Stewart Title Guaranty Company v. Credit Suisse, No. 1:2011cv00227 - Document 123 (D. Idaho 2013)
Court Description: MEMORANDUM DECISION AND ORDER re granting in part and denying in part 61 MOTION to Compel Discovery filed by Credit Suisse. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (krb)
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO Case No. 1:11-cv-00227-BLW STEWART TITLE GUARANTY COMPANY, a Texas corporation, MEMORANDUM DECISION AND ORDER Plaintiff, v. CREDIT SUISSE, Cayman Islands Branch, Defendant. INTRODUCTION The plaintiff Stewart Title has submitted 141 documents to the Court for an in camera inspection to determine if the documents are protected by the attorney/client privilege. Both parties have submitted briefing on the issue. For the reasons explained below, the Court finds that portions of the documents are protected by the privilege while other portions must be produced. The Court sets forth its decision in detail below. BACKGROUND This discovery dispute started when defendant Credit Suisse filed a motion to compel the production of documents containing communications between Stewart Title and its counsel at the law firm of Faegre Benson. Stewart Title objected, claiming that the documents were protected by the attorney/client privilege and the work product doctrine. The Court issued a decision finding the work product doctrine inapplicable, and giving counsel direction on the claims of privilege. The Court relied on the recent decision in Cedell v. Farmers Insurance Co. of Washington, 295 P.3d 239 (Wash.Sup.Ct. 2013). Adopting that holding, the Court presumed that the entire file was not protected by privilege and required Stewart Title to show how the ORDER RE. JOINT MOTION TO EXTEND DISCOVERY DEADLINES privilege applied to each document it sought to protect. The Court ordered Stewart Title to produce all of the challenged documents that deal primarily with the factual investigation of the lien claims and those that discuss both coverage and factual matters. In instances where there was a close question regarding the privileged content of the documents to be produced, the Court directed Stewart Title to submit the documents to the Court for in camera review. Pursuant to the Court s Order, Stewart Title produced hundreds of documents to Credit Suisse, and also submitted 141 pages of documents to the Court for in camera review. ANALYSIS In the supplemental briefing, Credit Suisse pointed out that it has a fraud claim against Stewart Title. Credit Suisse claims that Stewart Title had a secret plan devised in the early fall of 2010 to deny coverage for the Banner liens, some of the largest at issue, but not tell Credit Suisse until after the state court ruled on the validity of that lien claim. According to Credit Suisse, that allowed Stewart Title to exploit for itself the negotiating leverage created by the timing of trial and the uncertainty of settlement with Banner II (the general contractor) [to settle claims that were clearly covered]. See Supplemental Brief (Dkt. No. 107) at p. 5. Stewart Title adamantly denies this claim, but it presently exists in the case and provides a legitimate basis for discovery. There is no privilege for documents sufficiently related to allegations that the client is engaged in a fraudulent scheme while seeking the advice of an attorney. See In re Napster Inc. Copyright Litig., 479 F.3d 1078, 1090 (9th Cir. 2007), abrogated on other grounds by, Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100 (2009). The best evidence of the fraud is likely to be in the hands of the party invoking the privilege and hence is discoverable. Id. This analysis gives the Court further guidance for its in camera review. The Court will order the production of documents (1) that are sufficiently related to Credit Suisse s fraud claim that Stewart Title decided in the fall of 2010 to deny the Banner liens, and (2) that relate to ORDER RE. JOINT MOTION TO EXTEND DISCOVERY DEADLINES 2 Stewart Title s investigation and evaluation of the lien claims. The following table contains the Court s rulings at to each document reviewed in camera. The page numbers include the entire document submitted, although in most cases Stewart Title is claiming that only the yellow highlighted portions of those documents are privileged. In some instances, for a single multipage document, the Court has decided to compel production of some pages and/or paragraphs and order the redaction of other pages and/or paragraphs. The Court s decisions set forth in the table below relate to the yellow highlighted material contained in the particular document referenced. Date Page Numbers Decision September 13, 2010 3961 Discoverable. Relates to fraud claim/Banner lien. Part discoverable. Redact paragraphs 3 & 4. Produce everything else as it relates to fraud claim/Banner lien and evaluation of other liens. Discoverable. Relates to fraud claim/Banner lien. Discoverable. Relates to fraud claim/Banner lien. Privileged March 16, 2010 3964 (thru 0003) Undated 3965 (thru 0003) March 15, 2010 9343 (0002 to 0003) May 11 2009 14731 (thru 0002) March 30, 2011 17117 (thru 0002) March 25 2011 17203 (thru 0002) September 10, 2010 18516 September 10, 2010 18534 March 31, 2011 19468 (thru 0002) June 1 2011 28223 (thru 0002) Privileged. Discussion of law firm retention generally. Privileged. Discussion of law firm retention generally Discoverable. Relates to fraud claim/Banner lien. Discoverable. Relates to fraud claim/Banner lien. Privileged. Discussion of law firm retention generally. Privileged. Dec. 29, 2009 4694 Privileged May 12 2009 4163 Privileged. General settlement strategy. ORDER RE. JOINT MOTION TO EXTEND DISCOVERY DEADLINES 3 May 12 2009 3921 Privileged. General settlement strategy. Dec. 16 2009 3398 (thru 0002) Privileged. General settlement strategy. June 10 2009 2077 (thru 0002) Privileged. Sept 7 2010 1834 (thru 0002) Sept 7 2010 1764 Discoverable. Relates to fraud claim/Banner lien. Privileged. General settlement strategy. Sept 7 2010 1708 Privileged. May 11 2009 146 (thru 0002) Privileged. June 12 2009 89 (thru 0002) May 12 2009 07 The highlighted portion in the e-mail of June 12 2009 relates to the fraud claim/Banner lien and is discoverable. The highlighted portion in the e-mail dated June 10 2009 is privileged. Privileged. Bond discussion. May 12 2009 08 Privileged. Bond discussion. May 11 2009 01 Privileged. (same as 146) Undated 1635 (thru 0003) June 26 2009 3378 Discoverable. Relates to fraud claim/Banner lien. Privileged. August 11 2009 1618 (thru 0003) Privileged. Counsel general strategy August 18, 2009 600 (thru 0004) August 31 2009 601 (thru 0002) Nov. 20 2009 23046 (thru 0002) Discoverable. Appears to relate to lien investigations. Discoverable. Appears to relate to lien investigations. Privileged. Nov 20 2009 23049 Privileged. March 9 2010 627 (thru 0002) March 15 2010 1608 (thru 0003) Paragraphs 1 (all subparts), 3, 5, 8 and 9 are all discoverable as they related to fraud/Banner liens. Other paragraphs are privileged. Discoverable. Relates to fraud claim/Banner lien. ORDER RE. JOINT MOTION TO EXTEND DISCOVERY DEADLINES 4 March 23 2010 633 (thru 0004) September 2 2010 18590 Sept 10 2010 18518 (647 thru 648-0003) Sept 10 2010 18519 (thru 0003) May 6 2009 3430 Discoverable. Relates to fraud claim/Banner lien. Discoverable. Relates to fraud claim/Banner lien. Discoverable. Relates to fraud claim/Banner lien. Discoverable. Relates to fraud claim/Banner lien. Privileged. General legal research. May 7 2009 3430 Privileged (same e-mail as above) Aug 13 2009 19136 (thru 012) Privileged. General legal research Sept 18 2009 1623 to 1624 (thru 0007) & Privileged. General legal research 19135 (thru 002) March 12 2010 632 (thru 0007) Privileged. Memo regarding counsel. Aug 19 2010 649 (thru 0003) Privileged. General legal research. Aug 19 2010 638 (thru 0006) Privileged. General legal research. Sept 3 2009 19141 (pages -10 to -14) Privileged. Dec 15 2009 373 (pages -012 to -015) Privileged. April 15, 2010 434 (thru 0019) August 23 2010 485 (thru -0033) Nov 16 2009 23116 The only portions that are privileged are (1) the Policy Defenses paragraph on pages -0014 to -0015; and (2) the fourth bullet point on page -0016, and (3) all bullet points on page -0017. They shall be redacted and the remainder of the memo shall be produced. The following highlighted portions are not privileged as they related to fraud claim/Banner liens: (1) paragraph (3) at page -0009; (2) paragraph highlighted at page -0013; (3) second bullet point on page -0016 carried over to -0017 and including first full bullet point on -0017; and (4) two paragraphs highlighted on page -0024. Privileged. ORDER RE. JOINT MOTION TO EXTEND DISCOVERY DEADLINES 5 Oct 18 2010 18169 (at page -0002) Privileged. 0007) April 16 2010 9158 (thru -0002) Privileged. LID related. April 26 2010 9095 (thru -0003) Privileged. Gold course related. Oct 18 2010 1776 (thru -0006) Privileged. Golf course related. June 1 2010 1668 Privileged. LID related. May 27 2010 1525 (thru 0006) Privileged. Golf course related. March 21 2011 17296 March 11 2011 17297 Undated 17298 (thru 0022) Discoverable. Relates to fraud claim/Banner lien. Discoverable. Letter to opposing counsel, not to client. Privileged. Draft complaint. March 16 2011 17302 Discoverable. Relates to fraud claim/Banner lien. Conclusion In its earlier decision, see Memorandum Decision (Dkt. No. 81), the Court ruled on Credit Suisse s motion to compel by granting it in part and reserving a decision in part pending this in camera review. Now that the in camera review has been completed, the Court will grant the motion in part and deny it in part in accordance with the rulings made above. Stewart Title is directed to make the redactions noted above and produce the material immediately to Credit Suisse. ORDER In accordance with the Memorandum Decision set forth above, ORDER RE. JOINT MOTION TO EXTEND DISCOVERY DEADLINES 6 NOW THEREFORE IT IS HEREBY ORDERED, that the motion to compel (docket no. 61) is GRANTED IN PART AND DENIED IN PART in accordance with the rulings made above. DATED: August 14, 2013 _________________________ B. Lynn Winmill Chief Judge United States District Court ORDER RE. JOINT MOTION TO EXTEND DISCOVERY DEADLINES 7
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