PLEASANT GROVE MISSIONARY BAPTIST CHURCH OF RANDOLPH COUNTY INC v. State Farm Fire and Casualty Company

Filing 15

ORDER denying 10 Motion to Compel. Ordered by Judge Clay D. Land on 06/04/2012. (CGC)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
PLEASANT GROVE MISSIONARY
BAPTIST CHURCH OF RANDOLPH
COUNTY, INC.,

*
*

Plaintiff,

*
CASE NO. 4:11-CV-157 (CDL)

vs.

*

STATE FARM FIRE & CASUALTY
COMPANY,

*
*

Defendant.
*
O R D E R
In

this

insurance

dispute,

Plaintiff

Pleasant

Grove

Missionary Baptist Church of Randolph County (“Pleasant Grove”)
seeks production of certain documents created and maintained by
employees

of

Defendant

(“State Farm”).

State

Farm

Fire

&

Casualty

Company

State Farm contends that the documents are

protected from discovery under the work product privilege.

For

the reasons set forth below, the Court agrees that the documents
are

protected

work

product,

and

the

Court

therefore

denies

Pleasant Grove’s Motion to Compel (ECF No. 10).
FACTUAL BACKGROUND
Pleasant

Grove

purchased

a

church

insurance

State Farm in 2008 and renewed the policy in 2009.

policy

Compl. Ex.

A, Church Policy Renewal Certificate, ECF No. 1-2 at 21-22.
policy

contained

an

“Actual

Cash

Value

from

Endorsement,”

The
which

stated that the value of covered property “will be determined at
actual cash value as of the time of loss or damage” and that
State Farm would not pay more than the smaller of the policy
limit or “the actual cash value of the lost or damaged property
as of the time of loss or damage.”

Compl. Ex. A, Actual Cash

Value Endorsement, ECF No. 1-2 at 29.

The policy also contained

a “Fungus (Including Mold) Exclusion Endorsement,” which stated
that a loss due to the growth, proliferation, spread or presence
of mold or mildew was not a covered loss.

Compl. Ex. A, Fungus

(Including Mold) Exclusion Endorsement, ECF No. 1-2 at 31.
On

February

8,

2010,

Pleasant

Grove’s

pastor,

Rev.

Roosevelt Zanders, contacted the church’s State Farm agent to
report that storms in early January 2010 had blown shingles off
the

church’s

roof

sanctuary ceiling.

and

that

there

was

water

damage

on

the

E.g., Def.’s Resp. to Mot. to Compel Ex. A,

Dietrichs Aff. ¶ 3, ECF No. 13-1; accord Pl.’s Mot. to Compel
Ex. A, Activity Log 8, 2/9/2010 entry, ECF No. 10 at 8.

Rev.

Zanders first noticed the water damage on the sanctuary ceiling
on the first Sunday in January 2010.

Dietrichs Aff. ¶ 3.

State

Farm assigned in-house adjuster Chandler Christie to investigate
the claim.

Christie inspected the church on March 1, 2010 and

made the following entry into State Farm’s activity log on March
3, 2010:

2

Inspected with Mr. Zanders on Monday afternoon. Wind
damage to both slopes over the sancurary [sic].
It
will need to be reroofed.
Interior damage to the
ceiling inside.
The ceiling will need re-texturing.
Explained to insd.
Explained RCB and ACV.
He
understood.
Pl.’s Mot. to Compel Ex. A, Activity Log 7, 3/3/2010 entry, ECF
No. 10 at 7.

Christie determined that the actual cash value of

replacing the roof over the sanctuary and repairing the water
damage to the interior sanctuary ceiling was $6,267.79.
3/4/2010

entry.

Christie

issued

payment

in

that

Id. at

amount

to

Pleasant Grove on March 4, 2010, and he closed the claim.
In late May 2010, State Farm received two identical letters
from Rev. Zanders, one dated May 20, 2010 and the other dated
May 24, 2010.

Def.’s Resp. to Mot. to Compel Ex. B, Letter from

R. Zanders to State Farm (May 20, 2010), ECF No. 13-2; Def.’s
Resp. to Mot. to Compel Ex. C, Letter from R. Zanders to State
Farm (May 24, 2010), ECF No. 13-3.

In the letters, Rev. Zanders

stated

not

that

Pleasant

Grove

did

evaluation of the church’s loss.

agree

with

Christie’s

E.g., Def.’s Resp. to Mot. to

Compel Ex. B, Letter from R. Zanders to State Farm (May 20,
2010), ECF No. 13-2.

Rev. Zanders also stated that Pleasant

Grove had two contractors evaluate the damages.

Id.

reopened

to

the

file

and

asked

Pleasant

contractors’ estimates for review.

Grove

submit

the

Pl.’s Mot. to Compel Ex. A,

Activity Log 7, 5/21/2010 entry, ECF No. 10 at 7.

3

State Farm

Shortly after State Farm reopened the claim, State Farm
received an invoice for water extraction from RU Group in Macon,
Georgia.

Pl.’s Mot. to Compel Ex. A, Activity Log 7, 5/26/2010

entry, ECF No. 10 at 7.
dated March 22, 2010.

The invoice was for $2,678.28 and was

Id.

State Farm employee Buffie Marshall

contacted Rev. Zanders to ask if the water extraction bill was
related to the loss that had been reported on February 8.
Rev.

Zanders

told

Marshall

that

Pleasant

Grove

had

Id.

hired

a

public adjuster named Jay Barnes to handle the matter for the
church.

Id.

State Farm assigned Pleasant Grove’s claim to independent
adjuster

Laura

Martin,

who

representative Richard Tison.

was

assisted

by

senior

claims

Def.’s Resp. to Mot. to Compel

Ex. D, Tison Aff. ¶¶ 8-9, ECF No. 13-4.

On June 2, 2010, Tison

went to Macon, Georgia to interview someone from RU Group about
the water extraction invoice so he could determine whether it
was related to Pleasant Grove’s February claim.

Id. ¶ 10.

When

he arrived at the address on the invoice, he found that it was a
beauty supply store, but the woman who was working at the store
did not know where RU Group was located.

Id. ¶ 11; Pl.’s Mot.

to Compel Ex. A, Activity Log 6, 6/3/2010 entry, ECF No. 10 at
6.

Martin was later able to contact Carlton Pitts of RU Group,

who sent State Farm photos of the damage, but the photos were
too small to be of use.

Pl.’s Mot. to Compel Ex. A, Activity

4

Log 5, 6/8/2010 entry, ECF No. 10 at 5.

When questioned about

the amount of equipment he used, Pitts stated that he did an
“enhanced drying.”

Pl.’s Mot. to Compel Ex. A, Activity Log 6,

6/7/2010 entry, ECF No. 10 at 6.
Martin also contacted Barnes because Rev. Zanders advised
State

Farm

that

public adjuster.

Barnes

would

be

acting

as

Pleasant

Grove’s

When Martin spoke with Barnes, Barnes said

that he was not serving as a public adjuster but as a contractor
providing a damage estimate to Pleasant Grove.

Def.’s Resp. to

Mot. to Compel Ex. E, Martin Aff. ¶ 6, ECF No. 13-5.

On June

17, 2010, Martin went to inspect the church, and Rev. Zanders
was present for the inspection.

Id. ¶ 7.

Martin evaluated the

damage to the roof and then walked through the inside and around
the outside of the building, observing the damage and taking
photographs.

Id.

Martin found “water damaged ceilings in main

sanctuary, foyer, secretary office, storage room at front of
main bldg., mens bath entry, ladies bath entry, hallway on left
of church, Pastor’s office and kitchen at rear of structure.”
Mot. to Compel Ex. A, Activity Log 5, 6/18/2010 entry, ECF No.
10 at 5.
While

Martin

was

at

Pleasant

Grove,

Barnes

came

and

presented her with his estimate for repairing the church in the
amount of $181,260.11.

Martin Aff. ¶ 8; Pl.’s Mot. to Compel

Ex. A, Activity Log 5, 6/18/2010 entry, ECF No. 10 at 5.

5

Martin

reviewed

the

estimate

and

found

that

it

was

“basically

an

estimate to renovate and upgrade the entire Church building and
not just the damaged roof area and sanctuary ceiling from the
windstorm.”

Martin

Activity

5,

Log

Aff.

¶ 8;

6/18/2010

Pl.’s

entry,

ECF

Mot.

to

No.

10

Compel
at

Ex.

5.

A,

Martin

“realized that there were likely to be some problems with this
claim.”
the

Martin Aff. ¶ 8.

“Xact”

estimate

Martin noted in the activity log that

based

on

her

inspection

was

$9,689.18.

Pl.’s Mot. to Compel Ex. A, Activity Log 4, 6/20/2010 entry, ECF
No. 10 at 4.
Martin contacted Richard Wallace of State Farm’s Special
Investigative Unit (“SIU”) to discuss her concerns about the
claim.

Martin Aff. ¶ 10.

SIU “is not normally involved in the

investigation of routine property damage claims;” rather, SIU is
generally

responsible

for

claims

“in

regarding the merits of the claim.”
Compel Ex. F, Wallace Aff. ¶ 4,
Wallace met on June 22, 2010.
learned

that

Pleasant

Grove

which

questions

arise

Def.’s Resp. to Mot. to

ECF No. 13-6.

Martin and

During that meeting, Wallace
had

repaired the sanctuary ceiling.

not

replaced

Id. ¶ 8.

the

roof

or

Wallace also learned

that Barnes had provided the $181,260.11 estimate; Wallace was
familiar with Barnes from a previous case and had concerns based
on Barnes’s background and on the large increase from Christie’s
initial estimate to Barnes’s estimate.

6

Id. ¶¶ 13-14.

Wallace discussed the claim with Fire Field Claims Team
Manager Randy Ragans, and he recommended that State Farm retain
an attorney, Mark Dietrichs, who was familiar with Barnes and
who had previously represented State Farm “in the handling of
suspicious

property

reassigned

the

claim

damage
to

claims.”

Tison,

who

Id.
was

¶

to

resolve the claim with Wallace’s assistance.

15.

Ragans

investigate

and

Id. ¶ 16; Activity

Log 3, 6/22/2010 1:41 PM entry, ECF No. 10 at 3.
formally retained Dietrichs on June 24, 2010.

State Farm

Wallace Aff. ¶

18.
On June 23, 2010, Martin started making entries based on
her June 17 inspection into State Farm’s “Xactimate program,
without regard to whether or not the damage [she] had observed
was covered, in an effort to compare and analyze the information
calculated by Chandler Christie and Jay Barnes.”
¶ 14.

Martin Aff.

Martin never completed this task because the claim was

reassigned to Tison and Wallace.

Id.

On August 3, 2010, Tison and Wallace interviewed Carlton
Pitts and Doug Watson of RU Group regarding the water extraction
invoice.

Tison Aff. ¶ 18.

Tison and Wallace took a recorded

statement from Pitts, and the statement was later transcribed.
Id.
State

Farm

retained

Randall

Peters,

engineer, to inspect the church building.

7

a

professional

Pl.’s Mot. to Compel

Ex. F, Def.’s Resp. to Pl.’s 1st Interrogs. 7, ECF No. 10 at 25.
Peters “found no evidence of any damage to the roofing system of
the church or to any other parts of the sanctuary or church
building from wind or other direct weather-related event or any
damage from fungal growth associated with any roofing system
leakage.”

Id.

Rather,

Peters

determined

that

there

was

“significant shingle slippage on the sanctuary roof, openings in
metal

flashing

along

the

leakage on the steeple.”
of

shingles,

equipment,

and

steeple

Id.

woodpecker
inactive

and

significant

long-term

He also observed improper nailing

damage,
termite

water

damage

infestations.

from
Id.

HVAC
Peters

concluded that the damage to the ceiling inside the church “had
occurred over a long period of time from numerous events.”
State
Pleasant

Farm

Grove,

has

refused

contending

to

that

produce
the

several

documents

Id.

documents

are

to

privileged

work product: (1) Laura Martin’s post-June 22, 2010 analysis of
scope of damage; (2) Richard Tison’s July 2010 analysis of scope
of damage; (3) State Farm’s activity log after June 22, 2010;
and (4) the transcript of Carlton Pitts’s interview.

Pleasant

Grove asserts that the documents are not privileged and should
be produced.
DISCUSSION
“Ordinarily,

a

party

may

not

discover

documents

and

tangible things that are prepared in anticipation of litigation

8

or

for

trial

(including

by

the

or

for

other

another

party’s

party

or

attorney,

indemnitor, insurer, or agent).”

its

representative

consultant,

surety,

Fed. R. Civ. P. 26(b)(3)(A).

A party seeking “fact” work product—the type of work product at
issue here—may discover the materials if the party seeking it
shows “that it has substantial need for the materials to prepare
its

case

and

substantial

cannot,

equivalent

26(b)(3)(A)(ii).

without
by

undue

other

hardship,

means.”

Fed.

obtain
R.

their

Civ.

P.

The first question for the Court is whether

the documents at issue here were “prepared in anticipation of
litigation.”

If the answer is yes, the Court must determine

whether Pleasant Grove has a substantial need for the materials
and cannot obtain their substantial equivalent by other means.
“The general rule for determining whether a document can be
said to have been ‘prepared in anticipation of litigation’ is
whether ‘the document can fairly be said to have been prepared
or obtained because of the prospect of litigation, . . . (and
not) in the regular course of business.’” Carver v. Allstate
Ins. Co., 94 F.R.D. 131, 134 (S.D. Ga. 1982) (alteration in
original) (quoting 8 Wright & Miller, Fed. Practice & Procedure:
Civil § 2024 (1970)).

The courts have recognized that insurance

company investigating documents may be both “because it is the
ordinary

course

of

business

for

an

insurance

investigate a claim with an eye toward litigation.”

9

company
Id.

to
The

question whether insurance company investigatory documents were
“prepared in anticipation of litigation” turns on the facts of
the case.

Id.; accord, e.g., Allstate Ins. Co. v. Ever Island

Elec. Co., Civil Action No. 1:03-CV-3817-JEC, 2007 WL 2728979,
at

*6

(Sept.

17,

2007).

While

the

early

stages

of

claims

investigation is focused not on the contingency of litigation
but on whether to pay the claim, at some point, an insurance
company’s activity may shift “from mere claims evaluation to a
strong anticipation of litigation.”

Carver, 94 F.R.D. at 134.

At that point, when “the probability of litigating the claim is
substantial and imminent,” the insurance company’s investigatory
documents are considered work product.

Id.

For example, in Carver, the court found that diary sheets
created

by

an

insurance

company

employee

during

initial

investigation of a fire loss were discoverable but that diary
sheets prepared by insurance company’s investigative unit after
the insurance company determined that the fire was suspicious
were not.

Carver, 94 F.R.D. at 132, 135.

Similarly, in Lett v.

State Farm Fire & Cas. Co., 115 F.R.D. 501 (N.D. Ga. 1987), the
court found that work product privilege applied to documents
created by the insurance company’s special investigation unit
after the insurance company determined that the loss was caused
by a suspicious fire.

Lett, 115 F.R.D. at 503; accord Ever

Island Elec. Co., 2007 WL 2728979, at *6 (finding that work

10

product

privilege

applied

to

documents

created

after

an

insurance company referred the claim to its subrogation counsel
because an investigator determined that the cause of the fire
was a faulty extension cord).
Pleasant

Grove

appears

to

concede

that

some

of

the

documents created by State Farm’s employees and agents are work
product; Pleasant Grove simply contends that State Farm did not
strongly anticipate litigation until September 23, 2010, when
Randall Peters inspected the church and concluded that the loss
was not due to a single windstorm.

See Pl.’s Br. in Supp. of

Mot. to Compel 14-15, ECF No. 11 (“Coverage was not in question,
and the only issue between the parties was the amount of the
damages,
finds,

until

Mr.

however,

Peters

that

issued

State

his

report.”).

Farm

began

strongly

The

Court

anticipating

litigation on June 22, 2010, after State Farm received Pleasant
Grove’s

supplemental

services

that

investigation

were
and

claim,

which

inconsistent

also

included

included
with
repair

water

State

extraction

Farm’s

estimates

initial

that

were

nearly thirty times the amount State Farm initially paid for the
claim

related

to

the

damaged

roof.

Based

on

those

circumstances, State Farm decided to have its investigative unit
handle the claim, and State Farm determined that it would be
necessary to hire an attorney to help handle the claim.

See,

e.g., Cordell v. Pac. Indem. Co., No. CIVA 4:05CV167 RLV, 2006

11

WL 3335128, at *3 (N.D. Ga. Nov. 13, 2006) (finding that “proper
line of demarcation” was when claim was turned over to special
investigations unit based on suspicion that loss was not covered
due

to

arson).

Accordingly,

the

Court

concludes

that

the

investigatory documents created by State Farm after June 22,
2010 were prepared in anticipation of litigation, including (1)
Laura Martin’s post-June 22, 2010 analysis of scope of damage;
(2) Richard Tison’s July 2010 analysis of scope of damage; (3)
State

Farm’s

activity

log

after

June

22,

2010;

and

(4)

the

transcript of Carlton Pitts’s interview.
The

next

substantial

question

need

for

the

is

whether

materials

Pleasant
and

cannot

Grove

has

obtain

a

their

substantial equivalent by other means.

Given that State Farm

has

Wallace

agreed

to

make

Martin,

Tison

and

available

for

depositions, the Court finds that Pleasant Grove has available
to it a method for obtaining the substantial equivalent of the
documents that were created in anticipation of litigation.

See,

e.g., Lett, 115 F.R.D. at 504 (finding that plaintiffs had not
established substantial need for work product because they could
obtain the facts through depositions of the persons who prepared
the privileged reports); Carver, 94 F.R.D. at 136 (same).

The

Court therefore holds that investigatory documents created by
State

Farm

discoverable.

after

June

22,

2010

See Rule 26(b)(3).

12

are

privileged

and

not

CONCLUSION
In conclusion, the Court finds that investigatory documents
created by State Farm after June 22, 2010 are protected under
Rule 26(b)(3).

Therefore, the Court denies Pleasant Grove’s

Motion to Compel (ECF No. 10).

IT IS SO ORDERED, this 4th day of June, 2012.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE

13