Allendale Mutual Insurance v. Bull Data Systems, Inc.

152 F.R.D. 132, 1993 WL 515493, 1993 U.S. Dist. LEXIS 17195
CourtDistrict Court, N.D. Illinois
DecidedDecember 3, 1993
DocketNo. 91 C 6103
StatusPublished
Cited by53 cases

This text of 152 F.R.D. 132 (Allendale Mutual Insurance v. Bull Data Systems, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allendale Mutual Insurance v. Bull Data Systems, Inc., 152 F.R.D. 132, 1993 WL 515493, 1993 U.S. Dist. LEXIS 17195 (N.D. Ill. 1993).

Opinion

MEMORANDUM ORDER

BOBRICK, United States Magistrate Judge.

Before the court is the motion of defendants Bull Data Systems, Inc., Zenith D.S. France, S.A., and ZDS Europe (collectively “the ZDS defendants”), pursuant to Federal Rule of Civil Procedure 37, to compel General Reinsurance Corp. (“GenRe”) and Sorema North American Reinsurance Company (“Sorema”) to produce certain documents.

I. BACKGROUND

“I think that I shall never see A poem lovely as a tree”

Joyce Kilmer, Trees (1913), quoted in John Bartlett, Familiar Quotations, 661:16 (16th Ed.1992).

We quote this poem to give some context to the litigation which forms the background to the current discovery dispute between plaintiffs Allendale Mutual Insurance Company (“Allendale”) and Factory Mutual International (“FMI”), and the ZDS defendants. The amount of paper which has so far been expended in this lawsuit is indeed impressive, and no doubt many trees have been cut down to advance the course of this litigation. The court duly notes the sacrifice of those trees in the name of justice.

Allendale is the parent company of FMI, which is the primary insurer of the ZDS defendants. The insurance at issue in this case concerns inventory in a warehouse in Seclin, France, which has been insured in the amount of approximately $48 million. A fire totally destroyed the warehouse and all the inventory contained within. Plaintiffs brought this suit seeking to prove that the insurance issued to the ZDS defendants does not cover the Seclin fire loss.

Well before the fire, and in accord with normal insurance practice Allendale purchased reinsurance from several companies, including GenRe and Sorema. GenRe and Sorema are not parties to the suit, as the insurance contract at issue is solely between FMI, and hence Allendale, and the ZDS defendants. Of the $48 million, Allendale retained $2.5 million, for which it is directly responsible. Allendale then reinsured the remaining $45.5 million. Essentially, GenRe and Sorema are the “insurers” of Allendale, as they and the other reinsurers could ultimately be responsible for paying the $45.5 million to Allendale, who would then pay it to the ZDS defendants. Thus, GenRe’s and Sorema’s interests closely parallel that of Allendale and FMI in this litigation.

As part of the reinsurance contract, Allen-dale agreed to provide GenRe and Sorema with information about the status of the ZDS defendants’ claim and the course of the investigation into the Seclin fire. Allendale also agreed to keep the reinsurers apprised about the ongoing coverage litigation. These communications mainly took the form of letters and telephone conversations between one of Allendale’s claim representatives and claim representatives of GenRe and Sorema.

The ZDS defendants now want to gain access to the documents created as a result of these communications, as part of a broader discovery request. Also at issue here are the notes and memos written by GenRe’s and Sorema’s claim representatives concerning the information relayed by Allendale’s claim representative. The ZDS defendants also want to see documents created by Sorema’s claims director concerning the Seclin claim, and letters sent to other third parties by Sorema employees to keep those parties informed of the status of the Seclin fire loss claim.

GenRe and Sorema have refused to produce the documents. Allendale alleges that [135]*135all the documents contain either the work product of Allendale’s counsel, or reflect confidential communications, concerning legal advice, between Allendale’s counsel and employees of Allendale, and as such are protected by either the work product or attorney-client privilege. Allendale also asserts that these privileges were not waived when the information was passed on to the third parties GenRe and Sorema, because Allendale and its reinsurers have a common interest in the Seclin claim. Consequently, says Allen-dale, GenRe and Sorema can properly receive the material in order to further this common interest. Sorema also alleges separately that some of the documents are irrelevant and so beyond the scope of discovery.

The ZDS defendants naturally dispute all of these allegations. They claim that there is no evidence that the documents in question contain privileged material, because the documents are not described with enough particularity to enable a court to make a determination, and because only a few of the communications were either by a lawyer or to a lawyer. The ZDS defendants maintain that the material was created in the ordinary course of processing an insurance claim, and so cannot qualify for protection under any privilege. They further allege that the Sore-ma documents are relevant because they pertain to the reasons why Allendale refuses to pay on the claim.

II. ANALYSIS

Both the attorney-client privilege and the work product privilege are important limitations on the scope of discovery. The work product privilege exists so that one party cannot gain an unfair advantage over another by learning the other party’s counsel’s strategies and legal theories. Binks Mfg. Co. v. Nat. Presto Industries, Inc., 709 F.2d 1109, 1118 (7th Cir.1983). The attorney-client privilege is designed to prevent the disclosure of confidential information about a client. United States v. Lawless, 709 F.2d 485, 487 (7th Cir.1983). However, the scope of discovery is generally broad, and courts look unfavorably upon anything which narrows that scope. As the attorney-client and work product privileges obscure the search for the truth, they are both narrowly construed by courts to restrict their impact upon the discovery process. See, e.g., In re Walsh, 623 F.2d 489, 493 (7th Cir.), cert. denied, 449 U.S. 994, 101 S.Ct. 531, 66 L.Ed.2d 291 (1980). The Seventh Circuit’s cases are consistent with this general rule, in their warning that the scope of privileges “should be confined to the narrowest possible limits.” Lawless, 709 F.2d at 487. In accordance with the holdings of the Seventh Circuit, this court also narrowly interprets any claim of attorney-client or work product privilege. See, e.g., Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 145 F.R.D. 84 (N.D.Ill.1992).

In this case we will begin by analyzing Allendale’s, GenRe’s, and Sorema’s claims of work product privilege, then look at their claims of attorney-client privilege, then examine Sorema’s assertion that some of the documents are irrelevant. We will end with a review of the allegation that the common interest doctrine serve to keep intact any privilege which might otherwise exist for documents or communications transferred from Allendale to GenRe and Sorema.

A. The Claims of Work Product Privilege

The work product privilege is designed to protect material “prepared in anticipation of litigation or for trial by or for another party or by or for that other party’s representative (including the other party’s attorney----or agent)....” Fed.R.Civ.P. 26(b)(3).

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Cite This Page — Counsel Stack

Bluebook (online)
152 F.R.D. 132, 1993 WL 515493, 1993 U.S. Dist. LEXIS 17195, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allendale-mutual-insurance-v-bull-data-systems-inc-ilnd-1993.