GOLON, INC. v. SELECTIVE INSURANCE COMPANY OF THE SOUTHEAST et al

Filing 87

MEMORANDUM ORDER denying 82 Motion for Reconsideration and denying as moot 75 Motion to Maintain in Camera Documents. Signed by Judge Arthur J. Schwab on 12/14/2017. (lmt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
GOLON, INC. FORMERLY KNOWN AS,
GOLON MASONRY RESTORATION, INC.,
Plaintiff,

17cv0819
ELECTRONICALLY FILED

v.
SELECTIVE INSURANCE COMPANY OF
THE SOUTHEAST and SELECTIVE
INSURANCE COMPANY OF AMERICA,
Defendants.
ORDER OF COURT DENYING DEFENDANTS’ MOTION FOR
RECONSIDERATION/CLARIFICATION (ECF 82) OF THIS COURT’S DECEMBER 7,
2017 MEMORANDUM OPINION AND ORDER (ECF 71 and ECF 72)
A. Court’s December 7, 2017 Memorandum Opinion and Order (ECF 71 and ECF 72)
1. As this Court stated in its prior Memorandum Opinion denying Selective’s Motion for
Protective Order and granting, in part, Golon’s Motion to Compel (see ECF 71),
“[a]fter an in camera review of these documents (over 1,000 pages of withheld and/or
redacted documents), the Court finds itself confronted with the difficult task of balancing
respect for an important mediation privilege, supported by public policy, while seeking
not to allow this privilege to be misused or abused, and seeking to prevent the application
of such privilege to thwart justice in this particular case.”
2. After its thorough review of the 1,000 plus pages, this Court found that the mediation
privilege asserted by Selective was not applicable to almost all of the documents it had
either withheld or redacted (see ECF 71), and thus, Ordered that three of the documents
at issue remain under seal as having been properly withheld and/or redacted; but further

Ordered the remaining documents at issue to be produced to Golon’s attorney by Noon
on December 11, 2017. See ECF 72.
3. Further, after the detailed analysis set forth in ECF 71, and after finding the mediation
privilege (and the relevancy objection as to reinsurance documents) not applicable to the
overwhelming majority of the documents, the Court removed the seal thereon, and
Ordered the Clerk of Court to lift the seal on all but the three privileged documents, and
then, file the non-privileged documents at ECF 74. The Court also Ordered the Clerk of
Court to separately re-file those three documents which were subject to the mediation
privilege under seal at ECF 73.
4. Upon the Court’s entry of its Memorandum Opinion (ECF 71) and Order (ECF 72),
Selective immediately filed an “Unopposed Emergency Motion” to reseal all of the
documents the Court had just deemed were not subject to the mediation privilege (or
Selective’s relevancy-reinsurance objection). See ECF 75.
5. Instead of complying with the Court’s Order (ECF 72) directing Selective to produce all
but the three protected documents to Golon’s attorney by Noon on December 11, 2017
(see text Order at ECF 76), Selective openly stated that it would only produce to Golon’s
attorney those documents it had previously withheld on the grounds of relevancy (i.e., the
reinsurance documents), and it would file a Motion for Reconsideration as to the
mediation privilege documents the Court had ordered produced. See ECF 83 at p. 3.
6. Importantly, the Court notes that without reaching the merit of this federal bad faith and
breach of contract case, the “mediation privilege” documents which the Court ordered to
be produced, arguably provide evidence which may support Golon’s allegation that
Selective engaged in “bad faith, high risk, [and] brinkmanship negotiation strategy,”

-2-

(ECF 1-1 at ¶ 41), when Selective continually refused to settle the underlying state court
case within the total two-policy limits of $11 million, rejected its initial, well-respected
trial attorney’s advice, and tried the case to a jury verdict of $32 million.

B. Selective’s Failure to Comply with Order of Court (ECF 72)
1. Selective failed to produce the required documents, despite the Order of Court of
December 7, 2017, on or before the appointed date and time of December 11, 2017, at
Noon.
2. Instead, after the deadline had passed, at 12:05 PM, on December 11, 2017, Selective
filed a Motion Seeking Reconsideration and/or Clarification of the Court’s December 7,
2017 Opinion and Order Regarding Defendants’ Claim of Privilege Under
Pennsylvania’s Mediation Privilege Statute (ECF 82) (9 pages), Brief in Support (ECF
83) (9 pages), and then later, filed a Supplemental Brief in Support (ECF 85) (10 pages).
3. The Court will now DENY Selective’s Motion for Reconsideration finding that there is
no basis to grant such a Motion. The standard for granting a motion for reconsideration
was set forth in Max’s Seafood Café, by Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677
(3d Cir. 1999), which requires a court to decline reconsideration of a prior decision unless
there is or has been: (1) an intervening change in the controlling law; (2) the availability
of new evidence that was not available when the court granted the motion; or (3) the need
to correct a clear error of law or fact or to prevent manifest injustice. Selective’s two
Briefs only argue that this Court made a clear error of law when it determined that the
mediation privilege documents did not fall within Pennsylvania’s “mediation privilege,”
42 Pa.C.S.A. § 5949.

-3-

4. This Court does not find that its prior Opinion – which set forth the plain meaning of the
mediation privilege statute and then explained how Selective’s designated “mediation
privilege” documents fell outside of the statute’s well-defined reach (see ECF 71) –
constitutes an error of law. To the contrary, while it is abundantly clear to this Court that
Selective did not wish to disclose the documents, these documents do not fall within the
four corners of the plain meaning of the stated privilege. Nearly all of the documents
which this Court ordered produced constitute “communications” which occurred outside
of the mediation but did not involve the mediator directly (i.e., reports and email between
and among insurance company employees to one another about Golon’s underlying
mediations).
5. This Court, again, reiterates that it considers the mediation privilege a very important
privilege in jurisprudence; however, for this Court to stretch the mediation privilege
beyond its plain meaning and ambit of protection, in fact, would undercut the privilege
itself and exceed this Court’s power and authority. Expansion of this important privilege
to protect additional items, such as the reports and emails prepared and exchanged by and
among Selective’s insurance employees about Golon’s (the insured’s) underlying
mediation, is work for the legislature to perform, not this or any other Court.
6. Simply put, the Court does not find it committed an error of law upon applying the plain
meaning of Pennsylvania’s mediation privilege to the documents proffered by Selective
for its in camera inspection and determining that the vast majority of those documents
did not meet the definition of “mediation documents” or “mediation communications” as
those terms are defined by the statute. Thus, the Court will deny Selective’s Motion for
Reconsideration as no error of law was committed.

-4-

7. Additionally, Selective argued that this Court did not address the documents which
derived from the pre-trial conciliation before Judge Lutty, the presiding trial judge in the
underlying state court matter. The Court notes that it reviewed every document which
was provided to the Court for its in camera inspection and found three documents which
met the requirements established by Pennsylvania’s mediation privilege statute, 42
P.A.C.S.A. § 5949. This Court held that none of the other documents met the criteria set
forth in Pennsylvania’s mediation privilege statute. Accordingly, just because the Court
addressed these documents along with the all the others, and did not single them out as
pre-trial conciliation documents as Selective would have preferred, is not a basis for
reconsideration; and thus, the Court will deny the Motion for Reconsideration for this
reason as well.
8. Moreover, Selective disagrees with this Court’s final decision (ECF 72) that the content
of the documents at issue do not fall within the definition of “mediation communications”
which Pennsylvania’s mediation privilege protects. Selective’s disagreement with this
Court’s interpretation of the definition of the term and/or the scope of the statute is not a
valid basis to grant a Motion for Reconsideration, and thus, the Court will deny the
Motion for Reconsideration.
9. Finally, in support of its Unopposed1 Emergency Motion to Maintain in Camera

While this Court recognizes that Selective’s Emergency Motion (ECF 75) was unopposed by
Golon’s counsel, the granting of Selective’s Emergency Motion would remove the documents
from public view. Again, as stated in its prior Opinion (ECF 71) and in the instant Order, the
mediation privilege does not apply to most of the documents that Selective filed under seal. Once
the Court determined that the privilege did not apply as suggested by Selective, the Court had to
balance the impact of shielding non-privileged documents from the public against the public’s
right to view them. As can be seen by this Court’s actions up to this point, the Court finds that
absent a privilege, these documents may not be shielded. Hence, the Court denied Selective’s
Motion for Protective Order and granted, in part, Golon’s Motion to Compel.
1

-5-

Documents (ECF 75),2 Selective filed a brief (ECF 80) (18 pages) to expand upon its
request and relief sought by the Motion. However, the Court finds that the Emergency
Motion is nothing more than a creatively styled Motion for Reconsideration. The only
difference between the Emergency Motion and Brief in Support (ECF 75 and ECF 80),
and the Motion for Reconsideration and Brief in Support (ECF 82 and ECF 83) is that the
Emergency Motion also argues that Selective’s attorney-client privilege and/or work
product doctrine are being violated with this Court’s ordered production.
10. The Court notes that the attorney-client privilege and/or work product doctrine were
never briefed or discussed in Selective’s Response to Golon’s Motion to Compel /
Selective’s Motion for Protective Order. See ECF 60. Moreover, of all the documents
the Court ordered to be produced in its prior Order (ECF 72), only seven documents on
Selective’s privilege log note that attorney-client privilege and/or work product doctrine
apply. However, because Selective did not previously provide the Court with any
argument as to the application of the attorney-client privilege and/or work product
doctrine, they were, and are, deemed waived. Furthermore, based on the information and
current record which has been provided to the Court, the Court finds that Selective failed
to meet its burden of proving that it is entitled to redact and/or withhold documents in
accordance the attorney-client privilege and/or work product doctrine.
2

Selective also filed a second Unopposed Emergency Motion (ECF 78) less than 24 hours after
filing its first Emergency Motion. The second Emergency Motion sought “to Place Documents
Under Temporary Seal Pending Disposition of [Selective’s] Unopposed Emergency Motion to
Maintain in Camera Documents.” The Court denied the second Emergency Motion, but stated in
its Order that once counsel for Selective complied with the Court’s Orders (ECF 76 and 77)
which required Selective to: (1) file an Affidavit of Compliance demonstrating that it had
produced all of the non-privileged documents to Golon, and (2) the filing of a memorandum of
law in support of its first Emergency Motion, the Court would “promptly rule on [the first]
Emergency Unopposed Motion to Maintain in Camera Documents Submitted to the Court Under
Seal.” See ECF 79. Notably, Selective failed to file an Affidavit of Compliance in accordance
with the Court’s Order at ECF 76.

-6-

C. ORDERS OF COURT
AND NOW, this 14th day of December, 2017, the Court hereby DENIES the Motion for
Reconsideration filed by Defendants at ECF 82.
The Court also DENIES as MOOT the Emergency Motion filed by Defendants at ECF
75.
The Court, again, ORDERS Selective to produce the documents as described in ECF 71
to Golon, on or before 10:00 a.m. on Friday, December 15, 2017.
SO ORDERED, this 14th day of December, 2017.
s/ Arthur J. Schwab
Arthur J. Schwab
United States District Court Judge
cc: All ECF Counsel of Record

-7-