Mordesovitch v. Westfield Ins. Co., CIV.A. 2:02-0078.

Citation244 F.Supp.2d 636
Decision Date22 January 2003
Docket NumberNo. CIV.A. 2:02-0078.,CIV.A. 2:02-0078.
CourtUnited States District Courts. 4th Circuit. Southern District of West Virginia
PartiesFrank MORDESOVITCH, Plaintiff, v. WESTFIELD INSURANCE COMPANY, Defendant.

Christopher J. Heavens, Heavens Law Offices, Charleston, Counsel for Plaintiff.

Tanya M. Kesner, Brent K. Kesner, Kesner, Kesner & Bramble, Charleston, Counsel for Defendant.

MEMORANDUM OPINION AND ORDER

STANLEY, United States Magistrate Judge.

By memorandum opinion and order entered November 27, 2002, the court denied without prejudice, motions to compel filed by Plaintiff (Document 75 and 78) in which Plaintiff sought to compel Defendant to produce certain information and documents and, where a privilege was asserted by Defendant, to produce all allegedly privileged information and documents to the court for in camera review. (Documet # 82.) In his motions to compel, Plaintiff argued that the attorney-client privilege and work product doctrines did not apply in this first party insurance bad faith action and, as such, Defendant should be required to turn over protected information. The court rejected Plaintiffs arguments and determined that it was appropriate to apply established principles of attorney-client privilege and work product doctrine to the discovery at hand. At the time of the court's November 27, 2002, memorandum opinion and order, the court had not seen a privilege log that had been prepared by Defendant. The court directed the parties to comply with the Federal Rules of Civil Procedure related to the assertion of a privilege and imposed a schedule for the parties' compliance. Defendant filed a Second Supplemental Objection and Privilege Log of Westfield Insurance Company ("Privilege Log") on December 11, 2002, and Plaintiff responded by letter dated December 13, 2002. (Document # 85; Letter from Plaintiffs counsel dated December 13, 2002, attached hereto as Court's Exhibit 1.) By order entered December 20, 2002, following a hearing with the parties regarding the status of various matters, the court directed that Defendant submit for in camera review, documents as to which it has claimed a privilege(s) in the Privilege Log filed on December 11, 2002. Defendant submitted the at-issue documents to the Clerk on December 23, 2002. It is hereby ORDERED that the Clerk shall place the atissue documents, attached hereto as Court's Exhibit 2, UNDER SEAL.

Rule 501 of the Federal Rules of Evidence provides as follows:

Except as otherwise required by the Constitution of the United States or provided by Act of Congress or in rules prescribed by the Supreme Court pursuant to statutory authority, the privilege of a witness . . . shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience. However, in civil actions and proceedings, with respect to an element of a claim or defense as to which State law supplies the rule of decision, the privilege of a witness . . . shall be determined in accordance with State law.

Pursuant to the second sentence of Rule 501, state law supplies the rule of decision in this matter alleging violations of the West Virginia Unfair Trade Practices Act, West Virginia Code § 33-11-(9) (West 2002).

In State ex rel. USF & G v. Canady, 194 W.Va. 431, 460 S.E.2d 677, 684-85 (1995), the Supreme Court of Appeals of West Virginia noted that the attorney-client privilege and the work product exception are to be strictly construed. "As the attorney-client privilege and the work product exception may result in the exclusion of evidence which is otherwise relevant and material and are antagonistic to the notion of the fullest disclosure of the facts, courts are obligated to strictly limit the privilege and exception to the purpose for which they exist." Id. at 684. On the other hand, "[c]ourts must work to apply the privilege in ways that are predictable and certain" keeping in mind that "[t]he privilege forbidding the discovery of evidence relating to communications between an attorney and a client is intended to ensure that a client remains free from apprehension that consultations with a legal advisor will be disclosed." Id. at 684 (citations omitted). As the court in USF & G explained:

What is at stake here are two important competing policies. One policy protects the integrity and fairness of the factfinding process by requiring full disclosure of all relevant facts connected with the impending litigation. The other policy promotes full and frank consultation between a client and a legal advisor by removing the fear of compelled disclosure of information. "It is then the function of a court to mediate between them, assigning, so far as possible, a proper value to each, and summoning to its aid all the distinctions and analogies that are the tools of the judicial process."

Id. at 684-85 (quoting Clark v. United States, 289 U.S. 1, 13, 53 S.Ct. 465, 469, 77 L.Ed. 993, 999 (1933)).

In USF & G, the West Virginia Supreme Court reiterated the three elements necessary to determine whether the attorney-client privilege exists: "`(1) both parties must contemplate that the attorney-client relationship does or will exist; (2) the advice must be sought by the client from that attorney in his capacity as a legal adviser; (3) the communication between the attorney and client must be intended to be confidential.'" Id. at 688 (quoting State v. Burton, 163 W.Va. 40, 254 S.E.2d 129, 135 (W.Va.1979)).

A party waives the attorneyclient privilege

by asserting claims or defenses that put his or her attorney's advice in issue. The classical example is where an attorney is sued by a client for legal malpractice. See 8 Wigmore, supra § 2327 at 638. A defendant also may waive the privilege by asserting reliance on the legal advice of an attorney. Hunt [v. Blackburn], 128 U.S. [464,] 470, 9 S.Ct. [125,] 127, 32 L.Ed. [488,] 491 [1888] (client waived privilege when she alleged as a defense that she was mislead by counsel); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156 (9th Cir. 1992) (party's claim that its tax position was reasonable because it was based on advice of counsel puts advice in issue and waives privilege).

Id. In USF & G, the court cautioned that the party asserting the privilege must take

the affirmative step of placing the legal advice they received in issue. * * * [A]dvice is not in issue merely because it is relevant, and it does not come in issue merely because it may have some affect [sic] on a client's state of mind. Rather, it becomes an issue where a client takes affirmative action to assert a defense and attempts to prove that defense by disclosing or describing an attorney's communication.

Id. at 688 n. 16 (citing Pittston Co. v. Allianz Ins. Co., 143 F.R.D. 66, 72 (D.N.J. 1992); North River Ins. Co. v. Philadelphia Reinsurance Corp., 797 F.Supp. 363, 370-71 (D.N.J.1992)).

Rule 26(b)(3) of the West Virginia Rules of Civil Procedure governs the work product doctrine. It states as follows:

Trial Preparation: Materials. Subject to the provisions of subdivision (b)(4) of this rule, a party may obtain discovery of documents and tangible things otherwise discoverable under subdivision (b)(1) of this rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including the party's attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.

W. Va. R. Civ. P. 26(b)(3). To determine whether a document was prepared in anticipation of litigation, "the primary motivating purpose behind the creation of the document must have been to assist in pending or probable future litigation." State ex ret. United Hospital Center, Inc. v. Bedell, 199 W.Va. 316, 484 S.E.2d 199, 213 (1997). Consistent with the findings of the United States Court of Appeals for the Fourth Circuit in In re Grand Jury Proceedings, 33 F.3d 342, 348 (4th Cir.1994), the court in USF & G held that the work product protection is analyzed in two contexts: fact work product and opinion work product.

"Both are generally protected and can be discovered only in limited circumstances. Fact work product can be discovered upon a showing of both a substantial need and an inability to secure the substantial equivalent of the materials by alternate means without undue hardship . . . . Opinion work product is even more scrupulously protected as it represents the actual thoughts and impressions of the attorney, and the protection can be claimed by the client or the attorney."

USF & G, 460 S.E.2d at 691 (quoting In re Grand Jury Proceedings, 33 F.3d at 348).

In State ex rel. Allstate Ins. Co. v. Gaughan,1 203 W.Va. 358, 508 S.E.2d 75, 92 (W.Va. 1998), the West Virginia Supreme Court acknowledged the various approaches used in analyzing work product issues, and determined that a case-by-case approach is

"more sound in determining whether documents in an insurance claim file were prepared in anticipation of litigation. The trial court should consider the nature of the requested documents, the reason the documents were prepared, the relationship between the preparer of the document and the party seeking its protection from discovery, the relationship between the litigating parties, and any other facts relevant to the issue."

(quoting Askew v. Hardman, 918 P.2d 469, 473-74 (Utah 1996)).

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