Turner Construction Company v. American Safety Casualty Insurance Company

Filing 297

MEMORANDUM OPINION AND ORDER ADOPTING AND AFFIRMING AS FRAMED MAGISTRATE JUDGES DISCOVERY ORDER,OVERRULING IN PART AND DEFERRING IN PART INTERVENOR-PLAINTIFFS OBJECTIONS AND DIRECTING PLAINTIFF TO SUPPLEMENT OBJECTIONS. The magistrate judges discove ry order ECF Nos. 261 , 262 is ADOPTED and AFFIRMED AS FRAMED. Turners objections ECF No. 270 are OVERRULED IN PART and DEFERRED IN PART. It is ORDERED that Turner supplement its objections as to those documents on or before February 21,2017 . DSM may file any response on or before March 7, 2017, or within fourteen days of being served with Turners supplemental objections if filed before February 21, 2017. At this time, this Court does not believe a reply is necessary. Signed by Senior Judge Frederick P. Stamp, Jr on 2/14/2017. (Copy counsel of record via CM/ECF)(jmm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
TURNER CONSTRUCTION CO.,
Plaintiff,
v.

Civil Action No. 1:15CV83
(STAMP)

TIG INSURANCE COMPANY,
successor by merger to
AMERICAN SAFETY CASUALTY
INSURANCE COMPANY,
Defendant,
and
UNITED STATES f/u/b/o
DESIGNER’S SPECIALTY CABINET CO.,
d/b/a DESIGNER’S SPECIALTY MILLWORK,
Intervenor-Plaintiff,
v.
TURNER CONSTRUCTION CO.,
TRAVELERS SURETY & CASUALTY
CO. OF AMERICA,
FEDERAL INSURANCE CO.,
THE CONTINENTAL INSURANCE CO.,
FIDELITY & DEPOSIT CO. OF MD,
ZURICH NORTH AMERICAN INSURANCE CO.,
LIBERTY MUTUAL INSURANCE CO. and
ZURICH AMERICAN INSURANCE CO.,
Intervenor-Defendants.
MEMORANDUM OPINION AND ORDER
ADOPTING AND AFFIRMING AS FRAMED
MAGISTRATE JUDGE’S DISCOVERY ORDER,
OVERRULING IN PART AND DEFERRING IN PART
INTERVENOR-PLAINTIFF’S OBJECTIONS AND
DIRECTING PLAINTIFF TO SUPPLEMENT OBJECTIONS

I.

Procedural History

This is a Miller Act, 40 U.S.C. §§ 3131-3133, case in which
the plaintiff, Turner Construction Co. (“Turner”), seeks payment
from

the

intervenor-plaintiff’s

surety,

and

the

intervenor-

plaintiff, Designer’s Specialty Cabinet Co. doing business as
Designer’s Specialty Millwork (“DSM”), seeks payment from Turner’s
sureties.

The

throughout

parties

these

have

had

proceedings.

several

This

Court

discovery
referred

disputes
all

non-

dispositive matters, except motions in limine, to United States
Magistrate Judge Michael John Aloi.
DSM previously filed a motion to compel discovery responses
from Turner.

ECF No. 114.

Of relevance here, DSM sought to compel

responses to its Document Request No. 13, requesting that Turner
produce what DSM identifies as “‘Exhibit B’ in Excel format with
referenced ‘source’ documents,” which are referenced in Exhibit B.
Exhibit

B

regarding

is

an

Excel

purchase

descriptions,

and

subcontractors.

spreadsheet

change

pending

that

orders,

time

includes

information

modification

extension

claims

for

numbers,
various

It is part of a larger Excel document that

includes several spreadsheets containing information about the
Federal Bureau of Investigation (“FBI”) project (collectively “the
spreadsheets”).

Turner claims it created the spreadsheets as an

aid in negotiating final payments with the FBI. Turner continually
updated and changed the spreadsheets during the project and its

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negotiations with the FBI.

A prior version of Exhibit B was

disclosed to DSM in PDF format.

DSM seeks a copy of Exhibit B in

native, Excel, format so that it can see what changes were made
over time to determine whether Turner shifted expenses between
subcontractors and treated DSM unfairly.
Magistrate Judge Aloi ordered Tuner to produce Exhibit B and
the source documents for in camera review, he also later ordered
Turner to produce a privilege log regarding those documents.
Turner also provided to the magistrate judge several emails it
claims show that Exhibit B is covered by attorney-client privilege
or the attorney-work-product doctrine.

After reviewing those

documents, Magistrate Judge Aloi concluded that the spreadsheets,
Exhibit B, the source documents, and the emails were relevant.

He

concluded that the spreadsheets, source documents, and most of the
emails were not protected by attorney-client privilege or the workproduct doctrine, but that some of the emails were privileged.

He

ordered that all of the documents, except for certain emails he
found to be privileged, be disclosed to DSM.

Turner then filed

timely objections to the magistrate judge’s order.

DSM filed a

response in opposition to those objections, and Turner then filed
a reply.
II.

Applicable Law

Under Federal Rule of Civil Procedure 72(a), a district court
may refer to a magistrate judge “a pretrial matter not dispositive

3

of a party’s claim or defense.”

Fed. R. Civ. P. 72(a).

The

parties may file objections to the magistrate judge’s order, and
the “district judge in the case must consider timely objections and
modify or set aside any part of the order that is clearly erroneous
or is contrary to law.”

Id.
III.

Discussion

First, Turner argues that the magistrate judge erred in
finding

that

Exhibit

B

is

relevant.

Federal

Rule

of

Civil

Procedure 26(b)(1) permits parties to “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). In considering proportionality, courts must consider:
(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.”

Id.

“Information within this scope of

discovery need not be admissible in evidence to be discoverable.”
Id.
DSM’s claims include allegations that Turner treated DSM’s
delay claims differently than those made by other subcontractors
working on the interior of the FBI project.

The spreadsheets,

including Exhibit B, are a statement of the status of claims filed

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by other interior subcontractors, and are therefore relevant to
DSM’s claims.

Thus, this Court finds no clear error in the

magistrate judge’s conclusions on this issue.
Second, Turner argues that the spreadsheets, including Exhibit
B,

are

privileged.

communications

Attorney-client

between

consultations.”

a

client

and

privilege
an

“protects

attorney

during

State ex rel. Med. Assurance of W. Va., Inc. v.

Recht, 583 S.E.2d 80, 88 (W. Va. 2003) (internal quotation marks
omitted).1

“[T]he

privilege

protects

the

communications,” whether verbal or in writing.

substance

of

Id. (internal

quotation marks omitted). A communication is privileged where: (1)
“both

parties

.

.

.

contemplate[d]

that

the

attorney-client

relationship does or will exist”; (2) “the advice [was] sought by
the client from the attorney in his capacity as a legal advisor”;
and (3) “the communication between the attorney and client . . .
[was] intended to be confidential.”

Id. at 89.

However, the West

Virginia Supreme Court of Appeals has emphasized that
[t]he attorney-client privilege only protects disclosure
of communications; it does not protect disclosure of the
underlying facts by those who communicated with the
attorney.
A fact is one thing and a communication
concerning that fact is an entirely different thing. The
client cannot be compelled to answer the question “What
did you say or write to the attorney?” and may not refuse
to disclose any relevant fact within knowledge merely

1

Because West Virginia’s substantive contract law applies to
DSM’s claims in this civil action, West Virginia law governs
privilege claims. Fed. R. Evid. 501.
5

because s/he incorporated a statement of such fact into
her communication to her attorney.
Recht, 583 S.E.2d at 93 (quoting 1 Franklin D. Cleckley, Handbook
on Evidence for West Virginia Lawyers § 5-4(E)(1), 5-105 (4th ed.
2000)).
Turner argues that the spreadsheets are privileged because
they were created in collaboration with counsel.

Magistrate Judge

Aloi reviewed in camera communications between Turner and its
counsel regarding the spreadsheets’ contents and concluded that the
spreadsheets are not privileged.

Additionally, this Court finds

that while Turner’s communications with its counsel regarding the
spreadsheets may be covered by attorney-client privilege, as the
factual content of those communications, the spreadsheets are not
privileged.

The

attorney-client

privilege

protects

only

communications between a client and counsel, but “it does not
protect

disclosure

of

the

underlying

communicated with the attorney.”

Id.

facts

by

those

who

Thus, this Court finds no

clear error in the magistrate judge’s conclusion as to this issue.
Third, Turner argues that the magistrate judge erred in
concluding that the spreadsheets, including Exhibit B, are not
protected under the attorney-work-product doctrine.

The work-

product doctrine provides qualified immunity from disclosure of
“written materials obtained or prepared by an adversary’s counsel
with an eye toward litigation.”

State ex rel. Erie Ins. Prop. &

Cas. Co. v. Mazzone, 648 S.E.2d 31, 38 (W. Va. 2007) (internal
6

quotation marks omitted).

The doctrine’s protection extends to

“materials prepared by non-lawyers when the paramount purpose for
generating the materials is litigation.”

Id.

Based on his in camera review, Magistrate Judge Aloi concluded
that the spreadsheets are an accounting of subcontractors’ delay
and other impact claims, setting out the amount and status of those
claims.

He concluded that Turner created the spreadsheets in its

normal course of business in performing the prime contract and
managing its subcontractors.
that

Turner’s

use

of

the

Thus, the magistrate judge concluded
spreadsheets

in

negotiating,

and

subsequently litigating, payment disputes with the FBI did not
convert the information into attorney work product.

He further

concluded that none of the attorney-client communications regarding
the

spreadsheets

and

reviewed

in

camera

indicate

that

the

spreadsheets were originally created at the direction of counsel
for use in litigation or that the spreadsheets contain the mental
impressions, opinions, or advice of counsel.

This Court finds no

basis for second guessing the magistrate judge’s findings in that
regard.
Turner argues that the spreadsheets are work product because,
after they were created, they were modified at the direction of
counsel for use in negotiations with the FBI and any subsequent
litigation with the FBI.
“paramount

purpose

in

However, Turner fails to show that the
generating

7

[the

spreadsheets

was]

litigation,” id., rather than an accounting of subcontractor claims
used in the ordinary course of business that was later adapted for
use as a tool in negotiations with the FBI.

Turner does not

dispute that the spreadsheets were created before the project was
completed and without attorney input.

Rather, Turner argues that

the spreadsheets were reviewed by its counsel later, and that its
counsel commented on the contents of the spreadsheets.

However,

this does not convert documents created by Turner for its own use,
before litigation was contemplated, into attorney work product once
litigation was contemplated.

Accordingly, this Court finds no

clear error in the magistrate judge’s conclusion as to this issue.
Fourth, Turner argues that the magistrate judge erred in
ordering the disclosure of documents that were not responsive to
DSM’s document request.

Specifically, Turner argues that the

magistrate

the

judge

ordered

disclosure

of

the

entire

Excel

document containing Exhibit B and other spreadsheets not requested
by DSM, along with emails and their attachments submitted by Turner
for in camera review.
As to the other spreadsheets in the Excel file containing
Exhibit B, DSM requested Exhibit B in native format. Turner admits
that the only way it can do so is by giving DSM the entire Excel
document, including all of the spreadsheets.

The spreadsheets are

not privileged or protected by the work-product doctrine and are
covered by the protective orders entered in this case.

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Thus, to

comply with the magistrate judge’s discovery order and fully
respond to DSM’s discovery request, the entire Excel document must
be disclosed to DSM, and such disclosure will not overburden or
prejudice Turner.

In that regard, this Court finds no clear error

in the magistrate judge’s order.
As to the emails and documents attached thereto, Turner argues
that they are beyond the scope of DSM’s discovery request or are
otherwise privileged or work-product.

However, this Court lacks

sufficient information to review the magistrate judge’s order as to
these claims.

It is unclear which documents Turner is referring

to, and without specific references and argument, this Court is
unable to evaluate Turner’s claims.

Thus, this Court believes it

would be beneficial for Turner to supplement its objections as to
those documents and for DSM to have an opportunity to respond.
Accordingly, it is ORDERED that Turner supplement its objections as
to these documents and that the parties file supplemental briefs on
this issue as ordered in detail below.
IV.

Conclusion

For the foregoing reasons, the magistrate judge’s discovery
order (ECF Nos. 261, 262) is ADOPTED and AFFIRMED AS FRAMED.
Turner’s objections (ECF No. 270) are OVERRULED IN PART and
DEFERRED IN PART.

Further, it is ORDERED that Turner supplement

its objections as to those documents on or before February 21,
2017.

DSM may file any response on or before March 7, 2017, or

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within fourteen days of being served with Turner’s supplemental
objections if filed before February 21, 2017.

At this time, this

Court does not believe a reply is necessary.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:

February 14, 2017

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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