Opinion
Case No. 4:06CV01639 ERW.
October 15, 2007
MEMORANDUM AND ORDER
This matter comes before the Court on Defendants James E. Bubenik, D.M.D., and James E. Bubenik D.M.D., P.C.'s Motion to Compel the Production of Documents [doc. #47].
I. BACKGROUND
On September 10, 2007, this Court entered an order requesting that the disputed documents be submitted to this Court for in camera review. The Court has reviewed the submitted documents, and will now rule on whether they are privileged. For the majority of the documents, little discussion is necessary, and the Court will simply list the document number and whether or not it is privileged. The documents requested are contained within two separate privilege logs; the Court will use the numbering contained within the privilege logs, keeping the two logs separate.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 26 provides guidelines for discovery in civil cases. Specifically Rule 26(b) provides that "[p]arties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party. . . ." Fed.R.Civ.P. 26(b). The rule also places certain requirements on the party claiming the privilege.
When a party withholds information otherwise discoverable under these rules by claiming that it is privileged or subject to protection as trial-preparation material, the party shall make the claim expressly and shall describe the nature of the documents, communications, or things not produced or disclosed in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege or protection.
Fed.R.Civ.P. 26(b)(5)(A). "[I]t is the long established rule that confidential communications between an attorney and his client are absolutely privileged from disclosure against the will of the client." Diversified Industries, Inc. v. Meradith, 572 F.2d 596, 601 (8th Cir. 1977). A second rule, applicable to the case at bar, "is that information or materials assembled by or for a person in anticipation of litigation or in preparation for trial may be qualifiedly privileged from disclosure to an opposing party. That rule is known as the `work product' rule. . . ." Id.
III. DISCUSSION
A. Communications Between Non-lawyers
in camera PepsiCo, Inc. v. Baird, Kurtz Dobson LLP,305 F.3d 813816Id.
Many of the documents in question contain communications between two non-lawyers, about advice received from counsel. It is undisputed that attorney/client privilege applies to both individuals and corporations. Commodity Futures Tranding Com'n v. Weintraub, 471 U.S. 343, 348 (1985). However, unlike individuals, a corporation is an inanimate entity that can only act through its agents. Id. A corporation cannot speak directly to its lawyers, and therefore such actions must be taken by those empowered to act on behalf of the corporation. Id. The Second Circuit in United States v. Bein, held that "only communications between client and attorney are protected by the privilege, not discussions with non-lawyers concerning the same subject matter." 728 F.2d 107, 113 (2nd Cir. 1984). However, the specific facts of Bein are distinguishable. The conversation was between the client and his accountant, in which the accountant gave advice regarding the propriety of the client's action. Id. The case did not involve a discussion between two corporate representatives. The district court in First Wisconsin Mortgage Trust v. First Wisconsin Corp., succinctly stated the law regarding communications between officers of a corporation created in response to requests from an attorney for information. 86 F.R.D. 160, 172 (Dist. Wisc. 1980). "Realistically a large corporation could hardly assist in its own defense without this kind of communication, and if the privilege as applied to corporations is to mean anything, such documents must be protected." Id.; see also Barr Marine Products, Co., Inc. v. Borg-Warner Corp., 84 F.R.D. 631, 634 (Dist. Pa. 1979) ("[I]f one member of the control group relays legal advice to another member the privilege is not lost."). The Court concludes that those documents which contain communications between corporate representatives who are non-lawyers, regarding advice received from an attorney, are subject to the attorney-client privilege.
B. Insurer/Insured Relationship
Another key question that must be answered, before a determination can be made regarding the privileged status of the documents in question, is whether they were created in anticipation of litigation, such that the insured, the Bubenik Defendants, are not entitled to the documents. Generally, an insured is entitled to the claims file in the possession of an insurer. However, this question is complicated by the posture of the underlying Johnson matter, in which Dr. Bubenik took the fifth amendment.
Dr. Bubenik continues to assert the Fifth Amendment protection against self-incrimination in the case before this Court. His cooperation with his insurance company is restricted by reliance on his Fifth Amendment Right.
The Missouri Supreme Court has likened the insurer/insured relationship to that of attorney client. Grewell v. State Farm Mutual Insurance Co., Inc., 102 S.W.3d 33, 36 (Mo. 2003) (The insurer/insured relationship, while admittedly and distinctly different, can be analogized to the relationship established between attorney and client."). In the attorney-client relationship, the attorney's file belongs not to the attorney, but rather to the client whom he is representing. Id. at 37. The Missouri Supreme Court held that the same rule is applicable in the context of the insurer/insured relationship. Id. The language the Missouri Supreme Court used is significant, as it specifically acknowledges communications between the insured and the insurer related to and concerned with their potential liability resulting from the automobile accident at issue. Id. "[T]hose communications became subject to an attorney/client type privilege. Once their relationship attained that protected status, any claims file that resulted belonged to Appellants [insured], and they should be provided free and open access to that file." Id. The Missouri Supreme Court did not discuss the assertion of attorney/client privilege to documents contained within the claims file, but rather the assertion of privilege was based on the work-product doctrine.
The Court recognizes Plaintiff's assertion that this case is inapplicable, as privileges are a matter of federal procedural law, not state law. Diversified Industries, 572 F.2d at 601. However, the Court disagrees that this renders the case inapplicable. The Court in Grewell, determined that the contents of an insured's claim file, belongs to the insured. The case does not address whether or not certain documents fall within the claim file, nor does it address when specific documents are subject to attorney client privilege or work product protection. Therefore, this Missouri substantive law, that the claims file is the property of the insured, is applicable, along with federal privilege law which is procedural.
The second part of the equation that the Court must consider, is the effect of Dr. Bubenik's decision to take the Fifth Amendment. While the Court recognizes the clear Missouri rule that a claims file is the insured's, and not the insurer's, the Court does not believe that legal advice sought by the insurer regarding the non-cooperation of the insured is part of the insured's claims file. Those documents, over which the Plaintiff asserts attorney/client privilege, involve discussions with counsel, and between corporate representatives, regarding the Plaintiff's obligation to represent Defendant in the underlying malpractice actions. These documents are not part of the claims file, and therefore are not the property of the insured, and are protected by attorney-client privilege.
Lastly, the Court looks at when documents created by the Plaintiff were in anticipation of litigation, and therefore covered by the work-product doctrine. This presents a more difficult question of when documents are created in relation to the underlying malpractice action, and therefore part of the claims file, and when they are created in anticipation of litigation with the insured, and therefore subject to work-product protection. At some point during the civil case involving Dr. Bubenik and the Johnston Defendants, the Plaintiff began to question whether they were responsible for the representation of Dr. Bubenik, due to Dr. Bubenik's failure to cooperate. As a general rule, the work-product doctrine protects documents created in anticipation of litigation. PepsiCo, Inc., 305 F.3d at 817 ("In order to protect work product, the party seeking protection must show the materials were prepared in anticipation of litigation, i.e., because of the prospect of litigation.").
The test should be whether, in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation. But the converse of this is that even though litigation is already in prospect, there is no work product immunity for documents prepared in the regular course of business rather than for purposes of litigation.St. Paul Reinsurance Company, Ltd. v. Commercial Financial Corp., 197 F.R.D. 620, 629 (N.D. Iowa 2000) (citing 8 Wright Miller, Federal Practice and Procedure § 2024, at 198-199 (1970)). "An insurer's decision to decline coverage is typically the point at which the ordinary course of business ends and the anticipation of litigation begins." Tudor Insurance Co. v. McKenna Associates, 2003 WL 21488058, *3 (S.D.N.Y. 2003). The Iowa District Court in St. Paul Reinsurance Company, Ltd., determined that the best approach to determining when a party's actions are in anticipation of litigation is to require "a case-by-case analysis, considering the unique factual context of the given problem." 197 F.R.D. at 632. The Court agrees with the Iowa court, and rejects a hard line approach to work-product immunity in these circumstances.
Plaintiff asserts that many of the withheld documents were created in anticipation of litigation regarding coverage, however, Plaintiff seeks to protect documents created before coverage was formally denied. Specifically, Plaintiff asserts that litigation was anticipated when they first hired outside counsel. The Court notes that none of the documents created with regards to the Jaudon case are subject to the work product doctrine, as they were not prepared in anticipation of litigation. Although some of the documents related to the Jaudon case do reference concerns regarding Dr. Bubenik's assertion of his fifth amendment rights, Plaintiff did not deny coverage in that case, but rather settled the case on the Bubenik Defendants' behalf. These coverage concerns were in the nature of the ordinary course of business, not in anticipation of litigation. However, at some point during the Johnston case, the issue of coverage arose, eventually giving rise to the instant action questioning Plaintiff's obligation to represent and insure the Bubenik Defendants. While the retention of outside counsel is not dispositive of when litigation is anticipated, the Court finds that in the case at bar it indicates Plaintiff's intention to challenge coverage, and the beginning of an adversary relationship between the parties. See e.g. Mission National Insurance Co. v. Lilly, 112 F.R.D. 160 (D.Minn. 1986) (Law firm hired to perform claims investigation was performing an ordinary business function, which at some point in time turned into the preparation in the event of trial). Plaintiff did not issue a reservation of rights letter until October, 2006, at which time, it clearly anticipated litigation, and therefore the use of this date would fail to protect documents that were created in anticipation of litigation. Any documents created by Plaintiff after Plaintiff had hired outside counsel to challenge the coverage of the Bubenik Defendants are protected by the work-product doctrine. In accordance with the documents produced, outside counsel was retained on May 23, 2006. Therefore documents which discuss coverage issues after this date are in anticipation of litigation, and are protected.
Not all documents after this date will relate to the coverage question. Those documents which discuss the settlement or defense of Plaintiff in the underlying Johnston action are not protected as they are part of the claim file belonging to the Bubenik Defendants.
IV. First Amended Privilege Document Log
Many of the Document numbers are repeated in the privilege log. This indicates a number of distinct e-mail messages which contain separate information that were part of an e-mail series. The Court has followed the format of the privilege log, and has reviewed each individual e-mail message contained within the document independently.
Document Date Document Ruling No. Created Type 00931-00932 10/10/06 E-mail series Attorney Client and Work Product 00931-00932 10/09/06 E-mail series Attorney Client and Work Product 00933 06/13/06 E-mail series Attorney Client and Work Product 00933 06/13/06 E-mail series Attorney Client and Work Product 00934-00943 06/13/06 Letter Attorney Client and Work Product 00944-00950 06/27/06 Letter Attorney Client and Work Product 00951-00952 07/21/06 E-mail Attorney Client and Work Product 00953-00954 07/06/06 E-mail series Attorney Client and Work Product 00953-00954 07/06/06 E-mail series Attorney Client and Work Product 00955-00956 07/19/06 E-mail series Attorney Client and Work Product 00955-00956 07/06/06 E-mail series Attorney Client and Work Product 00955-00956 07/06/06 E-mail series Attorney Client and Work Product 00957 08/10/08 E-mail Attorney Client and Work Product 00958 08/14/06 E-mail Attorney Client and Work Product 00959-00962 08/14/06 E-mail series Attorney Client and Work Product 00959-00962 08/14/06 E-mail series Attorney Client and Work Product 00963-00966 08/24/06 E-mail series Attorney Client and Work Product 00963-00966 08/24/06 E-mail series Attorney Client and Work Product 00963-00966 08/24/06 E-mail series Attorney Client and Work Product 00963-00966 08/24/06 E-mail series Attorney Client and Work Product 00963-00966 08/24/06 E-mail series Attorney Client and Work Product 00963-00966 08/24/06 E-mail series Attorney Client and Work Product 00963-00966 08/23/06 E-mail series Attorney Client and Work Product 00967-00969 08/24/06 E-mail series Attorney Client and Work Product 00967-00969 08/24/06 E-mail series Attorney Client and Work Product 00967-00969 08/24/06 E-mail series Attorney Client and Work Product 00967-00969 08/24/06 E-mail series Attorney Client and Work Product 00967-00969 08/24/06 E-mail series Attorney Client and Work Product 00967-00969 08/23/06 E-mail series Attorney Client and Work Product 00970-00972 08/24/06 E-mail series Attorney Client and Work Product 00970-00972 08/24/06 E-mail series Attorney Client and Work Product 00973-00974 08/23/06 E-mail series Attorney Client and Work Product 00975-00976 09/12/06 E-mail series Attorney Client and Work Product 00975-00976 09/07/06 E-mail series Attorney Client and Work Product 00977 09/05/06 E-mail Attorney Client and Work Product 00978-00984 09/05/06 Memorandum Attorney Client and Work Product 00985-00986 09/14/06 E-mail Attorney Client and Work Product 00987 10/11/06 E-mail Not Privileged-Produce 00988 10/10/06 E-mail Attorney Client and Work Product 00989 10/09/06 E-mail Attorney Client and Work Product 00990-00991 10/06/06 E-mail series Attorney Client and Work Product 00990-00991 10/06/06 E-mail series Attorney Client and Work Product 00992 10/06/06 E-mail Attorney Client and Work Product 00993-00995 10/11/06 E-mail Attorney Client and Work Product 00996-00997 10/11/06 E-mail series Attorney Client and Work Product 00996-00997 10/11/06 E-mail series Attorney Client and Work Product 00998-00999 10/11/06 E-mail series Attorney Client and Work Product 00998-00999 10/11/06 E-mail series Attorney Client and Work Product 01000-01001 10/05/06 E-mail Attorney Client and Work Product 01002-01003 10/19/06 E-mail series Attorney Client and Work Product 01002-01003 10/19/06 E-mail series Attorney Client and Work Product 01002-01003 10/19/06 E-mail series Attorney Client and Work Product 01004-01007 10/19/06 E-mail series Attorney Client and Work Product 01004-01007 10/19/06 E-mail series Attorney Client and Work Product 01004-01007 10/19/06 E-mail series Attorney Client and Work Product 01004-01007 10/19/06 E-mail series Attorney Client and Work Product 01008-01011 10/19/06 E-mail series Attorney Client and Work Product 01008-01011 10/19/06 E-mail series Attorney Client and Work Product 01008-01011 10/19/06 E-mail series Attorney Client and Work Product 01008-01011 10/19/06 E-mail series Attorney Client and Work Product 01012-01016 10/27/06 E-mail series Attorney Client and Work Product 01012-01016 10/27/06 E-mail series Attorney Client and Work Product 01012-01016 10/19/06 E-mail series Attorney Client and Work Product 01012-01016 10/19/06 E-mail series Attorney Client and Work Product 01012-01016 10/19/06 E-mail series Attorney Client and Work Product 01012-01016 10/19/06 E-mail series Attorney Client and Work Product 01017 10/31/06 E-mail Attorney Client 01018 03/30/06 E-mail Attorney Client and Work Product 01019 03/30/06 E-mail Attorney Client and Work Product 01020-01021 03/30/06 E-mail Attorney Client 01022-01023 04/01/06 E-mail series Attorney Client and Work Product 01022-01023 03/31/06 E-mail series Attorney Client and Work Product 01022-01023 03/31/06 E-mail series Attorney Client and Work Product 01024-01026 03/31/06 E-mail Attorney Client and Work Product 01027 04/06/06 E-mail Attorney Client and Work Product 01028 04/06/06 E-mail Attorney Client and Work Product 01029 04/11/06 E-mail Not Privileged-Produce These documents relate to the underlying lawsuit and therefore are part of the claims file. 01030 04/11/06 E-mail Attorney Client and Work Product 01031 04/13/06 E-mail series Attorney Client and Work Product 01031 04/13/06 E-mail series Attorney Client and Work Product 01031 04/12/06 E-mail series Attorney Client and Work Product 01031 04/12/06 E-mail series Attorney Client and Work Product 01032-01033 04/13/06 E-mail series Not Privileged-Produce. The Court cannot determine whether these communications relate to the underlying action, or Plaintiff's decision to refuse coverage. Therefore the Court orders that they be produced, in conformance with the requirement that all claims of privilege are to be narrowly construed. 01032-01033 04/12/06 E-mail series Not Privileged-Produce. The Court cannot determine whether these communications relate to the underlying action, or Plaintiff's decision to refuse coverage. Therefore the Court orders that they be produced, in conformance with the requirement that all claims of privilege are to be narrowly construed. 01032-01033 04/12/06 E-mail series Attorney Client and Work Product 01034-01035 04/13/06 E-mail series Attorney Client and Work Product 01034-01035 04/13/06 E-mail series Attorney Client and Work Product 01034-01035 04/13/06 E-mail series Attorney Client and Work Product 01034-01035 04/12/06 E-mail series Attorney Client and Work Product 01034-01035 04/12/06 E-mail series Attorney Client and Work Product 01034-01035 04/12/06 E-mail series Attorney Client and Work Product 01036-01039 04/13/06 E-mail series Not-Privileged-Produce. This letter, and the e-mails attendant to it relate to the underlying Jauden action, in which the Plaintiff was representing the Bubenik Defendants as insurer. Therefore, the communications are part of the claims file and must be produced. 01036-01039 04/12/06 E-mail series Not-Privileged-Produce. This letter, and the e-mails attendant to it relate to the underlying Jauden action, in which the Plaintiff was representing the Bubenik Defendants as insurer. Therefore, the communications are part of the claims file and must be produced. 01036-01039 04/12/06 E-mail series Not-Privileged-Produce. This letter, and the e-mails attendant to it relate to the underlying Jauden action, in which the Plaintiff was representing the Bubenik Defendants as insurer. Therefore, the communications are part of the claims file and must be produced. 01040-01045 04/19/06 E-mail Attorney Client and Work Product 01046 04/06/06 E-mail Attorney Client and Work Product 01047 04/06/06 E-mail Attorney Client and Work Product 01048-01057 06/13/06 Letter Attorney Client and Work Product 01058-01066 07/16/06 Letter Attorney Client and Work Product 01067-01075 09/25/06 Letter Attorney Client and Work Product 01076-01079 08/14/06 E-mail series Attorney Client and Work Product 01076-01079 08/14/06 E-mail series Attorney Client and Work Product 01080-01081 04/10/06 E-mail Not Privileged-Produce. While this document contains some references to concerns regarding Dr. Bubenik's failure to testify, the majority of the letter addresses the underlying Jaudon matter, and whether settlement is possible, and if not, what is the likelihood of success at trial. Therefore, the Court concludes that this document is part of the Jaudon claims file, and therefore discoverable. The letter also specifically states that Dr. Bubenik has been cooperative up to this point. 01082 04/18/06 Letter Confidential Settlement Information 01083 04/18/06 Letter Confidential Settlement Information 01084-01085 04/18/06 Agreement Not Privileged-Produce. This document relates to the settlement of the Jaudon case. This is part of the claim file and therefore is property of the Defendants. 01086 04/18/06 Order Not Privileged-Produce. This is a court document memorializing the Jaudon settlement. It does not contain attorney-client privileged information or work product. 01087 05/16/06 E-mail Not Privileged-Produce. Does not contain attorney-client privileged information or work product, therefore it must be produced. 01088-01090 05/16/06 Memorandum Not Privileged-Produce. While this document does raise the issue regarding Dr. Bubenik's assertion of the fifth amendment. It is a communication between two non-lawyers, and was prior to litigation between the insurer and the insured. Therefore, it is not work product. 01091 05/23/06 E-mail Not Privileged-Produce. 01092 06/14/06 E-mail Not Privileged-Produced. References the settlement agreement in the Jaudon case. 01093-01130 09/27/06 E-mail Pages 01093-01099 are protected by the work product doctrine and need not be produced. However, the Court can find no basis for withholding pages 1100-01130, and therefore these must be produced. 01131-01132 04/06/06 E-mail series Not Privileged-Produce. While these e-mails discuss coverage questions. It is in the context of trying to settle the Jaudon action. Furthermore, the e-mails specifically state that if a settlement can be reached, then there is no need for a dispute with the insured regarding coverage. 01131-01132 04/04/06 E-mail series Not Privileged-Produce. While these e-mails discuss coverage questions. It is in the context of trying to settle the Jaudon action. Furthermore, the e-mails specifically state that if a settlement can be reached, then there is no need for a dispute with the insured regarding coverage. 01131-01132 04/04/06 E-mail series Not Privileged-Produce. While these e-mails discuss coverage questions. It is in the context of trying to settle the Jaudon action. Furthermore, the e-mails specifically state that if a settlement can be reached, then there is no need for a dispute with the insured regarding coverage. 01133 10/13/06 Notes The Court notes that this document appears to be incomplete. Therefore the Court cannot determine in what context these notes were made, nor is a date apparent. It appears that they relate to the Jaudon settlement, and therefore must be produced. The Court will reconsider this ruling, if the Plaintiff can provide the entire document which shows that they relate to the Johnston case. 01134 03/30/07 E-mail Not Privileged-Produce. Relates to the settlement and defense of the Jaudon case. 01135-01136 04/27/06 E-mail series Work-Product. 01135-01136 04/26/06 E-mail series Work-Product.
V. Supplemental Privilege Log
The second set of documents at issue in Defendants' Motion to Compel, are progress notes which were provided to the Defendants in redacted form. Plaintiff's counsel provided the Court with both clean and redacted documents, and the Court will now review those documents, following the same format as that utilized above. Document Date Document Ruling No. Created Type 01138 4/17/06 Progress Notes Not Privileged-Produce. This addresses coverage issues as leverage for settlement in the Jaudon case and therefore is not in anticipation of litigation, and is part of the claim file. 01140-01141 4/07/06 Progress Notes Not Privileged-Produce. These notes relate to settlement of the Jaudon case. 01141-01142 03/30/06 Progress Notes Not Privileged-Produce. This addresses coverage issues as leverage for settlement in the Jaudon case and therefore is not in anticipation of litigation, and is part of the claim file. 01143 03/3006 Progress Notes Not Privileged-Produce. This addresses coverage issues as leverage for settlement in the Jaudon case and therefore is not in anticipation of litigation, and is part of the claim file. 01144 03/28/06 Progress Notes Not Privileged-Produce. This addresses coverage issues as leverage for settlement in the Jaudon case and therefore is not in anticipation of litigation, and is part of the claim file. 01164 12/13/06 Progress Notes Attorney Client and Work Product 01164 11/03/06 Progress Notes Attorney Client and Work Product 01165 10/13/06 Progress Notes Attorney Client and Work Product 01166 09/27/06 Progress Notes Attorney Client and Work Product 01167 09/14/06 Progress Notes Attorney Client and Work Product 01168 08/24/06 Progress Notes Attorney Client and Work Product 01168-01169 08/21/06 Progress Notes Attorney Client and Work Product 01170-01171 08/14/06 Progress Notes Attorney Client and Work Product 01172-01173 05/31/06 Progress Notes Attorney Client and Work Product 01173 05/23/06 Progress Notes Attorney Client and Work Product 01173 05/23/06 Progress Notes Attorney Client and Work Product 01174-01175 04/28/06 Progress Notes Not Privileged-Produce. These notes were prior to the retention of outside counsel, and therefore were part of the ordinary course of Plaintiff's business, not in anticipation of litigation. 01175-01176 04/27/06 Progress Notes Not Privileged-Produce. These notes were prior to the retention of outside counsel, and therefore were part of the ordinary course of Plaintiff's business, not in anticipation of litigation. Accordingly,IT IS HEREBY ORDERED that Defendants James E. Bubenik, D.M.D., and James E. Bubenik D.M.D., P.C.'s Motion to Compel the Production of Documents [doc. #47] is GRANTED in part and DENIED in part. Plaintiff shall produce, within ten (10) days of the date of this order, those documents which this Court ruled above are not privileged.