Gerber Prods. Co. v. CECO Concrete Constr., LLC, CV–16–1096

• Decision Date: 01 November 2017
• Docket Number: No. CV–16–1096,CV–16–1096
• Citation: 533 S.W.3d 139
• Parties: GERBER PRODUCTS COMPANY, Appellant v. CECO CONCRETE CONSTRUCTION, LLC, and Alberici Constructors, Inc., Appellees
• Court: Arkansas Court of Appeals

533 S.W.3d 139

GERBER PRODUCTS COMPANY, Appellant

v.CECO CONCRETE CONSTRUCTION, LLC, and Alberici Constructors, Inc., Appellees

No. CV–16–1096

Court of Appeals of Arkansas, DIVISION I.

Opinion Delivered: November 1, 2017

Ledbetter, Cogbill, Arnold & Harrison, LLP, by: Victor L. Crowell, for appellant.

Willliams & Anderson, PLC, by: David M. Powell, Little Rock, Alec Gaines, and Heather G. Zachary, Little Rock, for appellee CECO Concrete Construction, LLC.

RAYMOND R. ABRAMSON, Judge

Appellant Gerber Products Company (Gerber) brings this interlocutory appeal from two discovery orders entered by the Sebastian County Circuit Court. Therein, the court denied Gerber's motion for a protective order and required Gerber to produce certain documents that it had withheld on the grounds of attorney-client and work-product privileges. The court also refused to require appellees CECO Concrete Construction, LLC (CECO), and Alberici Constructors, Inc. (Alberici), to return or destroy privileged documents that Gerber had inadvertently produced during the discovery process. We affirm the circuit court's rulings.

I. Jurisdiction

Because it is unusual for our appellate courts to entertain an interlocutory appeal, we take this opportunity to explain the basis for our jurisdiction.

In 2012, our supreme court adopted Rule 2(f) of the Arkansas Rules of Appellate Procedure—Civil. See In Re Ark. Rules of Civil Procedure, Appellate Procedure, 2012 Ark. 236. Rule 2(f) provides that a party may seek the supreme court's permission to file an interlocutory appeal from certain designated discovery orders involving the defense of privilege. The rule further provides that in determining whether or not the interlocutory appeal may proceed, the supreme court will be guided by six factors: the need to prevent irreparable injury; the likelihood that the petitioner's claim of privilege or protection will be sustained; the likelihood that an immediate appeal will delay a scheduled trial date; the diligence of the parties in seeking or resisting an order compelling the discovery in circuit court; the circuit court's written statement of reasons supporting or opposing immediate review; and any conflict with precedent or other controlling authority as to which there is substantial ground for difference of opinion. Ark. R. App. P.–Civ. 2(f)(1)(a)–(f) (2016). If the supreme court allows the appeal, the petitioner must file a timely notice of appeal and an appellate record. Ark. R. App. P.–Civ. 2(f)(3).

In the present case, Gerber filed a Rule 2(f) petition to appeal from two discovery orders involving a claim of privilege. The supreme court granted the petition and transferred Gerber's appeal—along with two other Rule 2(f) cases in which permission to appeal had been granted—to our court in August of this year. Our jurisdiction is therefore pursuant to Rule 1–2(d) of the Rules of the Supreme Court and Court of Appeals of the State of Arkansas (providing that the supreme court may transfer to the court of appeals any case appealed to the supreme court). Our research indicates that this will be the first case that addresses the merits of a Rule 2(f) appeal.

II. Background

This case stems from a construction project at the Gerber plant in Fort Smith. Appellee Alberici served as the general contractor and construction manager on the project, and appellee CECO was hired to perform concrete work.

In 2012, a subcontractor on the job, Vee-Jay Cement Contracting Company, Inc., sued Gerber, CECO, and Alberici in Sebastian County Circuit Court. Vee-Jay's claims were resolved and dismissed, but cross-claims remained among Gerber, CECO, and Alberici. It was in the context of these cross-claims that CECO and Alberici propounded requests for production of documents (RFPs) to Gerber in early 2013 during the discovery phase of the litigation.

The RFPs asked that Gerber produce contracts, reports, emails, and other correspondence and paperwork related to the construction project, along with the personnel files of two employees. Gerber objected to providing the personnel files on grounds of confidentiality and irrelevance but otherwise made no objection to the RFPs. In particular, Gerber made no objection that the requested materials were protected by attorney-client or work-product privileges. Instead, Gerber responded to the RFPs with the statement, "See documents provided on enclosed diskettes."

The diskettes that Gerber provided contained approximately 2,700 pages of documents. Upon reviewing the documents, CECO and Alberici (hereafter, collectively "CECO") determined that few, if any, emails from the year 2011 had been produced. CECO asked Gerber for the 2011 emails and, after several requests, was told that only two relevant emails existed from that period. CECO also noticed that some of the documents included on the diskettes contained privileged materials. CECO informed Gerber of that fact and returned the documents. Gerber stated that it would provide more material and would work on providing a privilege log.¹ As noted hereafter, the privilege log would not be provided for over two years.

In May 2013, CECO filed a motion to compel further production of documents by Gerber. The circuit court granted the motion in July 2013, ruling that Gerber had not objected to the RFPs but had "unilaterally" redefined the scope of the requests and produced only those documents in line with its "narrowed interpretation" of the requests. The court stated, "Having made no objection ... Gerber is bound to respond to the requests for production as written." After the entry of the court's order, Gerber sent CECO approximately 96,000 pages of additional documents—considerably more than the 2,700 pages it had initially considered responsive to the RFPs. CECO characterized the production as a "document dump" but reviewed the materials and still found them wanting. CECO detailed the perceived deficiencies in a June 2015 letter to Gerber and propounded a second set of RFPs.

Thereafter, Gerber provided several thousand more pages of documents and in July 2015 produced an eight-page privilege log. The log listed several items that Gerber claimed were subject to attorney-client and work-product privileges.

In October 2015, CECO filed a second motion to compel seeking a more complete response to its RFPs. The motion stated that Gerber had produced additional documents "fitfully and incompletely"; had "peppered" the production with irrelevant materials; and had not filed objections to either the first or second set of RFPs. The circuit court granted the motion to compel in January 2016 and imposed a $2,500 sanction on Gerber, stating that there was reason to believe that Gerber had either intentionally delayed production, withheld production, or produced large amounts of unresponsive material.

Soon thereafter, Gerber produced an additional 18,000 pages of documents and a second privilege log. The thirteen-page log contained over 200 entries listing items that Gerber considered to be protected by attorney-client or work-product privilege—some of which had not been identified in the previous privilege log.

Within weeks, CECO sent a letter to Gerber asserting that Gerber had waived its claim of privilege by waiting too long to assert it and that, in any event, Gerber had already turned over some of the materials listed in the privilege log without objection in an earlier "document dump." By this point, Gerber had acquired new counsel who responded that Gerber had not waived attorney-client privilege and asked that CECO return or destroy numerous inadvertently provided materials. CECO refused.

In July 2016, Gerber filed a "Motion For Protective Order Seeking Return of Inadvertently Produced Privileged Documents and Protection of Unproduced Privileged Documents Identified On Privilege Logs." Gerber asserted that it had not waived its right to withhold production of documents based on privilege, nor had it waived its right to seek the return or destruction of privileged documents that it had inadvertently produced. Following a hearing, the circuit court denied Gerber's motion. The court relied on Dunkinv. Citizens Bank of Jonesboro, 291 Ark. 588, 727 S.W.2d 138 (1987), for the proposition that failure to object to a discovery request in a timely manner waives all objections, including privilege. The court also stated that it was "particularly taken by the apparent complete lack of precautions in place" to prevent Gerber's inadvertent disclosures of privileged material. A second order was entered at Gerber's request, clarifying that the court's ruling governed both of the categories of documents at issue in this case: the materials Gerber had withheld on the ground of privilege and the documents that Gerber had inadvertently produced. Gerber appeals from those orders.

For its arguments on appeal, Gerber contends that 1) the circuit court erred in ruling that Gerber waived its right to assert attorney-client and work-product privileges as to the unproduced documents listed in the privilege logs and 2) the court erred in refusing to allow the retrieval or destruction of the privileged documents that Gerber inadvertently provided to CECO during discovery.

III. Standard of Review

A circuit court has broad discretion in matters pertaining to discovery, and the exercise of that discretion will not be reversed on appeal absent an abuse of discretion that is prejudicial to the appealing party. Hardesty v. Baptist Health, 2013 Ark. App. 731, 431 S.W.3d 327. To have abused its discretion, the circuit court must have not only made an error in its decision, but also must have acted improvidently, thoughtlessly, or without due consideration. Id. The abuse-of-discretion standard is also applied to a circuit court's ruling on a protective order. See Nat'l Enters., Inc. v. Lake Hamilton Resort, Inc., 355 Ark. 578, 142 S.W.3d 608 (2004).

IV. Documents Not Yet Produced

Gerber argues first that the circuit court erred in ruling that it...