LEGENDS MANAGEMENT CO., LLC v. AFFILIATED FM INSURANCE COMPANY

Filing 88

OPINION & ORDER GRANTING IN PART AND DENYING IN PART CROSS-MOTIONS TO COMPEL DISCOVERY, etc. re 50 Letter, 49 Brief. Signed by Magistrate Judge Steven C. Mannion on 8/22/17. (cm, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
NOT FOR PUBLICATION
Civil Action No.
2:16-CV-01608-SDW-SCM

LEGENDS MANAGEMENT CO.,
LLC,

OPINION ON CROSS-MOTIONS TO
COMPEL DISCOVERY

Plaintiff,
v.

D.E. 49, 50

AFFILIATED INSURANCE
COMPANY,
Defendant.
Steven C. Mannion, United States Magistrate Judge.
Before this Court are informal cross motions compelling discovery withheld as privileged.
Plaintiff

Legends

Management

Company,

LLC

(“Legends”)

and

Third-Party

Defendant/Counterclaimant Metairie Corporation (“Metairie”) (collectively, the “Legends
Parties”) and Defendant/Third-Party Plaintiff Affiliated FM Insurance Company (“Affiliated”)
respectively seek to compel documents withheld as privileged attorney-client communications
and/or work product.1 The Court heard oral arguments on March 8, 2017, May 19, 2017, and July
13, 2017. Upon consideration of the submissions and oral arguments, and for the reasons set forth
below, the Court GRANTS IN PART AND DENIES IN PART the Legends Parties’ informal
motion to compel, and GRANTS Affiliated’s informal motion to compel.

1

(ECF Docket Entry No. (“D.E.”) 49, 50).

BACKGROUND AND PROCEDURAL HISTORY2

I.

The Legends Parties allege breach of contract under an insurance policy (“Policy”) and bad
faith denial of insurance claims by Affiliated from storm-related damage to property known as the
Great Gorge Playboy Club and Seasons Hotel (the “Property”).3 Damage to the Property resulted
from two4 separate storm-related incidents which occurred in the Fall of 2011.5 On February 6,
2012, Citizens Public Adjusters, Inc. (“Citizens”), retained by the Legends Parties to assist with
the submission of the insurance claims, “first notified” Affiliated of the damage to the Property. 6
Notice was provided telephonically to FM Global, Affiliated’s claims examiner.7
After notice of damage was provided, Affiliated assigned Steven Leider (“Mr. Leider”) and
David Lawson (“Mr. Lawson”), claims adjusters at FM Global, to investigate and adjust the
claims, and determine whether there was coverage under the Policy. 8 During FM Global’s initial
post-claim inspection on March 1, 2012, it reportedly learned that the Property “had not been open
to the general public for approximately three (3) years” and “that Legends, on behalf of itself and
Metairie as owner of the property, had already demolished the first and second floors of the East

2

The allegations set forth within the pleadings and motion record are relied upon for purposes of
this motion only. The Court has made no findings as to the veracity of the parties’ allegations.
3

(D.E. 1-1, Compl. ¶ 2; D.E. 7, Third-Party Compl. ¶ 28).

4

The Legends Parties initially reported three loss events but dropped the last claim.

5

(D.E. 1-1, Compl. ¶ 1).

6

(D.E. 49-1, Ex. A to Decl. of Henry Catenacci, Esq. (“Catenacci Decl.”) at 6).

7

(Id.).

8

(D.E. 78-1, Decl. of Robert Brunelli, Esq. (“Brunelli Decl.”) ¶ 3).
2

Wing.”9 Thereafter, in March 2012, Affiliated retained the law firm of Podvey Meanor as outside
counsel “to provide legal opinions and legal advice regarding coverage issues relating to the claims
. . . because it anticipated there would be legal issues with respect to various aspects of the
claims.”10 Podvey Meanor is the former law firm of Henry Catenacci (“Mr. Catenacci”), counsel
for Affiliated.11 On March 19, 2012, Affiliated advised the Legends Parties by letter that it was
investigating the insurance claims under a full reservation of rights.12
The Legends Parties retained Attorney Jonathan Wheeler (“Mr. Wheeler”) in April 2013
following Affiliated’s Notices of Examinations Under Oath, “akin to a deposition,” to Legends’
President13 and later, Legends’ Chief Engineer.14 In addition to providing legal assistance in
connection with the Examinations Under Oath, Mr. Wheeler was “retained to provide legal advice
and counsel concerning the insurance coverage claims” and “Affiliated’s handling and allegedly
continued investigation of them.”15 Mr. Wheeler certifies that his involvement with the revised
claims was entirely in a legal capacity.16 For example, on March 7, 2014, Mr. Wheeler toured the
Property with Legends Chief Engineer and a former general manager of Citizens, and took
photographs to “develop an understanding of the areas of property damage that were [the] subject

9

(D.E. 7, Third-Party Compl. ¶¶ 45-48).

10

(D.E. 78-1, Brunelli Declaration ¶¶ 4-5).

11

(Id. ¶ 5).

12

(D.E. 7, Third-Party Compl. ¶ 50).

13

(D.E. 54-1, Aff. of Jonathan Wheeler, Esq. (“Wheeler Aff.”) ¶¶ 3, 6).

14

(Id. ¶ 6).

15

(Id.).

16

(Id. ¶ 8).
3

of the insurance claims.”17 Following that visit, on April 15, 2014, Mr. Wheeler submitted a cover
letter enclosing the Legends Parties’ revised insurance claims to Mr. Catenacci.18 The letter stated,
in part: “[t]hese amended submissions were made based upon the reevaluation of the loss
performed by myself, Dave Tassey and John Masucci of Citizens Public Adjusters.”19
Affiliated denied coverage for the claims on July 21, 2014, and this suit followed.20 After
hearing oral arguments on March 8, 2017, May 19, 2017, and July 13, 2017, the remaining dispute
concerns: (1) Affiliated’s request to compel Mr. Wheeler’s documents regarding his visit to the
Property and communications about the revised claims between the period February 19, 2014
through April 15, 2014;21 and (2) the Legends Parties’ request to compel the documents of Podvey
Meanor and Mssrs. Leider and Lawson.22 The parties respectively maintain that all non-privileged
documents have already been produced and the withheld documents are protected from disclosure
by the attorney-client privilege and/or work product doctrine. All withheld documents were
submitted to the Court for in camera review.
II.

DISCUSSION & ANALYSIS
A party asserting a claim of privilege is obligated to provide a log of withheld documents
which provides sufficient information “to assess the applicability of the privilege or protection.”23

17

(Id. ¶ 10).

18

(Id. ¶ 12).

19

(D.E. 49-1, Ex. F to Catenacci Decl. at 27).

20

(Id. Ex. G at 32).

21

(D.E. 49, Def.’s Br.).

22

(D.E. 50-1, Pl.’s Br.).

23

FED. R. CIV. P. 26(b)(5).
4

Consistent with this obligation, Affiliated and the Legends Parties provided privilege logs and
submitted the documents for in camera review. The Court will address the matters challenged by
each party by first analyzing the applicability of the attorney-client privilege followed by the work
product doctrine. Lastly, the Court will briefly address documents withheld by Affiliated under
New Jersey statute and regulation.
A. Attorney-Client Privilege
The party invoking attorney-client privilege bears the burden of proving the privilege
applies and must show: “(1) that it submitted confidential information to a lawyer, and (2) that it
did so with the reasonable belief that the lawyer was acting as the party’s attorney,”24 and (3) that
the purpose of the communications was to secure legal, as opposed to business, advice.25 The
Third Circuit has noted that federal courts narrowly construe the attorney-client privilege because
it obstructs the truth finding process.26 The “attorney-client privilege does not apply just because
a statement was made by or to an attorney.”27 “The privilege protects only those disclosures –
necessary to obtain informed legal advice – which might not have been made absent the
privilege.”28

24

Montgomery Acad. v. Kohn, 50 F. Supp. 2d 344, 350 (D.N.J. 1999).

25

See Kelly v. Ford Motor Co., 110 F.3d 954, 965 (3d. Cir 1997) (internal citation omitted); see
also Beachfront N. Condo. Ass'n v. Lexington Ins. Co., No. 14-6706, 2015 U.S. Dist. LEXIS
102917, at *6 (D.N.J. Aug. 5, 2015).
26

Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1423 (3d Cir. 1991)
(internal citation omitted).
27

Beachfront N. Condo., 2015 U.S. Dist. LEXIS 102917, at *4.

28

Id. (quoting Westinghouse, 951 F.2d at 1423-24).
5

Accordingly, “it is well-settled that when a client voluntarily discloses privileged
communications to a third party, the privilege is waived.”29 However, if disclosure to a third party
is necessary for the client to obtain informed legal advice, courts recognize exceptions to this
rule.30 The attorney-client privilege may therefore apply to communications between an attorney
and an “agent”31 even if the client is not a “direct participant.”32 It is well-settled that for purposes
of the privilege, “agents that help facilitate attorney-client communications or [] legal
representation” constitute “[p]rivileged persons.” 33 On the other hand, an attorney who performs
essentially “nonlegal duties” does not qualify as a “lawyer” for purposes of the privilege.34 Thus,
when the purpose of an attorney’s investigation is “to prepare an insurance claim . . . the privilege
does not apply.”35 At the same time, communications made to obtain legal advice do not
necessarily lose protection of the privilege because they involve an insurance claim.36

29

Westinghouse, 951 F.2d at 1424 (internal citation omitted).

30

Id.

31

Id. (quotation marks and internal citations omitted).

32

Beachfront N. Condo., 2015 U.S. Dist. LEXIS 102917, at *6 (citing In re Grand Jury, 705
F.3d 133, 160 (3d Cir. 2012)).
In re Grand Jury, 705 F.3d at 160 (quoting Teleglobe Commc’ns Corp. v. BCE, 493 F.3d 345,
359 (3d Cir. 2007)).
33

34

Payton v. N.J. Tpke. Auth., 148 N.J. 524, 550-51 (1997) (internal citation omitted).

35

Id.

36

See Reliance Ins. Co. v. Am. Lintex Corp., No. 00-5568, 2001 U.S. Dist. LEXIS 7140, at *6-7
(S.D.N.Y. May 31, 2001).
6

Podvey Meanor’s Files37

i.

The Legends Parties seek “[a]ny and all documents referring in any way to the claim[s]
submitted to Affiliated on or behalf of Legends . . . including, without limitation, all Documents
concerning Affiliated’s investigation, handling, analysis, consideration, evaluation and response
to such claim.”38 They believe Affiliated initially retained Podvey Meanor for claims investigative
purposes in the course of Affiliated’s “normal business operations” as evinced by the length of the
investigation and correspondence between Mr. Catenacci (a former member of Podvey Meanor)
and Affiliated’s claims handler as early as October 8, 2013.39 Thus, if Podvey Meanor assisted
with the handling of claims, rather than providing legal services, the attorney-client privilege does
not apply.40
With the exception of Podvey Privileged DNP 000279 and 000291; and Leider Privileged
000572, the Court finds that Affiliated has met its burden of establishing that the remaining
documents identified in the privilege logs are protected from disclosure by the attorney-client
privilege. Podvey Meanor was retained as outside counsel in March 2012.41 The Declaration of
Robert Brunelli, Esq. (hereinafter “Brunelli Declaration”), Vice President, Litigation Manager and

Initially, the Legends Parties only sought Podvey Meanor’s files. At oral argument, counsel
made clear that the Legends Parties seek all relevant and withheld documents inclusive of the
files of David Lawson and Steven Leider. For purposes of this Opinion, the Court refers to the
three sets of documents as “Podvey Meanor” documents. The corresponding Order specifies
what must be produced as to each bates stamped document pertaining to the files of Podvey
Meanor, David Lawson, and Steven Leider.
37

38

(D.E. 50-4, Ex. B to Cert. of Jennifer Black Strutt, Esq. (“Strutt Cert.”) ¶ 8 at 11).

39

(D.E. 50-1, Pl.’s Br. at 17-18).

40

(Id.).

41

(D.E. 78-1, Brunelli Decl. ¶ 5).
7

Assistant General Counsel of Affiliated, provides that Podvey Meanor’s “sole role was to provide
legal advice, opinions[,] and counsel” to Affiliated.42 “At no time did Podvey Meanor or any of
its attorneys conduct a physical examination of the . . . Property at issue” nor did they “perform a
claims[] adjustment or measurement function concerning the Legends Parties’ claims.”43 The
veracity of the Brunelli Declaration is bolstered by the privilege logs’ descriptions and the Court’s
in camera review which reveals that the communications exchanged between outside counsel at
Podvey Meanor and in-house counsel at Affiliated FM (Mr. Brunelli) consist of legal advice
regarding the extent of coverage, if any, under the Policy, and legal recommendations and opinions
regarding the Examinations Under Oath. None of the documents at issue were generated during
the regular course of Affiliated’s claims investigation business. The Court finds that they are
privileged and protected from disclosure.
While not argued by the Legends Parties, e-mails with multiple recipients do not alter the
result or constitute waiver of the privilege. Of the documents at-issue, only Mr. Brunelli, Mssrs.
Leider and Lawson of FM Global, Affiliated’s claims adjuster, and counsel at Podvey Meanor
received the e-mails. Even if it was argued that FM Global, Affiliated’s claims adjuster, did not
qualify as the client but rather the “agent” for purposes of the privilege, the Court would still find
that the privilege applies. What is dispositive is that in acting as Affiliated’s “agent,” FM Global
sought legal, as opposed to business, advice.44 In each instance, the redacted and withheld
documents contain confidential communications made for the purpose of securing legal advice

42

(Id.).

43

(Id. ¶ 9).

44

See Westinghouse, 951 F.2d at 1424 (quotation marks and internal citations omitted); see also
Kelly, 110 F.3d at 965 (internal citation omitted); Beachfront N. Condo., 2015 U.S. Dist. LEXIS
102917, at *6.
8

regarding existing as well as potential issues with respect to the claims. Contrary to the Legends
Parties’ position, the communications concern legal advice and do not lose the protection of the
privilege merely because they involve an insurance claim.45
The Court also finds that three e-mails authored by Peter Kahn (“Mr. Kahn”), a forensic
accountant retained by Podvey Meanor to assist in providing legal advice, are privileged.
Communications exchanged with consultants are not automatically privileged just because inhouse or outside counsel is “copied in” on correspondence; however, “if the express purpose of
the communication was to relay information for the purpose of seeking legal advice . . . the
privilege attach[es].”46 Based on in camera review, in-house and outside counsel were not merely
“copied in” on the communications. The “express purpose” of Mr. Kahn’s e-mails was to relay
his accounting expertise and allow Podvey Meanor to render legal assistance as to existing and
potential coverage issues arising from the Legends Parties’ insurance claims. In other words, Mr.
Kahn’s e-mails were sent in confidence “to relay information for the purpose of seeking legal
advice.” For these reasons, the redacted and withheld documents authored by Mr. Kahn are
privileged from disclosure.

45

See Reliance Ins. Co., 2001 U.S. Dist. LEXIS 7140, at *6-7.

46

See In re G-I Holdings, Inc., 218 F.R.D. 428, 436 (D.N.J. 2003) (internal citation omitted).
While not implicated in this case, the privilege also extends, under limited circumstances, to
communications between an accountant and a client “when the accountant functions as a
‘translator’ between the client and the attorney.” Id. at 434 (quoting United States v. Kovel, 296
F.2d 918, 921 (2d Cir. 1961)). In this role, the accountant “must act as a ‘go between[]’ to assist
the communication between a client and an attorney.” Id. at 435. Again, for the privilege to
attach, it is “vital . . . that the communication be made in confidence for the purpose of obtaining
legal advice from the lawyer.” Id.
9

ii.

Attorney Wheeler’s Files

Affiliated seeks to compel “Mr. Wheeler’s files relating to his inspection of the property,
re-evaluation of the claim submissions[,] and preparation of or input into the revised or amended
submissions on April 15, 2014. The documents sought are also limited to a less than (2) month
time period, from February 19, 2014 through the date of the amended submissions on April 15,
2014.”47 The issue is whether Mr. Wheeler’s files between February 19, 2014 and April 15, 2014
show that he was providing legal advice, or alternatively, preparing the revised insurance claims
for submission to Affiliated in which case the documents are not privileged.
While Mr. Wheeler certifies that he was retained to provide legal assistance to the Legends
Parties in connection to the Examinations Under Oath and that his “involvement with the revised
submission was entirely in a legal capacity,”48 the Court finds his statements are wholly conclusory
and that the documents at issue are not protected by attorney-client privilege. The record before
the Court, including Mr. Wheeler’s certified statement and an in camera review of the documents,
shows that Mr. Wheeler acted in a non-legal capacity when he evaluated the Property and prepared
and submitted the revised claims.

Thus, the attorney-client privilege does not apply. The

remaining communications were otherwise made to confirm travel arrangements and witness
availability and are not privileged.49
Moreover, in camera inspection of Mr. Wheeler’s April 15, 2014 letter demonstrates that
he communicated with employees of Citizens to assist with revising and submitting the insurance

47

(D.E. 49, Def.’s Br. at 2-3).

48

(D.E. 54-1, Wheeler Aff. at ¶¶ 5-6, 13).

49

An e-mail labeled Wheeler 0001173 was previously sent to opposing counsel at Podvey
Meanor and cannot now be withheld as privileged.
10

claims, and that his March 7, 2014 visit to the Property with Legends Chief Engineer and
subsequent conversations with him formed an integral function in revising the claims at issue. The
“attorney-client privilege does not apply just because a statement was made by or to an attorney.”50
In this role, Mr. Wheeler performed a business duty, not a legal one, and the attorney-client
privilege does not apply.
B. Work Product Doctrine
Under Rule 26(b)(3), the work product doctrine protects “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 (including the other party’s attorney, consultant, surety, indemnitor, insurer,
or agent).”51 A litigant who invokes the work-product protection bears the burden of proving both
that the withheld documents were prepared because “of reasonably anticipated litigation” and that
the documents were not prepared for any other purpose.52 Generally, “a party must show more
than a ‘remote prospect,’ and ‘inchoate possibility,’ or a ‘likely chance of litigation.’” 53 “Rather,
a party must show that there existed ‘an identifiable specific claim of impending litigation when
the materials were prepared.’”54 “The mere involvement of, consultation with, or investigation by
an attorney does not, in itself, evidence the ‘anticipation of litigation.’”55

50

Beachfront N. Condo., 2015 U.S. Dist. LEXIS 102917, at *4; see also Westinghouse, 951 F.2d
at 1423-24 (internal citation omitted).
51

Id. at 662 (citing FED. R. CIV. P. 26(b)(3)).

52

Beachfront N. Condo., 2015 U.S. Dist. LEXIS 102917, at *11-12 (internal citation omitted).

53

In re Gabapentin Patent Litig., 214 F.R.D. 178, 183 (D.N.J. 2003) (internal citation omitted).

54

Id.

55

Id.; see also Taroli v. General Elec. Co., 114 F.R.D. 97, 98 (N.D. Ind.1987).
11

“The work product doctrine is distinct from and broader than the attorney-client
privilege.”56 Compared to the attorney-client privilege, “disclosure to a third party does not
necessarily waive the protection of the work-product doctrine.”57 The work product doctrine’s
“protection extends beyond materials prepared by an attorney to include materials prepared by an
attorney’s agents and consultants.”58
At the same time, “the work product doctrine is not an absolute bar to discovery of
materials prepared in anticipation of litigation.”59 Upon a showing of “substantial need” and
“undue hardship,” work prepared in anticipation of litigation by an attorney or his agent is
discoverable.60

However, “‘core’ or ‘opinion’ work product that encompasses the ‘mental

impressions, conclusions, opinion, or legal theories of an attorney or other representative of a party
concerning the litigation’” is “discoverable only upon a showing of rare and exceptional
circumstances.”61 Neither underlying facts62 nor documents prepared in the ordinary course of
business are protected by the work product doctrine.63 Similarly, documents prepared for purposes
other than litigation that are useful in subsequent litigation are not protectable work product.64

56
57

In re Cendant Corp. Sec. Litig., 343 F.3d 658, 666 (3d Cir. 2003) (internal citation omitted).
Westinghouse, 951 F.2d at 1428.

58

In re Cendant, 343 F.3d at 662.

59

Id. at 663.

60

Id. (citing FED. R. CIV. P. 26(b)(3)).

Id. (noting that opinion work product is “generally afforded near absolute protection from
discovery”).
61

62

Ford Motor Co. v. Edgewood Properties, Inc., 257 F.R.D. 418, 422 (D.N.J. 2009).

63

United States v. Rockwell Int'l, 897 F.2d 1255, 1265-66 (3d Cir. 1990) (internal citation
omitted); see also In re Gabapentin, 214 F.R.D. at 184.
64

Id.
12

In cases involving insurance claims, determining the trigger date for the work product
doctrine’s application is especially difficult because investigating and evaluating claims is the
routine business of insurance companies.65 As a result, some courts have declined to find
communications between insured and insurers protected by work product prior to a coverage
decision.66 Other courts have adopted a case-by-case approach and consider factors such as
“whether the parties were still jointly exploring ways to resolve their differences; whether either
party had declared a definite position or both were still considering their positions; whether, once
a position was declared, what was done would have been done for business purposes, regardless
of the possibility of litigation; and what the parties’ routine business practice of investigation
was.”67 “While not determinative, an insurer’s referral of a claim to its attorney [may also be] a
significant factor in determining when the insurer anticipates litigation.” 68 Third Circuit courts
“have adopted a case by case approach.”69

65

See Mount Vernon Fire Ins. Co. v. Try 3 Bldg. Servs., Inc., No. 96-5590, 1998 WL 729735, at
*5 (S.D.N.Y. Oct. 16, 1998); see also Westwood Prods. v. Great Am. E&S Ins. Co., No. 103605, 2011 U.S. Dist. LEXIS 84171, at *35-36 (D.N.J. Aug. 1, 2011) (internal citation omitted).
66

See Mount Vernon Fire, 1998 WL 729735, at *6; Linde Thomson Langworthy Kohn & Van
Dyke, P.C. v. Resolution Trust Corp., 5 F.3d 1508, 1515 (D.C. Cir. 1993).
67

Halpin v. Barnegat Bay Dredging Co., No. 10-3245, 2011 U.S. Dist. LEXIS 68828, at *46-47
(D.N.J. June 27, 2011) (citing St. Paul Reinsurance Co. v. Commercial Fin. Corp., 197 F.R.D.
620, 635 (N.D. Iowa 2000), Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 190 F.R.D.
532, 537-38 (S.D. Ind. 1999)).
68

Mount Vernon Fire, 1998 WL 729735, at *7.

69

Westwood Prod., 2011 U.S. Dist. LEXIS 84171, at *39; see also Halpin, 2011 U.S. Dist.
LEXIS 68828, at *49-50.
13

i.

Podvey Meanor’s Documents
Affiliated maintains that a number of withheld documents are protected from disclosure by

the work product doctrine.

In support, the Brunelli Declaration provides that Affiliated

“anticipated there would be legal issues with respect to various aspects of the claims” in March
2012 and retained Podvey Meanor as a result.70 In opposition, the Legends Parties argue the work
product doctrine does not extend to Podvey Meanor’s work as a claims handler or adjuster prior
to the July 21, 2014 denial of claims.71 Previously, Affilated certified that it retained Podvey
Meanor in March 2012 “because it anticipated there would be legal issues with respect to various
aspects of the claims.”72 When asked to clarify, at oral argument on July 13, 2017, Mr. Catenacci
stated that Affiliated anticipated litigation upon receipt of the Legends’ Parties revised claims on
April 15, 2014. The revised claims differed from the initial submission by millions of dollars.
While Podvey Meanor was retained in March 2012, this fact is not dispositive of whether
Affiliated “anticipated litigation” at that time. Neither is its reservation of rights letter dated March
19, 2012. This letter did not contain any threat of litigation nor did Affiliated immediately deny
coverage. “[A]t a certain point an insurance company’s activity shifts from the ordinary course
of business to anticipation of litigation.”73 Here, in camera inspection of the withheld documents
shows that Affiliated anticipated litigation following the submission of revised claims by the
Legends Parties on April 15, 2014. Prior to this time, Affiliated had yet to take a position on the

70

(D.E. 78-1, Brunelli Decl. ¶ 4).

71

(See D.E. 50-1, Pl.’s Br. at 12).

72

(D.E. 78-1, Brunelli Declaration ¶¶ 4-5).

73

See Mount Vernon Fire, 1998 WL 729735, at *6 (quoting Fine v. Bellefonte Underwriters Ins.
Co., 91 F.R.D. at 420, 422 (S.D.N.Y. 1981).
14

claims and Podvey Meanor continued to provide legal advice in connection to coverage issues.
The following investigative reports or other documents prepared prior to April 15, 2014 are
therefore not entitled to work product protection and should be produced to the Legends Parties:
Lawson 000005-000008; Lawson 000009-0000012; Podvey 000001-000004. Reports and other
documents prepared after April 15, 2014 forward are protected by the work-product doctrine and
shall not be produced.
ii.

Attorney Wheeler’s Documents

Based upon review of the motion record and documents submitted for in camera review,
the Court finds that the Legends Parties cannot meet their burden of establishing that the work
product doctrine applies to the Wheeler documents. The Legends Parties contend that they
anticipated litigation as of April 2013 based upon when they retained Mr. Wheeler,74 the length
of Affiliated’s investigation, its “hostile tone,” and the notice of intent to examine Legends’
President under oath.75
The Legends Parties arguments are unavailing. As previously noted, retaining counsel is
not determinative of when a party anticipates litigation.76 There is to nothing to suggest that the
length of Affiliated’s investigation, its allegedly “hostile tone,” or the notices to examine Legends
executives under oath triggered the anticipation of litigation. While an insurer’s reservation of
rights letter has been found to trigger the work product doctrine, the Legends Parties do not even
make this argument.77 Even if they did, Affiliated’s March 19, 2012 reservation of rights letter

74

(D.E. 54-1, Wheeler Aff. ¶ 3).

75

(D.E. 54-2, Aff. of Hillel Meyers (“Meyers Aff.”) ¶¶ 5-6).

76

See Mount Vernon Fire, 1998 WL 729735, at *7.

77

Id. at *8.
15

made litigation a “remote prospect” and “inchoate possibility” which is insufficient to demonstrate
the “anticipation of litigation.”78 Furthermore, Affiliated did not take a clear position on the
insurance claims until it denied coverage on July 21, 2014.79 Even if the Legends Parties
anticipated litigation prior to the denial letter, it was only plausible after submission of the revised
claims on April 15, 2014. Prior to this date, the Legends Parties had not “declared a definite
position or . . . were still considering their position[]” on the claims.80 It is therefore implausible
to find that litigation was anticipated as early as April 2013.
Here, the evidence establishes that the Legends Parties could not have anticipated litigation
until July 21, 2014 – when Affiliated denied coverage of the claims. Because the Court finds that
only two documents (Wheeler 0001181-82 and 0001192) even implicate the work product doctrine
and are dated March 2014, prior to the submission of the revised claims, establishing a work
product trigger date is unnecessary.81

Even so, the Court’s in camera review reveals that the

documents authored by Mr. Wheeler were prepared in the ordinary course of his claims
investigation business and cannot now be protected as work product because they are useful in this
case.82 While they may contain Mr. Wheeler’s mental impressions and opinions, they were not
created in anticipation of litigation, and the work product doctrine does not apply. The Legends

78

In re Gabapentin, 214 F.R.D. at 183 (internal citation omitted).

79

(D.E. 49-1, Ex. G to Catenacci Decl. at 32).

80

See Halpin, 2011 U.S. Dist. LEXIS 68828, at *46-47 (internal citation omitted); Goodyear Tire
& Rubber Co., 190 F.R.D. at 537-38.
81

The remaining documents contain underlying facts which are not protected by the work
product doctrine. See Ford, 257 F.R.D. at 422.
82

See In re Gabapentin, 214 F.R.D. at 184.
16

Parties shall therefore produce all withheld Wheeler documents as neither the attorney-client
privilege nor work product doctrine applies.
C. New Jersey Statutory and Regulatory Protection
Lastly, the Legends Parties seek production of a letter and claim fraud referral forms
Affiliated submitted to New Jersey’s Office of Insurance Fraud Prosecutor (“OIFP”). Affiliated’s
privilege log indicates that the documents are being withheld pursuant to statutory authority,
N.J.S.A. 17:33A-11; regulatory authority, N.J.A.C. 11:16-6.11, and the State Deputy Attorney
Genery’s non-disclosure request applicable to insurance companies.
Under the relevant statute, “[p]apers, documents, reports, or evidence relative to the subject
of an investigation . . . shall not be subject to public inspection.”

83

Likewise, New Jersey

regulation provides that “[a]ll information and materials in the possession of the OIFP concerning
the possibility of the existence or occurrence of insurance fraud or related criminal activities are
confidential and privileged against disclosure, and shall not be deemed public records.” 84 The
purpose of the regulation is “to protect the public interest in the prosecution of insurance fraud.”85
In Parkway Insurance Co. v. Hernandez,86 the court was asked to determine whether the OIFP
could be compelled, pursuant to a subpoena duces tucem, to produce documents submitted by
plaintiff regarding a fraud investigation into defendant’s submitted claims. The court found that
the OIFP was not required to produce the confidential documents due, in part, to a concern that

83

N.J. STAT. § 17:33A-11.

84

N.J. ADMIN. CODE § 11:16-6.11.

85

Id.

86

No. MRS-L-961-97, 1999 WL 33944690, at *5 (N.J. Super. Ct. Law Div. Apr. 15, 1999).
17

“premature disclosure of the information” would taint or prejudice the ongoing investigation.87
The court also found defendant’s position of alternatively obtaining the files from the plaintiff
rather than from the OIFP, untenable as this would “circumvent and nullify the statute.” 88
In this case, bates stamped documents Leider Privileged DNP 000161-000193 are
confidential and prohibited from disclosure under New Jersey statute and regulation if there is an
ongoing fraud investigation by the OIFP. At this juncture, the Court cannot make such a
determination because it is unclear whether an open investigation into the Legends Parties exists.
The only evidence of such an investigation is rooted in a footnote of Affiliated’s privilege log
which reads:
The Department of Banking and Insurance and Deputy Attorney General
assigned to the pending insurance fraud investigation of Legends have advised
that they consider the fraud referral forms and all communications between
Affiliated [] and the Department privileged and confidential and have requested
that they not be disclosed.
If the OIFP is conducting an investigation into the Legends Parties then, like Parkway, ordering
disclosure via Affiliated would “circumvent and nullify the statute” and could further taint or
prejudice the investigation. For these reasons, Affiliated shall submit an affidavit from the OFIP
as to whether an investigation is open or not within fourteen (14) days of this Opinion and Order.
Otherwise, Leider Privileged 000161-000193 shall be produced to the Legends Parties.

87

Id. at *1.

88

Id. at *3.

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III.

CONCLUSION
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART the
Legends Parties’ informal motion to compel, and GRANTS Affiliated’s informal motion to
compel. An appropriate Order follows:
ORDER
1. The Legends Parties motion to compel is GRANTED IN PART and DENIED IN PART as
follows:
a. GRANTED as to documents labeled Podvey 000279; 000291; 000001-4; and 0000056 as neither the attorney-client privilege nor the work product doctrine applies.
Affiliated shall produce complete copies of documents Podvey 000279 and 000291
within fourteen (14) days of this Opinion and Order.
b. DENIED as privileged attorney-client communications and the following documents
need not be produced:
i. Podvey Privileged 000003 and e-mail chain; 000043 and e-mail chain; 000045
and e-mail chain; 000047; 000049; 000178; 000276; 000007; 000009-18;
000020-21; 000019;
ii. Leider Privileged 000015; 000572; 000275; 000798; 000804; 000899; 000902;
000902; 000994 and e-mail chain; 001061; 001098 and e-mail chain; 0012141215; 000001-000002; 000003-000004; 000005-000006; 000007-000009;
000010-000012; 000013-000016;000017-000018; 000019-000020; 000021000022; 000023-000024; 000025; 000026-000034; 000035-000051; 000052000065; 000066-000067; 000068-000069; 000070-000078; 000079-000080;
000081-000083; 000084-000086; 000087-000089; 000090-000091;

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iii. Lawson Privileged 000563; 000572; 000571; 000586; 000001-000002;
000003-000004;

000003;

000013-000016;

000017;

000018-000034;

000037;000038-000147; and 000148-000160.
c. GRANTED as the work product doctrine is inapplicable to documents prepared prior
to April 15, 2014.
i. Lawson 000005-000008; Lawson 000009-0000012; Podvey 000001-000004.
d. DENIED as protected work product for documents created after April 15, 2014.
i. Podvey Privileged 000052; 000054; 000056; 000007-8
ii. Leider Privileged 00105; 0001216-1217; 000052-000065;
iii. Lawson Privileged 000593 and e-mail chain; 000005-000008 and e-mail chain;
000009-000012; and 000035-000036.
2. Affiliated’s motion to compel is GRANTED and the Legends Parties shall produce all
withheld Wheeler documents as neither the attorney-client privilege nor the work product
doctrine applies. The Legends Parties shall produce complete copies of all withheld Wheeler
documents within fourteen (14) days of this Opinion and Order.
3. Affiliated shall submit an affidavit from the OFIP as to whether an investigation is open or not
within fourteen (14) days of this Opinion and Order. Otherwise, Leider Privileged DNP
000161-000193 shall be produced to the Legends Parties.

8/22/2017 9:20:35 AM

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Original: Clerk of the Court
Hon. Susan D. Wigenton, U.S.D.J.
cc: All parties
File

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