because the work product 12 doctrine is not an evidentiary privilege “but rather, [a] procedural limitation[] on discovery, 13 the scope of [the] asserted protection[] is determined by federal law, even when the federal 14 court sits in diversity.”
How later courts described this case
- because the work product 12 doctrine is not an evidentiary privilege “but rather, [a] procedural limitation[] on discovery, 13 the scope of [the] asserted protection[] is determined by federal law, even when the federal 14 court sits in diversity.”
- “[p]rivileged communications do not become discoverable because 12 they are related to issues raised in the litigation”
Written by the judges who cited it.
The opinion
1
2
3
4
5
6
7
8
9 UNITED STATES DISTRICT COURT
10 SOUTHERN DISTRICT OF CALIFORNIA
11
12 SKANSKA USA CIVIL WEST Case No.: 3:20-cv-00367-WQH-AHG
CALIFORNIA DISTRICT INC.,
13 ORDER RESOLVING JOINT
Plaintiff, MOTION FOR DETERMINATION
14
OF DISCOVERY DISPUTE
v.
15
NATIONAL INTERSTATE [ECF No. 44]
16
INSURANCE COMPANY,
17
Defendant.
18
19
Before the Court is Plaintiff Skanska USA Civil West California District Inc.
20
(“Plaintiff”) and Defendant National Interstate Insurance Company’s (“Defendant”) Joint
21
Motion for Determination of Discovery Dispute. ECF No. 44. Plaintiff seeks an order from
22
the Court compelling Defendant to produce documents it withheld based on attorney-client
23
privilege. Id. For the reasons set forth below, the Court DENIES Plaintiffs’ motion to
24
compel.
25
I. FACTUAL BACKGROUND
26
On February 27, 2020, Plaintiff filed its complaint, on behalf of itself and as assignee
27
of Zurich American Insurance Company (“Zurich”), alleging that Defendant breached its
28
1 duty to defend Plaintiff in a 2016 lawsuit. ECF No. 1. Plaintiff brought claims for
2 (1) declaratory relief; (2) breach of insurance contract; (3) breach of implied covenant of
3 good faith and fair dealing; (4) assigned claim for equitable indemnity; and (5) assigned
4 claim for equitable contribution. Id. On January 8, 2021, Plaintiff filed an amended
5 complaint,1 the operative complaint in this matter. ECF No. 42.
6 Plaintiff is “a contractor that was involved in a highway reconstruction project at
7 Interstate 805 in San Diego County.” ECF No. 42 at ¶ 28. In February 2016, Plaintiff hired
8 “Reeve Trucking Co., Inc. and/or Reeve Trucking Company” (“Reeve”) “to transport
9 thirteen 100-foot long steel I-beams from a construction site near Sorrento Valley,
10 California to a storage site in Lakeside, California.” Id. at ¶¶ 12, 29. On February 12, 2016,
11 Peter Chavarin was driving a motorcycle heading northbound on State Route 67 when he
12 collided with Reeve’s tractor-trailer carrying the I-beams, driven by Reeve employee
13 Christopher Collins, as the tractor-trailer was making a left turn from southbound State
14 Route 67 toward the entrance of the storage site. Id. at ¶¶ 33–34. “Chavarin sustained
15 severe injuries, including traumatic brain injury, coma, thoracic spine fracture, and other
16 bone fractures.” Id. at ¶ 35.
17 On April 6, 2016, Chavarin and his wife filed a complaint for damages against
18 Skanska, Reeve, and Collins in the Superior Court for the State of California County of
19 San Diego: Peter Chavarin, et al. v. Christopher Collins, et al., No. 37-2016-00011241-
20 CU-PA-CTL (the “Chavarin action”). Id. at ¶ 36. “[O]ne of the Chavarins’ theories of
21 liability against Skanska was that Skanska is vicariously liable for the conduct of Reeve
22 and/or Collins under the doctrine of peculiar risk[.]” Id. at ¶ 39.
23 Plaintiff is insured under “a commercial general liability policy” issued by Zurich
24 American (the “Zurich American Policy”). Id. at ¶ 23. The Zurich American Policy affords
25
26
27 1 Though Plaintiff’s amended complaint was not yet filed at the time Plaintiff propounded
the discovery requests, given that Plaintiff still requests the information in light of the
28
1 coverage to Skanska “in excess of any and all ‘other insurance, whether primary, excess,
2 contingent on or on any other basis,’ in cases where the loss arises out of the maintenance
3 or use of an ‘auto’ not owned or operated by Skanska.” Id. at ¶ 25. Under the Zurich
4 American Policy and subject to Skanska’s $500,000 deductible obligation, Zurich
5 American provided a defense in the Chavarin action. Id. at ¶¶ 24, 38.
6 Plaintiff alleges it is also “an insured under commercial motor carrier liability
7 insurance and excess liability insurance policies issued” to Reeve by Defendant. Id. at ¶ 3.
8 Defendant issued Reeve a commercial motor carrier liability insurance policy (the
9 “Primary National Interstate Policy”) with limits of $1,000,000 per accident for “all sums
10 an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’
11 to which this insurance applies, caused by an ‘accident’ and resulting from the ownership,
12 maintenance or use of a covered ‘auto.’” Id. at ¶ 12. “The Reeve-owned tractor-trailer
13 involved in the accident is a ‘covered auto’ under the Primary National Interstate Policy.”
14 Id. at ¶ 14. Thus, Defendant “has a duty to defend an insured in a suit asserting a claim for
15 which a potential for coverage under the Primary National Interstate Policy exists.” Id. at
16 ¶ 13. Defendant also issued to Reeve an excess liability insurance policy (the “Excess
17 National Interstate Policy”) with a limit of “$5,000,000 Each Incident.” Id. at ¶¶ 19, 21.
18 “Status as an insured under the Excess National Interstate Policy is conferred to those same
19 persons and entities which qualify as an insured under the Primary National Interstate
20 Policy.” Id. at ¶ 22.
21 “On or about April 15, 2016, tender was made to [Defendant] for [Plaintiff]’s
22 defense and indemnity against the claims asserted against [Plaintiff] in the Chavarin
23 action.” Id. at ¶ 44. “On April 21, 2016, [Defendant] denied its obligation under the
24 National Interstate Policies, or either of them, to defend and indemnify [Plaintiff] in the
25 Chavarin action.” Id. at ¶ 45. After the Chavarins filed first and second amended
26 complaints, Defendant again declined to provide any defense to Plaintiff. Id.
27 “[I]n early May of 2017 [Defendant] agreed to pay $6,000,000 to settle the
28 Chavarins’ claims against Reeve and Collins only . . . .” Id. at ¶ 69. On or about
1 May 26, 2017, a copy of the Chavarins’ proposed Third Amended Complaint was provided
2 to Defendant, and Plaintiff demand that Defendant provide a defense. Id. at ¶ 78. On
3 June 2, 2017, Defendant “wrote a letter advising that it will agree to participate in the
4 defense of Skanska.” Id. at ¶ 80. Defendant agreed to “continue to contribute toward the
5 cost of the defense of [Plaintiff] in the Chavarin action . . . .” Id. at ¶¶ 91, 93.
6 In April 2018, “[t]he Chavarins agreed to settle their claims against [Plaintiff] in the
7 Chavarin action in exchange for payment of $2,950,000.” Id. at ¶ 112. Zurich American,
8 without contribution by Defendant or by any other insurer, “paid $2,950,000, subject to
9 reservation of rights, to indemnify [Plaintiff] in settlement of the Chavarins’ liability claims
10 asserted against [Plaintiff] in the Chavarin action.” Id. at ¶ 117. Plaintiff alleges that
11 Defendant “has not paid its full and equitable share of the fees and costs, incurred after
12 May 26, 2017, of [Plaintiff]’s defense in the Chavarin action.” Id. at ¶ 95. Defendant “has
13 paid no amount for the fees and costs incurred in Skanska’s defense in the Chavarin Action
14 incurred prior to May 26, 2017.” Id. at ¶ 96.
15 Though Plaintiff had originally asserted that “Zurich American had assigned to
16 Skanska all of its rights and claims against National Interstate regarding the Chavarin
17 Action, including without limitation those rights and claims it obtained by virtue of its
18 payments for Skanska’s defense [and indemnity] in the Chavarin Action[,]” in support of
19 its assigned claims for equitable indemnity and equitable contribution, these claims were
20 removed from the operative amended complaint. Compare ECF No. 1 at ¶¶ 100, 118, 146–
21 63 with ECF No. 38-4 and ECF No. 42.
22 II. PROCEDURAL BACKGROUND
23 Plaintiff propounded discovery requests to Defendant on September 1, 2020. ECF
24 No. 44-1 at 17–27. Defendant served its responses on October 1, 2020. ECF No. 44-1 at
25 30–49. Pursuant to the Court’s Chambers Rules, on November 25, 2020, the parties alerted
26 the Court that they disagreed about six discovery issues but sought to continue meeting and
27 conferring. Email to Chambers (Nov. 25, 2020 at 4:53 p.m.); see Chmb.R. at 2. On
28 December 9, 2020, Defendant provided Plaintiff a supplemental privilege log. ECF No.
1 44-1 at 2, 52–100. After further meet and confer efforts, certain issues were resolved. The
2 parties jointly notified the Court about the remaining discovery issues on
3 December 14, 2020. Email to Chambers (Dec. 14, 2020 at 9:59 a.m.). In an effort to resolve
4 the disputes, the Court held a telephonic discovery conference on December 15, 2020. ECF
5 No. 36. The Court found it appropriate to issue a briefing schedule. ECF No. 37. The parties
6 timely filed their Joint Motion for Determination of Discovery Dispute. ECF No. 44. This
7 order follows.
8 III. DISCOVERY REQUESTS AT ISSUE
9 Plaintiff seeks to compel responsive documents to its first set of Requests for
10 Production of Documents (“RFPs”), specifically, numbers 1, 2, 4, 5, and 19–23. ECF No.
11 44 at 4. In RFP No. 1, Plaintiff requests:
12 Any and all DOCUMENTS maintained by YOU pertaining to any claim or
claims by SKANSKA under the NIIC PRIMARY POLICY concerning the
13
CHAVARIN ACTION. DOCUMENTS responsive to this Request shall
14 include, but are not limited to, any claim file or files, claim notes, adjuster
notes, logs or log notes, documentation of supervisor, management or other
15
internal review, documentation of authority and/or reserve requests and
16 responses to authority and/or reserve requests, COMMUNICATIONS, and
documentation of COMMUNICATIONS. If YOU contend that the
17
DOCUMENTS requested in this Request have been or will be produced either
18 voluntarily or in response to an earlier Request, please identify by Bates
number the responsive DOCUMENTS which have been or are being
19
produced.
20
ECF No. 44-1 at 20–21. In RFP No. 2, Plaintiff requests:
21
Any and all DOCUMENTS maintained by YOU pertaining to any claim or
22
claims by SKANSKA under the NIIC EXCESS POLICY concerning the
23 CHAVARIN ACTION. DOCUMENTS responsive to this Request shall
include, but are not limited to, any claim file or files, claim notes, adjuster
24
notes, logs or log notes, documentation of supervisor, management or other
25 internal review, documentation of authority and/or reserve requests and
responses to authority and/or reserve requests, COMMUNICATIONS, and
26
documentation of COMMUNICATIONS. If YOU contend that the
27 DOCUMENTS requested in this Request have been or will be produced either
voluntarily or in response to an earlier Request, please identify by Bates
28
1 number the responsive DOCUMENTS which have been or are being
produced.
2
3 Id. at 21. In RFP No. 4, Plaintiff requests:
4 Any and all DOCUMENTS maintained by YOU pertaining to any claim or
claims by REEVE under any insurance policy issued by YOU concerning the
5
CHAVARIN ACTION. DOCUMENTS responsive to this Request shall
6 include, but are not limited to, any claim file or files, claim notes, adjuster
notes, logs or log notes, documentation of supervisor, management or other
7
internal review, documentation of authority and/or reserve requests and
8 responses to authority and/or reserve requests, COMMUNICATIONS, and
documentation of COMMUNICATIONS. If YOU contend that the
9
DOCUMENTS requested in this Request have been or will be produced either
10 voluntarily or in response to an earlier Request, please identify by Bates
number the responsive DOCUMENTS which have been or are being
11
produced.
12
Id. at 22. In RFP No. 5, Plaintiff requests:
13
Any and all DOCUMENTS maintained by YOU pertaining to any claims by
14
Christopher Collins under any insurance policy issued by YOU concerning
15 the CHAVARIN ACTION. DOCUMENTS responsive to this Request shall
include, but are not limited to, any claim file or files, claim notes, adjuster
16
notes, logs or log notes, documentation of supervisor, management or other
17 internal review, documentation of authority and/or reserve requests and
responses to authority and/or reserve requests, COMMUNICATIONS, and
18
documentation of COMMUNICATIONS. If YOU contend that the
19 DOCUMENTS requested in this Request have been or will be produced either
voluntarily or in response to an earlier Request, please identify by Bates
20
number the responsive DOCUMENTS which have been or are being
21 produced.
22
Id. In RFP No. 19, Plaintiff requests:
23
To the extent not produced in response to the foregoing Requests, any and all
24 DOCUMENTS consisting of, relating to, documenting, or reflecting
COMMUNICATIONS between YOU and any other PERSON or PERSONS
25
concerning the limit or limits of insurance of the NIIC PRIMARY POLICY.
26
Id. at 25. In RFP No. 20, Plaintiff requests:
27
To the extent not produced in response to the foregoing Requests, any and all
28
1 DOCUMENTS consisting of, relating to, documenting, or reflecting
COMMUNICATIONS between YOU and any other PERSON or PERSONS
2
concerning the limit or limits of insurance of the NIIC EXCESS POLICY.
3
Id. In RFP No. 21, Plaintiff requests:
4
To the extent not produced in response to the foregoing Requests, any and all
5
DOCUMENTS consisting of, relating to, documenting, or reflecting
6 COMMUNICATIONS between YOU and any other PERSON or PERSONS
concerning any settlement demand, including without limitation YOUR
7
response to and/or negotiations concerning such settlement demand, in
8 connection with the CHAVARIN ACTION. If YOU contend that the
DOCUMENTS requested in this Request have been or will be produced either
9
voluntarily or in response to an earlier.
10
Id. at 25–26. In RFP No. 22, Plaintiff requests:
11
To the extent not produced in response to the foregoing Requests, any and all
12
DOCUMENTS consisting of, relating to, documenting, or reflecting
13 COMMUNICATIONS between YOU and any other PERSON or PERSONS
concerning the settlement of claims against REEVE and Christopher Collins,
14
in connection with the CHAVARIN ACTION. If YOU contend that the
15 DOCUMENTS requested in this Request have been or will be produced either
voluntarily or in response to an earlier Request, please identify by Bates
16
number the responsive DOCUMENTS which have been or are being
17 produced.
18
Id. at 26. In RFP No. 23, Plaintiff requests:
19
To the extent not produced in response to the foregoing Requests, any and all
20 DOCUMENTS consisting of, relating to, documenting, or reflecting
COMMUNICATIONS between YOU and any other PERSON or PERSONS
21
concerning the determination of good faith settlement in regards to the
22 settlement of claims against REEVE and Christopher Collins in the
CHAVARIN ACTION, including without limitation DOCUMENTS
23
concerning the negotiation and drafting of terms relating to determination of
24 good faith settlement as a condition to the settlement of claims against REEVE
and Christopher Collins, the application for and other briefing supporting
25
determination of good faith settlement of that settlement, and the drafting of
26 the application for and other briefing supporting determination of good faith
settlement of that settlement. If YOU contend that the DOCUMENTS
27
requested in this Request have been or will be produced either voluntarily or
28 in response to an earlier Request, please identify by Bates number the
1 responsive DOCUMENTS which have been or are being produced.
2
Id. Defendant objects to all nine discovery requests on the grounds2 that responsive
3
documents are protected from disclosure by the privileges afforded to attorney-client
4
communications, work product, or confidential information related to Defendant’s
5
insurance business. Id. at 33, 35–36, 44–46. Defendant produced its nonprivileged
6
documents, and detailed the documents withheld in a supplemental privilege log. ECF No.
7
44-1 at 2, 52–100.
8
IV. LEGAL STANDARD
9
Under Rule 26 of the Federal Rules of Civil Procedure, “[p]arties may obtain
10
discovery regarding any nonprivileged matter that is relevant to any party’s claim or
11
defense[.]” FED. R. CIV. P. 26(b)(1). Courts have broad discretion to determine relevancy
12
for discovery purposes. See Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). Here,
13
the issue is whether the discovery sought is nonprivileged. While the attorney-client
14
privilege “protects the confidentiality of communications between attorney and client made
15
for the purpose of obtaining legal advice[,]” the work product privilege “‘protects the
16
attorney’s thought processes and legal recommendations.’” Genentech, Inc. v. United
17
States ITC, 122 F.3d 1409, 1415 (Fed. Cir. 1997) (quoting Zenith Radio Corp. v. United
18
States, 764 F.2d 1577, 1580 (Fed. Cir. 1985)).
19
20
21
2 Defendant also objected on the grounds that the requests are overbroad and are not
22
relevant to any party’s claims or defenses. ECF No. 44-1 at 35, 36, 44, 45. However, these
23 objections were not reasserted in the instant motion, and are therefore deemed waived. See,
e.g., SolarCity Corp. v. Doria, No. 16cv3085-JAH-RBB, 2018 WL 467898, at *3 (S.D.
24
Cal. Jan. 18, 2018) (courts in this district “generally consider[ ] only those objections that
25 have been timely asserted in the initial response to the discovery request and that are
subsequently reasserted and relied upon in response to the motion to compel.”); Sherwin-
26
Williams Co. v. Earl Scheib of Cal., Inc., No. 12cv2646-JAH-JMA, 2013 WL 12073836,
27 at *2 n.1 (S.D. Cal. Mar. 4, 2013) (deeming all objections raised in response to the
discovery requests but not addressed in the discovery motion to be moot or waived, limiting
28
1 When federal courts exercise diversity jurisdiction over a case, “questions of
2 privilege are controlled by state law.” In re Cal. Pub. Utilities Comm’n, 892 F.2d 778, 781
3 (9th Cir. 1989); ECF No. 42 at ¶¶ 1–2, 7–9 (alleging federal jurisdiction premised on
4 diversity of citizenship); see FED. R. EVID. 501. Unlike attorney-client privilege, the work
5 product doctrine is governed by federal law, even in pure diversity cases.3 Eagle Precision
6 Techs., Inc. v. Eaton Leonard Robolix, Inc., No. 03cv352-BEN-WMc, 2005 U.S. Dist.
7 LEXIS 47173, at *8 n.3 (S.D. Cal. Aug. 11, 2005); see, e.g., Century Sur. Co. v. Saidian,
8 No. CV-12-7428-SS, 2015 WL 12765555, at *2 (C.D. Cal. July 28, 2015) (finding that the
9 work product doctrine in diversity cases is determined under federal law because the
10 doctrine is not an evidentiary privilege); U.S. Inspection Services, Inc. v. NL Engineered
11 Solutions, LLC, 268 F.R.D. 614, 617 n.2 (N.D. Cal. 2010) (because the work product
12 doctrine is not an evidentiary privilege “but rather, [a] procedural limitation[] on discovery,
13 the scope of [the] asserted protection[] is determined by federal law, even when the federal
14 court sits in diversity.”).
15 The California attorney-client privilege is codified in California Evidence Code
16 §§ 950 et seq. The privilege protects confidential communications between a client and an
17 attorney. “The privilege authorizes a client to refuse to disclose, and to prevent others from
18 disclosing, confidential communications between attorney and client.” Mitchell v. Superior
19 Court, 691 P.2d 642, 645 (Cal. 1984). “Confidential communications include information
20 transmitted between attorney and client, and ‘a legal opinion formed and the advice given
21 by the lawyer in the course of that relationship.’” Calvert v. State Bar, 819 P.2d 424, 431
22 (Cal. 1991) (quoting CAL. EVID. CODE § 952).
23 Under California law, “[t]he party claiming the [attorney-client] privilege has the
24 burden of establishing the preliminary facts necessary to support its exercise, i.e., a
25
26
27 3 “Courts that have applied federal law to the work product doctrine have reasoned that it
is not a privilege within the meaning of Rule 501.” Eagle Precision Techs., 2005 U.S. Dist.
28
1 communication made in the course of an attorney-client relationship.” Costco Wholesale
2 Corp. v. Superior Court, 219 P.3d 736, 741 (Cal. 2009) (citations omitted); see also CAL.
3 EVID. CODE § 952. Once the party claiming privilege has made a prima facie showing that
4 the material claimed to be privileged is a communication made in the course of an attorney-
5 client relationship, a presumption of privilege then applies to the communication, and the
6 burden shifts to the party opposing the claim “to establish the communication was not
7 confidential or that the privilege does not for other reasons apply.” Costco, 219 P.3d at 741
8 (citing CAL. EVID. CODE § 917(a) and Wellpoint Health Networks, Inc. v. Superior Court
9 of L.A. Cty., 68 Cal. Rptr. 2d 844, 852–53 (Cal. Ct. App. 1997)).
10 California law recognizes an implied at-issue waiver of attorney-client privilege in
11 limited circumstances. A party seeking to discover privileged information can show waiver
12 by demonstrating that the client has (1) “put the otherwise privileged communication
13 directly at issue” and (2) “that disclosure is essential for a fair adjudication of the action.”
14 S. Cal. Gas Co. v. Pub. Utilities Comm’n, 784 P.2d 1373, 1378 (Cal. 1990) (“SoCal Gas”).
15 Similarly, to determine whether implied waiver applies to the work product doctrine
16 under federal law, courts in this circuit consider (1) whether the party is asserting the
17 doctrine as the result of some affirmative act, (2) whether through this affirmative act, the
18 asserting party puts the privileged information at issue, and (3) whether allowing the
19 privilege would deny the opposing party access to information vital to its case. United
20 States v. Amlani, 169 F.3d 1189, 1195 (9th Cir. 1995); SoCal Gas, 784 P.2d at 1379 n.11.
21 V. PARTIES’ POSITIONS
22 Plaintiff seeks information through discovery to support its bad faith claim. ECF No.
23 44 at 2. Plaintiff seeks information to refute Defendant’s claim that, because it had no
24 choice but to settle, it did not commit bad faith when it settled the underlying action on
25 behalf of Reeve and Collins. Id. Thus, Plaintiff seeks information regarding whether
26 counsel’s decision to settle the case was reasonable. Id. at 7. Plaintiff argues that
27 Mr. McFaul’s declaration is not solely a recitation of facts, protected by attorney client
28 privilege or the work product doctrine, because he also included his legal opinions and
1 evaluations of the case. Id. at 2, 6–7. Thus, by affirmatively putting before the Court
2 testimony regarding the reasonableness of Defendant’s conduct, Plaintiff argues that any
3 privilege objections have been impliedly waived. Id. Plaintiff also contends that it needs
4 the information to refute and contest the remainder of Mr. McFaul’s testimony. Id. at 7.
5 In sum, Plaintiff seeks to discover Mr. McFaul’s “other legal opinions and
6 conclusions, and the documents and other materials in his files in which his opinions are
7 based or set out, so that Skanska has the opportunity to contest the evidence NIIC has put
8 forth.” Id. Specifically, Plaintiff is trying to find out
9 (1) whether McFaul’s other legal opinions about this matter are consistent or
divergent with those he expressed in his declaration, (2) how he arrived at and
10
justifies his opinions in the declaration including the opinion that there were no
11 other options but to settle without obtaining a release of the claims against
Skanska, contrary to California case law which specifies other options, (3) how
12
it is that he concluded that NIIC’s applicable policy limits were $6,000,000 for
13 the Chavarin matter, and (4) how it is that he concluded that Skanska was fully
protected from any exposure when he declares, in the same declaration, that
14
John Petze sent him a copy of the Zurich policy, which the exhibit shows had
15 a post-it (or other yellow marking) indicating the page showing Skanska had a
$500,000 deductible.
16
17 Id. at 7–8.
18 Defendant contends that Plaintiff amending the complaint moots the issue. Id. at 11.
19 Because Plaintiff removed its assignment claims from Zurich from its amended complaint,
20 Defendant argues that the underlying settlements in Chavarin are no longer at issue. Id. at
21 10–11 (referring to ECF No. 38-4 at ¶ 6). Further, since Mr. McFaul and Defendant had an
22 attorney-client relationship, Defendant contends that it has established a prima facie case
23 that privilege applies. ECF No. 44 at 13. According to Defendant, Plaintiff has not met its
24 burden of showing that a waiver occurred. Id. at 13–14. Defendant also reiterates that the
25 McFaul declaration does not include communications between Mr. McFaul and Defendant,
26 and instead recounts Mr. McFaul’s communications with plaintiff’s counsel in the
27 Chavarin action. Id. at 11.
28 / /
1 VI. DISCUSSION
2 Here, it is undisputed that there was an attorney-client relationship between
3 Defendant and Mr. McFaul, where Mr. McFaul provided legal advice to Defendant while
4 representing it in the Chavarin action. See ECF No. 15-3 at ¶ 2–3; ECF No. 44-2 at ¶ 2–4.
5 Thus, Defendant has satisfied its burden to make a prima facie showing. Costco, 219 P.3d
6 at 741 (“The party claiming the privilege has the burden of establishing the preliminary
7 facts necessary to support its exercise”). Thus, the burden has shifted to Plaintiff to
8 establish that the privilege does not apply. Id.
9 A. Express Waiver - Analysis of McFaul Declaration
10 In support of its waiver argument, Plaintiff points to four paragraphs of the McFaul
11 declaration that purport to expose his legal reasoning and therefore waive privilege. ECF
12 No. 44 at 6–7 (referring to ECF No. 15-3 at ¶¶ 17, 26, 34, 38).4 In paragraph 17, Mr. McFaul
13 stated:
14 Although NIIC strongly disagreed with Zurich’s contention that the Chavarins
were asserting vicarious liability claims against Skanska that would have
15
triggered a potential for coverage for Skanska under the NIIC policies, we
16 made every effort to convince Petze and his clients to include Skanska in the
proposed policy limits settlement.
17
18 ECF No. 15-3 at ¶ 17. Plaintiff contends that this paragraph “opine[d] whether sufficient
19 efforts were undertaken to protect Skanska.” ECF No. 44 at 6. The Court agrees with
20 Defendant that this paragraph is a summary of factual events, and not a summary of any
21 legal opinions or legal analysis.
22 In paragraph 26, Mr. McFaul stated:
23 Based on my review of the Zurich policies provided by Petze and my belief
that they were genuine based on Petze’s representation that Skanska itself had
24
25
26
4 Upon careful review of the McFaul declaration, the Court finds that most paragraphs
27 clearly refer to Mr. McFaul’s unprivileged communications with the plaintiff’s counsel in
the Chavarin action, other external communications, or facts rather than opinions. See ECF
28
1 produced them in the Chavarin lawsuit, NIIC and I understood that Zurich
afforded Skanska up to $25,000,000 in limits for its liability in the Chavarin
2
lawsuit.
3
ECF No. 15-3 at ¶ 26. Plaintiff contends that this paragraph “describe[s] his legal analysis
4
and his conclusions concerning Skanska’s insurance under the Zurich policies.” ECF No.
5
44 at 7. Defendant responds that this paragraph simply summarizes the dollar amount of
6
the policy limits, explaining that it was more than what the plaintiffs were seeking in the
7
Chavarin action. Id. at 17. The Court finds that, though the paragraph does slightly
8
implicate Mr. McFaul’s thinking, it does not broadly waive privilege.
9
In paragraph 34, Mr. McFaul stated:
10
Based on the evidence and arguments regarding liability and damages that had
11
presented by Petze, as well as Reeve Trucking’s declaration that it had no
12 applicable insurance other than the NIIC policies, it was clear that NIIC’s
rejection of the $6,000,0000 policy limits demand would have exposed Reeve
13
Trucking and Collins to a significant risk of a judgment in excess of those
14 limits and, as a result, potentially ruinous personal liability. By contrast, the
copies of the Zurich policies I had recently reviewed indicated that Skanska
15
was fully protected from any exposure to its personal assets by the
16 $25,000,000 in limits available to it under those policies.
17
ECF No. 15-3 at ¶ 34. Plaintiff contends that Mr. McFaul “state[d] his reasoning and legal
18
conclusions about the anticipated effects of NIIC’s conduct on Skanska as compared to
19
Reeve and Collins.” ECF No. 44 at 7. Defendant responds that this paragraph simply
20
summarizes the dollar amount of the policy limits, explaining that it was more than what
21
the plaintiffs were seeking in the Chavarin action. Id. at 17. The Court finds that this
22
paragraph is a summary of factual events, and not a summary of any legal opinions or legal
23
analysis.
24
In paragraph 38, Mr. McFaul stated:
25
At this point, it was clear that NIIC had only two choices: (1) accept the
26 $6,000,000 policy limits demand on the Chavarins’ terms and take Reeve
Trucking and Collins out of harm’s way or (2) reject the demand and expose
27
Reeve Trucking and Collins to a potential excess judgment and financial ruin.
28 There was no third option.
1
ECF No. 15-3 at ¶ 38. Plaintiff contends that Mr. McFaul “g[a]ve his legal opinion about
2
what choices an insurer has when faced with a demand for settlement of claims against
3
fewer than all insureds.” ECF No. 44 at 6. Defendants respond that “is another non-legal
4
summary of the factual circumstances discussed in detail in the declaration. Specifically,
5
McFaul is recapping that, despite his extensive communications with Petze regarding the
6
potential inclusion of Skanska in the policy limits settlement, the Chavarins ultimately
7
demanded that NIIC either accept or reject their demand ‘as is’ and would not agree to
8
modify the demand to include any release of their claims against Skanska.” Id. at 17. The
9
Court agrees with Defendant, and finds that no broad waiver has occurred here.
10
B. Implied Waiver - Whether the Information is At Issue
11
The parties disagree about whether the information is at issue. In doing so, the parties
12
repeatedly refer to the following cases, which the Court will briefly address in turn: SoCal
13
Gas v. Public Utilities Comm’n, 784 P.2d 1373 (Cal. 1990), Mitchell v. Superior Court,
14
691 P.2d 642 (1984), and Merritt v. Superior Court, 88 Cal. Rptr. 337 (Cal. Ct. App. 1970).
15
In SoCal Gas, a regulatory action considering whether the buyout of a supplier
16
contract was reasonable, the court found that implied waiver of attorney-client privilege
17
did not apply because the privileged communications were not placed at issue—“[SoCal
18
Gas does not] intend[] to rely on its attorneys’ advice or state of mind to demonstrate that
19
it acted reasonably when it bought out the [] contract.” 784 P.2d at 1379. Further, the court
20
did not find the privileged documents vital to a fair adjudication of the proceeding. Id. at
21
1380. In finding that the actual legal analysis provided by SoCal Gas’s attorneys was not
22
essential to the case, the court explained that the reasonableness issue was “an objective
23
one which [did] not depend on a particular attorney’s analysis, but upon the terms of the
24
contract itself and surrounding factual circumstances.” Id. There, the court also highlighted
25
an analogous case regarding allegations of a bad faith denial of insurance coverage, Aetna
26
Casualty & Sur. Co. v. Superior Court, 200 Cal. Rptr. 471 (Cal. Ct. App. 1984), where
27
“[t]he court held that Aetna had not impliedly waived its attorney-client privilege since it
28
1 was not relying on advice of counsel to show that it acted reasonably, but instead sought to
2 show that its conduct was reasonable based on the underlying facts. Moreover, the court
3 held that the fact that Aetna’s state of mind was at issue in the insured’s bad faith action
4 did not place in issue its attorneys’ state of mind or their advice.” SoCal Gas, 784 P.2d at
5 1378.
6 In Mitchell, though the factual scenario is distinguishable,5 the court nevertheless
7 found “no ‘waiver of the attorney-client privilege where the substance of the protected
8 communication is not itself tendered in issue, but instead simply represents one of several
9 forms of indirect evidence in the matter.’” SoCal Gas, 784 P.2d at 1378 (quoting Mitchell,
10 691 P.2d at 650); see also Schlumberger, Ltd. v. Superior Court, 171 Cal. Rptr. 413, 417
11 (Cal. Ct. App. 1981) (“[p]rivileged communications do not become discoverable because
12 they are related to issues raised in the litigation”).
13 In Merritt, where plaintiff asserted a bad faith claim against an insurer, the court
14 “held that plaintiff had impliedly waived his privilege since he had specifically put the state
15 of mind of his attorney at issue by alleging that the defendant’s attorney had confused his
16 attorney and impeded his attorney’s ability to settle his claim.” SoCal Gas, 784 P.2d at
17 1378 (citing Merritt, 88 Cal. Rptr. at 342). However, its decision was “limited in its
18 application to the one situation in which a client has placed in issue the decisions,
19 conclusions, and mental state of the attorney who will be called as a witness to prove such
20 matters.” SoCal Gas, 784 P.2d at 1379–80.
21 After consideration of these examples, finding SoCal Gas and Aetna persuasive, the
22 Court finds that the information is not at issue.
23 / /
24
25
5 Several plaintiffs filed suit seeking damages for emotional distress against various entities
26
involved with chemicals that plaintiffs alleged contaminated air and ground water around
27 their homes. One defendant sought discovery of information or documents a plaintiff
received from her attorneys about one of the chemicals. SoCal Gas, 784 P.2d at 1378 (citing
28
1 C. Whether the Evidence is Essential to a Fair Adjudication of this Case
2 Here, the evidence is not essential to a fair adjudication of this case. “Although these
3 || privileged communications might help [Plaintiff] litigate this case, [Plaintiff] may still
4 defend against [Defendant]’s claims without introducing the substance of these privileged
5 communications into evidence.” Luna Gaming San Diego LLC v. Dorsey & Whitney, LLP,
6 || No. 06cv2804-BTM-WMc, 2010 WL 148713, at *2 (S.D. Cal. Jan. 11, 2010).
7 Plaintiff contends that it needs the information to refute and contest the remainder
8 Mr. McFaul’s testimony. ECF No. 44 at 7. However, the Court is persuaded by
9 || Defendant’s representation that its original motion for summary judgment, and the McFaul
10 || declaration at issue, are both mooted by Plaintiff's amendment of the complaint to remove
11 |/ all assignment claims. ECF No. 44 at 11 (“Had Skanska filed its amended complaint as the
12 || original complaint, there would have been no need for NIIC to have filed its motion for
13 |}summary judgment or the supporting McFaul declaration”). Plaintiff did not meet its
14 burden to show, given the amendment, that the privileged communication “goes to the
15 || heart of the claim in controversy.” Mitchell, 691 P.2d at 649; SoCal Gas, 784 P.2d at 1380
16 || (finding that counsel’s actual legal analysis was not essential to the case, explaining that
17 ||the reasonableness issue was “an objective one which [did] not depend on a particular
18 ||attorney’s analysis, but upon the terms of the contract itself and surrounding factual
19 || circumstances”); see generally Aetna, 200 Cal. Rptr. at 475.
20 || VII. CONCLUSION
21 For the reasons set forth above, Plaintiff's motion to compel is DENIED.
22
23 IT IS SO ORDERED.
24 Dated: March 5, 2021
05 _ Siow. Xion
Honorable Allison H. Goddard
26 United States Magistrate Judge
27
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