United States District Court, W.D. Washington, Seattle
Attorneys and Law Firms A. Richard Dykstra, Peter J.
Mullenix, Friedman Rubin, Seattle, WA, for Plaintiff.
Videa, Jonathan R. Gross, Rebecca B. Aherne, Bishop Barry
Drath, Emeryville, CA, Jose Dino Vasquez, Karr Tuttle
Campbell, Seattle, WA, for Defendant.
ORDER ON PLAINTIFF'S MOTION TO COMPEL
L. ROBART, DISTRICT JUDGE.
matter comes before the court on Plaintiff MKB
(“MKB”) motion to compel
documents from Defendant American Zurich Insurance Company
(“American Zurich”). (See Mot. (Dkt.#
42).) Having considered the submissions of the parties, the
balance of the record, the relevant law, and being fully
advised, the court GRANTS in part and DENIES in part
MKB's motion. Within 10 days, American
Zurich must produce to MKB a new privilege
log that complies with the requirements set forth in this
order. If any discovery disputes remain following American
Zurich's compliance with this order, the court directs
the parties to confer and proceed in a manner consistent with
the court's local rules and this order.
case is about an insurance dispute. MKB is a
Washington joint venture comprised of Derian, Inc. and R.
Scott Constructors, Inc. (Am.Compl. (Dkt.#
35) ¶ 1.) American Zurich issued MKB a
“Builders Risk” policy for the period June 15,
2012, to October 31, 2012. (Id. ¶ 8.)
MKB contracted with the Lower Yukon School
District (“LYSD”) for a project, which included
“the procurement, delivery and placement of gravel
fill” for a new building pad and driveway upon which a
school building would be built. (Id. ¶ 6.)
alleges that, by August 2012, it realized that the fill
volume set forth in the contract was significantly less than
the amount required to bring the gravel foundation to finish
grade. (Id. ¶ 15.) A subsequent survey
confirmed that significant ground settlement caused the
planned volume of fill to fail to reach finish grade.
(Id.) On November 8, 2012, LYSD terminated
MKB's contract over this issue.
(Id. ¶ 18.)
notified American Zurich of the ground settlement problem.
(Id. ¶ 16.) On December 28, 2013,
MKB sent American Zurich documentation of
its costs related to the ground settlement beneath the school
building pad. (Id. ¶ 18.) On January 22, 2013,
MKB supplemented its claim to American
Zurich by providing a copy of LYSD's counterclaim for
breach of contract. (Ans. to Am. Compl. (Dkt.# 39) ¶
18.) On March 26, 2013, American Zurich sent
MKB a letter denying coverage for any of
MKB's claims. (Am. Compl. ¶ 20 .)
American Zurich contends that MKB's loss
is not covered because MKB used distorted
drawings and miscalculated the amount of gravel required for
the project. (Resp. (Dkt.# 47.) at 2, 4.)
initially sued American Zurich for breach of contract.
(Compl. (Dkt # 1) ¶ 20.) MKB
subsequently amended its complaint to bring additional claims
for violation of Washington's Insurance Fair Conduct Act,
RCW 48.30.015, breach of the duty of good faith and fair
dealing, and violation of Washington's Consumer
Protection Act, RCW 19.86. (See generally Am.
brought this motion to compel the production of documents
that American Zurich either withheld entirely or redacted in
response to MKB's discovery requests.
(See generally Mot.) In June 2013,
MKB served American Zurich with an initial
request for the production of documents. (Resp. at 6.) In
August 2013, American Zurich served MKB
responsive documents and a privilege log. (Id. at
October 2013, MKB re-served its earlier
interrogatories and requests for production after it amended
its complaint to add a claim for bad faith. (Mot. at 2.) At
that time, MKB directed American Zurich to
the Washington Supreme Court's recent decision in
Cedell v. Farmers Insurance Company of Washington,
176 Wash.2d 686, 295 P.3d 239 (Wash.2013), asserting that
American Zurich's redactions based on the attorney-client
privilege and work product doctrine were no longer
appropriate following Cedell. (Id.)
American Zurich's initial response to
MKB's renewed requests for production
contained no additional documents and did not include a
revised privilege log addressing Cedell.
(Id. at 3.)
Friday, March 14, 2014, attorneys for the parties held a
conference (as is required under the court's local rules)
concerning American Zurich's initial response to
MKB's demand for additional documents
under Cedell. (Id.); see Local
Rules W.D. Wash. LCR 37(a)(1). MKB filed
this motion on March 27, 2014. (See Mot.) On or
about April 3, 2014, just four days before its response to
MKB's motion was due, American Zurich
served MKB with additional documents and a
supplemental privilege log.(Resp. at 10.) As a result, many
of the disputes described in MKB's
motion are now moot. (See Resp. at 1; Reply (Dkt.#
49) at 1-2.) In its reply memorandum, MKB
asks the court to address two remaining issues: (1) American
Zurich's redaction of certain documents based on
attorney-client privilege and the work product doctrine, and
(2) the adequacy of American Zurich's supplemental
privilege log. (Reply at 1-2.) MKB also
requests that the court order production of certain documents
related to George Shumsky, American Zurich's subrogation
counsel, and David Edsey, American Zurich's coverage
counsel. (Id. at 2.)
redactions that American Zurich made on eight pages of
documents that it produced to MKB remain in
dispute. (Resp. at 12.) American Zurich argues that these
nine redactions are justified under both the attorney-client
privilege and the work product doctrine. (Id.)
MKB replies that American Zurich has failed
to meet its burden under Cedell, that “the
privileges are waived under Cedell, ” and that
the court should compel American Zurich to produce all nine
redactions. (Reply at 3, 4, 2.) MKB also
argues that American Zurich's April 2014, supplemental
privilege log is inadequate under Cedell.
asks the court to order American Zurich to produce a revised
privilege log that provides enough information with respect
to each document to determine “whether: (1) an attorney
was engaged in quasi-fiduciary tasks, (2) an attorney's
mental impressions are directly at issue in the insurer's
performance of quasi-fiduciary tasks, or (3) the document is
otherwise related to an issue for which a foundation for a
bad faith claim exists.” (Id. at 5, 2.)
The Attorney-Client Privilege and the Work Product
Zurich withholds or redacts documents under claims of
attorney-client privilege and the work product doctrine.
(Resp. at 14; see generally Gross Decl. Ex. U (Dkt.#
48-2).) “The attorney-client privilege has been
recognized as ‘the oldest of the privileges for
confidential communications known to the common law.'
” Gomez v. Vernon, 255 F.3d 1118, 1131 (9th
Cir.2001) (quoting Upjohn Co. v. United States, 449
U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981)).
“Practicing attorneys recognize the importance of the
privilege and the safe harbor that it provides to encourage
‘full and frank communication between attorneys and
their clients and thereby promote broader public interest in
the observance of law and administration of justice.'
” Id. (quoting Upjohn Co., 449 U.S.
work-product doctrine shelters the mental processes of
attorneys, recognizing that without “a certain degree
of privacy ... [i]nefficiency, unfairness and sharp practices
would inevitably develop in the giving of legal advice and in
the preparation of cases for trial, ” thus demoralizing
the legal profession and poorly serving the interests of
clients and the cause of justice. Hickman v. Taylor,
329 U.S. 495, 510-11, 67 S.Ct. 385, 91 L.Ed. 451 (1947). The
work product doctrine is a qualified protection limiting
discovery of “documents and tangible things”
prepared by a party or his or her representative in
anticipation of litigation or trial. Admiral Ins. Co. v.
U.S. Dist. Court for Dist. of Ariz., 881 F.2d 1486, 1494
(9th Cir.1989); see Upjohn Co., 449 U.S. at 397-402;
see Fed.R.Civ.P. 26(b)(3). The party claiming work
product protection bears the burden of establishing that the
work product doctrine applies. United States v.
Richey, 632 F.3d 559, 566 (9th Cir.2011).
Federal Rule of Civil Procedure 26(b)(3)(A)(ii), a party can
obtain discovery of work product only on a showing of
“substantial need” and an inability to obtain
equivalent information from other sources. Fed.R.Civ.P.
26(b)(3)(A)(ii). Even when a court orders disclosure of work
product, “it must protect against disclosure of the
mental impressions, conclusion, opinions, or legal theories
of a party's attorney or other representative concerning
the litigation.” Fed.R.Civ.P. 26(b) (3)(B). These
materials-otherwise known as “opinion” work
product-represent the “core types of work
product” that the doctrine was ...