ORDER FOLLOWING IN CAMERA REVIEW

ROBERT S. LASNIK, District Judge.

This matter comes before the Court on an in camera review of portions of Arrowood's claims file. Because Costco has not a provided a factual foundation for its allegation that Arrowood attempted in bad faith to defeat a meritorious claim for relief, the issue for the Court is whether the documents reflect (a) outside counsel's participation in the insurer's quasifiduciary functions of investigation, adjustment, and processing or (b) requests for and/or provision of legal advice regarding Arrowood's rights and obligations under the policy and Washington law. If the former, the attorney-client privilege does not apply under Cedell v. Farmers Ins. Co. of Wash., 176 Wn.2d 686 (2013), and production is appropriate. If the latter, the privilege applies and the document will not be produced.

Having reviewed the documents submitted in camera, Arrowood's revised privilege log, and the letters of the parties, the Court finds that many of the communications reflect activities that the insurer normally undertakes to investigate the claim but which, in this case, were farmed out to counsel, such as collecting collection information regarding the underlying litigation/arbitrations, the relevant policy provisions, and prior claims handling activities, obtaining documents from the insured, and/or contacting other insurers in an attempt to understand how the mediation and settlement process worked out. Some of the communications reflect claims handling and adjustment activities discussed with counsel, such as whether Arrowood should attempt to work with other insurers, offer a settlement, or update its position vis-a-vis the insured. Where there is no analysis of the coverage issues or provision of legal advice regarding rights and obligations under the policy, production will be required: simply asking an attorney's advice about the insurer's quasi-fiduciary activities is not enough to clothe the communication with the privilege. Under Cedell, the presumption is that documents found in the claims file will be produced, and it is Arrowood's burden to show that a particular communication is protected by the attorney-client privilege.

Arrowood is hereby ORDERED to produce documents within seven days of the date of this order as follows: