Bronsink et al v. Allied Property and Casualty Insurance Company et al, No. 2:2009cv00751 - Document 84 (W.D. Wash. 2010)
Court Description: ORDER granting 45 Motion to Compel re: privilege or work product; signed by Judge Marsha J. Pechman.(SC)
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Bronsink et al v. Allied Property and Casualty Insurance Company et al Doc. 84 The Honorable Marsha J. Pechman 1 2 3 4 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 5 6 7 8 SHERMAN BRONSINK and DAGMAR FRIESS, husband and wife, 9 Plaintiffs, 10 v. 11 12 13 Case No. 09-751 MJP ORDER ON AMENDED MOTION TO COMPEL RE DOCUMENTS WITHHELD ON THE BASIS OF PRIVILEGE OR WORK PRODUCT ALLIED PROPERTY AND CASUALTY INSURANCE, et al., Defendants. 14 15 16 17 18 19 20 21 22 23 24 This matter comes before the Court on Plaintiffs’ amended motion to compel production of documents withheld on the basis of privilege or work product. (Dkt. No. 45.) The aboveentitled Court having reviewed and received: 1. Plaintiffs’ Amended Motion to Compel RE Documents Withheld on the Basis of Privilege or Work Product. (Dkt. No. 45.) 2. Defendants’ Response to the Amended Motion to Compel RE Documents Withheld on the Basis of Privilege or Work Product. (Dkt. No. 57.) 3. Reply in Support of Amended Motion to Compel RE Documents Withheld on the Basis of Privilege or Work Product. (Dkt. No. 69.) 25 And all attached declarations and exhibits, makes the following ruling: 26 IT IS ORDERED that Plaintiffs’ Motion is GRANTED. ORDER ON AMENDED MOTION TO COMPEL - 1 Dockets.Justia.com 1 Background 2 On June 9, 2008, Plaintiff Sherman Bronsink’s (“Bronsink”) commercial property 3 4 burned. (Dkt. No. 45 at 1.) He filed an insurance claim under his homeowner’s policy, held by 5 Depositors. (Id.) Within two weeks Depositors had engaged its “Special Investigations Unit” to 6 investigate. (Id. at 2.) The special investigator, Chris Gormley, contacted “panel attorney” 7 Daniel Thenell on February 6, 2009. (Id. at 3.) Thenell agreed to assist with the claim. He also 8 conducted Examinations Under Oath (“EUO”) of Sherman Bronsink and his wife, Dagmar 9 Friess, on March 26, 2009. (Id.) On April 9, 2009, Thenell sent a letter to Bronsink indicating 10 that Depositors was continuing its investigation and that “no coverage determination has been 11 12 13 made.” (Id.) On May 11, 2009, Bronsink commenced the litigation. (Id. at 4.) At that time, Michael 14 Rogers of Reed McClure represented Depositors. (Id.) In the initial disclosure and answers to 15 interrogatories, Depositors describes Thenell as an “attorney who assisted with claims 16 17 investigation.” (Dkt No. 45, Ex. C at 2, Ex. D at 4.) In response to requests for production, Depositors has withheld 91 documents from Thenell’s file on the basis of attorney-client 18 19 20 privilege or work product protection. Depositors has also withheld seven documents from the Depositors claim file on the basis of attorney-client privilege and work product, six of which 21 were communications to or from Thenell. Bronsink now seeks production of all of these 22 documents. 23 24 Analysis In a diversity case, the court must apply state law to substantive issues and federal law to 25 procedural issues. Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). The attorney-client 26 privilege is a substantive issue and must be interpreted using the law of the state. Lexington Ins. ORDER ON AMENDED MOTION TO COMPEL - 2 1 2 Co. v. Swanson, 240 F.R.D. 662, 666 (W.D. Wash. 2007). Work product is procedural and governed by federal law. Id. 3 4 5 6 A. Attorney-Client Privilege Bronsink argues that the privilege does not apply to Thenell because he was acting in the role of a claims adjuster or investigator and was not necessary to the provision of legal advice. 7 “A communication is not privileged simply because it is made by or to a person who happens to 8 9 be a lawyer.” Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 602 (8th Cir. 1977). Attorneys 10 that act as claims adjusters or claims managers cannot later claim attorney-client privilege for 11 that work. Mission Nat’l Ins. Co. v. Lilly, 112 F.R.D. 160, 163 (D. Minn. 1986); see also 12 Schmidt v. Cal. State Auto. Ass’n, 127 F.R.D. 182, 183 (D. Nev. 1989); HSS Enter., LCC v. 13 14 Amco Ins. Co., No. 06-1485, 2008 WL 163669, at *3 (W.D. Wash. Jan. 14, 2008). Depositors argues that Thenell served as an attorney and states, “while [he] questioned 15 16 17 plaintiffs at their examinations under oath and gave advice concerning the investigation, this does not make him an adjuster.” (Dkt. No. 57 at 5-6.) The declarations of Thenell and Gormley 18 state that Thenell did provide legal advice, but fail to provide detail. (Decls. Thenell ¶ 3, 19 Gormley ¶ 6.) In the initial disclosures and the answers to interrogatories, Depositors describe 20 Thenell as an “attorney who assisted with claims investigation.” (Dkt No. 45, Ex. C at 2, Ex. D at 21 4.) The amended privilege log also fails to provide more specifics about Thenell’s role in each 22 of the documents and communications. (Rogers Decl. Ex. A.) Depositors offers no specific 23 24 25 26 evidence of Thenell’s role and Depositors’ own characterization of Thenell is inconsistent. A third party may claim attorney-client privilege if that third party is an agent of the attorney or the client and they are essential to the giving of legal advice. See State v. AquinoORDER ON AMENDED MOTION TO COMPEL - 3 1 Cervantes, 88 Wn. App. 699, 707 (1997); State v. Gibson, 3 Wn. App. 596, 599 (1970); United 2 States v. Kovel, 296 F.2d 918, 920 (2nd Cir. 1961). A party claiming the privilege has the 3 burden to establish the privilege exists. Versuslaw, Inc. v. Stoel Rives, LLP, 127 Wn. App. 309, 4 332 (2005). “To meet this burden, a party must demonstrate that its documents adhere to the 5 essential elements of the attorney-client privilege adopted by this court.” In Re Grand Jury 6 Investigation, 974 F.2d 1068, 1070 (9th Cir. 1992). An attorney acting as a claims adjuster, and 7 not as legal advisor, could still claim the privilege if that attorney was an agent necessary for the 8 9 provision of legal advice. The record reflects that Thenell likely was an agent of Depositors or 10 its attorney. However, even if Thenell served as an agent of the attorney or client, the record 11 does not demonstrate that the withheld documents and communications were necessary for the 12 provision of legal advice. Without some evidence to support these propositions, the withheld 13 14 documents and communications cannot be protected by privilege. The declarations and privilege log do not adequately support that Thenell was necessary to the provision of legal advice such 15 16 that the privilege would apply. The Court orders Depositors to disclose documents withheld on the basis of attorney 17 18 client privilege because Depositors has failed to demonstrate that the withheld documents and 19 communications are privileged. 20 21 B. Work Product 22 A party asserting work product privilege must show that the materials withheld are: (1) 23 24 documents and tangible things; (2) prepared in anticipation of litigation; and (3) the materials 25 were prepared by or for the party or attorney asserting the privilege. Garcia v. City of El Centro, 26 214 F.R.D. 587, 591 (S.D. Cal. 2003). In the insurance context, materials prepared as part of ORDER ON AMENDED MOTION TO COMPEL - 4 1 claims investigation are generally not considered work product due to the industry’s need to 2 investigate claims. Such materials are part of the ordinary course of business unless there is a 3 sufficiently concrete connection between the investigation and potential litigation. Harper v. 4 Auto-Owners Ins. Co., 138 F.R.D. 655, 659 (S.D. Ind. 1991); see Pete Rinaldi’s Fast Foods, Inc. 5 v. Great Am. Ins. Cos., 123 F.R.D. 198, 202 (M.D.N.C. 1988). 6 Normally an insurer has to deny the claim before a reasonable threat of litigation may 7 arise. Id. “However, if the insurer argues it acted in anticipation of litigation before it formally 8 9 denied the claim, it bears the burden of persuasion by presenting specific evidentiary proof of 10 objective facts demonstrating a resolve to litigate.” Id. (citing Binks Mfg. Co. v. Nat. Presto 11 Indus. Inc., 709 F.2d 1109, 1119 (7th Cir. 1983)). Further, “even after a claim is denied, reports 12 of investigations filed thereafter which contain prior investigations or evaluations, or are merely 13 14 a continuation of the initial routine investigation, may not be labeled as work product.” APL Corp. v. Aetna Cas. & Sur. Co., 91 F.R.D. 10, 14 (D. Md. 1980). 15 16 17 The only disputed element here is whether the materials were prepared in anticipation of litigation. Bronsink asserts that the withheld documents were produced in the ordinary course of 18 business and not in anticipation of litigation. Depositors makes no showing that the withheld 19 documents were prepared in anticipation of litigation. It fails to answer this threshold question 20 and focuses instead on Bronsink’s burden to show compelling need sufficient to overcome 21 protection. But a plaintiff only bears that burden when a defendant has demonstrated the 22 protection first applies. See Hickman v. Taylor, 329 U.S. 495, 511 (1947). With no specific 23 24 evidentiary proof that demonstrates their resolve to litigate, Depositors has failed to show work 25 product protection exists. Therefore, the documents withheld pursuant to work product are not 26 protected and the Court orders Depositors to produce them. ORDER ON AMENDED MOTION TO COMPEL - 5 1 2 Conclusion Plaintiff’s motion is GRANTED. Depositors has failed to provide sufficient evidence 3 supporting its claims of either attorney-client privilege or work product for the withheld 4 documents. Depositors will produce the requested materials within seven days of this order. 5 6 7 8 The Clerk is directed to send a copy of this order to all counsel of record. DATED this _4th_ day of March, 2010. 9 A 10 11 Marsha J. Pechman United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ORDER ON AMENDED MOTION TO COMPEL - 6
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