Opinion
CIVIL ACTION No: 00-2301-DJW.
May 21, 2001
MEMORANDUM AND ORDER
Pending before the Court is Plaintiff's Motion to Compel (doc. 24) and Defendant's Motion for Protective Order (doc. 29). For the reasons set forth below, the Plaintiff's Motion is granted in part and denied in part and Defendant's Motion is granted in part and denied in part.
Factual Background
Carol Seek ("Seek") is a registered nurse and employee of Wesley Medical Center in Wichita, Kansas. Both Plaintiff American Casualty Company of Reading, Pennsylvania ("Plaintiff" or "CNA") and Defendant Healthcare Indemnity, Inc. ("Defendant" or "HCII") are insurance companies ("the insurance companies"). At all relevant times, Seek was insured for acts of professional negligence by CNA and Wesley Medical Center was insured for acts of professional negligence by HCII.
Plaintiff American Casualty Company of Reading, Pennsylvania is a CNA Insurance Company. See Plaintiff's Complaint at ¶ 3 (doc. 1).
In 1999, Shirley Keck ("Keck") brought a medical malpractice action against Wesley Medical Center in the District Court of Sedgwick County, Kansas. See Keck v. Wesley Medical Center, Case No. 99-C-2307 ("the Lawsuit"). In the Lawsuit, Keck sought damages for injuries she suffered as the result of allegedly negligent care and treatment while she was a patient at Wesley Medical Center. While the lawsuit was pending, the insurance companies communicated back and forth regarding CNA's prospective contribution to the cost of defending the Lawsuit and/or indemnification of any settlement negotiated in the Lawsuit. Defendant asserts that during the course of these communications Plaintiff committed to pay, on behalf of Nurse Seek, twenty-five percent (25%) of the settlement negotiated in the Lawsuit and twenty-five percent (25%) of the cost of defense. Plaintiff denies Defendant's assertion and maintains that there was no agreement reached between the parties regarding the issue of indemnification.
Defendant ultimately settled the underlying Lawsuit and communicated to Plaintiff its expectation that CNA would contribute not less than 25% of the settlement amount. Plaintiff subsequently filed this declaratory judgment action requesting the Court determine the following issues:
(1) Whether the communications between the insurance companies created a contract for indemnification;
(2) Whether CNA owes HCII equitable contribution and/or indemnity;
(3) Whether, in the event CNA is liable for equitable indemnity and/or contribution to HCII under its policy of insurance issued to Nurse Seek, the settlement was reasonable;
(4) Whether, in the event CNA is liable for equitable indemnity and/or contribution to HCII under its policy of insurance issued to Nurse Seek, what portion of that settlement is fairly attributable to the alleged negligence of Nurse Seek versus that of other personnel for whom Wesley Medical Center was vicariously liable;
(5) Whether Plaintiff is entitled to recover its costs.
Plaintiff's Complaint (doc. 1). In its Answer to Plaintiff's petition for declaratory judgment, Defendant asserts counterclaims against Plaintiff for (1) breach of contract; and (2) equitable indemnity and equitable contribution for payment of twenty-five percent (25%) of the settlement amount paid and the defense costs in the underlying cause of action.
At issue in both Plaintiff's Motion to Compel and Defendant's Motion for Protective Order is production by HCII of its claim file pertaining to Shirley Keck's claim against Wesley Medical Center. Defendant objects to producing the file in both instances on the grounds that all of the documents contained within the claims file are protected from disclosure by the work product doctrine. In an Order dated February 23, 2001 (doc. 31), the Court ordered Defendant to produce a privilege log with regard to the documents within the claims file at issue and to produce such documents for "in camera" inspection. Plaintiff did so on March 1, 2001 and the Court is now ready to rule.
Plaintiff's Motion to Compel was filed due to work product objections lodged by Defendant in response to Request 4 of Plaintiff's Request for Production of Documents, which sought production of the claims file at issue. Defendant's Motion for Protective Order was filed on the basis of work product protection in response to a document request for the claims file appended to various deposition notices duces tecum issued to Defendant by Plaintiff.
Discussion
The only privilege asserted to protect the HCII claims file at issue from disclosure is the work product doctrine. The work product doctrine, which is embodied in Rule 26(b)(3) of the Federal Rules of Civil Procedure, protects from discovery documents, things and mental impressions of a party or his representative, particularly his attorney, developed for or in anticipation of litigation or trial. The purpose of the doctrine is to permit attorneys to prepare for litigation with a "certain degree of privacy," and without undue interference or fear of intrusion or exploitation of one's work by an adversary. Hickman v. Taylor, 329 U.S. 495, 510-11 (1947).
Defendant's refusal to produce the claims file at issue is based solely on work product protection. Defendant did not assert protection on the basis of the attorney-client privilege in its responsive pleading to Plaintiff's Request for Production of Documents, in its briefing of Plaintiff's Motion to Compel or the briefing of its own Motion for Protective Order. Therefore, the Court will not address the issue of attorney-client privilege.
"Unlike the attorney client privilege, the work product privilege is governed, even in diversity cases, by a uniform federal standard embodied in Fed.R.Civ.P. 26(b)(3)." Frontier Refining, Inc. v. Gorman-Rupp Co., Inc., 136 F.3d 695, 702 (10th Cir. 1998) (citation omitted).
As the asserting party, Defendant has the burden of establishing work product protection. See McCoo v. Denny's, Inc., 192 F.R.D. 675, 683 (D.Kan. 2000); Boyer v. Board of County Comm'rs, 162 F.R.D. 687, 688 (D. Kan 1995). To carry that burden, Defendants must make a "clear showing" that the asserted objection applies. See McCoo, 192 F.R.D. at 683; Ali v. Douglas Cable Communications, Ltd. Partnership, 890 F. Supp. 993, 944 (D.Kan. 1995). A "blanket claim" as to the applicability of the work product doctrine does not satisfy the burden of proof. McCoo, 192 F.R.D. at 680. It is well settled that the party seeking to invoke work product immunity has the burden to establish all elements of the immunity and that this burden can be met only by an evidentiary showing based on competent evidence. Id. "That burden cannot be "discharged by mere conclusory or ipse dixit assertions." Id. (quotations and citations omitted). A party's failure to meet this burden when the trial court is asked to rule upon the existence of the work product immunity is not excused because the document is later shown to be one that would have been privileged if a timely showing had been made. Peat, Marwick, Mitchell Co. v. West, 748 F.2d 540, 542 (10th Cir. 1984); McCoo, 192 F.R.D. at 680.
To establish work product protection, Defendant must show that "(1) the materials sought to be protected are documents or tangible things; (2) they were prepared in anticipation of litigation or for trial; and (3) they were prepared by or for a party or a representative of that party." Johnson v. Gmeinder, 191 F.R.D. 638, 643 (D.Kan. 2000) (citations omitted). Defendant appears to have established element one — the items sought to be protected are documents within the claims file. Thus, the issue presented is whether Defendant has established the second and third elements. Before deciding this issue for each of individual documents in the claims file, however, the Court will first determine whether Defendant's compilation of the claims file itself warrants work product protection.
A. The Claims File as a Whole
Defendant seems to suggest in its brief that regardless of whether each of the individual documents within the claims file warrants work product protection, the selecting and grouping of the documents within the claims file in and of itself accords them protection because the claims file was assembled in anticipation of litigation. This suggestion, however, ignores prior decisions of this Court. "The selecting and grouping of information does not transform discoverable documents into work product." Audiotext Communications Network, Inc. v. U.S. Telecom, Inc., 164 F.R.D. 250, 252 (D.Kan. 1996) (citing Bohannon v. Honda Motor Co. Ltd., 127 F.R.D. 536, 539-40 (D.Kan. 1989) (where court held "[c]ollecting and organizing discoverable documents in a notebook does not make the notebook protected work product."); but, see, Aguinaga v. John Morrell Co., 112 F.R.D. 671, 683 (D.Kan. 1986) (holding selection and compilation of documents used to refresh witness's memory were protected by work product doctrine pursuant to Fed.R.Evid. 612) (emphasis added).
In the context of viewing the claims file as a whole, Plaintiff asserts Defendant waived work product protection for every document within the claims file based on Defendant's failure to timely provide a privilege log for the documents within the file. It is true that Fed.R.Civ.P. 26(b)(5) requires the objecting party to expressly make the claim of privilege and "describe the nature of the documents, communications, or things not produced . . . in a manner that, without revealing information itself privileged or protected, will enable [the] other part[y] to assess the applicability of the privilege or protection." It is also true that failure to follow these Rules may result in waiver of work-product protection. 8 Charles Alan Wright, Federal Practice and Procedure § 2016.1, at 228-29 (2d ed. 1994). Although this result is not mandated by the Rules, the Advisory Committee contemplated the sanction. "To withhold materials without [providing notice as described in Rule 26(b)(5)] is contrary to the rule, subjects the party to sanctions under Rule 37(b)(2), and may be viewed as a waiver of the privilege . . . ." Fed.R.Civ.P. 26(b)(5) advisory committee's note (1993).
Acknowledging the harshness of a waiver sanction, however, courts have reserved the sanction for those cases where the offending party committed unjustified delay in responding to discovery. Minor procedural violations, good faith attempts at compliance, and other such mitigating circumstances militate against finding waiver. See First Sav. Bank, F.S.B. v. First Bank Sys., Inc., 902 F. Supp. 1356, 1361-63 (D.Kan. 1995) (collecting cases), rev'd on other grounds, 101 F.3d 645 (10th Cir. 1996). Based on the circumstances here, the Court finds Defendant has not waived work product protection for the entire file based on the untimely submission of its privilege log.
B. Individual Documents within the Claims File
The Court now will address the question of whether Defendant has established the second and third elements of work product protection for each of the individual documents within the claims file: (1) were each of the documents within the claims file prepared by or for a party or a representative of that party; and (2) were each of the documents within the claims file prepared in anticipation of litigation?
• Work Product Protection
a. Preparation by or for a Party or a Representative of that Party
Upon in camera review of each of the documents within the claims file, it appears that many of the documents included within such file were not prepared (a) by Defendant, (b) for Defendant or (c) for a representative of Defendant. For example, there are documents within the claims file drafted by Bradley Prochaska, Keck's attorney in the underlying suit and by Lee Schmidt, CNA claims representative. The claims file also contains the following documents, none of which appear to have been drafted by Defendant, for Defendant or for a representative of Defendant:
(1) copies of medical records;
(2) excerpts from deposition transcripts in the underlying suit;
(3) a multitude of documents (including e-mails, notes, memoranda, letters etc.) drafted by Wesley employees regarding understaffing;
(4) correspondence to Brad Prochaska from Wesley employees, Keck family members, health care professionals/experts and others regarding the hospital's care of Mrs. Keck;
(5) numerous performance reviews of Wesley employee Alison Goodman (written by Goodman herself as well as by other Wesley employees);
(6) hospital documentation relevant to the underlying lawsuit;
(7) a copy of a 17-page newspaper article published in the Chicago Tribune;
(8) numerous copies of the Qualified Assignment and Release document from the underlying lawsuit;
(9) numerous copies of pleadings, orders, journal entries as well as the Settlement Agreement and Release from the underlying lawsuit;
(10) a copy of the Summons, Complaint and Notice of Service of Process from this lawsuit;
(11) a copy of the Amended Petition from this lawsuit;
(12) copy of pleadings filed and/or drafted by Plaintiff and its attorney in this lawsuit; and
(13) a "Keck Care timeline" (no author, no date).
Although some of these documents contain handwritten notes in the margins, the privilege log submitted by Defendant does not designate who drafted the notes; thus, the Court has no basis to find such handwritten notes were drafted by Defendant, for Defendant or for a representative of Defendant. Even if Defendant had established that the handwritten notes in the margins were drafted by Defendant, for Defendant or for a representative of Defendant, however, the documents themselves would still be subject to disclosure after redaction of any privileged material. It would represent a retreat from the philosophy underlying the Federal Rules of Civil Procedure if a party could shield documents and/or facts from disclosure by combining them or interlacing them with work product. The Advisory Committee Notes to the federal rule establishing work product protection also recognize this need: "In enforcing [the Rule 26(b)(3) protection of work product material], the courts will sometimes find it necessary to order disclosure of a document but with portions deleted."
In addition, many documents within the claims file that were not drafted by Defendant, for Defendant or for a representative of Defendant appear to have been attached to, or transmitted with, documents that were drafted by Defendant, for Defendant or for a representative of Defendant. Again, a party cannot shield documents and/or facts from disclosure by combining them or interlacing them with work product; thus, the non-work product documents must be disclosed. See, e.g., U.S. v. Rockwell Int'l Corp., 144 F.R.D. 396, 399 (D.Colo. 1992) (when attorney merely acting as conduit for information, privilege does not apply).
Given Defendant has failed to establish that many of the documents within the claims file were prepared by Defendant, for Defendant or for a representative of Defendant, such documents fail to meet the second element necessary to establish work product protection; thus, Defendant will be ordered to produce them.
b. Prepared in Anticipation of Litigation
Defendant asserts the claims file was prepared in anticipation of litigation of both the underlying Keck lawsuit and/or the instant lawsuit. Plaintiff argues the claims file was not prepared in anticipation of litigation at all but instead was prepared by a claims adjuster in the ordinary course of Defendant's insurance company business.
As a preliminary matter, both parties' arguments erroneously focus on whether the claims file as a whole was prepared in anticipation of litigation. As noted in section A, supra, "[t]he selecting and grouping of information does not transform discoverable documents into work product." Audiotext Communications Network, Inc. v. U.S. Telecom, Inc., 164 F.R.D. at 252. Accordingly, the Court must determine whether those documents prepared by Defendant, for Defendant or for a representative of Defendant were prepared in anticipation of litigation.
The issue of whether documents were prepared in anticipation was extensively analyzed by Magistrate Judge Rushfelt in Marten v. Yellow Freight System, Inc., No. 96-2013-GTV, 1998 WL 13244 (D.Kan. Jan. 6, 1998). The Court stated:
The work product standard has two components. The first is what may be called the "causation" requirement. This is the basic requirement of the Rule that the document in question be produced because of the anticipation of litigation, i.e., to prepare for litigation or for trial. The second component is what may be termed a "reasonableness" limit on a party's anticipation of litigation. Because litigation can, in a sense, be foreseen from the time of occurrence of almost any incident, courts have interpreted the Rule to require a higher level of anticipation in order to give a reasonable scope to the immunity.
The court looks to the primary motivating purpose behind the creation of the document to determine whether it constitutes work product. Materials assembled in the ordinary course of business or for other non-litigation purposes are not protected by the work product doctrine. The inchoate possibility, or even the likely chance of litigation, does not give rise to work product. To justify work product protection, the threat of litigation must be "real and imminent." To determine the applicability of the work product doctrine, the court generally needs more than mere assertions by the party resisting discovery that documents or other tangible items were created in anticipation of litigation.Id., at *10 (citations and quotations omitted).
The underlying lawsuit in this matter was filed on July 29, 1999 and served upon Defendant on August 2, 1999. The claims adjuster assigned to the underlying plaintiff's claim retained counsel to represent Defendant in the underlying litigation on August 5, 1999. Upon in camera review of each of the documents within the claims file that were prepared by Defendant, for Defendant or for a representative of Defendant, the Court finds that each of these documents appear to have been drafted "because of the anticipation of [either this litigation or the underlying] litigation." See id. Although the Court certainly could envision circumstances under which an insurance claims agent and/or the attorney for such insurance company would draft documents in the ordinary course of business and not a threat of litigation that is "real and imminent," the timing of when the documents were drafted as well as the actual content of the documents reviewed in camera by the Court establish that they were prepared in anticipation of litigation as contemplated by Fed.R.Civ.P. 26(b)(3).
The Tenth Circuit has held that "[w]ork product remains protected even after the termination of the litigation for which it was prepared" in those instances when the subsequent litigation is "closely related" to the underlying suit. Frontier Refining, Inc. v. Gorman-Rupp Co., Inc., 136 F.3d 695, 703 (10th Cir. 1998); see, also, Simmons Foods, Inc. v. Willis, 196 F.R.D. 610 (D. Kan 2000). Because the facts here demonstrate that the underlying litigation is "closely related" to the litigation currently pending, work product from the underlying litigation remains protected in this lawsuit.
• Waiver of Work Product Protection
"Intentional disclosure to third parties of privileged information is a waiver of any privilege." Burton v. R.J. Reynolds Tobacco Co., 167 F.R.D. 134, 140 (D.Kan. 1996). See also In re Steinhardt Partners, L.P., 9 F.3d 230 (2d Cir. 1993) (work product protection waived by disclosure to adversaries); Falise v. American Tobacco Co., 193 F.R.D. 73, 81 (E.D.N.Y. 2000) (work product protection waived by disclosure to third parties where "disclosure substantially increases the opportunity for potential adversaries to obtain the information."); McCoo v. Denny's, Inc., 192 F.R.D. 675, 683 (D.Kan. 2000) (intentional disclosure to third parties of privileged information is a waiver of any privilege). Upon in camera review of the documents within the claims file prepared by Defendant, for Defendant or for a representative of Defendant, the Court finds many documents voluntarily disclosed by Defendant in a manner likely to be revealed to Defendant's adversary. Based on such voluntary disclosure, the Court finds Defendant waived its work product protection for these documents.
For example, the claims file contains
• numerous pleadings drafted by Defendant (or Defendant's counsel) that appear to have been transmitted and filed with the court;
• documents drafted by Defendant (or Defendant's counsel) that were transmitted to Bradley Prochaska (opposing counsel in the underlying litigation); and
• documents drafted by Defendant (or Defendant's counsel) that were transmitted to Lee Schmidt (claims representative for Plaintiff).
These are just three examples of documents in the claims file that were voluntarily disclosed by Defendant to its adversary and/or third parties.
• Application of the Substantial Need/Undue Burden Test
Notwithstanding the conclusions set forth in the preceding sections, the Court finds that there are documents within the claims file created by Defendant, for Defendant or for a representative of Defendant for which the work product protection was not waived by voluntary disclosure. The question thus presented is whether the work product doctrine prohibits Plaintiff from acquiring these particular documents.
The appropriate starting point is obviously Fed.R.Civ.P. 26(b)(3), which provides:
[A] party may obtain discovery of documents and tangible things . . . prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative . . . 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.
"Work product remains protected even after the termination of the litigation for which it was prepared" and such protection extends to "closely related" subsequent litigation regarding the underlying suit. Frontier Refining, Inc. v. Gorman-Rupp Co., Inc., 136 F.3d at 703.
Based on this rule, courts generally have recognized a difference between discovery of documents prepared in anticipation of litigation setting forth factual information and discovery of documents prepared in anticipation of litigation setting forth the mental impressions, conclusions, opinions, or legal theories of an attorney. See Frontier Refining, Inc. v. Gorman-Rupp Co., Inc., 136 F.3d 695, 704 n. 12 (10th Cir. 1998). Documents containing factual information prepared in anticipation of litigation generally are referred to by the courts as "fact work product" and documents containing the mental impressions of an attorney generally are referred to as "opinion work product." Id.
A. Fact Work Product
The substantial need/undue burden test referred to in the first part of Rule 26(b)(3) applies only to fact work product. Id. Therefore, Rule 26(b)(3) prevents discovery of fact work product unless (1) the discovering party demonstrates substantial need for the material and (2) the discovering party is unable to obtain the substantial equivalent of the material by other means without undue hardship. Id.
Plaintiff asserts it has a substantial need for the materials because they "may contain information that can adequately support Plaintiff's affirmative defense against Defendant." Plaintiff's Suggestions in Support of Motion to Compel at pp. 7-8 (doc. 25). Plaintiff further asserts that it "is unable to obtain the substantial equivalent of the claims file by any other means, since it is unlikely that the witnesses will have exact and accurate recollections of conversations nearly a year ago." Id.
Based on the facts presented and the applicable law, the Court finds Plaintiff has not adequately shown at this stage of discovery that the information they seek from the documents at issue is unavailable from other sources. The relevant discoverable information appears equally available from depositions of witnesses and responses to written interrogatories. There is no substantial need where the information can be obtained by deposing witnesses, unless the witnesses are no longer available or are unable to recollect the information sought. Given the circumstances presented here, the Court is not persuaded that Plaintiff has a substantial need for documents representing fact work product in the claims file or that Plaintiff is unable to obtain the substantial equivalent of the material by other means. Accordingly, the Court will not order Defendant to produce the fact work product documents listed in its privilege log.
B. Opinion Work Product
Unlike protection of fact work product, there is no universally accepted standard regarding the level of protection accorded to opinion work product. "Some courts have held that opinion work product is absolutely protected; others have concluded it may be discovered under compelling circumstances." Frontier Refining, Inc. v. Gorman-Rupp Co., Inc., 136 F.3d at 704 n. 12. In Holmgren v. State Farm Mut. Auto. Ins. Co., 976 F.2d 573, 577 (9th Cir. 1992), for example, the court held that opinion work product may be discovered when mental impressions are at issue and need for material is compelling. The United States District Court for the District of Columbia requires a showing of extraordinary justification by the party seeking the discovery in order to overcome protection of opinion work product. In re Sealed Case, 676 F.2d 793, 809-10 (D.C. Cir. 1982). Finally, in Duplan Corp. v. Moulinage et Retorderie de Chavanoz, 509 F.2d 730, 735 (4th Cir. 1974), the court held opinion work product is absolutely protected. Neither the United States Supreme Court nor the Tenth Circuit have decided whether opinion work product is absolutely immune from discovery. Upjohn Co. v. United States, 449 U.S. 383, 401-02 (1981) (declining to decide whether any showing of necessity can overcome opinion work product protection); Frontier Refining, 136 F.3d at 704 n. 12.
Notwithstanding the split in circuits on this issue, as well as the lack of definitive standard in the Tenth Circuit regarding the level of protection accorded to opinion work product, the Court finds no need to establish a standard here. This is because Plaintiff fails to support its claim of entitlement with anything other than their assertions of substantial need and inability to obtain the information without undue hardship. See Upjohn Co. v. United States, 449 U.S. at 401-02 (1981) (showing of substantial need and inability to obtain information, without more, is insufficient to compel disclosure of opinion work product). Accordingly, the Court will deny Plaintiff's request to compel production of opinion work product documents listed in Defendant's privilege log.
C. Conclusion
Based on the discussion above, Plaintiff's Motion to Compel (doc. 24) is granted in part and Defendant's Motion for Protective Order (doc. 29) is denied in part to the extent that
(1) Defendant shall produce any document within the claims file that was not prepared by Defendant, for Defendant or for a representative of Defendant consistent with footnote 5, supra; and
(2) Defendant shall produce any document within the claims file that was voluntarily disclosed by Defendant to its adversary and/or third parties.
Plaintiff's Motion to Compel (doc. 24) is denied in part and Defendant's Motion for Protective Order (doc. 29) is granted in part to the extent that Defendant shall not be required to produce fact or opinion work product documents listed in Defendant's privilege log.
IT IS SO ORDERED.