Preview
1 Stacy M. Tucker (SBN 218942)
stucker@kantorlaw.net
2
Jaclyn D. Conover (SBN 266749)
3 jconover@kantorlaw.net
KANTOR & KANTOR LLP
4 19839 Nordhoff Street
Northridge, California 91324
5 Telephone: (818) 886-2525
Facsimile: (818) 350-6272
6
7 Attorneys For Plaintiff,
GARY KOOP
8
SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF SONOMA
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12 GARY KOOP, Case No. SCV-266944
Northridge, California 91324
13
KANTOR & KANTOR LLP
Plaintiff, [Assigned to Hon. Oscar A. Pardo]
19839 Nordhoff Street
(818) 886 2525
14 vs. REPLY IN SUPPORT OF MOTION TO
COMPEL FURTHER DOCUMENT
15 FIRE INSURANCE EXCHANGE, dba PRODUCTION AND RESPONSES TO
FARMERS INSURANCE GROUP, BRIAN PLAINTIFF’S SECOND SET OF
16 HUNSAKER, REQUESTS FOR PRODUCTION AND
MOTION TO STRIKE IMPROPER
17 Defendants. SEPARATE STATEMENT
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Date: June 2, 2023
19 Time: 3:00 p.m.
Dept.: 19
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Action Filed: August 24, 2020
22 Trial Date: June 30, 2023
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
1 I. FARMERS IGNORES THAT CALIFORNIA DISCOVERY RULES ALLOW FOR
2 SUPPLEMENTAL INTERROGATORIES TO OBTAIN NEW INFORMATION
3 Farmers believes that discovery is a form of gamesmanship in which it can be rewarded for
4 successful attempts to hide information. This approach undermines the stated intent of the discovery
5 process. “California's pretrial discovery procedures are designed to minimize the opportunities for
6 fabrication and forgetfulness, and to eliminate the need for guesswork about the other side's
7 evidence, with all doubts about discoverability resolved in favor of disclosure.” (Glenfed Dev. Corp.
8 v. Superior Ct., 53 Cal. App. 4th 1113, 1119, 62 Cal. Rptr. 2d 195, 199 (1997).)
9 California law anticipated the possibility of parties willfully failing to acknowledge the
10 existence of responsive documents. That is why California Code of Civil Procedure includes section
11 2031.050, which allows that, “in addition to the demands for inspection, copying, testing, or
12 sampling permitted by this chapter, a party may propound a supplemental demand to inspect, copy,
Northridge, California 91324
13 test, or sample any later acquired or discovered documents, tangible things, land or other property,
KANTOR & KANTOR LLP
19839 Nordhoff Street
(818) 886 2525
14 or electronically stored information in the possession, custody, or control of the party on whom the
15 demand is made.” (Cal. Civ. Proc. Code § 2031.050 (emphasis added).)
16 This is not a situation where Plaintiff served discovery, failed to follow up, and then tardily
17 decided to bring a motion to compel. Plaintiff believed Farmers when it stated that there was no way
18 to obtain information about other reformations without reviewing the entirety of the claim file to
19 identify relevant documents, and agreed to the compromise of providing a number of reformations
20 only because Farmers assured Plaintiff it was not feasible to obtain documents about the individual
21 claims without taking hours per claim. In November 2022, Plaintiff learned for the first time that
22 Farmers’ prior assertions were inaccurate. It was indeed possible to obtain a summary of all relevant
23 information to a request for reformation, without any identifying information attached to it, with
24 just “a couple of clicks.” This opens up the “later discovered” documents that Plaintiff seeks, as
25 explicitly authorized under California code. Any other interpretation simply rewards Farmers for
26 failing to disclose this fact during the original meet and confer process. Farmers falsely suggests
27 that Mr. Schmitz’s revelation in his November deposition about the ease with which reformation
28 information can be obtained was something that Plaintiff would have realized if it had narrowed its
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
1 request for production. This ignores the fact that in the original meet and confer process, Plaintiff
2 had already narrowed his request to reformation requests related to the Tubbs fire. Farmers does
3 not even attempt to deny that, in the original meet and confer process, it insisted that it was not
4 possible to obtain the requested information specifically related to the Tubbs fire without hours of
5 review per file.
6 Farmers has created an untenable position for itself. If it answered honestly in the original
7 meet and confer process that there was no way to respond to the request without hours of labor per
8 file, then the request for the Sharepoint tabs is necessarily a new request, as those responsive
9 documents can be obtained in minutes. If the request for the Sharepoint tabs is not a new request
10 but was included in the original request, then Farmers did not answer honestly when meeting and
11 conferring about the amount of time it would take to obtain documents with the requested
12 information, and must respond to a supplemental request seeking the information once revealed.
Northridge, California 91324
13 Farmers does not claim that there would be any burden or difficulty, or any trade secret,
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14 confidentiality, or third-party privacy issues with Plaintiff’s request. It makes no such argument
15 because it cannot. It will take mere minutes at most for each requested file, and no third party
16 identifying information is included in the Sharepoint tabs. Farmers has not denied these facts. The
17 documents can be produced under protective order. Farmers simply does not want Plaintiff to see
18 the reformation requests it granted, those it denied, and its reasoning for each.
19 II. FARMERS’ HISTORY OF HANDLING REFORMATION REQUESTS ARE
20 INDEED RELEVANT TO THE QUESTION OF BAD FAITH
21 Farmers incorrectly argues that it has no legal requirement to reform an insurance policy
22 when it failed to follow its own policies and procedures, resulting in an underinsured home. This
23 issue is not properly decided in a discovery motion, but is explored at length in Plaintiff’s pending
24 motion for summary judgment filed on March 6, 2023, scheduled for hearing on June 28, 2023. This
25 Court is well aware that Farmers knows it has a duty to reform when its own employees and agents
26 make an error. Farmers reformed the policy for its insured Lane Scott Weiss once it learned that
27 Mr. Weiss’ agent admitted he made an error in preparing the replacement cost estimate, in the recent
28 case Weiss v. Fire Insurance Exchange, Case No. SCV-263540, Sonoma County Superior Court,
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
1 which was tried before this Court just last month in April 2023. In that case Farmers refused to make
2 further reformations beyond rectifying its agent’s error, and that refusal was the subject of the
3 litigation.
4 Here, Plaintiff simply asks Farmers to follow its own policies and procedures related to
5 reformation to comply with California law, and to follow the stated language in the policy, which
6 required Plaintiff to accept Farmers’ estimate of 100% of the replacement value. (See Major v. W.
7 Home Ins. Co., 169 Cal. App. 4th 1197, 1203, 87 Cal. Rptr. 3d 556, 563 (2009), as modified on
8 denial of reh'g (Jan. 30, 2009).) Western Home Insurance, a Farmers company, made the identical
9 arguments that Farmers makes now – that it had no duty to reform, that any reformation would be
10 voluntary and was not required by the contract. The Major court disagreed. Insureds with an
11 endorsement for extended replacement value, like Mr. Major and like Plaintiff, have different
12 language in their policies. The endorsement requires the insured to accept the insurer’s estimate of
Northridge, California 91324
13 100% replacement value. Thus the selection of the coverage amount is no longer up to the insured.
KANTOR & KANTOR LLP
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14 It is set by the insurer. In Major, the insurer required an inspection of the home to determine the
15 correct replacement cost. But it did not adopt the results of that inspection, which the insured learned
16 after losing his home in a wildfire. The Major court held that Western Home was “contractually
17 bound” to set the replacement value, and all coverages stemming from that value, based on the
18 results that would be obtained when following its policies and procedures. (Id at 1210.) Where
19 Western Home’s written policies and procedures required an inspection to determine the correct
20 replacement value, it was “contractually bound” to reform the policy to the amount of insurance that
21 would have been set had the insurer followed its own procedures.
22 In this action, Farmers had clearly stated policies and procedures dictating how the quality
23 grade of a house should be determined. It had written policies and procedures on how older policies,
24 like Mr. Koop’s, should be transitioned to its new policy form that were based for the first time on
25 a quality grade. It had written policies and procedures that required that its agents to conduct an
26 interior inspection of the property. Farmers employees and agents did not follow these policies and
27 procedures. Farmers, like Western Home, was “contractually bound” to do so because it required
28 Plaintiff to accept its estimation of replacement value.
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
1 Farmers’ agent Brian Hunsaker has admitted under oath that he never visited the home as he
2 falsely told both Plaintiff and Farmers he had done, he never obtained an inspection as required by
3 Farmers, and he never manually transitioned Plaintiff’s 2005 policy to the new 2013 form or
4 reviewed that transition for errors, as instructed by Farmers. He admitted under oath that, had he
5 followed those steps, per Farmers’ procedures Plaintiff’s home should have been insured as at least
6 “custom.” He never spoke to Plaintiff about what the quality grade meant, how it was determined,
7 or how it affected the replacement estimate, though Plaintiff called at least twice to discuss his
8 coverage and in one of those calls specifically asked to confirm that he had enough insurance to
9 rebuild in the event of a wildfire. Farmers’ underwriter in charge of reformation, Jared Schmitz,
10 agreed in his own deposition that the property should have been “custom if not premium.” Mr.
11 Schmitz testified that it is Farmers’ normal procedure to reform a policy for underinsurance when
12 its agent made an error. He testified that Farmers would not hold an insured responsible for catching
Northridge, California 91324
13 Farmers’ errors, even if the insured had the opportunity to do so. He admitted that Farmers had all
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14 of the documentation on Farmers agents and underwriters were supposed to correctly determine it,
15 and that Plaintiff had no access to those documents. He admitted that no one at Farmers in charge
16 of the reformation request ever even checked to see if the quality grade was correct. And then he
17 admitted that Farmers did indeed make errors that would require reformation, but he still would not
18 reform the policy because he believed Plaintiff had the chance to catch their errors.
19 Mr. Schmitz’s testimony is undisputed. Farmers was unable to provide the Court a
20 declaration from Mr. Schmitz denying it, or other deposition excerpts trying to explain it away.
21 Unlike in Weiss, where Farmers agreed to reform the error and increased the coverage by roughly
22 $100,000, reforming Farmers’ massive errors for Plaintiff’s policy would require an increase in
23 coverage of well over a million dollars. Perhaps this is why Farmers was willing to reform Mr.
24 Weiss’ policy, but not Mr. Koop’s. This is also why a review of the specifics of reformation requests
25 related to the Tubbs fire is so relevant. How many insureds claimed that Farmers misstated the
26 quality grade? Did any Farmers underwriter ever check to see if the procedures to determine the
27 quality grade were correctly followed? Did Farmers reform such policies on some occasions but not
28 others? If so, what were the differences between the requests? Does the difference in treatment
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
1 correlate to the dollar amount of the reformation? These questions are directly relevant to Farmers’
2 bad faith in this action.
3 “[A] plaintiff may establish a claim [of unfair claim settlement practices in violation of
4 Insurance Code section 790.03] by showing either that the acts that harmed him were knowingly
5 committed or were engaged in with such frequency as to indicate a general business practice.”
6 (Colonial Life & Accident Ins. Co. v. Superior Court, (Cal. 1982) 31 Cal.3d 785, 791.) Because
7 knowledge can be proved circumstantially, “[d]iscovery aimed at determining the frequency of
8 alleged unfair settlement practices is therefore likely to produce evidence directly relevant to the
9 action. [¶] Other instances of alleged unfair settlement practices may also be highly relevant to
10 plaintiff's claim for punitive damages. [Citation.]” (Id. at p. 792, 183 Cal.Rptr. 810, 647 P.2d 86.)
11 Farmers misunderstands the law if it believes that its failure to pay the actual amount of the coverage
12 owed had it followed its own policies and procedures cannot result in a finding of bad faith. (Major
Northridge, California 91324
13 v. W. Home Ins. Co., 169 Cal. App. 4th at 1203.) Where pattern and practice discovery is relevant
KANTOR & KANTOR LLP
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14 and admissible to the question of demonstrating bad faith, the Sharepoint reformation tabs should
15 be produced.
16 III. FARMERS IS RESPONSIBLE FOR THE CONDUCT OF ITS UNDERWRITERS
17 AND THEIR INCENTIVIZATION OF THOSE EMPLOYEES IS RELEVANT AND
18 DISCOVERABLE
19 Farmers misstates the issues in this lawsuit when it suggests that Plaintiff’s only concern
20 should be with the conduct of Farmer’s agent, Brian Hunsaker, and his employees. It was Farmers,
21 not Hunsaker, that investigated Plaintiff’s request for reformation. It was Farmers that had all its
22 internal documentation available to it, confirming that Plaintiff’s quality grade was indeed
23 inaccurate, and that the inaccuracy stemmed from Mr. Hunsaker’s falsehoods and Farmers’ failure
24 to follow its own procedures in transferring Plaintiff’s policy to Farmers’ new system that relied on
25 quality grades. Farmers employees declined to look for any such documentation when reviewing
26 Plaintiff’s request, though it was readily available. And it was Farmers employee Jared Schmitz
27 who was in charge of deciding whether or not to approve Plaintiff’s request. Jared Schmitz stated
28 under oath that he was required to follow Farmers procedures, and per Farmers’ procedures, he
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
1 would approve reformation of a policy if the agent admitted an error. Jared Schmitz confirmed that
2 he would do so even if the insured had the opportunity to catch Farmers’ error, as it was not the
3 responsibility of the insured to fix Farmers’ errors for it. But when he learned that Hunsaker
4 admitted his error, Schmitz stated that he would not reform the policy because Plaintiff should have
5 caught Farmers’ errors – despite having no access to the Farmers’ internal documents proving those
6 errors.
7 Farmers provided with its Opposition a copy of the replacement cost estimate sent to Plaintiff
8 in 2015 when he called to ask if he was sufficiently insured to rebuild in the event of a wildfire.
9 This is the document on which Farmers rests its entire defense not just for this Motion, but the entire
10 action. Farmers fails to recognize that the estimate did not include any definition or explanation of
11 the quality grade, what it meant for the replacement cost estimate, and how it was determined. When
12 no definition or explanation is provided, insureds quite reasonably believe that if their home is listed
Northridge, California 91324
13 as “above average,” that such a designation is the top tier designation after “average” and “below
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14 average.” Hunsaker and his employees have all confirmed that they never explained the quality
15 grade to Plaintiff or discussed it with him in any way, erroneously believing that it was a designation
16 determined by the 360Value software. Farmers assigned a quality grade to the insured’s home
17 without ever discussing it with him or obtaining his input on it, when the quality grade is the single
18 most important factor of a replacement value estimate.
19 IV. FARMERS DOES NOT EVEN ATTEMPT TO ARGUE THAT ANY OF THE
20 COMPENSATION INFORMATION SOUGHT IS BURDENSOME OR NOT
21 ADEQUATELY PROTECTED BY THE PROTECTIVE ORDER IN PLACE
22 Farmers insists that the calculation of the combined ratio and its effect on salaries and
23 bonuses is a trade secret. It is unsurprising that Farmers wants to keep confidential the calculations
24 it uses when rewarding the denial of claims with higher salaries and bonuses. But Plaintiff is not a
25 competitor. The revelation of this “trade secret” to Plaintiff, under protective order, will not
26 endanger Farmers’ competitiveness in the market, and Farmers was unable to provide the Court any
27 evidence to the contrary.
28 The compensation and incentive plans requested are not specific to any one individual and
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
1 will have no effect on the employees. The only employee whose specific compensation information
2 is requested is Jared Schmitz, the manager who denied the reformation claim and specifically stated
3 under oath that his compensation is determined based on how well he helps Farmers bring in more
4 premium while minimizing claim payouts. Mr. Schmitz has not provided any declaration suggesting
5 he will be harmed by the disclosure of his compensation under protective order, or that he even
6 objects to it.
7 Farmers’ reliance on West Pico Furniture is misplaced. West Pico required the production
8 of the information sought in discovery, and held that it was on the party refusing production to
9 demonstrate any oppressiveness or burden. “The objection based upon burden must be sustained by
10 evidence showing the quantum of work required, while to support an objection of oppression there
11 must be some showing either of an intent to create an unreasonable burden or that the ultimate effect
12 of the burden is incommensurate with the result sought.” (W. Pico Furniture Co. of Los Angeles v.
Northridge, California 91324
13 Superior Ct. In & For Los Angeles Cnty., 56 Cal. 2d 407, 417(1961).) It is Farmers’ burden to
KANTOR & KANTOR LLP
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14 support its objections, not Plaintiff’s to disprove them. Farmers has provided no evidence or
15 declarations to suggest that there is any burden or trade secret danger in producing either the
16 compensation plans or compensation calculations for Mr. Schmitz under protective order. It has not
17 demonstrated what, if anything, it does to keep its compensation information protected, or why the
18 protective order is insufficient to protect its interests. Nor has it explained at all why it would be
19 burdensome to produce the plans and compensation calculations. This is necessary information
20 Farmers had to provide to assert any sort of burden or trade secret protection. (Agric. Lab. Rels. Bd.
21 v. Richard A. Glass Co., 175 Cal. App. 3d 703, 715, 221 Cal. Rptr. 63, 70 (Ct. App. 1985).)
22 Farmers does not address any of the case law provided by Plaintiff demonstrating the clear
23 relevance of the requested information, and the regularity with which courts order its production.
24 Nor does it provide any precedent to support its position that the information is not discoverable and
25 cannot be produced under protective order. As with the reformation request information, discovery
26 requests related to compensation speak directly to the question of bad faith. Farmers does not, and
27 cannot, suggest that bad faith is not an available remedy for a refusal to reform a policy when the
28 basis for reformation is clear and “the policy itself provided for the coverage” and it was only the
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
1 dollar amount of that coverage that was at issue. (Major v. W. Home Ins. Co., 169 Cal. App. 4th
2 1197 at 1212.) The Major court agreed that the bad faith and punitive damages against the insurer
3 were proper for its willful failure to reform the policy.
4 V. FARMERS’ IMPROPER OPPOSITION SEPARATE STATEMENT IS
5 UNAUTHORIZED AND SHOULD BE STRICKEN
6 Farmers submitted a Separate Statement in support of its Opposition. Farmers did not
7 request permission from the Court to file such a document. Under California Rule of Court
8 3.1345(a), the only separate statement to be filed is required to be filed with the discovery motion.
9 There is no permission in the Rules or the California Code of Civil Procedure to file such a statement
10 in support of an opposition to a discovery motion. By filing an unapproved Separate Statement,
11 Farmers has included argument beyond the 15 pages permitted to it under Rule 3.113(d). As such,
12 Farmers’ separate statement should be stricken.
Northridge, California 91324
13 VI. IF THE COURT ORDERS SANCTIONS, THEY ARE PROPERLY AGAINST
KANTOR & KANTOR LLP
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14 FARMERS, NOT PLAINTIFF.
15 The Court has the option of imposing sanctions when a party refuses to comply with proper
16 discovery. Counsel for Plaintiff attempted multiple times to resolve these disputes. In addition to
17 the letters meeting and conferring about the dispute, Plaintiff’s counsel also arranged for a
18 telephonic meet and confer with Farmers’ counsel, held on May 17, 2023. (Declaration of Stacy
19 Monahan Tucker Re. Meet and Confer and Sanctions (“Tucker Decl.”), ¶ 2.) Farmers maintained
20 its utter refusal to comply with the discovery requests. Yet Farmers has provided no evidence
21 whatsoever to support its allegations of excessive burden, confidentiality and trade secrets related
22 to the compensation information. It has not even attempted to make such assertions related to the
23 reformation requests, relying wholly on its belief that its avoidance of providing accurate
24 information in the original meet and confer process shields it from producing documents today.
25 In the event that the Court chooses to impose sanctions on Farmers, Plaintiff’s counsel has
26 expended time valued at $18,130 in this dispute, including the preparation of this Reply. This does
27 not include anticipated time spent preparing for and attending the June 2, 2023 hearing. (Tucker
28 Decl., ¶3, Ex. 1.)
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
1 Farmers’ request for sanctions should be denied. In addition to being unfounded, Farmers
2 has been utterly unable to provide evidence supporting its position. Even if the Court does not grant
3 the Motion to Compel, Farmers has provided no basis on which to find the Motion was improper.
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5 DATED: May 24, 2023 KANTOR & KANTOR, LLP
6 By: /s/Stacy M. Tucker
Stacy Monahan Tucker
7 Attorneys for Plaintiff,
GARY KOOP
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Northridge, California 91324
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KANTOR & KANTOR LLP
19839 Nordhoff Street
(818) 886 2525
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
1 PROOF OF SERVICE
2 I, Carolyn Spencer, declare as follows:
3 I am employed in the County of Los Angeles, State of California. I am over the age of 18
and not a party to the within action; my business address is 19839 Nordhoff Street, Northridge,
4 CA 91324.
5 On May 24, 2023, I served the foregoing document described as PLAINTIFF’S REPLY
IN SUPPORT OF MOTION TO COMPEL in this action by serving a true copy thereof
6 addressed as follows:
7 Christopher R. Wagner, Esq. cwagner@grsm.com
David Jones, Esq. djones@grsm.com
8 sinouye@grsm.com
Steven Inouye, Esq.
GORDON REES SCULLY MANSUKHANI, LLP ilopez@grsm.com (assistant)
9 jodell@grsm.com (assistant)
633 West Fifth Street, 52nd floor
10 Los Angeles, CA 90071
Attorneys for Defendant Fire Insurance
11 Exchange, dba Farmers Insurance
Group
12
Albert M. T. Finch, III, Esq. tfinch@fgppr.com
Northridge, California 91324
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KANTOR & KANTOR LLP
19839 Nordhoff Street
Jason Deng, Esq. jdeng@fgppr.com
(818) 886 2525
14 FORAN GLENNON kokasaki@fgppr.com (assistant)
1741 Technology Drive, Suite 250
15 San Jose, CA 95110
16 Attorneys for Defendant Brian Hunsaker
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[X] BY E-MAIL SERVICE: I caused a copy of the document(s) to be sent from e-mail address
18 cspencer@kantorlaw.net to the persons at the e-mail addresses listed above. I did not receive,
within a reasonable time after the transmission, any electronic message or other indication that the
19
transmission was unsuccessful.
20
21 [x] STATE: I declare under penalty of perjury under the Laws of the State of California that the
foregoing is true and correct.
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I declare under penalty of perjury under the laws of the State of California that the above is
23 true and correct. Executed on May 24, 2023, Rohnert Park, California.
24
/s/Carolyn Spencer
25 Carolyn Spencer
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PLAINTIFF’S REPLY ISO MOTION TO COMPEL
Preview
1 Stacy M. Tucker (SBN 218942) stucker@kantorlaw.net 2 Jaclyn D. Conover (SBN 266749) 3 jconover@kantorlaw.net KANTOR & KANTOR LLP 4 19839 Nordhoff Street Northridge, California 91324 5 Telephone: (818) 886-2525 Facsimile: (818) 350-6272 6 7 Attorneys For Plaintiff, GARY KOOP 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF SONOMA 10 11 12 GARY KOOP, Case No. SCV-266944 Northridge, California 91324 13 KANTOR & KANTOR LLP Plaintiff, [Assigned to Hon. Oscar A. Pardo] 19839 Nordhoff Street (818) 886 2525 14 vs. REPLY IN SUPPORT OF MOTION TO COMPEL FURTHER DOCUMENT 15 FIRE INSURANCE EXCHANGE, dba PRODUCTION AND RESPONSES TO FARMERS INSURANCE GROUP, BRIAN PLAINTIFF’S SECOND SET OF 16 HUNSAKER, REQUESTS FOR PRODUCTION AND MOTION TO STRIKE IMPROPER 17 Defendants. SEPARATE STATEMENT 18 Date: June 2, 2023 19 Time: 3:00 p.m. Dept.: 19 20 21 Action Filed: August 24, 2020 22 Trial Date: June 30, 2023 23 24 25 26 27 28 PLAINTIFF’S REPLY ISO MOTION TO COMPEL 1 I. FARMERS IGNORES THAT CALIFORNIA DISCOVERY RULES ALLOW FOR 2 SUPPLEMENTAL INTERROGATORIES TO OBTAIN NEW INFORMATION 3 Farmers believes that discovery is a form of gamesmanship in which it can be rewarded for 4 successful attempts to hide information. This approach undermines the stated intent of the discovery 5 process. “California's pretrial discovery procedures are designed to minimize the opportunities for 6 fabrication and forgetfulness, and to eliminate the need for guesswork about the other side's 7 evidence, with all doubts about discoverability resolved in favor of disclosure.” (Glenfed Dev. Corp. 8 v. Superior Ct., 53 Cal. App. 4th 1113, 1119, 62 Cal. Rptr. 2d 195, 199 (1997).) 9 California law anticipated the possibility of parties willfully failing to acknowledge the 10 existence of responsive documents. That is why California Code of Civil Procedure includes section 11 2031.050, which allows that, “in addition to the demands for inspection, copying, testing, or 12 sampling permitted by this chapter, a party may propound a supplemental demand to inspect, copy, Northridge, California 91324 13 test, or sample any later acquired or discovered documents, tangible things, land or other property, KANTOR & KANTOR LLP 19839 Nordhoff Street (818) 886 2525 14 or electronically stored information in the possession, custody, or control of the party on whom the 15 demand is made.” (Cal. Civ. Proc. Code § 2031.050 (emphasis added).) 16 This is not a situation where Plaintiff served discovery, failed to follow up, and then tardily 17 decided to bring a motion to compel. Plaintiff believed Farmers when it stated that there was no way 18 to obtain information about other reformations without reviewing the entirety of the claim file to 19 identify relevant documents, and agreed to the compromise of providing a number of reformations 20 only because Farmers assured Plaintiff it was not feasible to obtain documents about the individual 21 claims without taking hours per claim. In November 2022, Plaintiff learned for the first time that 22 Farmers’ prior assertions were inaccurate. It was indeed possible to obtain a summary of all relevant 23 information to a request for reformation, without any identifying information attached to it, with 24 just “a couple of clicks.” This opens up the “later discovered” documents that Plaintiff seeks, as 25 explicitly authorized under California code. Any other interpretation simply rewards Farmers for 26 failing to disclose this fact during the original meet and confer process. Farmers falsely suggests 27 that Mr. Schmitz’s revelation in his November deposition about the ease with which reformation 28 information can be obtained was something that Plaintiff would have realized if it had narrowed its 1 PLAINTIFF’S REPLY ISO MOTION TO COMPEL 1 request for production. This ignores the fact that in the original meet and confer process, Plaintiff 2 had already narrowed his request to reformation requests related to the Tubbs fire. Farmers does 3 not even attempt to deny that, in the original meet and confer process, it insisted that it was not 4 possible to obtain the requested information specifically related to the Tubbs fire without hours of 5 review per file. 6 Farmers has created an untenable position for itself. If it answered honestly in the original 7 meet and confer process that there was no way to respond to the request without hours of labor per 8 file, then the request for the Sharepoint tabs is necessarily a new request, as those responsive 9 documents can be obtained in minutes. If the request for the Sharepoint tabs is not a new request 10 but was included in the original request, then Farmers did not answer honestly when meeting and 11 conferring about the amount of time it would take to obtain documents with the requested 12 information, and must respond to a supplemental request seeking the information once revealed. Northridge, California 91324 13 Farmers does not claim that there would be any burden or difficulty, or any trade secret, KANTOR & KANTOR LLP 19839 Nordhoff Street (818) 886 2525 14 confidentiality, or third-party privacy issues with Plaintiff’s request. It makes no such argument 15 because it cannot. It will take mere minutes at most for each requested file, and no third party 16 identifying information is included in the Sharepoint tabs. Farmers has not denied these facts. The 17 documents can be produced under protective order. Farmers simply does not want Plaintiff to see 18 the reformation requests it granted, those it denied, and its reasoning for each. 19 II. FARMERS’ HISTORY OF HANDLING REFORMATION REQUESTS ARE 20 INDEED RELEVANT TO THE QUESTION OF BAD FAITH 21 Farmers incorrectly argues that it has no legal requirement to reform an insurance policy 22 when it failed to follow its own policies and procedures, resulting in an underinsured home. This 23 issue is not properly decided in a discovery motion, but is explored at length in Plaintiff’s pending 24 motion for summary judgment filed on March 6, 2023, scheduled for hearing on June 28, 2023. This 25 Court is well aware that Farmers knows it has a duty to reform when its own employees and agents 26 make an error. Farmers reformed the policy for its insured Lane Scott Weiss once it learned that 27 Mr. Weiss’ agent admitted he made an error in preparing the replacement cost estimate, in the recent 28 case Weiss v. Fire Insurance Exchange, Case No. SCV-263540, Sonoma County Superior Court, 2 PLAINTIFF’S REPLY ISO MOTION TO COMPEL 1 which was tried before this Court just last month in April 2023. In that case Farmers refused to make 2 further reformations beyond rectifying its agent’s error, and that refusal was the subject of the 3 litigation. 4 Here, Plaintiff simply asks Farmers to follow its own policies and procedures related to 5 reformation to comply with California law, and to follow the stated language in the policy, which 6 required Plaintiff to accept Farmers’ estimate of 100% of the replacement value. (See Major v. W. 7 Home Ins. Co., 169 Cal. App. 4th 1197, 1203, 87 Cal. Rptr. 3d 556, 563 (2009), as modified on 8 denial of reh'g (Jan. 30, 2009).) Western Home Insurance, a Farmers company, made the identical 9 arguments that Farmers makes now – that it had no duty to reform, that any reformation would be 10 voluntary and was not required by the contract. The Major court disagreed. Insureds with an 11 endorsement for extended replacement value, like Mr. Major and like Plaintiff, have different 12 language in their policies. The endorsement requires the insured to accept the insurer’s estimate of Northridge, California 91324 13 100% replacement value. Thus the selection of the coverage amount is no longer up to the insured. KANTOR & KANTOR LLP 19839 Nordhoff Street (818) 886 2525 14 It is set by the insurer. In Major, the insurer required an inspection of the home to determine the 15 correct replacement cost. But it did not adopt the results of that inspection, which the insured learned 16 after losing his home in a wildfire. The Major court held that Western Home was “contractually 17 bound” to set the replacement value, and all coverages stemming from that value, based on the 18 results that would be obtained when following its policies and procedures. (Id at 1210.) Where 19 Western Home’s written policies and procedures required an inspection to determine the correct 20 replacement value, it was “contractually bound” to reform the policy to the amount of insurance that 21 would have been set had the insurer followed its own procedures. 22 In this action, Farmers had clearly stated policies and procedures dictating how the quality 23 grade of a house should be determined. It had written policies and procedures on how older policies, 24 like Mr. Koop’s, should be transitioned to its new policy form that were based for the first time on 25 a quality grade. It had written policies and procedures that required that its agents to conduct an 26 interior inspection of the property. Farmers employees and agents did not follow these policies and 27 procedures. Farmers, like Western Home, was “contractually bound” to do so because it required 28 Plaintiff to accept its estimation of replacement value. 3 PLAINTIFF’S REPLY ISO MOTION TO COMPEL 1 Farmers’ agent Brian Hunsaker has admitted under oath that he never visited the home as he 2 falsely told both Plaintiff and Farmers he had done, he never obtained an inspection as required by 3 Farmers, and he never manually transitioned Plaintiff’s 2005 policy to the new 2013 form or 4 reviewed that transition for errors, as instructed by Farmers. He admitted under oath that, had he 5 followed those steps, per Farmers’ procedures Plaintiff’s home should have been insured as at least 6 “custom.” He never spoke to Plaintiff about what the quality grade meant, how it was determined, 7 or how it affected the replacement estimate, though Plaintiff called at least twice to discuss his 8 coverage and in one of those calls specifically asked to confirm that he had enough insurance to 9 rebuild in the event of a wildfire. Farmers’ underwriter in charge of reformation, Jared Schmitz, 10 agreed in his own deposition that the property should have been “custom if not premium.” Mr. 11 Schmitz testified that it is Farmers’ normal procedure to reform a policy for underinsurance when 12 its agent made an error. He testified that Farmers would not hold an insured responsible for catching Northridge, California 91324 13 Farmers’ errors, even if the insured had the opportunity to do so. He admitted that Farmers had all KANTOR & KANTOR LLP 19839 Nordhoff Street (818) 886 2525 14 of the documentation on Farmers agents and underwriters were supposed to correctly determine it, 15 and that Plaintiff had no access to those documents. He admitted that no one at Farmers in charge 16 of the reformation request ever even checked to see if the quality grade was correct. And then he 17 admitted that Farmers did indeed make errors that would require reformation, but he still would not 18 reform the policy because he believed Plaintiff had the chance to catch their errors. 19 Mr. Schmitz’s testimony is undisputed. Farmers was unable to provide the Court a 20 declaration from Mr. Schmitz denying it, or other deposition excerpts trying to explain it away. 21 Unlike in Weiss, where Farmers agreed to reform the error and increased the coverage by roughly 22 $100,000, reforming Farmers’ massive errors for Plaintiff’s policy would require an increase in 23 coverage of well over a million dollars. Perhaps this is why Farmers was willing to reform Mr. 24 Weiss’ policy, but not Mr. Koop’s. This is also why a review of the specifics of reformation requests 25 related to the Tubbs fire is so relevant. How many insureds claimed that Farmers misstated the 26 quality grade? Did any Farmers underwriter ever check to see if the procedures to determine the 27 quality grade were correctly followed? Did Farmers reform such policies on some occasions but not 28 others? If so, what were the differences between the requests? Does the difference in treatment 4 PLAINTIFF’S REPLY ISO MOTION TO COMPEL 1 correlate to the dollar amount of the reformation? These questions are directly relevant to Farmers’ 2 bad faith in this action. 3 “[A] plaintiff may establish a claim [of unfair claim settlement practices in violation of 4 Insurance Code section 790.03] by showing either that the acts that harmed him were knowingly 5 committed or were engaged in with such frequency as to indicate a general business practice.” 6 (Colonial Life & Accident Ins. Co. v. Superior Court, (Cal. 1982) 31 Cal.3d 785, 791.) Because 7 knowledge can be proved circumstantially, “[d]iscovery aimed at determining the frequency of 8 alleged unfair settlement practices is therefore likely to produce evidence directly relevant to the 9 action. [¶] Other instances of alleged unfair settlement practices may also be highly relevant to 10 plaintiff's claim for punitive damages. [Citation.]” (Id. at p. 792, 183 Cal.Rptr. 810, 647 P.2d 86.) 11 Farmers misunderstands the law if it believes that its failure to pay the actual amount of the coverage 12 owed had it followed its own policies and procedures cannot result in a finding of bad faith. (Major Northridge, California 91324 13 v. W. Home Ins. Co., 169 Cal. App. 4th at 1203.) Where pattern and practice discovery is relevant KANTOR & KANTOR LLP 19839 Nordhoff Street (818) 886 2525 14 and admissible to the question of demonstrating bad faith, the Sharepoint reformation tabs should 15 be produced. 16 III. FARMERS IS RESPONSIBLE FOR THE CONDUCT OF ITS UNDERWRITERS 17 AND THEIR INCENTIVIZATION OF THOSE EMPLOYEES IS RELEVANT AND 18 DISCOVERABLE 19 Farmers misstates the issues in this lawsuit when it suggests that Plaintiff’s only concern 20 should be with the conduct of Farmer’s agent, Brian Hunsaker, and his employees. It was Farmers, 21 not Hunsaker, that investigated Plaintiff’s request for reformation. It was Farmers that had all its 22 internal documentation available to it, confirming that Plaintiff’s quality grade was indeed 23 inaccurate, and that the inaccuracy stemmed from Mr. Hunsaker’s falsehoods and Farmers’ failure 24 to follow its own procedures in transferring Plaintiff’s policy to Farmers’ new system that relied on 25 quality grades. Farmers employees declined to look for any such documentation when reviewing 26 Plaintiff’s request, though it was readily available. And it was Farmers employee Jared Schmitz 27 who was in charge of deciding whether or not to approve Plaintiff’s request. Jared Schmitz stated 28 under oath that he was required to follow Farmers procedures, and per Farmers’ procedures, he 5 PLAINTIFF’S REPLY ISO MOTION TO COMPEL 1 would approve reformation of a policy if the agent admitted an error. Jared Schmitz confirmed that 2 he would do so even if the insured had the opportunity to catch Farmers’ error, as it was not the 3 responsibility of the insured to fix Farmers’ errors for it. But when he learned that Hunsaker 4 admitted his error, Schmitz stated that he would not reform the policy because Plaintiff should have 5 caught Farmers’ errors – despite having no access to the Farmers’ internal documents proving those 6 errors. 7 Farmers provided with its Opposition a copy of the replacement cost estimate sent to Plaintiff 8 in 2015 when he called to ask if he was sufficiently insured to rebuild in the event of a wildfire. 9 This is the document on which Farmers rests its entire defense not just for this Motion, but the entire 10 action. Farmers fails to recognize that the estimate did not include any definition or explanation of 11 the quality grade, what it meant for the replacement cost estimate, and how it was determined. When 12 no definition or explanation is provided, insureds quite reasonably believe that if their home is listed Northridge, California 91324 13 as “above average,” that such a designation is the top tier designation after “average” and “below KANTOR & KANTOR LLP 19839 Nordhoff Street (818) 886 2525 14 average.” Hunsaker and his employees have all confirmed that they never explained the quality 15 grade to Plaintiff or discussed it with him in any way, erroneously believing that it was a designation 16 determined by the 360Value software. Farmers assigned a quality grade to the insured’s home 17 without ever discussing it with him or obtaining his input on it, when the quality grade is the single 18 most important factor of a replacement value estimate. 19 IV. FARMERS DOES NOT EVEN ATTEMPT TO ARGUE THAT ANY OF THE 20 COMPENSATION INFORMATION SOUGHT IS BURDENSOME OR NOT 21 ADEQUATELY PROTECTED BY THE PROTECTIVE ORDER IN PLACE 22 Farmers insists that the calculation of the combined ratio and its effect on salaries and 23 bonuses is a trade secret. It is unsurprising that Farmers wants to keep confidential the calculations 24 it uses when rewarding the denial of claims with higher salaries and bonuses. But Plaintiff is not a 25 competitor. The revelation of this “trade secret” to Plaintiff, under protective order, will not 26 endanger Farmers’ competitiveness in the market, and Farmers was unable to provide the Court any 27 evidence to the contrary. 28 The compensation and incentive plans requested are not specific to any one individual and 6 PLAINTIFF’S REPLY ISO MOTION TO COMPEL 1 will have no effect on the employees. The only employee whose specific compensation information 2 is requested is Jared Schmitz, the manager who denied the reformation claim and specifically stated 3 under oath that his compensation is determined based on how well he helps Farmers bring in more 4 premium while minimizing claim payouts. Mr. Schmitz has not provided any declaration suggesting 5 he will be harmed by the disclosure of his compensation under protective order, or that he even 6 objects to it. 7 Farmers’ reliance on West Pico Furniture is misplaced. West Pico required the production 8 of the information sought in discovery, and held that it was on the party refusing production to 9 demonstrate any oppressiveness or burden. “The objection based upon burden must be sustained by 10 evidence showing the quantum of work required, while to support an objection of oppression there 11 must be some showing either of an intent to create an unreasonable burden or that the ultimate effect 12 of the burden is incommensurate with the result sought.” (W. Pico Furniture Co. of Los Angeles v. Northridge, California 91324 13 Superior Ct. In & For Los Angeles Cnty., 56 Cal. 2d 407, 417(1961).) It is Farmers’ burden to KANTOR & KANTOR LLP 19839 Nordhoff Street (818) 886 2525 14 support its objections, not Plaintiff’s to disprove them. Farmers has provided no evidence or 15 declarations to suggest that there is any burden or trade secret danger in producing either the 16 compensation plans or compensation calculations for Mr. Schmitz under protective order. It has not 17 demonstrated what, if anything, it does to keep its compensation information protected, or why the 18 protective order is insufficient to protect its interests. Nor has it explained at all why it would be 19 burdensome to produce the plans and compensation calculations. This is necessary information 20 Farmers had to provide to assert any sort of burden or trade secret protection. (Agric. Lab. Rels. Bd. 21 v. Richard A. Glass Co., 175 Cal. App. 3d 703, 715, 221 Cal. Rptr. 63, 70 (Ct. App. 1985).) 22 Farmers does not address any of the case law provided by Plaintiff demonstrating the clear 23 relevance of the requested information, and the regularity with which courts order its production. 24 Nor does it provide any precedent to support its position that the information is not discoverable and 25 cannot be produced under protective order. As with the reformation request information, discovery 26 requests related to compensation speak directly to the question of bad faith. Farmers does not, and 27 cannot, suggest that bad faith is not an available remedy for a refusal to reform a policy when the 28 basis for reformation is clear and “the policy itself provided for the coverage” and it was only the 7 PLAINTIFF’S REPLY ISO MOTION TO COMPEL 1 dollar amount of that coverage that was at issue. (Major v. W. Home Ins. Co., 169 Cal. App. 4th 2 1197 at 1212.) The Major court agreed that the bad faith and punitive damages against the insurer 3 were proper for its willful failure to reform the policy. 4 V. FARMERS’ IMPROPER OPPOSITION SEPARATE STATEMENT IS 5 UNAUTHORIZED AND SHOULD BE STRICKEN 6 Farmers submitted a Separate Statement in support of its Opposition. Farmers did not 7 request permission from the Court to file such a document. Under California Rule of Court 8 3.1345(a), the only separate statement to be filed is required to be filed with the discovery motion. 9 There is no permission in the Rules or the California Code of Civil Procedure to file such a statement 10 in support of an opposition to a discovery motion. By filing an unapproved Separate Statement, 11 Farmers has included argument beyond the 15 pages permitted to it under Rule 3.113(d). As such, 12 Farmers’ separate statement should be stricken. Northridge, California 91324 13 VI. IF THE COURT ORDERS SANCTIONS, THEY ARE PROPERLY AGAINST KANTOR & KANTOR LLP 19839 Nordhoff Street (818) 886 2525 14 FARMERS, NOT PLAINTIFF. 15 The Court has the option of imposing sanctions when a party refuses to comply with proper 16 discovery. Counsel for Plaintiff attempted multiple times to resolve these disputes. In addition to 17 the letters meeting and conferring about the dispute, Plaintiff’s counsel also arranged for a 18 telephonic meet and confer with Farmers’ counsel, held on May 17, 2023. (Declaration of Stacy 19 Monahan Tucker Re. Meet and Confer and Sanctions (“Tucker Decl.”), ¶ 2.) Farmers maintained 20 its utter refusal to comply with the discovery requests. Yet Farmers has provided no evidence 21 whatsoever to support its allegations of excessive burden, confidentiality and trade secrets related 22 to the compensation information. It has not even attempted to make such assertions related to the 23 reformation requests, relying wholly on its belief that its avoidance of providing accurate 24 information in the original meet and confer process shields it from producing documents today. 25 In the event that the Court chooses to impose sanctions on Farmers, Plaintiff’s counsel has 26 expended time valued at $18,130 in this dispute, including the preparation of this Reply. This does 27 not include anticipated time spent preparing for and attending the June 2, 2023 hearing. (Tucker 28 Decl., ¶3, Ex. 1.) 8 PLAINTIFF’S REPLY ISO MOTION TO COMPEL 1 Farmers’ request for sanctions should be denied. In addition to being unfounded, Farmers 2 has been utterly unable to provide evidence supporting its position. Even if the Court does not grant 3 the Motion to Compel, Farmers has provided no basis on which to find the Motion was improper. 4 5 DATED: May 24, 2023 KANTOR & KANTOR, LLP 6 By: /s/Stacy M. Tucker Stacy Monahan Tucker 7 Attorneys for Plaintiff, GARY KOOP 8 9 10 11 12 Northridge, California 91324 13 KANTOR & KANTOR LLP 19839 Nordhoff Street (818) 886 2525 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 PLAINTIFF’S REPLY ISO MOTION TO COMPEL 1 PROOF OF SERVICE 2 I, Carolyn Spencer, declare as follows: 3 I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is 19839 Nordhoff Street, Northridge, 4 CA 91324. 5 On May 24, 2023, I served the foregoing document described as PLAINTIFF’S REPLY IN SUPPORT OF MOTION TO COMPEL in this action by serving a true copy thereof 6 addressed as follows: 7 Christopher R. Wagner, Esq. cwagner@grsm.com David Jones, Esq. djones@grsm.com 8 sinouye@grsm.com Steven Inouye, Esq. GORDON REES SCULLY MANSUKHANI, LLP ilopez@grsm.com (assistant) 9 jodell@grsm.com (assistant) 633 West Fifth Street, 52nd floor 10 Los Angeles, CA 90071 Attorneys for Defendant Fire Insurance 11 Exchange, dba Farmers Insurance Group 12 Albert M. T. Finch, III, Esq. tfinch@fgppr.com Northridge, California 91324 13 KANTOR & KANTOR LLP 19839 Nordhoff Street Jason Deng, Esq. jdeng@fgppr.com (818) 886 2525 14 FORAN GLENNON kokasaki@fgppr.com (assistant) 1741 Technology Drive, Suite 250 15 San Jose, CA 95110 16 Attorneys for Defendant Brian Hunsaker 17 [X] BY E-MAIL SERVICE: I caused a copy of the document(s) to be sent from e-mail address 18 cspencer@kantorlaw.net to the persons at the e-mail addresses listed above. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the 19 transmission was unsuccessful. 20 21 [x] STATE: I declare under penalty of perjury under the Laws of the State of California that the foregoing is true and correct. 22 I declare under penalty of perjury under the laws of the State of California that the above is 23 true and correct. Executed on May 24, 2023, Rohnert Park, California. 24 /s/Carolyn Spencer 25 Carolyn Spencer 26 27 28 10 PLAINTIFF’S REPLY ISO MOTION TO COMPEL