William Powell Co v. National Indemnity Company et al

Filing 119

ORDER that plaintiff Powell's 98 Motion to Compel is Granted in part in accordance with the terms of the Court's analysis. OneBeacon is Ordered to produce within (30) days of the date of this Order the information listed herein. OneBea con is Ordered to either revise the privilege log to correct deficiencies stated in the Court's Order or produce the improperly withheld documents within (30) days of the date of this Order. Powell's motion for sanctions is Denied. OneBeacon's 106 Motion for Protective Order and for sanctions is Denied. OneBeacon's 112 Motion to certify question to the Ohio Supreme Court is Denied. Signed by Magistrate Judge Karen L. Litkovitz on 4/11/2017. (art)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

THE WILLIAM POWELL CO.,
Plaintiff,

Case No. 1:14-cv-00807
Dlott, J.
Litkovitz, M.J.

vs.
NATIONAL INDEMNITY CO., et al.,
Defendants.

ORDER

This matter is before the Court on the following motions filed by the parties: (1)
defendant The William Powell Company’s Motion to Compel and for Sanctions (Doc. 98),
defendant OneBeacon Insurance Company’s opposing memorandum (Doc. 104), and plaintiff’s
reply in support of the motion (Doc. 108); (2) defendant’s Cross-Motion for Protective Order and
Sanctions (Doc. 106), plaintiff’s opposing memorandum (Doc. 109), and defendant’s reply (Doc.
111); and (3) defendant’s motion to certify question to the Ohio Supreme Court (Doc. 112),
plaintiff’s response (Doc. 113), and defendant’s reply (Doc. 118).
I. Background
Plaintiff The William Powell Company (Powell) is a privately-held Ohio corporation that
was formed in 1846. (Doc. 1, Complaint, ¶ 9). Powell manufactures industrial valves used in a
variety of industries. (Id.). Powell purchased numerous primary and excess level product
liability insurance policies from 1955 to 1977 from General Accident Fire & Life Assurance
Corporation (General Accident) that required the insurer to defend and indemnify Powell against
damages resulting from accidents leading to bodily injury. (Doc. 45 at PAGEID#: 961, citing
Doc. 1 at PAGEID#: 4-5). Through a series of corporate mergers and asset sales, defendant
OneBeacon Insurance Company (OneBeacon) assumed the insurance policies that provided

coverage to Powell. (Doc. 44 at PAGEID#: 942, citing Complaint, ¶ 19). According to the
complaint, OneBeacon entered into a reinsurance agreement with National Indemnity Company
(NICO), pursuant to which OneBeacon sold its then-existing claim reserves to NICO.
(Complaint, ¶¶ 20, 21). The complaint alleges that NICO agreed to provide a maximum of $2.5
billion to cover OneBeacon’s historic and undetermined liabilities attributable to risks such as
the long-tail asbestos exposure claims covered by Powell’s General Accident policies.
(Complaint, ¶ 21). In addition to acquiring responsibility for reimbursing OneBeacon for claims
and defense costs up to a total amount of $2.5 billion, NICO also acquired responsibility for
handling and adjusting all of OneBeacon’s claims; however, it delegated claims handling to
Resolute Management, Inc. (Resolute) in 2006. (Complaint, ¶¶ 21 22).
Beginning in 2001, individuals nationwide and in Canada began to sue for asbestosrelated injuries that were allegedly caused by asbestos in Powell valves. (Doc. 44 at PAGEID#:
942, citing Complaint, ¶ 16). Powell tendered claims to OneBeacon pursuant to the insurance
policies, which led to litigation in state court (Powell v. OneBeacon, No. A1109350 (Ham. Cty,
Ohio C.P. Nov. 23, 2011)) and the instant lawsuit which Powell subsequently filed on October
14, 2014. (Doc. 45 at PAGEID#: 962, 963; see Doc. 17-3). Powell initially brought claims for
violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and a claim for
tortious interference with contractual relations against NICO and Resolute; a claim for breach of
the duty of good faith and fair dealing against all defendants; and a claim for breach of contract
against OneBeacon. (See Doc. 45 at PAGEID#: 962, citing Doc. 1 at PAGEID#: 19-22). The
Court dismissed the claims against NICO and Resolute (Doc. 44), leaving only the breach of
contract and bad faith claims against OneBeacon pending. (Doc. 45 at PAGEID#: 962, citing
Doc. 44). On reconsideration, the Court stated it would abstain from proceeding on the breach of

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contract claim until the state courts had made a final determination on which of the insurance
policies were triggered by the underlying bodily injury claims. (Doc. 70 at PAGEID#: 1290-92).
Thus, the only claim currently at issue in this litigation is Powell’s claim against OneBeacon for
bad faith under Ohio law, which imposes a duty on an insurer to act in good faith in the handling
and payment of the claims of its insured. See Hoskins v. Aetna Life Ins. Co., 452 N.E.2d 1315
(Ohio 1983).
In the course of its rulings, the Court in this litigation rejected a statute of limitations
argument raised by OneBeacon in light of Powell’s representation to the Court that its bad faith
claim was based “solely upon acts which occurred on and after October 10, 2010.” (Doc. 45 at
PAGEID#: 968, citing Doc. 43 at PAGEID#: 916). The bad faith claim includes allegations that
OneBeacon denied coverage for claims after stating coverage was available, instructed counsel
to withhold information from Powell, delayed communication of coverage decisions to Powell,
excluded Powell from settlement discussions, unilaterally authorized settlements, failed to pay
defense costs of local defense counsel and failed to fund settlements, and limited investigations
into the exposure dates which determine whether the policies are triggered. (Id. at PAGEID#:
962, 967).
II. Chronology of discovery issues
Powell served it First Set of Requests for Production on OneBeacon on February 18,
2016. (Doc. 98, Exh. A). OneBeacon subsequently filed an interlocutory appeal from the
Court’s Order denying its motions to dismiss/motion to stay in the Sixth Circuit Court of
Appeals on March 1, 2016. (Doc. 49). The Court ordered the parties to proceed with Rule 26
initial disclosures (see Doc. 107 at PAGEID#: 2601-02), and the appeal was ultimately dismissed
for lack of jurisdiction on August 5, 2016. (Doc. 69). In the meantime, OneBeacon served its

3

written responses to Powell’s Requests for Production and produced 34,479 pages of documents
to Powell on June 2, 2016. (Doc. 98, Exh. B, Joseph M. Brunner Decl., ¶ 6; Id., Exh. C). To
Powell’s knowledge, the production did not include any emails. (Id., Exh. B, Brunner Decl., ¶
6). OneBeacon subsequently represented to Powell that OneBeacon would produce all relevant
documents, including all emails, by July 8, 2016. (Id., ¶ 9). On that date, OneBeacon produced
emails from one custodian, Darilyn Michaud, for the period January 18, 2016 to May 31, 2016,
and one email from October 2015. (Id., ¶ 10). Powell objected on the ground that OneBeacon
had identified four other individuals with knowledge in its interrogatory responses: Bonnie
McClements, Gregory Gaines, Clayton Budlong, and Graham Loxley (Doc. 85-1, Exhs. B, DPAGEID#: 1346-47, 1362). (Doc. 98, Exh. D, David Hine Decl., ¶ 6, Exh. 4, p. 2- PAGEID#:
1729). OneBeacon responded that it was performing a “privilege review” of an additional
50,000 Michaud emails that were responsive to Powell’s First Request for Production. (Id., Exh.
4, p. 1- PAGEID#: 1728; see Doc. 105, Exh. 1, Sunny Horacek Decl., ¶ 20; Exh. 2, Michaud
Decl., ¶¶ 16-23). OneBeacon informed Powell that it needed until August 19, 2016, to complete
review and production of Michaud’s emails, and that communications from other Resolute
employees would be duplicative of her emails because Michaud was the “information hub” for
the Powell account and Powell information “goes through” her. (Doc. 105, Exh. 1, Horacek
Decl., ¶ 20; Doc. 98, Exh. D, Hine Decl., Exh. 4, p. 1- PAGEID#: 1728). OneBeacon maintains
that this approach proved to be sound because only a “small percentage of documents” were later
produced to supplement the initial productions. (Doc. 104 at PAGEID#: 2152, citing Doc. 105,
Exh. 1, Horacek Decl., ¶ 35, Exh. R- PAGEID#: 2470-2508). Powell disagrees and argues the
number of emails generated by individuals other than Michaud and subsequently produced
demonstrates that OneBeacon’s approach of focusing solely on her emails was not valid.

4

The Court conducted a discovery conference on August 2, 2016. (Docket Sheet, 8/02/16
Minute Entry). The Court ordered OneBeacon to produce all outstanding documents by August
19, 2016, and a privilege log by September 2, 2016. (Doc. 97 at PAGEID#: 1576). Over the
next several weeks, OneBeacon produced three batches of emails: (1) Michaud emails for the
period January 2, 2012 to May 31, 2016, which OneBeacon produced on August 19, 2016; (2) an
additional 95,986 pages which it produced on August 24, 2016; and (3) 23,951 pages which it
produced on September 15, 2016. (Doc. 98, Exh. B, Brunner Decl., ¶¶ 11, 12). Powell alleges
that OneBeacon did not search for and produce emails from custodians other than Michaud. (Id.,
Exh. D, Hine Decl., ¶ 7, Exh. 5- PAGEID#: 1732). Nor did OneBeacon produce documents
concerning Powell’s account generally; instead, it limited production to documents concerning
the handling of individual claims. (Id., Exh. 5- PAGEID#: 1733-36).
The undersigned conducted an informal discovery conference to resolve the parties’
outstanding discovery issues on September 22, 2016. (Doc. 71). The Court issued a postconference Order that established a limited discovery method by which Powell could ascertain
whether custodians other than Michaud had emails relevant to Powell’s claims that were not
duplicative of Michaud’s. (Doc. 74). The process disclosed that three individuals in addition to
Michaud -- Graham Loxley, Tom Ryan, and Brooke Green -- had emails and other documents
that were responsive to Powell’s Requests for Production. (Doc. 85-1, Exhs. H, I, M- PAGEID#:
1373-78, 1385-87). The undersigned held a follow-up conference on October 13, 2016, after
which OneBeacon was ordered to provide supplemental affidavits; produce documents from the
three individuals by November 3, 2016; and provide a complete privilege log to Powell by
November 10, 2016. (Doc. 78). OneBeacon provided a revised privilege log on November 10,
2016. (Doc. 98, Exh. K).

5

The Court held another informal telephone discovery conference on November 18, 2016
(Doc. 88), after which it issued an Order directing the parties to proceed with telephone
depositions of six individuals who had previously given affidavits and scheduling the matter for
another informal discovery conference. (Doc. 90). Pursuant to the Court’s Order, Powell
deposed Gregory Gaines, Graham Loxley, David Gold, John Matosky, Peter Dinunzio, and
Clayton Budlong. (Doc. 98, Exhs. E-J). Their testimony disclosed that there were
communications and documents that OneBeacon had not produced.
The Court held a follow-up telephone discovery conference on December 9, 2016 (Doc.
91), after which Powell sent letters to OneBeacon on December 22 and 29, 2016 to try to resolve
the outstanding issues. (Doc. 98, Exh. D, Hine Decl., § 12, Exh. 10- PAGEID#: 1772-82; Exh.
B, Brunner Decl., § 13, Exh. 6- PAGEID#: 1663-66). Powell requested a response from
OneBeacon on the issues it identified in the letters. (Exh. B, Brunner Decl., ¶ 14, Exh. 7PAGEID#: 1668-69). OneBeacon responded shortly before the next scheduled conference with
the Court on January 9, 2017. (Id., Exh. 7- PAGEID#: 1667-68). After the conference, and at
Powell’s request, the Court issued an order setting a briefing schedule on the outstanding
discovery issues. (Doc. 96). The Court granted Powell until January 13, 2017 to file a motion to
compel. (Id.).
Powell filed its motion to compel and for sanctions on January 13, 2017. (Doc. 98).
Powell identified the following documents disclosed by the supplemental depositions which
OneBeacon had not produced:

6

1. A Powell desk file kept by Gaines (Doc. 98, Exh. E, Gaines Depo., pp. 19-20). 1
2. Emails with attachments containing financial data on Powell’s account which
Loxley receives monthly (Doc. 98, Exh. F, Loxley Depo., pp. 11-18, 20).
3. Emails containing meeting agendas and discussing topics for meetings that
Gold sent and received related to quarterly meetings Resolute employees and
Loxley conduct at which Gold but not Michaud is present and at which the status
of OneBeacon accounts, including the Powell account, are discussed. (Doc. 98,
citing Exh. G, Gold Depo., pp. 18-27).
4. Email conversations Matosky (Assistant Vice-President and Associate General
Counsel for Resolute) had with Loxley and previously with Stuart McKay at
OneBeacon for which OneBeacon has asserted a privilege claim, which Powell
disputes. (Doc. 98, Exh. H, Matosky Depo., pp. 29-32; Exh. B, Brunner Decl., ¶
14, Exh. 7- PAGEID#: 1667).
5. Relevant documents that likely exist on Resolute’s shared network spaces -- the
RAPID system and the V drive -- such as communications from local defense
counsel and settlement calculators, which have never been searched for
responsive nonduplicative documents. (Doc. 98, Exh. G, Gold Depo., pp. 15-17;
Exh. H, Matosky Depo., pp. 23-24; Exh. I, Dinunzio Depo., pp. 18-19).
(Doc. 98 at PAGEID#: 1594-95). Powell maintains it “is likely that other relevant documents
reside” with custodians other than Michaud. (Id. at PAGEID#: 1595).
OneBeacon filed a response to Powell’s motion to compel (Doc. 104) together with
supporting affidavits and exhibits (Doc. 105) and a motion for a protective order and sanctions
(Doc. 106). OneBeacon alleges that with the Court’s oversight, it has adopted an electronic
document production strategy designed to provide Powell with the discovery to which it is
entitled by “focusing on the production sources most likely to have responsive documents.”
(Doc. 104 at PAGEID#: 2139). OneBeacon contends that “for more than a decade” it has
managed Powell’s insurance coverage for Powell’s asbestos liability through Michaud and “[a]ll
communications and decisions about defense and indemnity” of Powell’s asbestos liability go
1

Powell asserts that OneBeacon has produced the desk file but has redacted large portions “for dubious reasons.”
(Doc. 98 at PAGEID#: 1594, citing Exh. B, Brunner Decl., ¶ 13, Exh. 6- PAGEID#: 1664). However, Powell has
not moved for production of unredacted portions of Gaines’ desk file and the Court’s decision expresses no opinion
as to these documents.

7

through her so that she can implement such decisions. (Id.). OneBeacon alleges that insofar as
other individuals are included in these communications, these individuals’ communications are
“manifestly duplicative” of Michaud’s. (Id.). OneBeacon asserts that any relevant
communications that do not involve Michaud have been identified and either produced or
withheld as privileged. (Id. at PAGEID#: 2139-40). OneBeacon denies Powell’s allegation that
it has failed to search the Resolute V drive or the RAPID claims system. (Doc. 104 at
PAGEID#: 2153, n. 6). OneBeacon claims that the documents from the Resolute V drive have
been searched and either produced or included in the privilege log between DocID range
H13251-0004-001001 and H13251-0004-002763 or in bates range OBFed0028051OBFed0330405. (Id.). OneBeacon alleges that the documents from Resolute’s RAPID system
are listed in OneBeacon’s privilege log between DocID range H13251-0001-001001 to H132510001-001012 and the produced portions are in bates range OBFed0034294-OBFed0034327.
(Id.).
Finally, OneBeacon argues that Powell’s demands for additional discovery are not
proportional to the needs of the case. (Id. at PAGEID#: 2140, 2153-56).
III. The parties’ motions
1. Powell’s motion to compel and for sanctions; OneBeacon’s motion for protective
order and to certify issue to the Ohio Supreme Court
Powell moves the Court under Fed. R. Civ. P. 37(a) to compel OneBeacon to produce
documents it has allegedly refused to produce or has improperly withheld on privilege grounds.
(Doc. 98). Powell alleges that OneBeacon has provided evasive or incomplete responses in
violation of Fed. R. Civ. P. 37(a)(4) and has improperly limited production to (1) one custodian,
Resolute employee Michaud, and (2) specific indemnification claims that Powell identified in the
complaint as only representative samples in support of its bad faith claim against OneBeacon.
8

Powell alleges that as of the date of its motion - January 13, 2017 - OneBeacon was still
collecting and producing documents from Ryan and Green and had not produced any emails
from Loxley despite being ordered to do so by the Court. (Doc. 98 at PAGEID#: 1593; see Doc.
78). Powell seeks an order compelling the production of emails and specified documents from
custodians other than Michaud whom it has identified and documents and communications
concerning the general administration and handling of Powell’s account that OneBeacon
allegedly “has refused to search, collect and produce.” (Doc. 98 at PAGEID#: 1586-87). In
addition, Powell moves the Court to order the production of documents that OneBeacon has
purportedly inappropriately withheld from production based on “incomplete and specious
privilege claims.” (Id. at PAGEID#: 1587). Powell alleges that the privilege log OneBeacon
originally provided on September 2, 2016 and revised on November 10, 2016 was deficient
because it provided “useless descriptions” of the withheld documents, such as “concerning WPC
v. One Beacon”; it indicated OneBeacon had withheld documents pertaining to underlying
asbestos claims that pre-date OneBeacon’s denial of coverage in those cases; it included entries
that did not identify the authors or recipients in some cases, or failed to identify the privilege
OneBeacon was asserting; and it indicated OneBeacon had withheld communications between
itself and third parties without any proof of a common interest or joint defense agreement. (Id. at
PAGEID#: 1596, citing Exh. K). Powell also asks the Court to require OneBeacon to pay the
expenses Powell incurred in obtaining relevant and improperly withheld documents. (Id. at
PAGEID#: 1611-13).
OneBeacon disputes that it has improperly withheld documents that Powell is entitled to
discover, that it has provided a deficient privilege log, and that Powell is entitled to an award of
sanctions. (Doc. 104). OneBeacon also alleges that Powell’s approach is not proportional to the

9

needs of the case. OneBeacon contends that only communications regarding specific underlying
claims are relevant and that the communications regarding the Powell account generally are
privileged. (Id.). OneBeacon argues that its communications with its agents and partners are
privileged. OneBeacon moves for a protective order and for sanctions against Powell for seeking
the additional discovery and withheld documents. (Doc. 106). OneBeacon also moves to certify
an issue pertaining to one specific category of withheld documents to the Ohio Supreme Court.
(Doc. 112).
2. Governing standards
Rule 26 provides that “[p]arties may obtain discovery regarding any nonprivileged
matter that is relevant to any party’s claim or defense and proportional to the needs of the
case[.]” Fed. R. Civ. P. 26(b)(1). If a party objects to the relevance of information sought in
discovery, “the party seeking discovery must demonstrate that the requests are relevant to the
claims or defenses in the pending action.” Anderson v. Dillard’s, Inc., 251 F.R.D. 307, 309-10
(W.D. Tenn. 2008) (citing Allen v. Howmedica Leibinger, 190 F.R.D. 518, 522 (W.D. Tenn.
1999)). “If that party demonstrates relevancy, the party resisting discovery bears the burden of
demonstrating why the request is unduly burdensome or otherwise not discoverable under the
Federal Rules.” Id. at 310 (citing cases).
If a party fails to produce documents, the opposing party may move for an order
compelling production. Fed. R. Civ. P. 37(a)(3)(B)(iv). For purposes of subdivision (a) of Rule
37, “an evasive or incomplete disclosure . . . must be treated as a failure to disclose. . . .” Fed. R.
Civ. P. 37(a)(4).
Several decisions issued by district courts in the Sixth Circuit have found that the burden
is on the resisting party to demonstrate with specificity that a discovery request is unduly

10

burdensome or that the discovery sought is not discoverable under the Federal Rules. Kafele v.
Javitch, Block, Eisen & Rathbone, No. 2:03-cv-638, 2005 WL 5095186, at *2 (S.D. Ohio Apr.
20, 2005) (“As a general rule, ‘[a]ll grounds for an objection . . . shall be stated with specificity. .
. . The mere statement by a party that an interrogatory or request for production is overly broad,
burdensome, oppressive and irrelevant is not adequate to voice a successful objection.”). See
also Kline v. Mortgage Elec. Sec. Sys., No. 3:08-cv-408, 2014 WL 4928984, at *13 (S.D. Ohio
Oct. 1, 2014), on reconsideration in part, 2014 WL 5460575 (S.D. Ohio Oct. 27, 2014) (same)
(citing In re Heparin Prods. Liab. Litig., 273 F.R.D. 399 (N.D. Ohio 2011)); Groupwell Int’l
(HK) Ltd. v. Gourmet Exp., LLC, 277 F.R.D. 348, 360 (W.D. Ky. 2011) (same).
Although the decisions summarized above pre-date the December 1, 2015 amendment of
Rule 26(b)(1), nothing in the amended Rule indicates that the allocation of burdens under the
Rule has been altered. Courts continue to hold that the party who files a motion to compel
discovery “bears the burden of demonstrating relevance.” Albritton v. CVS Caremark Corp., No.
5:13-cv-00218, 2016 WL 3580790, at *3 (W.D. Ky. June 28, 2016) (citing United States ex rel.
Gruenbaum v. Werner Enters., Inc., 270 F.R.D. 298, 302 (S.D. Ohio 2010); Anderson, 251
F.R.D. at 309-10)). See also Gazvoda v. Sec. of Homeland Sec., 15-cv-14099, 2017 WL 168159,
at *4 (E.D. Mich. Jan. 17, 2017); First Horizon Natl. Corp. v. Houston Cas. Co., No. 2:15-cv2235, 2016 WL 5869580, at *4 (W.D. Tenn. Oct. 5, 2016). If the movant demonstrates
relevancy, the burden shifts to the party resisting discovery to demonstrate “why the request is
unduly burdensome or otherwise not discoverable.” First Horizon Natl. Corp., 2016 WL
5869580, at *4 (quoting Anderson, 251 F.R.D. at 310); Gazvoda, 2017 WL 168159, at *4.
Commentary from the rulemaking process bolsters the position that the amended rule did not
shift the burden of proving proportionality to the party seeking discovery. See Committee on

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Rules of Practice and Procedure to the Judicial Conference of the United States, Report to the
Standing Committee, Rules Appendix B-8 (June 14, 2014), available online at
www.uscourts.gov/file/14140/download?token=McTrl8L0 (explaining that the proposed
Committee Note had been revised to address concerns about shifting the burden of proof to the
party seeking discovery and to clarify that the Rule as amended does not authorize “boilerplate
refusals to provide discovery on the ground that it is not proportional”). The advisory
committee’s note to Rule 26(b)(1) addresses the parties’ burdens under the amended Rule as
follows:
Restoring the proportionality calculation to Rule 26(b)(1) does not . . . place on
the party seeking discovery the burden of addressing all proportionality
considerations.
….
Nor is the change intended to permit the opposing party to refuse discovery
simply by making a boilerplate objection that it is not proportional. . . . [I]f the
parties continue to disagree, the discovery dispute could be brought before the
court and the parties’ responsibilities would remain as they have been since 1983.
A party claiming undue burden or expense ordinarily has far better information -perhaps the only information -- with respect to that part of the determination. A
party claiming that a request is important to resolve the issues should be able to
explain the ways in which the underlying information bears on the issues as that
party understands them. . . .
Fed. R. Civ. P. 26(b)(1) advisory committee’s note (2015).
The factors to be considered under amended Rule 26(b) in determining whether a party
is entitled to discovery are: “[(1)] the importance of the issues at stake in the action, [(2)] the
amount in controversy, [(3)] the parties’ relative access to relevant information, [(4)] the
parties’ resources, [(5)] the importance of the discovery in resolving the issues, and [(6)]
whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R.
Civ. P. 26(b)(1).

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3. The balance of considerations weighs in favor of production of the information in
dispute.
Powell seeks production of the following documents:
1. Monthly emails with attachments Loxley receives that contain financial data
concerning Powell’s accounts (Doc. 98, Exh. F, Loxley Depo., pp. 11-18);
2. Emails and agendas associated with quarterly meetings between Resolute
employees and Loxley (Doc. 98, Exh. F, Loxley Depo., pp. 31-35; Exh. G, Gold
Depo., pp. 18-27);
3. Emails between Resolute in-house counsel Matosky and Loxley or McKay
discussing Powell’s account (Doc. 98, Exh. H, Matosky Depo., pp. 12, 29-33);
4. Documents on Resolute’s shared network spaces that have not been searched
(Doc. 98, Exh. G., Gold Depo., pp. 15-17; Exh. H, Matosky Depo., pp. 23-24;
Exh. I, Dinunzio Depo., pp. 18-19);
5. Responsive, nonduplicative documents from custodians whose documents
have not been searched (Budlong, Gaines, Gold, Dinunzio, David Warren, Kevin
Hannemann, and Adrian Vann);
6. Communications and other documents that relate to Powell’s account generally
that have not been produced, including documents from Michaud, Ryan, and
Green; and
7. Documents that have been withheld based on allegedly incomplete or invalid
privilege claims.
(Doc. 98 at PAGEID#: 1586-87).
Initially, the Court finds that two categories of information have been produced to the
extent there is evidence such communications and documents exist: Category #2 agendas related
to quarterly meetings involving Loxley, and Category # 4 documents on Resolute’s shared
network spaces. Powell acknowledges the Loxley meeting agendas were produced the same date
it filed the motion to compel, and it reserves the right to challenge redactions to the documents.
(Doc. 108 at PAGEID#: 2615). OneBeacon represents that it has searched and produced
documents from shared network spaces consisting of the Resolute V-Drive and RAPID claims

13

system. (See Doc. 104 at PAGEID#: 2153, n. 6). Powell questions OneBeacon’s representations
but has not presented any specific evidence that refutes those representations. (Doc. 108 at
PAGEID#: 2614-15). 2 The Court therefore accepts OneBeacon’s representations to the Court on
this matter.
As to the remaining categories, the parties continue to debate whether OneBeacon’s
cause of action for bad faith handling of the asbestos claims against Powell is limited to the
specific asbestos claims identified in the complaint. The Court has found that the specific
asbestos claims identified in the complaint are not an exclusive list of the bad faith acts at issue
in this litigation; instead, the underlying cases identified in the complaint are only “a
representative sample of a larger set of bad faith incidents[.]” (Doc. 45 at PAGEID#: 967).
Further, the undersigned has previously determined that communications regarding information
that is not reflected in the policy manuals related to investigating, defending and processing
claims are “fair game” for discovery purposes given the bad faith claim. (Sept. 22, 2016 Inf.
Disc. Conf. Audio Recording at 1:38:38, 3:32:34-3:33:02). Thus, Powell’s discovery requests
are relevant insofar as they relate to alleged bad faith acts in the handling of Powell’s account,
and relevancy is not restricted to specific asbestos claims identified in the complaint. To the
extent Powell has pointed to evidence that indicates the custodians it has named are in possession
of those communications or related information, Powell is entitled to discover such information.
OneBeacon disputes that the information sought in Category Nos. 1, 2 (relating to
emails), 3, 5, and 6 is relevant to this lawsuit and is discoverable by Powell. First, One Beacon

2

For example, Powell alleges the number of documents OneBeacon claims to have produced from the Resolute V
drive is “suspect” (Doc. 108 at PAGEID#: 2614), but Powell has not presented information about any of the
particular documents within the 300,000 page span identified by OneBeacon to cast doubt on OneBeacon’s
representation. It is not sufficient for Powell to generally express doubt as to the validity of OneBeacon’s
representation and attempt to place the burden on OneBeacon to prove a negative, i.e., that no additional documents
exist.

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alleges that the Loxley emails described in Category Nos. 1 and 2 are not relevant because with
the exception of one underlying case that purportedly is not at issue here - the Edward Walton
case - Loxley “was clear that he is not involved in decisions regarding defense, indemnity or the
handling of the [Powell] account as a whole and [he] does not receive information regarding the
types of damages sought by [Powell].” (Doc. 111 at PAGEID#: 2677). The Court disagrees that
emails sent to Loxley containing financial data on the Powell account are not relevant to
Powell’s bad faith claim. Loxley provided testimony that indicated he received monthly email
communications and financial data pertaining to the Powell account and that he had a
responsibility to protect against Resolute eroding coverage too quickly for the Powell claims.
(Doc. 98, Exh. F, Loxley Depo. at 13-18). Loxley testified that as the head of claims for Armour
Risk Management, Ltd. (the entity that purchased OneBeacon’s asbestos liabilities), he oversees
a team of claims personnel who are responsible for adjusting claims on the portfolios his
company manages or owns, including OneBeacon. (Id. at 10-11, 14). Loxley testified that as the
head of claims he has received monthly emails from Resolute since January 2015 containing
financial data in a spreadsheet form pertaining to the Powell account. (Id. at 12-14). Loxley
testified that his primary responsibility with regard to the OneBeacon portfolio is to “work with
Resolute to monitor the erosion of the NICO reinsurance coverage which is in place protecting”
the OneBeacon portfolio. (Id. at 14-15). Loxley testified that after receiving the data, he will
speak with Resolute to be updated on any significant areas of activity or concern that may be
driving the erosion. (Id. at 15). Loxley also testified that his company monitored developments
in underlying claims in litigation and provided some oversight to make sure Resolute is “not
seeking to erode [the] coverage any quicker than they should.” (Id. at 18). Loxley testified that
by monitoring the claims, his company can be prepared to deal with a situation where the cover

15

might “erode more quickly” than anticipated, and they can “understand what their strategy is in
dealing” with claims filed against Powell. (Id. at 17-18). This testimony is sufficient to show
that the monthly emails Loxley receives are relevant to Powell’s bad faith claim and are
discoverable. In addition, Powell has presented evidence that Loxley communicated by email
with Resolute employees concerning the quarterly meetings and those emails “would not have
included the account managers.” (Doc. 98, Exh. G, Gold Depo. at 28-29). Thus, these emails
would not be duplicative of those produced for Michaud and are relevant.
Second, One Beacon alleges that the information in Category No. 3 -- emails between
Resolute’s in-house counsel Matosky and either Loxley or McKay discussing Powell’s account - relate to on-going coverage litigation between Powell and OneBeacon and that Powell
concedes Matosky’s communications with Loxley “have been identified and withheld as
privileged.” (Doc. 111 at PAGEID#: 2677-78, citing Doc. 98, Exh. H, PAGEID#: 1841, 1846
and Doc. 98 at PAGEID#: 1595). Matosky testified that he communicated with Loxley about the
Powell account by email about once a quarter, as he typically communicated with Loxley only to
report developments in litigation where OneBeacon was involved as a party, and prior to 2014 he
had communications of the same nature with McKay at OneBeacon. (Doc. 98, Exh. H, Matosky
Depo., pp. 31-33). Matosky’s description of the nature of his communications with Loxley and
McKay demonstrates the relevance of those communications to this litigation. Whether
OneBeacon is entitled to withhold those documents on the basis of an attorney-client privilege is
a separate issue that will be addressed infra.
Third, OneBeacon alleges it has produced relevant, unprivileged portions of information
in Category #5 (“Responsive, nonduplicative documents from custodians whose documents have
not been searched (Clayton Budlong, Greg Gaines, David Gold, Peter Dinunzio, David Warren,

16

Kevin Hannemann, and Adrian Vann)).” (See Doc. 111 at PAGEID#: 2678, citing Doc. 104 at
PAGEID#: 2153 and Doc. 105 at PAGEID#: 2178-2180). 3 OneBeacon contends that Powell has
not explained why it believes documents outside the scope of OneBeacon’s search may exist,
why they would be relevant, why they would not be privileged, and why they would not be
accessible from other sources. (Doc. 111 at PAGEID#: 2678). One Beacon alleges that
“hoping” to find additional documents does not justify conducting discovery. (Id.). However, as
to email communications related to the Powell account sent or received by Gold, Budlong and
Dinunzio, Powell has done more than simply express a “hope” that it can find additional relevant
emails from the individuals identified in Category #5. Powell relies on deposition testimony that
Gold participated in quarterly meetings between Resolute employees at which the status of
Powell’s account was discussed, and Gold sent and received emails related to the meetings
containing meeting agendas and discussing meeting topics. (Doc. 98 at PAGEID#: 1594-95,
citing Exh. G, Gold Depo., pp. 18-27). Budlong gave deposition testimony that although he was
not positive, he likely viewed email correspondence on exposure modeling for the Powell
account. (Doc. 98, Exh. J, Budlong Depo., pp. 17-18). Dinunzio testified that as a member of
Resolute’s Asbestos Strategic Unit (ASU) responsible for approving individual asbestos claim
settlements, he discussed the merits of individual Powell cases with his supervisors and other
members of the ASU (Doc. 98 at PAGEID#: 1595, citing Exh. I, Dinunzio Depo., pp. 14-16; see
also pp. 11-13). Thus, Powell has shown that information identified in Category No. 5 in the
custody of these three individuals is relevant.
Powell has not shown that communications of Warren, Hanneman and Vann are relevant.
Dinunzio testified that he did not recall whether he had any communications related to Powell
3

The portions of the record OneBeacon cites to support its contention do not reference documents from Budlong,
Gold, Dinunzio, Warren, Hanneman, or Vann.

17

with Warren, who worked with him in the ASU; he did not have communications with
Hanneman, who was not in the ASU while Dinunzio worked at Resolute; and Dinunzio did not
testify that he had any communications with Vann, who did not have settlement authority with
regard to the Powell claims. (Id. at 21-23). Gold testified he had no recollection of ever
receiving an email from the ASU on the Powell account. 4 (Doc. 98, Exh. B, Gold Depo., pp. 2225). Powell is therefore not entitled to discover email communications or documents in the
possession of these individuals at this juncture.
The sixth category of information Powell requests is communications and other
documents that relate to Powell’s account generally and which have not been produced,
including documents from Michaud, Ryan, and Green. To the extent OneBeacon has limited its
production to communications, documents, and information related to specific asbestos claims
against Powell, its production is incomplete. The Court has determined that the scope of
Powell’s claim is not limited at this stage to the underlying asbestos claims identified in its
complaint, but that its bad faith claim relates to the handling of Powell’s account generally.
By its discovery requests, Powell seeks information related to OneBeacon’s handling of
its account and communications involving individuals who worked on the account that are in
OneBeacon’s possession. Because these discovery requests are relevant to Powell’s bad faith
claim, OneBeacon has the burden of demonstrating why Powell’s request is “unduly burdensome
or otherwise not discoverable under the Federal Rules.” Anderson, 251 F.R.D. at 310. Upon
consideration of each of the factors set forth in amended Rule 26(b)(1), the undersigned
concludes that OneBeacon has failed to meet its burden to demonstrate with specificity that the

4

Warren, Hanneman and Vann worked in the ASU at the relevant time.

18

production of the requested information is not warranted under the Rule as to those categories of
information that have not yet been produced.
i. The importance of the issues at stake in the action
Powell alleges that the issues at stake in this matter are of critical importance and cannot
be measured in monetary terms. (Doc. 98 at PAGEID#: 1601-02). Powell alleges this is so
because it has been defending against asbestos claims for ten years and OneBeacon’s good faith
in defending the claims is vital to Powell’s continued existence. (Id.). Powell cites the advisory
committee’s note to Rule 26 for the proposition that the significance of the substantive issues
here “may be measured in institutional terms apart from the monetary stakes involved.” See Fed.
R. Civ. P. 26(b)(2)(C)(iii) advisory committee’s note (2015). One Beacon attempts to downplay
the significance of the issues at stake by arguing that all that is before the Court is a state law bad
faith claim which is limited to the processing of 23 specific asbestos claims identified in the
complaint and through discovery and to the time period after October 2010. (Doc. 104 at
PAGEID#: 2154-55).
Neither party has provided valid support for its arguments pertaining to the significance
of the substantive issues at stake here. OneBeacon’s attempt to minimize the importance of the
issues by focusing on the number of claims allegedly involved in this litigation is unavailing.
The Court has previously determined that the bad faith acts alleged with regard to the handling of
the approximately 20 claims identified in the complaint are representative of a larger set of bad
faith incidents (Doc. 45 at PAGEID#: 967), and the Court has never limited the bad faith claim
to the processing of those specific claims. 5 At the same time, Powell has failed to demonstrate
that it is impossible to measure monetarily the significance of the issues at stake. Powell has not
cited any evidence that indicates resolution of this lawsuit in its favor is essential to the
5

Powell identified a total of 23 specific underlying asbestos claims in discovery.

19

company’s continued existence. Moreover, Powell’s bad faith insurance claim does not seek to
vindicate the type of interests that the advisory committee’s note recognizes cannot be measured
in monetary terms, i.e., “vitally important personal or public values” or “public policy” matters
such as “employment practices [or] free speech” that “may have importance beyond the
monetary amount involved.” Fed. R. Civ. P. 26(b)(2)(C)(iii) advisory committee’s note (2015).
The first factor does not weigh in favor of ordering production of the requested information.
ii. The amount in controversy
The parties present widely varying positions on the amount in controversy. Powell
calculates the amount in controversy arising from OneBeacon’s alleged bad faith handling of its
claims at over $10 million, and Powell alleges that its monetary damages continue to increase.
(Doc. 98 at PAGEID#: 1602, citing Exh. B, Brunner Decl., ¶ 15, Exh. 8- PAGEID#: 1671-74).
Powell asserts these damages arise from OneBeacon’s alleged bad faith acts of rejecting
settlement demands without consulting Powell, preventing Powell’s usual trial counsel from
participating in trials or in witness preparation, and communicating with local counsel and
extending settlement authority without Powell’s knowledge. (Id. at PAGEID#: 1602, citing Exh.
M, p. 8- PAGEID#: 2042). Powell contends the damages include high settlement amounts to
which OneBeacon belatedly agreed; the delayed evaluation of cases and coverage positions; fees
Powell was required to pay to outside counsel to monitor OneBeacon’s activities; compensation
paid to Powell’s executives for time devoted to the lawsuit; and a $3 million punitive damages
verdict returned against Powell in the matter of George Coulborn, No. 3:13-cv-8141 (D. Ariz.).
(Doc. 98 at PAGEID#: 1602; see id., Exh. M, Powell Responses to OneBeacon’s First Set of
Interrogatories, Requests for Production of Documents, and Requests for Admission, at
PAGEID#: 2042).

20

In response, OneBeacon alleges that Powell has not placed a value on its bad faith
damages, which OneBeacon asserts must be separate and distinct from damages for a breach of
contract, and that the information Powell needs to value its damages is exclusively within its
possession. (Doc. 104 at PAGEID#: 2154). OneBeacon contends it has provided evidence that
the collective indemnity value of the 23 claims Powell has identified as being at issue is no
greater than $265,688. (Id. at PAGEID#: 2155). OneBeacon alleges it has spent almost this full
amount, or a total of approximately $250,000, on document production in the case to date. (Id. at
PAGEID#: 2152; see Doc. 105, Exh. 1, Horacek Decl., ¶ 43). OneBeacon also challenges
Powell’s claim that it acted in bad faith in the Coulbourn litigation and that Powell suffered $3
million in damages as a result. (Doc. 104 at PAGEID#: 2149-50, n. 4).
In reply, Powell states that the $11 million total in damages at which it values its case
was included in its initial disclosures (Doc. 108 at PAGEID#: 2617-18, citing Exh. CPAGEID#: 2656-57) and reflected in its April 8, 2016 settlement demand for $11 million,
consisting of $4.2 million in claimed compensatory damages for lost executive time, settlement
costs, and defense counsel invoices; punitive damages of double the amount of compensatory
damages; and attorney fees and costs. (Id., Exh. A, Brunner Decl., ¶ 5).
OneBeacon’s position that Powell’s damages are limited to $265,688 and that Powell has
not justified a damages claim in excess of $10 million is not supported by the record.
OneBeacon alleges that the Court has previously held in this case that Powell is limited to
pursuing a claim of “bad faith handling and processing of insurance claims separate and apart
from the denial of insurance coverage.” (Doc. 104 at PAGEID#: 2147-48, citing Doc. 70 at
PAGEID#: 1293). OneBeacon alleges that by so holding, the Court recognized that there “must
be damages other than breach-of-contract damages” for a bad faith “tort to be actionable

21

independent of a breach-of-contract claim.” (Id. at PAGEID#: 2147-48, citing Shimola v.
Nationwide Ins. Co., 495 N.E.2d 391, 393 (Ohio 1986); Strategy Group for Media, Inc. v.
Lowden, No. 12 CAE 03 0016, 2013 WL 1343614, at ¶ 30 (Ohio App. 5th Dist. March 21,
2013); Textron Fin. Corp. v. Nationwide Mut. Ins. Co., 684 N.E.2d 1261 (Ohio App. 9th Dist.
1996)). OneBeacon concludes that “[d]efense and indemnity costs are contract damages” and
that Powell must therefore demonstrate it has damages other than defense and indemnity costs
allegedly owed under the OneBeacon policies in order to proceed on its bad faith claim. (Id. at
PAGEID#: 2148). However, OneBeacon has not cited any authority to support its position that
defense and indemnity costs can be recovered only for a breach of contract. 6 Further,
OneBeacon construes the Court’s prior decision limiting Powell to proceeding on its bad faith
claim too broadly. The Court found that Ohio recognizes a cause of action against insurers for a
breach of the duty of good faith “separate and apart from the denial of insurance coverage”; that
Powell could proceed on its bad faith claim; but that Powell could not prove its breach of
contract claim because a determination had not yet been made as to “which policies were
triggered.” (Doc. 70 at PAGEID#: 1293-94). The Court did not make any findings regarding the
damages that Powell must allege or prove to proceed on its bad faith claim.
Ohio law governs the damages available to Powell on its breach of contract and bad faith
claims. Ohio law holds that “an insurer who acts in bad faith is liable for those compensatory
6

The Ohio cases OneBeacon cites do not support this proposition but instead hold that to recover punitive damages
or to proceed on a tort claim in addition to a claim for breach of contract, the plaintiff must allege actual damages
attributable to the tortious conduct that are in addition to those attributable to a breach of contract. See Shimola, 495
N.E.2d at 393 (holding that because “[e]xemplary or punitive damages may not be awarded in the absence of proof
of actual damages” under Ohio law, the appellant had to prove “he suffered a harm distinct from the breach of
contract action and attributable solely to the alleged tortious conduct of appellee” to recover punitive damages);
Strategy Group for Media, Inc., 2013 WL 1343614, at ¶ 30 (stating that in order for fraud and breach of contract
claims to coexist in same action, actual damages must be attributable to the wrongful acts of the alleged tortfeasor in
addition to those attributable to the breach of contract and holding that the plaintiff did not allege separate damages
there because the damages were based on the same outstanding invoices); Textron Fin. Corp., 684 N.E.2d at 1270
(holding that a claim for fraud did not lie where the claim was based on the same conduct that gave rise to the claim
for breach of contract and the plaintiff did not allege actual damages in addition to those attributable to the breach of
contract).

22

damages flowing from the bad faith conduct of the insurer and caused by the insurer’s breach of
contract.” Zoppo v. Homestead Ins. Co., 644 N.E.2d 397, 402 (Ohio 1994). See also Valley
Forge Ins. Co. v. Fisher Klosterman, Inc., No. 1:14-cv-792, 2016 WL 1642961, at *12 (S.D.
Ohio Apr. 26, 2016) (“an insurer who acts in bad faith is liable for those compensatory damages,
including attorney fees, flowing from the bad faith conduct of the insurer and caused by the
insurer’s breach of contract.”) (quoting Furr v. State Farm Mut. Auto. Ins. Co., 716 N.E.2d 250,
265 (Ohio App. 6th Dist. 1998)); Asmaro v. Jefferson Insurance Co. of New York, 574 N.E.2d
1118, 1123 (Ohio App. 6th Dist. 1989) (plaintiff who proves a bad faith claim can recover
“extra-contractual damages,” which are “actual damages over and above those covered by the
insurance contract sustained by the insured as a consequence of the insurer’s bad faith”). Powell
has specified the amounts and types of damages it claims have flowed from OneBeacon’s alleged
bad faith actions. Although OneBeacon challenges the merits of Powell’s bad faith allegations
and its $3 million damages claim in connection with the Coulbourn case (Doc. 104 at PAGEID#:
1249-50, n. 4), the merits of the parties’ dispute cannot be resolved at the discovery stage. At
this juncture, the Court has no reasonable basis to reject Powell’s representations that its
damages may exceed $10 million.
Conversely, OneBeacon alleges that its costs to complete the document production
requested by Powell and update its privilege log “could equal or exceed the $250,000” it has
spent on document production to date. (See Doc. 111-1, Second Horacek Declaration, ¶ 8).
However, OneBeacon has provided no factual basis for this estimate. OneBeacon has failed to
identify the additional time and costs it anticipates it would expend, including the number of files
and/or databases upon which it bases its estimate, the expected man-hours to identify responsive
information from and perform its review of these sources, and the anticipated cost basis for the

23

labor. See, e.g., Surles ex rel. Johnson v. Greyhound Lines, Inc., 474 F.3d 288, 306 (6th Cir.
2007) (providing such estimates). See also Kafele, 2005 WL 5095186, *2 n. 8 (responding party
“must show specifically how each discovery request is burdensome and oppressive by submitting
affidavits or offering evidence revealing the nature of the burden”) (citation omitted). 7 Further,
OneBeacon’s assertion that it could be required to spend more than twice the amount it has spent
to date on additional discovery is questionable given OneBeacon’s representation that it has
already produced the vast majority of its discovery. (See Doc. 104 at PAGEID#: 2152; see Doc.
105, Exh. 1, Horacek Decl., ¶ 43). Moreover, as the Court has determined that several of the
categories of discovery sought by Powell are not relevant, the cost will necessarily be lower than
OneBeacon’s estimate.
Thus, although the Court cannot reasonably estimate the additional discovery costs
OneBeacon is likely to incur based on the information OneBeacon has provided, those costs are
likely to be far lower than the discovery costs OneBeacon has incurred to date. At the same
time, Powell has demonstrated that the amount in controversy is substantial. This factor
therefore weighs in favor of production of the contested information.
iii. The parties’ relative access to relevant information
Powell argues that it has no access to the information it requests because the information
consists of OneBeacon’s internal documents and communications. (Doc. 98 at PAGEID#:
1602). OneBeacon alleges in response that Powell has equal access to documents it needs,
which OneBeacon divides into two categories: (1) any unprivileged documents that tend to show
OneBeacon’s actions were not reasonably justified; and (2) any unprivileged documents that tend

7

Likewise, the protective order OneBeacon seeks may only be issued for “good cause,” which requires OneBeacon
to “articulate specific facts showing ‘clearly defined and serious injury’ resulting from the discovery sought and [it]
cannot rely on mere conclusory statements.” Nix v. Sword, 11 F. App’x 498, 500 (6th Cir. 2001) (citation omitted).

24

to show Powell was damaged. (Doc. 104 at PAGEID#: 2155). OneBeacon alleges that Powell
has access to information in the first category related to defense and indemnification, including
all information generated and compiled by its defense lawyers, through the parties’ Data
Exchange Protocol and other shared information. 8 Id. One Beacon also claims that insofar as
this information “comes by and through Michaud,” OneBeacon has already produced it. (Id.).
OneBeacon alleges that information in the second category is “exclusively” in Powell’s
possession. (Id. at PAGEID#: 2155-56). OneBeacon argues that to the extent it has in its
possession information concerning defense and indemnity payments it made on Powell’s behalf,
that information pertains only to OneBeacon’s performance of its contractual obligations and
therefore cannot form the basis of Powell’s bad faith damages claim. (Id. at PAGEID#: 2156).
In response, Powell disputes that it has equal access to the information it seeks. Powell
alleges that the Data Exchange Protocol did not cover OneBeacon and Resolute’s internal
communications, which is “the bulk” of the information it seeks. (Doc. 108 at PAGEID#: 2618).
Powell also argues that it needs information about more than just the 23 claims referenced by
OneBeacon: Powell alleges it needs information from additional custodians senior to Michaud
who were responsible for analysis and settlement, the financial data, and information about the
Powell account as a whole to enable Powell to make sense of the claim-specific communications.
(Id.).
Considerations of access to the relevant information favor ordering production of the
information Powell seeks to discover. OneBeacon does not allege that Powell has access to its

8

OneBeacon and Powell agreed to implement a Data Exchange Protocol in 2012 whereby OneBeacon would
provide Powell with settlement information for every Powell asbestos liability claim partially or fully funded by
OneBeacon; OneBeacon would give Powell quarterly updates on such settlement information moving forward; and
OneBeacon would provide Powell with access to all of OneBeacon’s claims files concerning asbestos claims against
Powell, but privileged and protected coverage materials would not be subject to inspection. (Doc. 104 at PAGEID#:
2146).

25

internal communications, meeting agendas, and similar documents that Powell seeks. Internal
communications related to Powell’s account are relevant to its claim that OneBeacon acted in
bad faith “in the handling, processing, payment, and satisfaction of claims made under the
General Accident Policies” (see Doc. 70 at PAGEID#: 1292-93) by denying coverage for claims
after stating coverage was available, instructing counsel to withhold information from Powell,
excluding Powell from settlement discussions, and failing to pay defense costs of local defense
counsel. (Doc. 45 at PAGEID#: 967). The third factor weighs in favor of ordering production.
iv. The parties’ resources
Powell alleges it is a “small” company that has been placed in the position of defending
tens of thousands of asbestos cases. (Doc. 98 at PAGEID#: 1602). Powell has not produced any
evidence that sheds any light on its resources relative to OneBeacon and its potential asbestos
exposure. On the other hand, OneBeacon does not allege that complying with the additional
discovery requests will be particularly burdensome. OneBeacon simply alleges that this factor is
irrelevant in light of the total value of the case. (Doc. 104 at PAGEID#: 2156). OneBeacon has
not submitted affidavits or otherwise provided any specific information regarding its resources
vis-à-vis the anticipated costs of producing the additional information at issue. Because
OneBeacon has not shown that complying with Powell’s discovery requests would be “unduly
burdensome,” consideration of the parties’ resources does not weigh in favor of upholding
OneBeacon’s objections.

See Siriano v. Goodman Mfg. Co., L.P., No. 2:14-cv-1131, 2015 WL

8259548, at *6 (S.D. Ohio Dec. 9, 2015) (“The Sixth Circuit . . . has held that limiting the scope
of discovery is appropriate when compliance ‘would prove unduly burdensome,’ not merely
expensive or time-consuming.”) (quoting Surles, 474 F.3d at 305).

26

v. The importance of the discovery in resolving the issues
Powell alleges that the discovery it requests is important to resolving its bad faith claim
because the documents that relate to the Powell account generally and the documents from
custodians who are senior to Michaud “will inform and contextualize the individual claimspecific documents.” (Doc. 98 at PAGEID#: 1602). In response, OneBeacon alleges that Powell
has made no effort to explain what additional information is missing and what bearing the
additional information it seeks has on resolution of its bad faith claim. (Doc. 104 at PAGEID#:
2156).
Powell has demonstrated that the requested email communications and documents it
seeks are important because they pertain to OneBeacon’s handling of the Powell account and the
claims procedure it followed. Although OneBeacon protests that only information related to
settlement of the 23 specific claims identified by Powell in discovery is relevant, the Court
disagrees and finds the requested information is pertinent to the broader issues of who played a
role in the general administration and handling of Powell’s account and the claims-handling
process, what each individual’s function was, and whether the claims-handling process was
conducted in bad faith. This factor weighs in favor of production of the contested information.
vi. Whether the burden or expense of the proposed discovery outweighs its likely
benefit
The information before the Court does not show that the burden and expense of the
proposed discovery outweighs its likely benefit. The discovery Powell seeks is relevant to
whether OneBeacon acted in bad faith in the course of the Powell claims handling process.
OneBeacon has not carried its burden to show that it would be “unduly burdensome” to produce
this relevant information. See Siriano, 2015 WL 8259548, at *6. OneBeacon alleges it has spent
$250,000 to date on discovery and could spend that much or more on the additional discovery
27

Powell seeks. However, OneBeacon has not made a factual showing that it would be either
costly or particularly time-consuming to comply with the proposed discovery requests. Without
offering evidence explaining the nature of the alleged burden it faces in producing the proposed
discovery, OneBeacon has not met its burden of showing that the burden or expense of
complying with Powell’s discovery requests, as modified by the Court, outweighs the likely
benefit of such discovery to Powell in this lawsuit. The final factor weighs in favor of
production of the requested discovery.
4. Conclusion
The balance of considerations weighs in favor of ordering defendant OneBeacon to
produce the information sought by plaintiff Powell. Powell has demonstrated the requested
discovery is relevant and proportional to the issues in this lawsuit. Defendant OneBeacon has
not shown that producing this information would be unduly burdensome. The Court will
overrule OneBeacon’s objections to producing the information designated in Powell’s motion to
compel and grant the motion subject to the limited exceptions set forth above. OneBeacon must
produce the following documents to Powell:
1. Monthly emails Graham Loxley receives that contain financial data
concerning Powell’s account and emails relating to quarterly meetings
between Resolute employees and Loxley.
2. Responsive, nonduplicative documents from the following custodians whose
documents have not been searched: Clayton Budlong, Gregory Gaines, David
Gold, and Peter Dinunzio.
3. Communications and other documents that relate to Powell’s account
generally that have not been produced, including documents from Darilyn
Michaud, Tom Ryan, and Brooke Green.
IV. The privilege log
Powell alleges that OneBeacon’s privilege log is deficient under Fed. R. Civ. P.
28

26(b)(5)(A) on the following grounds: (1) the privilege log is not supported by sufficient
information to justify many of the privileges and protections OneBeacon asserts, such that
OneBeacon has waived any privilege or protection as to such documents; and (2) many of the
withheld documents are not entitled to protection because (a) OneBeacon waived the privilege
by sharing the documents with third parties, and (b) documents withheld on the grounds of
attorney-client privilege and work product that predate the denial of coverage by OneBeacon
“may cast light” on the bad faith claim and are therefore discoverable in accordance with Ohio
law. (Doc. 98 at PAGEID#: 1603-1611). Powell argues that the Court should order OneBeacon
to produce the documents for which the privilege log does not provide sufficient information to
substantiate the claimed privilege or protection or any document that has been withheld and is
not protected from disclosure. (Doc. 98 at PAGEID#: 1603).
In response, OneBeacon argues that Powell’s challenges to the sufficiency of its privilege
log are baseless. (Doc. 104 at PAGEID#: 2157). One Beacon alleges that its privilege log is
comparable in all respects to Powell’s privilege log and provides sufficient information for the
Court and Powell to know what information was withheld and why. (Id. at PAGEID#: 2160).
OneBeacon contends that the privilege log provides sufficient information to show draft
spreadsheets and related documents are protected by the work product doctrine; the burden is on
Powell to show why it would benefit from disclosure of communications involving active
litigation between the parties; OneBeacon’s communications with its agents and partners are
protected by the attorney-client privilege and work product doctrine under the “functional
employee” and “common interest” doctrines; and documents pertaining to OneBeacon’s
handling of underlying asbestos claims brought against Powell which predate any denial of
coverage by OneBeacon in those cases are discoverable only if Powell makes a prima facie

29

showing of bad faith. (Id. at PAGEID#: 2157-2164).
1. Rule 26(b)(5)(A)
Fed. R. Civ. P. 26(b)(5)(A) provides that a party who withholds information that is
otherwise discoverable “by claiming that the information is privileged or subject to protection as
trial-preparation material” must:
(i) expressly make the claim; and
(ii) describe the nature of the documents, communications, or tangible things not
produced or disclosed--and do so in a manner that, without revealing information
itself privileged or protected, will enable other parties to assess the claim.
Fed. R. Civ. P. 26(b)(5)(A). The Local Rules of this Court provide:
Any privilege log shall refer to the specific request to which each assertion of
privilege pertains. A privilege log shall list documents withheld in chronological
order, beginning with the oldest document for which a privilege is claimed.
S.D. Ohio Civ. R. 26.1(a). A privilege log must contain sufficient detail to enable the opposing
party and the court to assess whether each element of the attorney-client privilege is satisfied.
Cooey v. Strickland, 269 F.R.D. 643, 649 (S.D. Ohio 2010). See also In re Universal Services
Fund Tel. Billing Practices Litig., 232 F.R.D. 669, 673 (D. Kan. 2005).
In a diversity case, a federal court applies federal law to resolve work product claims and
state law to resolve attorney-client privilege claims. In re Powerhouse Licensing, LLC, 441 F.3d
467, 472 (6th Cir. 2006) (citing Baker v. General Motors Corp., 209 F.3d 1051, 1053 (8th Cir.
2000); Fed. R. Evid. 501; Jewell v. Holzer Hosp. Found., Inc., 899 F.2d 1507, 1513 (6th Cir.
1990)). Thus, state law governs OneBeacon’s claim of attorney-client privilege in this diversity
action. Travelers Cas. and Sur. Co. v. Excess Ins. Co. Ltd., 197 F.R.D. 601, 605-06 (S.D. Ohio
2000) (citing Fed. R. Evid. 501; Guy v. United Healthcare Corp., 154 F.R.D. 172, 177 (S.D.
Ohio 1993)). Under Ohio law, communications a client makes to his or her attorney “with a

30

view to professional advice or assistance are privileged,” and the court will not require those
communications to be divulged by the attorney without the client’s consent. Id. (citing Spitzer v.
Stillings, 109 Ohio St. 297, 303, 142 N.E. 365 (1924) (quoting King v. Barrett, 11 Ohio St. 261,
syll. (1860); Ohio Rev. Code § 2317.02(A); Ohio R. Ev. 501)). See also Waite, Schneider,
Bayless & Chesley Co., L.P.A. v. Davis, No. 1:11-cv-00851, 2013 WL 4757486, at *4 (S.D. Ohio
July 12, 2013) (“The attorney client privilege ‘bestows upon a client the privilege to refuse to
disclose, and to prevent others from disclosing, confidential communications made between the
attorney and client in the course of seeking or rendering legal advice.’”) (quoting H & D Steel
Serv. v. West, Hurd, Fallon, Paisely & Howley, No. 72758, 1998 WL 413772, *2 (Ohio App. 8th
Dist. July 23, 1998) (quoting Frank W. Schaefer, Inc. v. C. Garfield Mitchell Agency, Inc., 612
N.E.2d 442, 446 (Ohio App. 2d Dist. 1992)). “There is no material difference between Ohio’s
attorney-client privilege and the federal attorney-client privilege.” MA Equip. Leasing I, L.L.C.
v. Tilton, 980 N.E.2d 1072, 1079-1080 (Ohio App. 10th Dist. 2012) (citing Guy, 154 F.R.D. at
177 n.3); Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc., No. 2:07-cv-116, 2012 WL
3731483 (S.D. Ohio Aug. 28, 2012)). The attorney-client privilege applies “(1) [w]here legal
advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his
instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) unless
the protection is waived.” State ex rel. Leslie v. Ohio Housing Fin. Agency, 824 N.E.2d 990, 995
(Ohio 2005) (citing Reed v. Baxter, 134 F.3d 351, 355-356 (6th Cir. 1998); Perfection Corp. v.
Travelers Cas. & Sur. Co., 790 N.E.2d 817, 820 (Ohio App. 8th Dist. 2003)). The attorneyclient privilege is “founded on the premise that confidences shared in the attorney-client
relationship are to remain confidential. Only in this manner can there be freedom from

31

apprehension in the client’s consultation with his or her legal advisor.” Travelers Cas. and Sur.
Co., 197 F.R.D. at 605-06 (quoting Moskovitz v. Mt. Sinai Medical Center, 635 N.E.2d 331, 349
(Ohio 1994)).
In the corporate context, the attorney-client privilege extends to communications between
attorneys and corporate employees regardless of their position within the corporation where the
communications concern matters within the scope of the employees’ corporate duties, and the
employees are aware that the communication was for purposes of obtaining legal advice.
Upjohn Co. v. U.S., 449 U.S. 383, 394 (1981). See also In re Perrigo Co., 128 F.3d 430, 437
(6th Cir. 1997). The attorney-client privilege extends to factual investigations conducted by an
attorney at the request of the corporate client for purposes of providing legal advice to the
corporate client. Upjohn, 449 U.S. at 394, 395. Similarly, factual information conveyed by an
employee to the attorney in the course of the factual investigation is protected because the
attorney-client privilege protects “not only the giving of professional advice to those who can act
on it but also the giving of information to the lawyer to enable him to give sound and informed
advice.” Upjohn, 449 U.S. at 390. “Courts have extended the protection outlined in Upjohn to
communications between non-attorney corporate employees where the communications were
made for purposes of securing legal advice from counsel.” Graff v. Haverhill North Coke Co.,
No. 1:09-cv-670, 2012 WL 5495514, at *7 (S.D. Ohio Nov. 13, 2012) (and numerous cases cited
therein).
Fed. R. Civ. P. 26(b)(3) governs work product claims. With certain exceptions, Rule
26(b)(3) protects from disclosure all: (1) “documents and tangible things”; (2) “prepared in
anticipation of litigation or for trial”; (3) “by or for another party or its representative (including

32

the other party’s attorney, consultant, surety, indemnitor, insurer, or agent).” 9 Fed. R. Civ. P.
26(b)(3)(A). Under the Federal Rules, the work product protection under Rule 26(b)(3) is not
limited to attorneys but has been extended to documents and tangible things prepared by or for
the party and the party’s representative, as long as such documents were prepared in anticipation
of litigation. Id. See Eversole v. Butler County Sheriff’s Office, No. 1:99-cv-789, 2001 WL
1842461, at *2 (S.D. Ohio Aug. 7, 2001) (“Rule 26(b)(3) is not limited solely to attorneys” and
“documents and things prepared by the party or his agent fall within the work product rule.”)
(citing 8 Wright & Miller, Federal Practice & Procedure, § 2024). Rule 26(b)(3) excludes from
work product protection “[m]aterials assembled in the ordinary course of business, or pursuant to
public requirements unrelated to litigation, or for other nonlitigation purposes.” Rule 26
advisory committee’s note (1970).
“Opinion” work product is entitled to near absolute protection against disclosure, while
“fact” work product may be discoverable upon a showing by a party that it has a substantial need
for the materials to prepare its case and that it cannot, without undue hardship, obtain
substantially equivalent materials by other means. See In re Columbia/HCA Healthcare Corp.
Billing Practices Litig., 293 F.3d 289, 294 (6th Cir. 2002).

9

Rule 26(b)(3) provides:
(A) Documents and Tangible Things. Ordinarily, a party may not discover documents and
tangible things that are prepared in anticipation of litigation or for trial by or for another party or
its representative (including the other party’s attorney, consultant, surety, indemnitor, insurer, or
agent). But, subject to Rule 26(b)(4), those materials may be discovered if:
(i) they are otherwise discoverable under Rule 26(b)(1); and
(ii) the party shows that it has substantial need for the materials to prepare its
case and cannot, without undue hardship, obtain their substantial equivalent by
other means.

Fed. R. Civ. P. 26.

33

Two factors are material to whether a document is protected by the work product doctrine
because it was “in anticipation of litigation” or for trial: “(1) whether that document was
prepared ‘because of’ a party’s subjective anticipation of litigation, as contrasted with ordinary
business purpose; and (2) whether that subjective anticipation was objectively reasonable.” In re
Professionals Direct Ins. Co., 578 F.3d 432, 439 (6th Cir. 2009) (citing United States v.
Roxworthy, 457 F.3d 590, 594 (6th Cir. 2006)). See also Little Hocking Water Assn., Inc. v. E.I.
Du Pont De Nemours & Co., No. 2:09-cv-1081, 2013 WL 607969, at *9 (S.D. Ohio Feb. 19,
2013) (Report and Recommendation), affirmed, 2014 WL 5857994 (S.D. Ohio Nov. 12, 2014) (it
is not sufficient to state that a communication generally relates to litigation to warrant work
product protection; the communication must have been “prepared in anticipation of litigation or
for trial.”). The party resisting disclosure bears the burden of showing that the material was
“prepared in anticipation of litigation or for trial.” Toledo Edison Co. & Cleveland Electric
Illuminating Co. v. G A Technologies, Inc., 847 F.2d 335, 339 (6th Cir. 1988). A party may
satisfy this burden “in any of the traditional ways in which proof is produced in pretrial
proceedings such as affidavits made on personal knowledge, depositions, or answers to
interrogatories,” and the showing “can be opposed or controverted in the same manner.” Id.
“Where an ‘undisputed affidavit . . . is specific and detailed to indicate that the documents were
prepared in anticipation of litigation or trial,’ then the party claiming work product protection has
met its burden.” Roxworthy, 457 F.3d at 597 (quoting Toledo Edison Co., 847 F.2d at 341).
However, courts will reject claims for work product protection “where the ‘only basis’ for the
claim is an affidavit containing ‘conclusory statement[s].’” Id. (quoting Guardsmark, Inc. v.
Blue Cross and Blue Shield of Tenn., 206 F.R.D. 202, 210 (W.D. Tenn. 2002)). Finally, “[i]f a
document is prepared in anticipation of litigation, the fact that it also serves an ordinary business

34

purpose does not deprive it of protection[.]” In re Professionals Direct Ins. Co., 578 F.3d at 439
(quoting Roxworthy, 457 F.3d at 598-99). However, the party seeking protection bears the
burden of showing that “anticipated litigation was the ‘driving force behind the preparation of
each requested document.’” Id. (quoting Roxworthy, 457 F.3d at 595) (stating that such
documents do not lose protection under the work product doctrine “unless the documents ‘would
have been created in essentially similar form irrespective of the litigation’”) (quoting Nat’l
Union Fire Ins. Co. of Pittsburgh v. Murray Sheet Metal Co., 967 F.2d 980, 984 (4th Cir. 1992)).
3. Boone exception/Motion to certify
The Court will initially address Powell’s contention that the privilege log contains several
hundred entries identifying documents that OneBeacon improperly withheld on the ground they
pertain to the handling of underlying asbestos claims against Powell which predate any denial of
coverage by OneBeacon. (Doc. 98 at PAGEID#: 1610-11, citing Exh. Q). Powell alleges that
those documents are discoverable in this bad faith action pursuant to Boone v. Vanliner Ins. Co.,
744 N.E.2d 154 (Ohio 2001), which created an exception to the attorney-client privilege for
insurance claims file documents where the insured alleges a claim of bad faith denial of
insurance coverage. In Boone, the Ohio Supreme Court held:
In an action alleging bad faith denial of insurance coverage, the insured is entitled
to discover claims file materials containing attorney-client communications
related to the issue of coverage that were created prior to the denial of coverage.
At that stage of the claims handling, the claims file materials will not contain
work product, i.e., things prepared in anticipation of litigation, because at that
point it has not yet been determined whether coverage exists.
Id. at 158. The Ohio Supreme Court reasoned that claims file documents relating to a claim of
bad faith denial of insurance coverage and generated before a denial decision are not worthy of
protection under the attorney-client privilege and as work product. Id. at 157-58. See also
Unklesbay v. Fenwick, 855 N.E.2d 516, 521 (Ohio App. 2d Dist. 2006) (“claims-file materials
35

showing an insurer’s lack of good faith in processing, evaluating, or refusing to pay a claim are
unworthy of the protection afforded by the attorney-client or work-product privilege”); Garg v.
State Auto. Mut. Ins. Co., 800 N.E.2d 757, 762 (Ohio App. 9th Dist. 2003) (clarifying that Boone
is applicable to both the attorney-client privilege and the work product doctrine). In a discovery
dispute involving a bad faith denial of an insurance coverage claim, “[t]he critical issue is
whether the documents ‘may cast light’ on whether the insurer acted in bad faith.” Chubb
Custom Ins. Co. v. Grange Mut. Cas. Co., No. 2:07-cv-1285, 2012 WL 1340369, at *4 (S.D.
Ohio Apr. 17, 2012) (King, M.J.) (quoting In re Professionals Direct Ins. Co., 578 F.3d at 442
(in turn quoting Garg, 800 N.E.2d at 763)). Powell alleges that the documents it seeks that
predate denial of coverage in the underlying asbestos cases “may cast light on whether
[OneBeacon] acted in bad faith” and are therefore discoverable under Boone. (Doc. 98 at
PAGEID#: 1610-11, citing Exh. Q).
OneBeacon contends that Powell’s arguments related to the Boone exception are
premised on an erroneous interpretation of Ohio law, which potentially raises a question that this
Court should certify to the Ohio Supreme Court. OneBeacon alleges that the holding of Boone
has been superseded by the amendment of Ohio Rev. Code § 2317.02(A)(2), effective October
31, 2007. (Doc. 104 at PAGEID#: 2163, citing 2006 Ohio Laws File 198 (Am. Sub. S.B. 117,
section 6)). The statute, as amended, provides as follows:
The following persons shall not testify in certain respects:
(A)(1) An attorney, concerning a communication made to the attorney by a client
in that relation or concerning the attorney’s advice to a client, except that the
attorney may testify by express consent of the client. . . . However, if the client
voluntarily reveals the substance of attorney-client communications in a
nonprivileged context or is deemed by section 2151.421 of the Revised Code to
have waived any testimonial privilege under this division, the attorney may be
compelled to testify on the same subject.

36

The testimonial privilege established under this division does not apply
concerning either of the following:
....
(2) An attorney, concerning a communication made to the attorney by a client in
that relationship or the attorney’s advice to a client, except that if the client is an
insurance company, the attorney may be compelled to testify, subject to an in
camera inspection by a court, about communications made by the client to the
attorney or by the attorney to the client that are related to the attorney’s aiding or
furthering an ongoing or future commission of bad faith by the client, if the party
seeking disclosure of the communications has made a prima-facie showing of bad
faith, fraud, or criminal misconduct by the client.
Ohio Rev. Code § 2317.02. OneBeacon alleges that § 2317.02(A)(2) was expressly “modified . .
. to provide for judicial review regarding the [attorney-client] privilege,” and OneBeacon
construes that statute as modified to require that a party must make “a prima facie showing of
bad faith” before a claims file document protected by the attorney-client privilege will be
subjected to an in camera review. 10 (Doc. 104 at PAGEID#: 2163-64). OneBeacon argues that
the statute as amended “clearly applies to both testimony and discovery.” (Id. at PAGEID#:
2164, citing Jackson v. Geiger, 854 N.E.2d 487, 490 n.1 (Ohio 2006) (stating that § 2317.02
provides a “testimonial privilege” and that such a privilege prohibits an attorney’s testimony at
trial concerning attorney-client communications and also applies to “protect the sought-after
communications during the discovery process.”)).
Powell disputes that Boone has been statutorily superseded by Ohio Rev. Code §
2317.02(A) such that a prima facie showing of bad faith is required before Powell is entitled to
discover the documents at issue. (Doc. 108 at PAGEID#: 2626). Powell contends that the
10

“The General Assembly declares that the attorney-client privilege is a substantial right and that it is the public
policy of Ohio that all communications between an attorney and a client in that relation are worthy of the protection
of privilege, and further that where it is alleged that the attorney aided or furthered an ongoing or future commission
of insurance bad faith by the client, that the party seeking waiver of the privilege must make a prima facie showing
that the privilege should be waived and the court should conduct an in camera inspection of disputed
communications. The common law established in Boone v. Vanliner Ins. Co. (2001), 91 Ohio St.3d 209, Moskovitz
v. Mt. Sinai Med. Ctr. (1994), 69 Ohio St.3d 638, and Peyko v. Frederick (1986), 25 Ohio St.3d 164, is modified
accordingly to provide for judicial review regarding the privilege.” 2006 Ohio Laws File 198 (Am. Sub. S.B. 117)

37

statute creates only a “testimonial privilege precluding an attorney from testifying about
confidential communications” and does not apply to documents, as multiple courts have held.
(Doc. 108 at PAGEID#: 2626) (citing cases).
OneBeacon contends that numerous Ohio and federal courts have rejected Powell’s
position that the statute does not apply to the discovery of documents and “clearly hold to the
contrary.” (Doc. 111 at PAGEID#: 2681-2682, citing cases). OneBeacon also argues that “it is
clear that Ohio law is in conflict on the application of R. C. 2317.02(A)(2) to discovery of
documents in bad faith cases” and neither the Ohio Supreme Court nor the Sixth Circuit has
issued a controlling decision on the issue. (Id. at PAGEID#: 2684). OneBeacon contends that
resolution of whether the statute applies to the discovery of documents in bad faith cases is
determinative of a “proceeding” as defined under Ohio law and the Court should therefore certify
the following question to the Ohio Supreme Court pursuant to Ohio S. Ct. Prac. R. 9.01(A):
Do[] the attorney client-privilege and related procedures set forth in R. C.
2317.02(A)(2) extend to the discovery of documents in insurance bad faith cases?
(Doc. 111 at PAGEID#: 2682, 2683).
Federal courts have the ability to certify questions of law to the Ohio Supreme Court
when “there is a question of Ohio law that may be determinative of the proceeding and for which
there is no controlling precedent in the decisions of this Supreme Court.” S. Ct. Prac. R.
9.01(A). See also Super Sulky, Inc. v. U.S. Trotting Ass’n, 174 F.3d 733, 744 (6th Cir. 1999).
The decision to certify a question to the state supreme court is within the district court’s
discretion. Pennington v. State Farm Mut. Auto. Ins. Co., 553 F.3d 447, 449-50 (6th Cir. 2009).
Certification is not warranted simply because ascertaining what state law provides is somewhat
difficult. Metz v. Unizan Bank, 416 F. Supp.2d 568, 574 (N.D. Ohio 2006) (citing Duryee v.
United States Dep’t of the Treasury, 6 F. Supp.2d 700, 704 (S.D. Ohio 1995)). Certification of
38

“[n]ovel or unsettled questions of state law” may be appropriate “where certification will save
time, energy and resources, or where there are conflicting federal interpretations of an important
state law question which would otherwise evade state court review.” Id. (citing Arizonans for
Official English v. Arizona, 520 U.S. 43, 77 (1997); Geib v. Amoco Oil Co., 29 F.3d 1050, 1060
(6th Cir. 1994)). Thus, the court in Metz denied certification where it found there was “sufficient
guidance in the current state and federal law to allow it to make a reasoned and principled
decision” under Ohio law on the issue before it. Id.
The Court exercises its discretion to decline OneBeacon’s request to refer the question it
presents to the Ohio Supreme Court for certification. OneBeacon has failed to establish that
resolution of the instant discovery dispute involving a claimed privilege “is determinative of a
‘proceeding.’” (Doc. 112 at PAGEID#: 2819, citing Ohio Rev. Code § 2505.02(B)). Even
assuming Ohio law defines the resolution of a discovery dispute such as this one as a potentially
determinative “proceeding,” resolution of the privilege issue would not be dispositive of the
proceeding before this Court. Whether Powell is entitled to discover claims file materials
created prior to the denial of coverage under Ohio Rev. Code § 2317.02(A)(2) is only one aspect
of the parties’ discovery dispute. The parties raise several additional issues, which are not
reviewable on an interlocutory basis under 28 U.S.C. § 1292 or under the collateral order
doctrine. See In re Professionals Direct Ins. Co., 578 F.3d at 438 (citing John B. v. Goetz, 531
F.3d 448, 458 (6th Cir. 2008)). Thus, resolution of whether Ohio Rev. Code § 2317.02 is a
testimonial privilege only would not be determinative of a motion or any other proceeding before
the Court.
Assuming, arguendo, that the elements of the certification statute were satisfied, a review
of the relevant authorities does not support OneBeacon’s position that Ohio and federal courts

39

have “clearly held” that Ohio Rev. Code § 2317.02(A) applies to documents in addition to an
attorney’s testimony. Rather, the majority of courts to have addressed the issue have found that
the statute is limited to attorney testimony and does not extend to documents related to coverage
issues that were created prior to the denial of coverage. Courts that have explicitly addressed the
issue have concluded that § 2317.02(A) applies to attorney testimony and not to documents held
by defendants. 11 See Mayer v. Allstate Vehicle & Prop. Ins. Co., No. 2:15-cv-2896, 2016 WL
1632415, at *5 (S.D. Ohio Apr. 22, 2016), objections overruled, 2016 WL 2726658 (S.D. Ohio
May 10, 2016) (finding “Ohio’s testimonial privilege statute does not apply to documents” and
rejecting the argument that the explanatory note to the amendment supported a different
conclusion); Tallmadge Spinning & Metal Co. v. Am. States Ins. Co., No. 5:15-cv-1763 (N.D.
Ohio Feb. 11, 2016 Order, ECF No. 23 at *3) (plaintiffs were not required to make prima facie
showing of bad faith to discover claims file documents because statute applies only to testimony,
not documents); Arrowood Indem. Co. v. The Lubrizol Corp., No. 1:10-cv-2871, 2013 WL
12130641, at *3 (N.D. Ohio Aug. 6, 2013) (“Because Ohio Rev. Code § 2317.02(A)(2) does not
apply to documents, Lubrizol does not need to make out a prima facie case of bad faith by
Arrowood in order to view the documents it has requested during discovery. Such documents
are discoverable under Ohio law insofar as ‘they may cast light’ on whether Arrowood acted in
bad faith.”); Little Italy Dev., LLC v. Chicago Title Ins. Co., No. 1:11-cv-112, 2011 WL
4944259, at *2 (N.D. Ohio Oct. 17, 2011) (concluding that “a plain reading of the language in
subsection (A)(2) compels the same result” as subsection (A)(1) and “limits the statute’s
application to cases in which a party is seeking to compel testimony of an attorney”).

11

Powell relies on In re Professionals Direct Ins. Co., 578 F.3d at 440, which held that subsection (A)(1) of §
2317.02 applied to attorney testimony and not documents held by plaintiffs. However, the Court declined to
interpret the scope of subsection (A)(2) at issue here because that subsection was enacted after the suit was filed. Id.
at 441.

40

OneBeacon cites a number of cases that purportedly “clearly hold” that § 2317.02(A)(2)
applies to discovery disputes involving documents in bad faith cases: Galion Community Hosp.
v. The Hartford Life & Acc. Ins. Co., No. 1:08-cv-1635, 2010 WL 359126, at *2-3 (N.D. Ohio
Jan. 29, 2010); Chubb Custom Ins. Co. v. Grange Mut. Cas. Co., No. 2:07-cv-1285, 2012 WL
1340369, at *4-7 (S.D. Ohio Apr. 17, 2012); Bausman v. Am. Fam. Ins. Group, 60 N.E.3d 772,
773-76 (Ohio App. 2d Dist. 2016); and Cobb v. Shipman, No. 2011-T-0049, 2012 WL 1269128,
at *10-11 (Ohio App. 2d Dist. March 4, 2016). (Doc. 111 at PageID#: 2672). A review of these
cases does not support OneBeacon’s position. In Galion Community Hosp., 2010 WL 359126, at
*2-3, the one federal court to require a prima facie showing that the attorney-client privilege
should be waived as to documents sought in discovery did not expressly address the distinction
between documents and testimony and has not been followed by subsequent courts. See
Arrowood Indem. Co., 2013 WL 12130641, at *2 (noting that the decision in Galion had been
“rejected as unpersuasive” by two cases that addressed its analysis: Little Italy Dev., LLC v.
Chicago Title Insurance Co., et. al., No. 1:11-cv-112, 2011 WL 4944259, at *2 (N.D. Ohio Oct.
17, 2011), and Creatore v. Assurance Co. of America, No. 5:09-cv-1877, 2010 WL 4366093, at
*2 (N.D. Ohio Oct. 28, 2010)). The remaining cases cited by OneBeacon are either inapplicable
or do not support OneBeacon’s assertion that § 2317.02(A)(2) applies to documents sought in
connection with a bad faith claim. This Court in Chubb Custom Ins. Co., 2012 WL 1340369,
addressed § 2317.02(A) only as it applied to an attorney’s deposition testimony, not documents.
The Ohio appellate court in Bausman, 60 N.E.3d at 773-76, addressed whether emails in an
“attorney” file, and not the “claims” file, were discoverable. The court of appeals determined
that documents exclusively in the files of a client’s attorneys were not discoverable and did not
address whether § 2317.02(A)(2) prohibits the disclosure of documents in a claims file in the

41

absence of a prima facie showing. Cobb, 2012 WL 1269128, involved discovery from the file of
an attorney in a prejudgment interest proceeding. The Ohio court of appeals did not address
whether § 2317.02(A)(2) applies to documents, as opposed to attorney testimony. Rather, the
court of appeals determined that the statute “does not apply in cases related to prejudgment
interest proceedings and the determination of a lack of a good faith effort to settle. . . .” Id., at
*11.
Thus, the overwhelming weight of authority holds that the testimonial privilege in bad
faith insurance cases set forth in § 2317.02(A)(2) does not apply to documents. Certification is
not warranted simply because the Ohio Supreme Court has not spoken on the issue. See Duryee,
6 F. Supp.2d at 704. The Court will deny OneBeacon’s motion for certification of the question
to the Ohio Supreme Court.
Under Boone, OneBeacon is not entitled to assert the attorney-client privilege as to those
attorney communications from the claims file that “may cast light” on the bad faith insurance
claim. (See Doc. 98, Exh. Q). To the extent OneBeacon also asserts such documents are
protected under the work product doctrine, OneBeacon has failed to establish that such
documents were prepared in anticipation of litigation as opposed to an ordinary business
purpose. Roxworthy, 457 F.3d at 594. All of the documents listed in Exhibit Q either predate the
date of coverage denial or were created on the date coverage was denied. Neither the privilege
log nor the affidavit of OneBeacon’s counsel alleges or gives any indication that the documents
contained in Exhibit Q were prepared “because of” the subjective anticipation of litigation. In re
Professionals Direct Ins. Co., 578 F.3d at 439. The privilege summary in the privilege log
simply states “concerning coverage analysis; concerning coverage determination” with no
indication that the driving force for the creation of the documents was litigation, as opposed to

42

determining the issue of insurance coverage in the ordinary course of business. Id. OneBeacon
has not presented affidavits, deposition testimony, or other evidence to show these documents
were created in anticipation of litigation and has not met its burden for asserting work product
protection for the documents described in Exhibit Q. Roxworthy, 457 F.3d at 597. OneBeacon
must produce those communications identified in Exhibit Q to Powell. See In re Powerhouse
Licensing, LLC, 441 F.3d 467, 473 (6th Cir. 2006) (where objecting party fails to meet its burden
of showing document was prepared in anticipation of litigation, “the court’s inquiry ends and the
documents must be produced”).
4. Specific Rule 26(b)(5)(A) deficiencies
Powell has provided a list of the entries it challenges as “deficient” which includes
approximately 1,340 documents. (Id., citing Exh. N). Aside from the documents covered by the
Boone exception, Powell identifies the following additional deficiencies in the privilege log: (1)
the privilege log is not supported by sufficient information to justify the privilege asserted, and
OneBeacon has therefore waived any privilege as to these documents; and (2) the withheld
documents are not entitled to protection because OneBeacon waived the privilege by sharing the
documents with third parties. (Doc. 98 at PAGEID#: 1605-06). Powell argues that OneBeacon
should be ordered to produce those documents identified in its deficient entries. (Id. at
PAGEID#: 1607). 12
OneBeacon generally alleges in response to Powell’s challenge to its privilege log that
the undersigned reviewed a prior version of the log at the September 22, 2016 informal discovery
conference and indicated that only minor revisions were needed, which OneBeacon subsequently

12

Powell argues that the privilege log provided for Greg Gaines’ desk file suffers from similar deficiencies. (Id. at
PAGEID#: 1606). However, as OneBeacon has explained, it agreed to supplement its privilege log with respect to
the Gaines file. Therefore, any alleged deficiencies in the Gaines’ desk file are not before the Court. (Doc. 104 at
PAGEID#: 2158 n. 9).

43

made. (Doc. 104 at PAGEID#: 2157). 13 OneBeacon further asserts that Powell challenges (1) a
relatively few entries that do not list an author or recipient, and (2) entries that relate to
correspondence regarding this litigation or the state court litigation. (Doc. 104 at PAGEID#:
2157-58). OneBeacon argues that it is entitled to a protective order and that the Court should
perform an in camera inspection of any documents it has withheld that are specifically
challenged by Powell. (Doc. 111).
The Court declines OneBeacon’s invitation to review in camera the 1,340 documents
identified by Powell as deficient. To do so would not promote “the just, speedy, and inexpensive
determination” of this action. Fed. R. Civ. P. 1. Rather, the Court formulates general rules for
the parties to follow in determining whether the challenged entries listed on OneBeacon’s
privilege log must be produced to Powell based on the arguments of the parties.
a. Failure to provide sufficient identifying information
i. Authors “Not Available”
Powell contends that OneBeacon’s privilege log is deficient because the privilege log
does not identify the authors of certain documents. (Doc. 98 at PAGEID#: 1605). Instead, the
author of the document is identified as “Not Available.” There are 12 such entries on
OneBeacon’s privilege log. (Doc. 98, Ex. K at PageID#: 1890-1894). With the exception of
entry H13251-0004-001313, which asserts both the attorney-client privilege and work product
protection, the remaining 11 documents were withheld solely on the basis of work product.
OneBeacon cannot validly claim the attorney-client privilege for entry H13251-0004001313, which is an excel document described as “Bills from coverage litigation from Davis and

13

To the extent OneBeacon suggests this Court indicated any ruling or determinations about the adequacy of the
privilege log, it is incorrect. The Court addressed with the parties the concerns raised by Powell but did not perform
a comprehensive review of OneBeacon’s privilege log.

44

Young.” This entry identifies neither an author nor a recipient of the communication. 14 Without
this information, the Court is unable to determine whether the documents relate to the seeking of
legal advice from an attorney by someone at OneBeacon or Resolute. Ohio House Fin. Agency,
824 N.E.2d at 995. While billing records may qualify as protected work product to the extent the
billing entries reflect the specific nature of the services provided by counsel and thus reveal the
mental processes of counsel, see Nesse v. Pittman, 202 F.R.D. 344, 356 (D.D.C. 2001); Lucas v.
Gregg Appliances, Inc., No. 1:14-cv-70, 2014 WL 6901518, at *5 (S.D. Ohio Dec. 5, 2014), the
Court lacks sufficient information to determine the nature of the entries contained within the
excel document to conclude this document is protected as work product.
The other eleven entries which identify the author as “Not Available” have been withheld
by OneBeacon on the basis of work product protection. These entries do not provide sufficient
information to show the documents qualify as work product, which “protects from disclosure
documents prepared by or for an attorney in anticipation of litigation.” Reg’l Airport Auth. of
Louisville v. LFG, LLC, 460 F.3d 697, 713 (6th Cir. 2006) (emphasis added). The privilege log
fails to include any information to indicate such documents were prepared by an attorney or by
another individual at the request of an attorney for litigation purposes, and OneBeacon has
provided no other argument or evidence showing why such documents are protected as work
product. As such, OneBeacon has not met its burden of proof as to these documents for which it
has not identified an author. Thus, OneBeacon must supply the missing author information and
provide sufficient additional information in a revised privilege log to show the documents
qualify as work product, or else produce these documents it has improperly withheld under the
work product doctrine.

14

This appears to be the only entry for which OneBeacon claims the attorney-client privilege and for which there is
no identified author and recipient.

45

ii. Authors not identified in privilege log legend
Powell takes issue with entries that list authors not included in OneBeacon’s December
14, 2016 privilege log legend, including “M. Zyra,” “B. Stroll,” and “HCG.” (Doc. 98 at
PAGEID#: 1605). Powell’s objection is well-taken.
OneBeacon must produce a legend identifying these and any other individuals who
appear in OneBeacon’s privilege log but who have not yet been identified.
iii. Recipients omitted from email document entries
Powell argues that the privilege log is deficient because it fails to identify the recipients
of numerous documents and omits the requisite information needed to determine whether such
documents are privileged. Powell provides as examples the following entries that do not identify
recipients:
•
•
•
•
•

P. 1, entry H13251-0001-001012
P. 1, entry H13251-0004-001012
P. 1, entry H13251-0004-001016
P. 1, entry H13251-0004-001321
P. 5, entry H13251-0004-002633

(Doc. 98 at PAGEID#: 1605, citing Exh. K). Each of these entries is an email document found
on pages one through five of the privilege log for which OneBeacon asserts attorney-client
privilege and work product protection. OneBeacon has not satisfied its burden to show that the
documents described in the entries Powell challenges and similar email entries are entitled to
protection under the attorney-client privilege. See Little Hocking Water Assn., Inc., 2013 WL
607969, at *8 (“As the party resisting production, [OneBeacon] bears the burden of establishing
the attorney client privilege.”). For instance, OneBeacon has withheld email communications
authored by Michaud and by Brooke Kelley on the basis of the attorney-client privileges. (See p.
1, entries H13251-0001-001012, H13251-0004-001012). Michaud is not an attorney, and
OneBeacon has not identified Kelley in the privilege log key and has not submitted an affidavit
46

or other evidence to show she is an attorney. More importantly, OneBeacon has not identified
with whom these individuals communicated. OneBeacon is not entitled to withhold documents
that were not exchanged between an attorney and his or her client or between client employees
for the specific purpose of obtaining legal advice from counsel. Upjohn, 449 U.S. at 390; Graff,
2012 WL 5495514, at *7. As the privilege log lists no recipient indicating with whom the author
communicated, the Court cannot conclude that these email communications are protected by the
attorney-client privilege.
Thus, OneBeacon must either revise the privilege log to provide the missing recipient
information and sufficient additional information to justify its withholding under the attorneyclient privilege or produce those communications it has improperly withheld pursuant to an
attorney-client privilege.
To the extent OneBeacon claims these email documents on pages one through six of the
privilege log are protected from disclosure as work product, it has not carried its burden to show
that the documents are protected with the exception of entries H13251-0004-001316 and
H13251-0004-001321. These documents are authored by OneBeacon’s outside counsel Richard
Garner and concern pretrial reports for the state law action between Powell and OneBeacon. The
privilege log adequately identifies the purpose for which counsel created each document and
includes sufficient information to show the documents are protected as work product. 15 As such,
OneBeacon need not disclose these documents.
As to the remaining email documents on pages one through six of the privilege log,
OneBeacon has not presented any evidence, by affidavit or otherwise, to demonstrate that the
email documents for which it has not identified a recipient were prepared in anticipation of
15

H13251-0004-001319 is not an email but is a litigation activity report for the instant federal action between
Powell and OneBeacon from outside counsel to in-house counsel for Resolute. This entry likewise contains
sufficient information to show the document is protected as work product.

47

litigation or for trial. The Court is unable to discern from the cursory descriptions of the emails
that they were prepared at the request of counsel and in anticipation of litigation so as to qualify
for protection as work product. Thus, OneBeacon must either revise the privilege log to provide
the missing information, or else it must produce those communications for which it has
improperly asserted work product protection.
iv. Non-email entries related to spreadsheets on the privilege log, pages 1-6, which fail
to identify a recipient
Powell challenges as deficient the privilege log’s identification of excel spreadsheets on
pages one through six of the privilege log that OneBeacon asserts are protected as work product.
(Doc. 98 at PAGEID#: 1605; Doc. 108 at PAGEID#: 2619-20). Powell contends that
OneBeacon has failed to provide sufficient information to show that such documents were not
prepared in the ordinary course of business but instead were prepared in anticipation of litigation.
(Doc. 108 at PAGEID#: 2620).
OneBeacon acknowledges that there are no recipients identified for “entries for draft
spreadsheets and related documents collected from OneBeacon’s claims systems regarding
exhaustion and other coverage issues” which are included on the first six pages of the privilege
log. (Doc. 104 at PAGEID#: 2158, citing Horacek Decl., ¶¶ 30-31). However, OneBeacon
argues that the “nature and location of the information [] gives [Powell] all of the indicia of
documents protected by the work product privilege.” (Id., citing Horacek Decl., ¶¶ 30-31).
The entries that Powell challenges on this basis include: (1) entries that describe the
withheld document as “William Powell Exhaustion Chart” or “GEARS report” and summarize
the privilege as “concerning coverage determination and allocation methods”; (2) entries
authored by B. Green described as “Significant Claim Report for WPC” and summarizing the
privilege as “concerning coverage determination and allocation methods”; and (3) various other
48

entries that summarize the privilege as “concerning coverage determination and allocation
methods” (Doc. 108 at PAGEID#: 2620, citing Exh. K- PAGEID# 1890-1894), for which
OneBeacon asserts work product protection.
Whether OneBeacon may withhold from Powell those documents for which it claims
work product protection depends on whether the documents were “prepared in anticipation of
litigation or for trial,” and “by or for another party or its representative.” Fed. R. Civ. P.
26(b)(3)(A). OneBeacon bears the burden of showing that the documents were “prepared in
anticipation of litigation or for trial.” Little Hocking Water Assn., Inc., 2013 WL 607969, at *9
(citing Toledo Edison Co., 847 F.2d at 339). OneBeacon must show that anticipated litigation
was the “driving force behind the preparation of each requested document.” Id. (citing In re
Professionals Direct Ins. Co., 578 F.3d at 439) (citing Roxworthy, 457 F.3d at 595). OneBeacon
can satisfy its burden by affidavit made on personal knowledge or other traditional methods of
proof. Id. (citing Roxworthy, 457 F.3d at 597).
OneBeacon has not carried its burden to show that the excel documents challenged by
Powell are protected from disclosure as work product. OneBeacon has not presented any
evidence, by affidavit or otherwise, to demonstrate that the documents for which it has not
identified a recipient were prepared in anticipation of litigation or for trial. OneBeacon generally
alleges that the excel documents are “internal documents concerning coverage determination and
allocation methods,” and are “internal documents regarding coverage issues in dispute with
[Powell].” (Doc. 104 at PAGEID#: 2158). OneBeacon alleges that “even if the corresponding
log entries do not contain all of the information ideally provided in a privilege log, they
nonetheless contain sufficient information to show them as protected by work-product privilege.”
(Id.). OneBeacon relies on counsel’s affidavit wherein she states that the 171 entries on these

49

pages “were pulled from the V-Drive of Resolute and the RAPID claims system” and “[t]he
nature and location of these documents indicated they were protected by the work-product
privilege.” (Doc. 105 at PAGEID#: 2173-74, Horacek Decl., ¶¶ 30, 31). However, these limited
allegations as to where the information can be found fall far short of satisfying OneBeacon’s
burden to show that the “driving force behind the preparation” of these documents was
anticipated litigation rather than an ordinary business purpose. See In re Professionals Direct
Ins. Co., 578 F.3d at 439; see also Cooey, 269 F.R.D. at 649 (setting forth the information that
privilege logs should include). It is impossible to discern from the “location” and “nature” of
many of the documents whether they were prepared in anticipation of litigation or for trial rather
than in the ordinary course of business. Further, OneBeacon’s description of the documents -“draft spreadsheets and related documents collected from OneBeacon’s claims systems regarding
exhaustion and other coverage issues” -- does not assist the Court in ascertaining whether these
documents were prepared in the ordinary course of business or for purposes of litigation. (Doc.
104 at PAGEID#: 2158).
Because OneBeacon has not carried its burden in this regard, OneBeacon is not entitled
to withhold the documents as work product. However, the Court will not require OneBeacon to
produce the documents at this time. OneBeacon will have an opportunity to supply the omitted
information for the entries withheld under the work product doctrine which it describes as
“concerning coverage determination and allocation methods.” If OneBeacon fails to provide the
necessary information to demonstrate the material is privileged, OneBeacon must produce the
documents to Powell.
To the extent OneBeacon also lists the attorney-client privilege for some of these excel
documents that fail to identify a recipient (see, e.g., H13251-0004-001453, H13251-0004-

50

001454, and H13251-0004-002635), the Court cannot discern from the limited information
provided on the privilege log whether these documents were confidential communications
involving legal advice that was sought by employees of Resolute. Ohio House Fin. Agency, 824
N.E.2d at 995. Therefore, these documents are not protected by the attorney-client privilege.
OneBeacon must supplement the privilege log with the required information or produce the
documents.
b. Entries where the privilege summary lists litigation between Powell and
OneBeacon
Powell also challenges as deficient an unspecified number of entries that purportedly do
not “substantiate the privilege asserted” or do not provide sufficiently detailed descriptions of the
documents but instead describe the privilege as: “concerning WPC v. OneBeacon (A1109350),”
“concerning WPC v. OneBeacon (1:14-cv-807-SJD)” or “concerning WPC v. OneBeacon (C
1300681).” (Doc. 98 at PAGEID#: 1605, citing Exh. N). Powell notes as examples the
following entries where sufficiently detailed descriptions of the documents allegedly are not
provided:
•
•
•

P. 45 entry H13251-0008-001857
P. 82 entry H13251-0008-003008
P. 103 entry H13251-0008-003504

Powell argues that it is not sufficient to simply state that a communication “generally relates to
litigation” (Doc. 98 at PAGEID#: 1606) and contends that similarly vague descriptions have
been held to be insufficient to entitle a document to protection from disclosure. (Id., citing Little
Hocking Water Assn., Inc., 2013 WL 607969; Avis Rent A Car System, LLC v. City of Dayton,
Ohio, No. 3:12-cv-399, 2013 WL 3781784, at *8 (S.D. Ohio July 18, 2013)).
OneBeacon responds that Powell’s objections to the withholding of documents that
involve “active litigation” between Powell and OneBeacon are baseless because Powell
51

identifies the documents en masse, Powell’s position contradicts one it took earlier as to these
documents, and the burden is on Powell under these circumstances to show some identifiable
benefit from itemizing these particular communications between their attorneys. (Doc. 104 at
PAGEID#: 2158-2160, citing Avis Rent A Car System, LLC, 2013 WL 3781784, at *8).
i. Documents that do not list in-house counsel or outside counsel as an author or a
recipient and for which the privilege summary lists litigation between Powell and OneBeacon
Powell has clarified it is not challenging entries concerning litigation between Powell and
OneBeacon that are described as pertaining to legal advice. 16 (Doc. 108 at PAGEID#: 2621, n.9
citing, e.g., H13251-0008-002080). Entry H13251-0008-002080 is an email and attachment
authored by Michaud and sent to Elizabeth Sackett, former Resolute Associate General Counsel,
concerning discovery production in the state court case between Powell and OneBeacon with the
privilege summary description of “providing information for legal advice.” This document, and
others like it, need not be produced by OneBeacon.
To the extent Powell challenges OneBeacon’s assertion of the attorney-client privilege or
work product protection for documents that do not involve in-house counsel or outside counsel
and for which the privilege summary lists litigation between Powell and OneBeacon without
identifying the purpose of the communication, OneBeacon has failed to satisfy its burden to
provide the requisite detail. OneBeacon asserts the attorney-client privilege and work product
protection for a number of documents for which it provides a summary of the privilege that reads
“concerning WPC v. OneBeacon ([case number])” and no description of the document. For
example, entry H13251-0008-001857 is an email from Michaud to a Resolute employee that
does not list a description of the email’s subject and for which the only description provided in
the privilege summary is “concerning WPC v. OneBeacon (A 1109350).” The nature and
16

To the extent Powell does challenge these entries, it challenges them for reasons other than the deficient
description of the documents. (Doc. 108 at PAGEID#: 2621, n.9).

52

purpose of this communication is not clear from the sparse information provided. Further, the
fact that OneBeacon has provided a more detailed summary for similar communications that
specifies the purpose of the communication -- such as “providing legal advice” or “requesting
legal advice” (documents which Powell does not challenge) -- raises questions about the purpose
of those communications for which it has omitted this information.
OneBeacon has not adequately explained its failure to provide a description of the
withheld communications. Instead, OneBeacon notes that Powell’s counsel stated at a prior
conference with the Court that he did “not want Ms. Horacek’s communication with Darilyn
Michaud about this litigation” (Doc. 104 at PAGEID#: 2159, citing Sept. 22, 2016 Inf. Disc.
Conf. Audio Recording at 1:38:38), which OneBeacon has construed to mean that Powell “was
not seeking production of communications regarding the handling of the State Court Action or
this action, and that no further detail about communications involving active litigation between
the parties was required.” (Doc. 104 at PAGEID#: 2159). While OneBeacon has accurately
quoted Powell counsel’s statement, counsel for Powell gave no indication that Powell was
foregoing its right to more specific information on the privilege log with respect to any
communications related to pending litigation. To the contrary, counsel clarified that Powell
wanted to discover communications between Michaud and counsel for OneBeacon about this
litigation if there was a third party to the communication, as well as communications with
counsel about the handling of underlying claims in other cases that predated the coverage
determination under the Boone doctrine. Therefore, OneBeacon is not entitled to withhold
H13251-0008-001857 and like documents that do not involve in-house or outside counsel and
that generally reference litigation between Powell and OneBeacon without providing the purpose
of the communication, such as the provision of legal advice.

53

ii. Documents that list in-house counsel or outside counsel as an author or a recipient
and for which the privilege summary lists litigation between Powell and OneBeacon
OneBeacon contends that those communications it has withheld that relate to pending
litigation carry indicia of privilege and the burden is on Powell to make a showing of “some
identifiable benefit resulting from the considerable effort that would justify” requiring
OneBeacon “to expend time and resources to itemize hundreds of communications between their
attorneys, almost all of which occurred after” litigation between the parties commenced. (Doc.
104 at PAGEID#: 2159, citing Avis Rent A Car System, LLC, 2013 WL 3781784, at *8
(emphasis added)). The court in Avis observed that there are some circumstances where a nexus
exists between the merits of a case and documents generated after the complaint has been filed
that justifies a party’s request for discovery of those documents; however, the defendant in the
case before it had offered no connection between the breach of contract claim and counsel’s
post-complaint communications. Id., at *8-9. Thus, the Court required the defendant to explain
the relevance of the communications and provide a convincing rationale for why it was entitled
to those communications. Id.
The Court is persuaded by the rationale of Avis to the extent Powell challenges the
withholding of communications between in-house counsel or outside counsel that relate to
pending cases between Powell and OneBeacon. OneBeacon is entitled to withhold
communications between Resolute, OneBeacon and/or NICO employees and in-house counsel or
outside counsel related to litigation between the parties (to the extent there is no waiver of the
attorney-client privilege by disclosure to third parties or where the documents are subject to
production under the Boone doctrine). The privilege log as to these entries provides sufficient
indicia of privilege and information to enable the Court to conclude that the assertion of the
attorney-client privilege or work product protection is satisfied. For example, Powell challenges
54

entry H1325-0004-001312 as deficient. (Doc. 98, Exh. N, PAGEID#: 2058). This entry is an
excel spreadsheet authored by Michaud and is described as “Claimant Chart of settled claims
prepared for coverage litigation to Richard Garner” [OneBeacon’s outside counsel] “concerning
coverage determination and concerning WPC v. OneBeacon (A 1109350).” (Doc. 98, Exh. K,
PAGEID#: 1890). This description sufficiently apprises the Court that the communication was
prepared for purposes of litigation between Powell and OneBeacon and transmitted to counsel
for OneBeacon and is protected as work product. Similarly, entry H13251-0008-001858 is an
email from Resolute counsel to outside counsel Richard Garner on which Michaud and outside
counsel or litigation support staff were copied “concerning WPC v. OneBeacon (A 1109350).”
(Doc. 98, Exh. K, PAGEID#: 1934). Viewing the information provided in the privilege log for
this entry in light of Powell’s representation at the conference with the Court that Powell did not
want communications between outside counsel and Michaud, the Court can find no basis for
finding that this entry, and others like it, are not entitled to protection under the attorney-client
privilege. The Court can reasonably infer from the subject matter of the email (a pending lawsuit
between the parties) and the participants (one of whom was an attorney who either prepared or
received the communication) that the communication was made for the primary purpose of
obtaining legal advice. Likewise, Powell challenges entry H13251-0008-003008, which is an
email chain from Resolute counsel John Matosky to Michaud and other Resolute employees
“concerning WPC v. OneBeacon (C 1300681)” for which OneBeacon asserts protection under
the attorney-client privilege and as work product. (Doc. 98, Exh. K, PAGEID#: 1971). Matosky
testified that he is assigned to matters in active litigation to monitor and work with outside
counsel. (Doc. 98, Exh. 4- PAGEID#: 1841). He was initially assigned responsibility for the
state court declaratory judgment action by Powell against OneBeacon and testified that if a

55

request for a legal opinion is made with respect to the Powell account “it is almost certain to be
assigned to me.” (Id. at PAGEID#: 1842). He was also assigned responsibility for the instant
federal action by Powell against OneBeacon and a separate state court action. (Id. at PAGEID#:
1843). He further testified that most of documents pertaining to the Powell account would be in
email form, with the bulk of them from Michaud. (Id. at PAGEID#: 1844). Matosky also
testified that he receives documents from outside counsel for Resolute regarding the Powell
matter (Id. at PAGEID#: 1845) and communicates with others about the Powell litigations. (Id.
at PAGEID#: 1846). 17 Given this testimony, the Court is persuaded that the privilege log entries
involving communications by or to in-house counsel relating to active Powell litigation are
protected by the asserted privilege or protection and need not be produced. 18
iii. Entry fails to identify the privilege
Powell identifies a single entry on the 140 page privilege log for which no privilege is
identified. (Doc. 98, PAGEID#: 1605, citing Ex. K at 124 entry H13251-008-043298). This is
clearly a typographical error. The letter “A” appears in the “Privilege Type” column, signifying
the assertion of attorney-client privilege. The Court will not order production solely on the basis
of a typographical error.
b. Communications disclosed to third parties
Powell alleges that OneBeacon has improperly withheld “hundreds” of communications
that are not protected by the attorney-client privilege because they were shared with third parties
who do not appear to have an attorney-client relationship. (Doc. 98 at PAGEID#: 1607-08,
17

Matosky also testified that he was asked to “weigh in on legal matters relating to [underlying asbestos litigation].”
(Id. at PAGEID#: 1847). To the extent his communications on such underlying asbestos actions predated the
coverage decision, the communications are discoverable under Boone.
18

To the extent OneBeacon objects to the disclosure of emails between Matosky and Loxley from Armour on the
basis of attorney-client privilege, OneBeacon has failed to show any attorney-client relationships between counsel
for Resolute and Armour. Therefore, OneBeacon may not withhold such emails from disclosure.

56

citing Exh. O, OneBeacon privilege log legend). Powell alleges that OneBeacon has not carried
its burden to show that the attorney-client privilege was not waived as to (1) documents that it
shared with third parties who were not parties to the Joint Defense Agreement between
OneBeacon, Resolute and NICO, and (2) documents that were shared with parties to the Joint
Defense Agreement for reasons outside the scope of the agreement. (Doc. 98 at PAGEID#:
1608-09).
OneBeacon relies on the “functional employee” doctrine, the “common interest doctrine,”
and the Joint Defense Agreement to contend it did not waive any attorney-client privilege and
work product protection by disclosing documents to its “agents and contractual partners.” (Id. at
PAGEID#: 2160-2162). OneBeacon alleges that it has pled and documented “special
relationships” between NICO, Resolute and itself. (Id. at PAGEID#: 2161). OneBeacon further
alleges that Armour and Trebuchet and other unnamed entities “occupy the same role” as NICO
and Resolute. (Id.). OneBeacon alleges that Powell should not be allowed to challenge the
communications with third parties as a whole rather than address them individually.
Powell alleges that it has recognized that OneBeacon executed a Joint Defense
Agreement with Resolute and NICO on December 3, 2014. (Doc. 108 at PAGEID#: 2623, n.10,
citing Doc. 98 at PAGEID#: 1608-09). Powell does not challenge privileges OneBeacon has
asserted as to communications exclusively between OneBeacon, Resolute, and NICO. (Id.).
However, Powell contends that OneBeacon has not satisfied its burden to show that the attorneyclient privilege was not waived as to communications that were disclosed to Berkshire
Hathaway, Inc., Armour Risk Management, Ltd., National Union Fire Insurance Company,
Continental Casualty Insurance Company, Trebuchet U.S. Holdings, Inc., Berkshire Reinsurance

57

Group, Charles Wagner, and the information technology service providers listed on the privilege
log. (Id.). Powell argues that these communications must be produced.
A party may waive the attorney-client privilege by communicating information to a third
party. Travelers Cas. and Sur. Co., 197 F.R.D. at 606 (citing State v. Post, 513 N.E.2d 754
(Ohio 1987)). However, the “common interest doctrine” on which OneBeacon relies is
recognized under Ohio law and is an exception to the waiver doctrine. Avis Rent A Car System,
LLC, 2013 WL 3781784, at *3 (citing State ex rel. Bardwell v. Ohio Atty. Gen., 910 N.E.2d 504
¶¶ 87-88 (Ohio App. 10th Dist. 2009) (“expanding the attorney-client privilege, through
application of the common interest doctrine, to allow the redaction of an email containing
communications between two attorneys general discussing an interstate student loan
investigation”). As the Court in Avis Rent A Car System explained, the common interest doctrine
“typically arises in the context of litigation when two parties are either represented by the same
attorney or are independently represented but have the same goal in the litigation. Under those
circumstances, they may freely share otherwise privileged communications without waiving the
[attorney-client] privilege.” Id. (quoting Fresenius Medical Care Holdings, Inc. v. Roxana Lab.,
Inc., No. 2:05-cv-0889, 2007 WL 895059 at *2 (S.D. Ohio Mar. 21, 2007)).
As Powell does not challenge OneBeacon’s assertion of the attorney-client privilege as to
communications shared exclusively with Resolute and NICO, there is no dispute that OneBeacon
did not waive the privilege as to those communications. OneBeacon has not carried its burden to
show that it is entitled to assert an attorney-client privilege as to communications disclosed to
any other third parties. Id., at *8 (quoting In re Grand Jury Investigation No. 83-2-35, 723 F.2d
447, 450 (6th Cir. 1983) (“The burden of establishing privilege rests with the person asserting
it.”). OneBeacon has not submitted any evidence to demonstrate the existence of a relationship

58

between OneBeacon and any of the other entities that would give rise to a common interest and
entitle the parties to share attorney communications without waiving the attorney-client
privilege. OneBeacon’s unsupported and conclusory assertions as to the functions of Armour
and Trebuchet and “other entities” to whom communications have been disclosed do not suffice.
(See Doc. 104 at PAGEID#: 2161-62). OneBeacon has waived the attorney-client privilege for
documents on the privilege log that were disclosed to third parties other than NICO and
Resolute, and OneBeacon must produce those documents.
V. OneBeacon’s motion for protective order/sanctions (Doc. 111)
OneBeacon has filed a motion for a protective order and sanctions that is a duplicate of
its memorandum in opposition to Powell’s motion to compel and for sanctions. (Doc. 106).
OneBeacon moves for a protective order against Powell pursuant to Fed. R. Civ. P. 26(c)
because “counsel for OneBeacon have worked and conferred with WPC for months to resolve
this discovery dispute - to no avail.” Id. at PAGEID#: 2567. OneBeacon alleges that Powell’s
discovery approach should be rejected because it is not proportional to the needs of this case, and
OneBeacon’s protective order should be granted. (Id.). OneBeacon alleges that “this Court may
well find that OneBeacon is entitled to sanctions against [Powell] for failing to act in good faith
during the discovery process.” (Id.). OneBeacon does not further address its sanctions request in
its motion.
Fed. R. Civ. P. 26 authorizes a protective order limiting discovery “to protect a party or
person from annoyance, embarrassment, oppression, or undue burden or expense.” Fed. R. Civ.
P. 26(c)(1). “The burden of establishing good cause for a protective order rests with the
movant.” Smith v. Gen. Mills, Inc., No. 2:04-cv-705, 2006 WL 7276959, at *2 (S.D. Ohio Apr.
13, 2006) (quoting Nix, 11 F. App’x at 500). “To show good cause, a movant for a protective

59

order must articulate specific facts showing a ‘clearly defined and serious injury’ resulting from
the discovery sought and cannot rely on mere conclusory statements.” Id. (quoting Nix, 11 F.
App’x at 500). See also Nemir v. Mitsubishi Motors Corp., 381 F.3d 540, 550 (6th Cir. 2004)
(holding that to justify a protective order, one of Rule 26(c)(1)’s listed harms “must be illustrated
with ‘a particular and specific demonstration of fact, as distinguished from stereotyped and
conclusory statements’”) (quoting Gulf Oil Co. v. Bernard, 452 U.S. 89, 102 n.16 (1981)).
OneBeacon has not met its burden of establishing good cause for a protective order.
OneBeacon’s motion is supported by nothing more than conclusory assertions. The Court has
found that Powell has substantiated the need for additional discovery through affidavits and
deposition testimony, and OneBeacon has failed to provide the necessary information on its
privilege log to show it is entitle to withhold many of the documents as to which Powell has
challenged the claim of privilege. Further, OneBeacon has not alleged any facts or cited
authority to demonstrate it is entitled to an award of sanctions under Fed. R. Civ. P. 37. The
Court will therefore deny OneBeacon’s motion for a protective order and sanctions.
VI. Powell’s request for its reasonable expense in making the motion
Powell moves the Court for an award of its attorney fees and expenses under Fed. R. Civ.
P. 37(b)(2), which provides as follows:
(A) For Not Obeying a Discovery Order. If a party . . . fails to obey an order to
provide or permit discovery . . ., the court where the action is pending may issue
further just orders. They may include the following:
....
(C) Payment of Expenses. Instead of or in addition to the orders above, the court
must order the disobedient party, the attorney advising that party, or both to pay
the reasonable expenses, including attorney’s fees, caused by the failure, unless
the failure was substantially justified or other circumstances make an award of
expenses unjust.
Fed. R. Civ. P. 37(b)(2)(A), (C). (Doc. 98 at PAGEID#:1611-13).
60

Powell alleges that OneBeacon violated the Court’s Order to complete its document
production by August 19, 2016. (Doc. 98 at PAGEID#:1612, citing Doc. 97, August 2, 2016
Hrg. Tr. at 7; August 2, 2016 Docket Entry). Powell asserts it is undisputed that OneBeacon
belatedly produced discovery following the deadline established by the Court consisting of:
approximately 96,000 pages of Michaud documents produced on August 24, 2016;
approximately 24,000 more pages of Michaud documents produced on September 15, 2016; an
unspecified number of Loxley documents produced on November 11, 2016; the Gaines’ desk file
produced on December 16, 2016; and approximately 7,400 pages of Ryan and Green documents
produced on four dates in December, 2016. (Id. at PAGEID#: 1612). Powell alleges that
counsel’s reasonable investigation would have disclosed the existence of these documents and
that there are more outstanding documents to be collected. (Id. at PAGEID#: 1613). Powell
alleges that OneBeacon’s failure to timely complete its document production has caused Powell
to incur unnecessary expenses to prepare for and attend several court hearings and conferences,
obtain affidavit testimony, take depositions, and file this motion. (Id.).
In response, OneBeacon alleges that all of its actions have been “substantially justified’
and that any award of sanctions would be unjust. (Doc. 104 at PAGEID#: 2141). OneBeacon
contends that sanctions are not warranted because it has cooperated with Powell during the
discovery process and the parties have worked under the Court’s direction to resolve
disagreements informally rather than by filing motions to compel.
Powell’s request for an award of sanctions under Rule 37(b) is denied. While Powell has
clearly been frustrated with the pace of OneBeacon’s document production, the history of the
discovery proceedings demonstrates that OneBeacon has not refused to abide by a Court Order
or to permit discovery in the matter. Rather, OneBeacon has continued to cooperate in the

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discovery process throughout the course of these proceedings. As Powell’s summary of
OneBeacon’s document production shows, OneBeacon provided the bulk of the documents the
Court ordered it to produce by August 19, 2016, within one month of that deadline and
approximately four months before Powell filed its motion to compel. Although OneBeacon
objected to a number of document requests made by Powell, OneBeacon continued to cooperate
with Powell and the Court over the ensuing months to provide outstanding discovery and resolve
areas of dispute extrajudicially or with the Court’s guidance through the informal discovery
process. As of the date of the last informal discovery conference at which Powell stated its
intention to file a motion to compel, all extrajudicial means of resolving any remaining areas of
dispute had not been exhausted. To the contrary, OneBeacon was continuing to provide
documents in response to Powell’s requests, and it did not appear that the parties had reached an
impasse as to any outstanding discovery issues. The circumstances therefore make an award of
sanctions under Fed. R. Civ. P. 37(b) unjust. See Fed. R. Civ. P. 37(b)(2)(C).
IT IS THEREFORE ORDERED THAT:
1. Plaintiff Powell’s motion to compel and for sanctions (Doc. 98) is GRANTED in part
in accordance with the terms of the Court’s analysis. OneBeacon is ORDERED to produce,
within thirty (30) days of the date of this Order, the following information:
i.

Monthly emails Graham Loxley receives that contain financial data
concerning Powell’s account and emails between Loxley and Resolute
employees concerning quarterly meetings.

ii.

Responsive, nonduplicative documents from the following custodians
whose documents have not been searched: Clayton Budlong, Gregory
Gaines, David Gold, and Peter Dinunzio.

iii.

Communications and other documents that relate to Powell’s account
generally that have not been produced, including documents from Darilyn
Michaud, Tom Ryan, and Brooke Green.
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iv.

v.

Communications/documents described in Exhibit Q that either predate the
decision to deny coverage or were created on the date coverage was
denied.
Communications listed on the privilege log for which OneBeacon has
asserted an attorney-client privilege but which have been disclosed to third
parties other than Resolute and NICO.

2. OneBeacon is ORDERED to either revise the privilege log to correct the following
deficiencies or produce the improperly withheld documents within thirty (30) days of the date of
the Order:
i. The privilege log must identify the authors of documents for which the
entry lists the author as “Not Available” and for which OneBeacon has
asserted work product protection and, in one instance, an attorney-client
privilege, and provide sufficient additional information to show the
documents qualify for the protection or privilege asserted.
ii. OneBeacon must identify in the privilege log legend any individuals
whose names appear in the privilege log but who are not included in the
legend.
iii. The privilege log must identify the recipients of email documents for
entries listed on the log at pages one through six for which OneBeacon has
asserted an attorney-client privilege or work product protection, with the
exception of documents authored by OneBeacon outside counsel Richard
Garner discussed at page 47, supra, and provide sufficient additional
information to show the documents qualify for the protection or privilege
asserted.
iv. The privilege log must identify the recipients of non-email entries
related to excel spread sheets that are listed on the log at pages one
through six for which OneBeacon has asserted work product protection or
an attorney-client privilege and provide sufficient additional information
to show these documents qualify for the protection or privilege asserted.
v. The privilege log must specify the purpose of communications for
which the entry (1) does not list in-house counsel or outside counsel as an
author or a recipient, and (2) only generally references litigation between
Powell and OneBeacon.
3. Powell’s motion for sanctions is DENIED.
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4. OneBeacon’s motion for protective order and for sanctions (Doc. 106) is DENIED.
5. OneBeacon’s motion to certify question to the Ohio Supreme Court (Doc. 112) is
DENIED.

Date: 4/11/2017

s/Karen L. Litkovitz
Karen L. Litkovitz
United States Magistrate Judge

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