Sipes v. Allstate Indemnity Company

Filing 126

ORDER re: 110 Plaintiff's Unopposed Motion for 'In-Camera' Review of Claim Diary Redactions, Withheld Claim Diary Attachments and Withheld Claim File Documents. Pursuant to the court's in camera review, Defendant shall pro duce documents to Plaintiff consistent with this Order on or before 5/13/2013. The deposition of Lori Kidwell shall be completed before 5/22/2013. Any additional expert witness opinions by either party's claim handling expert shall be disclosed on or before 6/3/2013. Any further discovery deposition of either partys claim handling expert shall be completed on or before 6/13/2013. By Magistrate Judge Kathleen M. Tafoya on 5/12/13. (mnfsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Kathleen M. Tafoya
Civil Action No. 11–cv–02369–PAB–KMT

LARRY SIPES,
Plaintiff,
v.
ALLSTATE INDEMNITY COMPANY, an Illinois corporation,
Defendant.

ORDER

This matter is before the court on “Plaintiff’s Unopposed Motion for ‘In-Camera’ Review
of Claim Diary Redactions, Withheld Claim Diary Attachments and Withheld Claim File
Documents” (“Mot.”) [Doc. No. 110] filed April 26, 2013. Defendant filed a response on May
6, 2013 (“Resp.) [Doc. No. 121] and submitted un-redacted copies of the claim diary, withheld
attachments to the claim diary, index to claim diary, and amended log to privileged claim file
documents [Doc. No. 123, filed May 9, 2013]. The court has reviewed in camera every disputed
claim diary entry and matched every disputed attachment to the claim diary where appropriate,
as well as reviewing the document itself completely. Additionally, the court reviewed the
separately objected to documents.

The court has been able to verify that claim diary entries dated “07/25/12, 04/30/12,
02/04/12, 01/04/12, 01/03/12” are nothing more than the exact amount, repeated on each of the
entries, that was the original payment made to “Plaintiff’s mortgagee pursuant to the lost payee
clause of the subject insurance contract.” (See Resp. at 5.) Further, no entry among those
reviewed in camera and withheld on the grounds of privilege in the claims diary indicated
“settlement authority” beyond what had already been paid to the mortgagee until the January
2013 mediation. The court disagrees with the characterization by Plaintiff that the claims file “is
completely devoid of any documentation of the basis for the decision to pay the fire loss almost
three (3) years after the occurrence.” (Mot. at 4.) Plaintiff is well-aware of the addition of a new
expert, Mr. Toth and his opinions entered in or about October 2012, and there is a notation about
the report in the claims diary that was not withheld. (See claim diary entry November 19, 2012
at 3:18 p.m.) There is no reason to believe that Ms. Kidwell will be unable to fully explain her
reasons for re-evaluation of the claim based upon Mr. Toth’s report without the requirement of
disclosing privileged material.
The Federal Rules of Civil Procedure provide that “[p]arties may obtain discovery
regarding any nonprivileged matter that is relevant to any party’s claim or defense-including the
existence, description, nature, custody, condition, and location of any documents or other
tangible things and the identity and locations of persons who know of any discoverable matter.”
Fed. R. Civ. P. 26(b)(1). Jurisdiction in this case is premised upon diversity and therefore state
law controls the determination of attorney-client privilege issues. In Colorado, the
attorney-client privilege is “established by the act of a client seeking professional advice from a
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lawyer and extends only to confidential matters communicated by or to the client in the course of
gaining counsel, advice, or direction with respect to the client’s rights or obligations.” People v.
Tucker, 232 P.3d 194, 198 (Colo. App. 2009). The privilege only applies to communications
under “circumstances giving rise to a reasonable expectation that the statements will be treated
as confidential.” Wesp v. Everson, 33 P.3d 191, 197 (Colo. 2001).
With the following exceptions, the court finds that all the claim diary entries that have
been redacted and the attachments related thereto were properly withheld either on the grounds
of attorney-client privilege or work product protection. The parties and the court have made
extensive records on the body of law associated with both privileges, and legal authority will not
be extensively repeated here.
The following entries in the claim diary are not attorney-client privileged documents, nor
are they subject to a claim of work product protection even though litigation was in
progress/anticipated at the time. The entries do not concern advice to or from an attorney, but
instead reflect an adjuster investigating some background facts about Mr. Sipes, the policy, loss
history, etc. This is activity which is commonly associated with adjusting a claim by an
insurance company and is therefore discoverable. See Hurtado v. Passmore & Sons, 2011 WL
2533698, at *4-5 (D. Colo. June 27, 2011)(results of factual investigation not privileged). Those
diary entries occurred on: October 6, 2011 at 1:54 p.m. and on October 7, 2011 at 2:55 p.m.,
2:57p.m., 3:18 p.m. and 3:21 p.m. Therefore, the Defendant will produce those claims diary
entries to the Plaintiff on or before May 15, 2013.

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With respect to the separate documents contained on Exhibit 4 to Plaintiff’s Motion, the
documents all contain privileged information which renders them properly withheld from
discovery. One document, however, deserves special mention. The May 31, 2011 entry on
Exhibit 4 is a billing statement from Harris, Karstaedt, Jamison & Powers, P.C. to Allstate. An
attorney generally may not refuse to answer questions about the identity of a client and fee
arrangements. Lee v. State Farm Mut. Auto. Ins. Co., 249 F.R.D. 662, 684 (D. Colo. 2008). In
general, billing records are not accorded privileged status unless specific entries contain
privileged communications. For instance, information on an attorney’s billing statement that
shows the fee amount, the general nature of the services performed, and the case on which the
services were performed is not considered privileged. United States v. Hodgson, 492 F.2d 1175,
1177 (10th Cir. 1974). However, billing statement entries that reflect the client’s motive in
seeking representation, litigation strategy, or the specific nature of services provided, such as
researching particular areas of the law, are privileged. See In re Gibco, Inc., 185 F.R.D.at 299;
Roe, 281 F.R.D. at 636.
The May 31, 2011 billing statement contains entries that are specific between an attorney
and his client regarding particular events and would reveal litigation strategy if disclosed.
Therefore the document is privileged and properly withheld from production.
It is therefore ORDERED
1.

Pursuant to the court’s in camera review, Defendant shall produce documents to

Plaintiff consistent with this Order on or before May 13, 2013.

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It is further ORDERED
2.

The deposition of Lori Kidwell shall be completed before May 22, 2013.

3.

Any additional expert witness opinions by either party’s claim handling expert

shall be disclosed on or before June 3, 2013.
4.

Any further discovery deposition of either party’s claim handling expert shall be

completed on or before June 13, 2013.
5.

The dates previously set for the Trial Preparation Conference and the Trial before

District Judge Phil A. Brimmer shall not be affected by this Order.
Dated this 12th day of May, 2013.

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