McDivitt v. Geico
1 CA-CV 15-0732
| Ariz. Ct. App. | Feb 16, 2017Background
- On January 2, 2013 Plaintiffs’ 2003 Chevrolet Silverado was totaled; GEICO valued the loss using a CCC One market valuation report and paid Plaintiffs after a deductible and salvage offset. Plaintiffs sued GEICO (breach of contract; bad faith) in June 2013.
- Plaintiffs served an extensive Rule 30(b)(6) notice seeking CCC formulas, calculations, contract information, inspection guidelines, and related matters; GEICO designated Martin Crowell as its corporate witness but repeatedly advised many topics concerned proprietary CCC information a non-party would need to provide.
- Crowell was deposed in March 2015 and could answer some general questions about CCC usage but could not and did not testify to CCC’s proprietary algorithms or detailed calculations. Plaintiffs did not seek discovery directly from CCC.
- Plaintiffs moved to compel further Rule 30(b)(6) testimony, sought sanctions, and requested an extension of discovery; GEICO moved for summary judgment. Plaintiffs filed a Rule 56(f) request but failed to comply with the rule’s affidavit/certification requirements or explain delay.
- The superior court denied Plaintiffs’ motion to compel and Rule 56(f) relief, granted GEICO’s summary judgment (Plaintiffs did not timely respond), and later awarded GEICO reduced attorneys’ fees ($16,500 of $138,691 requested). Both parties appealed; the court of appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GEICO violated discovery obligations by producing an inadequate Rule 30(b)(6) witness and thus should be sanctioned / discovery extended | GEICO produced a “warm body” after discovery cutoff and Plaintiffs lacked CCC information essential to their case | GEICO argued it warned Plaintiffs many topics concerned proprietary CCC materials and a CCC representative (non-party) would be required; GEICO produced a witness who could testify about GEICO’s use of CCC where reasonably available | Court held GEICO did not abuse discovery obligations; Plaintiffs should have sought discovery from CCC and were not sandbagged; no abuse of discretion in denying motion to compel, sanctions, or extension |
| Whether Plaintiffs’ Rule 56(f) request required deferral of summary judgment to allow additional discovery | Plaintiffs said they lacked essential evidence about CCC methodology and GEICO–CCC contract and needed time to obtain it | GEICO pointed to Plaintiffs’ lack of diligence, failure to comply with Rule 56(f) requirements, and prior notice that CCC would be the source for proprietary information | Court held denial of Rule 56(f) relief was within discretion given Plaintiffs’ lack of diligence and failure to follow Rule 56(f) procedural requirements |
| Whether summary judgment for GEICO was improper when Plaintiffs did not timely respond | Plaintiffs contended additional discovery and unexplored factual issues could defeat summary judgment | GEICO argued the uncontroverted evidentiary record supported judgment and Plaintiffs failed to present competent contrary evidence or timely response | Court affirmed summary judgment: court considered the record before it and found no genuine material factual dispute; Plaintiffs’ failure to timely and properly oppose was fatal |
| Whether the superior court abused discretion in awarding reduced attorneys’ fees to GEICO under A.R.S. § 12-341.01 | Plaintiffs argued no fees should be awarded | GEICO argued for full requested fees ($138,691) | Court upheld reduced award ($16,500) as within discretion: rates reasonable but court permissibly reduced award based on hardship to Plaintiffs and public-policy considerations regarding chilling litigation |
Key Cases Cited
- Marquez v. Ortega, 231 Ariz. 437 (App. 2013) (trial court has broad discretion in discovery rulings)
- Tilley v. Delci, 220 Ariz. 233 (App. 2009) (standard for abuse of discretion)
- Gulf Homes, Inc. v. Beron, 141 Ariz. 624 (1984) (sanctions where Rule 30(b)(6) designee repeatedly failed to answer basic company questions)
- Groat v. Equity Am. Ins. Co., 180 Ariz. 342 (App. 1994) (providing an uninformed ‘‘warm body’’ for Rule 30(b)(6) may justify sanctions)
- Grand v. Nacchio, 214 Ariz. 9 (App. 2006) (review standard for denial of Rule 56(f) relief)
- Choisser v. State ex rel. Herman, 12 Ariz. App. 259 (1970) (failure to respond to summary judgment may allow court to deem movant’s evidence uncontroverted)
- GM Dev. Corp. v. Cmty. Am. Mortg. Corp., 165 Ariz. 1 (App. 1990) (unsworn assertions of counsel are not competent evidence to oppose summary judgment)
- Lee v. ING Inv. Mgmt., LLC, 240 Ariz. 158 (2016) (discretion to deny appellate fee awards when both appeal and cross-appeal are unsuccessful)