Levert Smith v. Scottsdale Insurance Company
Filing
UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 5:12-cv-00086-FPS-JES Copies to all parties and the district court/agency. [999630952].. [15-1002]
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-1002
LEVERT SMITH; NELSON D. RADFORD, Co-Administrators of the
Estate of Joseph Jeremaine Porter,
Plaintiffs - Appellants,
v.
SCOTTSDALE INSURANCE COMPANY,
Defendant - Appellee,
and
SCOTTSDALE INDEMNITY COMPANY; NATIONWIDE INSURANCE COMPANY,
Defendants.
Appeal from the United States District Court for the Northern
District of West Virginia, at Wheeling.
Frederick P. Stamp,
Jr., Senior District Judge. (5:12-cv-00086-FPS-JES)
Submitted:
June 30, 2015
Decided:
July 30, 2015
Before GREGORY, DUNCAN, and KEENAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Timothy F. Cogan, Patrick S. Cassidy, CASSIDY, COGAN, SHAPELL &
VOEGELIN, LC, Wheeling, West Virginia, for Appellants.
Thomas
E. Scarr, Sarah A. Walling, JENKINS FENSTERMAKER, PLLC,
Huntington, West Virginia; Denise D. Pentino, William E
Robinson, Jacob A. Manning, DINSMORE & SHOHL, LLP, Wheeling,
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West Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Levert Smith and Nelson Radford, as administrators of the
Estate
of
Joseph
Jermaine
Porter
(the
“Estate”),
appeal
the
district court’s orders affirming the magistrate judge’s denial
in part of the Estate’s motion to compel discovery and granting
summary judgment to Scottsdale Insurance Company (“Scottsdale”)
on the Estate’s claim under the West Virginia Human Rights Act,
W. Va. Code §§ 5-11-1 to 5-11-20 (2013) (“WVHRA”).
The claim
arises from a civil rights lawsuit filed by the Estate against
Scottsdale’s insured, the City of Huntington, West Virginia (the
“City”).
See Smith v. Lusk, 533 F. App’x 280 (4th Cir. July 18,
2013) (No. 12-2063).
We affirm.
I.
The
Estate
first
challenges
the
district
court’s
order
denying in part its motion to compel discovery of portions of
Scottsdale’s claim file.
are
afforded
District courts and magistrate judges
substantial
discretion
in
managing
discovery.
United States ex rel. Becker v. Westinghouse Savannah River Co.,
305 F.3d 284, 290 (4th Cir. 2002).
for an abuse of discretion.
We review discovery rulings
Kolon Indus. Inc. v. E.I. DuPont de
Nemours & Co., 748 F.3d 160, 172 (4th Cir.), cert. denied, 135
S. Ct. 437 (2014).
district
court’s
An abuse of discretion occurs when the
decision
is
3
“guided
by
erroneous
legal
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principles” or “rests upon a clearly erroneous factual finding.”
Westberry v. Gislaved Gummi AB, 178 F.3d 257, 261 (4th Cir.
1999).
that
We review de novo the district court’s legal conclusion
the
attorney-client
applicable.
and
work
product
privileges
are
Hawkins v. Stables, 148 F.3d 379, 382 (4th Cir.
1998).
Because this is a diversity action, the elements of the
attorney-client
privilege
are
governed
by
West
Virginia
law.
Fed. R. Evid. 501; Ashcraft v. Conoco, Inc., 218 F.3d 282, 285
n.5 (4th Cir. 2000) (“[I]n a diversity action the availability
of an evidentiary privilege is governed by the law of the forum
state.”).
Under West Virginia law, there are three elements
necessary to establish this privilege: “(1) both parties must
contemplate that the attorney-client relationship does or will
exist; (2) the advice must be sought by the client from the
attorney
in
his
capacity
as
a
legal
advisor;
[and]
(3)
the
communication between the attorney and client must be intended
to be confidential.”
State ex rel. Med. Assurance of W. Va.,
Inc. v. Recht, 583 S.E.2d 80, 84 (W. Va. 2003).
This privilege
also applies to communications between an attorney and a client
that are shared with the client’s insurance company.
Id. at 89.
The Estate argues that when the attorney’s activities in a
discrimination
case
become
an
intimate
part
of
the
claimed
discrimination, the privileged communications are discoverable,
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citing State ex rel. Westbrook Health Servs., Inc. v. Hill, 550
S.E.2d
646
(W.
Va.
2001).
However,
“privileged
although relevant, are not discoverable.
rule,
many
documents
that
could
very
matters,
As a result of this
substantially
aid
a
litigant in a lawsuit are neither discoverable nor admissible as
evidence.”
Recht, 583 S.E. 2d at 84.
Moreover, the Supreme
Court of Appeals of West Virginia in Hill did not conclude that
documents related to an attorney’s actions in a discrimination
case
are
per
se
outside
the
protection
of
the
privilege;
instead, the court found that the employer failed to meet the
three-part test for application of the privilege.
550 S.E.2d at
650-51.
The
Estate
impliedly
further
waived
argues,
however,
attorney-client
that
privilege
because
attorneys’ communications are “at issue” in this
party
may
waive
the
attorney-client
Scottsdale
privilege
case.
by
the
“A
asserting
claims or defenses that put his or her attorney’s advice in
issue.”
State ex rel. Brison v. Kaufman, 584 S.E.2d 480, 482
(W.
2003)
Va.
(internal
quotation
marks
omitted).
“[A]n
attorney’s legal advice only becomes an issue where a client
takes affirmative action to assert a defense and attempts to
prove that defense by disclosing or describing an attorney’s
communication.”
689
S.E.2d
796,
State ex rel. Marshall Cnty. Comm’n v. Carter,
805
(W.
Va.
2010)
5
(internal
quotation
marks
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omitted).
place
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We conclude that Scottsdale did not affirmatively
any
attorney-client
privileged
matters
at
issue.
“[A]dvice is not in issue merely because it is relevant, and
does not come in issue merely because it may have some affect on
a client’s state of mind.”
State ex rel. U.S. Fid. & Guar. Co.
v. Canady, 460 S.E.2d 677, 688 n.16 (W. Va. 1995).
Scottsdale
did
not
assert
any
claim
or
defense
Further,
based
on
counsel’s advice in the underlying case; instead, it maintained
that its actions were based on its own evaluation of the case
and the City’s refusal to consent to a settlement.
The
Estate
also
sought
documents
the
magistrate
judge
concluded were protected under the work product doctrine.
work
product
documents
prepared
litigation.”
F.3d
221,
doctrine
“confers
by
an
a
qualified
attorney
in
The
privilege
on
anticipation
of
Solis v. Food Employers Labor Relations Ass’n, 644
231
(4th
Cir.
2011).
Work
product
is
“generally
protected and can be discovered only in limited circumstances.”
In re Grand Jury Proceedings, 33 F.3d 342, 348 (4th Cir. 1994).
“Fact work product is discoverable only upon a showing of both a
substantial
need
and
an
inability
to
secure
the
substantial
equivalent of the materials by alternate means without undue
hardship.”
1999)
Chaudhry v. Gallerizzo, 174 F.3d 394, 403 (4th Cir.
(internal
quotation
marks
omitted).
“[O]pinion
work
product enjoys a nearly absolute immunity and can be discovered
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very
rare
and
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extraordinary
circumstances.”
Id.
(internal quotation marks omitted).
The
Estate
argues
that
the
attorney’s
opinions
are
“at
issue” here because of the intimacy of the involvement of the
attorneys and adjusters in determining the course of the civil
rights lawsuit.
Here, however, Scottsdale has never contended
that it relied upon counsel’s opinions in refusing to settle.
It has consistently asserted that it made the decision based on
its own conclusions and the City’s decision, which was not made
on
the
advice
of
counsel.
Thus,
because
Scottsdale
is
not
“attempt[ing] to use a pure mental impression or legal theory as
a sword and as a shield in the trial of a case,” In re Martin
Marietta Corp., 856 F.2d 619, 626 (4th Cir. 1988), we conclude
that
the
Estate
circumstances”
to
has
overcome
not
the
afforded to opinion work product.
demonstrated
“nearly
“extraordinary
absolute
immunity”
See Chaudhry, 174 F.3d at
403. *
II.
*
To the extent that the Estate summarily contends that
documents
containing
Scottsdale’s
valuation
of
the
case
constituted fact work product rather than opinion work product,
we conclude that the Estate has waived that argument by failing
to submit adequate briefing.
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The Estate also argues that the district court erred in
granting summary judgment to Scottsdale on its WVHRA claim.
review
de
novo
whether
a
district
court
erred
in
We
granting
summary judgment, viewing the facts and drawing all reasonable
inferences in the light most favorable to the nonmoving party.
Glynn v. EDO Corp., 710 F.3d 209, 213 (4th Cir. 2013).
Summary
judgment is properly granted “if the movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”
56(a).
Fed. R. Civ. P.
A district court should grant summary judgment unless a
reasonable jury could return a verdict for the nonmoving party
on the evidence presented.
Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 249 (1986).
The
Michael
2010).
WVHRA
v.
creates
Appalachian
“three
Heating,
distinct
701
causes
S.E.2d
116,
of
action.”
117
(W.
Va.
Under the WVHRA:
it is an unlawful discriminatory practice for any
person . . . to: (1) engage in any form of threats or
reprisal, or; (2) engage in, or hire, or conspire with
others to commit acts or activities of any nature, the
purpose of which is to harass, degrade, embarrass or
cause physical harm or economic loss, or (3) aid,
abet, incite, compel, or coerce any person to engage
in any of the unlawful discriminatory practices
defined in W. Va. Code § 5-11-9 [(2013)].
W.
Va.
Code
§ 5-11-9(7)(A).
The
WVHRA
“prohibits
unlawful
discrimination by a tortfeasor’s insurer in the settlement” of a
claim.
Id. at 118.
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The Estate argues that the district court erred when it
determined
that
the
Estate
failed
to
show
that
Scottsdale’s
proffered reasons for its actions in the underlying case were
pretextual.
determine
West Virginia courts employ a three-pronged test to
whether
a
plaintiff
has
established
a
prima
facie
case, analyzing whether (1) the plaintiff is within a protected
class; (2) the plaintiff suffered an adverse decision; and (3)
there is evidence permitting an inference that “[b]ut for the
plaintiff’s
protected
have been made.”
establish
the
adverse
decision
would
not
Dawson v. Allstate Ins. Co., 433 S.E.2d 268,
274 (W. Va. 1993).
must
status,
a
To complete its prima facie case, the Estate
link
between
Scottsdale’s
decision
and
its
status as a member of the protected class sufficient “to give
rise to an inference that the . . . decision was based on an
illegal discriminatory criterion.”
Conaway v. E. Assoc. Coal
Corp., 358 S.E.2d 423, 429 (W. Va. 1986).
If the Estate establishes the prima facie case, then the
burden
shifts
to
Scottsdale
to
provide
a
nondiscriminatory
reason for the adverse action; if Scottsdale provides such a
reason, then the burden shifts back to the Estate to demonstrate
that the proffered reason is merely pretextual.
demonstrate
[defendant]
pretext,
did
not
the
act
plaintiff
as
it
9
did
must
Id. at 430.
“prove
because
of
that
its
To
the
offered
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explanation.”
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Skaggs v. Elk Run Coal Co., Inc., 479 S.E.2d 561,
584 (W. Va. 1996).
Even assuming that the Estate has established a prima facie
case, we conclude that the Estate has failed to demonstrate that
Scottsdale’s proffered reasons for its decision not to settle
the
civil
rights
lawsuit
were
pretextual.
Scottsdale
has
consistently maintained that it refused to settle the lawsuit
based on two facially race-neutral reasons: its own assessment,
ultimately proven correct, that the City was likely to not be
found
liable,
settlement.
and
the
City’s
refusal
to
consent
to
any
While the Estate asserts that these reasons are
pretextual, it concedes that Scottsdale could not settle the
lawsuit without the City’s consent.
The Estate contends, however, that Scottsdale had notice of
the racial elements of the lawsuit
and thus had a duty to
investigate the City’s reasons for refusing to settle in order
to ensure that the decision was not based on an improper motive,
under Fairmont Specialty Servs. v. W. Va. Human Rights Comm’n,
522
S.E.2d
180
(W.
Va.
1999).
The
Estate
asserts
that
Scottsdale could have tried to persuade the City to settle or
provide a special review for cases with racial components and
that
Scottsdale’s
failure
to
do
proffered reasons were pretextual.
10
so
demonstrates
that
its
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conclude
investigate
that
claims
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Scottsdale
that
racial
did
not
animus
have
a
motivated
decision not to settle the underlying case.
duty
the
to
City’s
As the district
court noted, the Supreme Court of Appeals of West Virginia only
has
recognized
a
cause
of
action
against
an
insurer
for
discrimination in settlement practices; it has not imposed upon
an
insurer
a
duty
to
investigate
whether
the
City
had
unlawful motive in refusing to consent to a settlement.
Michael, 701 S.E.2d at 124-26.
on
Fairmont
concluded
Specialty
only
that
is
“[a]n
an
See
Moreover, the Estate’s reliance
misplaced.
There,
employer’s
the
liability
in
high
court
harassment
cases is tied to the nature of its response to a complaint of
discriminatory conduct.”
522 S.E.2d at 189 (emphasis added).
The court has not extended this holding to create a freestanding
duty to investigate any claims of discrimination.
Therefore, we
conclude that summary judgment was proper.
III.
Accordingly, we affirm the district court’s orders.
dispense
with
contentions
are
oral
argument
adequately
because
presented
in
the
the
facts
We
and
legal
materials
before
this Court and argument will not aid the decisional process.
AFFIRMED
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