United States District Court, E.D. Michigan, Northern Division
ORDER GRANTING MOTION TO COMPEL
L. LUDINGTON, UNITED STATES DISTRICT JUDGE.
heavy snowfall, the roof of a Saginaw, Michigan, shopping
center owned by Gratiot Center, LLC, partially collapsed.
Gratiot Center then contracted with Star Construction and
Restoration, LLC, to perform repairs. On June 27, 2016, Star
Construction filed a Complaint against Gratiot Center and a
party later identified as Mountain Asset Management Group,
LLC, which allegedly entered into the repair contracts with
Star Construction. Compl, ECF No. 1, Case No. 1: 16-cv-12413.
On November 23, 2016, Gratiot Center filed a Complaint
against Lexington Insurance Company, Chubb Insurance, Liberty
Mutual Fire Insurance Company, QBE Insurance, and Ace
American Insurance. Compl.. ECF No. 1, Case No.
1:16-cv-14144. In the present suit, Gratiot Center is
asserting a breach of contract claim against Defendants for
refusing to pay $636, 139.27 in losses arising out of the
roof collapse. Am. Compl. at 5, ECF No. 21. Gratiot Center
explains that it “has suffered damages in the amount of
$636.139.27, which is the amount claimed by Star Construction
[in the related case].” Id. at 6. Gratiot
Center also asserts $70, 038.52 in expenses related to
Defendants' denial of coverage and $75, 975.45 in legal
fees across the two actions. Id. at 7. On February 1,
2017, Gratiot Center filed a motion to consolidate the two
cases, which was denied. ECF No. 32. Subsequently, the Court
issued a scheduling order in Gratiot Center v. Lexington
Insurance Company, et al. ECF No. 29.
Construction v. Gratiot Center, LLC, et al, has been
dismissed pursuant to a stipulated order of dismissal. Case
No. 1: 16-cv-12413, ECF No. 40. As part of the agreement
leading to dismissal, Star Construction's counsel agreed
to represent Gratiot Center in the related litigation. That
substitution of counsel has occurred.
Defendants have moved for an order compelling Gratiot Center
to produce the settlement agreement and joint prosecution
agreement it entered into with Star Construction. ECF No. 38.
Gratiot Center is refusing to produce the agreements,
contending that they are irrelevant. Defendants argue that
“the documents are relevant because this suit must be
prosecuted by the Real Party in Interest.” Mot. Compel
at 4. Defendants further contend that “Gratiot Center
is no longer the Real Party in Interest to this suit if it
has assigned its rights under the insurance policies to Star
Construction.” Id. Additionally, “each
of the policies issued to Gratiot Center contain clauses
barring the insured from transferring its rights under the
policies and The Insurers cannot evaluate whether the terms
of the policies have been breached without reviewing all the
settlement documents.” Id. at 4.
Center disputes the relevance of the settlement agreements,
but offers to provide the documents at issue to the Court for
in camera review. Specifically, Gratiot Center
contends that, even if it entered into an agreement to pay
policy proceeds to Star Construction, it remains the real
party in interest. Second, Gratiot Center alleges that even
if an assignment has occurred, the anti-assignment provisions
in the policies are unenforceable in this instance:
“assignments of post-loss claims cannot be prohibited
by such clauses.” Pl. Resp. Br. at 8, ECF No.
to Federal Rule of Civil Procedure 26(b),
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, considering the
importance of the issues at stake in the action, the amount
in controversy, 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
standard “has been construed broadly to encompass any
matter that bears on, or that reasonably could lead to other
matter that could bear on, any issue that is or may be in the
case.” Oppenheimer Fund, Inc. v. Sanders, 437
U.S. 340, 351 (1978). Thus, “[t]he Federal Rules of
Civil Procedure authorize extremely broad discovery.”
Guinn v. Mount Carmel Health Sys., No. 2:09-CV-0226,
2010 WL 2927254, at *3 (S.D. Ohio July 23, 2010) (citing
United States v. Leggett & Platt, Inc., 542 F.2d 655 (6th
Cir.1976)). The information sought “need not be
admissible in evidence to be discoverable.” Rule 26(b).
Center argues that the agreements between it and Star
Construction are “not relevant to any issue in this
action.” Resp. Mot. Compel at 3, ECF No. 39. In their
motion to compel, Defendants argue that the documents are
relevant for two reasons: because the agreements might reveal
that Gratiot Center is not the real party in interest and
because the insurance policies issued by Defendants contain
an anti-transfer provision. Gratiot Center argues that
neither argument is even facially cognizable in this suit.
speaking, the underlying merits of claims and affirmative
defenses should not be litigated via a motion to compel.
See State Farm Mut. Auto. Ins. Co. v. Universal Rehab
Servs., Inc., No. 15-10993, 2016 WL 5369610, at *2 (E.D.
Mich. Sept. 26, 2016) (“Universal's arguments that
State Farm cannot meet its burden of proof are better left
for a motion on the merits, not a motion to compel.”);
Strategic Mktg. & Research Team, Inc. v. Auto Data
Sols., Inc., No. 2:15-CV-12695, 2017 WL 1196361, at *4
(E.D. Mich. Mar. 31, 2017) (“The factual basis of
ADS's claims is properly addressed at summary judgment,
and ‘has no bearing on whether the discovery Plaintiffs
seek is relevant, particularly viewed in light of a
party's broad rights to discovery under Rule
26.'”) (quoting Scooter Store, Inc. v.
Spinlife.com, LLC, No. 2:10-CV-18, 2011 WL 2160462, at
*2 (S.D. Ohio June 1, 2011) (similar)). After all, the scope
of discovery is not limited to “admissible”
evidence or evidence supporting meritorious arguments.
Rather, Defendants are entitled to discovery of “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.” Oppenheimer Fund, Inc. v, 437 U.S.
at 351. Nevertheless, if the discovery which Defendants seek
is only potentially relevant to a claim that could not be
reasonably advanced given the procedural and factual
setting of ...