Fryer et al v. UMIA et al
Filing
68
ORDER denying 38 Motion to Compel. IT IS HEREBY ORDERED that Defendants' Motion to Compel (Doc. 38) shall be DENIED. Signed by Magistrate Judge Timothy J. Cavan on 3/26/2024. (JLE)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION
DONNA FRYER, BARBARA
DAVISON,
vs.
CV 22-14-BLG-SPW-TJC
ORDER
Plaintiffs,
UMIA, an insurance company,
CONSTELLATION, INC., a mutual
insurance holding company doing
business as “Constellation®”,
Defendants.
Before the Court is Defendants’ Motion to Compel. (Doc. 38.) The Court
held a motion hearing on February 28, 2024. For the following reasons, the motion
is DENIED.
I.
BACKGROUND
This action arises out of medical malpractice actions brought by Plaintiffs
against Montana physician, Enrico Arguelles (“Arguelles”), and his clinic, the
Arthritis & Osteoporosis Center of Billings (“AOC”). Defendants here were
insurers for Arguelles and AOC. Following resolution of the medical malpractice
actions, Plaintiffs brought this action against Defendants alleging, among other
claims, that Defendants violated the Montana Unfair Claims Settlement Practices
Act, Mont. Code Ann. § 33-18-201 (“MUTPA”) in the course of the underlying
1
litigations. Specifically, Plaintiffs allege Defendants failed to effect prompt,
reasonable and equitable settlements of Plaintiffs’ malpractice claims when
liability was reasonably clear. (Doc. 8.)
During discovery in this case, Defendants served requests for production on
Plaintiffs, which included a request for “[a]ny and all documents and/or
communications exchanged between You and Your Underlying Counsel in
connection with the Underlying Claim.” (Doc. 39-1 at 42, 71.) Plaintiffs objected
to the request on grounds of attorney client privilege. (Id.) Ultimately, the parties
reached an impasse, resulting in Defendants filing the instant motion to compel.
(Doc. 38.)
Through subsequent meet and confer efforts, the parties were able to distill
their dispute into the following four categories of documents:
(1) documents relative to any delay in providing materials to the
insurer for evaluation;
(2) documents relative to any alleged fraud or violation of law by
Arguelles or AOC which may have been excluded from UMIA’s
coverage;
(3) documents relative to the evaluation of the underlying claim by
Plaintiffs and their counsel; and
(4) disclosure of any expert reports or analysis Plaintiffs may have
obtained regarding the issues of the standard of care, causation, and
damages.
(Docs. 59, 60.)
2
Defendants argue that Plaintiffs’ claims have placed at issue all of the
documents in the foregoing categories. Plaintiffs respond that all of the
requested documents are protected by attorney-client privilege and/or the
work product doctrine.
II.
ANALYSIS
“The purpose of the attorney-client privilege ‘is to encourage full and frank
communication between attorneys and their clients and thereby promote broader
public interest in the observance of law and administration of justice.’” Dion v.
Nationwide Mut. Ins. Co., 185 F.R.D. 288, 294 (D. Mont. 1998), citing Upjohn Co.
v. United States, 449 U.S. 383, 389 (1981). Where, as here, jurisdiction is based
on diversity of citizenship, the scope of the attorney client privilege is determined
by state law. Id. Montana law provides that:
(1) An attorney cannot, without the consent of the client, be examined
as to any communication made by the client to the attorney or the
advice given to the client in the course of professional employment.
(2) A client cannot, except voluntarily, be examined as to any
communication made by the client to the client’s attorney or the
advice given to the client by the attorney in the course of the
attorney’s professional employment.
Mont. Code Ann. § 26-1-803.
The attorney-client privilege “may be waived if a party ‘injects into . . .
litigation an issue that requires testimony from its attorneys or testimony
concerning the reasonableness of its attorneys’ conduct.’” Dion, 185 F. R.D. at
3
294 (quoting Thornton v. Syracuse Savings Bank, 961 F.2d 1042, 1046 (2d Cir.
1992)). In a bad faith insurance action, for example, the attorney-client privilege
can be waived if a party names its attorneys as witnesses or injects into the
litigation an issue that requires testimony from its attorneys. High Country Paving,
Inc. v. United Fire & Cas. Co., 414 F.Supp.3d 1299, 1305-06 (D. Mont. 2019).
The work product doctrine protects from disclosure materials prepared in
anticipation of litigation and the mental impressions, conclusions, opinions or legal
theories of an attorney or other representative of a party concerning the litigation at
hand. Dion, 185 F.R.D. at 292. Work product protection “is not absolute and
materials may be discoverable if the opposing party can establish a substantial
need for the information and undue hardship in obtaining it by other means.” High
Country, 414 F.Supp.3d at 1302. Mental impression work product is subject to
additional protection. Id. To be discoverable, the requesting party must show that
the “mental impressions are directly at issue in a case and the need for the material
is compelling.” Id.
In the present case, the Court finds that there has been no waiver of the
attorney-client privilege or work product protection. Plaintiffs have not designated
any of their attorneys as expert witnesses. Plaintiffs also represented at the hearing
that their attorneys will not testify or be called as witnesses.
4
Further, the Court finds evidence of Plaintiffs’ evaluation of their cases, their
expert evaluations, and any evidence Plaintiffs possessed regarding fraud, are not
relevant to the issues in this action. The essence of a claim under the MUTPA, “is
that an insurer, given information available to it, has acted unreasonably in
adjusting a claim, perhaps by failing to investigate, failing to communicate or
failing to negotiate in good faith.” Peterson v. Doctors’ Co., 170 P.3d 459,467
(Mont. 2007). Here, as in Peterson, “the relevant issue is almost universally how
the insurer acted given the information available to it.” Id. ( emphasis in original).
As a result, the Montana Supreme Court found that in most cases “the claimant’s
attorney’s file from the underlying claim is generally undiscoverable[.]” Id.
Nevertheless, the Peterson Court declined to adopt a rule “that an attorney’s
file from an underlying case is per se undiscoverable in a subsequent MUTPA
case.” Id. The Court acknowledged that it was possible that a claimant’s conduct
may be relevant in a later MUTPA case where, e.g., the claimant’s actions delayed
or impaired the ability of the insurer to settle. Id.
Here, Defendants argue they are entitled to production of any attorney-client
communications that show delay by Plaintiffs in providing information to
Defendants in order to assess whether any such delay was part of a strategic plan
by Plaintiffs. Therefore, out of an abundance of caution, the Court required
Plaintiffs to submit all documents relative to delay, listed on pages 3-4 of UMIA’s
5
Supplemental Brief in Support of Motion to Compel, for in camera review.
Plaintiffs have now done so. (Doc. 67.)
The Court has reviewed the documents and finds that none should be
ordered produced. None of the documents are relevant to any theory that Plaintiffs
delayed responding to Defendants’ requests for information to further a calculated
plan to gain advantage either in the underlying action or in this case. That issue
aside, Defendants are fully informed of what information they requested from
Plaintiffs and when the information was requested, and when and how plaintiffs
responded to those requests.
III.
CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED that Defendants’
Motion to Compel (Doc. 38) shall be DENIED.
DATED this 26th day of March, 2024.
_______________________________
TIMOTHY J. CAVAN
United States Magistrate Judge
6
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?