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Olga Despotis Trust v. The Cincinnati Insurance Co.

United States District Court, E.D. Missouri, Eastern Division

July 15, 2014

OLGA DESPOTIS TRUST, Plaintiff,
v.
THE CINCINNATI INSURANCE COMPANY, Defendant.

MEMORANDUM AND ORDER

AUDREY G. FLEISSIG, District Judge.

Plaintiff, the Olga Despotis Trust, brings this action for breach of contract and vexatious refusal to pay claim under a property insurance policy issued by Defendant The Cincinnati Insurance Company. Pursuant to the Plaintiff's request, the Court ordered Defendant to produce un-redacted versions of certain documents for the Court's review in conjunction with Plaintiff's Second Motion to Compel.[1] Upon review of the documents and for the reasons set forth below, Plaintiff's Second Motion to Compel will be granted.

BACKGROUND

In response to Plaintiff's request for production, Defendant produced redacted versions of documents bearing Bates Nos. CIC 541, 542, 545, and 546 and a Privilege Log justifying the redactions.[2] See Doc. Nos. 34-1 & 34-2. Some months later on March 14, 2014, without first consulting Defendant's counsel, Plaintiff filed this motion asserting among other things that the Privilege Log was inadequate. On March 16, 2014, Defendant's counsel, in an effort to resolve the parties' ongoing dispute, e-mailed Plaintiff's counsel a more detailed explanation for each of the redactions. Defendant asserted that the redactions applied to communications protected by the attorney-client privilege, namely, discussions between Defendant's employees around the time that Plaintiff first indicated its intention to litigate the claim, regarding Defendant's decision to refer the claim to its counsel. See Doc. No. 34-3.

The Court denied Plaintiff's March 14, 2014 motion to compel for failure to comply with Local Rule 37-3.04(A). See Doc. No. 32. After consultation with Defendant, Plaintiff filed the present motion again seeking to compel the disclosure of the redactions in the "log notes" entered in Defendant's claim file on or about April 6, 2011, and April 8, 2011, and bearing Bates Nos. CIC 541, 542, 545, and 546. Defendant asserts the attorney-client privilege with respect to all of the disputed documents and also claims the protection of the work-product doctrine with respect to Bates No. CIC 541. The Court thereafter granted the portion of Plaintiff's motion requesting in camera review of the un-redacted documents, withholding its ruling on the substance of the motion pending that review.

I. Arguments of the Parties

In support of its motion, Plaintiff asserts that the Privilege Log fails to satisfy the requirements of Fed.R.Civ.P. 26(b)(5)(A) and that, as a result, Defendant has waived its claim of attorney-client privilege with respect to the documents. In the alternative, citing the importance of the documents to its claim of vexatious refusal to pay, Plaintiff asks the Court to review the documents to assess the validity of Defendant's assertion of the attorney-client privilege. Finally, noting that Defendant also has asserted that the work product doctrine applies to Bates No. CIC 541, Plaintiff contends that the Court nonetheless should compel full disclosure of that document on the ground that Plaintiff has a substantial need for it in light of Plaintiff's claim of vexatious refusal to pay.

Defendant responds that the redacted portions of the notes are subject to the attorney-client privilege and with respect to Bates No. CIC 541, the work product doctrine because they reflect internal discussions regarding its decision to retain or consult counsel after Plaintiff indicated its intention to litigate the unpaid claim. In addition, Defendant asserts that when coupled with the information found in the unredacted portions of the notes and the additional information it provided to Plaintiff in the March 16, 2014 e-mail, the Privilege Log is sufficient to justify the redactions and that no further disclosure should be required. See Doc. No. 34-3.

In the alternative, Defendant asserts that even if the Privilege Log were deemed deficient, such deficiency would not amount to a waiver of its claim of attorney-client privilege. Defendant finally contends that Plaintiff is unable to establish substantial need for the document covered under the work product doctrine, Bates No. CIC 541.

APPLICABLE LAW

I. The Attorney-Client Privilege

Under Federal Rule of Civil Procedure 26(b)(1) litigants may obtain "discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party." Fed.R.Civ.P. 26(b)(1). Missouri law governs the existence and scope of the attorneyclient privilege in this diversity action. Fed.R.Evid. 501; Baker v. Gen. Motors Corp., 209 F.3d 1051, 1053 (8th Cir. 2000). In Missouri, the common law attorney-client privilege has been statutorily codified, Mo. Rev. Stat. ยง 491.060(3), [3] and the privilege "protects any professionally-oriented communication between attorney and client regardless of whether it is made in anticipation of litigation or for preparation for trial.'" Lloyd's Acceptance Corp. v. Affiliated FM Ins. Co., No. 4:05 CV 1934 DDN, 2012 WL 1389708, at *7 (E.D. Mo. Apr. 23, 2012) (quoting State ex rel. Tillman v. Copeland, 271 S.W.3d 42, 45 (Mo.Ct.App. 2008)).

The privilege does not attach unless the communication involves the attorney and the client and is made to obtain legal advice. Tillman, 271 S.W.3d at 45; see also United States v. Spencer, 700 F.3d 317, 320 (8th Cir. 2012). "The attorney-client privilege prohibits the discovery of confidential communications, oral or written, between an attorney and his client with reference to... litigation pending or contemplated. '" Ratcliff v. Sprint Missouri, Inc., 261 S.W.3d 534, 546 (Mo.Ct.App. 2008) (quoting State ex rel. Terminal R.R. Ass'n of St. Louis v. Flynn, 363 Mo. 1065, 1072 (Mo. banc 1953) (emphasis supplied)).

Nonetheless, as Plaintiff correctly notes, merely including counsel among the recipients of a document does not bring the document within the ambit of the attorneyclient privilege; the document must be shared in furtherance of the client's solicitation of legal advice. See Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 609 (8th Cir. 1977) (explaining that "the mere receipt of routine reports by the corporation's counsel will not make the communication privileged" and that such communications are "made for independent business reasons"); Monsanto Co. & Monsanto Tech. LLC v. E.I. Du Pont de Nemours & Co., No. 4:09 CV 686 ERW, 2011 WL 4408184, at *2 (E.D. Mo. Sept. 22, 2011) (noting that the "attorney-client privilege does ...


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