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UNPUBLISHED PER CURIAM OPINION filed.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UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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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