Sovereign Cape Cod Investors LLC v. Eugene A. Bartow Insurance Agency, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

--------------------------------------------------------------X

SOVEREIGN CAPE COD INVESTORS LLC,

Plaintiff, MEMORANDUM

AND ORDER

20-CV-03902 (DG)(JMW)

-against-

EUGENE A. BARTOW INSURANCE AGENCY,

INC.,

Defendant.

--------------------------------------------------------------X

A P P E A R A N C E S:

David G. Skillman

Tuttle Yick LLP

352 Seventh Avenue

14th Floor

New York, NY 10001

Attorney for Plaintiff Sovereign Cape Cod Investors LLC

Maureen E. O'Connor

L’Abbate Balkan Colavita & Contini

3 Huntington Quadrangle, Suite 102-S

Melville, NY 11747

Attorney for Defendant Eugene A. Bartow Insurance Agency, Inc.

WICKS, Magistrate Judge:

This case involves a single claim of professional malpractice against an

insurance broker for allegedly failing to procure insurance. Specifically, Plaintiff

Sovereign Cape Cod Investors, LLC (“SCCI”) claims Defendant Eugene A. Bartow

Insurance Agency, Inc. (“Bartow”) did not secure adequate commercial property

insurance, as SCCI claims it requested Bartow to do, before SCCI’s commercial

property sustained significant water damage, leaving SCCI uninsured and “under

water.” Before the Court at this time are two motions: one to compel document

production and a second to quash non-party subpoenas.

The Court assumes familiarity with the prior proceedings but will recount a

brief background of recent events relevant to the present dispute. On November 22,

2021, SCCI moved to compel production of, inter alia, Bartow’s documents and

communications involving its insurance carrier, Utica Mutual Insurance Company

(the “Utica Documents”). (DE 17.) Bartow opposed that motion. (DE 18.) On

December 28, 2021, the Court—in light of the fact that Bartow had yet to produce a

privilege log associated with the withheld Utica Documents—denied SCCI’s motion

with leave to renew and directed Bartow to produce a privilege log. (DE 21.) SCCI

now renews its motion, after having obtained Bartow’s privilege log, to compel the

production of the Utica Documents. (DE 24.) Distilling the arguments, SCCI

contends that Bartow has not established that the work product doctrine or attorney-

client privilege protect the Utica Documents from disclosure and that, in any event,

Bartow waived its privilege objections in its responses to SCCI’s document requests.

(Id.)

In a separate motion, SCCI moves to quash Bartow’s third-party subpoenas

directed at Bachant Builders, the general contractor that has provided SCCI

numerous appraisals for construction work on the property at issue. (DE 29.)

Bartow opposes both of SCCI’s motions in their entirety. (DE 27, 30.) For the

reasons that follow, SCCI’s motion to compel is granted in part and denied in part,

and SCCI’s motion to quash is denied.

I. DISCUSSION

A. SCCI’s Motion to Compel

i. Are the Utica Documents Protected under the Work Product Doctrine?

Long ago in Hickman v. Taylor, 329 U.S. 495 (1947), the Supreme Court

enunciated the rule that the work product doctrine protects documents prepared in

anticipation of litigation from adversarial invasion absent a showing of substantial

need. This rule, of course, has since been codified in Federal Rule of Civil Procedure

26(b)(3). Fed. R. Civ. P. 26(b)(3)(A); see Mermelstein v. United States Dep’t of

Just., Fed. Bureau of Investigation, 19-CV-00312 (GRB) (JMW), 2021 WL

3455314, at *7 (E.D.N.Y. Aug. 4, 2021). Materials are prepared “in anticipation of

litigation,” and thus fall within the purview of work product protection, “if ‘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.’” United States v. Adlman, 134 F.3d 1194, 1202 (2d Cir. 1998)

(citation omitted and emphasis in original). On the other hand, the “‘work product

[doctrine] does not apply to’ documents that are prepared ‘in the ordinary course of

business or that would have been created in essentially the same form irrespective

of the litigation.’” Rubie’s Costume Co., Inc. v. Kangaroo Mfg., Inc., CV 16-6517

(SJF) (AKT), 2018 WL 4864833, at *3 (E.D.N.Y Sept. 28, 2018) (quoting Adlman,

134 F.3d at 1202). It is beyond cavil that “‘[t]he party asserting work-product

immunity bears the burden of establishing that it applies.’” United States v. Town

of Oyster Bay, 14-CV-2317 (GRB)(SIL), 2022 WL 34586, at *4 (E.D.N.Y Jan. 3,

2022) (brackets in original) (quoting Safeco Ins. Co. of Am. v. M.E.S., Inc., 289

F.R.D. 41, 46 (E.D.N.Y. 2011)); see In re Grand Jury Subpoena Dated July 6, 2005,

510 F.3d 180, 183 (2d Cir. 2007) (“The party invoking the [work product doctrine]

bears the heavy burden of establishing its applicability”).

The insurance context presents even thornier issues, requiring close

examination of the facts when applying these rules. That is, the work product

doctrine in the insurance context is “‘particularly troublesome because it is routine

business of insurance companies to investigate and evaluate claims.’” United Nat’l

Ins. Co. v. MNR Hotel Grp./363 Roberts Partners, LLC, Civ. No.

3:19CV01265(JAM), 2021 WL 1220819, at *3 (D. Conn. Apr. 1, 2021) (quoting

Roc Nation LLC v. HCC Int’l Ins. Co., PLC, No. 19CV00554(PAE), 2020 WL

1970697, at *3 (S.D.N.Y. Apr. 24, 2020)); see 99 Wall Dev. Inc. v. Allied World

Specialty Ins. Co., 18-CV-126 (RA) (KHP), 2020 WL 2730944, at *7 (S.D.N.Y May

6, 2020) (“In insurance matters, it is often difficult to determine when work product

protection might apply. This is because it is routine for insurance companies to

investigate claims while at the same time the potential for litigation is ever

present.”); Certain Underwriters at Lloyd’s v. Nat’l R.R. Passenger Corp., 14-CV-

4717 (FB), 2016 WL 2858815, at *6 (E.D.N.Y. May 16, 2016) (“Indeed, numerous

courts have recognized the inherent difficulty in assessing work product claims made

by an insurance company and the insurance company’s consequent need to provide

support for its work product claims”) (collecting cases). Because of the blurred line

dividing work product and insurance claims reports,

courts presented with work product disputes in the insurance context

must be careful not to hold that documents are protected from discovery

simply because of a party’s “ritualistic incantation” that all documents

created by insurers are made in preparation for litigation, and mindful

of the fact that insurer-authored documents are more likely than

attorney-authored documents to have been prepared in the ordinary

course of business, rather than for litigation purposes.

Weber v. Paduano, No. 02 Civ. 3392(GEL), 2003 WL 161340, at *4 (S.D.N.Y. Jan.

22, 2003) (citation omitted).

In other words, the work product doctrine is not applicable merely because a

document was created by an insurer. Parties relying on the work product doctrine

in the insurance context therefore “may not rest on conclusory allegations of

privilege, but must establish, by objective evidence, that the author of the document

anticipated litigation at the time that the document was created, and would not have

created the document in essentially the same way had the prospect of litigation not

existed.” Id. (citing Adlman, 134 F.3d at 1202).

Here, Bartow has failed to establish that most1 of the Utica Documents are

protected by the work product doctrine. Because this case features an insurance

dispute—adding a layer of complexity to the work product analysis—it is incumbent

upon Bartow, the party asserting the privilege,2 to “demonstrate by specific and

competent evidence that the documents were created in anticipation of litigation.”

Id. (citation omitted). Rather than doing so, Bartow states in conclusory fashion

that, “as detailed in Bartow’s privilege log, SCCI’s request calls for production of

1 These documents include those bearing Bates Numbers 1082–1085; 1089; 1098–1103; 1105–

1112; 1114; 1123–1127; 1132–1134; 1135–1138; 1146–1147; 1153–1154; 1155–1171; 1192–

1202; 1211–1220; 1249–1259; 1270–1272; 1285–1290; 1296; 1301; 1312–1316; 1328–1329;

1340–1341; 1346–1347; 1369–1377; 1384–1392; 1403–1405; 1416; 1436–1437; 1453; 1490–

1491; 1503; 1515–1521; 1532–1534; and 1547. (DE 24-1 at 1–3.)

2 In its opposition, Bartow suggests that it is SCCI’s burden here to establish that is has a substantial

need for Utica Documents. (DE 27 at 1.) In doing so, Bartow puts the proverbial cart before the

horse, as this argument assumes that the work product doctrine protects the communications at

issue. As noted supra, it is Bartow’s, not SCCI’s, burden to establish in the first instance that the

work product privilege protects the Utica Documents. In re Grand Jury Subpoena Dated July 6,

2005, 510 F.3d at 183. If Bartow did indeed make this showing, then and only then would the

burden shift to SCCI to establish a substantial need.

documents that are specifically addressed in the Adlman decision, material prepared

in anticipation of litigation, i.e., which ‘were prepared to assist in the making of a

business decision expected to result in the litigation[.]’” (DE 27 at 2–3.) Bartow’s

privilege log is equally unilluminating. The descriptions of the withheld

communications proffered by Bartow include “Background investigation

documents,” “Investigative Report to E&O Insurer,” and “Email and Investigative

Report re background investigation.” (DE 24-1.) If anything, these descriptions

suggest that the communications at issue are routine insurance investigative reports

that are not covered by the work product doctrine. Compare Weber, 2003 WL

161340, at *5–7. Bartow’s only other argument—that SCCI retained counsel

immediately following the water damage event at issue (DE 27 at 3)—is inapposite

and woefully fails to establish that the withheld documents were prepared in

anticipation of litigation as opposed to being prepared in the ordinary course of

business.

Bartow has, however, established that the Utica Documents bearing Bates

Numbers 1550–2671 are covered by the work product doctrine. These

communications are between Bartow, its counsel, and Utica, and concern the

“[i]nital assignment and background materials for counsel at outset of litigation and

commencement of action, including notes, mental impressions, input from Bartow

and related materials.” (DE 24-1 at 3.) These communications occurred after SCCI

commenced this action, involved Bartow’s counsel, and appear by description to

contain mental impressions and notes. Au fond, these materials “clearly do not relate

to the regular claims filing process,” and therefore are covered by the work product

doctrine. 99 Wall Dev. Inc., 2020 WL 2730944, at *8; see also Mount Vernon Fire

Ins. Co. v. Try 3 Bldg. Servs., Inc., No. 96CV05590(MJL)(HBP), 1998 WL 729735,

at *7 (S.D.N.Y. Oct. 16, 1998) (“While not determinative, an insurer’s referral of a

claim to its attorney is a significant factor in determining when the insurer anticipates

litigation.”).

ii. Did Bartow Waive the Attorney-Client Privilege and Work Product

Protections?

SCCI argues that Bartow waived its work product and attorney-client

protections when it failed to raise them in its responses and objections to SCCI’s

document demands. (DE 24 at 2–3.) Bartow in turn contends that these privileges

were indeed raised in its responses and objections in the general objections portion

of that document. (See DE 27 at 3; DE 24-2 at 2.)

In 2015, the Advisory Committee to the Federal Rules of Civil Procedure

amended Rule 34 with the goal of “reducing the potential to impose unreasonable

burdens by objecting to requests to produce.” Fed. R. Civ. P. 34 advisory committee

notes to 2015 amendment. Fifteen months later, in Fischer v. Forrest, 14 Civ. 1304

(PAE) (AJP), 14 Civ. 1307 (PAE) (AJP), 2017 WL 773694 (S.D.N.Y. Feb. 28,

2017), the Honorable Andrew J. Peck painstakingly detailed the changes brought on

by the 2015 amendments, noting that it was “time, once again, to issue a discovery

wake-up call to the Bar in this District,” id. at *1. In his order, Judge Peck walked

through the newly adopted language of Rule 34 and the associated advisory

committee notes, highlighting “Rule 34’s requirement to state objections with

specificity . . . and to clearly indicate whether responsive material is being withheld

on the basis of objection[.]” Id. at *3. Judge Peck’s shot across the bow of litigators

underscored that Rule 34 no longer allows parties to assert generalized objections to

discovery requests. See generally id. at *1–3; see also CapRate Events, LLC v.

Knobloch, 17-CV-5907-NGG-SJB, 2018 WL 4378167, at *2 (E.D.N.Y Apr. 18,

2018) (“The 2015 Amendments to the Federal Rules no longer permits global,

generalized objections to each request.”). That is, generalized objections peppered

in a response and objection in scattershot form—seemingly applying to all demands

rather than being tailored to particular demands—violate the rule. The exception to

this rule—as noted by Judge Peck and other subsequent courts—is that general

objections may be appropriate only if the objection applies to every response to every

document request. Forrest, 2017 WL 773694 at *3 (noting that “[g]eneral objections

should rarely be used after December 1, 2015 unless each such objection applies to

each document request”); see, e.g., Lombardo v. R.L. Young, Inc., 3:18 CV 188

(JBA), 2019 WL 4233568, at *3 (D. Conn. Sept. 6, 2019) (same); Futreal v. Ringle,

No. 7:18-CV-00029-FL, 2019 WL 137587, at *4 (E.D.N.C. Jan. 8, 2019)

(interpreting Fischer). And, of course, it goes without saying that failure to properly

object on the basis of a privilege or the work product doctrine “may be viewed as a

waiver of the privilege or protection.” Fed. R. Civ. P. 26(b)(5) advisory committee

notes to 1993 amendment.

The Court concludes that Bartow did not waive the attorney-client privilege

or work product protection in asserting general objections to SCCI’s document

demands. As noted in its opposition, Bartow did lodge a general privilege objection

for each of SCCI’s document requests, and therefore preserved its objections by

putting SCCI on notice of their existence. (DE 27 at 3; DE 24-2 at 2.) Although

Bartow’s counsel by no means exercised best practices in the manner of doing so,

the stated, general objections included privilege claims which, as noted in Forrest,

ordinarily apply to every request. 2017 WL 773694 at *3 (deeming objections made

without specificity waived “except as to privilege”).3 As such, Bartow’s privilege

objections fall under the narrow exception—which, again, should be used

sparingly—to the rule that general objections are no longer permissible. Thus,

3 The Court respectfully disagrees with the Futreal court’s interpretation of Forrest, in particular

its conclusion that Forrest “does not support [the] use of general objections to raise work-product

objection[s].” 2019 WL 137587, at *4. The Forrest court explicitly referenced the practice of

objecting to the production of privileged material in discussing circumstances where an objection

applies to each document demand. 2017 WL 773694 at *3 (“General objections should rarely be

used after December 1, 2015 unless each such objection applies to each document request (e.g.,

objecting to produce privileged material).”) (emphasis added). This interpretation of Forrest

squares with the importance of privileged materials and courts’ general reluctance to require

disclosure of such materials.

Bartow did not waive the attorney-client privilege or work product protection in

lodging general, as opposed to specific, objections to SCCI’s document requests.

In sum, there has been no waiver of the work product objection by Bartow.

* * *

Accordingly, the Court finds that the Utica Documents bearing Bates

Numbers 1550–2671 are protected by the work product doctrine and need not be

produced, but the remaining documents are not and must be disclosed.

B. SCCI’s Motion to Quash

SCCI moves to quash Bartow’s third-party subpoenas directed at Bachant

Builders, urging that the subpoenas are untimely because they were issued outside

of the deadline for fact discovery. (DE 29.) Bartow responds that the parties remain

entitled to engage in fact discovery because the end date for all discovery has yet to

pass. (DE 30.) Both parties, however, miss a crucial issue—whether SCCI even has

standing to challenge Bartow’s subpoenas.

In assessing a party’s motion to quash a non-party subpoena, courts must

consider, as a threshold matter, whether the moving party has standing to make such

a motion. Doe v. Town of Greenwich, Civ. No. 3:18CV01322(KAD), 2020 WL

2374990, at *2 (D. Conn. Apr. 21, 2020) (“As a threshold matter, the Court considers

whether [the movant] has standing to move to quash or for a protective order as to

these subpoenas.”). To have standing to challenge a non-party subpoena, the movant

must have “some personal right or privilege with regard to the documents sought.”

9A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2459

(3d ed. 2008); see Rodal v. Mass. Mut. Life Ins. Co., CV 19-1960 (JMA) (AKT),

2020 WL 3448278, at *1 (E.D.N.Y. Apr. 23, 2020) (“A party ordinarily lacks

standing to quash a subpoena directed at a nonparty unless the party is seeking to

protect a personal privilege or right.”) (internal quotation marks and citation

omitted). “When deciding whether a personal privilege or right exists, courts should

consider ‘whether the information itself is private, confidential, privileged, or highly

sensitive.” Forsythe v. Midland Funding LLC, 18 CV 03276 (ARR) (CLP), 2019

WL 245459, at *3 (E.D.N.Y. Jan. 17, 2019) (internal quotation marks, brackets, and

citation omitted); see US Bank Nat’l Ass’n v. PHL Variable Ins. Co., No. 12 CIV.

6811(CM)(JCF), 2012 WL 5395249, at *2 (S.D.N.Y. Nov. 5, 2012) (explaining that

a “personal right or privilege” in the motion to quash context includes “an interest

in proprietary, confidential information” or “maintaining a privilege that would be

breached by disclosure”) (citation omitted). Importantly, the claim of personal right

or privilege “must be personal to the movant, not the non-party witness on whom the

subpoena was served.” Rodal, 2020 WL 3448278 at *2 (emphasis added) (internal

quotation marks and citation omitted).

SCCI has failed to establish that it has standing to move to quash Bartow’s

subpoenas directed at non-party Bachant Builders. All the Court can surmise from

SCCI’s motion is that SCCI obtained two appraisals from Bachant Builders—a

general contractor—for the cost of construction required to rectify the damage

caused by the water event. (DE 29 at 1.) SCCI does not assert any personal right or

privilege over materials and information sought by Bartow through the subpoenas at

issue. (See generally id. at 1–4.) Indeed, the issue of standing goes wholly

unaddressed in SCCI’s motion, presumably because SCCI has no basis to claim that

the information Bartow seeks is “private, confidential, privileged, or highly

sensitive” information personal to it. Forsythe, 2019 WL 245459 at *3. Because

SCCI has not established that it has standing to move to quash the subpoenas, its

motion must be denied.

Even if the Court were to conclude that SCCI has standing, the result would

not change. SCCI focuses its entire motion to quash on the grounds that Bartow’s

subpoenas are untimely—given that the fact discovery deadline has expired—and

unnecessary. (See generally DE 29.) SCCI is correct that “[f]act discovery deadlines

in federal court are more than just aspirational suggestions.” (Id. at 1 (citation

omitted).) However, in claiming that the parties are past the point where they may

conduct any fact discovery, SCCI misapprehends the discovery deadlines set by the

Court. Although general fact discovery concluded on December 10, 2021 (see

Electronic Order dated Nov. 12, 2021), all discovery, including expert discovery,

remains open until April 8, 2022 (see Electronic Order dated Jan. 13, 2022). That

the latter deadline includes expert discovery underscores that ancillary fact discovery

disclosures may be made up until April 8, 2022.

The current dispute highlights why the Court crafted this case’s discovery

schedule in a manner that permits the parties to engage in continuing fact discovery

until the ultimate close of all discovery. This leaves the parties opportunity to follow

up and conclude fact discovery as needed up to the end date of all discovery. Parties,

of course, always have a continuing obligation to supplement their initial

disclosures, including a computation of damages, “in a timely manner if the part[ies]

learn[] that in some material respect the disclosure or response is incomplete or

incorrect[.]” Fed. R. Civ. P. 26(e)(1)(A). That appears to be what SCCI did here

after learning that Bachant Builders original appraisal for construction costs

increased because of “cost of materials and . . . inflation generally.” (DE 29 at 1.)

Bartow is entitled to respond to this newly acquired information by conducting non-

party fact discovery. To hold otherwise would be contrary to Federal Rule of Civil

Procedure 1’s mandate that federal courts construe and administer the Rules to

secure a just determination of every action and proceeding. Fed. R. Civ. P. 1.

In sum, SCCI’s motion to quash is denied.

II. CONCLUSION

For the foregoing reasons, (1) SCCI’s motion to compel the production of the

Utica Documents is denied as to the documents bearing Bates Numbers 1550–2671

and granted as to all other documents; and (2) SCCI’s motion to quash is denied.

Dated: Central Islip, New York

March 3, 2022

S O O R D E R E D:

/s/ James M. Wicks

JAMES M. WICKS

United States Magistrate Judge