United States District Court, W.D. Washington, Tacoma
ALEXANDER N. SOUSIE and AMY M. SOUSIE, Plaintiff,
ALLSTATE INDEMNITY COMPANY, Defendant.
ORDER DENYING DEFENDANT'S MOTION FOR
BENJAMIN H. SETTLE, United States District Judge
matter comes before the Court on Defendant Allstate Indemnity
Company's (“Allstate”) motion for
reconsideration (Dkt. 92).
April 3, 2018, the Court granted Plaintiff Alexander and Amy
Sousie's (“Sousies”) motion to reopen
discovery to take the deposition of Rick Wathen. Dkt. 90. On
April 11, 2018, Allstate filed a motion for reconsideration
arguing that the Court “mistakenly applied the
incorrect law.” Dkt. 92 at 2.
for reconsideration are governed by Local Rule of Procedure
7(h), which provides as follows:
Motions for reconsideration are disfavored. The court will
ordinarily deny such motions in the absence of a showing of
manifest error in the prior ruling or a showing of new facts
or legal authority which could not have been brought to its
attention earlier with reasonable diligence.
case, Allstate moves for reconsideration on numerous grounds.
First, before addressing the merits of the motion, attorneys
Rick Wathen and A. Elyse O'Neill signed a document that
contains the following:
Plaintiffs make bald assertions, attempting to use buzz
words, from [Cedell v. Farmers Insurance Company of
Washington, 176 Wn.2d 686 (2013)], that counsel:
• helped in investigating, evaluating, and/or processing
the Sousies' claim. ECF 46 at 11:1-2.
• authored the letters denying the claim. ECF 46 at
9:5-6. None of these assertions are supported by evidence in
Dkt. 92 at 4. To the extent that “counsel” refers
to Mr. Wathen, the record contains letters that he authored
(1) requesting that the Sousies sit for examinations under
oath, Dkt. 64-6, (2) denying the Sousies' claim, Dkt.
14-3 at 7-8, and (3) denying the Sousies' request for
reconsideration, id. at 16-17. The first two letters
establish that Mr. Wathen both assisted in processing the
claim and “authored [a letter] denying the
claim.” Dkt. 92 at 4. It is also undisputed that Mr.
Wathen conducted the Sousies' examinations under oath,
which is a fact-finding activity that, absent an unusual
circumstance, would be considered investigating the claim.
Thus, Allstate's motion begins with a mischaracterization
of the evidence.
Allstate argues that Rygg v. Hulbert, C11-1827JLR,
2013 WL 64769 (W.D. Wash. Jan. 4, 2013), controls the issue
of Mr. Wathen testifying. Dkt. 92 at 5-6. In Rygg,
the Court addressed a situation in which a property dispute
between neighbors developed into a single claim for
wiretapping. Id. at *1. Although the Court declined
to resolve any discovery disputes because the parties had
failed to file proper motions, the Court “provide[d]
guidance to the parties should similar [discovery] requests
be filed in the future.” Id. at *3. As part of
that “guidance, ” the Court informed the parties
that it would “follow the principles outlined in
Shelton v. American Motors Corp. [805 F.2d 1323');">805 F.2d 1323,
1327-28 (8th Cir. 1986)] with respect to whether the
Plaintiffs will be allowed to depose attorneys in this
matter.” Id. To the extent that Rygg
is a decision, the Court did not commit manifest error in not
following the principles outlined in Shelton.
Instead, the Court explicitly stated why Cedell v.
Farmers Ins. Co. of Washington, 176 Wn.2d 686, 698
(2013), “governs the Sousies' IFCA claim.”
Dkt. 70 at 3-4. The Court concluded that an IFCA claim was a
specific subset of the more general bad faith tort.
Cedell, “in first party insurance claims by
insured's claiming bad faith in the handling and
processing of claims, other than UIM claims, there is a
presumption of no attorney-client privilege.”
Cedell, 176 Wn.2d at 700. In the absence of this
privilege, it is irrelevant whether Mr. Wathen is a necessary
witness. See, e.g., Babai v.
Allstate Ins. Co., C12-1518 JCC, 2015 WL 1880441, at *3
(W.D. Wash. Apr. 24, 2015) (“Nor does the
attorney-client privilege protect Mr. Wathen's testimony
regarding the investigation of Plaintiff's claim because
while Mr. Wathen participated in the investigation and
handling of Plaintiff's claim, he was not acting in his
capacity as Allstate's advisor.”). When Mr. Wathen
was investigating and denying the Sousies' claim, he was
not acting as Allstate's advisor. Instead, he was acting
as an agent of Allstate and would be considered a lay witness
for a certain period of time. The standard to call a lay
witness is whether the testimony is relevant, not whether the
witness is necessary. Therefore, the Court denies the motion
on this issue.
Allstate argues that if the Sousies depose Mr. Wathen, then
they may move to disqualify him from representing Allstate in
this matter, depriving Allstate of counsel on the eve of
trial. Allstate asserts that this is a “litigation
tactic.” Dkt. 92 at 7. When Mr. Wathen previously
advanced this exact argument, the Court found that
“requiring Mr. Wathen to testify will not impose an
undue burden on Allstate because Allstate had sufficient
notice that Mr. Wathen would be called.”
Babai, 2015 WL 1880441 at *4. Likewise, Allstate had
sufficient notice that Mr. Wathen could be called as a
witness in this case because it filed a motion for protective
order regarding this issue in November 2017. Dkt. 28. Even if
Mr. Wathen is called as a witness, he is not automatically
disqualified from representing Allstate. Under the Rules of
Professional Conduct, Mr. Wathen may not advocate for
Allstate if he is a witness. RPC 3.7. Even then, there are
exceptions to this rule. Id ...