GILBERTSON, Chief Justice
#28555-r-DG APPEAL FROM THE CIRCUIT COURT OF THE FIFTH JUDICIAL CIRCUIT DAY COUNTY, SOUTH DAKOTA THE HONORABLE JON S. FLEMMER Judge LEE SCHOENBECK
JOE ERICKSON of
Schoenbeck Law, P.C.
Watertown, South Dakota Attorneys for plaintiffs and
appellees. MELANIE L. CARPENTER of
Woods, Fuller, Shultz
& Smith, P.C.
Sioux Falls, South Dakota Attorneys for defendant and
appellant. GILBERTSON, Chief Justice [¶1.] Steven and Coralee Krueger filed a complaint against Grinnell Mutual Reinsurance Co. (Grinnell) alleging failure to pay underinsured motorist benefits. The Kruegers served written discovery requests on Grinnell. Grinnell responded but raised several objections. The Kruegers wrote a letter demanding answers to certain discovery requests within a week. Grinnell did not respond, and the Kruegers filed a motion to compel. The circuit court granted the Kruegers' motion in its entirety, finding that Grinnell had sufficient notice of the Kruegers' bad faith claim and thus had intentionally not responded to requests related to a bad faith cause of action. The circuit court also granted the Kruegers' request for attorney fees. We granted Grinnell's request for discretionary appeal. We reverse.
Facts and Procedural History
[¶2.] This case arises from an accident on March 14, 2015. The Kruegers were rear-ended by a vehicle driven by William Akron. Akron's insurance had limits of $50,000 per person. The Kruegers' policy with Grinnell included a $25,000 per person medical payment (med-pay) coverage and underinsured motorist coverage of $250,000 per person or $500,000 per accident. Following the accident, claims for med-pay coverage and vehicle damage were opened. The Kruegers' medical bills were paid as they were incurred. Initially, there was no claim for underinsured motorist coverage. [¶3.] On January 17, 2017, Lee Schoenbeck informed Grinnell he would be representing the Kruegers. On March 31, the Kruegers told Grinnell they reached a settlement agreement against Akron to his policy's limits. They also noted, "We now intend to pursue an underinsured motorist claim against your company." Grinnell continued to pay the Kruegers' medical bills until Steven's med-pay limits were exhausted in May 2017. Coralee's limits were exhausted after the filing of this lawsuit. [¶4.] On July 12, 2017, the Kruegers demanded payment of underinsured motorist benefits, asking Grinnell, "[W]ould it be reasonable to expect that you complete your investigation by August 1, 2017?" The adjuster who had been working on the Kruegers' med-pay file, Pat McCumber, replied on July 13. She informed the Kruegers that Grinnell had opened an underinsured motorist benefits file and that Sheryl Stepanek was the assigned adjuster to that file. [¶5.] On July 27, Stepanek wrote the Kruegers a letter advising them that she had received their demand for underinsured motorist coverage and that she was assigned to the underinsured motorist file to avoid a conflict of interest while the med-pay file was still open. She requested authorization from the Kruegers for McCumber to release documents from the med-pay file to the underinsured motorist file so that she could consider their claim. On August 3, the Kruegers replied, providing the requested authorization. The same day, the Kruegers' counsel signed a summons and complaint against Grinnell. [¶6.] The Kruegers' complaint alleged in pertinent part:
14. Grinnell Mutual has refused to pay the underinsurance benefits owing under the contract, and has not been reasonable in dealing with the Plaintiffs.
15. Grinnell Mutual has breached its contract and duties with respect to Plaintiffs.
16. As a result of Grinnell Mutual's actions, Plaintiffs have been damaged.
17. Grinnell Mutual's refusal to indemnify, particularly because it was done without proper investigation, was without reasonable cause.
18. Grinnell Mutual should be required to pay a sum to Plaintiffs as reasonable attorney's fees for the cost of Plaintiffs pursuing and recovering the amounts owed to them under the Auto Policy.
The prayer for relief requested "a reasonable amount to be determined by a jury, including attorney's fees." [¶7.] The Kruegers served Grinnell discovery requests on September 22, 2017. Grinnell answered on November 22, following an extension. Grinnell objected to many of the Kruegers' requests on the basis that the information sought was "beyond the permissible scope of discovery as provided by
SDCL 15-6-26(b)(1), it [was] unduly burdensome and overly broad and vague, and it [was] not reasonably calculated to lead to the discovery of admissible evidence." Grinnell made additional objections based on attorney-client privilege and the work-product doctrine. [¶8.] On January 17, 2018, the Kruegers sent a letter to Grinnell's counsel demanding answers to certain interrogatories and requests for production. The Kruegers demanded that Grinnell "make a good faith effort to answer each of these questions by January 24, 2018." They stated that if Grinnell did not respond by January 24, they would "schedule a motion to compel." [¶9.] There was no further contact between the parties until the Kruegers filed a motion to compel on January 25, 2018. The following day, Grinnell sent a
Kruegers' demand letter, with the caveat that "personnel files . . . shall be produced pursuant to this protection order that the materials shall be maintained as confidential in this litigation[.]" The court further ordered that Grinnell pay the Kruegers' counsel $2,200.00 in attorney fees. Grinnell filed a petition for permission to take discretionary appeal that we granted on April 3, 2018 and stayed further proceedings. Grinnell raises two issues in this appeal, which we have rephrased and address in the following order:
1. What level of specificity is a party required to plead to allow the proper scope of discovery to be determined by the litigants and the court?
2. Whether one letter from plaintiff stating that defendant must answer written discovery requests satisfies the requirements of SDCL 15-6-37(a)(2) that a party must confer in good faith before filing a motion to compel.
Standard of Review
[¶12.] "A circuit court discovery sanction under SDCL 15-6-37 is reviewed under an abuse of discretion standard." Pearson v. O'Neal-Letcher, 2007 S.D. 92, ¶ 10, 738 N.W.2d 914, 917. Abuse of discretion "is a fundamental error of judgment, a choice outside the range of permissible choices, a decision, which, on full consideration, is arbitrary or unreasonable." Thurman v. CUNA Mut. Ins. Soc'y, 2013 S.D. 63, ¶ 11, 836 N.W.2d 611, 616 (quoting State v. Lemler, 2009 S.D. 86, ¶ 40, 774 N.W.2d 272, 286). "SDCL 15-6-37 gives the trial judge broad latitude in penalizing the party who has failed to comply with discovery orders, however such latitude is not limitless." Pearson, 2007 S.D. 92, ¶ 10, 738 N.W.2d at 917 (quoting Haberer v. Radio Shack, 1996 S.D. 130, ¶ 16, 555 N.W.2d 606, 610).
Analysis and Decision
1. What level of specificity is a party required to plead to allow the proper scope of discovery to be determined by the litigants and the court? [¶13.] We assume without deciding for purposes of this appeal that the allegation of bad faith was adequately raised and decline to address Issue 1 further, finding Issue 2 to be dispositive of the outcome of this case.
2. Whether one letter from plaintiff stating that defendant must answer written discovery requests satisfies the requirements of SDCL 15-6-37(a)(2) that a party must confer in good faith before filing a motion to compel. [¶14.] Under SDCL 15-6-37(a), also referred to as Rule 37(a), "the discovering party may move for an order compelling an answer" if a party fails to respond to a discovery request. "The motion must include a certification that the movant has in good faith conferred or attempted to confer with the person or party failing to make the discovery in an effort to secure the information or material without court action." SDCL 15-6-37(a)(2) (emphasis added). If the court grants the motion, the court shall order the party resisting discovery pay "the reasonable expenses incurred in obtaining the order, including attorneys' fees, unless the court finds that the motion was filed without the movant's first making a good faith effort to obtain the disclosure or discovery without court action, or that the party's nondisclosure, response or objection was substantially justified[.]" SDCL 15-6-37(a)(4)(A) (emphasis added). [¶15.] Grinnell argues that by merely sending one letter, "[t]he Kruegers' counsel failed to meet and confer in good faith as required by the rule, which is justification for both outright denial of the motion to compel as well as a denial of [¶17.] Courts addressing this issue have found that in instances where there is a genuine dispute about the discoverability of the information sought or the adequacy of the answers, one letter does not fulfill the meet and confer requirement. "A single letter between counsel which addresses the discovery dispute . . . does not satisfy the duty to confer." Williams v. Bd. of Cty. Comm'rs of Unified Gov't of Wyandotte Cty., 192 F.R.D. 698, 700 (D. Kan. 2000). This is because mailing a letter to opposing counsel does not meet the requirement that counsel converse and deliberate. Id. See also Hays v. Adam, 512 F. Supp. 2d 1330, 1334 (N.D. Ga. 2007) ("This single letter does not constitute a sufficient effort to resolve the issue outside of court pursuant to Rule 37(a)[.]"). [¶18.] Even if more than one letter is sent, courts still examine the quality of the efforts to confer put forth by the moving party. Wilson v. Aargon Agency, Inc., 262 F.R.D. 561, 564 (D. Nev. 2010). In Wilson, the court observed:
Two back to back letters stating merely that Wilson's responses were 'wholly inadequate' do not stand in as a 'personal consultation and sincere effort . . . to resolve the matter without court action' . . . . The meet and confer requirement is not merely a formalistic prerequisite to discovery disputes and cannot be met by simply showing that the discovery in question was requested more than once.
Id. (internal citations omitted). The court emphasized that parties at an informal conference "must present to each other the merits of their respective positions with the same specificity with which they would brief the discovery dispute."
Id. [¶19.] The amount of effort a moving party must expend to meet and confer "is different in different circumstances, and may vary with the prospects for success."
Clement, 99 Cal. Rptr. 3d at 804. A court, through its broad discretion
should consider the requirements listed above for the movant's certification of good faith efforts to resolve the dispute without judicial intervention. If the court finds that the moving party has failed to meet and confer in good faith, that finding serves as a basis for denying the motion to compel. Alternatively, there may be other grounds for granting the motion to compel despite a lack of good faith efforts, such as "temporal exigencies requir[ing] speedy action" or "when the goal of encouraging compromise is unlikely to be achieved."
See Moore,
supra § 37.05[4], at 37-29. In these cases, the court should look to the provisions of
SDCL 15-6-37(a)(4)(A) and not grant attorney fees if "the court finds that the motion was filed without the movant's first making a good faith effort to obtain the disclosure . . . or that the opposing party's nondisclosure . . . was substantially justified or that other circumstances make an award of expenses unjust."
Conclusion
[¶28.] We reverse because the circuit court abused its discretion when it granted the Kruegers' motion to compel and awarded the Kruegers' attorney fees. [¶29.] KERN, JENSEN and SALTER, Justices, concur.