Elk City Golf and Country Club v. Philadelphia Indemnity Insurance Company

Filing 100

ORDER granting in part and denying in part 43 Plaintiff's Motion to Compel and Brief in Support. Defendant shall produce to Plaintiff, within 14 days from the date of this Order, unredacted copies of the documents produced in camera, except the documents identified supra that are not relevant to Plaintiffs claims or contain privileged communications. Signed by Honorable Timothy D. DeGiusti on 12/26/2019. (mb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
ELK CITY GOLF AND COUNTRY
CLUB, INC.,
Plaintiff,
v.
PHILADELPHIA INDEMNITY
INSURANCE COMPANY,
Defendant.

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Case No. CIV-18-196-D

ORDER
Currently pending before the Court for resolution is an outstanding issue raised by
Plaintiff’s Motion to Compel Discovery and Brief in Support [Doc. No. 43], regarding
Defendant’s failure to produce unredacted documents from its insurance claim file, based
on claims of privilege for attorney-client communications and attorney work product.
After a ruling by the Court [Doc. No. 98], Defendant submitted the documents at issue for
in camera review. The documents are generally listed on Defendant’s privilege log. See
Pl.’s Mot. to Compel, Ex. 1 [Doc. No. 43-1].
“The party seeking to assert a privilege has the burden of establishing its
applicability.” Motley v. Marathon Oil Co., 71 F.3d 1547, 1550 (10th Cir. 1995). In this
diversity case, Defendant’s claim of attorney-client privilege is governed by Oklahoma
law. Seneca Ins. Co. v. W. Claims, Inc., 774 F.3d 1272, 1275 (10th Cir. 2014); FED. R.
EVID. 501. Oklahoma has codified its legal rule regarding the attorney-client privilege,
which protects “confidential communications made for the purpose of facilitating the

rendition of professional legal services to the client.” OKLA. STAT. tit. 12, § 2502(B).
“‘[T]he mere fact that an attorney was involved in a communication does not automatically
render the communication subject to the attorney-client privilege; rather, the
‘communication between a lawyer and client must relate to legal advice or strategy sought
by the client.’” In re Grand Jury Proceedings, 616 F.3d 1172, 1182 (10th Cir. 2010)
(quoting Motley, 71 F.3d at 1550–51; United States v. Johnston, 146 F.3d 787, 794 (10th
Cir. 1998)).
In all federal court litigation, attorney work product is governed by Rule 26(b)(3) of
the Federal Rules of Civil Procedure. Frontier Ref., Inc. v. Gorman-Rupp Co., Inc., 136
F.3d 695, 702 n.10 (10th Cir. 1998) (“Unlike the attorney client privilege, the work product
privilege is governed, even in diversity cases, by a uniform federal standard embodied in
FED. R. CIV. P. 26(b)(3).”) (internal quotation omitted). This rule generally protects from
disclosure documents “prepared in anticipation of litigation or for trial” by a party’s
attorney or other representative. See FED. R. CIV. P. 26(b)(3)(A). “Rule 26(b)(3) prevents
discovery of an attorney’s work product unless (1) the discovering party can demonstrate
substantial need for the material and (2) the discovering party is unable to obtain the
substantial equivalent of the material by other means without undue hardship.” Frontier
Ref., 136 F.3d at 704 (footnote omitted). The rule provides additional protection for “the
mental impressions, conclusions, opinions, or legal theories of a party’s attorney or other
representative concerning the litigation.” FED. R. CIV. P. 26(b)(3)(B).

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With these legal principles in mind, the Court has reviewed the documents produced
by Defendant in camera and finds that Defendant has failed to establish its claims of
privilege with respect to most of the documents in question.
Loss Reserves
Many of the redacted documents relate to Defendant’s loss reserves, which the
Court found were discoverable in its November 15, 2019 Order [Doc. No. 98 at 5]. The
redactions in the Claim Summary Report are a summary of pre-litigation communications
among Defendant’s claims specialist, claims supervisor, and assistant vice president noting
changes to the reserves amount based on the investigation of Plaintiff’s Claim. See PIIC
CF 2–4, 6–12. Contrary to Defendant’s assertion, the Claim Summary Report does not
involve attorney-client communications, and aside from the first page, was prepared prior
to litigation. The communications concern routine insurance business matters and are not
the rendition of professional legal services. Most of these communications occurred early
in Defendant’s claim investigation process while it was still collecting documents and
information.
Although Defendant asserts that the Claim Summary Report is proprietary in nature,
Defendant does not explain how it is proprietary and the Court is unable to draw that
inference. Thus, the Claim Summary Report is discoverable. See PIIC CF 1–12. Likewise,
PIIC CF 29–65, 272–75, 313–47, 1079–85, 1119–24, and 1201 involve email
communications (pre-litigation) among Defendant’s claims specialist, claims supervisor,
general adjuster, and assistant vice president regarding the adequacy of the reserves amount
and changes thereto. For the same reasons described supra, they are discoverable.
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The Claim Summary [PIIC CF 1358] references total reserves for prior claims by
Plaintiff. The Court does not see the relevance of this document to Plaintiff’s claims or to
Defendant’s defenses. Based on the Court’s December 3, 2019 Order [Doc. No. 99 at 7–
8], in which the Court found that Defendant could not introduce evidence of Plaintiff’s
prior claims, the Court concludes that the Claim Summary [PIIC CF 1358] is not
discoverable.
Premiums
A substantial part of the redacted documents relates to premiums; however,
Defendant does not assert a specific objection in the privilege log. Further, in a separate
motion pending before the Court, Plaintiff has indicated that it does not intend to comment
or argue about the amount of premiums paid [Doc. No. 87 at 31] unless Defendant makes
the matter relevant to an issue in the case. The premiums do not appear facially relevant,
and Plaintiff bears the burden of establishing relevance. Thus, the Court finds they are not
discoverable. See PIIC CF 179–83, 300–01, 506, 512–13, 516, 518–19, 527, 531–32, 533,
536, 540, 542, 836, 840–43, 846, 848–49, 857, 861–63, 866, 870, 872, 1359, 1362, 1365,
1423–25.
Property Reports
Defendant asserts that the property reports are work product, privileged, and
proprietary in nature.

PIIC CF 1585–91, 1800–06, 2065–66, 2071–73.

The Court

disagrees. The reports are prepared by Defendant’s general adjusters for the benefit and
approval of the claims examiner. They do not involve attorney-client communications and
were prepared prior to litigation. The reports include an estimate of loss, an abstract of
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policy coverage, a summary of the adjusters’ inspection and investigation, and payment
recommendations. Further, Defendant does not explain how the reports are proprietary in
nature, and the Court cannot draw that conclusion based on its review. Thus, the property
reports are discoverable.
Coverage Counsel Referral
The fact that Defendant referred Plaintiff’s claim to coverage counsel five days after
Plaintiff filed its lawsuit is not privileged. Although coverage counsel’s opinion would be
protected under the attorney-client privilege, the opinion itself is not attached to the email
correspondence in PIIC CF 27–28. Thus, the two emails are discoverable.
Notice of Litigation
PIIC CF 108–135 includes email correspondence notifying Defendant of Plaintiff’s
lawsuit, a copy of the Complaint, a Litigation Hold Notice which indicates that records
should be preserved, and a letter from Plaintiff’s counsel to Defendant’s general adjuster
dated three days after the lawsuit was filed. None of the email correspondence includes
legal analysis or advice. PIIC CF 1331–41 and 1343–48 include the same information.
The Court finds, however, that 1342 does contain a request for counsel’s advice on a
particular issue. This page constitutes attorney-client communications and is protected.
Property Claims Handling Guidelines
Defendant indicates that the Property Claims Handling Guidelines are confidential,
but that Defendant will produce them pursuant to a protective order. PIIC CF 150–75,
243–68. The Court invites the parties to submit a joint motion for an agreed-upon

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protective order to limit the disclosure or dissemination of confidential or private
information.
ISO Claims Search1
Defendant asserts that the ISO Claims Search information is protected under HIPAA
and the Gramm-Leach-Bliley Act, and that it includes confidential and proprietary
information belonging to ISO.2 PIIC CF 360–61. The ISO report summary appears to list
a claim by Plaintiff with another insurance agency a year prior to the May 2017 tornado.
Defendant, however, is not precluded from disclosing this information by the GrammLeach-Bliley Act. 15 U.S.C. § 6801 et seq. That Act does not prohibit Defendant from
disclosing nonpublic personal information in response to a discovery request or order
compelling discovery responses in a civil action. See 15 U.S.C. § 6802(e)(8); Jones v.
Farmers Ins. Co., CIV-11-159-R, 2012 WL 12863976, at *3 (W.D. Okla. Feb. 29, 2012);
Marks v. Glob. Mortg. Grp., Inc., 218 F.R.D. 492, 495–96 (S.D. W. Va. 2003). Further,
no protected health information is disclosed so as to implicate HIPAA. See 45 C.F.R. §
164.500 et seq. Finally, any proprietary concerns – although Defendant does not identify
or explain what those are – could be addressed through a protective order.

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The ISO ClaimSearch database is an insurance fraud detection system owned by the
Insurance Services Office. It contains detailed records of losses paid from participating
insurers. Insurance companies can become a member of ISO and send claims information
to ISO to check whether similar claims have been filed with other insurance companies.
See generally, Ins. Serv. Office, ISO ClaimSearch, VERISK, https://www.verisk.com/
insurance/products/claimsearch/ (last visited Dec. 19, 2019).

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Defendant also asserts that the privilege is claimed by ISO; however, Defendant does not
cite to any authority that gives it standing to assert a privilege that belongs to ISO.
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Relevance for purposes of discovery remains broader than relevance for purposes
of trial admissibility, and the trial court is given “wide discretion in balancing the needs
and rights of both plaintiff and defendant.” See, e.g., FED. R. CIV. P. 26(b)(1); Gomez v.
Martin Marietta Corp., 50 F.3d 1511, 1520 (10th Cir. 1995) (internal quotation marks and
citation omitted); see also Tanner v. McMurray, 2019 WL 2008991, at *44, __ F.Supp.3d
___ (D.N.M. 2019). Construing relevance for purposes of discovery broadly, the Court
finds that the ISO Claims Search information is relevant to Plaintiff’s claims or
Defendant’s defenses and is proportional to the needs of the case; thus, it is discoverable.
Tanner, 2019 WL 2008991, at *49.
CONCLUSION
Based on the foregoing, Plaintiff’s Motion to Compel Discovery and Brief in
Support [Doc. No. 43] is GRANTED in part and DENIED in part. Defendant shall
produce to Plaintiff, within fourteen days from the date of this Order, unredacted copies of
the documents produced in camera, except the documents identified supra that are not
relevant to Plaintiff’s claims or contain privileged communications. The parties may
submit a joint motion for an agreed protective order to address those issues identified supra
where dissemination should be limited.
IT IS SO ORDERED this 26th day of December 2019.

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