Government Employees Insurance Company v. Saco et al

Filing 31

ORDER granting in part and denying in part 26 Motion for Discovery. Ordered by Magistrate Judge Marilyn D. Go on 10/2/2013. (Moo-Young, Jillian)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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GOVERNMENT EMPLOYEES INSURANCE CO.,
Plaintiff,
ORDER
- against CV 2012-5633 (NGG)(MDG)
DIANE SACO, ET AL.,
Defendants.
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This is a declaratory judgment action brought by Government
Employees Insurance Company ("GEICO") against defendants Suzanne
Kasulas and Diane Saco for a declaration that it is not obligated
to pay more than the face amount of automobile and umbrella
policies it issued to Ms. Saco.

Ms. Kasulas had sued Ms. Saco

for injuries sustained in an accident in 2006 and obtained a
verdict on March 5, 2012 in excess of the amount of the policies.
Kasulas had previously moved, inter alia, to compel disclosure of
certain documents that plaintiff claimed were privileged or
protected by work product. The parties agreed at a conference on
August 13, 2013 with the Court's view that documents created
after March 5, 2012 should not be disclosed.

Since only five

documents remained in dispute, this Court directed plaintiff to
submit the documents for in camera inspection and to supplement
its claim that the documents are protected from disclosure by the
work product doctrine.

Plaintiff followed with a motion to

protect from disclosure five e-mail chains listed in its

privilege log, which it contends were "prepared in anticipation
of litigation."

See Mot. for Discovery (ct. doc. 26); Privilege

Log at 2 (ct. doc. 25, Ex. 2).
Plaintiff argues that five e-mail chains constitute
protectable work product because they were generated in
anticipation of subsequent bad faith litigation.
Discovery.

See Mot. for

Plaintiff also argues that the date of the

disposition in the underlying tort case, March 5, 2012, should
not serve as a bright line between documents created in
anticipation of subsequent bad faith litigation and those created
as part of the underlying tort litigation.

See id.

Plaintiff

has attached those e-mails to its motion for in camera
inspection, but submitted no explanatory affidavit by a GEICO
employee.
Although defendant Kasulas argues that the e-mail chains
"provide unique and necessary information regarding GEICO's
handling of the underlying claim" that are "crucial" to "GEICO's
valuation of the case made during the underlying litigation," she
does not explain why such information is unique, nor why she
cannot obtain that information from other sources.
Opp'n at 1-2.

See Def.'s

Additionally, Kasulas argues that the plaintiff

does not provide any affidavits or objective evidence that those
e-mail chains were generated after deciding to litigate the
anticipated bad faith action.

See id. at 3.

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In reply, plaintiff argues that Kasulas fails to prove a
substantial need for the e-mail chains, other than her assertion
that they are "unique."

See Pl.'s Reply at 4.

Plaintiff asserts

that because it already produced reports by its counsel in the
underlying action, none of which recommended that it tender its
policy limits, the defendant already has GEICO's valuation of the
underlying tort claim.

See id.

Further, counsel argues that

allegations of bad faith were raised "as early as September 26,
2007," and therefore all the documents prepared subsequent to
that date should be protected.

See id.

The work-product doctrine, which has been codified in Fed.
R. Civ. P. 26(b)(3), provides qualified protection from
disclosure for documents and other tangible things "prepared in
anticipation of litigation or for trial." Fed. R. Civ. P.
26(b)(3); see generally Hickman v. Taylor, 329 U.S. 495 (1947).
The doctrine "is intended to preserve a zone of privacy in which
a lawyer can prepare and develop legal theories and strategy
'with an eye toward litigation,' free from unnecessary intrusion
by his adversaries."

United States v. Adlman, 134 F.3d 1194,

1196 (2d Cir. 1998) (quoting Hickman, 329 U.S. at 510-11).
Work product is discoverable only upon a showing that the
requesting party has "substantial need" of the materials to
prepare his case and that the party "is unable without undue
hardship to obtain the substantial equivalent of the materials by
other means." Fed. R. Civ. P. 26(b)(3).

Courts in this Circuit

have found that "substantial need" and "undue hardship" do not
exist where the information sought can be obtained through
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depositions or other discovery methods. See Horn & Hardart Co. v.
Pillsbury Co., 888 F.2d 8, 12 (2d Cir. 1989); Tribune Co. v.
Purcigliotti, Civ. No. 93-7222, 1998 WL 175933 at *3-*5 (S.D.N.Y.
Apr. 14, 1998) ("'Substantial need' cannot be shown where persons
with equivalent information are available for deposition");
Maloney v. Sisters of Charity Hosp., 165 F.R.D. 26, 30-31
(W.D.N.Y. 1995) (holding that plaintiff had failed to make the
requisite showing under Rule 26(b)(3) because she could obtain
the information sought through depositions).
The party claiming work product protection, however, "bears
the burden of establishing that the documents in question were
'prepared principally or exclusively to assist in anticipated or
ongoing litigation.'"

Adlman, 134 F.3d at 1202 (quoting United

States v. Const. Prods. Research, Inc., 73 F.3d 464, 473 (2d Cir.
1996)).

Unless the privilege is overcome, it bars discovery

"where a document was created because of anticipated litigation,
and would not have been prepared in substantially similar form
but for the prospect of that litigation."

Adlman, 134 F.3d at

1195; see also Hickman, 329 U.S. at 511.
In determining whether material was prepared "in
anticipation of litigation," the proper inquiry is "whether the
documents were prepared 'because of' existing or expected
litigation."

Adlman, 134 F.3d at 1198.

Documents are "deemed

prepared in 'anticipation of litigation' if 'in light of the
nature of the document and the factual situation in the
particular case, the document can fairly be said to have been
prepared or obtained because of the prospect of litigation.'"
Strougo v. Bea Assocs., 199 F.R.D. 515, 520-21 (S.D.N.Y. 2001)
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(quoting Adlman, 134 F.3d at 1202).

In other words, "the

pertinent question is what would have happened had there been no
litigation threat – that is, whether the party seeking work
product protection would have generated these documents if it
were acting solely for its business-related purposes." William A.
Gross Const. Assoc. v. Am. Mfrs. Mut. Ins. Co., 262 F.R.D. 354,
360 (S.D.N.Y. 2009); see also Adlman, 134 F.3d at 1202 (noting
that the "because of" formulation does not protect "documents
that are prepared in the ordinary course of business or that
would have been created in essentially similar form irrespective
of litigation").

Distinguishing between documents prepared in

anticipation of litigation and those created in the ordinary
course of business is particularly fact specific in the insurance
context because "the very business" of an insurance company "is
to evaluate claims that may ultimately ripen into litigation."
Weber v. Paduano, 2003 WL 161340, at *4 (S.D.N.Y. Jan. 2, 2003)
(internal citations omitted)).

Accordingly, the party opposing

production must demonstrate by "specific and competent evidence"
that the documents were created because of litigation.

See QBE

Ins. Corp. v. Interstate Fire & Safety Equip. Co., Civ. No. 071883, 2011 WL 692982 at *3 (D. Conn. Feb. 11, 2011)(quoting
Weber, 2003 WL 161340, at *4).
As a preliminary matter, this Court notes that the issue
over work product here centers on the question of when plaintiff
first anticipated the possibility of bad faith litigation rather
than over conduct of the underlying tort litigation.

As

previously discussed and conceded by plaintiff, having provided a
defense for Saco in the underlying litigation, plaintiff cannot
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shield from discovery materials which concern Saco's defense.
After review of the publicly filed letters and the e-mails
submitted to the Court for in camera inspection, this Court finds
that the earliest objective indication that GEICO was
contemplating allegations of bad faith is February 11, 2008, when
plaintiff's counsel wrote that by not responding to plaintiff's
demands, it was "acting in bad faith regarding it[s] insured."
See Pl.'s Reply, Ex. E (Letter from Randall Lazzaro to Joe
Karpowicz).

Accordingly, the Court finds that the October 29,

2007 e-mail chain, which was generated before this date and does
not suggest anticipation of any bad faith litigation, does not
fall within work product protection.

Fed. R. Civ. P. 26(b)(3);

Strougo, 199 F.R.D. at 520-21.
Second, this Court finds that the partially undated e-mail
chain between John Quagliato, Edgar Sabanegh and Don Truitt is
protected from disclosure because the undated portion of the
formatted e-mail clearly was written after March 5, 2012, a date
which, as discussed the last conference, provides a "bright line"
to shield documents from disclosure.

In any event, this e-mail

chain clearly was created in anticipation of bad faith litigation
and is protectable work product.

It may also be attorney advice,

though plaintiff provides insufficient information for that
finding to be made.

Further, plaintiff asserts that it has

already produced reports by its counsel in the underlying action,
which do not recommend tendering the policy's limits, see Pl.'s
Reply at 4, and, thus GEICO's valuation of the underlying tort
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claim, which Kasulas states is "crucial," can be obtained via
other discovery methods.

Accordingly, to the extent Kasulas now

seeks that e-mail chain, she has not shown a "substantial need"
for the e-mail chain sufficient to overcome work product
protection.

Fed. R. Civ. P. 26(b)(3); see Horn & Hardart Co.,

888 F.2d at 12
Last, this Court finds that the three remaining e-mail
chains are not protectable work product; they neither refer nor
allude to any impending or existing bad faith litigation, but
instead appear to discuss only the status and handling of the
underlying case against Kasulas.

Contrary to plaintiff's

argument that there was "no question that [all] the emails were
generated to address the [bad faith] claims against the insurer
GEICO," see Mot. for Discovery at 2, those three e-mail chains
refer only to GEICO's internal decisions on how to address
negotiations with defendant Kasulas and her attorney in the
underlying tort claim.

They do not fairly suggest contemplation

of an anticipated bad faith claim.
520-21.

Strougo, 199 F.R.D. at

Rather, they reflect discussion of the conduct of the

underlying litigation, which, in the context of this dispute, are
writings that would have been prepared anyway in the ordinary
course of business, rather than in anticipation of bad faith
litigation.

See Chen-Oster v. Goldman, Sachs & Co., 2013 WL

3009489, No. 10-cv-6950, at *3 (S.D.N.Y. June 18, 2013)
(citations omitted).

Because plaintiff has not demonstrated by

specific and competent evidence that those three e-mail chains

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were generated because of anticipated bad faith litigation, those
three e-mail chains do not constitute work product.

See QBE

Ins., 2011 WL 692982, at *3 (quoting Weber, 2003 WL 161340, at
*4).
CONCLUSION
For the foregoing reasons, the plaintiff's motion to shield
the five e-mails from disclosure is granted in part and denied in
part.

SO ORDERED.
Dated:

Brooklyn, New York
October 2, 2013
/s/___________________________
MARILYN D. GO
UNITED STATES MAGISTRATE JUDGE

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