Celebration Church, Inc. v. United National Insurance Company

Filing 23

ORDERED that 18 Motion for Protective Order is GRANTED in part and DENIED in part. It is GRANTED as to the affidavit, and it is DENIED as to the emails and the Time and Expense Worksheet. Signed by Magistrate Judge Karen Wells Roby. (cml)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CELEBRATION CHURCH, INC.

CIVIL ACTION

VERSUS

NO:

UNITED NATIONAL INSURANCE CO.

SECTION: “G” (4)

14-1050

ORDER
Before the Court is Defendant, United National Insurance Company’s (“UNIC”) Motion
for Protective Order (R. Doc. 18), seeking a court order declaring that the six documents at
issue are protected by attorney-client privilege and/or work product doctrine. The motion is
opposed. R. Doc. 19. The motion was heard for oral argument on Wednesday, February 11,
2015.
I.

Background
This case arises out of the theft of the condensers1 in seven air conditioning units owned

by the Plaintiff, Celebration Church (“Celebration”), on March 30, 2013. See R. Doc. 1-1, at 1.
The thieves stoles the condenser equipment from each unit but left the copper tubing attached to
each unit. Id. At the time of the theft, Celebration had a commercial property insurance policy
through the Defendant, UNIC, and submitted a claim for $71,894.40, the proposed cost to
replace the condenser units. Id. at 2. The policy contained a “Precious Metals Exclusion” and
UNIC denied Celebration’s claim pursuant to the exclusion, which excludes the attempted theft
of copper, aluminum or other precious metals. Id.

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An air conditioning unit is made up of three parts, a compressor, a condenser, and an evaporator. The
compressor and the condenser are located in the outdoor unit and the evaporator is located indoors.

Celebration filed this action in the 24th Judicial District for the Parish of Jefferson on
April 29, 2014 claiming that UNIC’s denial of the claim was arbitrary and capricious, and that
UNIC was in violation of good faith and fair dealing pursuant to La. R.S. 22:1892 and La. R.S.
22:1973 for its failure to timely, adequately and properly adjust its claim. Id.
As to the instant motion, UNIC seeks to prohibit the disclosure of certain privileged
documents in response to a subpoena issued by Celebration to non-party and independent
adjuster, Jonathan Kimball. See R. Doc. 18-1, at 1. UNIC argues that Celebration’s subpoena
requests the entire file of Jonathan Kimball and that a small number of the documents contain or
memorialize communications between Kimball and counsel for UNIC. UNIC enumerates six
documents it contends are protected:
1. A draft of an Affidavit of Jonathan Kimball, prepared by defense counsel Bruce
W. Boudreaux but never signed by Mr. Kimball;
2. An email from defense counsel Bruce W. Boudreaux to Jonathan Kimball dated
June 5, 2014;
3. An email from Kate Wilkinson of Global Indemnity/UNIC to Jonathan Kimball
and copying Bruce W. Boudreaux dated June 5, 2014;
4. A second copy of the same email referenced in No. 3, located in Jonathan
Kimball’s File Review Notes;
5. A note entered by Jonathan Kimball on a “Time and Expense Worksheet,” dated
June 19, 2014, describing his communication with Bruce W. Boudreaux; and
6. A note entered by Jonathan Kimball on a “Time and Expense Worksheet,” dated
June 20, 2014, describing his communication with Bruce W. Boudreaux.
II.

Standard of Review
Federal Rule of Evidence 501 states that “in a civil case, state law governs privilege

regarding a claim or defense for which state law supplies the rule of decision.” Thus, in a
diversity action, as is before the Court, the Court must apply Louisiana law to determine whether

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the information sought is protected by the attorney-client privilege. Conoco Inc. v. Boh Bros.
Const. Co., 191 F.R.D. 107, 115 (W.D. La. 1998) (citing Dunn v. State Farm Fire & Casualty
Co., 927 F.2d 869, 875 (5th Cir. 1991) and Scherer v. Latter, 1998 WL 205417 (E.D. La. 1998)).
Article 506 of the Louisiana Code of Evidence encompasses the rules on attorney-client
privilege. In general, “a client has a privilege to refuse to disclose, and to prevent another person
from disclosing, a confidential communication between certain categories of individuals . . .
made for the purpose of facilitating the rendition of professional legal services to the client.”
Maldonado v. Kiewit Louisiana Co., 152 So. 3d 909, 927 (La. App. 1st Cir. 2014), (citing
La.Code Evid. art. 506(B)), reh'g denied (Aug. 24, 2014), reh'g denied (Sept. 26, 2014).
The party asserting the privilege has the burden of proving: “1) the holder of the privilege
is or sought to become a client; 2) the communication was made to an attorney or his subordinate
in a professional capacity; 3) the communication was made outside the presence of strangers; 4)
the communication was made for the purpose of obtaining a legal opinion or services; and 5) the
privilege has not been waived.” Cacamo v. Liberty Mut. Fire Ins. Co., 798 So. 2d 1210, 1216
(La. App. 4th Cir. 2001) (citing In Re Shell Oil Refinery, 812 F. Supp. 658, 661 (E.D.La. 1993));
see also Maldonado, 152 So. 3d at 927.
As for determining whether the work-product doctrine applies, the Court looks to Rule
26(b)(3), which governs the disclosure of documents prepared in anticipation of litigation. Rule
26(b)(3) provides that “a party may obtain discovery of documents and tangible things . . .
prepared in anticipation of litigation or for trial by or for another party or by or for that other
party's representative . . . only upon a showing that the party seeking discovery has substantial
need of the materials in the preparation of the party's case and that the party is unable without

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undue hardship to obtain the substantial equivalent of the materials by other means.” Fed. R. Civ.
P. 26(b)(3).
III.

Analysis
A.

Attorney-Client Privilege

UNIC argues that Kimball, as an independent adjuster who adjusted the claim on behalf
of UNIC, is an agent of UNIC for the purpose of the application of the attorney-client privilege.
See R. Doc. 18-1, at 3. UNIC argues that Kimball is an agent because he investigated the claim
on behalf of UNIC and is the functional equivalent of an employee. Id. at 4. UNIC also argues
that the communications between Kimball and defense counsel were created after the litigation
began. Id.
UNIC cites to Residential Constructors, LLC v. Ace Prop. & Cas. Ins. Co., No.
2:05CV01318, 2006 WL 3149362, at *13 (D. Nev. Nov. 1, 2006), for the holding that
communications between the insurance company’s counsel and the independent adjusting
company are protected. Id. UNIC argues that the court in Residential Constructors held that the
independent adjuster is covered because the insurer is responsible for their conduct and is legally
liable to the insured for their bad faith conduct in handling claims. Id. at 5. UNIC argues that the
court reasoned that the independent adjuster is the functional equivalent of an in-house claims
employee. Id. at 6.
In opposition, Celebration argues that Kimball’s communications are not protected by
attorney-client privilege because he is not an agent of UNIC and because he was not employed
by UNIC’s independent adjuster Mariposa Insurance Services, Inc. (“Mariposa”) at the time of
the communication. See R. Doc. 19, at 2. Celebration argues that the attorney-client privilege is
not applicable because Louisiana courts have declined to extend the privilege to third party

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adjusters. In support of its argument, Celebration cites to Kimpton Hotel & Rest. Grp., Inc. v.
Liberty Mut. Fire Ins. Co., 974 So. 2d 72, 77-78 (La. App. 4th Cir. 2007), where the Louisiana
Fourth Circuit Court refused to extend the attorney-client privilege to a third party insurance
consultant. Id. at 5.
Celebration further argues that under Louisiana law, a representative of a client is either
(1) a person who has the authority to obtain or act upon legal advice; or (2) any other person who
makes or receives confidential information for the purpose of effectuating legal representation
for the client while acting within their scope of employment. Id. at 4. Celebration argues that
UNIC does not establish that Kimball falls under either definition of a client representative.
Specifically, Celebration argues that Kimball was not acting within the scope of his employment
because he was not employed by Mariposa or UNIC at the time of the communications. Id. at 5.
Under

Louisiana

law,

the

attorney-client

privilege

protects

“a

confidential

communication, whether oral, written, or otherwise, made for the purpose of facilitating the
rendition of professional legal services to the client, as well as the perceptions, observations, and
the like, of the mental, emotional, or physical condition of the client in connection with such a
communication.” La. Code Evid. art. 506(B). A confidential communication is a communication
that is not intended to be disclosed to persons other than to:
(a) Those to whom disclosure is made in furtherance of obtaining or rendering
professional legal services for the client.
(b) Those reasonably necessary for the transmission of the communication.
(c) When special circumstances warrant, those who are present at the behest of the
client and are reasonably necessary to facilitate the communication.
La. Code Evid. art. 506(A)(5).
The privilege also extends to the confidential communications of a representative of the
client. A person qualifies as a representative of the client if they (1) have the authority to “obtain

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professional legal services, or to act on advice so obtained, on behalf of the client,” or (2) can
make or receive “a confidential communication for the purpose of effectuating legal
representation for the client, while acting in the scope of employment for the client.” La. Code
Evid. art. 506(A)(2).
While the parties disagree on whether Kimball qualifies as a client representative, the
Court finds that the real issue is whether the documents would qualify as a “confidential
communication” because regardless of Kimball’s status as a client representative, the documents
would not be protected under the attorney-client privilege if they are not a confidential
communication. As stated above, a confidential communication is a communication that is not
intended to be disclosed to persons other than to those to whom disclosure is made in furtherance
of obtaining or rendering professional legal services for the client. La. Code Evid. art. 506(A)(5).
Two of the documents at issue are emails. The first email is an email from Kate
Wilkinson of UNIC to Kimball and copying defense counsel. In the email, Wilkinson asks
Kimball to assist defense counsel by signing an affidavit. The second email is an email from
defense counsel to Kimball attaching the affidavit for Kimball to review. However, the content
of the emails “do not contain any confidential communications or attorney advice, opinion or
mental impressions, [and] are not privileged simply because they are written by or to an
attorney.” Dixie Mill Supply Co. v. Cont'l Cas. Co., 168 F.R.D. 554, 559 (E.D. La. 1996) (citing
La.Code Evid. art. 506(A)(5)) (finding that a transmittal letter is not privileged); cf. Ingraham v.
Planet Beach Franchising Corp., No. CIV.A. 07-3555, 2009 WL 1076717, at *1 (E.D. La. Apr.
17, 2009) (applying Louisiana law to find that the content of an email is protected because “the
information is for the purpose of facilitating legal advice”). Since the substance of the emails
does not contain confidential information, the Court concludes that the emails are not privileged.

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The next two items at issue are notes entered by Jonthan Kimball on a “Time and
Expense Worksheet,” describing his communication with defense counsel. The worksheet
appears to be a document Kimball keeps in the ordinary course of business to log all his work
activities for a specific claim. The worksheet is not a communication that was created in the
furtherance of obtaining or rendering professional legal services, nor does it look like a
document that was not meant for disclosure. In fact, the document looks like it was made to be
disclosed as evidence of the time he expended on a claim. Thus, the Court finds that the “Time
and Expense Worksheet” is not protected.
B.

Work-Product Doctrine

UNIC argues that the affidavit prepared by its defense counsel is covered under the workproduct privilege because it was prepared after the commencement of litigation and for the
specific purpose of assisting UNIC in the litigation of the claim at issue. Id. at 7. UNIC further
argues that the work product doctrine has not been waived because Kimball is the functional
equivalent of an employee. Id.
In opposition, Celebration argues that the work product doctrine does not apply because
the affidavit was prepared for the purpose of disclosure as an attachment to a motion. Id. at 7.
Additionally, Celebration argues that it would not be covered because it includes factual or
coverage determinations made by Kimball, or a description of Kimball’s claim, which would not
be protected from disclosure. Id. at 8.
The work-product doctrine shields from discovery the materials prepared by or for an
attorney in preparation of litigation. Hickman v. Taylor, 329 U.S. 495 (1947); Blockbuster
Entertainment Corp. v. McComb Video, Inc., 145 F.R.D. 402, 403 (M.D. La. 1992). However,
as the Rule provides, the work-product doctrine is not limited to materials prepared by attorneys.
It also affords protection to materials prepared for by a “consultant, surety, indemnitor, insurer,
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or agent.” Fed. R. Civ. P. 26(b)(3).

The doctrine is not an umbrella that shades all materials

prepared by a lawyer, or agent of the client. It focuses only on materials assembled and brought
into being in anticipation of litigation. Piatkowski v. Abdon Callais Offshore, L.L.C., 2000 WL
1145825, at *2 (E.D. La. Aug. 11, 2000).

Excluded from the work-product doctrine are

materials assembled in the ordinary course of business. United States v. El Paso Co., 682 F.2d
530 (5 th Cir.1982), cert. denied, 466 U.S. 944 (1984). It also does not extend to the underlying
facts relevant to the litigation. See generally Upjohn v. U.S., 449 U.S. 383, 395-96 (1981).
In determining whether a document was made in anticipation of litigation, the primary
focus is on the reason or purpose for creating the document. Beal v. Treasure Chest, No. 980786, 1999 WL 461970, at *3 (E.D. La. July 1, 1999). Factors that courts rely on to determine
the primary motivation for the creation of a document include the retention of counsel and his
involvement in the generation of the document and whether it was a routine practice to prepare
that type of document or whether the document was instead prepared in response to a particular
circumstance. Piatkowski, 2000 WL 1145825, at *2. If the document would have been created
regardless of whether litigation was expected to ensue, the document is deemed to have been
created in the ordinary course of business and not in anticipation of litigation. Id.
Here, the affidavit was prepared in anticipation of litigation and is protected by the workproduct doctrine. The affidavit was prepared by the attorney and memorializes his mental
impressions. Since the affidavit was not signed by Kimball, it is not an attestation by Kimball but
the mental impressions of the attorney based on Kimball’s claims file. Furthermore, the primary
motivation for the attorney to prepare the affidavit was to attach the affidavit to a motion and
was not prepared in the ordinary course of business. Therefore, the Court finds that the affidavit
is protected under the work-product doctrine.

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IV.

Conclsuion
IT IS ORDERED that Defendant, United National Insurance Company’s Motion for

Protective Order (R. Doc. 18) is GRANTED in part and DENIED in part. It is GRANTED
as to the affidavit, and it is DENIED as to the emails and the Time and Expense Worksheet.

New Orleans, Louisiana, this 25th day of February 2015.

KAREN WELLS ROBY
UNITED STATES MAGISTRATE JUDGE

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