Gebremedhin et al v. American Family Mutual Insurance Company

Filing 237

ORDER ON PENDING DISCOVERY MOTIONS by Magistrate Judge Nina Y. Wang on 7/15/15. The Motion to Quash and for Protective Order 216 is GRANTED IN PART and DENIED IN PART; Dismissed Parties Granite State and National Union's Motion to Quash and fo r Protective Order as to Rule 30(b)(6) Notices 218 is GRANTED IN PART and DENIED IN PART; Dismissed Parties Granite State and National Union's Amended Motion to Quash and for Protective Order Re: Gorski Deposition 224 is DENIED; Unopposed Motion to Reset the Pre-Trial Conference and to Extend the Time to Take Depositions 235 is GRANTED. The Pretrial Conference set for 7/28/2015 is VACATED and RESET to 9/8/2015 03:30 PM in Courtroom C204 before Magistrate Judge Nina Y. Wang. (bsimm, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 1:13-cv-02813-CMA-NYW
WELDESAMUEL GEBREMEDHIN, an individual,
TERHAS DESTA, an individual,
ABRHAM GIDAY, a minor, by and through his guardians and natural parents,
WELDESAMUEL GEBREMEDHIN and TERHAS DESTA,
Plaintiffs,
v.
AMERICAN FAMILY MUTUAL INSURANCE COMPANY,
Defendant.
______________________________________________________________________
ORDER ON PENDING DISCOVERY MOTIONS
______________________________________________________________________
Magistrate Judge Nina Y. Wang
This matter comes before the court on Counsel for Dismissed Parties Veronica
and Glen Turner Tiffaney Norton’s Motion to Quash and for Protective Order, filed on
June 15, 2015 [#216] (also “Norton Motion to Quash”); Dismissed Parties Granite State
Insurance Company (“Granite State”) and National Union Fire Insurance Company of
Pittsburgh’s (“National Union”) Motion to Quash and for Protective Order as to American
Family’s Notices of Rule 30(b)(6) Depositions, filed on June 17, 2015 [#218] (“Rule
30(b)(6) Depositions Motion to Quash”); and Dismissed Parties Granite State and
National Union’s Amended Motion to Quash and for Protective Order Re Gorski
Deposition, filed June 19, 2015 [#224] (“Gorski Motion to Quash”) (collectively, the
“Motions”).

In addition, Defendant American Family Mutual Insurance Company

(“American Family”) filed an Unopposed Motion to Reset Pre-Trial Conference and to
Extend Time to Take Depositions (“Motion to Reset Pre-Trial Conference and to Extend
Time”). [#235]. These Motions were referred to this Magistrate Judge pursuant to the
Order Referring Case dated October 21, 2013 [#6], the Reassignment dated February
9, 2015 [#158], and the Memoranda dated June 17, 2015 [#219], June 22, 2015 [#225];
and July 14, 2015 [#236]. The court has carefully considered the Motions and related
briefing, the arguments of the Parties’ counsel at the July 1, 2015 oral argument on the
Motions, the court file, and the applicable case law. For the reasons discussed below
and as set forth herein, the court GRANTS IN PART and DENIES IN PART the Norton
Motion to Quash, GRANTS IN PART and DENIES IN PART Granite State and National
Union’s Rule 30(b)(6) Motion to Quash, DENIES Granite State and National Union’s
Gorski Motion to Quash, and GRANTS American’s Family’s Motion to Reset Pre-Trial
Conference and Extend Time.
BACKGROUND
I.

Plaintiffs’ Complaint.
Plaintiffs Weldesamuel Gebremedhin (“Mr. Gebremedhin”), Terhas Desta (“Ms.

Desta”), and Abrham Giday (“Abrham”) (collectively “Plaintiffs”) originally filed their
Complaint in District Court for the City and County of Denver in the State of Colorado on
October 1, 2013. [#1-2]. On October 15, 2013, American Family removed the action to
federal court in this district under 28 U.S.C. § 1332(a) and 28 U.S.C. § 1441(a) on the
basis of diversity jurisdiction. [#1]. Plaintiffs’ underlying Complaint in this action was redocketed as [#3]; the following is a recitation of certain relevant allegations from same.

2

Mr. Gebremedhin and Ms. Desta are the birth parents of Abrham, who remains a
minor child. [#3 at ¶ 2]. On April 24, 2009, Abrham was placed in the care of temporary
foster parents Veronica Turner and Glen Turner (individually, “Ms. Turner” and “Mr.
Turner,” and collectively, the “Turners”) due to a misdiagnosed skill fracture. [Id. at ¶ 8].
Within less than a week of that date in the early morning hours of April 30, 2009,
Abrham became seriously ill while within the care of the Turners. [Id.]. Ms. Turner took
Abrham to an urgent care facility, where Ms. Turner was instructed by a physician to
immediately take the child to the nearest emergency room. [Id.] Ms. Turner failed to do
so. [Id.] When Abrham was returned to the custody of his parents Mr. Gebremedhin
and Ms. Desta at some point during the evening on April 30, 2009, “he began twitching
and shaking and was transported to the hospital via ambulance where he was treated
for a severe traumatic brain injury and other injuries.” [Id.]
Plaintiffs subsequently filed a lawsuit sounding in negligence in a Colorado state
court against the Turners based on the resulting injuries to Abrham (the “Underlying
Litigation”). [Id. ¶ 9]. Plaintiffs also sought recovery as against “Special Kids Special
Families . . . which had allegedly trained, employed, and certified the Turners as foster
parents.” [Id.]
In response, the Turners tendered the “Underlying Lawsuit to American Family
and sought a defense and indemnification for the claims asserted against them by the
Giday Plaintiffs” based on a homeowners insurance policy. [Id. at ¶ 11]. The Complaint
alleges that American Family declined to do so, and “refused” to attend a July 10, 2012
mediation between the parties to the Underlying Lawsuit; shortly thereafter, Plaintiffs
resolved their claims as against Special Kids Special Families. [Id. at ¶¶ 11-14].

3

On October 12, 2012, American Family allegedly expressly advised the Turners
that American Family did not intend to participate in the Turners’ defense in the
Underlying Lawsuit, or to provide indemnification for any liability flowing from it. [Id.] On
November 29, 2012, American Family “was apprised that the Giday Plaintiffs were
willing to resolve their claims against the Turners in exchange for payment of the
Policy’s $500,000 liability limits within 21 days.” [Id. at ¶ 15]. American Family again
“maintained its denial of a defense and indemnity.” [Id. at ¶ 16].
Default was entered as against the Turners, who “assigned to the Giday Plaintiffs
their rights, title, and interest in their claims against American Family for collection of the
judgment entered against them in the Underlying Lawsuit, including their rights to
prosecute those claims in a civil action and keep the proceeds of those claims.” [Id. at ¶
19]. Pursuant to the assignment, on May 23, 2013, an arbitral hearing as to damages
was held. [Id. at ¶ 20]. Shortly thereafter, an arbitration award of $14,533,606.86 was
entered as against the Turners, and judgment in the amount of $12,583,543.34 was
entered in the Underlying Lawsuit (reflecting a set off as to moneys previously received
by Plaintiffs in their settlement with Special Kids Special Families). [Id. at ¶ 21] .
The settlement agreement between Plaintiffs and the Turners included a
covenant not to execute the judgment awarded in the underlying litigation against the
Turners. [#148-5 at 2 ¶ G]. As noted in Plaintiffs’ Complaint, the potential enforceability
of such agreements under Colorado substantive law was again addressed by the

4

Colorado Supreme Court in Nunn v. Mid-Century Ins. Co., 244 P.3d 116 (Colo. 2010).
[Id. ¶ 18]. 1
II.

American Family’s Answer and Third-Party Complaint.
On October 7, 2013, American Family filed its answer. [#7]. American Family’s

Eleventh Affirmative defense asserted as follows:

“The default judgment in the

Underlying Lawsuit is void and/or unenforceable as to this Defendant as it was a
product of collusion and/or a civil conspiracy.” [Id. at 5].
On December 11, 2013, filed a Third Party Complaint against the Turners,
Special Kids Special Families, Granite State Insurance Company (“Granite State”), and
National Union Fire Insurance Company of Pittsburgh (“National Union”). [#16]. In
reaction to motions to dismiss filed by the Third Party Defendants, American Family filed
a First Amended Third Party Complaint. [#70]. The core of the Third Party Complaint
was premised on assertions that American Family owed no duty of defense or
indemnification to the Turners under the American Family policy at issue, and that it was
in fact Granite State and/or National Union that as “primary insurers” owed (and
breached) a duty of defense as to the Turners. [Id.]. On the basis of these and other
allegations, American Family brought claims as against the Turners, Special Kids
Special Families, Granite State, and National Union Fire (collectively, the “Third-Party

1

Under Colorado law, such agreements are now commonly referred to as Nunn-Bashor
agreements. See Nunn v. Mid-Century Ins. Co., 244 P.3d 116, 117 (Colo. 2010)
(explaining that the “term ‘Bashor Agreement’ is derived from our case Northland Ins.
Co. v. Bashor, 177 Colo. 463, 494 P.2d 1292 (Colo. 1972), and has since been used to
refer to settlement agreements involving a formal assignment of claims against an
insurer to a third party and a stipulated judgment coupled with a covenant not to
execute.”).
5

Defendants”), asserting claims for declaratory relief, subrogation, contribution, and
breach of the covenant of good faith and fair dealing. [Id.].
The Third Party Defendants moved to dismiss these claims. [#71, #83, #95]. On
March 31, 2015, the court entered an ordered dismissing the First Amended Third Party
Complaint in its entirety, and also mooting then pending motions to compel further
production of documents based on party-directed discovery propounded by American
Family upon the Turners, Granite State, and National Union Fire. [#177].
III.

Pending Motions.
Three fully briefed discovery motions that were argued before the court on July 1,

2015 are now before the court for resolution. Tiffaney Norton, the attorney hired by
Granite State to represent the Turners with respect to resolution of the Underlying
Litigation, has filed a Motion to Quash Subpoena and Motion for Protective Order as to
a subpoena served upon her by American Family.

[#216].

Ms. Norton principally

argues that her deposition should not be taken because the proposed lines of inquiry
are likely to intrude upon information protected by attorney-client privilege, the attorney
work-product doctrine, or some other applicable privilege or protection from disclosure.
[Id.] In response, American Family argues that Ms. Norton’s deposition should proceed
because she may be able to offer non-privileged testimony going to a number of
different issues relevant to the subject matter of this litigation. [#227]. American Family
takes the position that no heightened showing of need should be required of a party
who seeks to take an adverse party’s counsel’s deposition, asserting that as “long as
Ms. Norton likely has knowledge of discoverable facts not protected by privilege, she
may be deposed.” [Id. at 13].

6

In addition, Granite State and National Union have filed a Motion to Quash and
Motion and for Protective Order as to American Family’s Notices of Rule 30(b)(6)
Depositions to each of their organizations. [#218]. Granite State and National Union
argue that some or all of the topics are relevant only to the claims raised by American
Family’s previously dismissed Third Party Complaint, rather than to the claims and
defenses remaining at issue now in the litigation. [Id. at 6-10]. As to the remainder of
the topics, Granite State and National Union contend that they are overbroad, lack
particularity, are cumulative of prior discovery, and/or are likely to intrude upon certain
privileges and protections, including the attorney-client privilege. [Id. at 9-12].
Granite State and National Union have also filed a Motion to Quash and for
Protective Order Re: Gorski Deposition. 2 [#221]. Ronald Gorski is a “former employee
who was a claims examiner on behalf of Granite State and handled the underlying claim
against Special Kids Special Families, Inc. [] and the Turners.” [Id. at 2]. Granite State
and National Union argue that Mr. Gorski does not have relevant, non-privileged
testimony to provide regarding American Family’s collusion affirmative defense or any
other claim or defense still at issue. [Id. at 5-7]. Granite State and National Union also
argue that the deposition would impose an undue burden on former employee Mr.
Gorski, because any possible inquiry would lack relevance, and because Mr. Gorski
would need to take time away from work and family to attend any deposition. [Id.].
2

As an initial matter, a “party generally lacks standing to challenge a subpoena issued
to a non-party absent a claim of privilege or a proprietary interest in the subpoenaed
matter.” United States v. Tucker, 249 F.R.D. 58, 60 n. 3 (S.D.N.Y. 2008). However,
counsel for Granite State and National Union indicated that they represented Mr. Gorski
for the purposes of this case and the deposition during the hearing on July 1.
Therefore, while the Gorski Motion to Quash would be more properly filed on behalf of
Mr. Gorski rather than Granite State and National Union, this court will proceed with its
disposition.
7

ANALYSIS
I.

Standard of Review
A.

Grounds for Entry of Protective Order and/or Order Quashing
Subpoena

In considering whether information is subject to discovery, the court exercises its
discretion while balancing the interests and burdens of all parties. The general test of
discoverability is whether the information sought by a discovery request is “relevant to
any party’s claim or defense.” Fed. R. Civ. P. 26(b)(1). This is a broad standard meant
to allow the parties to discover the information necessary to prove or disprove their
cases.

Bagher v. Auto-Owners Insurance Company, No. 12–cv–00980–REB–KLM,

2013 WL 5417127, at *5 (D. Colo. Sept. 26, 2013).

Upon a showing of “good cause”

by the proponent of discovery, an even broader standard of “any matter relevant to the
subject matter involved in the action” may be applied. In re Cooper Tire & Rubber Co.,
568 F.3d 1180, 1188 (10th Cir. 2009).

Despite the presumptive discoverability of

relevant, non-privileged information, when the relevance of a discovery request is not
apparent on the face of the request itself, the proponent of discovery bears the burden
of making an initial, rebuttable showing of relevance. Thompson v. Jiffy Lube Int’l, Inc.,
No. 05–1203–WEB, 2007 WL 608343, at *8 n.20 (D. Kan. Feb. 22, 2007).
The proper scope of discovery is further bounded by the principles of
proportionality. Fed. R. Civ. P. 26(b)(2)(C); see also Qwest Commc’ns Int’l v.
Worldquest Networks, Inc., 213 F.R.D. 418, 419 (D. Colo. 2003).

Indeed, Rule

26(b)(2)(C) allows a court to limit discovery on motion or on its own if it determines that:
(1) the discovery sought is unreasonably cumulative or duplicative, or may be obtained
from some other source that is more convenient, less burdensome, or less expensive;
8

(2) the party seeking discovery has had ample opportunity to obtain the information by
discovery in the action; or (3) the burden or expense of the proposed discovery
outweighs its likely benefit, considering the needs of the case, the amount in
controversy, the parties’ resources, the importance of the issues at stake in the action,
and the importance of the discovery in resolving the issues. Fed. R. Civ. P. 26(a)(2)(C).
A trial court may find that discovery into matters not relevant to the case
imposes a per se undue burden. McBride v. Medicalodges, Inc., 250 F.R.D. 581, 586–
87 (D. Kan. 2008) (finding topics in a 30(b)(6) notice irrelevant and granting a protective
order as to those topics). A protective order may “forbid[ ]” inquiry into certain matters,
or “limit[ ]” the scope of disclosure or discovery to certain matters.” Fed. R. Civ .P.
26(c)(1)(D).
Applying these principles, the court considers the appropriate scope of
depositions, under Rule 30(b)(6) or Rule 45 of the Federal Rules of Civil Procedure. In
doing so, the court reviews the Rule 30(b)(6) topics as articulated. For a Rule 30(b)(6)
deposition to function effectively, “the requesting party must take care to designate, with
painstaking specificity, the particular subject areas that are intended to be questioned,
and that are relevant to the issues in dispute.” Berwick v. Hartford Fire Ins. Co., No.
11–cv–01384–MEH–KMT, 2012 WL 573939, at *2 (D. Colo. Feb. 21, 2012).

If a

30(b)(6) deposition notice includes topics that as framed suggest that a party’s
contemplated inquiries are likely to unduly intrude on privileges or other protections
belonging to some other party, the court may within its discretion enter a protective
order limiting the scope of such topics, or precluding inquiry as to them altogether. See,
e.g., SEC v. Morelli, 143 F.R.D. 42, 47 (S.D.N.Y.1992) (entering order precluding

9

corporate representative testimony on topics that in the court’s view “constitute[d] an
impermissible attempt by defendant to inquire into the mental processes and strategies
of the [party subject to 30(b)(6) notice]”). Similarly, pursuant to Rule 45(c)(3)(A)(iii) and
(iv) of the Federal Rules of Civil Procedure, “[o]n timely motion, the issuing court must
quash or modify a subpoena that (iii) requires disclosure of privileged or other protected
matter, if no exception or waiver applies; or (iv) subjects a person to undue burden.”
B.

Attorney-Client Privilege and Work Product Doctrine

Generally, information protected by the attorney-client privilege or the work
product doctrine is not discoverable. Fed. R. Civ. P. 26(b)(1). Privileges further the
administration of justice and should not be set aside lightly. McNeil-PPC, Inc. v. Procter
& Gamble Co., 138 F.R.D. 136, 138 (D. Colo. 1991). But because privileges also serve
to withhold relevant information from the finder of fact, they must also be narrowly
construed.

See Montgomery v. Leftwich, Moore & Douglas, 161 F.R.D. 224, 225

(D.D.C. 1995). In this case, because the court’s subject matter jurisdiction is based on
diversity, Colorado substantive law regarding the attorney-client privilege governs.
White v. Am. Airlines, Inc., 915 F.2d 1414, 1424 (10th Cir. 1990) (“In a civil action based
upon a state cause of action, state law controls the determination of privileges.”). By
contrast, “the work product privilege is governed, even in diversity cases, by a uniform
federal standard embodied in Fed .R. Civ. P. 26(b)(3).”

Frontier Refining, Inc. v.

Gorman–Rupp Co., Inc., 136 F.3d 695, 702 n.10 (10th Cir. 1998) (citation and quotation
omitted).
Colorado has codified the attorney-client privilege in pertinent part as follows:

10

“An attorney shall not be examined without the consent of his client as to any
communication made by the client to him or his advice given thereon in the
course of professional employment ...”
Colo.Rev.Stat. § 13–90–107(b). The law is clear that the attorney-client privilege inures
to the benefit and protection of the client, to allow a client to gain counsel, advice or
direction with respect to the client’s rights and obligations confidentially. See Mountain
States Tel. & Tel. Co. v. DiFede (“DiFede”), 780 P.2d 533, 541 (Colo. 1989). The work
product doctrine is reflected in Fed. R. Civ. P. 26(b)(3)(A), which generally protects
“documents and tangible things that are prepared in anticipation of litigation or for trial
by or for a party or its representative (including the other party's attorney, consultant,
surety, indemnitor, insurer, or agent).” Fed. R. Civ. P. 26(b)(3)(A).
Neither of these privileges is absolute; both the attorney-client privilege and the
work product doctrine may be waived. A waiver may be express, i.e., a party may
affirmatively consent to disclosure of the information. See, e.g., Grace United Methodist
Church v. City of Cheyenne, 451 F.3d 643, 668 (10th Cir. 2006) (“The work-product
privilege may be waived by the voluntary release of materials otherwise protected by
it.”) (citation and quotation omitted). Waiver may also be implied through conduct. The
burden of proving waiver rests upon the party seeking to overcome the privilege.
DiFede, 780 P.2d at 542; accord. H. ex rel. Holder v. Gold Fields Mining Corp., 239
F.R.D. 652, 655 (N.D. Okla. 2005) (“[T]he majority view is that the party claiming waiver
has the burden of proof on that issue.”).
As to attorney-client privilege, the Colorado Supreme Court found that an implied
waiver of privilege is appropriate in the following instance:
(1) assertion of the privilege was a result of some affirmative act, such as
filing suit, by the asserting party; (2) through this affirmative act, the
11

asserting party put the protected information at issue by making it relevant
to the case; and (3) application of the privilege would have denied the
opposing party access to information vital to his defense.
DiFede, 780 P.2d at 543–44. In addition, the Federal Rules provide that work product
may be discovered if it is otherwise discoverable under Rule 26(b)(1) and the party
“shows that it has substantial need for the materials to prepare its case and cannot,
without undue hardship, obtain their substantial equivalent by other means.” Id.
II.

Norton Motion to Quash
The court first considers the Motion to Quash filed by the Turners’ counsel,

Tiffaney Norton. In Boughton v. Cotter Corp., the Tenth Circuit held that a district court
may properly exercise its broad discretion to limit discovery under Fed. R. Civ. P.
26(b)(2)(C) by requiring a party seeking to depose opposing counsel to show all of the
following as to the potential testimony sought to be elicited: “(1) no other means exist to
obtain the information than to depose opposing counsel; (2) the information sought is
relevant and nonprivileged; and (3) the information is crucial to the preparation of the
case.” 65 F.3d 823, 829 (10th. 1995) (citing the rule originally set forth by the Eight
Circuit in Shelton v. American Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986), and
widely subsequently applied by district court in other circuits).
American Family contends that it should not be required to set forth such a
showing, because Ms. Norton is not trial counsel for any party still a party to this action.
[#227 at 14]. Although some courts have held that the Shelton standards apply only to
trial counsel, it is clear that the circumstances of this case continue to present significant
issues with respect to privilege and waiver for Ms. Norton and the Turners. Therefore,
this court—like many others within and outside this circuit—finds that consideration of

12

the Shelton factors is appropriate. See, e.g., Malcolm D. Smithson and Christine B.
Smithson Trusts v. Amerada Hess Corp., No. CIV 06-624 JB, 2007 WL 5685112 at *9
(D.N.M. Dec. 19, 2007) (construing Boughton to stand for the proposition that even if
the Shelton criteria need not be strictly applied to counsel “who are not trial counsel in
the current litigation,” they nevertheless remain “useful factors” for a district court “to
consider when deciding a motion for protective order” as to counsel for adverse party);
see also Townsend v. Imperial County, No. 12–cv–2739–WQH (PCL), 2014 WL
2090689 at *2 (S.D. Cal. May 19, 2014) (applying Shelton to counsel not responsible for
trial in the case at bar).
In considering the Shelton factors, the court concludes that American Family has
established that certain communications, namely Ms. Norton’s communications with
Plaintiffs, Granite State, and National Union regarding the Underlying Lawsuit are
relevant, may not be subject to adequate discovery from any other source, are likely
non-privileged, and are potentially crucial to American Family’s affirmative defense that
the Nunn-Bashor agreement assigning the Turners’ claims to Plaintiffs was the product
of fraud or collusion. 3
Ms. Norton’s communications with Plaintiffs and other third-parties concerning
the Underlying Lawsuit may provide a unique source of information as to whether there
is a foundation for American Family’s assertion of this affirmative defense.

For

instance, Ms. Norton was in email communication with Plaintiffs’ counsel and counsel
3

The Colorado Court of Appeals has recognized, in cases such as the instant one
where “the parties did not stipulate to a damages award, but instead agreed that the
damages be determined by an arbitration judge,” that in “challenging the
reasonableness of the damages award, [a party such as American Family] may also
raise the affirmative defense of collusion or fraud.” DC-10 Entertainment, LLC v. Manor
Insurance Agency, Inc., 308 P.3d 1223, 1227 (Colo. App. 2013).
13

for Granite State and National Union about the execution of the Nunn-Bashor
agreement. [#216-3; #148-9]. Ms. Norton could certainly not have an attorney-client
relationship that extended to Plaintiffs or their counsel, as the Turners were directly
adverse to Plaintiffs prior to execution of the agreement.
Nor could Ms. Norton have a common interest privilege with counsel for Granite
State or National Union for the time period before the Nunn-Bashor agreement was
executed in November 2012. As American Family argued, Colorado law provides that
“an attorney retained by the insurance carrier owes a duty to the insured only; there is
no attorney-client relationship between an insurance carrier and the attorney it hires to
represent the insured.” EMC Ins. Co. v. Mid-Continent Cas. Co., No. 10-CV-03005LTB-KLM, 2012 WL 4668453, at *3 (D. Colo. Oct. 3, 2012). Nor does a common
interest prior to the execution of the Nunn-Bashor agreement arise on another basis.
Under applicable federal law as to work product and Colorado law as to the attorneyclient privilege, no sufficiently similar common legal interest was shared between the
Turners and Granite State or National Union at any point prior to execution of the NunnBashor agreement in November of 2012.

Courts within this circuit have held that

Colorado recognizes the common interest doctrine only as to “‘communications made
between co-defendants and the attorney who represents them both, for the sake of
discussing their common interests in a joint defense in civil or criminal litigation.’”
Garcia v. Berkshire Life Ins. Co. of America, No. 04–cv–01619–LTB–BNB, 2007 WL
3407376, at *8 (D. Colo. Nov. 13, 2007) (quoting Gordon v. Boyles, 9 P.3d 1106, 1124
(Colo. 2000)). As to the scope of the federal common interest doctrine, the Tenth
Circuit has held that the doctrine applies only when “the nature of the interest” at issue

14

is “identical, not similar.” Frontier Refining, Inc. v. Gorman–Rupp Co., Inc., 136 F.3d
695 at 705. Because the Turners did not share an attorney in common during the
Underlying Litigation with Plaintiffs, Granite State, or National Union, and in fact had
interests adverse to the Plaintiffs then suing them in the Underlying Litigation and to any
insurance company denying them indemnity for same, the court finds that Ms. Norton’s
communications regarding the Underlying Lawsuit with Plaintiffs and the insurance
carriers

waived any potentially applicable attorney-client privilege or work product

doctrine protection as to the underlying substance of the communications.
For reasons similar to those set forth above, other courts confronted with
analogous fact patterns have permitted insurance companies to depose counsel as to
communications and underlying facts relevant to entry of default and assignment of
rights. American Cas. Co. of Reading, Pa. v. Krieger, 160 F.R.D. 582 (S.D. Cal. 1995)
(“Krieger”).

The court finds that the deposition of Ms. Norton should proceed, but

should (as in Krieger) be limited to 3 hours over the course of a single day prior to
August 17, 2015. The court also orders that inquiry should be limited to Ms. Norton’s
communications

with

Plaintiffs,

Granite

State

(including

counsel

and

representatives), and National Union (including counsel and representatives) or
other third-parties concerning three areas: (1) the Underlying Litigation, (2) the entry of
default and resulting arbitral award of damages, and (3) the Turners’ entry into the
Nunn-Bashor agreement in the Underlying Litigation. 4

4

The court also finds—at least on the record and briefing before it—that the BashorNunn agreement alone has not placed any work product or attorney-client
communication at issue in the instant litigation. In addition, because the court is
permitting American Family to pursue third-party discovery about the circumstances
surrounding the execution of the agreement (subject to any valid objection of counsel at
15

As to any other potential areas of inquiry addressed by American Family’s
response to Ms. Norton’s Motion to Quash [#227], the court finds that American Family
has failed to make the showing of relevance, lack of availability from other sources,
likely absence of privilege, and/or need necessary in the circumstances of this case to
find that such questioning of Ms. Norton should be permitted to go forward.
III.

Rule 30(b)(6) Depositions Motion to Quash
Granite State and National Union devote much of their briefing in their Motion to

Quash and For Protective Order as to American Family’s Notices of Rule 30(b)(6) (and
the subsequent Reply in support thereof) to the arguments that American Family should
not be permitted to pursue discovery bearing on its fraud/collusion affirmative defense
because American Family has not yet (according to Granite State and National Union)
obtained specific evidence in support thereof, and because in any event, the lack of
reasonableness of the arbitral award could be proven even absent fraud or collusion.
[#218 at 9-10]. The court respectfully disagrees.
As an initial matter, the circumstances surrounding the resolution of the
Underlying Lawsuit are unusual enough, for the purposes of discovery, to permit
American Family to pursue information in support of its defense of fraud/collusion.
Discovery to date has revealed that Ms. Norton was retained only for the purposes of
settling the matter, not to provide a defense to the Turners. [#216 at 8]. Then, during a
hearing in the Underlying Lawsuit, Ms. Norton states “There was an agreement as to
how this judgment would be obtained against American Family…” [#227-9 at 6:25-7:1].
The Turners did not file an Answer but rather permitted a default judgment to be entered
deposition), it is unlikely that American Family could establish that privileged information
is “vital” to its defense, a required element to find implied waiver under DiFede.
16

against them. While American Family may ultimately fail in its affirmative defense of
fraud/collusion, the court is unwilling to prejudge the issue and prevent American Family
from taking discovery on it.
Moreover, the fact that some of the topics propounded by American Family were
relevant to American Family’s dismissed claims of bad faith against Granite State and
National Union does not undercut their relevance to a defense of fraud/collusion. For
example, information about the claim handling may lead to admissible evidence with
respect to whether the settlement was consistent with prior claims handling, and
therefore not a product of collusion or fraud. Similarly, non-privileged information about
the settlement process may lead to admissible evidence regarding any promises made
by Granite State and National Union to both Plaintiffs and the Turners to induce them to
increase their settlement demand, or agree not to challenge such demand.
As parties are generally entitled to discovery of relevant, non-privileged subject
matter bearing on any claim or defense remaining at issue in the litigation, the court
does not find the arguments by Granite State and National Union addressed above to
be persuasive.

Moreover, Granite State and National Union fail to make any non-

conclusory showing that any burden accompanying production of a 30(b)(6)
representative to speak to topics potentially relevant to American Family’s
fraud/collusion affirmative defense would outweigh the value of the discovery sought by
such testimonial inquiry.
On the other hand, American Family’s only efforts to establish the relevance of
the bulk of the noticed topics (topics that lack facial relevance to the issues remaining in
this litigation) appear to be based on its previously dismissed third-party claims. To the

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extent American Family believes it may be able to restyle these claims as theories of
apportionment of fault pursuant to Colorado’s “Non-Party at Fault” statutory provisions,
the court notes American Family has not yet sought leave to make any such designation
out of time. The court will not order Granite State or National Union to provide any
further discovery pertaining to American Family’s previously dismissed bad faith claims,
or any other claim or defense that is not presently in this case.
Therefore, the court orders Granite State and National Union to designate
(without waiver of any previously asserted objection, including attorney-client privilege
or other applicable privilege) a corporate representative(s) to testify only as to Topics 3,
4, 5, 8, and 13 as set out in the Amended Rule 30(b)(6) Notices to Granite State and
National Union. [#218-4 & 5]. 5 As a general matter, Granite State and National Union’s
arguments that these topics lack reasonable particularity and/or relevance, to the extent
they present any, fail to persuade the court. 6 Nor is the court persuaded that the
information provided at a 30(b)(6) deposition concerning such topics would be unduly
cumulative of discovery already provided in this action, particularly given that it is

5

To the extent those topics implicate settlement communications, the court notes that
“[a]bsent direction from the Tenth Circuit, this court will not imply the existence of a
federal settlement privilege under either Fed. R. Evid. 408 or under Fed. R. Evid. 501.”
Heartland Surgical Specialty Hosp., LLC v. Midwest Div., Inc., No. 05–2164–MLB–
DWB, 2007 WL 1246216, at *4 (D. Kan. Apr. 27, 2007). Moreover, absent similar
direction from the Tenth Circuit, the Colorado Supreme Court, or the Colorado Court of
Appeals, this court will not imply the existence of such a privilege under state law. As to
Colorado’s “mediation privilege,” the court notes that privilege appears limited to
communications “made in the presence or at the behest of the mediator.” Yaekle v.
Andrews, 195 P.3d 1101, 1109 (Colo. App. 2008).
6

The court does note, however, to the extent that these topics invoke the term “all,”
Rule 30(b)(6) depositions are not intended to be memory tests in which a deponent is
asked to recall every single detail related to a particular topic. If there are relevant
documents, the court expects that American Family will show such documents to the
deponent.
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unclear whether any

previous witness testified that he or she lacked personal

knowledge about a particular topic.
With respect to the other noticed topics [#218-4 & 5], the court finds they are
(when not principally directed to previously dismissed claims) unduly cumulative of
topics 3, 4, 5, 8, and 13 and/or likely to target information subject to a valid privilege or
protection under the circumstances of the case. See SEC v. Morelli, 143 F.R.D. 42, 47
(entering order precluding corporate representative testimony on topics that in the
court’s view “constitute[d] an impermissible attempt by defendant to inquire into the
mental processes and strategies of the [party subject to 30(b)(6) notice]”). 7
Therefore, the court orders that each insurance carrier produce a designee or
designees for deposition of no more than one day of four (4) hours 8 at a time of mutual
convenience prior to August 17, 2015.
IV.

Gorski Motion to Quash
Granite State and National Union also move to quash the deposition of Mr.

Gorski, the initial claims adjuster on the Underlying Litigation. [#224]. Granite State
and National Union argue that Mr. Gorski’s knowledge pertains to the dismissed claims,
that American Family has taken the opportunity to depose all other claims adjusters,
and that it would be cumulative of the Rule 30(b)(6) depositions that American Family
seeks. [#224, #232]. Upon reflection after the oral argument, the court is not convinced

7

To the extent Topics 3, 4, 5, 8, and 13 potentially implicate information subject to a
valid claim of privilege or protection, the court finds that counsel for Granite State and
National Union should be able without undue burden to preserve any such privilege or
protection by interposing objections at deposition, when proper and well-founded.

8

Given the shortened duration of these depositions, the court encourages the Parties to
discuss whether any previously taken testimony will be designated as binding upon the
respective corporations to further streamline the depositions.
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that Mr. Gorski lacks knowledge of potentially relevant non-privileged information as to
American Family’s fraud/collusion defense. American Family contends, and Granite
State and National Union do not dispute, that Mr. Gorski was involved in the evaluation
of the claim, the settlement of the claim, instructions to counsel for the Turners, and
negotiations regarding the resolution of the claim. [#229 at 2-3]. While some of those
topics may have been covered by other witnesses or encompassed by the Rule 30(b)(6)
depositions of Granite State and National Union, the court cannot presume, without
evidence and based on attorney argument alone, that the testimony would be unduly
duplicative. See Miller v. Colorado Farms, No. 97-cv-02015-WFD-OES, 2001 WL
629463, at *4 (D. Colo. 2001) (J. Schlatter). In addition, the touchstone of discovery is
relevance and not admissibility; the fact that Mr. Gorski’s testimony may ultimately not
be admissible at trial does not preclude American Family from inquiring about the steps
Mr. Gorski took to resolve the claim. Nevertheless, because the court is sympathetic to
the fact that Mr. Gorski no longer works for Granite State and/or National Union,
counsel is directed to take the deposition, to be limited to four (4) hours, at Mr. Gorski’s
convenience, even if that results in a deposition scheduled after hours over two days or
on a weekend day. Accordingly, the court denies the Motion to Quash.
CONCLUSION
Based on the court’s review of the papers and supporting evidence, the oral
arguments, and application of the pertinent case law, IT IS HEREBY ORDERED that:
(1)

The Motion to Quash and for Protective Order [#216] filed by Tiffany
Norton is GRANTED IN PART and DENIED IN PART;

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(2)

The court DIRECTS Tiffaney Norton to sit for deposition of no more than
three hours over the course of a single day at a time of mutual
convenience prior to August 17, 2015, limited as set forth above to Ms.
Norton’s communications with third-parties concerning the Underlying
Litigation, and to any facts pertaining to the entry of default, the arbitral
award of damages, and the Turners’ entry into the Nunn-Bashor
agreement in the Underlying Litigation;

(3)

Dismissed Parties Granite State and National Union’s Motion to Quash
and for Protective Order as to Rule 30(b)(6) Notices [#218] is GRANTED
IN PART and DENIED IN PART;

(4)

Granite State and National Union each shall designate one or more
corporate representatives to testify to Topics 3, 4, 5, 8 , and 13 in the
underlying 30(b)(6) notices, as set forth above, for a deposition limited to
four (4) hours, at a time of mutual convenience to the parties prior to
August 17, 2015;

(5)

Dismissed Parties Granite State and National Union’s Amended Motion to
Quash and for Protective Order Re Gorski Deposition [#224] is DENIED;

(6)

The court directs that the deposition of Mr. Gorski, limited to four (4)
hours, proceed at a time(s) of mutual convenience to the Parties and Mr.
Gorski prior to August 17, 2015;

(7)

Defendant American Family Mutual Insurance Company’s Unopposed
Motion to Reset the Pre-Trial Conference and to Extend the Time to Take

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Depositions [#235] is GRANTED, solely to complete the depositions
contemplated herein no later than August 17, 2015;
(8)

The Pre-Trial Conference currently set for July 28, 2015 at 1:30 is
VACATED and RESET to September 8, 2015 at 3:30 p.m.; and

(9)

No further extensions of the schedule in this case will be entertained
except in exceptional circumstances.

DATED: July 15, 2015

BY THE COURT:

s/ Nina Y. Wang
United States Magistrate Judge

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