Christiana Care Health Services Inc. v. PMSLIC Insurance Company

Filing 68

MEMORANDUM ORDER regarding a discovery dispute (see Memorandum Order for further details). Signed by Judge Richard G. Andrews on 11/10/2015. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

CHRISTIANA CARE HEALTH SERVICES,
INC.,
Plaintiff;
Civil Action No. 14-1420-RGA

v.
PMSLIC INSURANCE COMPANY,
Defendant.

MEMORANDUM ORDER
Presently before the Court is a discovery dispute between Plaintiff Christiana Care Health
Services, Ipc. and Defendant PMSLIC Insurance Company. Christiana Care "seeks the
production of documents relating to PMSLIC's pre-verdict evaluation of the settlement value,
verdict value, anticipated outcome or prospects of settlement for the Houghton case." (D.I. 57 at
1). PMSLIC has withheld portions of these documents on the basis of attorney-client privilege
and work product protection. (D.I. 58 at 1). At the Court's request, PMSLIC submitted the
unredacted withheld communications for ex parte, in camera review. (See D.I. 61).
This case arises out of PMSLIC's allegedly wrongful conduct in an underlying medical
liability action (the "Houghton Action") against PMSLIC's insured, Dr. Shapira. (D.I. 1-1 at 89). PMSLIC retained John A. Elzufon, Esq. to represent Dr. Shapira and his medical practice in
the Houghton Action. (Id. at 13). Dr. Shapira assigned to Christiana Care his claims against
PMSLIC in connection with the Houghton Action. (Id. at 23-24).

If an insurer retains counsel to represent the common interest of the insurer and its
insured in defending a lawsuit against the insured, the insurer cannot claim attorney-client

i

-

privilege or work product protection for its communications with counsel related to that
representation. Athridge v. Aetna Cas. & Sur. Co., 184 F.R.D. 181, 186-87 (D.D.C. 1998).
Attorney-client privilege and work product protection likewise may not be asserted against the
insured's assignee. See id at 187. Christiana Care argues that PMSLIC therefore cannot assert
claims of attorney-client privilege or work product protection against it with respect to
information relating to its assessment of settlement value or prospects for settlement in the
Houghton Action. (D.I. 57 at 2).
PMSLIC maintains, however, that it has produced to Christiana Care all documents in
which communications between PMSLIC and counsel were made in furtherance of the joint
interests of PMSLIC and its insured regarding the Houghton action. (D.I. 58 at 2). PMSLIC
argues that its "withholding of documents pertaining to PMSLIC's sole interest," as it diverged
from Dr. Shapira's interest, is valid. (Id at 2); see Eureka Inv. Corp., NV v. Chicago Title Ins.

Co., 743 F.2d 932, 937 (D.C. Cir. 1984) (holding that certain communications between an
insured and joint counsel were not discoverable by the insurer because "both the insured and the
joint attorneys thought that they had begun a separate, individual representation of the insured on
the insurance bad-faith claim that was distinct from the underlying liability action.").
"The burden of proving that the (attorney-client) privilege applies is placed upon the
party asserting the privilege." Matter of Grand Jury Empanelled Feb. 14, 1978, 603 F.2d 469,
474 (3d Cir. 1979) (quoting United States v. Lando/, 591F.2d36, 38 (9th Cir. 1978)) (internal
quotation marks omitted). After reviewing the documents in camera, I am not convinced that the
withheld communications were made pursuant to a separate attorney-client relationship between
PMSLIC and Mr. Elzufon. No separate attorney-client relationship is self-evident from the

2

documents and PMSLIC submitted no affidavit in support of its existence. I therefore conclude
that PMSLIC has not met its burden to prove that attorney-client privilege or work product
protection applies.
IT IS HEREBY ORDERED that PMSLIC produce the withheld communications.

Entered this lf_ day of November, 2015.

~~·~
United States

3

istrict Judge