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State ex rel. Shelter Mutual Insurance Co. v. Wagner

Court of Appeals of Missouri, Western District, Writ Division

June 27, 2018



          Before: Victor C. Howard, Presiding Judge, Gary D. Witt, Judge and Karen King Mitchell, Judge

          Victor C. Howard, Presiding Judge

         Nathaniel Brennan ("Brennan") filed suit against Shelter Insurance ("Shelter") for bad faith refusal to settle a claim. In the course of discovery, Brennan sought the production of all documents contained in his insurance claims file. Shelter claims approximately 58 pages of documents in the file are protected by attorney-client privilege. Following an in camera review, the trial court ordered the entire file to be produced. Shelter now seeks a writ of prohibition from this court.


         Shelter provided automobile insurance to Brennan for a Mercury Grand Marquis. While driving the Mercury, Brennan caused a two vehicle accident on December 6, 2009 ("Accident"). Following the Accident, Brennan was sued by the driver of the other vehicle for her injuries and by the driver's husband for loss of consortium ("Browns"). During the suit, a dispute arose as to whether five additional insurance policies that Brennan, and Brennan's parents, held with Shelter afforded additional liability coverage. The Browns refused to settle with Shelter for the $50, 000 limit of the Mercury policy and the couple sued Brennan. Ultimately, a judgment was entered against Brennan on April 16, 2013, for a total amount of $300, 000 plus interest. Shelter paid the $50, 000 limit of the Mercury policy to the Browns on May 20, 2013, in partial satisfaction of their judgment against Brennan.

         The Browns filed the underlying equitable garnishment action against Shelter in November 2013. They allege that Shelter owes additional coverage amounts under the Mercury policy and also contend that the other five policies afford additional coverage. In the same action, Brennan filed a cross-claim against Shelter asserting a claim for bad faith refusal to settle the Browns' claims in the Browns' original injury lawsuit ("Underlying Suit")

         Shelter claims that, based on a letter sent by Browns' counsel on January 4, 2010, the settlements demands were "specifically designed to [facilitate]" a future bad faith claim brought by Brennan against Shelter. Shelter retained outside counsel, Foland, Wickens, Eisfelder, Roper & Hofer, P.C., and Clay Crawford ("Crawford") in particular, to represent Shelter's interests in connection with the coverage dispute. Shelter retained separate counsel from a different law firm to represent Brennan's interests.

         All communications related to the Accident, including communications between Shelter and Crawford, were kept in one claims file.

         In the course of discovery for the Underlying Suit, Shelter produced a number of documents. Shelter withheld and redacted certain documents from the production on the basis of the attorney-client and work product privileges. Brennan filed a motion on November 17, 2017 seeking an in camera review of the documents described in Shelter's privilege logs. Following an in camera review, the court ordered all the documents to be produced.

         Shelter sought a writ of prohibition from this Court. On January 31, 2018, this Court found that the Browns "have affirmatively stated that they have not sought discovery of communications from Shelter Insurance Company to its counsel, Foland, Wickens, Roper, Hofer & Crawford, P.C. or from Foland, Wickens, Roper, Hofer & Crawford, P.C. to Shelter Insurance Company." Because the privileged documents were not within the scope of the documents requested, this Court ordered that any attorney-client communications be removed from the documents held in camera, because "[a]ll such communications are privileged and, thus, absent waiver, are not discoverable," but otherwise denied Shelter's writ petition.

         On February 28, 2018, the circuit court held a hearing regarding the allegedly privileged documents. The court stated that it was its belief that Brennan held the right to waive attorney-client privilege for all documents in the claims file--even those between Shelter and its attorney. Ultimately, the court held that it would stand on its prior ruling, again ordering the documents produced. Shelter then filed the current writ that is before this Court, again requesting that the circuit court be prohibited from ordering the production of privileged material.[1]

         Standard of Review

         "A writ of prohibition does not issue as a matter of right." State ex rel. Rosenberg v. Jarrett, 233 S.W.3d 757, 760 (Mo. App. W.D. 2007). "A writ of prohibition will lie only where necessary to prevent a usurpation of judicial power, to remedy an excess of jurisdiction, or to prevent an absolute irreparable harm to a party." State ex rel. Collom v. Fulton, 528 S.W.3d 42, 43 (Mo. App. S.D. 2017). "Prohibition is the proper remedy when a trial court has abused its discretion in a discovery order to the extent that its act exceeds its [authority]." Id. (internal quotation omitted). "A trial court abuses its discretion when its ruling is clearly against the logic of the circumstances then before the court and [is] so arbitrary and unreasonable as to shock the sense of justice and indicate a lack of careful consideration." Id. at 43-44 (internal quotation omitted).


         The trial court ordered Shelter to produce all documents contained in Brennan's insurance claims file. Shelter produced some, but not all, of the file. Shelter argues that the withheld pages are protected by attorney-client privilege.

         "Absent a waiver, privileged materials are immune from discovery." State ex rel. Chase Resorts, Inc. v. Campbell, 913 S.W.2d 832, 838 (Mo. App. E.D. 1995). "Application of the attorney-client privilege is a matter of law, not judicial discretion, and is properly a matter for prohibition." Id. "The Missouri Supreme Court 'has spoken clearly of the sanctity of the attorney-client privilege.'" State ex rel. Behrendt v. Neill, 337 S.W.3d 727, 729 (Mo. App. E.D. 2011) (quoting State ex rel. Peabody Coal Co. v. Clark,863 S.W.2d 604, 607 (Mo. banc 1993)). "Confidentiality is essential if attorney-client relationships are to be fostered and effective." Id. "[T]he determinative issue [is] whether the relationship of attorney and client existed between the parties at the ...

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