State ex rel. Brison v. Kaufman

• Decision Date: 13 June 2003
• Docket Number: No. 31115., No. 31114
• Citation: 584 S.E.2d 480,213 W.Va. 624
• Court: West Virginia Supreme Court
• Parties: STATE of West Virginia ex rel. M. Andrew BRISON and Rebecca Stepto, Petitioners v. The Honorable Tod J. KAUFMAN, Judge of the Circuit Court of Kanawha County, and Deborah K. Falls, Administratrix of the Estate of Cledith Lee Falls, Jr., Deceased, Respondents. and State of West Virginia ex rel. Nationwide Mutual Insurance Company and Ash Cowder, Jr., Petitioners v. The Honorable Tod J. Kaufman, Judge of the Circuit Court of Kanawha County, and Deborah K. Falls, Administratrix of the Estate of Cledith Lee Falls, Jr., Deceased, Respondents.

584 S.E.2d 480

213 W.Va. 624

STATE of West Virginia ex rel. M. Andrew BRISON and Rebecca Stepto, Petitioners v. The Honorable Tod J. KAUFMAN, Judge of the Circuit Court of Kanawha County, and Deborah K. Falls, Administratrix of the Estate of Cledith Lee Falls, Jr., Deceased, Respondents. and State of West Virginia ex rel. Nationwide Mutual Insurance Company and Ash Cowder, Jr., Petitioners v. The Honorable Tod J. Kaufman, Judge of the Circuit Court of Kanawha County, and Deborah K. Falls, Administratrix of the Estate of Cledith Lee Falls, Jr., Deceased, Respondents.

Nos. 31114, 31115.

Supreme Court of Appeals of West Virginia.

Submitted March 26, 2003.

Decided June 13, 2003.

Concurring Opinion of Justice Davis June 24, 2003.

Daniel R. Schuda, Schuda & Associates, Charleston, for M. Andrew Brison and Rebecca Stepto, Petitioners.

Barbara J. Keefer, Maria Marino Potter, MacCorkle, Lavender, Casey and Sweeney, Charleston, for Nationwide Mutual Insurance Company and Ash Cowder, Jr., Petitioners. John Einreinhofer, Robin L. Godfrey, Charleston, for Deborah K. Falls, Respondent.

Paul T. Farrell, Jr., Wilson, Frame, Benninger & Metheney, Morgantown, Michael J. Romano, Romano Law Offices, Clarksburg, for West Virginia Trial Lawyers Association, Amicus Curiae.

Marc E. Williams, J. David Bolen, Huddleston, Bolen, Beatty, Porter & Copen, Huntington, for Defense Research Institute, Amicus Curiae.

James S. Crockett, Jr., Mary M. August, Spilman, Thomas & Battle, for West Virginia Insurance Federation, Amicus Curiae.

Henry W. Jernigan, Jr., Dinsmore & Shohl, Charleston, Lucien G. Lewin, Bridget M. Cohee, Martinsburg, for Defense Trial Counsel of West Virginia, Amicus Curiae.

Robert D. Aitcheson, Charles Town, David P. Greenberg, Martinsburg, for Ok Cha and Robert Collins, Amicus Curiae. McGRAW, Justice:

In these original proceedings, an insurance company, its former claims representative and two of its former attorneys seek to prohibit the enforcement of a January 7, 2003, pre-trial discovery order entered in a "bad faith" and unfair trade practices action filed in the Circuit Court of Kanawha County, West Virginia. Specifically, Nationwide Mutual Insurance Company, claims representative Ash Cowder, Jr., and attorneys M. Andrew Brison and Rebecca Stepto, hereinafter "petitioners," ask this Court to prohibit the compelled production and disclosure of the petitioners' litigation file and redacted portions of the petitioners' claim file, both of which were created and maintained during an earlier wrongful death action involving a claim for underinsured motorist coverage.

The petitioners contend, as they alleged in a motion for a protective order denied below, that the litigation file and the redacted portions of the claim file are subject to the attorney-client privilege and the work product doctrine. Thus, the petitioners argue that the Circuit Court exceeded its jurisdiction in ordering production and disclosure. Respondent, Deborah K. Falls, however, the plaintiff in the underlying bad faith action and also the plaintiff in the earlier wrongful death action, contends that the ruling of the Circuit Court was within its discretion.

This Court has before it the petitions for writs of prohibition, the responses thereto, all exhibits and the arguments of counsel. In addition, this Court has received amicus curiae briefs from the West Virginia Trial Lawyers Association, the Defense Research Institute, the West Virginia Insurance Federation, the Defense Trial Counsel of West Virginia and Ok Cha and Robert Collins.

For the reasons expressed below, this Court holds that the Circuit Court exceeded its jurisdiction in ordering production and disclosure of the litigation file and the redacted portions of the claim file by failing to apply the correct legal standards to the petitioners' assertions of attorney-client privilege and work product doctrine. Accordingly, production and disclosure of the documents in question are hereby prohibited pending a renewal below of the respondent's motion for production and a renewal of the petitioners' motion for a protective order, following which the Circuit Court shall apply the principles expressed herein.

I. FACTUAL BACKGROUND AND THE WRONGFUL DEATH ACTION

On August 7, 1999, Cledith Lee Falls, Jr., the son of respondent Deborah K. Falls, was killed in an accident on State Route 39 in Nicholas County while riding as a passenger in an automobile driven by April D. Knight. At least two other vehicles were involved in the accident. Soon after, in September 1999, respondent Falls, as Administratrix of the Estate of Cledith Lee Falls, Jr., filed a wrongful death action in the Circuit Court of Kanawha County against April D. Knight and others.

Because the accident involved several motor vehicles, the insurance proceeds of various policies were potentially available to respondent Falls with regard to her son's death. Respondent Falls, however, asserted a claim for underinsured motorist coverage against a policy issued by petitioner Nationwide Mutual Insurance Company to Cledith Lee Falls' stepmother, Tonya Falls. According to the respondent, the claim against the stepmother's policy was valid because Cledith Lee Falls, Jr., had been residing in his stepmother's household at the time of the accident. Although initially disputing the decedent's residence, Nationwide, by letter dated May 31, 2000, from claims representative Cowder, stated that coverage could be provided for the respondent's underinsurance claim. In the meantime, having been formally served with notice of the wrongful death action, Nationwide assigned the matter to attorney M. Andrew Brison, who filed a response in the Circuit Court of Kanawha County reserving Nationwide's right to file various defenses. W.Va.Code, 33-6-31(d) (1998). Mr. Brison was an attorney in the law firm Dwane L. Tinsley & Associates, Nationwide Trial Division, Charleston, West Virginia.

By letter dated October 26, 2000, petitioner Brison stated to counsel for respondent Falls that all available insurance proceeds from other applicable policies would have to be paid before any payment of underinsured motorist proceeds would be made by Nationwide. Similarly, in a subsequent letter to respondent Falls' counsel, dated January 16, 2001, petitioner Cowder stated: "Once you have provided us with the information confirming that all applicable limits of coverage have been exhausted, we will then be able to give consideration to payment under our underinsured motorist claim." Thereafter, petitioner Stepto, an attorney replacing Mr. Brison at Dwane L. Tinsley & Associates, filed a Notice of Court Scheduling Conflict and argued that the trial of the wrongful death action, set for April 30, 2001, be continued. The Circuit Court refused to continue the trial. Thereafter, on April 26, 2001, Nationwide paid the respondent, Deborah K. Falls, $50,000, the policy limits concerning the underinsurance claim. In return, respondent Falls signed a release of all claims against Nationwide with regard to the accident of August 7, 1999, and with regard to all negotiations in relation thereto.

II. THE UNDERLYING BAD FAITH ACTION

In December 2001, respondent Falls filed a "bad faith" and unfair trade practices action in the Circuit Court of Kanawha County against Nationwide, claims representative Ash Cowder, Jr., and others. The respondent alleged that Nationwide's delay in paying her claim for underinsurance benefits was unreasonable, thereby constituting bad faith and a violation of the West Virginia Unfair Trade Practices Act, W.Va.Code, 33-11-1 (1974), et seq. Nationwide and Cowder, on the other hand, filed an answer and motion to dismiss in which they denied the allegations of the complaint and asserted that the release signed by respondent Falls barred the bad faith and unfair trade practices action. The answer and motion to dismiss were filed upon behalf of Nationwide and Cowder by a Charleston law firm completely separate from Dwane L. Tinsley & Associates and attorneys Brison and Stepto.

In January 2002, respondent Falls filed a discovery request in the bad faith and unfair trade practices action for production of Nationwide's claim file, which concerned the respondent's claim for underinsured motorist benefits. In addition, respondent Falls requested production of the litigation file created and maintained by petitioners Brison and Stepto with regard to the wrongful death action. Specifically, the litigation file was generated by Brison and Stepto, as attorneys employed by Dwane L. Tinsley & Associates, Nationwide Trial Division, following service upon Nationwide of notice of the wrongful death action. In response to the discovery request, the petitioners filed a motion for a protective order raising the attorney-client privilege and the work product doctrine. According to the petitioners, both files evidenced privileged attorney-client communications between Nationwide and its counsel during the wrongful death action as to the respondent's claim for underinsured motorist benefits. Consequently, an abridged claim file was disclosed to the respondent (with an attached "privilege log"), and the issues of attorney-client privilege and the work product doctrine, as to both the litigation file and the redacted portions of the claim file, remained for the Circuit Court to decide.

Following a hearing and an in camera review of the documents in question, the Circuit Court entered the order of January 7, 2003, denying the petitioners' motion for a protective order and directing the petitioners to produce and disclose, in their entirety, the litigation file and the redacted portions of the claim file. In so ruling, the Circuit Court stated that the files were not subject to the protections of either the attorney-client privilege or the work product doctrine. The Circuit Court focused primarily, however, upon the attorney-client privilege and concluded as follows:

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