The opinion of the court was delivered by: Magistrate Judge Norah McCann King
This is a diversity action, removed to this Court, in which Bank One ("plaintiff or Bank One") seeks recovery in connection with the alleged breach by defendants, Echo Acceptance Corporation ("EAC") and EchoStar Communications Corporation (collectively "defendants") of an indemnification agreement and a guaranty in connection with the resolution of certain litigation. This matter is before the Court on the Motion of Plaintiff Bank One to Compel Discovery ("Plaintiff's Motion to Compel"). Doc. No. 47. For the reasons set forth below, Plaintiff's Motion to Compel is GRANTED in part.
I. FACTS AND PROCEDURAL HISTORY
The following facts are taken from Judge Marbley's December 10, 2004, Opinion and Order, wherein he granted defendants' motion to dismiss plaintiff's duty to defend claim and denied defendants' motion to dismiss plaintiff's duty to indemnify claim and breach of guaranty claim:
On August 24, 1994, Bank One and Echo Acceptance Corporation ("EAC") entered into a Private Label Revolving Credit Plan Agreement (the "Credit Agreement") through which Bank One provided financing for Defendants' satellite dish customers. Under the agreement, EAC, through its own sales force, was to sell the home satellite dish equipment and offer its customers a Bank One credit card to help finance the purchase. The credit card bore the name of both Bank One and EAC and involved an open-ended financing plan. Because EAC's sales force would actually be making the sales, Bank One insisted on including a broad indemnification clause in the Credit Agreement. Bank One wanted to protect itself against any misconduct by EAC's sales force. . . .
In addition, Bank One attempted to protect its interests by accepting a separate written guaranty from EchoStar [Communications Corporation ("EchoStar")], EAC's parent, guaranteeing EAC's performance of the indemnity provision. Bank One had a similar credit agreement and almost identical selling arrangement with two other entities, Consumer Satellite Systems ("CSS") and Home Cable. Doc. No. 28 ("Opinion and Order")at 1-2.
In 1998, approximately 73,000 credit card holders, 55,000 of whom had bought satellite dishes from defendants and their dealers, eventually joined a Tennessee state court class action, Hunter v. Bank One, Civil Action No. 98-3948 (Tenn. Cir. Ct. Jul. 19, 2002) ("the Hunter class action"), against Bank One claiming negligent investigation, negligent monitoring of sales, negligent design of a financial product, negligent implementation and monitoring of financial product and negligent supervision and training of sales agents. Opinion and Order at 3. The class also alleged that defendants and their dealers used deceptive, fraudulent, and misleading sales tactics to encourage customers to purchase the satellite dishes with the financing plan. Id. However, neither EchoStar nor any of its subsidiaries was named in the lawsuit. Id.
Plaintiff, believing that the Hunter class action arose in part out of EAC's actions, including EAC's breach of the Credit Agreement's covenant prohibiting deceptive sales practices, contacted EAC on four occasions demanding indemnification. Id. at 4. Although EAC acknowledged at least one of plaintiff's letters, EAC did not oblige plaintiff's requests for indemnification. Id.
On July 19, 2002, plaintiff entered into a settlement agreement in the Hunter class action. Id. Plaintiff now demands from defendants in this action indemnification for all funds paid pursuant to that settlement. Id. Defendants deny they have a duty to indemnify plaintiff. Id.
On March 12, 2004, plaintiff filed its initial Complaint against defendants in the Court of Common Pleas for Franklin County, Ohio, alleging that defendants acted in breach of their duty to indemnify for settlement costs, plaintiffs' expenses, and plaintiff's own legal costs in defending the underlying Hunter class action. Id. On April 23, 2004, defendants removed the case to this Court based on diversity jurisdiction, 28 U.S.C. §1332.
On May 18, 2004, defendants filed a motion to dismiss this action for failure to state a claim upon which relief can be granted. Doc. No. 8. On December 10, 2004, Judge Marbley dismissed plaintiff's claim of breach of duty to defend but let stand plaintiff's claims of breach of indemnification and guaranty agreements. Opinion and Order, Doc. No. 28.
On November 4, 2005, plaintiff filed Plaintiff's Motion to Compel, Doc. No. 47, and on December 27, 2005, defendants filed Defendants' Memorandum in Opposition to Motion of Plaintiff Bank One to Compel Discovery ("Defendants' Memorandum Contra"), Doc. No. 48. On January 9, 2006, plaintiff filed its Reply in Support of Plaintiff Bank One's Motion to Compel Discovery ("Plaintiff's Reply"). Doc. No. 49.
On February 13, 2006, this Court entered an Agreed Order Staying Case Pending Mediation. Doc. No. 52. On April 10, 2006, the parties filed a Joint Report to the Court Regarding Mediation and Motion to Compel. Doc. No. 54. In that report, the parties informed the Court that the mediation attempt was unsuccessful. Additionally, the parties informed the Court that plaintiff still seeks production of the documents at issue in Plaintiff's Motion to Compel; defendants contend that, after a reasonable good faith search, they have produced all documents in their possession, ...