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Continental Western Insurance Co. v. Opechee Construction Corp.

United States District Court, D. New Hampshire

April 25, 2016

Continental Western Insurance Company
Opechee Construction Corporation, et al. Opinion No. 2016 DNH 088

John E. Brady, Esq. Christie Burnett, Esq. Doreen F. Connor, Esq. Adam R. Mordecai, Esq. Thomas Paolini, Esq. Matthew F. Renna, Esq. Matthew D. Sweet, Esq. Thomas J Underwood, Jr., Esq. James G. Walker, Esq.


Continental Western Insurance Company (“Continental”) brings a subrogation action against Opechee Construction Corporation, the general contractor that built the Hampton Inn in Dover, New Hampshire, and two plumbing subcontractors, North American Plumbing & Heating, LLC and Linx Ltd. The claims arise from extensive water damage at the hotel caused by a pipe failure. Opechee moves to compel Linx, the hotel’s pipe flange supplier, to respond to its discovery requests. Linx objects.

Standard of Review

“Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1). Whether discovery is “proportional to the needs of the case, ” depends on, among other things, “the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Id. If a party fails to respond to requests for production or interrogatories, the party seeking discovery may move to compel production of the requested documents or answers to the interrogatories. Fed. R. Civ. P. 37(a)(3)(B)(iii) & (iv).

The party seeking an order compelling discovery responses over the opponent’s objection bears the initial burden of showing that the discovery requested is relevant. Caouette v. OfficeMax, Inc., 352 F.Supp.2d 134, 136 (D.N.H. 2005). Once a showing of relevance has been made, the objecting party bears the burden of showing that a discovery request is improper. See, e.g., Gowan v. Mid Century Ins. Co., 309 F.R.D. 503, at 509 (D.S.D. Sept. 11, 2015); Collins v. Bledsoe, 2015 WL 5174021, at *2 (M.D. Pa. Sept. 2, 2015).


Continental brought this lawsuit against Opechee, Linx, and North American Plumbing in January of 2015. About nine months later, the parties learned that Linx had become the subject of a receivership action in the Rhode Island Superior Court for Newport County (“the state court”). On October 5, 2015, the state court issued an order appointing Richard J. Land as permanent receiver over Linx. See Order Appointing Permanent Receiver, Doc. No. 56-1. That order provided that the “continuance of the prosecution . . . of any action” against Linx is “hereby restrained and enjoined.” Id. at ¶ 14. The order also allowed the receiver to “take possession and charge of all of the said estate, assets, effects, property and business” of Linx. Id. at ¶ 3. Linx has represented that pursuant to the order, the receiver has obtained possession of Linx’s documents.

A. Previous Order

Opechee’s motion to compel raises issues similar to those that the court resolved in a previous motion to compel in this action. See Doc. No. 57. In that motion, the plaintiff, Continental, moved to compel Linx to respond to its requests for production and interrogatories. In response, Linx asserted that it could not produce the requested discovery because the receiver, who possessed the relevant documents, would not assist it in responding to discovery. See Doc. No. 58 at 2. In addition, Linx represented that it was no longer operating and had no remaining employees to provide the requested information. Id. Continental did not dispute either representation.

In an order dated March 2, 2016, this court denied Continental’s motion to compel based on Linx’s objections. Order Denying Motion to Continental’s Motion to Compel (“Continental Order”), Doc. No. 64. The court first clarified that the state court’s order did not stay this action. Id. at 4-5. The court then held that Linx could not be compelled to produce the documents under Federal Rule of Civil Procedure 34, which only requires parties to produced documents under their “possession, custody, or control.” Id. at 6 (quoting Fed.R.Civ.P. 34(a)(1)(A)). As the court explained, based on the information presented for purposes of Continental’s motion to compel, Linx did not have possession, custody, or control of the requested documents because it was undisputed that those documents were in the possession of the receiver and that Linx had no right to access them. Id. at 6-7 (“[D]ocuments are within a party’s control ‘when that party has the right, authority or ability to obtain those documents upon demand.’”) (quoting Szulik v. State St. Bank & Tr. Co., 2014 WL 3942934, at *1 (D. Mass. Aug. 11, 2014)).

The court also held that Linx could not be compelled to answer Continental’s interrogatories, which required the participation of its former employees, because Federal Rule of Civil Procedure 33 does not require a party responding to interrogatories to obtain information from persons not under its control. Id. at 7-8. In addition, the court concluded that, given the parties’ respective positions, the information requested in the interrogatories was not “proportional to the needs of the case, ” and therefore outside the scope of discovery. Id.

B. Opechee Discovery Requests

Opechee served first sets of requests for production of documents and interrogatories (together, the “discovery requests”) on Linx on January 20, 2016. Linx did not respond to Opechee’s discovery requests within the time required under the Federal Rules of Civil Procedure. In a conference after that deadline lapsed, Linx’s counsel informed Opechee’s counsel that Linx could not respond to the discovery requests because the receiver, who possesses the relevant documents, would not participate in discovery unless the state court ...

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