AKH Company, Inc. v. Universal Underwriters Insurance Company

Filing 300

MEMORANDUM AND ORDER granting in part 282 Motion to Compel. Signed by Magistrate Judge Kenneth G. Gale on 7/27/15. Mailed to pro se party Gauntlett & Associates c/o Alan Jampol by regular mail. (df)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

AKH COMPANY, INC.,

)
)
Plaintiff,
)
)
v.
)
)
UNIVERSAL UNDERWRITERS
)
INSURANCE COMPANY,
)
)
Defendant,
)
______________________________ )

Case No. 13-2003-JAR-KGG

ORDER ON DEFENDANT UNIVERSAL’S MOTION TO COMPEL
Now before the Court is Defendant Universal’s “Motion to Compel” (Doc.
282), regarding a third-party subpoena issued to Gauntlett & Associates, a law firm
that previously represented Plaintiff AKH. For the reasons set forth below, the
Court GRANTS in part this motion.
BACKGROUND
The above-captioned matter is a declaratory judgment action based on a
dispute concerning insurance coverage and the settlement of a trademark dispute
involving Plaintiff AKH and a third party. (See Doc. 1; Doc. 75, sealed, at 5-6
(underlying litigation hereinafter referred to as “RT litigation” or “RT case).) The
facts of the case were summarized by District Court in its Order (Doc. 75, sealed)

denying Plaintiff AKH’s Motion for Partial Summary Judgment (Doc. 7) and
Defendant Universal’s Motion to Bifurcate (Doc. 68). The Court incorporates that
factual summary herein. (See Doc. 75, sealed, at 4-7.)
The case has, unfortunately, had a long and, in the Court’s opinion,
unnecessarily contentious history. (See e.g., Docs. 40, 61, 82, 117, 123, 144, 152,
158, 160, 163, 164, 168, 184, 215, 220, 264, 269, 282, 290.) The parties
disagreements culminated in this Court’s ruling on Defendant’s “Motion to
Compel Sufficient Written Responses and Production of Documents” (Doc. 123),
in which the Court held that the facts presented by Defendant created a prima facie
case of fraud sufficient to waive the attorney-client privilege as to certain
documents Plaintiff argued were privileged and protected from discovery. Upon
Plaintiff’s Motion for Reconsideration (Doc. 163) the Court’s prior Order (Doc.
158), the Court ordered an in camera inspection of the documents and ordered that
certain of them be produced to Defendant Universal. Plaintiff complied with that
Order.
The present motion was initially filled by Defendant Universal in the United
States District Court for the Central District of California1, seeking an Order

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Because Defendant Universal brought that motion in the Central District of
California, the matter received its own caption for that District, styled as Universal
Underwriters Insurance Company, Plaintiff, vs. Gauntlett & Associates, Defendant. (See
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compelling non-party law firm Gauntlett to produce documents responsive to a
subpoena. (Doc. 282.) That subpoena, served on July 15, 2014, seeks “production
of communications and documents relating to the underlying litigation and its
settlement,” with settlement of the underlying RT litigation occurring from
September through December 2012. (Doc. 283, at 5-6.)
Defendant Universal contends that responsive documents “are relevant to
[its] claims regarding fraud, misrepresentation, and concealment, among others.”
(Id., at 6.) Universal argues that the information Gauntlett has produced is nonresponsive and that the accompanying privilege log, which contains a single entry
encompassing almost 2,000 documents, is insufficient. (Id.)
Gauntlett responds that it has produced all non-privileged documents and/or
does not possess the documents Universal contends it is withholding. (Id., at 2425.) Gauntlett argues that its privilege log is sufficient. It contends that because of
the voluminous nature of documents sought, a document-by-document privilege
log would be unreasonable and overly burdensome. (Id., at 28.) It further
contends that “the documents withheld . . . are attorney-client communications and
in-firm communications between attorneys in connection with the underlying

Docs. 282 - 287.) For purposes of this case, however, Universal shall be referred to as
“Defendant Universal,” “Defendant,” or “Universal” and Gauntlett & Associates shall be
referred to as “Gauntlett.”
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litigation and, as such, are obviously protected by the attorney-client and work
product privileges2 . . . .” (Id., at 29.)
DISCUSSION
A.

Standards for Discovery.
Fed.R.Civ.P. 26(b) states that “[p]arties may obtain discovery regarding any

matter, not privileged, that is relevant to the claim or defense of any party . . .
Relevant information need not be admissible at the trial if the discovery appears
reasonably calculated to lead to the discovery of admissible evidence.” As such,
the requested information must be both nonprivileged and relevant to be
discoverable.
“‘Discovery relevance is minimal relevance,’ which means it is possible and
reasonably calculated that the request will lead to the discovery of admissible
evidence.” Teichgraeber v. Memorial Union Corp. of Emporia State University,
932 F.Supp. 1263, 1265 (D. Kan. 1996) (internal citation omitted). “Relevance is
broadly construed at the discovery stage of the litigation and a request for
discovery should be considered relevant if there is any possibility the information
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The Court notes that there is no legally recognized “work product privilege”
within the scope of Fed.R.Civ.P. 501. Rather, federal courts recognize the work product
doctrine as “‘a tool of judicial administration’ that furthers the goals of fairness and
convenience.’” Plaza Ins. Co. v. Lester, 2015 WL 3528336, at *4 (D. Colo. June 4,
2015) (quoting Pete Rinaldi's Fast Foods, Inc. v. Great Am. Ins. Cos., 123 F.R.D. 198,
201 (M.D.N.C.1988)).
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sought may be relevant to the subject matter of the action.” Smith v. MCI
Telecommunications Corp., 137 F.R.D. 25, 27 (D.Kan.1991). Stated another way,
“discovery should ordinarily be allowed unless it is clear that the information
sought can have no possible bearing on the subject matter of the action.” Snowden
By and Through Victor v. Connaught Lab., 137 F.R.D. 325, 341 (D.Kan.1991),
appeal denied, 1991 WL 60514 (D.Kan. Mar. 29, 1991). The scope of discovery is
broad, but not unlimited. If the proponent has failed to specify how the
information is relevant, the Court will not require the respondent to produce the
evidence. Gheesling v. Chater, 162 F.R.D. 649 (D. Kan. 1995).
B.

Responsive, Non-Privileged Documents.
Universal enumerates its first issue as “whether Gauntlett must produce all

responsive, non-privileged documents.” (Doc. 283, at 7.) Gauntlett contends that
the documents in its “possession consist of: (1) communications with Universal;
(2) pleadings and other public documents (3) communications between Gauntlett,
AKH, and other counsel representing AKH and (4) research and analysis that
constitute Gauntlett’s opinions, theories, conclusions.” (Id., at 24.) Gauntlett
continues that “[a]ll documents in [its] possession or control . . . which are in the
first two categories of documents, none of which are claimed to be privileged, were
produced” to Universal. (Id.)
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In Universal’s supplemental briefing, it references communications that
Gauntlett has identified “‘from RT’s counsel to defense counsel or AKH [that]
were sent to Gauntlett’ pursuant to the attorney-client relationship.” (Doc. 287, at
2.) Universal also discusses “communications with Universal from the relevant
time period (September to December 2012)” that have not been produced. (Id., at
2-3.) Universal contends it has only received “communications relevant to
[Gauntlett’s] later role as counsel of record in the Kansas litigation (running from
2013 to 2014).” (Id., at 3.)
Finally, Universal contends that Gauntlett has “ignore[d] communications
with parties other than Universal and AKH (or AKH’s counsel) during the
responsive time period.” (Id.) As a specific example, Universal references
“communications between Jesse Abrams of Gauntlett and counsel to RT on
‘concerns regarding insurance.’” (Id.) Universal also states that “other parties have
produced communications with attorneys at the Gauntlett firm, including David
Gauntlett, James Lowe, and Jesse Abrams, among others.” (Id., at 4.)
Defendant Universal’s motion is GRANTED and counsel for Gauntlett is
ordered to produce any such documents in its possession, custody, and/or control.
To the extent Universal is aware of the existence of specific documents and/or
communication, it shall provide a list of the same to Gauntlett within two weeks of
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the date of this Order. Thereafter, Gauntlett shall have thirty (30) days from
receipt of such a list from Universal to produce to Universal all such responsive
documents or provide Universal with a written explanation as to why Gauntlett
does not have such documents in its possession, custody, and/or control, including,
but not limited to, any such documents specifically listed by Universal.
C.

Privilege Log.
Courts in this District, including the undersigned Magistrate Judge, have

addressed the issue of privilege log sufficiency on numerous occasions. As stated
by Magistrate Judge James O’Hara in Sprint Comm’ns Co. L.P. v. Big River
Telephone Co., LLC,
[a] party objecting to discovery on privilege
grounds has the burden to establish the privilege.
Fed.R.Civ.P. 26(b)(5)(A) provides that
[w]hen a party withholds information otherwise
discoverable by claiming that the information is
privileged or subject to protection as
trial-preparation material, the party must:
(I) expressly make the claim; and
(ii) describe the nature of the
documents, communications, or
tangible things not produced or
disclosed—and do so in a manner
that, without revealing information
itself privileged or protected, will
enable other parties to assess the
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claim.
If a party fails to make the required showing, by not
producing a privilege log or by providing an inadequate
one, the court may deem the privilege waived. Because
waiver is a harsh sanction, however, ‘courts often reserve
such a penalty for those cases where the offending party
unjustifiably delayed in responding to the discovery
requests or acted in bad faith.’ Minor procedural
violations, good faith attempts at compliance, and other
such mitigating circumstances bear against finding
waiver.
No. 08-2046-JWL, 2009 WL 2878446, at *1 (D.Kan. Sept. 2, 2009). The Court’s
analysis thus turns to what constitutes an adequate privilege log.
“A privilege log must provide sufficient information to allow the other party
assess the claimed to privilege.” Helget v. City of Hays, No. 13-2228-KHV-KGG,
2014 WL 1308890, at *3 (D. Kan. March 28, 2014) (citing Kear v. Kohl's Dept.
Stores, Inc., No. 12–1235–JAR–KGG, 2013 WL 3088922, *3 (D. Kan. June 18,
2013) (citing Fed.R.Civ.P. 26(b)(5))). See also Fed.R.Civ.P. 26(b)(5)(a). Quoting
the Advisory Committee’s notes to the 1993 amendments to Rule 26, Gauntlett
argues its single-entry privilege log – encompassing 1,973 documents that were
generated over the course of two years – provides sufficient information. (Doc.
283, at 27.) “Details concerning time, persons, general subject matter, etc., may be
appropriate if only a few items are withheld, but may be unduly burdensome when
voluminous documents are claimed to be privileged or protected, particularly if the
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items can be described by categories.” Fed.R.Civ.P. 26 advisory committee’s note
to 1993.
The Court agrees that, under certain circumstances, Gauntlett’s privilege log
would be sufficient, particularly given its involvement as a non-party in this
litigation. The undersigned Magistrate Judge previously held in this litigation,
however, that Defendant Universal has
establish[ed] a prima facie case sufficient to invoke the
crime-fraud exception to the attorney-client privilege” in
this case as a result of “false representations made by
Plaintiff [AKH] as to a material fact or the suppression of
facts which Plaintiff was under a legal or equitable
obligation to communicate and ‘in respect of which [it]
could not be innocently silent . . . .’
(Doc. 158, at 42-43 (quoting DuShane v. Union Nat. Bank, 223 Kan. 775, 759,
576 P.2d 674, 678 (1978)). As such, this case involves a greater likelihood that
otherwise privileged documents are discoverable.
Given this context, the Court finds that there is sufficient need to require
Gauntlett to provide additional, specific information addressing the documents
implicated. The Court does not, however, find that a revised privilege log is the
most efficient way to address the situation given the obviously privileged nature of
communications between Gauntlett and Plaintiff AKH, Gauntlett’s former client.
In the Court’s previous Order requiring an in camera inspection of
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documents, Plaintiff AKH was ordered to provide to the Court all communications
between itself and counsel (whether coverage counsel or litigating counsel) that
were withheld on the basis of the attorney-client privilege or work product doctrine
that occurred from the completion of the unsuccessful mediation in September
2012 until Defendant Universal received the final draft of the settlement agreement
with RT in December 2012. (Doc. 158, at 43; Doc. 215, at 2.) The Court finds this
procedure to best address the parties’ concerns as well as serve the interests of
justice and judicial economy. As such, Gauntlett is ordered to submit to the Court,
for in camera inspection, all documents and communications between itself and
Plaintiff AKH, other counsel (whether coverage counsel or litigating counsel),
and/or any third parties, that were withheld on the basis of the attorney-client
privilege or work product doctrine, that were created or occurred from the
completion of the unsuccessful mediation in September 2012 until Defendant
Universal received the final draft of the settlement agreement with RT in
December 2012.
The documents shall be delivered to the Court within thirty (30) days of the
date of this Order in both a hard copy as well as by searchable PDF form (saved in
individual pages). The documents are to be Bates numbered. The Court will
review the communications for evidence of an intent by Plaintiff AKH to conceal
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material elements of the negotiations or settlement from Defendant. To the extent
Gauntlett has withheld any communications with, or documents shared with, any
non-client third parties at any time on the basis of the attorney-client privilege or
work product doctrine, such documents shall be produced to Defendant Universal
as no privilege applies to documents shared with a third party. Any such
documents shall be delivered to Defendant within thirty (30) days of the date of
this Order in both a hard copy as well as by searchable PDF form (saved in
individual pages). The documents are to be Bates numbered.

IT IS THEREFORE ORDERED that Universal’s Motion to Compel (Doc.
282 ) is GRANTED in part as more fully set forth herein.
IT IS SO ORDERED.
Dated at Wichita, Kansas, on this 27th day of July, 2015.
S/ KENNETH G. GALE

KENNETH G. GALE
United States Magistrate Judge

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