Kay Laboratories, Inc. v. District Court In and For Pueblo County, Tenth Judicial Dist., 82SA215

• Decision Date: 01 November 1982
• Docket Number: No. 82SA215,82SA215
• Citation: 653 P.2d 721
• Parties: KAY LABORATORIES, INC., Petitioner, v. The DISTRICT COURT In and For PUEBLO COUNTY, Colorado In the TENTH JUDICIAL DISTRICT, and the Honorable Matt J. Kikel, One of the Judges thereof, Respondents.
• Court: Colorado Supreme Court

Page 721

653 P.2d 721

KAY LABORATORIES, INC., Petitioner, v. The DISTRICT COURT In and For PUEBLO COUNTY, Colorado In the TENTH JUDICIAL DISTRICT, and the Honorable Matt J Kikel, One of the Judges thereof, Respondents.

No. 82SA215.

Supreme Court of Colorado En Banc.

Nov. 1, 1982.

Glenn S. Pressman, The Law Firm of Justin R. Melat, Colorado Springs, for petitioner.

Lee Wills, Kane, Donley & Wills, Colorado Springs, for respondents.

DUBOFSKY, Justice.

In this original proceeding under C.A.R. 21, we directed the respondent Pueblo County district court to show cause why petitioner Kay Laboratories' motion to compel discovery of a hospital incident report for use in defending a products liability and negligence action should not be granted. We hold that the court's denial of the motion constituted an abuse of discretion and now make the rule absolute.

In the underlying action, June McMichael brought suit in Pueblo County district court against Kay Laboratories and St. Mary-Corwin Hospital of Pueblo seeking damages for injuries she sustained while a patient at the hospital. McMichael alleged that a chemical ice pack manufactured by petitioner Kay Laboratories and administered by the hospital leaked, causing chemical burns on her body. Following standard procedure, a nurse at the hospital prepared a report about the incident.

The petitioner served a request for production of documents on the co-defendant hospital, seeking, inter alia, "incident reports which relate to this law suit." The hospital objected to the request for the incident report on the ground that it was "not discoverable." The petitioner moved to compel discovery. After a hearing, the district court denied the motion, ruling that the incident report was prepared for the purpose of defending against a law suit, was obtained confidentially and was therefore privileged. The petitioner sought relief in the nature of mandamus, contending that the district court's ruling constituted an abuse of discretion and substantially prejudiced the preparation of its case. We agree.

In Hawkins v. District Court, 638 P.2d 1372 (Colo.1982), we discussed the standards for evaluating a party's assertion that a document is privileged and not subject to discovery under C.R.C.P. 26 because it was prepared in anticipation of litigation (the work product doctrine). Hawkins, which arose in the context of an insurance company's refusal to produce copies of witness statements and investigative reports to its insured, held that "the insurance company has the burden of demonstrating that the document was prepared or obtained in order to defend the specific claim which already had arisen and, when the documents were prepared or obtained, there was a substantial probability of imminent litigation over the claim, or a lawsuit had already been filed." Id., 638 P.2d at 1379. Without such a showing, there is a presumption that the documents were prepared in the ordinary course of the insurance company's business. As we noted, to hold otherwise would insulate almost all internal documents of insurance companies from discovery, since the nature of the business is the investigation of potential claims against other parties or the insurance company itself.

Here the hospital did not meet the burden of showing that the incident report was prepared to defend McMichael's claim. The evidence presented at the hearing on the petitioner's motion to compel showed that the report, like incident reports generally, was prepared in accordance with hospital routine. ¹ The hospital's insurance adjustor had supplied it with a quantity of pre-printed incident report forms to complete whenever an incident occurred which could possibly result in litigation against the hospital. ² The form is filled out in triplicate by a nurse on duty when an incident occurs. The hospital admits that the nurse completes the report within six to eight hours of the incident, leaving virtually no possibility that the hospital takes the report "to defend a specific claim ... already ... arisen" or that "imminent litigation" of the claim is probable. The hospital concedes that it had no notice of McMichael's claim when the incident report sought was completed. Further, although copies of the completed report forms are forwarded to the hospital's insurance adjustor for possible use in defending lawsuits, not all incidents reported result in litigation. The insurance adjustor also uses the forms to perform statistical...