however, State Farm
State Farm’s response is incredible for several reasons. Without any documentation, how
does State Farm know that Melzer passed tests “required of any person seeking to adjust State
1
Exhibit “A”, State Farm’s Responses to Second Request for Production of Documents.
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Farm homeowner’s claims”? Mr. Melzer recently testified during his deposition on May 14,
2009, that State Farm tested him on multiple topics during the one week of training Melzer
received in Gainesville, Florida in September, 2004.2 Melzer described the exams as “written”
and covering a variety of topics, including State Farm’s homeowner’s insurance policy. Melzer
further testified that upon completing his exams, he handed the exams to a State Farm supervisor
in Gainesville, who in turn graded the exam and apprised Melzer he passed. Lastly, Melzer was
surprised to learn State Farm reportedly did not have a copy of his exam or exam results and
described as “strange”, State Farm’s assertion that it did not have a copy of Melzer’s exam or
exam results.
Furthermore, undersigned counsel has obtained the tests and test results of other
“independent adjusters” just like Melzer, who completed State Farm training required to adjust
State Farm homeowner’s claims. 3 As the Court can tell from the documents marked Exhibit B in
globo and Exhibit “C” in globo, defendant maintains a wide array of documents going back to
the mid-1990s that relate to the qualifications of independent adjusters who defendant retained to
adjust homeowner’s insurance claims arising out of Hurricane Katrina. Defendant’s response
becomes even more implausible in light of the fact defendant issued Melzer some type of license,
license number E143345 and a State Farm id., SOMF, following his training in Gainesville,
Florida. Consequently, the Frughts respectfully request the Court order defendant to produce
Melzer’s exams and exam results. Alternatively, the Frughts respectfully request the Court order
defendant to produce the exams and answer keys for the exams Melzer took in order to become
2
The Frughts will supplement their Memorandum in Support of Second Motion to Compel with a copy of Mr.
Melzer’s deposition transcript should the Court so desire.
3
Exhibit “B” in globo, documents pertaining to independent adjuster, James Patterson, who handled Hurricane
Katrina homeowner’s insurance claims on behalf of State Farm. The materials were obtained pursuant to subpoena
duces tecum in the matter titled Voth v. State Farm Fire & Casualty Company, Civil Action No. 07-4393 (E.D. La.
2007) (Duval, J. presiding). See also Exhibit “C”, in globo, exam and exam results of independent adjuster, Karen
Stein, received from State Farm pursuant to Judge Fallon’s Order (R. Doc. No. 145) in Weatherly v. State Farm Fire
& Casualty Company, Civil Action No. 07-4371 (E.D. La.2007).
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State Farm certified so the Weatherlys may at least learn what subject matter was covered during
State Farm objects to the production of any documentation reflecting the basis of any
payments made to All Valley Adjusters on the basis that such information is proprietary and
constitutes a trade secret. The disclosure of pay rates and other confidential information in
connection with State Farm’s contracts with various third party adjusting firms could potentially
harm State Farm in both its present and future relationships with such firms.
State Farm further objects to this request because it is unduly burdensome. In order to
determine how much All Valley adjusters was paid for Roger Melzer’s work, State Farm would
be required to locate all Katrina claims adjusted by All Valley Adjusters, manually review each
claim to determine if Roger Melzer participated in the handling of each claim and then attempt to
locate each invoice pertaining to Roger Melzer. Such requirement is unduly burdensome and
costly especially considering the lack of relevance of this information. If the Court determines
that such a search is warranted, State Farm requests plaintiff bear the cost of the search.
First and foremost, defendant’s initial objection does not address the specific request
made in Supplemental Request for Production Number 3. More particularly, the request did not
ask for any information regarding how defendant determined the amount of compensation paid
All Valley Adjusters for the work its employees did handling Hurricane Katrina claims on
defendant’s behalf. The request simply asked for documentation showing the total amount paid to
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All Valley Adjusters for work Melzer did adjusting Hurricane Katrina claims.
Second, defendant articulates no factual or legal basis for its conclusory objection that
that “such information is proprietary and constitutes a trade secret. The disclosure of pay rates and
other confidential information in connection with State Farm’s contracts with various third party
adjusting firms could potentially harm State Farm in both its present and future relationships with
such firms.” The Frughts do not understand how defendant can reasonably claim that they are not
entitled to know how much money defendant was paying the adjusting firm defendant hired to
adjust their homeowner’s claims. In fact, defendant’s contention regarding the discoverability of
the payment information is shocking given that defendant is a “mutual” company meaning
policyholders like the Frughts have ownership interest in defendant. On one hand, defendant
sought and accepted the Frughts’ money in the form of premiums for countless years, yet now
claims the Frughts do not have a right to know how much of the Frughts’ money was paid to the
Third, the information is absolutely relevant as the information goes to Melzer’s bias.
Melzer testified he made $30,000.00 in one month adjusting Florida hurricane claims in 2004.
According to Melzer, the money he made adjusting hurricane claims was substantially more than
the money he made at his previous job as a clerical worker with the United States Navy.
Likewise, the Frughts suspect Melzer made similar or more money adjusting State Farm
Hurricane Katrina claims during the two (2) months he was in southeast Louisiana.
Finally, defendant’s suggestion that its insureds, the Frughts, shoulder the costs of
given defendant enough money over the last several years and to even suggest the Frughts should
pay defendant for relevant documents/information is in and of itself a bad faith claims handling
practice. The Frughts, who are by no means independently wealthy, do not have the same vast
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resources as defendant, who was ranked number 32 on the 2008 Fortune 100 list. Thus, the
Frughts respectfully request the Court order defendant at its own cost, to produce documentation
showing how much money defendant paid All Valley Adjusters for work Roger Melzer did
Defendant’s response is the same as its response to Supplemental Request for Production
Number 3.
The Frughts adopt and re-iterate their arguments made in support of compelling
Roger Melzer adjusted claims for State Farm in Florida in 2004 and during Hurricane
Katrina. However, State Farm is unable to respond to this Request since State Farm is currently
not certain as to what, if any written materials were provided to Roger Melzer in the past. If
such materials are identified in the future, they will be produced; however, no confidential,
proprietary or trade secret information will be produced in the absence of the appropriate
protective order.
Defendant’s response is essentially a non-response and the brazen declaration that “if
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such materials are identified in the future, they will be produced” is worthy of sanction
independent of defendant’s other non-responses. What are the Frughts supposed to do, wait and
hope defendant voluntarily produces the requested documents at some unknown point and time
down the road in litigation? Defendant’s bold assertion that defendant will do what it wants and
at such time as defendant deems proper, violates of the core fundamentals of written discovery
and the time limitations for responding imposed by Federal Rules of Civil Procedure.
Furthermore, Melzer’s résumé indicates that Melzer underwent four (4) weeks of training
with defendant and became “State Farm” certified as a result of his four (4) week training course.
State Farm’s own response reveals that State Farm knows at the very least, Melzer received his
training in 2004. Finally, Melzer recently testified on May 14, 2009, that State Farm put him
through a one, not four week training course in Gainesville, Florida during September, 2004.
Surely defendant can determine what “manuals, guidelines, textbooks or other written
documentation” defendant gave Melzer during his one week training course in light of the very
specific information defendant possesses regarding when and where Melzer underwent his
training. The Frughts note that they already possess a portion of the Wind/Hail Catastrophe
Certification Manual given to adjusters like Melzer, who underwent training to become State
Farm certified in this particular area and thus, defendant cannot seriously contend that no written
materials exist.4 Accordingly, the Frughts respectfully request the Court deem defendant’s
evasive, incomplete answer a “non-response” and order defendant to immediately produce the
4
Exhibit 3 of Exhibit “D” in globo, specifically State Farm’s Wind/Hail Catastrophe Training Manual.
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State Farm objects to this request on grounds that disclosure of this information would
invade privacy rights of Roger Melzer, who has never been an employee of State Farm and is not
Like the multitude of objections defendant asserted in response to the other supplemental
request for production of documents, defendant’s objection “on grounds that disclosure of this
information would invade privacy rights of Roger Melzer” is wholly without merit. First and
foremost, the documents are highly relevant and defendant is not asserting a privilege. Thus, the
documents should automatically be produced under Rule 26 of the Federal Rules of Civil
Procedure. Second, Melzer certainly does not have any reasonable expectation of privacy
regarding the very public nature of how he adjusted Hurricane Katrina property damage claims.
Third, the Frughts remind defendant that in a first party insurance dispute like the one at bar,
Melzer was supposed to be working on the Frughts’ behalf as much as he was working on State
Farm’s behalf. Lastly, defendant once again makes a conclusory objection without offering any
somehow undiscoverable under the Federal Rules of Civil Procedure based on “invasion of
privacy” principles. The fact Melzer “has never been an employee of State Farm and is not a
Melzer’s job performance during Hurricane Katrina should be produced. Accordingly, the
Frughts respectfully request the Court order defendant to produce Melzer’s performance
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evaluations.
Defendant’s failure to answer the Frughts’ discovery was not substantially justified and
thus, the Frughts are entitled to attorney’s fees under Federal Rule of Civil Procedure 37
(a)(4)(A). More particularly, Federal Rule of Civil Procedure 37 (a)(4)(A) titled “Expenses and
In the instate case, sanctions are warranted defendant refused without justifiable reason to
produce certain requested documents in its possession. Consequently, the Frughts submit that
sanctions are warranted given defendant’s continued refusal to produce documents undisputedly
in its possession and lack of candor in responding to the Frughts’ Second Request for Production
of Documents.
RESPECTFULLY SUBMITTED:
CERTIFICATE OF SERVICE
I hereby certify that I have on this 16th day of May, 2009, electronically filed the
foregoing with the Clerk of Court by using the CM/ECF system which will send a notice of
__ /s/_Ryan P. Reece______________
RYAN P. REECE
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