Smith v. Scottsdale Ins. Co.

• Citation: 40 F.Supp.3d 704
• Decision Date: 16 May 2014
• Docket Number: Civil Action No. 5:12–cv–86.
• Court: U.S. District Court — Northern District of West Virginia
• Parties: Levert SMITH and Nelson D. Radford, Co-administrators of the Estate of Joseph Jeremaine Porter, Plaintiffs, v. SCOTTSDALE INSURANCE COMPANY, Defendant.

40 F.Supp.3d 704

Levert SMITH and Nelson D. Radford, Co-administrators of the Estate of Joseph Jeremaine Porter, Plaintiffs
v.
SCOTTSDALE INSURANCE COMPANY, Defendant.

Civil Action No. 5:12–cv–86.

United States District Court, N.D. West Virginia.

Signed May 16, 2014.

40 F.Supp.3d 711

Patrick S. Cassidy, Timothy F. Cogan, Cassidy, Myers, Cogan & Voegelin, Wheeling, WV, for Plaintiffs.

Barbara J. Keefer, Gary Alan Matthews, Jenkins Fenstermaker, PLLC, Huntington, WV, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO COMPEL

JAMES E. SEIBERT, United States Magistrate Judge.

This matter comes before the Court on Plaintiffs' Motion to Compel filed on January 24, 2014.¹ Defendant filed a response to the motion on February 6, 2014,² and Plaintiffs filed a reply on February 13, 2014.³ This Court held an evidentiary hearing and argument on Defendants' Motion on March 14, 2014. Present at the hearing were Barbara J. Keefer, Esq., counsel for Defendant, and Timothy F. Cogan, Esq., counsel for Plaintiffs. No testimony or evidence was presented. At the conclusion of the hearing, the Court granted Defendant's motion for leave to file a surreply and directed Plaintiffs to file any responsive memorandum to Defendant's surreply. The Court also directed Defendant to file the withheld documents with the Court for in camera review. Defendant filed its surreply on March 17, 2014,⁴ and Plaintiffs filed a response on March 21, 2014.⁵ On March 28, 2014, the undersigned received the withheld documents. The Court has reviewed the documents in consideration of the motion.

I. INTRODUCTION

A. Background

Plaintiffs are the co-administrators of the Estate of Joseph Porter, who was fatally shot on November 8, 2009, by Huntington police officer Ronnie Lusk. Defendant, Scottsdale Insurance Company, was the City of Huntington's insurer at the time of the shooting. This case arises from the settlement negotiations between Defendant and Plaintiffs in an underlying lawsuit against the City of Huntington and

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Lusk.⁶ During the course of the underlying litigation, the parties attempted mediation and, subsequently, settlement negotiations, but all were unsuccessful. Eventually, all claims in that case were resolved in the defendants' favor, either through summary judgment, judgment as a matter of law, or by jury verdict returned on May 25, 2012.

Two weeks prior to the trial date in the underlying case, Plaintiffs filed the instant suit in the Circuit Court of Ohio County, West Virginia, on May 10, 2012. In the complaint, Plaintiffs allege that Defendant violated the West Virginia Human Rights Act by discriminating against Plaintiffs during settlement negotiations based upon their race. Defendant removed the case to this Court on June 13, 2012. On August 31, 2012, Plaintiffs appealed the jury verdict in the underlying case to the United States Court of Appeals for the Fourth Circuit. On October 4, 2012, the Court stayed these proceedings pending the exhaustion of Plaintiffs' appeals in the underlying action.⁷ On November 18, 2013, the Court lifted the stay at Plaintiffs' request and ordered discovery to resume.⁸ The parties engaged in discovery and a dispute arose.

B. The Motion

Plaintiffs' Motion to Compel.

C. Decision

Plaintiffs' Motion is granted in part because some of the withheld documents are not privileged, nor are they immune from discovery under the work product doctrine. However, the majority of the documents are privileged communications or protected work product and need not be disclosed by Defendant.

II. PLAINTIFFS' MOTION TO COMPEL

A. Contentions of the Parties

Plaintiffs contend that they are entitled to all of the documents withheld by Defendant from the underlying claim file on the basis of attorney-client privilege and work-product protection. Plaintiffs do not address whether the withheld documents actually qualify for protection under either the attorney-client privilege or the work-product doctrine. Instead, Plaintiffs raise several grounds for finding the privilege wholly inapplicable. First, Plaintiffs contend that Defendant procedurally waived its discovery objections by not specifically addressing each withheld document in its response brief. Substantively, Plaintiffs contend that they are analogous to first-party bad-faith claimants, and that as such, no attorney-client privilege or work-product protection attaches to the underlying claim file. Plaintiffs also argue that even if they are considered more like third-party claimants, all documents generated prior to the filing of this claim, on May 10, 2012, are discoverable pursuant to the decision of the West Virginia Supreme Court of Appeals in State ex rel. Allstate Ins. Co. v. Gaughan, 203 W.Va. 358, 370 n. 17, 508 S.E.2d 75, 86–87 (1998). Next, Plaintiffs contend that even if the Court finds that the documents qualify for work-product protection or the attorney-client privilege, they have a substantial need for the documents due to the unique nature of a Michael action. Finally, Plaintiffs argue that the nature of their allegations results in an implied waiver of both the attorney-client privilege and the work-product protection.

40 F.Supp.3d 713

Defendant, on the other hand, contends that the documents were properly withheld under either the attorney-client privilege or the work-product doctrine.

B. Discussion

1. Waiver of Discovery Objections

In responding to Plaintiffs' request for documents, Defendant withheld 595 documents from the underlying defendants' claim file and provided a very detailed privilege log. Plaintiffs nonetheless argue that Defendant waived its objections because it did not address each and every document in its response to Plaintiffs' motion to compel. Plaintiffs are correct that failure to make specific objections to discovery requests may result in a waiver of those objections and that a party cannot carry this burden with general allegations or blanket assertions that the privilege should apply. Shaffer v. Northwestern Mut. Life Ins. Co., 2006 WL 2432110 at *2 (N.D.W.Va. Aug. 21, 2006). However, here, Defendant complied with the requirements of both the Federal and Local Rules of Civil Procedure by providing a detailed privilege log. This is not a case where a party made generic assertions of privilege such that waiver of those objections is appropriate, and the Court will address the merits of the parties' positions.

2. Broad Discovery in Discrimination Cases

Plaintiffs also argue that because this is a “straight discrimination action,” they are entitled to enjoy broad discovery. It is true, as Plaintiffs assert, that courts often allow broader discovery in discrimination cases than normally allowed in other civil litigation and that “ ‘the imposition of unnecessary limitations on discovery is especially to be avoided in Title VII cases,’ because of the nature of the proofs required to demonstrate unlawful discrimination may often be indirect or circumstantial.”Miles v. Boeing Co., 154 F.R.D. 117, 119 (E.D.Pa.1994) (quoting Robbins v. Camden City Bd. of Educ., 105 F.R.D. 49, 55 (D.N.J.1985) ). However, this principle concerns the scope of allowable discovery, i.e. what is considered relevant and therefore discoverable, and not, as Plaintiffs suggest, the applicability of the attorney-client privilege or work-product doctrine. Plaintiffs do not cite to any authority for the proposition that the standards for applying the attorney-client privilege or work-product doctrine are relaxed in a discrimination case. The case upon which they rely for this theory, State ex. rel. Westbrook Health Services, Inc. v. Hill, 209 W.Va. 668, 550 S.E.2d 646 (2001), did not hold that the attorney-client privilege was inapplicable simply because the case involved a discrimination claim; rather, the Westbrook Court found that the defendant had not established that the elements of the attorney-client privilege were met. Accordingly, the Court will apply the standard tests for determining whether the withheld documents in this case are protected, and therefore non-discoverable, and declines to establish a novel exception to those rules because this is a discrimination case.

3. First–Party vs. Third–Party Insurance Claims

Plaintiffs next urge the Court to apply the privilege rules applicable to first-party, rather than third-party, bad faith actions to this Michael action. “For definitional purposes, a first-party bad faith action is one wherein the insured sues his/her own insurer for failing to use good faith in settling a claim brought against the insured or a claim filed by the insured. A third-party bad faith action is one that is brought against an insurer by a plaintiff

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