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Senior Lifestyle Corporation v. Key Benefit Administrators, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

September 20, 2019

SENIOR LIFESTYLE CORPORATION, Plaintiff,
v.
KEY BENEFIT ADMINISTRATORS, INC., Defendant.

          ORDER ON PLAINTIFF’S MOTION TO COMPEL

          MARK J. DINSMORE UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on Plaintiff’s Motion to Compel Production or Identification of Documents and for Leave to Take Limited Testimony on Same [Dkt. 258.] For the reasons set forth below, the Court DENIES the motion.

         I. Allegations in the Complaint

         As relevant to the instant motion, Plaintiff Senior Lifestyle Corporation (“SLC”) alleges the following facts in its Complaint. [Dkt. 1.] SLC entered into an Administrative Services Agreement (“ASA”) with Defendant Key Benefit Administrators, Inc., (“KBA”) in 2015, pursuant to which KBA was to administer SLC’s employee benefit plan. One of the provisions of the ASA required KBA to “[c]oordinate the purchase of stop-loss insurance coverage and provide stop loss claim administration” for SLC. [Dkt. 1-1 at 4.] KBA procured stop-loss coverage for SLC and KBA was responsible for making monthly payments to the stop-loss carrier. [Dkt. 1 at 4.] On November 6, 2015, SLC “learned that its stop-loss coverage had been cancelled due to KBA’s failure to pay owed premiums to the stop-loss carrier.” Id.

KBA claimed it ceased making stop-loss payments, because SLC had allegedly failed to make sufficient payments to KBA. On the same day that SLC’s stop-loss insurance coverage was cancelled, KBA notified 44 other employers that their stop-loss coverage been cancelled. As with SLC, KBA had stopped making payments on their behalf to the stop-loss carrier. . . . [P]rior to the cancellation of stop-loss coverage, KBA never informed SLC that any of SLC’s payments to KBA were deficient.

Id. Due to KBA’s failure to pay the premiums due under the stop-loss policy, SLC lost reimbursement of up to one million dollars from the policy. Id. at 5. SLC asserts claims for breach of fiduciary duty under ERISA and breach of contract.

         II. History of Discovery

         Because the instant motion relates to SLC’s desire to obtain additional discovery from KBA, a review of the history of discovery in this case as it relates to KBA’s discovery responses is in order.[1]

         The original deadline for non-expert witness discovery and discovery relating to liability issues in this case was May 18, 2018. [Dkt. 43 at 5.] On April 27, 2018, the parties filed a joint motion to extend that and other deadlines in this case by ninety days. [Dkt. 72.] This motion was based primarily on the fact that, on April 11, 2018, KBA had produced a spreadsheet consisting of 60 rows of information relating to all claims (over 32, 000) received and processed by KBA during the time period relevant to this lawsuit. Id. The parties were in the process of obtaining the information that SLC would need to understand the various codes used in the spreadsheet. Id. SLC would then need time to review the information in the spreadsheet and it did not want to take the depositions of certain KBA witnesses until after it had a complete understanding of the spreadsheet. Id.

         In ruling on the joint motion to extend deadlines, the Court noted that the original case management plan had allowed 282 days for the completion of liability discovery and “the parties’ motion is devoid of any explanation regarding why that time was insufficient for the parties to complete liability discovery.” [Dkt. 73 at 1.] Although the Court “remain[ed] unconvinced that the parties ha[d] diligently prosecuted discovery in this matter, or that any enlargement [was] appropriate, ” the Court granted the joint motion in part and extended the deadline for non-expert witness discovery and discovery relating to liability issues to August 10, 2018, and the deadline for expert witness discovery and discovery relating to damages to January 18, 2019. Id. at 1-2. This necessitated moving the trial in this case from February 4, 2019, to June 17, 2019. See [Dkt. 78].

         In conjunction with extending the deadlines, the Court ordered the parties to submit regular joint reports on the status of discovery. [Dkt. 75.] In the first such report, which was filed on May 8, 2018, the parties noted that KBA was in the process of supplementing its document production in response to a deficiency letter sent by SLC. [Dkt. 76.] At a May 10, 2018, discovery conference, the Court required Defendant to “file a report with the Court confirming the supplementation of its interrogatory responses, and either confirming the completion of its supplemental document production or providing a date certain by which that supplemental document production will be complete.” [Dkt. 79.] That report was filed on May 18, 2018, and read as follows:

Pursuant to the Court’s Minute Entry [ECF No. 79], dated May 11, 2018, Defendant Key Benefit Administrators, Inc. (“KBA”) submits this report on the status of its responses to Plaintiff Senior Lifestyle Corporation’s (“SLC”) discovery requests. As agreed at the parties’ May 10, 2018 discovery conference, KBA has supplemented its responses to SLC’s interrogatories, numbers 4, 12, 15 and 18. KBA has also assembled additional responsive documents that it will produce to SLC the week of May 21, 2018 (and hopefully on May 21, 2018). In addition, in response to questions from SLC about the scope of KBA’s document searches, KBA is in the process of performing additional searches to confirm the completeness of its search efforts. If these searches identify additional responsive, non-privileged documents, KBA will produce those documents by no later than June 1, 2018.

[Dkt. 81.] On June 5, 2018, the parties reported that KBA’s supplemental production was still ongoing. SLC reported:

While SLC served its discovery requests on September 26, 2017, it has learned from the parties’ May 17, 2018 and May 24, 2018 meet and confer telephone conferences regarding KBA’s electronically stored information (“ESI”) searching and production, that KBA had not searched its custodians’ back-up files and could not say for certain whether it had identified all documents responsive to SLC’s requests. Accordingly, KBA informed SLC that it would be performing a search of its custodians’ accounts using search terms that were agreed upon by the parties. On June 1, 2018, KBA informed SLC that the initial search was complete, and that counsel’s review of the documents would begin “shortly, ” and that counsel expected to complete its review and production by July 1, 2018. To date, KBA is unaware as to how many documents were returned in the initial search, but the search returned approximately 61 GB of data.

[Dkt. 85 at 4.] In fact, approximately 98, 000 documents were generated by KBA’s follow-up search. KBA segregated over 80, 000 of those documents as “non-responsive and/or properly withheld under the Federal Rules of Civil Procedure.” The remaining documents were produced by KBA on a rolling basis. [Dkt. 90.]

         In light of this ongoing discovery, on July 5, 2018, the parties filed a second joint motion to extend the remaining case management deadlines. [Dkt. 90.] This time, the parties asked to bump back the deadlines by 60 days but not to move the trial date. That motion was granted in part, and the deadline for non-expert witness discovery and discovery relating to liability issues was extended to September 7, 2018. [Dkt. 92.]

         On July 17, 2018, the Court held a telephonic discovery conference “at the parties’ request to discuss issues relating to the production of electronically stored information by Defendant.” [Dkt. 100.] As a result of that conference, “Plaintiff was authorized to file a motion to compel with regard to the issues discussed if the parties are unable to resolve the dispute based upon the guidance provided by the Court.” Id.

         On August 2, 2018, the parties filed a Joint Motion for Entry of Attorneys’ Eyes Only Protective Order. [Dkt. 101] In that motion, the parties noted that the protective order they sought was developed “[b]ased on guidance provided by the Court at a July 17, 2018 Telephonic Discovery Hearing, and pursuant to an agreement between the parties reached subsequent to that hearing.” Id. The parties described their agreement and the process leading to it as follows:

Key Benefits Administrators, Inc. (“KBA”) processed approximately 98, 000 documents collected from KBA’s employees’ mailboxes that either contain, or are attached to a document that contains, at least one of the following search terms: “SLC”, “Senior Lifestyle”, and/or “MTA 11070”. During the attorney review of those documents, KBA’s counsel identified approximately 85, 000 non-privileged documents that it believes to be non-responsive and/or properly withheld under the Federal Rules of Civil Procedure based upon the use of supplemental search terms and/or attorney review (“Excluded Documents”). KBA has not produced the Excluded Documents.
Based on guidance provided by the Court at a July 17, 2018, Telephonic Discovery Hearing, and pursuant to an agreement between the parties reached subsequent to that hearing, KBA’s counsel will produce to SLC’s counsel the extracted text of all non-privileged Excluded Documents under an “ATTORNEYS’ EYES ONLY” designation (“AEO Production Documents”).
These documents will be produced by KBA no later than two (2) business days after the Effective Date of this Order. In addition, no later than two (2) business days after the Effective Date of this Order, KBA will produce to SLC all of the “search terms” it used to identify and segregate the Excluded Documents, as well as all of the agreed upon metadata for the Excluded Documents. In exchange, SLC shall cause-no later than seven (7) business ...

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