Allied World Assurance Company (U.S.), Inc. v. Lincoln General Insurance Company
Filing
19
MEMORANDMUM AND ORDER granting in part and denying in part Pltf's Motion to enforce subpoena 2 . 1. The motion is GRANTED as set out herein. Dft shall produce within (30) days of this order the requested documents in accordance with the directi ons and limitations set forth in the above memorandum. If any disputes arise pertaining to specific documents or categories of documents, the court will address those issues at that time.2. Pltfs request for an in camera review is DENIED.Signed by Honorable Sylvia H. Rambo on 02/02/12 (ma, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ALLIED WORLD ASSURANCE
COMPANY (U.S.), INC.,
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Plaintiff
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v.
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LINCOLN GENERAL INSURANCE :
COMPANY,
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Defendant
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MISC. NO. 1:11-mc-00342
Judge Sylvia H. Rambo
MEMORANDUM
Presently before the court is Plaintiff, Allied World Assurance
Company’s (“Allied World”) motion to enforce a subpoena against Lincoln General
Insurance Company (“Lincoln”). (Doc. 2.) The motion has been briefed and is ripe
for disposition. For the reasons below, the motion will be granted in part and denied
in part.
Background1
I.
This matter involves a bad faith insurance action (“bad faith action”)
brought by Plaintiffs Vanessa Lymon, as Plenary Guardian of Kendra Lymon and
Assignee of Bynum Transport Inc., (“Bynum”) and Robert Bohn (“Bohn”) against
Allied World, Bohn’s excess insurer, for allegedly acting in bad faith by failing to
settle Lymon’s personal injury claim against Bynum and Bohn (“underlying
1
This recitation of facts is derived from the parties’ briefs. It is assumed that, consistent
with Federal Rule of Civil Procedure 11, the factual representations are accurate. The facts are
uncontested, unless noted.
lawsuit”). The bad faith action is currently pending in the United States District
Court for the Middle District of Florida, docketed at 8:10-cv-1927-T-23TBM. At
issue here is a subpoena, dated October 7, 2011, that was issued in the Middle
District of Pennsylvania by Allied World to Lincoln, a non-party in the bad faith
action, requesting various documents relating to the underlying lawsuit.
Some background regarding the underlying lawsuit is necessary to
understand the nature of the bad faith action. The lawsuit was commenced following
a collision on August 21, 2007, between a car driven by Kendra Lymon and a truck
and tank trailer operated by Robert Bohn and owned by Bynum Transport, Inc.
(Pl.’s Br. in Supp., Doc. 3 at 3.) At the time of the collision, Bynum and Bohn were
insured by a primary insurance policy issued by Lincoln, which had $1 million in
liability limits, and an excess policy from Allied World, which provided an
additional $1 million in liability limits. (Id. at 2.) Following the accident, Lymon
filed a personal injury claim against Bynum and Bohn (the aforementioned
“underlying lawsuit”). (Id.) It is undisputed that Lincoln, as the primary insurer,
investigated the claim and defended Bynum and Bohn. (Id. at 3.) Allied World did
not defend Bynum and Bohn in that action. Lincoln, through its adjuster, Greg
Fetcho (“Fetcho”), retained an agency to investigate the facts and an attorney to
represent its insureds. (Id.)
In May, 2008, Lincoln and Allied World offered their combined $2
million of coverage to Lymon. (Id.) Lymon rejected the offer, claiming that
Lincoln’s retained attorney “never properly disclosed the extent of Bynum and
Bohn’s insurance coverage.” (Id.) Lincoln’s attorney was subsequently discharged
and replaced. (Id.)
2
On March, 20, 2009, a jury returned a $65 million verdict against
Bynum and Bohn. (Id. at 2, 4.) Following the judgment, a series of mediations took
place that involved Lymon, Bynum, Bohn, Lincoln, Allied World, as well as
Lincoln’s first attorney and his replacement. (Id. at 4.) As a result of the mediations,
the judgment was satisfied as to Bynum and partially satisfied as to Bohn as well as
Lincoln, which paid more than its $1 million policy limit. (Id.) Thereafter, Bohn
and Vanessa Lymon, as Plenary Guardian of Kendra Lymon and Assignee of Bynum
Transport Inc., commenced this bad faith action seeking to recover the balance of the
judgment from Allied World. (Id.) Lymon and Bynum contend that Allied World
breached its “fiduciary duty with respect to the investigation, evaluation, negotiation,
settlement and defense of the Lymon claim” by, inter alia, failing to settle Lymon’s
claim within the policy limits. (Doc. 3, Ex. B, Cons. Compl. ¶¶ 23, 25). To defend
against this claim, Allied World is seeking, by way of a subpoena duces tecum,
documents from Lincoln related to Lincoln’s investigation and defense of Bynum
and Bohn in the underlying lawsuit. (Doc. 3, Ex. A.) Prior to the issuance of that
subpoena, which is at issue here, other subpoenas were issued, to which Lincoln
objected via letters to Allied World, stating several objections including technical
deficiencies regarding service of the subpoena and also objecting to the nature of the
document requests on grounds of privilege, confidentiality, and over breadth. (See,
e.g., Doc. 3, Exs. H & I.) Lincoln did, however, produce approximately 420 pages of
materials which contained copies of non-privileged communications. (Doc. 13 at
10.) Following numerous correspondence between counsel for Allied World and
Lincoln, and the issuance of several refined subpoenas, Lincoln’s objections
remained, resulting in the present motion to enforce the subpoena.
3
II.
Discussion
Allied World’s subpoena contains a five-page attachment listing twenty-
one document requests. The general types of documents the subpoena seeks include:
(1) Lincoln’s entire claim file for the underlying case and the claim made by Kendra
Lymon against Lincoln and Allied World’s insureds, Bynum and Bohn, and
documents one would expect to find within a claims file such as notes and settlement
and reserve authority requests; (2) the underwriting file for the Lincoln Policy and
documents one would expect to find in an underwriting file; (3) the personnel file –
except for confidential personal information – for Lincoln’s adjuster Greg Fetcho;
(4) all communications – whether maintained in the claims file or elsewhere –
between and among Greg Fetcho, other Lincoln employees, the insureds, Bynum and
Bohn, defense counsel retained by Lincoln to represent the insureds; and any other
parties that relate to the defense of Lincoln and Allied World’s insureds in the
Underlying Case; (5) all communications between and among Lincoln’s bad faith
counsel and third parties such as Lymon, Bynum, Bohn, and defense counsel, which
were shared among adverse parties and, thus, are not attorney-client privileged or
work product; (6) copies of insurance polices, including reinsurance, providing
coverage for Lincoln for the bad faith claims made against it as a result of the
underlying case and claims made under those polices; and (7) documents regarding
any claims made against Lincoln as a result of the way Lincoln handled the
underlying case. (See Pl.’s Reply Br., Doc. 14 at 3.)2
2
This categorized summary of the documents requested is taken directly from Plaintiff’s
Reply Brief. (Doc. 14.) After reviewing the requests contained in the subpoena, the court finds this
summary to be consistent with the nature of the actual requests.
4
Allied World categorizes the objections memorialized in letters from
Lincoln’s attorneys as (1) technical objections, (2) work product objections, (3)
attorney-client privilege objections, (4) settlement or mediation privilege objections,
and (5) an unwarranted intrusion objection. Lincoln’s brief in opposition does not
dispute this characterization of its objections. The only category of documents
specifically identified by Lincoln as undiscoverable is the employment file of Greg
Fetcho. The court will analyze each objection in turn.
A.
Technical Objections
Allied World represents that Lincoln objected to the subpoena on the
ground that no related action had been opened in the Middle District of Pennsylvania
and that the attorney issuing the subpoena must be admitted to the district court from
which the subpoena was issued. (Doc. 3 at 7.) These objections lack merit. Under
Federal Rule of Civil Procedure 45(a)(3), an attorney may issue and sign a subpoena
as an officer of “a court for a district where a deposition is to be taken or production
is to be made, if the attorney is authorized to practice in the court where the action is
pending.” Fed. R. Civ. P. 45(a)(3). Here, Kathryn Christian, attorney for Allied
World, signed the subpoena and is authorized to practice in the Middle District of
Florida, where this bad faith insurance action is pending. (Id.; Doc. 3, Ex. A.)
Lincoln also argues that the subpoena was not properly served because
the Proof of Service states that the subpoena was served on October 11, 2011, to
“Chris Klimes as administrative assistant.” (Doc. 13 at 13.) Lincoln argues that this
service was improper because “personal service of the subpoena on ‘an officer or
authorized agent of Lincoln General’ was necessary” to comply with Federal Rule of
Civil Procedure 45(b)(4). (Id.) Lincoln appears to be inferring, without explicitly
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stating, that Chris Klimes is not an officer or authorized agent of Lincoln, or at least
that Allied World has failed to make such a showing. That this objection is repeated
in its Brief in Opposition is somewhat curious given that Lincoln stated earlier in its
Brief, when defending its “technical objections,” that “Lincoln General’s objections
ultimately forced Allied World to issue a proper subpoena in a proper jurisdiction .
. . .” (Id. at 4.) It would appear that, although Lincoln’s objections are renewed, they
are also conceding that the subpoena has been issued properly. In any event,
Lincoln’s argument fails. Federal Rule of Civil Procedure 45(b) (dealing with
service of subpoenas) does not require that service of a subpoena upon a corporation
be done personally and to an authorized agent or officer. Furthermore, Federal Rule
of Civil Procedure 4(h) (regarding service of a corporation) permits service to be
made in “a manner prescribed by Rule 4(e)(1) for serving an individual.” Fed. R.
Civ. P. 4(h)(1)(A). Federal Rule of Civil Procedure 4(e)(1) permits an individual to
be served “following state law for serving a summons in an action brought in courts
of general jurisdiction . . . .” Turning then to Pennsylvania law, Pennsylvania Rule
of Civil Procedure 424 provides:
Service of original process upon a corporation or similar
entity shall be made by handing a copy to any of the
following persons provided the person served is not a
plaintiff in the action:
(1) an executive officer, partner or trustee of the
corporation or similar entity, or
(2) the manager, clerk or other person for the time being in
charge of any regular place of business or activity of the
corporation or similar entity, or
(3) an agent authorized by the corporation or similar entity
in writing to receive service of process for it.
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Pa. R. Civ. P. 424 (emphasis added). An affidavit from a process server attached to
Allied World’s reply indicates that the process server identified himself and stated
that he had legal papers to serve on Lincoln. (Doc. 14-2.) In response, Chris Klimes
appeared and agreed to accept service of the subpoena. (Id.) The court is satisfied
that service was proper and Lincoln’s objections are overruled in this regard.
B.
Work Product Objections
Lincoln objects to Allied World’s subpoena on the ground that it has not
made the requisite showings to justify an intrusion on Lincoln’s work product
privilege. (Doc. 13 at 4.) Lincoln argues that Allied World has failed to demonstrate
the “substantial need” and “undue hardship” required to compel production of fact or
opinion work product under Federal Rule of Civil Procedure 26(b)(3). (Id. at 5.) In
response, Allied World argues that, under Florida law,3 work product material
generated in the adjustment of an underlying claim, and in defense of insureds in the
underlying litigation, up to and including the date of the resolution of the claim, is
discoverable in a third-party bad faith case. (Doc. 3 at 9.) The court agrees.
Generally, Florida protects from discovery the work product of a party
or documents prepared in anticipation of litigation. Liberty Mut. Fire Ins. Co. v.
Kaufman, 885 So. 2d 905, 909-910 (Fla. Dist. Ct. App. 2004) (citing Fla. R. Civ. P.
3
Allied World notes that Pennsylvania choice-of-law rules apply to this motion. (Doc. 3 at
6) (citing Gould, Inc. v. CNA, 809 F. Supp. 328, 331 (M.D. Pa. 1992)). These rules require “an analysis
of the policies and interests underlying the particular issue before the Court,” such that “the place having
the most interest in the problem” has “paramount control over legal issues arising out of a particular
factual context and thereby allows the forum to apply the policy of the jurisdiction most intimately
concerned with the outcome of the particular litigation.” (Id. at 6-7) (quoting Gould, 809 F. Supp. at
331). Here, the underlying accident occurred in Florida, the resultant litigation occurred in Florida, and
the bad faith case is presently pending in Florida. Thus, Florida has the most interest in the case and
Florida law applies. Defendant does not dispute this conclusion in its brief in opposition.
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1.280). An insurer’s claims and litigation files constitute work product and are
protected from production. Id. (citing Fla. R. Civ. P. 1.280(b)(3)). However, where
a fiduciary duty exists between the parties, courts may compel production if the party
seeking production is able to show a “substantial need.” Kaufman, 885 So. 2d at
910. This is true even if a fiduciary relationship later turns adversarial. Id. (citing
Springer v. United Servs. Auto. Assoc., 846 So. 2d 1234, 1235 (Fla. Dist. Ct. App.
2003)).
The Florida Supreme Court has held that, in third-party bad faith actions
for failure to settle a claim, “discovery of the insurer’s underlying claim file type
material is permitted over objections of work product protection.” Allstate Indemnity
Co. v. Ruiz, 899 So. 2d 1121, 1126 (Fla. 2005). In so holding, the court noted:
It is clear that in an action for bad faith against an
insurance company for failure to settle a claim within
policy limits, all materials, including documents,
memoranda and letters, contained in the insurance
company’s file, up to and including the date of judgment in
the original litigation, should be produced.
Id. (quoting Stone v. Travelers Ins. Co., 326 So. 2d 241, 243 (Fla. Dist. Ct. App.
1976)). This rule has been “historically predicated on the fact that the insurer owes
to the insured a duty of fair dealing, honesty and due regard for the insured’s
interests in handling the third-party litigation.” Id.
As Lincoln points out, this case is distinguishable because in Ruiz, the
insurance company ordered to produce the requested documents was defending
against the bad faith claim. Here, by contrast, the party from which documents are
sought (Lincoln) is a non-party to the bad faith action. Nevertheless, relevant case
law makes clear that Lincoln owed a fiduciary duty not only to Bynum and Bohn as
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the insureds, but also to Allied World as the excess insurer. See Progressive Am. Ins.
Co. v. Nationwide Ins. Co., 949 So. 2d 293, 294 (Fla. Dist. Ct. App. 2007) (“[I]n
Florida, a primary carrier owes a duty of good faith to an excess carrier – the same
duty it owes to its insured.”) (citing Ranger Ins. v. Travelers Indem. Co., 389 So. 2d
272, 275 (Fla. Dist. Ct. App. 1980)); accord Central Nat’l Ins. Co. of Omaha v. Med.
Protective Co. of Fort Wayne, Indiana, 107 F.R.D. 393, 394-95 (E.D. Mo. 1985)
(“When there is excess liability coverage, the duty owned to the excess insurance
carrier by the primary carrier is identical to that owed to the insured.”)
Furthermore, Lincoln’s claim file is very likely the only place such
information can be ascertained. As the Florida Supreme Court in Ruiz explained:
[In] ‘bad-faith’ failure to settle or defend [cases], . . . the
pertinent issue is the manner in which the company has
handled the suit including its consideration of the advice of
counsel so as to discharge its mandated duty of good faith.
Virtually the only source of information on these questions
is the claim file itself. Accordingly . . . it has been
consistently held in our state that a claim file is subject to
production in such an action.
See Ruiz, 899 So. 2d at 1129 (quoting Fidelity & Cas. Ins. Co. of New York v. Taylor,
525 So. 2d 908 (Fla. Dist. Ct. App. 1987)); see also Employers Mut. Cas. Co. v. Key
Pharm., Inc., 1992 U.S. Dist. LEXIS 11091, *3 (S.D.N.Y. July 27, 1992) (holding
that an insurer may not use the attorney-client or work product privilege against an
excess insurer. . . to prevent disclosure of documents related to the underlying
litigation because such documents “go to the heart of the case.”).
Given the fiduciary relationship between Lincoln and Allied World in
the underlying litigation, and the importance of the requested documents to Allied
World’s defense in the bad faith action, the court is satisfied that there exists a
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“substantial need” for these documents and the information contained therein.
Lincoln does not provide, nor is the court aware of any other source that would
provide Allied World with this information. Accordingly, the court finds that the
work product privilege is inapplicable as to any communications between Lincoln
and Lincoln’s retained defense counsel concerning the defense of Bynum and Bohn
and therefore those documents are discoverable. See Allstate Ins. Co. v. Levesque,
263 F.R.D. 663, 668 (M.D. Fla. 2010). Further, documents containing comments
and evaluations by representatives of Lincoln concerning the legal work performed
by Lincoln’s retained counsel while representing Bynum and Bohn must be
produced. Id. However, the production need not include any correspondence and
communications between Lincoln’s employees or agents and Lincoln’s in-house
counsel as those documents remain privileged. Id. (citing Kaufman, 885 So. 2d at
909).
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C.
Attorney-Client Privilege
Lincoln also objects to the production of certain documents on the
grounds that Allied World has failed to provide a reason upon which this court
should ignore the well-settled rule that communications between attorneys, clients
and their insurers are not discoverable. (Doc. 13 at 6.) Lincoln argues that its
interests and those of Allied World are not aligned, the alignment of which might
render the privilege inapplicable. (Id. at 7.)
The court agrees that the interests of Lincoln and Allied World are not
aligned for the purposes of this motion or in the pending bad faith action. However,
there is no doubt that their interests were aligned in the underlying personal injury
litigation. Generally, when an insurer accepts the defense obligations of its insured,
certain interests of the insured and the insurer essentially merge. See Kaufman, 885
So. 2d at 908. Given Lincoln’s fiduciary duty to Allied World, it is likewise true that
Lincoln’s and Allied World’s interests also essentially merged. Such common
interests bar the attorney-client privilege from attaching to communications among
the attorney, the insurer and the insured. Id. (citations omitted).
In Kaufman, a case that involved a bad faith insurance claim for failure
to settle the underlying litigation, the court found that certain documents were
discoverable because the parties shared common interests during the underlying
litigation and a fiduciary duty existed between the parties. Specifically, the court
found that, in light of the fiduciary relationship between insured and the insurer in
the underlying trial, any correspondence between the insurer and the insurer’s
retained counsel concerning insured’s cases was not privileged and must be produced
by the insurance company. Kaufman, 885 So. 2d at 909; see also Springer, 846 So.
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2d at 1235 (holding that “communications between an insured and his counsel that
pertain to the common interest held by the insured and the insurer – i.e. the defense
of the claim – are available to the insurer and this right of access would continue
even if their interests became adverse.”) Likewise, here, Lincoln and Allied World
shared a common interest in defending against Lymon’s personal injury claim in the
underlying litigation. Moreover, as stated, Lincoln had a fiduciary duty to Allied
World. In light of this, any communications between Lincoln and its retained
counsel concerning Lincoln’s defense in the underlying case are discoverable.
However, here again, communications between Lincoln employees or agents and
Lincoln’s in-house counsel remain protected as attorney/client communications. See
Kaufman, 885 So. 2d at 909 (citing Progressive Am. Ins. Co. v. Lanier, 800 So. 2d
698, 691 (Fla. Dist. Ct. App. 2001)).
D.
Mediation Privilege
Lincoln claims that the discovery of mediation-privileged
communications is prohibited under Florida’s Mediation and Privilege Act. (Doc. 13
at 8.) The court disagrees. Section 44.405 of the Mediation and Privilege Act
provides that “[a] mediation participant shall not disclose a mediation
communication to a person other than another mediation participant or participant’s
counsel.” Fla. Stat. 44. 405(1). This privilege is therefore inapplicable where, as
here, both Lincoln and Allied World were mediation participants and there has been
no effort to disclose the communications to persons other than mediation
participants. See Altheim v. Geico Gen. Ins. Co., 2010 U.S. Dist. LEXIS 133782, * 4
(M.D. Fla. Dec. 8, 2010). Additionally, to the extent that Allied World is claiming
communications that occurred outside the mediation process, the privilege may not
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be invoked. See id. Moreover, a hearing was held on this subject in the pending bad
faith action. The court found, citing Altheim, the mediation privilege to be
inapplicable to this case. (Doc. 3-1, Ex. K, Order dated October 21, 2011, docket
no. 8:10-cv-1927-T-23TBM.) This court agrees and, as such, documents requested
that relate to the mediation proceedings shall be produced. However, any mediation
documents in Lincoln’s control that were created subsequent to Allied World’s
withdrawal from the proceedings are protected by the privilege and need not be
produced.
E.
Employment File of Greg Fetcho
Allied World’s subpoena requests the employment file for Greg Fetcho,
Lincoln’s adjuster who was the primary handler of the underlying litigation.
Specifically, the subpoena seeks:
All documents . . . relative to training, education,
experience, licensure, pay level, job positions,
responsibilities and duties associated with those positions,
any complaints, commendations, or other documentation of
performance evaluations or reviews . . . of Greg Fetcho for
the years 2000 through the earlier of 2009 or the end of his
employment with Lincoln General. Allied World is not
seeking the production of social security numbers,
telephone numbers, drug test results, information relating
to the employee’s family, or any other protected health
information.
(Doc. 3-1, Ex. A, ¶ 19). Lincoln objects to this request stating that the request is
overly broad, does not seek information reasonably calculated to lead to the
discovery of admissible evidence, and seeks privileged work product or attorneyclient communications. (Doc. 13 at 11.) To the extent that Lincoln is claiming
attorney-client or work product objections, those objections are overruled for the
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reasons stated above. The court also finds Lincoln’s remaining objections to be
without merit.
Courts have found the type of information contained in a personnel file
to be relevant to a bad faith claim and therefore discoverable. In Waters v. Cont’l
Gen. Ins. Co., 2008 U.S. Dist. LEXIS 47375 (N.D. Okla. June 19, 2008), a case
involving a bad faith insurance claim, Plaintiff requested personnel files containing
information regarding the adjusters’ training and job performance. The court held
that such information was discoverable in a bad faith insurance claim and ordered the
defendant to produce files pertaining to “the adjusters’ background, qualifications,
training and job performance.” Id. at *2. This production was limited to only those
“adjusters who actually handled some aspect of Plaintiff’s claim.” Id. The court
cautioned, however, that the production should not include sensitive personal or
medical information that is not relevant to the issues of the case. Id.
Likewise, in Saldi v. Paul Revere Life Ins. Co., 224 F.R.D. 169 (E.D.
Pa. 2004), another case involving a bad faith insurance claim, the defendants lodged
a similar objection, arguing that personnel files are highly confidential and unduly
burdensome to produce. The court, noting a “heightened standard of relevance” for
discovery of information contained in personnel files, found the requested documents
to be relevant and to have a sufficient nexus to the bad faith claim. Id. at 184. The
court noted that the defendant failed to identify precisely how such information
might be confidential or embarrassing and also failed to identify a less confidential
source from which Plaintiff could obtain this information. The same holds true here.
Lincoln attempts to distinguish these cases by once again noting that, in
those cases, the insurance company was the defendant in the bad faith action while
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here, Lincoln is not a party to the bad faith action. Once again, the court finds this
argument unconvincing because Lincoln was a party to, and assumed the
responsibility of defending against claims made in the underlying litigation which
led to the bad faith claim. Accordingly, the court finds that Allied World’s request
for documents regarding the personnel file of Greg Fetcho was proper and Lincoln is
required to produce this information accordingly.
F.
Privilege Log
Allied World notes that, of the documents produced by Lincoln, some
were redacted. (Doc. 3 at 6.) Allied World argues that because Lincoln did not
produce a privilege log, there is no way to determine whether those redactions were
proper. (Id.) Lincoln retorts that no privilege log was necessary because Allied
World stated in a letter to Lincoln that a privilege log was not necessary because no
attorney/client privilege communications were sought. (Doc. 13 at 10; Doc. 13-4.)
Thus, Lincoln argues that, “with this understanding in place,” they produced
documents without a privilege log. (Doc. 13 at 10.) This argument fails.
Federal Rule of Civil Procedure 45(d)(2)(A) provides that when a party
withholds otherwise discoverable subpoenaed information by claiming the informing
is privileged, the party must expressly make the claim and describe the nature of the
documents not produced and do so in a manner that, “without revealing information
itself privileged or protected, will enable the parties to assess the claim.” Fed. R.
Civ. P. 45 (d)(2)(A); see also Fed. R. Civ. P. 26(b)(5)(A) (same, in relation to
discovery generally). Further, Rule 34(b) provides that “[a]n objection to part of a
request must specify the part and permit inspection of the rest.” Fed. R. Civ. P.
34(b)(2)(C). Lincoln’s argument is, in essence, that they were relieved of their duty
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to comply with these rules based on Allied World’s belief that no privileged
documents were being requested in the first place. However, Lincoln nevertheless
concluded that privileged information was requested, and withheld documents or
information based upon that conclusion. After reviewing Allied World’s letter, the
court finds the statement that “no log is necessary” is merely Allied World’s position
based upon its belief that no privileged documents are sought. Such a statement is
not indicative of an “understanding” between the parties that would relieve Lincoln
of its obligation to provide a privilege log. In fact, Lincoln obviously disagrees with
Allied World’s position. Thus, Lincoln is required to satisfy its obligations under
Federal Rules of Civil Procedure 26 and 45. Accordingly, if Lincoln maintains that
certain documents are subject to a privilege, Lincoln shall provide Allied World
with a privilege log identifying each document in sufficient detail to permit opposing
counsel and, if necessary, the court, to assess the applicability of the claimed
privilege.
G.
Agreement to Reimburse
In its brief in opposition, Lincoln claims that during a teleconference
between counsel for Lincoln and Allied World, representations were made by Allied
World to reimburse Lincoln for its reasonable fees and costs associated with the
gathering of the voluminous information sought. (Doc. 13 at 13-16.) Lincoln further
argues that Federal Rule of Civil Procedure 45(c)(1), which requires the court to
protect a subpoenaed party from any undue burden or expense, entitles Lincoln to
reimbursement of the expense of the attorneys and paralegals who gathered the
requested materials.
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Allied World denies that any agreement to reimburse the costs
associated with the subpoena was entered into. (Doc. 14 at 10.) However, Allied
World acknowledges its duty to reimburse to the extent necessary to satisfy Federal
Rule of Civil Procedure 45. (Id. at 11.) At this point, the court is not in a position to
make any ruling on this issue as there does not appear to be a real dispute between
the parties. The court agrees with the parties that Allied World has a duty to take
reasonable steps to avoid imposing an undue burden or expense on Lincoln and fully
expects the parties to comport with this requirement. If a dispute regarding
reimbursement for reasonable costs arises in the future, the court will address that
issue at that time.
III.
Conclusion
In short, the court finds Lincoln’s blanket claims of privilege or
immunity to be insufficient. Courts have found that documents such as those
requested here, including the claims file and documents pertaining to the underlying
litigation, to be relevant and discoverable in a bad faith insurance claim. Absent
objections to specific documents or categories of documents, the court can only rule
as to the inapplicability of Lincoln’s general privilege and immunity objections with
regard to bad faith insurance claims. If, following this memorandum, Lincoln
maintains privilege or immunity objections, the court will address those objections as
to the specific documents or category of documents involved and, if necessary,
conduct an in camera review as to those documents. Plaintiff’s request for an in
camera review is otherwise denied.
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An appropriate order will be issued.
s/Sylvia H. Rambo
United States District Judge
Dated: February 2, 2012.
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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ALLIED WORLD ASSURANCE
COMPANY (U.S.), INC.,
:
:
:
:
Plaintiff
:
:
:
v.
:
:
:
LINCOLN GENERAL INSURANCE :
COMPANY,
:
:
Defendant
:
MISC. NO. 1:11-mc-00342
Judge Sylvia H. Rambo
ORDER
In accordance with the accompanying memorandum of law, it is
HEREBY ORDERED that Plaintiff’s motion to enforce subpoena (Doc. 2) is
hereby GRANTED in part and DENIED in part as follows:
1. The motion is GRANTED as set out herein. Defendant shall produce
within thirty (30) days of this order the requested documents in accordance with the
directions and limitations set forth in the above memorandum. If any disputes arise
pertaining to specific documents or categories of documents, the court will address
those issues at that time.
2. Plaintiff’s request for an in camera review is DENIED.
s/Sylvia H. Rambo
United States District Judge
Dated: February 2, 2012.
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