NINA Y. WANG, Magistrate Judge.
This matter comes before the court on two motions:
The undersigned considers the Motions pursuant to 28 U.S.C. § 636(b) and the Memorandum dated April 29, 2019 [#72]. This court concludes that oral argument will not materially assist in the resolution of this matter.
This litigation arises out of an insurance dispute between Mr. Olsen and Owners. See [#1; #3]. On or about April 23, 2017, Plaintiff was involved in a traffic collision with a third party, Varejo Manzaneras ("Ms. Manzaneras"). See [#3 at ¶ 5]. Plaintiff sustained injuries because of the traffic collision, requiring medical treatment; Plaintiff alleges his injuries also prohibited from returning to work. See [id. at ¶¶ 10, 15-19, 26-27]. Mr. Olsen, through his employer at the time, was covered under Defendant's uninsured/underinsured motorist insurance policy. See [id. at ¶ 29].
On or about October 9, 2017, Owners gave permission to Plaintiff to accept Ms. Manzaneras's $25,000 policy limit. See [id. at ¶ 23]. Believing this money did not cover all his injuries and medical treatment, Plaintiff sought benefits from Owners. See [id. at ¶¶ 32-36]. Over the next several months, Plaintiff continued to request benefits or an update on the status of his benefits and provided medical bills to Owners, but to no avail. See [id. at ¶¶ 32-62]. Plaintiff then initiated this suit, originally filed in the Denver County District Court but removed to this court by Owners, asserting claims against Owners for breach of contract, unreasonable delay or denial of insurance benefits pursuant to Colo. Rev. Stat. § 10-3-1115, and bad faith breach of an insurance contract. See [id. at ¶¶ 69-83].
Relevant here, the Parties appeared before the undersigned for an informal discovery dispute conference on April 10, 2019, at which the Parties raised a host of issues regarding both Parties' production obligations in response to written discovery. See [#69]. As to the issues of Defendant's production of deemed privileged communication between its claims adjuster and its in-house counsel and Plaintiff's production of noneconomic and impairment damages information, this court ordered further briefing on the matters. See [id.]. On April 26, 2019, the Parties filed the instant Motions to Compel. Plaintiff's Motion to Compel seeks production of approximately 48 documents that contain correspondence between Owners' claims adjuster Nicholas Zeman ("Mr. Zeman") and its in-house counsel Andrew Torrey ("Mr. Torrey") that Owners has withheld as privileged. See [#70; #83]. Defendant's Motion to Compel seeks production of information concerning Mr. Olsen's claimed noneconomic and impairment damages. See [#71; #84]. Because the Motions are now ripe, I consider each below.
Pursuant to Rule 37(a)(1), a party may move for a court order compelling disclosure or discovery, and must certify that she "has in good faith conferred or attempted to confer with the person or party failing to make disclosure or discovery in an effort to obtain it without court action." Fed. R. Civ. P. 37(a)(1). A motion to compel may include a party's failure to produce documents requested pursuant to Rule 34. See Fed. R. Civ. P 37(a)(3)(B)(iv). "The party moving to compel discovery must prove that the opposing party's answers are incomplete[,]" and the "party objecting to discovery must establish that the requested discovery does not fall under the scope of relevance as defined in Rule 26(b)(1)." Tara Woods Ltd. P'ship v. Fannie Mae, 265 F.R.D 561, 566 (D. Colo. 2010). Ultimately, "[t]he administration of the rule[] lies necessarily within the province of the trial court with power to fashion such orders [as] may be deemed proper to vouchsafe full discovery for the just, speedy and inexpensive determination of the lawsuit." Robison v. Transamerica Ins. Co., 368 F.2d 37, 39 (10th Cir. 1966).
Because this is a diversity action, Colorado substantive law governs the scope and application of the attorney-client privilege. See White v. Am. Airlines, Inc., 915 F.2d 1414, 1424 (10th Cir. 1990) ("In a civil action based upon a state cause of action, state law controls the determination of privileges."). By contrast, "the work product privilege is governed by a uniform federal standard embodied in Fed. R. Civ. P. 26(b)(3)." Frontier Refining, Inc. v. Gorman-Rupp Co., Inc., 136 F.3d 695, 702 n.10 (10th Cir. 1998) (citation and quotation omitted).
Colorado has codified the attorney-client privilege in pertinent part as follows: "An attorney shall not be examined without the consent of his client as to any communication made by the client to him or his advice given thereon in the course of professional employment. . . ." Colo.Rev.Stat. § 13-90-107(b). The law is clear that the attorney-client privilege inures to the benefit and protection of the client to allow a client to gain counsel, advice, or direction with respect to the client's rights and obligations confidentially. See Mountain States Tel. & Tel. Co. v. DiFede ("DiFede"), 780 P.2d 533, 541 (Colo. 1989).
The work product doctrine is reflected in Fed. R. Civ. P. 26(b)(3)(A), which generally protects "documents and tangible things that are prepared in anticipation of litigation or for trial by or for a party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent)." Fed. R. Civ. P. 26(b)(3)(A). The party seeking to invoke the attorney-client privilege or the work product doctrine bears the burden of establishing that it attaches.
Neither the attorney-client privilege nor the work product doctrine is absolute as either may be waived. The burden of proving such waiver rests upon the party seeking to overcome the privilege. DiFede, 780 P.2d at 542; accord. H. ex rel. Holder v. Gold Fields Mining Corp., 239 F.R.D. 652, 655 (N.D. Okla. 2005) ("[T]he majority view is that the party claiming waiver has the burden of proof on that issue."). A waiver of the attorney-client privilege or work product doctrine may be either express or implied. A waiver may be express when a party affirmatively consents to disclosure of the information. See, e.g., In re Qwest Commc'ns Int'l Inc., 450 F.3d 1179, 1185 (10th Cir. 2006) (explaining that a client may waive the attorney-client privilege by disclosing privileged communications to a third-party; noting, "Any voluntary disclosure by the client is inconsistent with the attorney-client relationship and waives the privilege." (citation and internal quotations omitted)); Grace United Methodist Church v. City of Cheyenne, 451 F.3d 643, 668 (10th Cir. 2006) ("The work-product privilege may be waived by the voluntary release of materials otherwise protected by it." (citation and quotation omitted)). Waiver may also be implied through conduct. See, e.g., People v. Madera, 112 P.3d 688, 691 (Colo. 2005) ("Courts have found implied waiver of the attorney-client privilege when a defendant places the allegedly privileged communication at issue in the litigation, because `any other rule would enable the client to use as a sword the protection which is awarded him as a shield.'" (citations omitted)).
Unlike the attorney-client privilege, work product immunity is not automatically waived by any disclosure to a third party. In re Sealed Case, 676 F.2d 793, 802-10 (D.D.C. 1982). The general standard for determining whether protected work product must be disclosed is where (1) the materials are otherwise discoverable under Rule 26(b)(1); and (2) the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means. Fed. R. Civ. P. 26(b)(3). If disclosure of work product is ordered by the court, the court must protect against the disclosure of the mental impressions, conclusions, opinions, or legal theories of a party's attorney or other representative concerning the litigation. Fed. R. Civ. P. 26(b)(3)(B).
In the context of insurance claims and investigations, "[n]ot every document drafted by counsel or every communication with counsel is protected by the attorney-client privilege. " Hurtado v. Passmore & Sons, L.L.C., No. 10-cv-00625-MSK-KLM, 2011 WL 2533698, at *4 (D. Colo. June 27, 2011) (citing Nat'l Farmers Union Prop. & Cas. Co. v. Dist. Court For City & Cty. of Denver, 718 P.2d 1044, 1049 (Colo. 1986) [hereinafter Nat'l Farmers Union]). "For example, the attorney-client privilege does not protect the results of a factual investigation conducted by counsel relating to the origination of an insurance policy and the validity of a claim." Colo. Mills, LLC v. Philadelphia Indem. Ins. Co., No. 12-cv-01830-CMA-MEH, 2013 WL 1340649, at *3 (D. Colo. Apr. 2, 2013) (citing Nat'l Farmers Union, 718 P.2d at 1048-49); accord Cornhusker Cas. Co. v. Skaj, No. 11-cv-110-S, 2012 WL 12541136, at *2 (D. Wyo. Apr. 5, 2012) (holding the work product doctrine did not protect disclosure of the insurer's investigative file, because doing so "would allow an insurance company to insulate all investigative materials generated in every case involving serious injuries long before any coverage decisions are made or threats of litigation arise."). Indeed, "if a lawyer is acting in an investigative capacity, and not as a legal counselor, with reference to whether an insurance claim should be paid, then neither the [attorney-client] privilege . . . nor the work product privilege protects communications from a lawyer to an insurance carrier." Munoz v. State Farm Mut. Auto. Ins. Co., 968 P.2d 126, 130 (Colo. App. 1998) (citing Nat'l Farmers Union, 718 P.2d at 1044); accord Smith v. Marten Transp., Ltd., No. 10-cv-0293-WYD-KMT, 2010 WL 5313537, at *2-4 (D. Colo. Dec. 17, 2010) (holding the neither the attorney-client privilege nor work-product doctrine applied to communications by an attorney acting as a claims investigator regarding a claim investigation or communications with a witness).
Typically, claim investigations arising in the first-party context, like the claim at issue here, are "made in the ordinary course of business and are discoverable[.]" Weitzman v. Blazing Pedals, Inc., 151 F.R.D. 125, 126 (D. Colo. 1993) ("When an insured presents a first party claim, he is asking for payment under the terms of the insurance contract between him and the insurance company, and the insurance company owes him a duty to adjust his claim in good faith. There is no initial contemplation of litigation."). Indeed, the roles of claims handler and attorney are not mutually exclusive. See W. Nat'l Bank of Denver v. Emp'rs Ins. Of Wausau, 109 F.R.D. 55, 57 (D. Colo. 1985) (noting that "investigations by a person who is an attorney but acting in the capacity of an investigator and adjustor for the insurance company" prepares an investigative file in the ordinary course of the insurer's business). The mere fact that an attorney is involved in a communication or drafting does not automatically render that communication or document subject to the attorney-client privilege or work product doctrine. See Perez v. Alegria, No. 15-MC-401-SAC, 2015 WL 4744487, at *4 (D. Kan. June 24, 2015) (rejecting a blanket privilege objection for the basis for prohibiting his deposition or document discovery when the attorney was also a fact witness); Heartland Surgical Specialty Hosp., LLC v. Midwest Div., Inc., No. 05-2164 MLB-DWB, 2007 WL 625809, at *6 (D. Kan. Feb. 23, 2007) (observing that privilege does not necessarily attach when an attorney also performed duties as a consultant involved in competitive business activities and decision-making).
To the extent such communications are protected by the attorney-client privilege, courts consider whether (1) the information was provided by agents of the corporate client "to counsel acting as counsel" at the direction of supervisors; (2) the information was necessary for the provision of legal advice; (3) the agents were aware that their communications were made for the purpose of counsel rendering legal advice to the corporate client; and (4) the communications were treated as confidential. See Bonanno v. The Quizno's Franchise Co., LLC, No. 06-cv-02358-WYD-KLM, 2008 WL 1801173, at *3 (D. Colo. Apr. 18, 2008) (citing Nat'l Farmers Union, 718 P.2d at 1049 (discussing Upjohn Co. v. United States, 449 U.S. 383, 394-95 (1981))). Accordingly, the nature of the services rendered by Owners' attorneys to Owners at any given time drives whether the work product doctrine or attorney-client privilege attaches, not a particular chronology of events. See Church Mut. Ins. Co. v. Coutu, No. 17-CV-00209-RM-NYW, 2018 WL 2388555, at *5 (D. Colo. May 25, 2018).
Mr. Olsen seeks production of several claim notes that contain communications between Mr. Zeman and Mr. Torrey, and which Owners has withheld as attorney-client privileged or protected by the work-product doctrine. Mr. Olsen contends that Mr. Zeman consulted Mr. Torrey in the ordinary course of Owners' claim-handling process and thus Owners must produce communications that do not seek legal advice but rather discuss the handling of Mr. Olsen's insurance claim. See [#70 at 6-7; #83 at 2-3]. Mr. Olsen argues that although Mr. Torrey is Owners' in-house counsel, he did not always provide Mr. Zeman with legal advice, and at times acted as a claim-handler, i.e., authorized independent medical examinations or settlements. See [#70 at 6-8; #83 at 2-5]. According to Plaintiff, those communications where Mr. Torrey assisted Mr. Zeman in the handling of Plaintiff's insurance claim are not subject to the attorney-client privilege or work-product doctrine. See [#70 at 6-8; #83 at 2-5].
Owners counters that the communications at issue are subject to the attorney-client privilege and work-product doctrine because "Mr. Zeman was generally advised to seek legal counsel from Mr. Torrey if he had questions about whether his investigation of a suspicious claim would result in bad faith liability for Owners[.]" [#80 at 5]. According to Owners, it is immaterial whether Mr. Zeman contacted Mr. Torrey during the claim-handling process, as the communications concerned limiting Owners' liability in any subsequent litigation between Mr. Olsen and Owners. See [id. at 6-9].
Though disagreeing as to its application, the Parties agree that the court's inquiry focuses on the substance of the communication between Mr. Zeman and Mr. Torrey. Indeed, the touchstone of the attorney-client privilege is that legal advice is sought and exchanged. The privilege does not attach when an attorney is acting in a different capacity, i.e., when an attorney functions as a claims handler, the attorney-client privilege does not protect his communications with his client.
Owners identifies 16 groups of documents in its supplemental privilege log that it believes the attorney-client privilege protects. See [#94]. By Minute Order dated May 21, 2019, this court ordered that Defendant submit the withheld documents for in camera review.
As above, Owners argues that the work-product doctrine shields discovery of the withheld documents because Mr. Olsen seeks communications containing legal advice. See [#80 at 10]. But as discussed, the withheld documents do not contain legal advice or Owners' strategy for defending against this civil action.
Further, the mere retention of counsel is insufficient to establish a reasonable anticipation of litigation; at least one of our sister courts in this Circuit has held:
Quality Time, Inc. v. W. Bend Mut. Ins. Co., No. 12-1008-JTM-GLR, 2012 WL 5499555, at *7 (D. Kan. Nov. 13, 2012). While Owners is correct that "at some point an insurance company's activity shifts from claims evaluation to anticipation of litigation," Hurtado, 2011 WL 2533698, at *4, the majority of the communications discussed above do not consist of documents and tangible things prepared in the anticipation of litigation.
Nor does Owners provide adequate support for its assertion that it reasonably anticipated litigation "immediately" after Mr. Olsen filed his insurance claim based solely on Mr. Olsen's counsel who "boasts an active practice in bad faith breach of insurance contract cases." Cf. Church Mutual Insurance Co., 2018 WL 2388555, at *5 ("Church Mutual provides no authority for (and this court's research did not yield any) its proposition that Mr. Coutu's `reputation' as litigious made litigation reasonably anticipated" as of the date of the demand for appraisal). On the record before this court, it appears that the first concerns regarding litigation arose on June 6, 2018, after Owners receives a copy of the Complaint. Unlike other cases, the claim notes do not reflect any communications between Owners and Plaintiff's counsel, other than receiving a voice mail from the attorney on October 12, 2017. There is no indication after that point that Plaintiff's counsel made any demands to Owners or threatened Owners with any accusations of bad faith. Thus, I conclude that the work-product doctrine
Based on the foregoing, I conclude that neither the attorney-client privilege nor the work-product doctrine shield the withheld documents from discovery by Mr. Olsen. Accordingly, I
Rule 26(a)(1) of the Federal Rules of Civil Procedure directs parties to disclose certain information without awaiting a formal discovery request, including, inter alia, "a computation of each category of damages claimed by the disclosing party." Fed. R. Civ. P. 26(a)(1)(iii). "Rule 26(a)(1) disclosures are designed to accelerate the exchange of basic information and help focus the discovery that is needed, and facilitate preparation for trial or settlement. . . . To that end, initial disclosures should provide an opposing party with information essential to the proper litigation of all relevant facts, to eliminate surprise, and to promote settlement." Poitra v. Sch. Dist. No. 1 in the Cty. of Denver, 311 F.R.D. 659, 663 (D. Colo. 2015) (internal quotation marks, citations, and brackets omitted). Rule 26(e)(1) provides that a party must supplement its disclosure(s) and response(s) in a timely manner if the party learns that the response(s) or disclosure(s) are incomplete or incorrect in some material respect, or by court order. Fed. R. Civ. P. 26(e)(1)(A)-(B).
Rule 26(b)(1) of the Federal Rules of Civil Procedure defines the scope of permissible discovery in this action. Fed. R. Civ. P. 26(b)(1). The Rule permits discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case. Id. This scope for discovery does not include all information "reasonably calculated to lead to admissible evidence." The amendments to Rule 26 effective December 1, 2015, purposefully removed that phrase. See Advisory Committee Notes to 2015 Amendments to Rule 26(b)(1) ("The former provision for discovery of relevant but inadmissible information that appears `reasonably calculated to lead to the discovery of admissible evidence' is also deleted. The phrase has been used by some, incorrectly, to define the scope of discovery."); In re Bard Filters Products Liability Litig., 317 F.R.D. 562, 563 (D. Ariz. 2016) [hereinafter Bard]. As explained by the Bard court, the Advisory Committee on the Federal Rules of Civil Procedure was concerned that the phrase had been used incorrectly by parties and courts to define the scope of discovery, which "might swallow any other limitation on the scope of discovery." Bard, 317 F.R.D. at 563 (citing Fed. R. Civ. P. 26 advisory committee's notes to 2015 amendment).
The applicable test is whether the evidence sought is relevant to any party's claim or defense, and proportional to the needs of the case. Id. Rule 401 of the Federal Rules of Evidence defines relevant evidence as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more or less probable than it would be without the evidence." Fed. R. Evid. 401. In defining the scope of appropriate discovery, the Parties and the court are directed to consider the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Fed. R. Civ. P. 26(b)(1).
Owners seeks to compel Plaintiff to produce information concerning the amount of non-economic and impairment damages Plaintiff seeks. See [#71 at 1-4]. In response to Owners' Interrogatory No. 3,
Mr. Olsen argues that Rule 26(a)(1)(A)(iii)
Here, Mr. Olsen represents that he does not know the extent of those damages, and that they may vary as this matter proceeds. Cf. Brower v. Sprouts Farmers Mkt., LLC, No. 1:16-CV-01334 SMV-LF, 2017 WL 3397374, at *2 (D.N.M. Aug. 8, 2017) ("`[s]ince compensatory damages for emotional distress are necessarily vague and are generally considered a fact issue for the jury, they may not be amenable to the kind of calculation disclosure contemplated by Rule 26(a)(1)[(A)(iii)].'" (brackets in original) (quoting Williams v. Trader Publ'g Co., 218 F.3d 481, 486 n.3 (5th Cir. 2000))). Nor do Plaintiff's pleading or other filings suggest that his non-economic and impairment damages relate to discrete, quantifiable, and/or severe injuries. See Fox v. Gates Corp., 179 F.R.D. 303, 307 (D. Colo. 1998) (explaining that emotional distress goes beyond garden-variety if the plaintiff asserts a separate claim for infliction of emotional distress, alleges a specific mental or psychiatric disorder, or claims unusually severe emotional distress). Further, Mr. Olsen indicates that, unless the court compels a calculation of his non-economic and impairment damages, he does not intend to call an expert witness to testify to the quantity of such damages. See McCrary v. Country Mut. Ins. Co., No. 13-CV-507-JED-PJC, 2014 WL 314777, at *2 (N.D. Okla. Jan. 28, 2014) (stating that if the plaintiffs intended to "use expert testimony to support their emotional distress claim, they must provide Defendant with a computation of these damages."); but cf. Smith v. Ingersoll-Rand Co., 214 F.3d 1235, 1245-46 (10th Cir. 2000) (noting in dicta that federal courts to consider expert testimony on hedonic damages, i.e., the value of human life, have "unanimously held quantifications of such damages inadmissable [sic]."). And the weight of authority nationally appears to lean away from requiring such disclosures pursuant to Rule 26(a)(1) due to their very nature. See, e.g., Williams, 218 F.3d at 486 n.3; Odom v. Thompson, No. 5:13-CV-211-TBR, 2017 WL 6522072, at *3 (W.D. Ky. Dec. 19, 2017); De Varona v. Disc. Auto Parts, LLC, No. 12-20714-CIV, 2012 WL 2334703, at *2 (S.D. Fla. June 19, 2012) (collecting cases); Bowers v. Am. Heart Ass'n, Inc., No. 1:06-CV-2989-CC, 2008 WL 11407360, at *3 (N.D. Ga. Dec. 2, 2008); United Steelworkers Local 12-369 v. United Steel, No. CV-07-5053-RHW, 2009 WL 10676178, at *1 (E.D. Wash. Mar. 16, 2009); Santos v. Farmers Ins. Exch., No. 07-11229, 2008 WL 2937778, at *2 (E.D. Mich. July 24, 2008); Estate of Gonzalez v. Hickman, No. 05-00660, 2007 WL 3237635, at *4 (C.D. Cal. June 28, 2007) (collecting cases).
Under these circumstances, this court will not compel a further response to Interrogatory No. 3. See Hancock v. Greystar Mgmt. Servs., L.P., No. CIV-15-1095-R, 2016 WL 2889084, at *1 (W.D. Okla. May 17, 2016) (denying a motion to compel where the plaintiff failed to provide an amount of damages sought for emotional distress because she need not provide such an amount). By the same token, Mr. Olsen appears to be forfeiting his opportunity to request a specific amount of non-economic and impairment damages from the jury. De Varona, 2012 WL 2334703, at *2. To the extent that he intends to seek a specific amount, then he
Nor is this court convinced that Mr. Olsen confessed this issue in his Response, as Owners suggests, such that this is reason enough to grant Owners' Motion to Compel. See [#84 at 3 ("Because Plaintiff ignored Owners' interrogatory, he has confessed the motion as to that separate and independent basis for granting a motion to compel, which should be granted.")]. Rule 26(b)(1) allows for discovery of "any
Based on the foregoing, I conclude that neither Rule 26(a)(1) nor 26(b)(1) require Mr. Olsen to produce a total amount for his non-economic and impairment damages. Accordingly, I
Therefore,
