United States District Court, N.D. Indiana, Hammond Division
JOSEPH ELWELL, CRYSTAL ELWELL, DEBORAH BALDWIN, Individually and as custodian for her Minor children WM and AM, ROBERT BALDWIN, Plaintiffs,
FIRST BAPTIST CHURCH OF HAMMOND, INDIANA, INC., Defendant.
OPINION AND ORDER
P. Rodovich United States Magistrate Judge.
matter is before the court on the Motion to Quash the
Subpoena and/or Motion for Protective Order [DE 60] filed by
the defendant, First Baptist Church of Hammond, Inc., on June
5, 2017. For the following reasons set forth below, the
motion is DENIED.
plaintiffs, Joseph Elwell, Crystal Elwell, Deborah Baldwin,
Individually and as custodian for her minor children WM and
AM, and Robert Baldwin filed a complaint against the
defendant, First Baptist Church of Hammond, Inc., on May 5,
2016. The complaint asserts three causes of action: fraud,
constructive fraud, and negligent retention by First Baptist.
The plaintiffs have alleged that First Baptist was aware that
the non-parties, Thomas Kimmel and Jack Schaap, engaged in
misconduct regarding an investment product that was developed
and sold by Sure Line Acceptance Corporation. The plaintiffs
further alleged that Kimmel solicited and sold the promissory
notes made by Sure Line Acceptance Corporation to First
Baptist members while he was acting within his scope of
22, 2017, the plaintiffs served subpoenas on five companies:
Illinois National Insurance Company; Princeton Excess and
Surplus Lines Insurance Company; The Underwriters Group,
Inc.; Swett & Crawford of Illinois, Inc.; and Chartis
Claims, Inc. The subpoenas requested the following:
1. Copies of all documents, correspondence, communications
and/or notes in your file regarding any applications for
insurance submitted on behalf of First Baptist Church of
Hammond, Indiana, Inc. (“First Baptist”) or
Hyles-Anderson College (“Hyles-Anderson”), from
January 1, 2000 to the present;
2. Copies of all correspondence, communications, and/or notes
in your file regarding any claims paid under any insurance
policies for which First Baptist or Hyles-Anderson are named
as insureds, which relate to any claims involving Thomas L.
Kimmel, from January 1, 2000 to the present; and
3. Copies of all correspondence, communications, and/or notes
in your file between you, William Owens, The Owens Group,
Inc., First Baptist, Hyles-Anderson, Rick Sparks, Eddie
Lapina, Mirian Garcia, Ross Wonson, Owen Schipplein, John
Wilkerson, Jack Schaap, and/or Thomas L. Kimmel, regarding
any risk-management audits conducted for or on behalf of
First Baptist and/or Hyles-Anderson from January 1, 2000 to
Baptist has argued that all of the requested documents are
protected by Indiana's insured-insurer privilege. On June
19, 2017, the plaintiffs filed a response in opposition.
First Baptist filed a reply on June 26, 2017.
Baptist has not filed a certification of good faith as
required by N.D. Ind. L.R. 37-1. The plaintiffs have
indicated that the parties discussed the application of
Indiana's insured-insurer privilege to the subpoena
requests on two separate occasions, but did not reach a
resolution. In the interest of justice, the court will
consider the merits of the parties' arguments
notwithstanding First Baptist's failure to comply with
the Local Rules.
Rule of Civil Procedure 45(d)(3)(A)(iii) provides that
“[o]n timely motion, the court by which a subpoena was
issued shall quash or modify the subpoena if it . . .
requires disclosure of privileged or other protected material
and no exception or waiver applies.” However, implicit
in the rule is the requirement that a subpoena seek relevant
information. See Stock v. Integrated Health Plan,
Inc., 241 F.R.D. 618, 621-622 (S.D. Ill. 2007);
Syposs v. United States, 181 F.R.D. 224, 226
(W.D.N.Y.1998) (“The reach of a subpoena issued
pursuant to Fed.R.Civ.P. 45 is subject to the general
relevancy standard applicable to discovery under Fed.R.Civ.P.
26(b)(1).”). Relevancy under this rule is construed
broadly to encompass “any matter that bears on, or that
reasonably could lead to other matter[s] that could bear on,
any issue that is or may be in the case.” Chavez v.
DaimlerChrysler Corp., 206 F.R.D. 615, 619 (S.D. Ind.
2002) (quoting Oppenheimer Fund, Inc. v. Sanders,
437 U.S. 340, 351, 98 S.Ct. 2380, 2389, 57 L.Ed.2d 253
general rule, “a party lacks standing to quash a
subpoena issued to a nonparty unless the party has a claim of
privilege attached to the information sought or unless it
implicates a party's privacy interests.” Malibu
Media, LLC v. John Does 1-14, 287 F.R.D. 513, 516 (N.D.
Ind. 2012); United States v. Raineri, 670 F.2d 702,
712 (7th Cir. 1982). “The party seeking to quash a
subpoena under Rule 45(d)(3)(A) has the burden of
demonstrating that the information sought is
privileged.” Hodgdon v. Northwestern
University, 245 F.R.D. 337, 341 (N.D. Ill. 2007).
Regardless of how minimal or exceedingly small the interests
are, parties need only have some personal right or privilege
in the information sought to have standing to challenge a
subpoena to a third party. Malibu Media, LLC, 287
F.R.D. at 517. A specific explanation of why the document is
privileged must be shown by the party claiming a privilege,
such that a court can decide whether the party has met its
burden. Allendale Mutual Insurance Company v. Bull Data
Systems, Inc., 152 F.R.D. 132, 137 (N.D. Ill. 1993).
federal court sits in a diversity action, it must apply the
substantive privilege rules of the forum state, so Indiana
law applies here. Federal Rule of Evidence 501; Country
Life Ins. Co. v. St. Paul Surplus Lines Ins. Co., 2005
WL 3690565, *4 (C.D. Ill. Jan. 31, 2005) (where the basis of
federal jurisdiction is diversity, the court is to apply the
state law of attorney client privilege); Lorenz v. Valley
Forge Ins. Co.,815 F.2d 1095, 1097 (7th Cir. 1987)
(applying the state law of privilege to a diversity claim in
federal court). Claims of privilege must be made and
sustained on a question-by-question or document-by-document
basis. Airgas Mid-America, Inc. v. Long, 812 N.E.2d
842, 845 (Ind.Ct.App. 2004); Brown v. Katz, 868
N.E.2d 1159, 1167 (Ind.Ct.App. 2007). Absent an articulation
of specific reasons why the ...