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Illiana Surgery and Medical Center LLC v. Hartford Fire Insurance Co.

United States District Court, N.D. Indiana, Hammond Division

March 19, 2014

ILLIANA SURGERY AND MEDICAL CENTER LLC n/k/a Heartland Memorial Hospital LLC, Plaintiff,
v.
HARTFORD FIRE INSURANCE COMPANY, Defendant.

OPINION AND ORDER

ANDREW P. RODOVICH, Magistrate Judge.

This matter is before the court on the Motion to Compel Production of Documents [DE 277] filed by the plaintiff, Illiana Surgery and Medical Center, LLC, on October 28, 2013; the Motion for Protective Order [DE 280] filed by the defendant, Hartford Fire Insurance Co., on November 12, 2013; the Motion for Attorney Fees [DE 286] filed by Illiana on December 9, 2013; the Motion to Request Oral Argument on Hartford's Motion for Protective Order [DE 288] filed by Hartford on December 13, 2013; the Motion to Amend/Correct the Motion for Attorneys Fees [DE 292] filed by Illiana on January 2, 2014; and the Motion for Leave to File Sur-Reply [DE 296] filed by Hartford on January 16, 2014.

For the following reasons, the Motion to Compel Production of Documents [DE 277] is GRANTED; the Motion for Protective Order [DE 280] is DENIED; the Motion for Attorney Fees [DE 286] is GRANTED IN PART and DENIED IN PART; the Motion to Request Oral Argument on Hartford's Motion for Protective Order [DE 288] is DENIED; the Motion to Amend/Correct the Motion for Attorneys Fees [DE 292] is GRANTED; and the Motion for Leave to File Sur-Reply [DE 296] is GRANTED.

Background

This matter arises from an insurance claim the plaintiff, Illiana, filed with its insurer, Hartford, for property loss and damages arising out of the destruction of the hospital's database. Discovery has been tumultuous and resulted in the parties filing many motions. The court's May 16, 2013, Opinion and Order explains the ongoing discovery dispute in detail. To briefly recap, the court first directed Hartford to produce its claim file on April 4, 2007. Hartford did not comply, and on June 30, 2008, the court granted Illiana's first motion to compel, directing Hartford to produce the complete claim file.

Illiana later noticed that certain pages were missing despite Hartford's assurance that all the claim file documents had been produced. Hartford subsequently produced more documents. At the January 2011 deposition of Kevin Pugliese, Hartford's counsel produced hundreds of additional documents. This belated production caused Illiana to file its first motion for sanctions. The court granted Illiana's motion for sanctions and re-opened discovery for Illiana only.

On October 4, 2011, Illiana issued a second request for documents, seeking any and all emails related to Illiana's claim. Hartford responded by filing a motion to quash. Hartford subsequently withdrew its motion, but it did not produce any additional documents, insteading representing that "[t]o the extent the emails were printed... they have been produced." (DE 264-11). Illiana moved to compel the deposition of a Hartford representative to testify about the efforts Hartford had taken to respond to discovery. On June 5, 2012, this court granted Illiana's motion to compel the deposition of a Hartford representative and denied Hartford's request for a protective order. Following the court's order, Hartford produced even more documents, including 849 pages at the Rule 30(b)(6) deposition that had not been produced previously because of an "inadvertent mistake".

At the deposition, Hartford's designee, John Moynihan, could not describe the mistake, what processes caused the documents to be found, how the documents previously were missed by Hartford, or any other details related to how Hartford had complied with its discovery obligations in this case. Moynihan did explain that Hartford has utilized an e-mail backup system for years to preserve all of its e-mails. However, he was not prepared to testify whether any searches had been performed to find Hartford's e-mails related to this claim.

Because of the belated production of documents turned over at the deposition and Moynihan's lack of preparedness and inability to explain Hartford's discovery efforts, Illiana filed a second motion for sanctions. On May 16, 2013, this court granted Illiana's motion and ordered Hartford "to pay all costs associated with Illiana's motion as well as any additional costs and fees associated with discovery related to Hartford's late production of documents and failure to present a prepared deponent." The District Court affirmed this ruling. Illiana submitted its fee petition on December 9, 2013. Hartford objects to many of the entries.

On July 10, 2013, Illiana served its third request for production on Hartford. Hartford responded that the requests were "improper at this stage of litigation, " that the e-mails exist on backup tapes, but that they were not reasonably accessible because of undue burden or cost. The parties could not agree on who should bear the cost of searching and producing the e-mails related to the adjustment of this claim.

The parties now dispute the reasonableness of the attorney fee petition submitted by Illiana following the court's May 16, 2013 Opinion and Order granting sanctions, and also dispute who should bear the cost of searching and producing the e-mails Illiana requests.

Discussion

Illiana filed a motion to amend its Motion for Attorney's Fees, informing the court that the Exhibit it attached improperly labeled some of the hours it spent working on its response to Hartford's Motion to Quash as discovery efforts. However, the total hours reported remained the same and only the allocation of the fees between categories changed. Hartford does not oppose this motion. The court GRANTS Illiana's Motion to Amend/Correct the Motion for Attorneys Fees.

Hartford also requested leave to file a Sur-reply to Illiana's fee petition, arguing that Illiana should not have been permitted to file a reply brief and that Illiana raised new arguments in its reply that Hartford has not had the opportunity to address. Illiana did not file a response in opposition to Hartford's motion. For this reason, the court will GRANT Hartford's Motion for Leave to File Its Sur-Reply.

Turning to Hartford's objections to Illiana's fee petition, the recoverable fees are limited to the reasonable fees that an attorney would charge a client. Bowerman v. Wal-Mart Stores, Inc., 2000 U.S. Dist. LEXIS 21616, at *3 (S.D. Ind. Nov. 30, 2000). The court will consider whether the costs reportedly incurred in making the motion were reasonably necessary by evaluating the reasonableness of the time spent preparing the motion and the rates charged. Equal Employment Opportunity Commission v. Accurate Mechanical Contractors, Inc., 863 F.Supp. 828, 834 (E.D. Wis. 1994).

"The attorney's standard hourly rate is the best measure of the attorney's reasonable hourly rate." Accurate, 863 F.Supp. at 834 ( citing Gusman v. Unisys Corp., 986 F.2d 1146, 1150 (7th Cir. 1993)). This is because the rate clients are willing to pay the attorney account for his individual skill and ability. Gusman, 986 F.2d at 1150. In rendering this judgment, the court generally will take the attorney's experience and qualifications into consideration. Accurate, 863 F.Supp. at 834.

The court also must determine whether the time allotted to the given task is reasonable under the circumstances. Accurate, 863 F.Supp. at 834. The court will consider the length of the motion or memorandum, the complexity of the case, and the citation to authority contained in the document refers to when assessing the reasonableness of the time allotted. Maxwell v. South Bend Work Release, 2010 U.S. Dist. LEXIS 114462, at *13-14 (N.D. Ind. Oct. 25, 2010); Arrington v. La Rabida Children's Hosp., 2007 U.S. Dist. LEXIS 31127, 2007 WL 1238998, at *3 (N.D. Ill. Apr. 25, 2007) (reducing requested time when the brief in support of motion did not cite any case law); Mattenson v. Baxter Healthcare Corp., 2003 U.S. Dist. LEXIS 17983, 2003 WL 22317677, at *1 (N.D. Ill. Oct. 9, 2003) (finding that two hours was a reasonable length of time to complete a three page motion). Duplicate and excessive time cannot be recovered, and the court will scrutinize a fee petition for such carefully. Bowerman, 2000 U.S. Dist. LEXIS 21616 at *3. To enable the court to complete this task, "[t]he billing records must be sufficiently clear to enable the district court to identify what hours, if any, are excludable because they are excessive, redundant, or otherwise unnecessary." Shoney's, Inc. v. Schoenbaum, 894 F.2d 93, 97 (4th Cir. 1990).

The parties first dispute whether Illiana is entitled to fees only for the motion to compel and future costs associated with Hartford's delay, or whether the order applies retroactively to all the costs Illiana incurred when attempting to gather the discovery information. The court's order granting attorneys' fees states that "the court ORDERS Hartford to pay all costs associated with Illiana's motion as well as any additional costs and fees associated with discovery related to Hartford's late production of documents and failure to present a prepared deponent." The dispute arises over the word "additional". Hartford argues that the term refers only to costs going forward. However, additional means extra or supplementary. The court ordered Hartford to pay all costs associated with the motion and the extra costs - those in addition to the costs associated with the motion - that arose because of Hartford's failure to comply with Illiana's discovery requests.

Illiana seeks fees not only for its second motion for sanctions, but also for discovery, its response to Illiana's motion to quash and motion to correct errors, its motion to compel the Rule 30(b)(6) deposition, and the hours it spent preparing and taking the Rule 30(b)(6) deposition. The court's order specifically included the costs associated with the Rule 30(b)(6) deposition, therefore these fees ...


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