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Grimsley v. Manitowoc Co., Inc.

United States District Court, M.D. Pennsylvania

July 13, 2017

CRYSTAL GRIMSLEY, Individually and as Administratrix of THE ESTATE OF RICKIE L. GRIMSLEY, Plaintiff
THE MANITOWOC COMPANY, INC., et al., Defendants


          William W. Caldwell United States District Judge

         I. Introduction

         Before this court is a motion by Defendant Grove U.S. L.L.C. (“Grove”) to obtain a protective order or to quash a third-party subpoena directed to its purported workers' compensation insurance carrier, Sentry Insurance Company (“Sentry”). (Doc. 41). The subpoena seeks production of documents from Sentry's workers' compensation claim file, which pertains to a crane accident resulting in the death of Plaintiff Crystal Grimsley's late husband, decedent Rickie L. Grimsley. (Doc.44-1 at 4). Grove argues that it has standing to file this motion because it is insured by Sentry and has an interest in the subject matter of the subpoena, and that Sentry's workers' compensation file may contain documents protected by attorney-client privilege or the work product doctrine. (Doc. 42 at 7-11). Grove contends that documents from the workers' compensation claim file should first be screened by its lawyers so that Grove may withhold and identify in a privilege log any potentially privileged documents. Because Grove has not met its respective burdens to establish standing or to assert privilege over unspecified documents in Sentry's claim file, we will deny its motion.

         II. Background

         On June 29, 2015, Plaintiff, individually and as executrix of decedent's estate, filed a complaint in this court against Defendants The Manitowoc Company, Inc. (“Manitowoc”), Manitowoc Crane Companies, LLC (“MCC”), Manitowoc Cranes, LLC (“Manitowoc Cranes”), Grove, and Kyle Mellott (“Mellott”).[1] (Doc. 1). According to the complaint, the Corporate Defendants form a chain of ownership: Grove is owned by Manitowoc Cranes, which is owned by MCC, which is owned by Manitowoc; in other words, Grove, Manitowoc Cranes, and MCC are, directly or indirectly, wholly owned subsidiaries of Manitowoc. (See id. ¶¶ 29-36). The complaint brings negligence, wrongful death, and survival claims against all Defendants, as well as strict liability claims against the Corporate Defendants. (Id. ¶¶ 68-90).

         This lawsuit arises from a crane accident on August 29, 2013, which resulted in decedent's death (“Incident”). (See id. ¶ 1). The complaint alleges that at around 2:40 p.m. that day, decedent was working as a heavy-equipment mechanic and acting as a yard signalman at a Manitowoc crane manufacturing facility in Shady Grove, Pennsylvania (“Facility”) when a crane driven by Mellott, who was not licensed to operate cranes, was being moved to an open lot on the Facility and turned too sharply, striking and killing decedent as a result of being crushed between the moving crane and another parked crane. (See id. ¶¶ 1, 9, 51-64). Decedent was fifty-nine years old and had worked at the Facility for more than twenty-five years. (Id. ¶ 9). As alleged in the complaint, the record owner of the Facility's property was Grove, but the Facility bore Manitowoc's name and was “held out to the public” as one of Manitowoc's regional headquarters. (Id. ¶¶ 9, 19, 23-26). The complaint does not contain allegations as to decedent's employer, but alleges that Mellott was employed by Manitowoc. (Id. ¶ 41-43).

         On September 8, 2015, Defendants moved to dismiss the complaint, arguing that they were immune from suit under various provisions of Pennsylvania's Workers' Compensation Act (“PWCA”), see 77 P.S. §§ 72, 481(a). (Docs. 8 & 10). On October 29, 2015, we granted each of Defendants' motions and dismissed the complaint in its entirety. (Doc. 17). First, we dismissed the complaint as to Grove, finding that it was entitled to immunity under PWCA § 481(a) because “the allegations in the complaint suggest that Grove was [decedent]'s employer at the time of the [I]ncident.” (Doc. 16 at 7). Second, we perceived language in the complaint highlighting the Manitowoc Defendants' dominion and control over Grove as an allegation that the Manitowoc Defendants and Grove were a single entity; therefore, we interpreted the complaint as an attempt to pierce the corporate veil under an alter-ego theory against the Manitowoc Defendants and dismissed the complaint as to those Defendants, surmising that, under the circumstances, the Pennsylvania Supreme Court would grant immunity to each Manitowoc Defendant because they qualified as an “employer, ” along with Grove, under § 481(a). (Id. at 7-10). Finally, we dismissed the complaint as to Mellott, finding that he was immune from suit under PWCA § 72 because he and decedent were “fellow employees.” (Id. at 12).

         On November 19, 2015, Plaintiff filed a motion for reconsideration, arguing that this court erred by finding Grove was decedent's employer; by reading into the complaint an alter-ego theory that was not pleaded; and by treating the Corporate Defendants as a single entity that was entitled to immunity under PWCA. (Docs. 18 & 19). On January 4, 2016, we denied Plaintiff's motion, finding that, even if we committed error in concluding that Grove was decedent's employer, our conclusions as to Defendants' immunity “required the same result given that neither the allegations in the complaint nor Plaintiff's arguments reasonably suggested that an entity other than the named Corporate Defendants employed [decedent] at the [F]acility.” (Doc 22 at 3). We found dismissal of the complaint without leave to amend proper “because no matter how the case was pleaded . . . [Defendants] would be cloaked with immunity.” (Id.) On January 27, 2016, Plaintiffs appealed our decisions to the Third Circuit. (Doc. 23).

         On January 10, 2017, the Third Circuit reversed our decision granting Defendants' motions to dismiss, reinstated the complaint as to all Defendants, and remanded for further proceedings. Grimsley v. Manitowoc Co., Inc., 675 F.App'x 118, 119 (3d Cir. 2017). First, the panel reversed our determination that Grove was decedent's employer, finding that “[e]ven if select facts ‘suggest that Grove was [decedent's] employer at the time of the [I]ncident, ' those facts do not establish that Grove is subject to dismissal as a matter of law.” Id. at 121. Next, because we “erred in according immunity to Grove, ” the panel also held that it was error for us to extend that immunity to the Manitowoc Defendants, and to find Mellott to be decedent's co-employee. See id. & n.4. Finally, “to clarify the nature of the claims that remain, ” the panel added that “[a] fair reading of the [c]omplaint discloses that [P]laintiff sued the Manitowoc [Defendants] on a direct participation theory, ” and that we therefore “incorrectly characterized plaintiff's claims” as attempting to pierce the corporate veil. Id. at 121-22. To the extent the complaint alleged that the Manitowoc Defendants exercised dominion and control over Grove, the panel stated that Plaintiff is master of her complaint, has “repeatedly insisted” that she will not pursue alter-ego liability, and “should simply be estopped from making a veil-piercing argument in any further proceeding.” Id. at 122.

         Defendants filed their answers to the complaint on March 2, 2017. (Docs. 35 & 36). In their answer, the Manitowoc Defendants denied being Mellott's or decedent's employer on the day of the Incident. (Doc. 36 ¶ 25). In a separate answer, Grove admitted that it was Mellott's and decedent's employer[2] and that Mellott was driving a crane without a crane operator's license, but denied that Mellott was required to carry such a license while driving-as opposed to “operating”-a crane. (Doc. 35 ¶¶ 25, 35, 41, 53). Grove also denied that Manitowoc controlled any manner or method of work done at the Facility, and averred that decedent “put himself in the blind spot of the crane being driven by [Mellott] . . . and despite being told by another employee to move, unfortunately failed to do same, and was struck by the crane.” (Id. at ¶¶ 39, 56).

         This case proceeded to discovery and, on April 20, 2017, Plaintiff noticed Defendants of her intent to serve third-party subpoenas on various entities pursuant to Federal Rule of Civil Procedure 45. (Doc. 42-2 at 2). One of the subpoenas was directed to Sentry and requested that Sentry produce “any and all documents, including correspondence with the insured relating to” Sentry's workers' compensation claim file and its third-party liability insurance claim file. (Id. at 4). The subpoena did not identify who the “insured” was for each claim file, but identified the claim number and date of the Incident attached to each claim. (Id.)

         On April 24, 2017, upon receiving the third-party subpoena, Defendants' counsel, who represents all Defendants in this action, expressed his intent to file a motion for a protective order on Grove's behalf. (Doc. 42-3). Alternatively, Defendants' counsel proposed that Plaintiff allow Sentry to produce each claim file to him to be screened for documents potentially protected by attorney-client privilege or the work product doctrine, and then have Defendants' counsel produce any discoverable documents to Plaintiff along with a privilege log. (See Doc. 42 at 3). On May 1, 2017, Plaintiff's counsel agreed to Defendants' proposal as to Sentry's third-party liability insurance claim file, believing Grove to be insured by Sentry with respect to that claim, but did not agree with respect to Sentry's worker's compensation claim file, arguing that Sentry's workers' compensation coverage “is wholly separate from” any third-party liability coverage that Sentry provides for Grove. (Doc. 42-4). Plaintiff sent Defendants a modified third-party subpoena requesting that Sentry produce all documents, including correspondence with Sentry's insured, relating only to Sentry's workers' compensation claim file. (Doc. 42-5).

         On May 2, 2017, a case management conference was held with the parties, during which this court was notified of the discovery dispute. On May 9, 2017, Grove filed the instant motion under Federal Rules of Civil Procedure 26(c) and 45(d)(3) for a protective order or to quash the modified third-party subpoena to Sentry regarding documents in Sentry's workers' compensation claim file. (Doc. 41). In its motion, Grove argues that it is insured by Sentry for workers' compensation and that Sentry's claim file may contain documents protected by attorney-client privilege or the work product doctrine. (Doc. 42 at 7-11). Plaintiff argues that Grove does not have standing to challenge the third-party subpoena because Manitowoc is Sentry's “insured” for workers' compensation coverage. (Doc. 44 at 18-20). Plaintiff contends that Grove conflates third-party liability insurance coverage it has been provided by Sentry “with the wholly separate workers' compensation insurance coverage provided by Sentry . . . to [Manitowoc].” (Id. at 21).

         III. Discussion

         Federal Rule of Civil Procedure 45 “establishes the rules for discovery directed to individuals and entities that are not parties to the underlying lawsuit.” First Sealord Sur. v. Durkin & Devries Ins. Agency, 918 F.Supp.2d 362, 382 (E.D. Pa. 2013). “A subpoena under Rule 45 ‘must fall within the scope of proper discovery under [Federal Rule of Civil Procedure] 26(b)(1).'” Id. (quoting OMS Invs., Inc. v. Lebanon Seaboard Corp., No. 08-2681, 2008 WL 4952445, at *2 (D.N.J. Nov. 18, 2008)). Under Rule 45, it is within the sound discretion of district courts to “ensure compliance with subpoenas, while avoiding unfair prejudice to persons who are the subject of a subpoena's commands.” Audi of Am., Inc. v. Bronsberg & Hughes Pontiac, Inc., No. 3:16-CV-2470, 2017 WL 2212505, at *1 (M.D. Pa. May 17, 2017).

         Here, Plaintiff seeks to issue a third-party subpoena to Sentry requesting production of its workers' compensation claim file related to the Incident. (Doc. 44-1 at 4). The parties do not appear to contest that information in the claim file falls within the proper scope of discovery pursuant to Rule 26(b)(1). (Docs. 41 ¶¶ 11-12 & 44 at 8). However, Grove moves to obtain a protective order or quash the third-party subpoena, claiming that it is insured by Sentry for workers' compensation and holds a personal right or privilege over unspecified documents in the claim file. (Doc. 42 at 7-11). The instant motion thus boils down to (1) who is “insured” by Sentry for workers' compensation pursuant to Plaintiff's third-party subpoena; and (2) whether an insured party to litigation has standing to obtain a protective order or quash a third-party subpoena directed to its purported workers' compensation insurance carrier by asserting claims of attorney-client privilege or work product over unspecified documents in its insurer's claim file. Because Grove fails to supply sufficient information to answer these questions, we will deny its motion.

         Federal Rule of Civil Procedure 45(d)(3)(A) requires a court, upon motion, to quash or modify a subpoena that, among other things, “requires disclosure of privileged or other protected matter, if no exception or waiver applies.” Fed.R.Civ.P. 45(d)(3)(A). The party moving to quash such a subpoena “bears a ‘heavy burden' of demonstrating that an enumerated basis for quashing the subpoena exists.” Malibu Media, LLC v. Doe, No. 4:15-CV-2281, 2016 WL 524248, at *2 (M.D. Pa. Feb. 10, 2016).

         In the alternative to a motion to quash a third-party subpoena under Rule 45, a party may also seek a protective order over certain discovery requests pursuant to Federal Rule of Civil Procedure 26(c). See Mun. Revenue Servs., Inc. v. Xspand, Inc., No. 07-42, 2007 WL 1875793, at * 1 (E.D. Pa. June 27, 2007) (“[A]nalysis of Rule 45([d])(3)(A) motions is similar to analysis of Federal Rule of Civil Procedure 26(c) motions for a protective order.”). In pertinent part, Rule 26(c)(1) provides:

A party or any person from whom discovery is sought may move for a protective order . . . . The motion must include a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action. The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following:
(A) forbidding the disclosure or discovery;
. . .
(D) forbidding inquiry into certain matters, or limiting the scope of disclosure or discovery to ...

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