Jet Air Inc v. Alliance Air Parts Inc

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF OKLAHOMA

JET AIR, INC., )

)

Plaintiff, )

)

v. ) Case No. CIV-23-899-D

)

ALLIANCE AIR PARTS, INC., )

)

Defendant. )

ORDER

Before the Court is Plaintiff Jet Air, Inc.’s Motion to Quash and Memorandum of

Law in Support of Its Motion to Quash Subpoena to Produce [Doc. No. 33]. Defendant

Alliance Air Parts, Inc. filed a Response [Doc. No. 37], and Jet Air filed a Reply [Doc. No.

40].1 The matter is fully briefed and at issue.2

FACTUAL AND PROCEDURAL BACKGROUND

This case stems from a cabin fire in a Cessna 550 Aircraft bearing Registration No.

N22JA (hereinafter referred to as the “N22JA”). The fire allegedly started while one of Jet

Air’s employees attempted to install an oxygen bottle that had been purchased from

Alliance. Due to extensive damage from the fire, the N22JA was declared a total loss.

1 The Court refers to Plaintiff as “Jet Air” and Defendant as “Alliance.”

2 In its Motion, Jet Air states it “attempted to confer in good faith with Alliance via telephone and

email on multiple occasions . . . .” Pl.’s Mot. at 1-2. However, “Alliance’s counsel did not respond

with a position on this Motion except to ask for a privilege log.” Id. at 2. Despite Jet Air’s statement

to the contrary, this is not a “sincere attempt to resolve differences . . . .” See id. Indeed, it is unclear

how there could have been any “sincere attempt” to resolve the issues raised when it does not

appear the parties even discussed the substance of the Motion. Should future discovery disputes

arise, the Court fully expects the parties to engage in the good-faith, sincere discussions

contemplated by LCvR37.1.

After the fire, Jet Air filed a claim with its insurer, Allianz Global Risk US Insurance

Company (“Allianz Global”), who in turn hired McLarens Aviation to investigate the

circumstances surrounding the fire. Michael Staszel, an adjuster with McLarens, contacted

Alliance to place it on notice of the claim and discuss the underlying fire. Around this time

(approximately one month after the fire), two adjusters at McLarens—Mr. Staszel and Jack

Gunka—authored a report entitled “McLarens Preliminary Investigation Report to Allianz

Global Corporate & Specialty” (the “McLarens Report”).

During discovery in this case, Alliance issued a subpoena [Doc. No. 32-2] to

McLarens (the “McLarens Subpoena”) seeking documents related to its investigation of

the fire on behalf of Allianz Global. Jet Air filed the instant Motion seeking to quash the

McLarens Subpoena on the grounds that it seeks information—namely, the McLarens

Report—that qualifies as protected work product.3

3 Although Alliance does not contest Jet Air’s standing to challenge the McLarens Subpoena,

“decisions applying Rule 45[(d)(3)(A)] require a court to consider the movants' standing even if it

is not disputed.” Pub Serv. Co. of Okla. v. A Plus, Inc., CIV–10–651–D, 2011 WL 691204, at *2

(W.D. Okla. Feb. 16, 2011) (citing cases). As a general rule, “only the person to whom

the subpoena is directed has standing to object to its issuance.” Id. However, an exception exists

“where the challenging party asserts a personal right or privilege with respect to the

materials subpoenaed.” Id. “To satisfy the standing requirement on this basis, a conclusory

assertion that the subject documents ‘are private, confidential, and proprietary’ is insufficient;

instead, the challenging party must specifically identify the personal right or privilege on which

he relies.” Id. at *3 (quoting Hitachi Medical Systems America, Inc. v. Branch, No. 5:09cv1575,

2010 WL 3222424, at *2 (N.D. Ohio Aug. 13, 2010)). Here, because Jet Air specifically asserts

the information sought is protected by the work product doctrine, the Court concludes Jet Air has

standing to challenge the McLarens Subpoena. See, e.g., Lindley v. Life Investors Ins. Co. of Am.,

No. 08-CV-379-CVE-PJC, 2010 WL 1837715, at *1 (N.D. Okla. Apr. 30, 2010) (concluding that

defendant had standing to object to non-party subpoena based on attorney-client privilege

where subpoena sought a prior deposition of defendant's counsel and privileged communications

with them).

DISCUSSION

“On timely motion, the court for the district where compliance is required must

quash or modify a subpoena that: . . . requires disclosure of privileged or other protected

matter, if no exception or waiver applies[.]” Fed. R. Civ. P. 45(d)(3)(A)(iii). The party

“moving to quash a subpoena has the burden to demonstrate good cause and/or the

privilege to be protected.” Willis v. Progressive Direct Ins. Co., No. CV-22-349-SLP, 2023

WL 4305130, at *1 (W.D. Okla. June 30, 2023); In re Grand Jury Proc., 616 F.3d 1172,

1183 (10th Cir. 2010) (“The burden of establishing the applicability of [the attorney-client]

privilege rests on the party seeking to assert it.” (internal quotation marks omitted)).

To establish that a document is protected work product, the moving party “must

show that (1) the materials sought to be protected are documents or tangible things; (2)

they were prepared in anticipation of litigation or for trial; and (3) they were prepared by

or for a party or a representative of that party.” AKH Co. v. Universal Underwriters Ins.

Co., 300 F.R.D. 684, 688 (D. Kan. 2014) (internal quotation marks omitted); Fed. R. Civ.

P. 26(b)(3)(A). There are two primary considerations when determining whether a

document was prepared in anticipation of litigation:

The first is the causation requirement—the document in question must have

been created because of the anticipation of litigation (i.e. to prepare for

litigation or for trial). The second component imposes a reasonableness limit

on a party's anticipation of litigation—the threat of litigation must be real and

imminent. In addition, courts look to the primary motivating purpose behind

the creation of the document to determine whether it constitutes work

product. Materials assembled in the ordinary course of business or for other

non-litigation purposes are not protected by the work-product doctrine.

Kannaday v. Ball, 292 F.R.D. 640, 648-49 (D. Kan. 2013) (internal footnotes and quotation

marks omitted).

Jet Air argues that the “documents and information sought in the Subpoena request

McLarens’ claim file and any and all documents related to the incident.” Pl.’s Mot. at 5.

But, Jet Air continues, the claim file “and any other materials in McLarens’ possession are

protected work product because McLarens was hired to investigate this accident on [Jet

Air’s] behalf.” Id. Therefore, the McLarens investigation—and subsequent McLarens

Report—was “completed for the purpose of initiating a subrogation claim with this Court

and given that the aircraft was deemed a total loss – this lawsuit was the result.” Id. In other

words, according to Jet Air, “investigative material in McLarens’ possession is work

product resulting from the anticipation of this subrogation claim and therefore

inadmissible.” Id.

In response, Alliance takes issue with Jet Air’s framing and argues there is a

“rebuttable presumption that neither attorney work product nor attorney-client privilege

protects an insurer’s investigatory file on an insured’s claim from discovery before a final

decision is made.” Def.’s Resp. at 3-4 (quoting Lindley v. Life Invs. Ins. Co. of Am., 267

F.R.D. 382, 399 (N.D. Okla. 2010)). Further relying on Lindley, Alliance contends it is

“presumed that a document or thing prepared before a final decision was reached on an

insured’s claim, and which constitutes part of the factual inquiry into or evaluation of that

claim, was prepared in the ordinary and routine course of the insurer’s business of claim

determination and is not work product.” Id. (quoting Lindley, 267 F.R.D. at 299). Here,

Alliance concludes, a “report, authored by non-attorneys a little over a month after the

alleged loss, before a denial of the claim from Defendant’s insurer, and over twenty months

before litigation was commenced, cannot be fairly said to have been authored solely to

prepare for litigation.” Id. at 6.

Upon consideration, the Court finds that Jet Air has not carried its burden of

establishing that the information sought by the McLarens Subpoena is protected work

product, and, therefore, the subpoena should not be quashed. Jet Air maintains the

McLarens Report was prepared in anticipation of pursuing a subrogation claim against

Alliance. See Pl.’s Mot., Ex. 4, ¶ 4. But several considerations undercut that contention.

First, as to the causation prong identified by the Kannaday court, the temporal

proximity between the fire and completion of the McLarens Report suggests it was

prepared to investigate the facts underlying the fire, not due to the anticipation of litigation.

Allianz Global hired McLarens shortly after the cabin fire to investigate the circumstances

surrounding the fire. See Pl.’s Mot., Ex. 2 [Doc. No. 33-2], ¶ 3. Around that same time, Mr.

Staszel and Mr. Gunka authored the McLarens Report. This appears to have been

approximately one month after the fire, which supports the notion that the McLarens

Report was prepared in the ordinary course of business (or, at the very least, that preparing

for litigation was not the motivating factor behind the McLarens Report). See Falconcrest

Aviation, L.L.C. v. Bizjet Int’l Sales and Support, Inc., No. 03-CV-577-TCK-SAJ, 2005 WL

8179742, at *2 (N.D. Okla. June 23, 2005) (“An insurance company has a duty to

investigate and evaluate a claim to determine whether the claim is covered by its policy

with the insured. Thus, a routine investigation into a possibly resistible claim is within the

ordinary course of business for an insurance company.” (internal citation omitted)).4

Second, as to the reasonableness prong and even assuming the McLarens Report

was created in anticipation of litigation, the temporal proximity between completion of the

McLarens Report and the filing of this lawsuit—nearly two years—suggests that the threat

of litigation was not imminent. It might be true that a subrogation claim against Alliance

was a possibility, see Pl.’s Mot., Ex. 2, ¶ 4, but the “inchoate possibility, or even likely

chance of litigation, does not give rise to work product.” Ledgin v. Blue Cross & Blue

Shield, 166 F.R.D. 496, 498 (D. Kan. 1996) (citations omitted). Instead, “[b]ecause

litigation can, in a sense, be foreseen from the time of occurrence of almost any incident,

courts have interpreted the Rule to require a higher level of anticipation in order to give a

reasonable scope to the immunity.” Marten v. Yellow Freight System, Inc., No. Civ. A. 96–

2013–GTV, 1998 WL 13244, at *10 (D. Kan. Jan. 6, 1998) (citations and quotations

4 In its Reply, Jet Air argues that, unlike the investigations in two of the cases Alliance relies on

“where the insurer’s work was performed as part of a defense to existing claims, the investigation

and report in this matter were not created in the routine practice or ordinary course of business.”

Pl.’s Reply at 2. Instead, Jet Air argues, it “was and is investigating liability for purposes of

bringing and supporting the lawsuit – not to defend against one.” Id. (emphasis in original). It is

unclear to the Court how this is a meaningful difference. In both situations, an insurance company

is investigating the facts underlying a specific incident shortly after the incident occurred. Here,

McLarens was investigating the fire to determine whether a potential subrogation claim had merit.

Presumably, if McLarens had concluded that Alliance was not to blame for the fire, Jet Air would

not have brought this action. Therefore, although litigation was a possibility based on the outcome

of the McLarens Report, it is a stretch to claim the investigation “was a shift from the ordinary

activities of an insurer.” This is especially true when it very well could be argued that, in certain

situations, evaluating potential subrogation claims falls within the ordinary business for insurance

companies.

omitted). Jet Air provides the Court with no credible evidence supporting such a higher

level of anticipation of litigation against Alliance.

CONCLUSION

At the end of the day, it is Jet Air’s burden to establish that the McLarens Subpoena

seeks protected work product and, therefore, should be quashed. But Jet Air has not carried

its burden. For this reason, and those fully set forth in this Order, Jet Air’s Motion to Quash

[Doc. No. 33] is DENIED. The parties shall bear their own costs and fees associated with

the instant Motion.

IT IS SO ORDERED this 13" day of September, 2024.

Ally 0.O,Pit

TIMOTHY D. DeGIUSTI

Chief United States District Judge