Walker v. Geico Indemnity Company

Filing 111

ORDER adopting 106 Report and Recommendations; granting 67 Motion to Compel; granting in part and denying in part 29 Motion to Disqualify Counsel; denying as moot 110 Motion to extend time; directing Defendant to obtain new counsel on or before May 1, 2017; directing Plaintiff's counsel to file a motion to withdraw or other notification with the Court on or before May 1, 2017; and staying the case. Signed by Judge Carlos E. Mendoza on 3/30/2017. (KMS)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION

NADINE WALKER,
Plaintiff,
v.

Case No: 6:15-cv-1002-Orl-41KRS

GEICO INDEMNITY COMPANY,
Defendant.
/
ORDER
THIS CAUSE is before the Court on Plaintiff’s Renewed Motion to Compel Return of
Inadvertently Produced Documents, and Motion for Sanctions (“Motion to Compel,” Doc. 67),
and Plaintiff’s Motion to Disqualify [Defendant’s] Counsel, and Motion for Sanctions (“Motion
to Disqualify,” Doc. 29). United States Magistrate Judge Karla R. Spaulding issued an Order (Doc.
70), granting the Motion to Compel, to which Defendant has filed an Objection (Doc. 81). Judge
Spaulding also issued an Amended Report and Recommendation (“R&R,” Doc. 106),
recommending that the Court grant the Motion to Disqualify but deny the request for monetary
sanctions, to which Defendant also filed an Objection (Doc. 109). Plaintiff did not object to either.
I.

BACKGROUND

Plaintiff alleges that she was injured when she was struck by an automobile operated by
non-party Priscilla Condemarin. (Am. Compl., Doc. 14, ¶ 6). At the time, Condemarin was insured
by Defendant. (Id. ¶ 4). The insurance contract at issue had bodily injury liability limits of
$10,000.00 per person and $20,000.00 per occurrence. (Id. ¶ 5). According to Plaintiff, in
December 2007, Defendant advised Plaintiff’s attorney at the time, Michael Sutton, that it intended
to tender the full $10,000.00 policy limits. (Id. ¶ 9). Sutton made note of this conversation in his

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case management software and included his mental impressions regarding whether any such check
should be returned. (Hr’g Tr., Doc. 107, at 92:3–11; see also Second Am. Privilege Log, Doc. 6710, at 3 (Dec. 17, 2007 entry)). Despite Defendant’s representation that it would tender the policy
limits, it did not do so. (Doc. 14 ¶ 9). Therefore, Plaintiff filed suit against Condemarin (the
“underlying litigation”) and obtained a judgment in the amount of $3,022,991.65. (Id. ¶¶ 10, 14;
Am. Final J., Doc. 14-3, at 1). In August 2008, during the pendency of the underlying litigation,
Defendant finally tendered the $10,000.00 to Plaintiff, which she rejected, allegedly due to
Defendant’s failure to timely resolve the claim. (Doc. 14 ¶ 12–13). After obtaining the excess
judgment, Plaintiff filed this case, asserting one claim of “bad faith”—i.e., that Defendant breached
its duty of care under the insurance contract. (Id. ¶¶ 16–23).
Around the time that Defendant tendered the policy limits to Plaintiff, Plaintiff’s
underlying attorney, Sutton, consulted with one of Plaintiff’s current attorneys, Fred Cunningham,
regarding the viability of Plaintiff’s bad faith claim. (Doc. 107 at 36:21–37:12). They had several
phone consultations. (Id. at 36:21–23). To enable Cunningham to provide a useful assessment,
Sutton sent a letter and attached documents to Cunningham, including a timeline of events created
by Sutton. (Id. at 41:12–20; Sutton Aff., Doc. 67-12, ¶ 30). During the calls with Cunningham,
Sutton made handwritten notes, documenting Cunningham’s mental impressions regarding
Defendant’s handling of the underlying claim and the viability of a bad faith claim. (Doc. 6712 ¶¶ 17, 23, 65). Sutton also sent Plaintiff a letter, which discussed the strategy moving forward
with the bad faith case, Sutton’s assessment of the likelihood of success in the bad faith litigation,
and a summary of Sutton’s understanding of Cunningham’s assessment of the likelihood of
success. (Id. ¶ 27). Sutton also made notes containing the substance of his conversations with
Cunningham, including Cunningham’s assessment of the viability of the bad faith claim and advice

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regarding strategy, in his case management software. (Id. ¶¶ 40, 42, 43, 47, 55, 56, 59). After
Sutton received the check for the policy limits, Sutton sent an e-mail to his legal assistant and his
paralegal with directions to return the check, which included notes pertaining to the underlying
liability. (Doc. 67-10 at 5)
During the pendency of discovery in this case, Defendant sent Plaintiff a Request to
Produce (“RTP,” Doc. 67-1). Included in the RTP was a request for the underlying litigation file
(the “Sutton File”), which one of Plaintiff’s attorneys, Greg Yaffa, agreed to obtain from Sutton
and to produce. (Yaffa Aff., Doc. 67-5, ¶ 6; Doc. 107 at 94:4–9). In so agreeing, Yaffa stated that
he would remove all privileged documents from the file and produce it along with a privilege log.
(Doc. 67-5 ¶ 6). Plaintiff’s response to the RTP also stated “It is anticipated that documents
responsive to this request will be contained in the underlying litigation files . . . . These files are
not currently in the Plaintiff’s possession and it is anticipated that the responsible parties will
prepare a privilege log relating to said files.” (Pl.’s Resp. to RTP, Doc. 67-2, at 2). Plaintiff’s law
firm, Domnick Cunningham & Whalen 1 (the “Cunningham Firm”) received the Sutton File around
December 16, 2015. (See Dec. 16, 2015 through Jan. 20, 2016 E-mail Chain, Doc. 67-3, at 4). It
was contained in nine bankers’ boxes, consisting of over 17,000 pages. (Id.; Doc. 67-5 ¶ 16). The
Sutton File included all of the above-referenced notes and correspondence created by Sutton. (See
generally Doc. 67-10). Upon receipt, Yaffa contacted Amanda Kidd, an associate attorney with
Defendant’s law firm, regarding the specifics of the production of the Sutton File. (Doc. 67-3 at
4). In a follow up e-mail, Yaffa again confirmed that he would “produce all of the non privileged
documents” in the Sutton File. (Id. at 3).

1

Since then, Plaintiff’s law firm’s name has changed to Cunningham Whalen & Gaspari.
The pertinent attorneys have remained on this case.

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A legal assistant at the Cunningham firm, Laura Sabbatino, sent the Sutton File to a copy
service to have it copied and bates stamped. (Sabbatino Aff., Doc. 67-6, ¶¶ 8–9). When Sabbatino
received the file back, the attorneys discovered that the service failed to bates stamp it. (Id. ¶ 11).
Sabbatino then re-sent the Sutton File to the copy service. (Id. ¶ 12). She received the batesstamped file back from the copy service on January 13, 2016. (Id. ¶ 16). During this time,
Sabbatino was contacted at least twice by a legal assistant at Defendant’s law firm, Young, Bill,
Boles, Palmer & Duke, P.A. (the “Young Firm”), regarding when the Young Firm could expect
delivery of the Sutton File. (See Doc. 67-3 at 1, 2). Sabbatino, who, although otherwise an
experienced legal assistant, was new to the Cunningham Firm, felt that the production of the Sutton
File was delinquent and that she needed to expedite its delivery to the Young Firm. (Doc. 676 ¶¶ 2–5, 18). Therefore, Sabbatino drafted a cover letter for her own signature, rather than one of
the attorneys’ signatures, and sent a CD containing an electronic copy of the entire Sutton File to
the Young Firm via overnight mail. (Id. ¶¶ 18, 20). Sabbatino did not copy any of the attorneys at
the Cunningham Firm on her communications regarding the production of the Sutton File, nor did
she advise the attorneys that she had sent the file. (Id. ¶¶ 13–15, 20, 22; Doc. 67-5 ¶ 21;
Cunningham Aff., Doc. 67-4, ¶¶ 21–22; see also Doc. 67-3 (exhibiting that no attorneys at the
Cunningham Firm were copied on Sabbatino’s e-mails with the Young Firm regarding the
production of the Sutton File)). Indeed, after Sabbatino’s production of the Sutton File, attorneys
at the Cunningham Firm continued to work on the file, reviewing documents and starting a
privilege log. (Doc. 67-4 ¶¶ 19–20; Doc. 67-5 ¶¶ 18–19).
When the Young Firm received the file, the electronic documents were placed on the firm’s
internal server. (Doc. 107 at 99:19–21). Kidd accessed the file and did a “scrolling review” of all
the documents, viewing every document in the Sutton File and selecting certain folders to be

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printed for a more thorough review. (Id. at 99:24–100:7; Kidd Dep., Doc. 97-1, at 23:21–24:4). 2
Kidd observed that there was no privilege log provided with the Sutton File. (Doc. 107 at 138:21–
139:1). She also recognized that the Sutton File included documents over which privilege could
have been asserted. (Id. at 126:13–14). In fact, Kidd testified that she was “surprised” and thought
it was “unusual” that the Cunningham Firm would produce such documents, but she did not think
the disclosure was inadvertent. (Id. at 126:4–7; Doc. 97-1 at 39:15–18).
One of the documents Kidd reviewed in depth was Sutton’s December 2007 case notes
made after his call with Defendant, where Defendant advised that it would tender the policy limits;
the note included Sutton’s opinion regarding whether Plaintiff should return any such tendered
check. (See Doc. 97-1 at 33:20–34:1). Kidd believed the note was relevant to Defendant’s
affirmative defense that Plaintiff was unwilling to settle her claim, (see Doc. 107 at 135:18–136:5),
and Kidd advised her supervising attorney, Richard Young, of the contents of these notes and
provided him with a copy, (Doc. 97-1 at 33:20–34:1; Young Dep., Doc. 97-2, at 35:15–36:12).
Young was in the midst of three back-to-back trials at the time, and therefore, he did not give these
documents his full attention. (Doc. 97-2 at 20:15–19). Kidd also sent at least one document to
Defendant’s representatives via e-mail. (Doc. 97-1 at 36:12–21). In addition, such information was
discussed between Young, Kidd, and Defendant’s representative in the context of whether to
accept a settlement offer from Plaintiff. (Doc. 97-2 at 31:20–32:1).
Based on the documents in the Sutton File regarding Sutton’s consultation with
Cunningham, Kidd determined that Cunningham was a potential witness in this case. (Doc. 107 at
128:5–13). Kidd believed Cunningham had information regarding Plaintiff’s willingness to settle

2

Although the depositions of Kidd and Young were not admitted into evidence at the
hearing, the parties agreed that they wanted the Court to review and utilize those depositions in
the resolution of the Motion to Disqualify. (Doc. 107 at 84:7–21).

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the underlying case and her reasons for rejecting the policy limits. (Id.). On March 15, 2016, the
Young Firm sent a request to the Cunningham Firm to conduct the deposition of Cunningham.
(Doc. 67-4 ¶ 21; Doc. 67-5 ¶ 20). It was this request that first notified any attorney at the
Cunningham Firm that the full Sutton File had been produced. (Doc. 67-4 ¶¶ 21–22; Doc. 675 ¶¶ 20–21). Cunningham and Yaffa immediately called the Young Firm, asking for Kidd or
Young. (Doc. 67-4 ¶ 24–25; Doc. 67-5 ¶¶ 23–24). When neither were available, a message was
left. (Doc. 67-4 ¶ 25; Doc. 67-5 ¶ 24). The next day, when neither Kidd nor Young had returned
the call, Cunningham sent the Young Firm a letter, transmitted via e-mail, advising the Young
Firm that the Sutton File was inadvertently disclosed and demanding its immediate return, which
would be replaced by a file with the privileged information removed and a privilege log. (Doc. 674 ¶ 26; Doc. 67-5 ¶ 25; Mar. 16, 2016 Letter, Doc. 67-7).
The next day, Kidd responded via e-mail stating that she and Young were out of the office
and requesting five days to respond to the letter. (Mar. 17, 2016 E-mail Chain, Doc. 67-8, at 1).
Cunningham responded that he was concerned about “being accused of not acting immediately
when we became aware of the inadvertent disclosure.” (Id.). Kidd responded, “This is not an issue.
You are obviously acting immediately and I am not disputing that.” (Id.).
On March 22, 2016, Kidd sent a letter to the Cunningham Firm, refusing to return the
Sutton File, but agreeing to sequester them, stating: “[A]s an officer of the court and in the spirit
of good faith, we will agree to not review or utilize the documents for a sufficient length of time
so that the court can determine whether production of over 17,000 pages without a privilege log is
considered to be a waiver.” (Mar. 22, 2016 Letter, Doc. 67-9, at 1). Thereafter, Kidd filed a motion
to compel the deposition of Cunningham. In that motion, Kidd referenced and quoted information

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contained in the documents that were subject to sequestration. 3 Two weeks after the Cunningham
Firm demanded the return of the Sutton File, it produced a privilege log to the Young Firm. (See
Doc. 97-1 at 63:10–15 (agreeing that Plaintiff produced a privilege log on the day that her first
motion to compel was filed); Doc. 27 (exhibiting that Plaintiff’s first motion to compel was filed
on March 29, 2016)).
II.

STANDARD OF REVIEW

Plaintiff’s objections to the Magistrate Judge’s Order are reviewed under the “clearly
erroneous” or “contrary to law” standard. Fed. R. Civ. P. 72(a); Hallford v. Allen, No. 07-0401WS-C, 2007 WL 2570748, at *1 (S.D. Ala. Aug. 30, 2007) (citing additional authority). The
objected-to portions of the R&R are reviewed de novo. 28 U.S.C. § 636(b)(1); see also Fed. R.
Civ. P. 72(b)(3).
III.

MOTION TO COMPEL RETURN OF DOCUMENTS

The parties agree that Plaintiff has established a prima facie case of privilege for all of the
items listed on the Second Amended Privilege log. Plaintiff asserts that Defendant should be
required to return all of those documents. Defendant argues that it should not be compelled to do
so because Plaintiff waived any privilege or protection and that the work product protection does
not apply in bad faith cases to the type of documents at issue here. Each argument will be addressed
in turn.
A.

Waiver by Disclosure

Defendant argues that Plaintiff’s disclosure of privileged information waived any privilege
or protection. Federal Rule of Evidence 502(b) provides that when a disclosure is made in a federal

3

Defendant’s motion to compel has since been placed under seal and is on file with the
Court. (See July 7, 2016 Order, Doc. 69).

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proceeding, it “does not operate as a waiver . . . if: (1) the disclosure is inadvertent; (2) the holder
of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder
promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule
of Civil Procedure 26(b)(5)(B).” Judge Spaulding determined that Plaintiff satisfied all three
elements, and therefore, Plaintiff’s inadvertent disclosure did not constitute a waiver. Defendant
objects.
1.

Inadvertent Disclosure

Judge Spaulding found that the disclosure was inadvertent because it was clearly a mistake
and there was no evidence that Plaintiff intended to waive her privileges. Rule 502 does not define
inadvertence. Some courts take a common-sense approach, “essentially asking whether the party
intended a privileged or work-product protected document to be produced or whether the
production was a mistake.” Thermoset Corp. v. Bldg. Materials Corp. of Am., No. 14-60268-CIV,
2015 WL 1565310, at *8 (S.D. Fla. Apr. 8, 2015) (quotation omitted). Others continue to use pre502 4 factors, “including the total number of documents reviewed, the procedures used to review
the documents before production, and the actions of the producing party after discovering that the
documents had been produced.” Id. The Court agrees with Judge Spaulding that, in this situation,
incorporating the pre-502 considerations is unnecessary because they are adequately addressed
under the other 502 factors. See Fed. R. Evid. 502 Advisory Committee’s Note to 2008
Amendment (noting that while Rule 502(b) “is flexible enough to accommodate any of [the pre502] factors,” “[t]he rule does not explicitly codify that test, because it is really a set of nondeterminative guidelines that vary from case to case”). 5

4

Rule 502 was enacted on September 19, 2008. 28 U.S.C. § 502 Note, 122 Stat. 3537.
The Court does not express an opinion as to whether the pre-502 factors could be relevant
to the inadvertence analysis under a different set of facts.
5

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The Court also agrees with Judge Spaulding that the evidence indicates that Plaintiff did
not intend to waive her privileges. Defendant asserts that this determination was erroneous, but its
arguments are somewhat confusing. Defendant argues that, overall, Plaintiff was not diligent in
producing the Sutton File, and therefore, somehow, that delay exhibits an intention to disclose and
waive privileged information. First, Defendant skews the facts. While Defendant correctly asserts
that the Sutton File was not produced for 120 days after the formal request for production,
Defendant ignores the fact that the Sutton File was not in Plaintiff’s possession and that Defendant
agreed to extensions of time. 6 Second, Defendant fails to explain how a delay in producing
documents evidences an intent to disclose privileged materials.
Next, Defendant asserts that Plaintiff’s disclosure of over 17,000 pages without a privilege
log or an indication of asserting a privilege evidences that Plaintiff intended to waive her privilege.
Defendant is incorrect that Plaintiff gave no indication that it was intending to assert any
privileges—in the communications between counsel leading up to the production, Plaintiff’s
counsel referenced creating a privilege log and asserting privileges with regard to the Sutton File
at least twice. Second, the mere fact that the documents were disclosed without a privilege log
does not indicate that Plaintiff intended to waive her privileges under the specific circumstances
here; it is undisputed that Sabbatino incorrectly disclosed the documents without consulting her
supervising attorneys. Moreover, the attorneys were in the process of reviewing the Sutton File for
the purpose of creating a privilege log at the time Sabbatino sent the file to Defendant and
continued to do so after the disclosure, indicating that Plaintiff’s attorneys were not aware of, nor

6

Although not relevant to the waiver analysis, it is concerning to the Court that Defense
counsel repeatedly characterized these extensions as solely Plaintiff’s counsel’s delay, but at the
hearing on the motion to disqualify, Kidd admitted that at least one of these extensions was mutual
because both firms were busy getting ready for trials. (Doc. 107 at 106:19–107:16).

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did they intend, such disclosure. Defendant’s focus on the narrow fact that a privilege log did not
accompany the file without explaining the context of the disclosure ignores the forest for the trees.
Finally, Defendant asserts that Sabbatino’s Affidavit and Yaffa’s Affidavit contradict one
another. They do not. Sabbatino avers that there were delays in obtaining a bates-stamped version
of the Sutton File and that Defendant’s counsel’s office was repeatedly contacting her, inquiring
as to the status of the file. As a result, Sabbatino felt rushed and pressured to produce the file
quickly. Yaffa avers that, in his opinion, there was no rush to produce the file because of the agreed
extensions of time and the fact that the discovery deadline was in the distant future. These
statements merely express the opinions and experiences of each individual. Both Yaffa and
Sabbatino also agree that they did not discuss the status of the Sutton File at the time. Therefore,
it is entirely reasonable that Sabbatino, who was new to the office, felt rushed to produce the file
while Yaffa, and experienced litigator who was not copied on the e-mails from Defendant’s firm
inquiring as to the status of the Sutton File, did not.
Accordingly, Defendant has not established that Judge’s Spaulding’s determination that
Plaintiff’s disclosure was inadvertent was clearly erroneous or contrary to law.
2.

Reasonable Steps to Prevent Disclosure

It is undisputed that Plaintiff’s law firm implemented the following procedure to avoid
disclosure of privileged materials: once a bates stamped copy of the underlying litigation file is
obtained, an assigned attorney will review the file and prepare a privilege log; then, prior to
transmitting the file to opposing counsel, an attorney must conduct a final review and sign the
transmittal letter, confirming that what is being disclosed is appropriate. (Doc. 67-4 ¶ 9; Doc. 675 ¶ 7; Doc. 67-6 ¶ 8). Judge Spaulding determined that this procedure constituted reasonable steps
to prevent disclosure. Defendant objects to this determination.

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Defendant first argues that there is no evidence that Sabbatino knew of the procedure prior
to this incident or whether she had deviated from such procedures previously. Sabbatino makes
clear in her Affidavit that she is familiar with the above-referenced procedure. Although she does
not expressly state that she was aware of this procedure prior to this incident, it is certainly implied
in the context of her statements. (See Doc. 67-6 ¶¶ 9, 19 (noting that she was “[a]ttempting to
follow” the firm’s procedure and that she “forgot that privileged documents needed to be removed”
from the Sutton File)). Other than pure speculation, Defendant has provided no basis for this Court
to question Sabbatino’s sworn Affidavit. Further, contrary to Defendant’s argument, there is
testimony that indicates that Sabbatino had not engaged in this type of behavior previously; both
Yaffa and Cunningham aver that in the twenty-four years and twelve years, respectively, that each
has been litigating bad faith claims with Plaintiff’s law firm, neither is aware of any time when
firm personnel deviated from this standard procedure. (Doc. 67-4 ¶ 10; Doc. 67-5 ¶ 8). Thus,
Defendant’s conjecture regarding Sabbatino’s knowledge of the procedures and her prior
deviations is unsupported and inconsequential.
Defendant also accuses Plaintiff’s counsel and Sabbatino of being untruthful in their
statements that Sabbatino did not tell her supervising attorneys that she produced the Sutton File
and that they did not discuss the Sutton File from the time Sabbatino produced it until the time that
Defense counsel requested to take Cunningham’s deposition. (See Doc. 81 at 10–11 (arguing that
Plaintiff’s assertion “defies logic and reason,” “strains believability” and either is “untrue or
further evidence of the entire want of care and lack of diligence . . . .”). Such accusations are
unprofessional and baseless. 7

7

Defense counsel’s unabashed accusations against Plaintiff’s counsel of being untruthful
is disconcerting. These are serious accusations that can result in serious consequences; they should
not be made lightly or without proper support. There was no basis for Defense counsel’s

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Given that Sabbatino thought she was simply completing a task she was assigned combined
with the fact that Sabbatino’s supervising attorneys were not ready to discuss the matter with
Sabbatino yet because they were still reviewing the 17,000-plus pages in the file to determine what
items were privileged, it is entirely reasonable that Sabbatino and the attorneys would not have
discussed the matter. Further, as noted, Sabbatino felt rushed by Defendant’s office, not by her
supervising attorneys, so, again, it is believable that she did not feel that it was necessary to update
her supervising attorney that she had completed a task she believed was delegated to her,
particularly when that attorney was not inquiring as to its status. Plaintiff’s firm no doubt handles
more than one matter at a time, and it is entirely reasonable that Sabbatino and her supervising
attorneys continued to move forward handling their cases without discerning a need to share the
minutiae of each completed task.
Finally, with regard to the reasonableness of Plaintiff’s precautions, Defendant objects to
Judge Spaulding’s analysis of U.S. Fidelity & Guaranty Co. v. Liberty Surplus Insurance Corp.,
630 F. Supp. 2d 1332 (M.D. Fla. 2007). There, a legal assistant misunderstood the supervising
attorney’s instructions and included privileged documents in a file that was to be produced. Id. at
1340. On the day that the production was due, the supervising attorney was not in the office and
the legal assistant took the file to another attorney in the firm who was unfamiliar with the case.
Id. That attorney signed the transmittal letter without reviewing the file; if he had reviewed it, he
would have discovered privileged information because some documents were labeled “privileged
and confidential” on their face. Id. at 1340–41. The U.S. Fidelity court determined that counsel did

recrimination. Before making any such allegations in the future, Defense counsel would be well
advised to review the portion of the Oath of Admission to the Florida Bar that states: “To opposing
parties and their counsel, I pledge fairness, integrity, and civility, not only in court, but also in all
written and oral communications.”

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not take reasonable precautions to prevent the inadvertent disclosure of privileged documents. Id.
at 1341.
As Judge Spaulding cogently explained, U.S. Fidelity is distinguishable from the instant
case. In U.S. Fidelity, the attorney for the producing party was given an opportunity to review the
documents before they were produced and did not do so. If he had, he would have discovered the
legal assistant’s mistake. Here, the attorneys had no knowledge of the production, and they were
not given the opportunity to review the documents before they were produced even though the
firm’s longstanding operating procedures required the legal assistant to bring the documents to an
attorney prior to producing them. Contrary to Defendant’s assertion, Plaintiff is not attempting to
create a “legal assistant exception” to excuse lawyer misconduct. Unlike in U.S. Fidelity, there
was no lawyer misconduct here.
3.

Prompt, Reasonable Steps to Rectify the Error

Rule 502 explicitly references the requirements of Federal Rule of Civil Procedure
26(b)(5)(B) regarding whether the disclosing party took prompt, reasonable steps to rectify the
inadvertent disclosure. Rule 26(b)(5)(B) provides:
If information produced in discovery is subject to a claim of
privilege or of protection as trial-preparation material, the party
making the claim may notify any party that received the information
of the claim and the basis for it. After being notified, a party must
promptly return, sequester, or destroy the specified information and
any copies it has; must not use or disclose the information until the
claim is resolved; must take reasonable steps to retrieve the
information if the party disclosed it before being notified; and may
promptly present the information to the court under seal for a
determination of the claim. The producing party must preserve the
information until the claim is resolved.
Judge Spaulding correctly determined that Plaintiff’s counsel acted promptly and
reasonably, noting that counsel did exactly what was required by Rule 26(b)(5)(B). Defendant
argues that this determination was “unfounded” because Plaintiff’s counsel waited two months

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after the disclosure to notify Defense counsel. Defense counsel again focuses on certain facts to
the exclusion of others. While it is true that the disclosure occurred on January 20, 2016, the
undisputed evidence establishes that Plaintiff’s counsel was not aware of the disclosure until
March 15, 2016, and took steps that day to rectify the problem. To the extent Defendant argues
that Plaintiff’s counsel was or should have been aware of the disclosure prior to March 15, 2016,
such contention relies on counsel’s previous ill-advised accusations of untruthfulness and is
without merit.
The day Plaintiff’s counsel became aware of the disclosure, Plaintiff’s counsel called and
left a message for Kidd and Young, who were unavailable. The call was not immediately returned,
so the next day Plaintiff’s counsel sent Defense counsel a letter explaining the situation and
demanding the immediate return of the Sutton File. On March 17, 2016, Kidd responded and
requested that she be given until March 22, 2016, to respond to the letter because she was on
vacation. Plaintiff’s counsel immediately responded and expressed concerns of “being accused of
not acting immediately when we became aware of the inadvertent disclosure.” (Doc. 67-8 at 1).
As noted, Kidd responded: “That is not an issue. You are obviously acting immediately and I am
not disputing that.” (Id.). Defense counsel has now, apparently, decided to retract such assurances.
Regardless, the argument is without merit.
Defense counsel also asserts that Plaintiff’s counsel did not act promptly because a
privilege log was not provided for two weeks following the discovery of the disclosure. In the
initial letter from Plaintiff’s firm to Defense counsel, Plaintiff’s counsel explained: “I have
segregated the non-privileged portion of [the Sutton F]ile and can produce that to you upon your
return of the entire file. I am currently creating a privilege log for the hundreds of documents that
we believe fall within the attorney-client and/or work-product privileges.” (Doc. 67-7 at 2). Kidd’s

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e-mail response to this letter, requesting additional time to respond, gave no indication that
Defendant’s firm would refuse to return the Sutton File, only that Defense counsel needed more
time because she was not physically in the office. On March 22, 2016, Defense counsel responded,
indicating that they would not return the Sutton File. As noted by Judge Spaulding, until the March
22 letter, Plaintiff’s firm had no reason to believe that Defense counsel would not return the file.
Further, Defense counsel has provided no authority to indicate that immediately notifying
opposing counsel of an inadvertent disclosure and then finalizing a privilege log is inappropriate.
Further, there is no basis to argue that two weeks to finalize a privilege log for a 17,000-plus page
file is unreasonable. Even though the file had been in Plaintiff’s possession prior to that time, at
least in Plaintiff’s counsel’s view, there was no urgency to finalize the privilege log prior to these
incidents due to the parties’ agreed extensions of time.
Accordingly, Defendant’s arguments with regard to the inadvertent disclosure are without
merit. The Court agrees with Judge Spaulding’s determination that Plaintiff did not waive her
privileges or protections due to disclosure.
B.

Waiver by Failing to Provide a Privilege Log

Defendant asserts that Plaintiff waived her privileges by failing to timely provide a
privilege log. Defendant conflates this argument with the arguments made in the waiver by
disclosure section. As addressed above, those arguments fail. The only other argument that
Defendant makes in this regard is that Plaintiff should have provided a privilege log on the date
that the response to Defendant’s RTP was due. As explained by Judge Spaulding, Plaintiff was not
in possession of the Sutton File at the time, the parties had discussed this fact, and they were in
agreement that Plaintiff would have more time to obtain it. Necessarily, Plaintiff could not have
produced a privilege log regarding a file that was not in its possession. Defendant’s objections to

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Judge Spaulding’s determination that Plaintiff did not waive her privileges by failing to provide a
privilege log at the time the response was due are without merit.
C.

Waiver by Failing to Object

Defendant also asserts that Plaintiff waived her privileges and protections by failing to
assert any objections in her initial response to the RTP. Judge Spaulding determined that no
objections to the RTP were necessary because the request explicitly exempted privileged
information, 8 Plaintiff did not have the Sutton File in her possession at the time, and Yaffa notified
Kidd that he would be filing a privilege log once he obtained and reviewed the Sutton File.
Defendant does not address the fact that its RTP specifically exempted privileged documents,
rendering an objection unnecessary. Instead, Defendant expects this Court to ignore reality and
determine that Plaintiff should have made specific attorney-client privilege and work-product
protection claims for a file that was not in Plaintiff’s possession. Under the facts of this case,
Plaintiff was not required to do so.
Further, Defendant’s argument that it had no notice that Plaintiff was going to be asserting
any privileges because, in other cases, Plaintiff’s counsel had made the strategic decision to
produce certain privileged materials is unavailing. First, Defendant does not assert that in previous
cases Plaintiff’s counsel produced entire underlying litigation files without privilege logs, as
occurred here, only that certain documents over which privilege could be asserted had been
produced in previous cases. Moreover, Yaffa told Kidd more than once that he would review the
Sutton File when he obtained it and create a privilege log. As Judge Spaulding found, that was

8

As Judge Spaulding noted, the parties used the term privilege to apply to both attorneyclient privileged documents and work product protected documents.

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sufficient in this case. Particularly where the Defendant agreed to give Plaintiff more time to obtain
and review the Sutton File.
D.

Waiver by Issue Injection

Defendant next argues that Plaintiff has waived her work product protection by putting her
willingness to settle the underlying case at issue. Judge Spaulding properly rejected this argument
because Plaintiff did not put the issue of her willingness to settle at issue; Defendant did. Tolz v.
Geico Gen. Ins. Co., No. 08-80663-CIV, 2010 WL 384745, at *4 (S.D. Fla. Jan. 27, 2010) (“[T]he
plaintiff did not inject the issue by suing for bad faith. Rather, it was the defendant insurer who
injected the issue of the plaintiff’s alleged ‘unwillingness’ to settle as a defense. . . . [The
defendant] cannot inject an issue in this case and then claim the privilege has been waived by the
other party.”).
E.

Application of Work-Product Protection

Finally, Defendant argues that the work product protections do not apply in bad faith cases
to items prepared in anticipation of the underlying litigation prior to its resolution. Defendant relies
on Allstate Indemnity Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005) and its progeny. In Ruiz, the Florida
Supreme Court stated that, in bad faith litigation, work product protection does not automatically
apply to the insurer’s “materials, including documents, memoranda, and letters, contained in the
underlying claim and related litigation file material that was created up to and including the date
of resolution of the underlying disputed matter and pertain in any way to coverage, benefits,
liability, or damages.” Id. at 1129–30. In doing so, the Ruiz court emphasized that this “claim file
type material presents virtually the only source of direct evidence with regard to the essential issue
of the insurance company’s handling of the insured’s claim. Id. at 1128 (emphasis added). The

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Ruiz Court did not address whether the work product protection applied in the same manner to the
insured’s underlying materials.
Judge Spaulding determined that Ruiz did not stand for the blanket proposition that work
product protections do not apply to any documents prepared in anticipation of the underlying
litigation. Instead, Judge Spaulding required Defendant to comply with Rule 26(a)(3) and make a
showing of substantial need. Defendant has not established that Judge Spaulding’s analysis is
contrary to law.
Defendant argues that the Ruiz holding should apply equally to insureds’ work product.
But Defendant does not address the rationale behind the Ruiz decision; Defendant simply states
that the insured is permitted to invade the work product of the insurer, so the insured should also
be able to do so. It is not clear, however, that the concerns expressed by the Ruiz court with regard
to the availability of evidence apply equally to an insurer’s affirmative defense. Specifically,
Defendant has not addressed whether Plaintiff’s otherwise work product protected information is
the only, or at least virtually the only, source of evidence to support its affirmative defense.
Further, district courts in Florida disagree as to whether federal or state law applies to the
work product analysis in this context—i.e., where the Court is exercising diversity jurisdiction
over a bad faith claim where the underlying action took place entirely in state court. Cozort v. State
Farm Mut. Auto. Ins. Co., 233 F.R.D. 674, 676 (M.D. Fla. 2005) (determining that state law applies
to the work product analysis where the underlying bad faith case was brought, litigated, and
resolved in state court); Milinazzo v. State Farm Ins. Co., 247 F.R.D. 691, 699–700 (S.D. Fla.
2007) (determining that federal law applies to work product protection and distinguishing Cozort
because, inter alia, Milinazzo did not involve a bad faith claim); see also Batchelor v. Geico Cas.
Co., No. 6:11-cv-1071-Orl-37GJK, 2014 WL 3697682, at *5 (M.D. Fla. June 4, 2014) (“While

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federal law provides the framework for assessing the applicability of the work-product privilege
and whether it has been overcome in a diversity case, state law nevertheless remains instructive in
determining whether there is a substantial need for materials otherwise protected by the
privilege.”), aff’d, No. 6:11-cv-1071-Orl-37GJK, 2014 WL 3687492 (M.D. Fla. July 17, 2014);
Woolbright v. GEICO Gen. Ins., Co., No. 12-21291-CV-UNGARO/TORRES, 2012 WL
12864931, at *3 (S.D. Fla. Nov. 16, 2012) (stating that “[u]nlike the attorney-client privilege, work
product protection is governed by federal law even in diversity cases. But in bad faith cases where
Florida work product protection governed the underlying case, Florida law is relevant” and citing,
among other cases, Cozort and Milinazzo (internal citations omitted)).
The Court need not resolve this issue. Having determined that Ruiz does not create a blanket
exception to the work product doctrine for the insureds’ work product protected information, the
Court must engage in the typical work product analysis, and federal and state law on this matter
are, for all relevant purposes, the same. Compare Fed. R. Civ. P. 26(b)(3), with Fla. R. Civ. P.
1.280(b)(4). The Court also notes that Defendant did not object to Judge Spaulding’s application
of federal law.
To compel the disclosure of work product protected information, Rule 26(B)(3)(A)(ii)
requires Defendant to establish “that it has substantial need for the materials to prepare its case
and cannot, without undue hardship, obtain their substantial equivalent by other means.” See also
Fla. R. Civ. P. 1.280(b)(4) (requiring a showing “that the party seeking discovery has need of the
materials in the preparation of the case and is unable without undue hardship to obtain the
substantial equivalent of the materials by other means” to obtain discovery of work product).
Further, “opinion work product”—i.e., “[m]aterial that reflects an attorney’s mental impressions,
conclusions, opinions, or legal theories”— “enjoys a nearly absolute immunity and can be

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discovered only in very rare and extraordinary circumstances.” Cox v. Adm’r U.S. Steel &
Carnegie, 17 F.3d 1386, 1422 (11th Cir. 1994) (quotation omitted), opinion modified on reh’g, 30
F.3d 1347 (11th Cir. 1994) (modifying unrelated portion of the opinion).
Judge Spaulding determined that Defendant failed to satisfy even the basic requirements
of Rule 26(b)(3), much less the “extraordinary circumstances” required to compel discovery of
opinion work product. Judge Spaulding specifically noted that Defendant “has not shown that it
cannot discover from [Plaintiff] the reasons she decided not to accept [Defendant’s] settlement
offer.” (Doc. 70 at 21). In its objections, Defendant does not attempt to satisfy this deficiency.
Instead, Defendant states that whether or not Plaintiff would have settled the underlying case
within the policy limits is directly at issue in Defendant’s affirmative defense and the work product
materials contain information that address this matter. Again, Defendant has failed to explain why
this same information cannot be obtained from another source, for example deposing Plaintiff. The
Court agrees with Judge Spaulding that Defendant has failed to establish that it has a substantial
need for the work product in this case.
Accordingly, Defendant has failed to establish that Judge Spaulding’s Order compelling
the return of Plaintiff’s inadvertently disclosed privileged and protected materials was clearly
erroneous and contrary to law. The Order will be affirmed.
IV.

MOTION TO DISQUALIFY COUNSEL

Plaintiff has moved to disqualify the Young Firm due to the receipt, review, and retention
of the inadvertently disclosed privileged and protected documents. Judge Spaulding recommends
granting the Motion for Disqualification. Defendant objects.
A.

Legal Framework

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Although disqualification is a drastic remedy, it is necessary in certain circumstances where
there has been an inadvertent disclosure. “The receipt of an inadvertent disclosure warrants
disqualification when the movant establishes that: (1) the inadvertently disclosed information is
protected, either by privilege or confidentiality; and (2) there is a ‘possibility’ that the receiving
party has obtained an ‘unfair’ ‘informational advantage’ as a result of the inadvertent disclosure.”
Moriber v. Dreiling, 95 So. 3d 449, 454 (Fla. 3d DCA 2012) (citing Atlas Air, Inc. v. Greenberg
Traurig, P.A., 997 So. 2d 1117, 1118 (Fla. 3d DCA 2008); Abamar Hous. & Dev., Inc. v. Lisa
Daly Lady Decor, Inc., 724 So. 2d 572, 573–74 (Fla. 3d DCA 1998) (“Abamar II”)). But “a movant
is ‘not required to demonstrate specific prejudice in order to justify disqualification.’” Abamar II,
724 So. 2d at 573 (quoting Junger Util. & Paving Co. v. Myers, 578 So. 2d 1117, 1119 (Fla. 1st
DCA 1989) and citing Zarco Supply Co. v. Bonnell, 658 So. 2d 151, 154–55 (Fla. 1st DCA 1995)).
To determine whether an unfair informational advantage was obtained, the Court considers
the content of what was disclosed; the extent the information was “reviewed, copied, or
disseminated”; and “the actions of the receiving attorneys” upon obtaining the privileged or
protected information. Moriber, 95 So. 3d at 454. In reviewing the receiving attorney’s actions,
the Court considers Rule 4-4.4(b) of the Rules Regulating the Florida Bar and Federal Rule of
Civil Procedure 26(b)(5)(B). See Abamar II, 724 So. 2d at 574 n.2 (noting that “an attorney
who . . . complies with the obligation to promptly notify and to return immediately the inadvertently
produced documents without exercising any unfair advantage (such as photocopying the
“confidential documents” prior to returning them), will not be subject to disqualification” and
citing Rule 4-4.4(b)); see also Fed. R. Civ. P. 26(b)(5)(B) (requiring a party who receives
inadvertently produced privileged or protected information to, among other things, “promptly
return, sequester, or destroy” such information).

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“The party moving to disqualify counsel bears the burden of proving grounds for
disqualification.” Bedoya v. Aventura Limousine & Transp. Serv., Inc., 861 F. Supp. 2d 1346, 1350
(S.D. Fla. 2012) (quotation omitted). Because a party is presumptively entitled to counsel of its
choice, disqualification should be ordered only for compelling reasons. Id.
B.

Analysis

The Court agrees with Judge Spaulding’s analysis that Plaintiff has established a sufficient
possibility that the Young Firm obtained an unfair informational advantage by reviewing the
privileged or protected information in the Sutton File, and therefore, the Young Firm must be
disqualified.
First, the Young firm argues that it should not be disqualified because Plaintiff has not
established the threshold matter of whether the information at issue here is privileged or protected.
This argument is without merit. Defendant stipulated that Plaintiff met her prima facie case of
establishing that the documents listed in the Second Amended Privilege Log were privileged or
protected, and the Young Firm has provided no basis on which this Court could determine that,
despite the documents being prima facie privileged or protected, they would otherwise be
discoverable. Indeed, the information contained in Sutton’s notes—his opinions as to whether
Plaintiff should accept the policy limits and his thoughts and impressions regarding the viability
of Plaintiff’s bad faith claim—fall squarely within the work product protection set forth in Federal
Rule of Civil Procedure 26(b)(3) (“Ordinarily, a party may not discover documents and tangible
things that are prepared in anticipation of litigation or for trial by or for another party or its
representative (including the other party’s attorney, consultant, surety, indemnitor, insurer, or
agent.”)).

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With regard to Judge Spaulding’s analysis, the Young Firm first objects to her
determination that it failed to comply with Rule 4-4.4(b). That Rule provides: “A lawyer who
receives a document or electronically stored information relating to the representation of the
lawyer’s client and knows or reasonably should know that the document or electronically stored
information was inadvertently sent must promptly notify the sender.” The Young Firm contends
that it did not know, nor should it have known that the information contained in the Sutton File
was privileged or protected when the file was received.
As Judge Spaulding explained, Yaffa confirmed twice in writing that he would only be
producing non-privileged documents from the Sutton File and that he would be producing a
privilege log. In addition, the documents, on their face, were clearly privileged, and several
documents implicated Cunningham as a witness in this case. Kidd’s testimony that sometimes
attorneys choose to produce privileged information for strategic purposes does not change this
fact. First, as noted previously, no one from the Young Firm asserted that they had ever received
an entire underlying litigation file without any privilege asserted. Instead, the instances pointed to
by Kidd involved the production of certain documents which were favorable to the plaintiffs’
cases. Kidd also emphasized the fact that the entire file was produced without a privilege log, but
that fact actually weighs against the Young Firm. It was not reasonable for Kidd to assume that,
despite Yaffa’s representations that a privilege log would be prepared, he knowingly produced the
entire Sutton File—17,000-plus pages—without asserting a single privilege, particularly given the
fact that the file contained privileged information that was unfavorable to his case and that could
make an attorney at his firm a witness in the case. Moreover, Kidd herself testified that she was
surprised by the disclosure and thought it was unusual. Further, given the obviousness of the
privileged nature of some of the documents and Young’s extensive litigation experience, he would

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have undoubtedly recognized the inadvertent disclosure had he not been preoccupied with three
back-to-back trials. After considerable deliberation, the Court will not attach ill-will or bad faith
to the Young firm’s actions in failing to recognize the inadvertent disclosure. The Court however
agrees with Judge Spaulding that the Young Firm failed to comply with Rule 4-4.4(b).
The Young Firm also failed to comply with Rule 26(b)(5)(B). That Rule provides, in
relevant part, that “[a]fter being notified [of an inadvertent disclosure], a party must promptly
return, sequester, or destroy the specified information and any copies it has; must not use or
disclose the information until the claim is resolved; [and] must take reasonable steps to retrieve
the information if the party disclosed it before being notified.” In an effort to comply with this
Rule, the Young Firm agreed to sequester the Sutton File. Despite this representation, however,
Kidd used and disclosed information contained in the supposedly sequestered Sutton File in her
Motion to Compel. Even more concerning is the fact that Kidd and Young disregard the
significance of Kidd’s actions. At the evidentiary hearing, Kidd and Young repeatedly categorized
Kidd’s use of privileged information as merely putting quote marks around two words. That is not
the case. Kidd used information in violation of the Federal Rules of Civil Procedure, the Rules
Regulating the Florida Bar, and her own promise. 9
Finally, the Young Firm argues that the remedy of excluding the use of the documents in
this case is sufficient to remediate any prejudice. In so arguing, the Young Firm asserts that Judge
Spaulding misconstrued the importance of this information to its client’s defense. There is

9

It is worth noting that the Court was perilously close to attributing bad faith to Kidd’s
actions. One more cynical than the undersigned might reasonably conclude that the Young Firm
stumbled upon a treasure trove of privileged information then, in making a conscious decision to
keep it, invented arguments inconsistent with their own prior words and deeds. Admittedly, it is a
bit of a stretch to find that Kidd simply had a lapse in judgment, but the Court will reluctantly
leave it at that.

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substantial evidence on the record that Defense counsel found these protected documents to be
significant to their defense—so much that they discussed the contents of the documents with their
client in the context of whether to settle the case. Further, information regarding the contents of
the protected information was transmitted electronically to Defendant, and Defendant has not been
able to sufficiently establish that all such information has been deleted.
Thus, all of the requirements for disqualification are met. The contents of the protected
information is highly impactful with regard to Defendant’s defense, as evidenced by Young and
Kidd’s own testimony. This information was extensively reviewed, copied, discussed, and
disseminated to Defendant, and it is not clear that all such information has been destroyed. Further,
the actions of the Young Firm upon receipt and notification of the privileged information certainly
weigh in favor of disqualification. See Atlas Air, Inc., 997 So. 2d at 1118 (“Because there is no
requirement that prejudice be shown, and it is so difficult to measure how much of an advantage,
if any, was obtained due to the inadvertent disclosure of privileged documents, the court must look
to the actions taken by the receiving lawyer or law firm in determining whether the drastic remedy
of disqualification is warranted.” (citations omitted)) (Rothenberg, J., concurring).
Finally, the Court notes that what is required for disqualification is a showing that there is
a “possibility” that an unfair informational advantage was obtained, not a showing of specific
prejudice. Thus, even if the couple of documents discussed extensively by the parties do not
establish that the Young Firm gained an unfair information advantage, Kidd testified that she
viewed every document in the Sutton File, and Young testified that he cannot remember, precisely,
what he reviewed. Further, throughout these procedures Young’s memory has been jogged at least
once, causing him to recall more in-depth information. The prospect of future revelations supports

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a finding that the Young Firm obtained an unfair informational advantage that cannot be
remediated by any remedy other than disqualification.
Further, at the evidentiary hearing, the Cunningham Firm indicated that it would be seeking
to withdraw as counsel once these issues were decided. As set forth below, if the Cunningham
Firm intends to do so, it must file a motion to withdraw.
V.

CONCLUSION

In accordance with the foregoing, it is ORDERED and ADJUDGED as follows:
1. Defendant’s Objection (Doc. 81) to the Magistrate Judge’s Order (Doc. 70)
granting Plaintiff’s Motion to Compel and deferring ruling on Plaintiff’s Motion
for Sanctions (Doc. 67) is OVERRULED and Order (Doc. 70) is AFFIRMED. As
set forth in Judge Spaulding’s Order, the Motion to Compel (Doc. 67) is
GRANTED insofar as it seeks return of the inadvertently produced privileged or
protected documents. The Cunningham Law Firm shall promptly advise the Court
in writing whether it wishes to pick up the complete Sutton Litigation File provided
to the Clerk of Court by the Young Law Firm, formerly filed at Doc. Nos. 47-56,
or whether it wishes the Clerk of Court to destroy those documents.
2. The Amended Report and Recommendation (Doc. 106) is ADOPTED and
CONFIRMED and made part of this Order.
3. Plaintiff’s Motion to Disqualify [Defendant’s] Counsel, and Motion for Sanctions
(Doc. 29) is GRANTED insofar as it seeks the disqualification of the Young Firm;
it is DENIED in all other respects.
4. The Clerk is directed to terminate Attorneys Amanda L. Kidd, B. Richard Young,
and Stephanie Ann McQueen as attorneys of record in this case.

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5. Defendant shall obtain new counsel, and such counsel shall file a notice of
appearance on or before Monday, May 1, 2017.
6. On or before Monday, May 1, 2017, the Cunningham Firm shall file a motion to
withdraw as counsel or a notice that it does not intend to do so with an explanation
for its decision.
7. All deadlines in this case are STAYED until further order of the Court. Upon
appearance of new counsel, the Court will set a status conference to determine the
deadlines moving forward in this case.
8. The Joint Motion to Extend Dispositive Motion Deadline (Doc. 110) is DENIED
as moot.
DONE and ORDERED in Orlando, Florida on March 30, 2017.

Copies furnished to:
Counsel of Record

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