Wausau Underwriters Insurance Company v. Reliable Transportation Specialists, Inc. et al
Filing
174
ORDER denying plaintiff's Objections to Magistrate Judge's 9/6/18 Opinion and Order denying plaintiff's motion to compel production of joint defense agreement 169 Signed by District Judge George Caram Steeh. (MBea)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
WAUSAU UNDERWRITERS
INSURANCE COMPANY,
Plaintiff,
vs.
CASE NO. 15-12954
HON. GEORGE CARAM STEEH
RELIABLE TRANSPORTATION
SPECIALISTS, INC., AMARILD
USHE and BURT HOLT,
Defendants.
____________________________/
ORDER DENYING PLAINTIFF’S OBJECTIONS TO
MAGISTRATE JUDGE’S SEPTEMBER 6, 2018 OPINION AND
ORDER DENYING PLAINTIFF’S MOTION TO COMPEL
PRODUCTION OF JOINT DEFENSE AGREEMENT [DOC. 169]
This case stems from an underlying lawsuit (the AHolt Litigation@) filed
by Burt Holt against Reliable Transportation Specialists (“Reliable”),
Amarild Ushe, and Containerport Group Inc., related to injuries sustained
by Holt when he was struck by a tractor trailer operated by Ushe. The Holt
Litigation proceeded to trial and Holt obtained a verdict against defendants
Reliable and Ushe in the amount of $8,735,142.35. The present litigation
arises out of Reliable’s and Ushe’s breach of contract / duty of good faith
and fair dealing claim alleging that Wausau acted in bad faith against its
insured by refusing to negotiate a settlement within the policy limits in the
Holt Litigation.
On July 27, 2018, Wausau filed a motion to compel production of a
joint defense agreement entered between Holt and Reliable. Magistrate
Judge Stafford held a hearing on the motion on September 6, 2018, having
previously ordered that the Common Interest Confidentiality Agreement
(“Agreement”) be produced for in camera review by the court. Magistrate
Judge Stafford denied the motion to compel, finding that the Agreement is
not relevant and therefore not discoverable.
A.
Standard of Review
Fed. R. Civ. P. 26(b)(1) allows the discovery of information “that is
relevant to any party’s claim or defense and proportional to the needs of
the case.” Fed. R. Civ. P. 72(a) provides that “[t]he district judge in the
case must consider timely objections and modify or set aside any part of
the [Magistrate’s] order that is clearly erroneous or is contrary to law.” The
clearly erroneous standard applies to a magistrate’s factual findings,
whereas legal conclusions are reviewed under the “contrary to law”
standard. Sedgwick Ins. v. F.A.B.E. Custom Downstream Sys., Inc., 47 F.
Supp. 3d 536, 538 (E.D. Mich. 2014).
-2-
B.
Analysis
Judge Stafford described the Agreement as “merely a mechanism for
safely sharing information,” and noted that the Agreement “does not define
the scope of the common interest” between Holt and Reliable. She further
described the Agreement as containing only generic, boilerplate terms. In
response to Wausau’s argument that this case is unique because there are
adverse interests among the parties to the Agreement that may lead to
future litigation between them, Judge Stafford concluded that “adverse
interests among parties to a common interest agreement are not unique . . .
and the alleged uniqueness of this case does not distinguish this case from
others finding that boilerplate joint defense agreements are not relevant or
discoverable.” (Order, p. 2, citing JP Morgan Chase Bank, N.A. v. Winget,
No. 08-13845, 2010 WL 11545362, at *3 (E.D. Mich. Dec. 10, 2010).
Wausau argues that the scope of discovery is traditionally quite
broad, Lewis v. ACB Bus. Servs., 135 F.3d 389, 402 (6th Cir. 1998), and
therefore the Agreement’s provisions are relevant to the claims and
defenses in this case. Wausau again points out that Reliable and Holt are
adversaries in that Holt has an outstanding judgment against Reliable.
While the parties believe they have a common interest in pursuing
Reliable’s claim for bad faith against Wausau, the scope and nature of such
-3-
common interest is not obvious to Wausau. Wausau wants to discover the
entire Agreement which may be useful to impeach witnesses at trial,
including fact witnesses such as Holt’s and Reliable’s attorneys. Wausau
believes that understanding the common interest between the two parties
and the terms of their agreement to maintain confidentiality is relevant to
impeach the credibility or explain the motivation behind the testimony of
such fact witnesses.
Magistrate Judge Stafford considered each of the arguments made
by Wausau and concluded that under applicable law, the terms of the
Agreement are not relevant and therefore not discoverable. The
Magistrate Judge’s decision is not contrary to law. While Wausau is
correct that the scope of discovery is generally quite broad, when it comes
to joint defense agreements, courts are clear that boilerplate agreements
are neither relevant nor discoverable as they do not pertain to the claims or
defenses at issue in the cases. Wausau’s objections are therefore
overruled.
Wausau contends that even if the terms of the Agreement are not
discoverable, the fact that Holt and Reliable entered into the Agreement is
relevant. “The parties to a joint defense agreement . . . are relevant
because the existence of the agreement may demonstrate bias.” Biovail
-4-
Laboratories International SRL v. Watson Pharmaceuticals, Inc., No. 1020526, 2010 WL 344187, *1 (S.D. Fla. August 10, 2010) (emphasis in
original). In Biovail, the Florida District Court held that the joint defense
agreement at issue was not relevant because it contained only boilerplate
terms, but that the parties to the agreement and the date of the agreement
were relevant. Id. at *2. Wausau seeks clarification from this court as to
whether it can refer to the existence of the Agreement and the parties
thereto. This is an issue that is more appropriately addressed in the
context of a motion in limine. Now, therefore,
IT IS HEREBY ORDERED that Wausau’s Objections to Magistrate
Judge’s September 6, 2018 Opinion and Order Denying Plaintiff’s Motion to
Compel Production of the Joint Defense Agreement are DENIED.
IT IS SO ORDERED.
Dated: October 18, 2018
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
October 18, 2018, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk
-5-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?