The opinion
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
KEDRON GASTON,
Plaintiff,
v. CASE NO. 3:21-CV-896-JD-MGG
JACKIE C. HAZELTINE,
ROYAL PAPER STOCK CO., INC., and
GRANGE MUTUAL CASUALTY CO.,
Defendants.
OPINION AND ORDER
Pending and ripe before the Court is a Motion to Compel filed by Plaintiff,
Kedron Gaston (“Kedron”), on December 27, 2022. [DE 62]. The motion seeks complete
discovery answers and response to the interrogatories and requests for production
Kedron served on Defendant Grange Mutual Casualty Company (“Grange Insurance”).
Specifically, Kedron is asking the Court to compel the following items: (1) responses to
Interrogatory No. 11; (2) correspondence between Attorneys Jennifer Davis / Thad
Kelley / Bill Kelley and representatives of Grange Insurance; (3) correspondence from
the insurer to the insured; and (4) response to Interrogatory No. 3 and Request for
Production No. 11 to the extent that the responses relate to the spoliation of evidence.
Since the motion was filed, the parties participated in a video motion hearing on
September 8, 2023, where they presented oral arguments to augment their briefings of
the Motion to Compel. [DE 63, 65, 66]. As discussed below, Kedron’s Motion to Compel
is granted in part and denied in part.
I. RELEVANT BACKGROUND
This cause of action arises from a motor vehicle accident that occurred on
November 24, 2015. Plaintiff Kedron Gaston was a passenger in a car that collided with
a stopped semi-truck operated by Jackie Hazeltine (“Hazeltine”) and owned by his
employer Royal Paper Stock Company, Inc. (“RPS”). Kedron and her mother, Jessica
Gaston, were injured during the crash. The driver of their car, Kedron’s aunt, was
decapitated. Due to her injuries, Jessica Gaston could not care for Kedron, causing
Kedron to move into foster care.
RPS’s and Hazeltine’s insurer, Grange Insurance, retained attorney Jennifer
Davis to represent RPS’s and Hazeltine’s interests. During the investigation of the crash,
Attorney Davis, on behalf of Grange Insurance, hired Cooper Barrette Consulting and
Adam Hyde (“Hyde”) to perform testing on the trailer’s rear lighting system (“lighting
system”) of the semi-truck. After his initial inspection, Hyde submitted his Traffic Crash
Investigation Report dated March 1, 2016. In discussing his inspection of the rear
lighting system, Hyde said that he “found parts of the bulb unit were broken resting at
the base of the unit [but that] no further examination was completed at that time . . . as
further examination may be destructive in nature to the sealed unit.” [DE 63-7 at 12]. At
Attorney Davis’s direction, however, Hyde conducted additional testing on the lights,
without contacting Kedron, her representatives, or the Court beforehand. Kedron
asserts the latter inspection affected the condition of the brake light evidence. According
to Kedron’s expert Paul Thogersen, Hyde failed to properly preserve the condition of
the brake lights during this examination. In particular, Mr. Thogersen found that “the
condition of the lighting connectors” was not preserved and that “[d]irt and dust
deposits on the lamp housing were removed which removes and alters evidence of the
connections to the lamps.” [DE 81-5 ¶ 6].
On November 2, 2021, Kedron filed this lawsuit, bringing two claims: (1)
negligence and negligent infliction of emotional distress against Hazeltine and RPS,
which alleges that the stopped truck did not have active taillights or brake lights at the
time of the crash and that there were no other mechanisms to alert approaching drivers
of the truck’s presence in the fog; and (2) spoliation of evidence against Grange
Insurance, alleging that Hyde took the taillights and brake lights from the truck and
performed destructive testing, thereby making crucial evidence unavailable.
On May 5, 2022, Kedron moved for partial summary judgment on her spoliation
claim against Grange Insurance, which the Court denied on January 24, 2023. Then, on
February 2, 2023, Kedron filed a second motion for partial summary judgment on the
duty and breach of duty elements of her spoliation claim against Grange Insurance. The
Court granted the motion on May 4, 2023, finding that Grange Insurance had a duty to
exercise reasonable care to preserve the lighting system while denying the motion as to
the element of breach of duty.
In discovery, Kedron propounded interrogatories and requests for production on
Grange Insurance seeking information on the handling of the investigation following
the accident, and the preservation and inspection of evidence. Grange Insurance
withheld information to some of Kedron’s written discovery requests asserting
objections grounded in attorney-client privilege, insured-insurer privilege, and the
work-product doctrine. Kedron’s instant Motion to Compel arises from the parties’
inability to resolve their dispute over Grange Insurance’s objections.
II. ANALYSIS
Information is discoverable if it is nonprivileged, relevant to any claim or defense
in the case, and proportional to the needs of the case. Fed. R. Civ. P. 26(b)(1). A party
may seek an order to compel discovery when an opposing party fails to respond to
discovery requests or has provided evasive or incomplete responses. Fed. R. Civ. P.
37(a)(2)-(3). “The party resisting such a motion bears the burden to show why a
particular discovery request is improper” and must do so with specificity. See Hills v.
AT&T Mobility Servs., LLC, 3:17-CV-556-JD-MGG, 2021 WL 3088629, at *4 (N.D. Ind. July
22, 2021). “When the party resists on the basis of privilege, that party must demonstrate
both that the privilege applies and that it has not been waived.” E.F. Transit, Inc. v. Ind.
Alcohol & Tobacco Comm’n, No. 1:13-cv-01927-WTL-MJD, 2015 WL 1013475, at *2 (S.D.
Ind. Mar. 9, 2015) (citations omitted). In the case of overly broad discovery requests or
less than apparent relevancy, “the requesting party must establish relevancy.” Vajner v.
City of Lake Station, Ind., No. 2:09-cv-245, 2010 WL 4193030, at *2 (N.D. Ind. Oct. 18,
2010).
This Court has broad discretion in deciding whether to compel discovery and
may deny discovery to protect a party from annoyance, embarrassment, oppression, or
undue burden or expense. Fed. R. Civ. P. 26(c); Satter v. Motorola, Inc., 138 F.3d 1164,
1171 (7th Cir. 1998); Gile v. United Airlines, Inc., 95 F.3d 492, 495-96 (7th Cir. 1996). As
such, the court “independently determine[s] the proper course of discovery based upon
the arguments of the parties.” Gile, 95 F.3d at 496.
A. Interrogatory No. 11
Kedron challenges Grange Insurance’s objection to Interrogatory No. 11., which
asks if Grange Insurance alleges that any of RPS’s or Hazeltine’s responses to
deposition questions and interrogatories in Kedron’s mother’s parallel case in Wabash
Superior Court, Jessica Gaston v. Hazeltine, et al. (Cause No. 85D01-1709-PL-605) (“the
Jessica Gaston Case”) “were inaccurate and/or should not be relied by [Kedron] in this
case . . . .” [DE 63-3 at 6]. According to Kedron, the information requested in
Interrogatory No. 11 is discoverable under Fed. R. Civ. P. 26(b)(1) because it is
nonprivileged, relevant to a claim or defense in the case, and proportional to the needs
of the case. However, Grange Insurance objected to Interrogatory No. 11 based on
relevance, form, mental impression, attorney-client privilege, and work-product
doctrine. Kedron argues that Grange’s objection is a blanket claim of privilege that is
“not favored” by Indiana courts. See Howard v. Dravet, 813 N.E.2d 1217, 1221 (Ind. Ct.
App. 2004).
In a civil case, “state law governs privilege regarding a claim or defense for
which state law supplies the rule of decision.” Fed. R. Evid. 501. Here, the law of
Indiana provides the rule of decision as already determined by this Court therefore the
privilege law of Indiana governs.1 [DE 77 at 9]. When deciding whether a privilege
applies to particular information, “the trial court must review the contested material
and determine whether the claim is justified or mistaken and whether production of the
requested documents should be barred or compelled.” Howard, 813 N.E.2d at 1221
(quoting Canfield v. Sandock, 563 N.E.2d 526, 531 (Ind. 1990)). When a responding party
fails to give the requesting party sufficient specificity from which to discern why the
responsive information is being withheld, the responding party has asserted an
improper claim of blanket privilege. Hartford Fin. Serv. Grp., Inc. v. Lake Cnty. Park &
Recreation Bd., 717 N.E.2d 1232, 1237 (Ind. Ct. App. 1999). In Hartford Financial, the court
held that the defendant did not assert a blanket claim of privilege because it identified
“the date, author, recipients, and the type of document and privilege asserted for each
[withheld document].” Id. Thus, the content of the privilege log produced by the
responding party is central to any determination of whether an improper blanket claim
of privilege has been asserted.
Grange Insurance’s Amended Privilege Log includes descriptions of each
privileged document, the date, and the type of privilege asserted. [DE 63-4]. Like the
privilege log in Hartford Financial, Grange’s Amended Privilege Log is thorough and
provides enough information from which Kedron can assess the grounds on which
Grange Insurance has withheld requested information and whether the claims of
1 The parties raised their dispute over whether Ohio law or Indiana law governs in briefing the instant
motion to compel. In fact, the Court previously resolved the conflicts of law question [DE 77 at 9]; thus,
no further analysis is required.
privilege are justified or mistaken. Therefore, Grange Insurance’s objections to
Interrogatory No. 11 do not rise to an improper blanket claim of privilege.
Still, the information Kedron requests through Interrogatory No.11 is protectable
as work-product. “[A] party may not discover documents and tangible things that are
prepared in anticipation of litigation or for trial by or for another party or its
representative [unless] they are otherwise discoverable under Rule 26(b)(1); and the
[requesting] party shows that it has substantial need for the materials to prepare its case
and cannot, without undue hardship, obtain their substantial equivalent by other
means.” Fed. R. Civ. P. 26(b)(3)(A). The work-product doctrine serves the purpose of
protecting an attorney’s thought processes and mental impressions against disclosure.
Sandra T.E. v. S. Berwyn Sch. Dist. 100, 600 F.3d 612, 622 (7th Cir. 2010). “[The court]
must protect against disclosure of the mental impressions, conclusions, opinions, or
legal theories of a party’s attorney or other representative concerning the litigation.”
Fed. R. Civ. P. 26(b)(3)(B). The Indiana Court of Appeals held such work product, also
referred to as opinion work product, “enjoys a nearly absolute immunity and only in
rare situations can it be discovered.” Barr v. United Farm Bureau Mut. Ins. Co., 560 N.E.2d
1250, 1256 (Ind. Ct. App. 1990) (citation omitted).
Kedron asks if Grange and its attorneys “allege” that any of the responses given
by its insureds—Hazeltine and RPS—in the Jessica Gaston Case are “inaccurate and/or
should not be relied upon” by Kedron and her counsel in this action. [DE 63-3]. The
way Kedron phrases Interrogatory No. 11 suggests she is looking to know the opinions
of Grange Insurance and its attorneys about Hazeltine’s and RPS’s previous testimony.
To answer the interrogatory as written, Grange Insurance and its attorneys would have
to make a judgment about the accuracy of the prior testimony and how it would be
used in Kedron’s instant case. Such judgments qualify as opinions and mental
impressions of Grange’s counsel, which are explicitly protected from disclosure under
the work-product doctrine. Thus, Kedron’s motion to compel Grange Insurance to
respond to Interrogatory No. 11 is denied as to attorney work product, mental
impressions, and opinions.
That said, facts are not protected under the work-product doctrine. “Mutual
knowledge of all the relevant facts gathered by both parties is essential to proper
litigation, [and] either party may compel the other to disgorge whatever facts he has in
his possession.” Hickman v. Taylor, 329 U.S. 495, 507 (1947). As a result, the factual and
legal bases for claims and defenses sought through contention interrogatories, like
Kedron’s Interrogatory No. 11, must usually be produced so long as the requests are not
abusive. See Amax Coal Co. v. Adams, 597 N.E.2d 350, 353-54 (Ind. Ct. App. 1992). Grange
Insurance is thus reminded to include any factual statements responsive to
Interrogatory No. 11, to the extent that they have not yet been produced, in their
supplemental discovery responses produced pursuant to Fed. R. Civ. P. 26(e) and this
Court’s Rule 16(b) Scheduling Order [DE 18] through trial.
B. Correspondence between Attorneys Jennifer Davis / Thad Kelley / Bill
Kelley and Representatives of Grange Insurance
Kedron also challenges Grange Insurance’s withholding of correspondence
between its representatives and Attorneys Jennifer Davis, Thad Kelley, and Bill Kelley
(“the RPS/Hazeltine Attorneys”) who Grange hired to represent its insureds, Hazeltine
and RPS. Grange Insurance asserts that the requested correspondence is protected from
disclosure by the attorney-client privilege.2 The attorney-client privilege “applies to all
communications between the client and his attorney for the purpose of obtaining legal
advice or aid, regarding the client’s rights and liabilities.” Groth v. Pence, 67 N.E.3d 1104,
1118 (Ind. Ct. App. 2017) (quoting Corll v. Edward D. Jones & Co., 646 N.E.2d 721, 724
(Ind. Ct. App. 1995)). To assert the attorney-client privilege, the party must prove “1)
the existence of an attorney-client relationship and 2) that a confidential communication
was involved.” Brown v. Katz, 868 N.E2d 1159, 1166 (Ind. Ct. App. 2007).
Kedron argues that the attorney-client privilege no longer applies to the
requested correspondence because Grange Insurance and RPS/Hazeltine now have
adverse interests regarding the outcome of this case. Moreover, Kedron argues that
certain categories of documents, as identified on Grange’s privilege log, should not be
protected because they suggest the attorneys were not providing legal advice, but were
acting as claims adjusters. Kedron cites categories including “Regarding Future
Handling and Investigation” and “Regarding Preservation and Inspection.” [DE 63 at
5]. Additionally, Kedron challenges Grange Insurance’s claim of privilege over
2 The Supreme Court of Indiana has recognized that a lawyer appointed by an insurance company to
defend its insured can represent both the insurer and the insured, meaning that the defense lawyer has an
attorney-client relationship with both, as long as the interests of the insurer and the insured align. See
Cincinnati Ins. Co. v. Wills, 717 N.E.2d 151, 161 (Ind. 1999). Grange Insurance share the same interests with
RPS/Hazeltine in challenging the liability for the negligence and spoliation claims in both the Jessica
Gaston case and this instant suit and has provided RPS/Hazeltine with defense support. Thus, Grange
Insurance is a co-client of Attorneys Jennifer Davis, Thad Kelley, and Bill Kelley, and attorney-client
privilege may be invoked to protect their communication.
documents that do not seem to contain confidential information between attorneys and
clients. While the first argument is unpersuasive, the latter two prevail.
First, “the attorney-client privilege [can]not be used to prevent the disclosure of
privileged communications against the now adverse but formerly commonly-
represented parties.” Woodruff v. Am. Fam. Mut. Ins., 291 F.R.D. 239, 244 (S.D. Ind. 2013)
(citing Ind. R. Prof’l. Conduct 1.7). In Woodruff, an insurer provided defense counsel for
an insured in a car crash case. After an unsuccessful trial, the insured filed a bad-faith
claim against the insurer who then tried to assert attorney-client privilege over its
communications with the attorneys it hired to represent the insured. The court found
the interests of insured and insurer to have become adverse and required the insurer to
disclose the communications at issue. Id. at 245. The Woodruff court relied on multiple
cases applying this exception to the attorney-client privilege when previously
commonly represented parties later became direct opponents in litigation. See Simpson
v. Motorist Mut. Ins. Co., 494 F.2d 850 (7th 1974); Med. Assurance Co., Inc. v. Weinberger,
M.D., No. 4:06-cv-117, 2013 WL 501746 (N.D. Ind. Feb. 7, 2013); Camacho v. Nationwide
Mut. Ins. Co., 287 F.R.D. 688 (N.D. Ga. Dec. 3, 2012).
Here, Kedron brings forth no evidence that Grange Insurance and
RPS/Hazeltine are making claims against each other in this third-party action or any
other lawsuit. As a result, they are not adverse parties. Moreover, Kedron has offered
no evidence that they are working in opposition to each other while working together
to disprove the claims asserted by Kedron. In fact, Grange Insurance continues to
provide defense for RPS/Hazeltine to this day. Without any showing of adverse
interests, Kedron has not established that the attorney-client privilege should be
disturbed as to the correspondence between Grange Insurance and the RPS/Hazeltine
attorneys.
Second, the attorney-client privilege shields confidential communication
between attorney and client made for the purpose of obtaining legal advice. Potts v.
Allis-Chalmers Corp., 118 F.R.D. 597, 602 (S.D. Ind. May 28, 1987). The privilege does not
apply “to the extent that an attorney has acted as a claim adjuster, claims process
supervisor, or claims investigation monitor, and not as a legal advisor . . . .” Illiana
Surgery & Med. Ctr. LLC v. Hartford Fire Ins. Co., No. 2:07 cv 3, 2008 WL 2622803, at *2
(N.D. Ind. June 30, 2008) (quoting Stout v. Ill. Farmers Ins. Co., 150 F.R.D. 594, 610 (1993)).
In Illiana Surgery, a hospital seeking indemnification from its own insurer for property
loss and damages from a database destruction incident challenged its insurer’s claim of
privilege over some documents produced by the law firm employed by its insurer.
Illiana Surgery, 2008 WL 2622803, at *1. The court held that without providing evidence
to show that the law firm performed legal advisory functions, fulfilling obligations
beyond claims adjusting, the insured cannot assert attorney-client privilege over the
disputed documents. Id. at *3. The “public policy issue behind this result is that
insurance companies . . . should not be permitted to insulate the factual findings of its
claims investigation by the involvement of an attorney to perform such work.” Id. at *2
(quoting Cont’l Cas. Co. v. Marsh, No. 01 C 0160, 2004 WL 42364, at *2 (N.D. Ill. Jan. 6,
2004) (holding that the insurer’s letter regarding the payment of the settlement was not
privileged because the insurer was acting as a claims adjuster or claims process advisor,
conducting an “ordinary course of an insurer’s business”)). Therefore, the key question
at issue is whether the documents Grange categorized as “Regarding Future Handling
and Investigation” and “Regarding Preservation and Inspection” are factual findings
from claims investigations typically performed by insurers post-accident, or legal
advice given by attorneys or parties performing as attorneys in anticipation of litigation.
The three documents at issue were produced on December 7, 2015, and January
6, 2016, only one to two months after the Gaston accident happened on November 24,
2015, and about two years before the complaint for the Jessica Gaston Case was filed in
the Wabash Superior Court on September 20, 2017. The details provided by the
Amended Privilege Log and timeline of events suggests the documents were produced
by Grange Insurance and its affiliates to gather information about the crash
immediately, which is one of insurer’s functions. It is unconvincing that at the time,
Grange Insurance was already providing RPS/Hazeltine with legal advice for the
litigation that would commence about two years later. Moreover, the matters discussed
such as “investigation,” “inspection,” and “preservation” appear to relate to factual
findings of claims investigation directly. These documents are produced within the
“ordinary course of an insurer’s business” and function as a claims processor, rendering
them discoverable. See Continental Casualty, 2004 WL 42364, at *5. Without more detail
from Grange Insurance to clarify the functions of the parties in creating these
documents and the type of information they contain, Grange has not refuted Kedron’s
challenge to attorney-client privilege. Considering Grange Insurance had the
opportunity to confront Kedron’s argument in its Response to Kedron’s Motion to
Compel [DE 66] and during the hearing but did not do so, Grange Insurance failed to
meet its burden to present facts showing the privilege applies. Thus, Grange Insurance
is ordered to produce documents categorized as “Regarding Future Handling and
Investigation” (Grange 000016-18; Grange 000019-21) and “Regarding Preservation and
Inspection” (Grange 000026-28).
Third, as a “general rule information regarding a client’s attorney’s fees is not
protected by the attorney-client privilege because the payment of fees is not considered
a confidential communication between attorney and client.” Corll, 646 N.E.2d at 725; see
also Boulangger v. Ohio Valley Eye Inst., 89 N.E.3d 1112, 1116 (Ind. Ct. App. 2017). Yet, the
attorney-client privilege still applies in situations where revealing a payee’s identity or
fee arrangement would also reveal confidential information. See Hueck v. State, 590
N.E.2d 581, 585 (Ind. Ct. App. 1992). The record includes nothing to suggest such a
concern here. Accordingly, Grange Insurance is ordered to produce documents
categorized as “Defense Invoice,” (Grange 000022-23) “Defense Costs,” (Grange 000039;
Grange 000082; Grange 000087-89; Grange 000093-96; Grange 002322-2325), and
“Defense Costs and Budgeting” (Grange 000193-197). Grange Insurance also asserted
privilege over other cost-relevant documents categorized as related to attorney
assignment, attorney tasks, defense strategies, and future handling. Those categories
would necessarily include confidential legal advice, or privileged information, that
should not be disclosed.
For the reasons above, the attorney-client privilege is properly asserted by
Grange Insurance as to certain categories of information. Documents containing
confidential information between representatives of Grange Insurance and the
RPS/Hazeltine Attorneys are protected. Nevertheless, the information Grange
Insurance has categorized as “Regarding Future Handling and Investigation,”
“Regarding Preservation and Inspection,” “Defense Invoice,” “Defense Costs,” and
“Defense Costs and Budgeting” is not privileged because it does not contain legal
advice or otherwise confidential communications.
C. Correspondence from the Insurer to the Insured
Kedron challenges Grange Insurance’s withholding of its correspondence
directed to RPS and Hazeltine, whom Grange insures. Grange Insurance argues the
insured-insurer privilege prevents the requested materials from being disclosed.
Kedron disputes the applicability of the privilege to the requested information.
Specifically, Kedron argues that only communications from the insured to the insurer
are protected by the privilege, not communications from the insurer to the insured.
Thus, Kedron wants Grange Insurance to produce its communications about the crash
directed to RPS and Hazeltine but does not ask for RPS’s and Hazeltine’s
communications to Grange.
The main goal of the insured-insurer privilege is to prevent “what should be a
cooperative relationship among the insured, insurer and attorney” from being
“undermine[d].” Richey v. Chappell, 594 N.E.2d 443, 446 (Ind. 1992). In Richey, the
plaintiff in a personal injury action requested production of a statement the defendant
made to his insurer concerning the accident. Id. at 444-45. Recognizing that the insurer
may be exposed to sensitive matters about the insured while fulfilling its duty to defend
its insured against claims by third persons, the Indiana Supreme Court expanded the
attorney-client privilege to insured and insurer. Id. at 446. The court held that
“statements from the insured to the insurer concerning an occurrence which may be
made the basis of a claim by a third party are protected from disclosure.” Id. at 447.
The Richey court only addressed discovery of statements from insureds to
insurers. Citing Richey, the Indiana Court of Appeals later upheld a trial court’s decision
finding that “the [insured-insurer] privilege applies to communications between the
insured and its agents to the insurer.” Steinrock Roofing & Sheet Metal, Inc. v. McCulloch,
965 N.E.2d 744, 750 (Ind. Ct. App. 2012) (emphasis added and quotations omitted). In
Steinrock, the plaintiff roofing contractor sought the claims file from the defendant
homeowner’s insurance carrier, but the court found the file protected by the privilege.
Id. at 748–50. As insurance claims files include both the insurer’s and the insured’s
communications to the other, Steinrock effectively extended Richey to protect
communications from insurers and insureds.
Thus, Kedron has not overcome Grange Insurance’s assertion of the insurer-
insured privilege regarding its correspondence to RPS and Hazeltine about the
November 2015 crash and subsequent litigation. Plaintiff’s request for the
correspondence from the insurer to the insured is denied.
D. Responses to Certain Discovery Requests to the Extent They Relate to the
Spoliation of Evidence
Lastly, Kedron argues that even if the spoliation-related information Grange
Insurance withheld in the Amended Privilege Log is protected by attorney-client and
insurer-insured privileges, the privileges do not apply to matters involving a crime or
fraud. Courts in other states have extended this crime-fraud exception to privileged
information related to spoliation. As a result, Kedron argues information and
documents related to the spoliation of the lighting system are discoverable.
“[T]he attorney-client privilege is not absolute, and sometimes the larger societal
interest in preventing illegal conduct outweighs the equally important interest of
safeguarding confidential communications. In such situations, the crime-fraud
exception applies.” Lahr v. State, 731 N.E.2d 479, 482 (Ind. Ct. App. 2000). The rationale
underlying the crime-fraud exception is to assure “that the seal of secrecy between
lawyer and client does not extend to communications made for the purpose of getting
advice for the commission of a fraud or crime.” United States v. Zolin, 491 U.S. 554, 563
(1989). In determining whether the crime-fraud exception applies, Indiana courts utilize
a two-part test. First, the moving party must make a prima facie showing that a
sufficiently serious crime or fraud occurred. Lahr, 731 N.E.2d at 483. Next, the moving
party “must establish some relationship between the communication at issue and the
prima facie violation.” Id.
To meet the prima facie burden, the evidence presented must provide a prudent
person with a reasonable basis to suspect the perpetration of a crime or fraud. Id.
(citation omitted). When the court cannot make an informed decision on whether
particular communications fall within the crime-fraud exception to the privilege, in
camera review of alleged privileged communications may be necessary. Zolin, 491 U.S. at
565. But before a court may conduct in camera review, the party opposing the privilege
must present evidence sufficient to support a reasonable belief that in camera review
may yield evidence establishing the exception’s applicability. Id. at 570-72.
Indiana recognizes spoliation as an independent tort, which “is analyzed either
as a species of negligence or under the rubric of intentional interference with
prospective or actual civil litigation.” J.S. Sweet Co. v. Sika Chem. Corp., 400 F.3d 1028,
1032 (7th Cir. 2005). A defendant is liable in Indiana for negligent spoliation if a plaintiff
shows that the defendant, who allegedly lost or suppressed the evidence, owed a duty
to the plaintiff to preserve the material, “that the duty was breached, that [the plaintiff
was] harmed by the breach, and ‘that the harm resulted in damages that can be proven
with reasonable specificity.’” J.S. Sweet Co., 400 F.3d at 1034 (quoting Thompson ex rel.
Thompson v. Owensby, 704 N.E2d 134, 140 (Ind. Ct. App. 1998)).
Here, this Court addressed the question of Grange Insurance’s duty in its
summary judgment order dated May 4, 2023. The Court held that Grange Insurance had
a duty to exercise reasonable care to preserve the lighting system, but did not address
the element of breach because it poses a question of fact to be decided by a jury. [DE 102
at 9-10]. Therefore, whether Grange Insurance breached its duty to preserve the lighting
system in anticipation of litigation is still an open question.
In arguing that the crime-fraud exception should apply to communications about
the alleged destruction of evidence, Kedron presents evidence in support of her
spoliation claim. See Zolin, 491 U.S. at 570-72. Specifically, Kedron filed an affidavit from
Jessica Ellis, P.E., who stated that Hyde’s inspection on July 23, 2016, “altered” critical
components of the lighting system and “prevented all future analysts from reliably
determining the activation state of the tail lamps at the time of the incident.” [DE 63-12
at 12-13]. Additionally, Kedron points to an affidavit and expert report from Paul
Thorgersen, P.E., C.F.E.I, who opined that Hyde’s failure to preserve the condition of
the connectors has “altered the evidence and prevented proper examination,” and that
Hyde’s reports on the status of the lamp at the time of the collision contain
inconsistency. [DE 63-11 at 2]. Kedron then directs the Court to Hyde’s deposition
testimony stating that he informed Attorney Jennifer Davis that he paused the
inspection after determining that “further examination [of the lighting system] may be
destructive in nature to the sealed unit.” [DE 63-7 at 12]. Hyde then testified that he
performed the additional testing after Attorney Davis instructed him to do so. [DE 63-8
at 8].
Based on the evidence produced to the Court, Kedron has not clearly established
whether the crime-fraud exception applies to communications before Hyde inspected
the lighting system in July 2016 between Grange Insurance’s representatives, Attorney
Davis, and Hyde. Kedron has, however, met her burden to support a reasonable belief
that in camera review may yield evidence establishing the exception’s applicability. See
Zolin, 491 U.S. at 570-72.
Thus, the Court will conduct an in camera review of information responsive to
Kedron’s Interrogatory No. 3 and Requests for Production No. 1, No. 8,3 and No. 11 to
3 Kedron asserts the crime-fraud exception applies to her Requests for Production No. 1 and No.
8 in the body of her Memorandum in Support of First Motion to Compel [DE 63 at 10-11], but
does not ask for the production of either request in her prayer for relief. Nevertheless, the Court
will require Grange Insurance to respond to Requests No. 1 and No. 8—the extent related to the
the extent related to the alleged spoliation of evidence to determine whether a prudent
person would have a reasonable basis to suspect the perpetration of a crime or fraud.
III. CONCLUSION
For the reasons discussed above, Plaintiff’s Motion to Compel [DE 62] is
DENIED IN PART and GRANTED IN PART. Grange Insurance is ORDERED to
• produce correspondences between RPS/Hazeltine’s attorneys (Davis, Kelley,
and Kelley) and representatives of Grange Insurance as detailed as the
analysis above in response to Kedron’s discovery requests no later than
October 13, 2023; and
• deliver information responsive to Kedron’s Interrogatory No. 3 and Request
for Production No 1, No. 8, and No. 11—the extent related to the alleged
spoliation of evidence—to the undersigned on or before October 13, 2023, for
purposes of in camera review.
The deadline for the close of all discovery is EXTENDED until December 15,
2023, for the limited purposes of (1) Grange Insurance’s production of discovery
responses consistent with this Order; (2) the Court’s in camera review and resolution of
the remaining crime-fraud exception issues; and (3) any necessary follow-up
depositions. The deadline for filing any discovery-related, nondispositive motion
deadline is November 17, 2023. Consistent with the mandate of Fed. R. Civ. P. 1 to
secure a just, speedy, and inexpensive resolution of this action, the parties should
expect that additional extensions of these case management deadlines are not likely to
be granted absent a showing of circumstances beyond the control of the parties and
their inability to negotiate those circumstances in the exercise of due diligence.
alleged spoliation of evidence—for in camera review purposes because such production may
yield evidence to help the Court determine the applicability of the crime-fraud exception.
SO ORDERED this 29th day of September 2023.
/s/Michael G. Gotsch, Sr.
Michael G. Gotsch, Sr.
United States Magistrate Judge