Hartford Fire Insurance Company v. Harris Company of Fort Smith, Inc.

Filing 57

OPINION AND ORDER granting in part and denied in part 39 Motion to Compel, filed by Harris Company of Fort Smith, Inc. as set forth. Signed by Honorable Timothy L. Brooks on July 16, 2015. (rw)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FORT SMITH DIVISION

HARTFORD FIRE INSURANCE COMPANY

v.

PLAINTIFF

Case No. 2:14-CV-02096

THE HARRIS COMPANY OF FORT SMITH, INC.

DEFENDANT/
THIRD-PARTY PLAINTIFF

v.
LIMESTONE DEVELOPMENT, LLC and
ARK-CON TESTING SERVICE, INC.

THIRD-PARTY DEFENDANTS

OPINION AND ORDER

Now pending before the Court are Defendant/Third-party Plaintiff The Harris
Company of Fort Smith, lnc.'s ("Harris Company") Motion to Compel Discovery (Doc. 39)
and brief in support; Plaintiff Hartford Fire Insurance Company's ("Hartford Fire") Response
(Doc. 42) and brief in support, and Harris Company's Reply (Doc. 48). Hartford Fire's
Response also contained a Motion to Quash the subpoena directed to James Reddick and
Guest+Reddick, Inc., as well as a Motion for Protective Order concerning the documents
that are the subject of Harris Company's Motion to Compel. The Court held a telephonic
hearing on the pending Motions on May 14, 2015, at which time counsel had the
opportunity to present oral argument. The documents withheld due to privilege were
presented to the Court for in camera inspection. Following its review of the documents, the
Court sent a letter to counsel (Doc. 54) on June 29, 2015, requesting answers to particular
questions; and counsel promptly responded to the Court's letter on June 30, 2015 (Doc.
55) .

I. PERTINENT BACKGROUND
This lawsuit arises out of a construction project at the Ft. Smith National Cemetery,
which is owned and maintained by the United States Department of Veterans Affairs.
Third Party Defendant, Limestone Development, LLC ("Limestone") was the original
general contractor for the project. Separate Defendant, the Harris Company, was a
subcontractor. Hartford Fire was the surety of a performance bond issued to insure proper
performance of the construction contract between Limestone and the United States.
Limestone defaulted on the construction contract, at which point Hartford Fire assumed
the role of successor general contractor, as well as the obligation to perform the contract
and complete the construction project. Hartford Fire now brings this subrogation lawsuit to ·
recover monies from the Harris Company because of certain subcontracted work that,
allegedly, was either not performed or improperly performed. A discovery dispute exists
concerning the validity of Hartford Fire's assertion of privilege over certain documents the
Harris Company seeks to have produced.

II. MOTION TO COMPEL
A. Documents Hartford Fire Prepared in Anticipation of Litigation or Trial

Information or documentation is protected by the work-product privilege when
"prepared or obtained because of the prospect of litigation." Simon v. G.D. Searle & Co.,
816 F.2d 397, 401 (8th Cir. 1987).

Furthermore, Federal Rule of Civil Procedure

26(b)(3)(A) holds that documents produced by non-attorneys in anticipation of litigation
may be shielded from production by the work-product privilege. See, e.g., Diversified
Indus., Inc., v. Meredith, 572 F.2d 596, 604 (8thh Cir. 1977) ("[T]he concept of work

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product is not confined to information or materials gathered or assembled by a lawyer.").
In general, it can be said that the work-product privilege is "distinct from and broader than
the attorney-client privilege." United States v. Nobles, 422 U.S. 225, 238 n. 11 (1975).
Accordingly, business records prepared by party representatives, such as Luis Copat or
Marc-Andre Levigne, may be entitled to work-product privilege if prepared in anticipation
of litigation. If such records "were specifically selected and compiled by the other party or
its representative in preparation for litigation and that the mere acknowledgment of their
selection would reveal mental impressions concerning the potential litigation," then the
privilege will apply. Petersen v. Douglas Cnty. Bank & Trust Co., 967 F.2d 1186, 1189 (8th
Cir. 1992). If, however, the documents in question were merely transferred to an attorney
or litigation department, or "assembled in the ordinary course of business or for other
nonlitigation purposes," privilege will not apply. Id. (citing Simon, 816 F.2d at 401).
Based on its in camera inspection of the documents in question, the Court finds that
Hartford Fire has properly asserted privilege as to a majority of the documents described
on its privilege log. However, the Court finds that a distinction needs to be revisited as
between documents Hartford Fire generated in anticipated of subrogation litigation, versus
documents that it generated in the normal course of
contractor.

its role as successor general

The latter are not necessarily privileged, as they were not necessarily

generated "because of the prospect of litigation," but instead during the ordinary course of
business. However, when Hartford Fire stepped out of its'role as general contractor and
turned its attention to the pursuit of subrogation remedies to recover monies spent in
performance of the bond, the documents generated from that point onward were likely
created in anticipation of trial and thus protected by the work product privilege.

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The Court notes that DeVlieger Hilser P.C ., a law firm, was retained by Hartford Fire
on September 1, 2011 (see Doc. 55) . It follows that privilege log documents created after
this date, which concern Hartford Fire's subrogation/mitigation remedies and strategies,
would be privileged-and the Court's in camera review confirms that to be the case.
However, documents generated prior to that date may not be privileged, as they may have
been generated by Hartford Fire in the ordinary course of business while serving in the role
of general contractor.
Accordingly, Hartford Fire is ORDERED to undertake further review of all privilege
log documents generated prior to September 1, 2011, and to closely scrutinize and identify
any documents which relate to Hartford Fire's role or purpose in completing construction

(i.e. documents which were not specifically generated in anticipation of litigation). Hartford
Fire must produce any such documents by no later than JULY 31, 2015.

B. Documents Provided/Exchanged with
Guest+Reddick before February of 2012
At some point after Hartford Fire was called upon to complete the construction
project, it retained the Guest+Reddick architecture firm to serve as the project architect.
The firm was initially retained in the ordinary course of business with regard to Hartford
Fire's role as surety, to complete the construction project at the National Cemetery project.
James Reddick and David Conyers were the principal architects working on the project for
Hartford Fire, and their work-at least initially-was not that of a retained expert for purely
litigation purposes. However, in February, 2012, Mr. Reddick was asked to assist Hartford
Fire with documenting the basis of a formal claim letter being sent to the Harris Company
demanding payment of money damages for alleged failure to perform obligations pursuant

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to the terms of its subcontract. Later, on or about April 4, 2012, Hartford Fire specifically
asked Mr. Reddick to serve as an expert witness. Pursuant to Fed.R.Civ.P. 26(b)(4),
communications with experts and drafts of their expert reports are not discoverable, except
as stated in the rule.

However, Guest+Reddick's communications and work product

performed in furtherance of completing the construction project are not privileged. Hartford
Fire is therefore ORDERED to produce all documents and communications provided or
exchanged-prior to February 2012-between its party representatives and Mr. Reddick
(and/or other representatives of Guest+Reddick), to the extent such documents have not
been produced already. A few examples observed by the Court would include: HFIC
22731-22732, HFIC 22737-22739, and HFIC 22743-22750.
With all of that said, if it is later established that Mr. Reddick's opinions are based
on documents or communications that have not been produced, then Hartford Fire bears
the risk at trial or on motions in limine that Mr. Reddick's opinions will be precluded and/or
stricken.

C. Communications between Hartford Fire and Third Parties
Hartford Fire apparently agrees that documents concerning communications
exchanged by or provided to third-parties are not subject to privilege. This is evidenced
by Hartford Fire's voluntary withdrawal of privilege and its more recent production of
certain documents as itemized in a May 21, 2015 letterto the Court. However, the Court's
review of the remaining privilege log documents reveals a large number of emails that are
to, from, or cc'd to third parties that have not yet been produced. 1 Accordingly, Hartford

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This would include, but is not limited to, emails that are to, from, or cc'd to representatives
of the following: U.S. Department of Veteran's Affairs (Jessie Magee, Shaquana Cooper,
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Fire is ORDERED to conduct a thorough review of all privilege log documents so as to
isolate and identify communications with third parties. Hartford Fire must produce any
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such documents, to the extent not already produced, by · o later than JULY 31, 2015 .
D. Memorandum Referenced on Page 15 of Reddick's Deposition

The Court was provided in camera with a copy of the memorandum in question and
finds it to be a classic example of attorney work product, and a privileged communication
pursuant to Rule 26(b)(4)(C). In addition, Mr. Reddick testified that he did not rely on this
memorandum in forming the basis of his expert opinion. Based on the Court's review of
the memorandum, it finds Mr. Reddick's testimony in this regard to be credible and
accurate.
Ill. MOTION FOR PROTECTIVE ORDER AND MOTION TO QUASH

Within Hartford Fire's Response (Docs. 42 and 43) it seeks a Protective Order for
the documents identified on its privilege log . This request is essentially the mirror image
of the Motion to Compel. Thus, the request will be GRANTED IN PART AND DENIED IN
PART, to the same extent and for the same reasons as set forth in the Court's ruling above

with respect to the Motion to Compel.
On April 21, 2015-the same date that it filed the instant Motion to Compel-the
Harris Company issued separate Subpoenas Duces Tecum to James Reddick and
Guest+Reddick, Inc. The subpoenas (Doc. 45) essentially commanded production of the

Michael Ouellette, and Nikki Gardner); the Forth Smith National Cemetery (Craig
Lachance); Limestone (G.L. Harvie and Nate Gibson); and Traveler's Insurance (Brenda
Johnson). Although this is not intended to be an all-inclusive list of third party
representatives, a word search of the in camera documents produced several hundred
"hits" on these names.

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entire files maintained by Mr. Reddick and/or Guest+Reddick relating to the construction
project. In its Response (Docs. 42 and 43) Hartford Fire seeks an order quashing these
subpoenas and a protective order for the Guest+Reddick documents identified on its
privilege log.

Based on the Court's in camera inspection of these documents, and

consistent with the reasons stated in the Court's ruling above, Hartford Fire's Motion to
Quash and for Protective Order (within Docs. 42 and 43) is GRANTED, subject to the
following caveats. First, Hartford Fire need not produce James Reddick's (and/or other
members' of Guest+Reddick) privilege log documents generated from February 1, 2012
through the present time. However, for the reasons stated and pursuant to the Court's
ruling above, all Reddick (and/or Guest+Reddick) privilege log documents generated prior
to February 2012 must be identified and produced. Secondly, The Harris Company may-if
it so chooses-take a supplemental deposition of Mr. Reddick limited to questions or
issues raised by Hartford Fire's supplemental document production in compliance with this
Order.
IV. CONCLUSION
The Court finds that, except in particular instances, the documents submitted for in
camera inspection were properly withheld by Hartford Fire based on attorney-client

privilege, work-product privilege, and/or the expert materials protected by Fed .R.Civ.P.
26(b)(4). It Is Therefore Ordered that the Harris Company's Motion to Compel (Doc. 39)
is GRANTED IN PART AND DENIED IN PART as follows:
First, Hartford Fire must further review its privilege log documents generated
prior to September 1, 2011, for the purpose of identifying documents in
furtherance of completing the construction project, i.e. documents not
specifically generated in anticipation of litigation. It is Ordered that all such

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identified documents must be produced to the Harris Company by no later
than JULY 31, 2015.
Second, Hartford Fire must review its privilege log documents and identify
all documents/emails sent to, from, or cc'd to Mr. Reddick (or any other
member of the Guest+Reddick firm) prior to February 2012. It is Ordered
that all such documents must be produced by no later than JULY 31, 2015.
Third, Hartford Fire must search for, identify, and produce all
communications and documents sent to, from, or cc'd to "third parties"-per
the explanation above. It is Ordered that all such documents must be
produced by no later than JULY 31, 2015.
Finally, Hartford Fire need not produce the "memorandum" referenced by Mr.
Reddick in his deposition.
It Is Further Ordered that Hartford Fire's Motion for Protective Order (within Docs.
42 and 43), pertaining to the same documents sought to be produced by the Motion to
Compel, is GRANTED IN PART AND DENIED IN PART, for the same reasons and to the
same extent as set forth in the ruling above.
It Is Further Ordered that Hartford Fire's Motion to Quash and for Protective Order
(within Docs. 42 and 43) is GRANTED, subject to the caveats set forth above.
IT IS SO ORDERED this /

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TIMOTHY&,BROOKS
UNITED STATES DISTRICT JUDGE

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