MAINE BUSINESS AND CONSUMER COURT CUMBERLAND, ss Location: Portland Docket No.: BCD-CV-09-35
) IRVING OIL LIMITED and ) HIGHLANDS FUEL DELIVERY, LLC ) ) Plaintiffs, ) ) V. ) ORDER ON DEFENDANT'S MOTION ) FOR ISSUANCE OF LETTERS ACE INA INSURANCE, ) ROGATORY ) Defendant. )
I. INTRODUCTION
Before the Court is Defendant ACE INA Insurance's ("ACE") Motion for
Issuance of Letters Rogatory. In said Motion, ACE requests this Court to ask the Ontario
Superior Court of Justice to order certain discovery from Royal & Sun Alliance Insurance
Company of Canada ("Royal"), its employee, Gillian Moorcroft, and Marsh Canada
Limited ("Marsh"), the Irving Plaintiffs' insurance broker. Specifically, ACE's Letters
Rogatory seek the assistance of the Canadian Courts in obtaining deposition testimony
and documents that ACE needs to defend against the Irving Plaintiffs' claims. ACE
contends that the requested discovery is relevant to: which underlying primary policies
and coverage must be exhausted in order to trigger ACE's excess coverage; the scope,
types, and limits of primary liability coverage; and whether the Irving Plaintiffs have
established the necessary exhaustion to trigger ACE's excess coverage. For the reasons
discussed below the Court denies the Defendant's motion as to Royal and Ms. Moorcroft
and denies the motion without prejudice as to Marsh.
1 II. DISCUSSION
A. Royal
On June 25, 2015, this Court granted a Second Stipulated Order Amending Case
Management Conference Scheduling Order No. 4. 1 Pursuant to the joint request of the
Parties, ACE agreed that the deadline for completion of all fact and merit discovery
would be August 28, 2015. At the time ACE agreed to the August 28, 2015 deadline,
ACE was surely aware of the breadth of documents it requested from Royal its motion
was filed with the Court on May 20, 2015. Because ACE's request will entail a process
that cannot be expected to be completed within the latest facts/merits discovery deadline
in this case, the Court denies ACE's motion as it relates to Royal Canada.
B. Gillian Moorcroft
ACE's request for documents and the deposition of Royal Canada employee,
Gillian Moorcroft, is also untimely as the August 28, 2015 discovery deadline is fast
approaching. ACE knew of Ms. Moorecroft's proffered testimony as of October 2014
when she submitted her first affidavit, and counsel for Ace admitted that it was aware of
her testimony by December of2014. However, Ace's counsel argues that it was not until
it received the voluminous February 2015 discovery submitted by the Plaintiffs how
significant her role would be. However, ACE failed to timely act and waited until May
1 On June 24, 2014 the Court entered Case Management Order No.4. This followed a conference of June 12, 2014 which had been set after the Supreme Judicial Court dismissed Plaintiffs appeal and Defendant's cross appeal. The June 24, 2014 order made it clear that any party initiating discovery had to do so sufficiently in advance of the pertinent discovery deadline to enable any party responding to the request to respond within that deadline. The order also set March 7, 2015 as the facts/merits discovery deadline. That order was amended by agreement on March 4, 2015 and the facts/merits discovery deadline was extended to June 26, 2015. The most recent amendment, as noted, extended that deadline to August 28, 2015.
2 20, 2015 to file this motion, and did so approximately a month before the (now-prior)
discovery deadline expired.
As the Court stated at the hearing on this motion, based on the pendency of this case,
absent unforeseen circumstances, the Court is unwilling to further extend the discovery
deadline to accommodate this late request. The Court therefore denies ACE's motion in
regard to documents and depositions requested from Gillian Moorecroft.
C. Marsh
ACE has also requested a large number of documents as well as a deposition from
Marsh. It is the Court's understanding that the Plaintiffs are still in the process of
proffering a significant number of Marsh-related documents to ACE. Because ACE will
receive those documents this week, the Court fmds that ACE should, in fairness, have an
appropriate period of time for adequate review. Thus, ACE shall complete its document
review by close of business on July 17,2015. On July 20,2015 at 10:00 AM the Court
will convene a telephonic conference with counsel for Marsh and counsel for the parties
to this action. In said conference, Ace is expected to convey to the Court whether the
documents provided by Irving were responsive to its requests and whether there is a
substantial, good faith basis to request more discovery from Marsh directly through the
letters rogatory process. ACE's motion as it pertains to Marsh is therefore denied without
prejudice.
III. CONCLUSION
Based on the foregoing the entry shall be:
ACE's Motion for the Issuance of Letters Rogatory as to Royal and Ms. Moorcroft. ACE shall complete its document review in relation to Marsh
3 on or before close of business July 17, 2015. The Court will convene a telephonic conference with Marsh and counsel for the parties on July 20, 2015 at 10 AM.
Pursuant to M.R. Civ. P. 79(a), the Clerk is herby directed to incorporate the
Order by reference in the docket.
Dated: July 8, 2015 Is M. Michaela Murphy, Justice Business and Consumer Court
4 Irving Oil Limited, and Highlands Fuel Delivery, LLC v. Ace INA Insurance BCD-CV-2009-35
Irving Oil Limited and Highland Fuel Delivery, LLC Plaintiff
Counsel: John Ciraldo, Esq. David McConnell, Esq. Jennifer Pincus, Esq. One Canal Plaza, Suite 900 PO Box 426 Portland, ME 04112-0426
Ace INA Insurance Defendant
Counsel: Harold Friedman, Esq. Brett Leland, Esq. One Portland Square PO Box 586 Portland, ME 04112-0586 AND Laurence Leavitt, Esq. 25 Pearl Street PO Box 4726 Portland, ME 04112-4726 STATE OF MAINE BUSINESS AND CONSUlviER COURT CUMBERLAND, ss BCD-CV-09-35 /
) ffi. VING OIL LINflTED and ) HIGHLANDS FUEL DELIVERY; LLC ) ) Plaintiffs, ) ) v. ) ORDER ON PLAINTIFFS' MOTION TO ) COMPEL PRODUCTION ACE INA INSURANCE, ) ) Defendant. ) )
Before the court is Plaintiffs', Irving Oil Limited (11 IOL"), and Highlands Fuel
Delivery, LLC ("HigWands") (collectively, the ulrving Entities" or "Plaintiffs") Motion
to Compel the Production of certain claim and tmdelWriting files maintl\ined by
Defendant ACE INA, Insurance C'ACE"). Through tllis motion, Plaintiffs seek an order-
compelling ACE to conduct a reasonably diligent search for and to produce all non-
privileged documents responsive to Plaintiffs' Second Request for Production of
Documents. Pmsuant to the Febn.1ary 12, 2015 hearing on the matter, the court has
conducted in camerct review of the disputed documents submitted by ACE.
II. FACTS
Since 2003, over sixty (60) lawsuits have been flied against the Irving Entities
based on the presence of methyl tertimy butyl ether ("MTBE") in Plnintiffs' refined
gasoline products. As a result of the various lawsuits, the Plaintiffs incurred significant I
unreimbursed expenses in connection with the investigation, defense, and settlement.
1 The Pl11intiffs nnticipate that even more expenses will be incurred ns a result of the
Vermont MTBE Lawsuit. (Pis. 's Sec. Amd. Compl. ~ 15.)
In response to the various lawsuits, the Pl11intiffs cont11cted ACE alleging thnt the
applicable product hazard limits of liability of Plaintiffs' primary insurance policies
underlying the ACE umbrella policies had been exhausted. (Pis.' Sec. Amd. Compl. ~
16.) The Plaintiffs requested that ACE provide 11 defense to the Vermont MTBE Lawsuit
I'Uld agree to indemnify them under the applicable ACE umbrella policies for any ndversc
jud~meut that may be entered. The Plaintiffs further infonned ACE of the settlement of
the MTBE suiis and requested that ACE contribute. Id. ACE denies that the u11derlying
primary policies have been exhausted. Plaintiffs brought the underlying action seeking
declaratory relief nnd damages for breach of contract nnd unfair claims settlement
pmctices arising from the Defendant's alleged willful 11nd bad"faith refusal to defend or
indemnify the Plaintiffs under umbrella liability insurance policies in numerous
underlying product liability actions brought against the Plaintiffs. (Pis.' Sec. Amd.
Compl. ~ 1.)
Plaintiffs now seek to compel ACE to produce its entire claim fiJcs for the MTBE
Lawsuits against the Irving Entities, comnnmications with other insurers about MTBE
Lawsuits against the Irving Entities, numerous documents maintained in ACE's
uuderwriting files, standard fonn policies, and re-insurance related documents. The court
hos reviewed the necessary documents in camera and has made n detennination as to
discovery below. ill.STANDARD OF REVIEW
A. Work-Product Doctrine
The purvose of the work-product doctrine and associated nale is to "pi'Omote the
adversary system by protecting the confidentiality of papers prepared by or on behRlf of
attorneys in anticipation of litigation." Springfield Terminal Ry. Co. v. Dep't ojTmnsp.,
2000 IVIE 126, ~ 19,754 A.2d 353. Pursuant to M.R. Civ. P. 26(b)(3):
(A) pnrty may obtain discovery of documents and tangible things ... prepared in anticipation of litigation or for trial by or for another party or by or for tbat other party's representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case nnd thHt the party is unHble without undue hnrdship to obtain the subst11nti11l equivalent of the matednls by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative ofa party concerning the litigation.
(Emphasis added). Because the work-product privilege applies only to documents and
tangible things, "discovery of work product will be denied if the party seek.ing discovery
can obtain the desired information by taking the deposition of witnesses." Wright and
Miller, 8 Federal Prnctice and Procedure§ 2025 at 538 (3d ed. 2010); accord Eoppolo v.
Nat'! R. Passenger C01p., 108 F.R.D. 292, 294 (E.D. Pa. 1985).
In Maine, the party seeking protection from the work product doctrine "must
show that the documents were prepAred principally or exclusively to assist in anticipated
or ongoing litig11tion." Sprtngjleld Terminal, 2000 1\tffi 126, ~ 17, 754 A.2d 353 (citing
United States v. Consh·. Prods. Research, Inc., 73 F.3d 464, 473 (2d Cir. 1996) (emphasis
added)). "[T]he test should be whether, in light of the nature of the document and the
factual situation in the particular cf\se, the document can be fairly snid to have been
prep11red or obtained because of the prospect of litig11tion." ld. ~ 17 (citing In re Grcmd
3 lilly Proceedings, 604 F.2d 798,803 (3d Cir. 1979)). Moreover, it is not just the work of
the attorney that is protected. Also protected are documents created by the party or the
party's representatives, as long as they are created in anticipation of litigation. !d. ~ 18;
see also M.R. Civ. P. 26(b)(3). "A remote possibility of litigation is insufficient,"
however, "nnd some courts even have found the likelihood of litigation to be n deficient
showing, requiring a substantial probability with commencement imminent." Springfield
Terminal, 2000 IviE 126, ~ 19, 754 A.2d 353 (internal citations omitted).
"Rule 26(b)(3) . . . contemplates a preliminary analysis by the tJinl court to
detem1ine whether the party seeking to protect the material from disclosure has met its
burden of establishing thnt the document is work product." See M.R. Civ. P. 26(b)(3).
'1f that burden is met, the burden then shifts to the party seeking disclosure to
demonstrate tlult it has substantial need of the materials 11nd cannot obtain the document
othenvise without undue hardship." Springfield Terminal, 2000 ME 126, ,I 14, 754 A.2d
353 (citing M.R. Civ. P. 26(b){3))." Finally, even if the party seeking disclosure can
establish substnntinl need and undue hardship, documents or parts of documents,
containing "mental impressions, conclusions, opinions, or legal theories of an attorney"
shall not be disclosed. See id.
B. Attorney-Client Privilege
"The purpose of the attorney-client privilege is to encoumge clients to make f1.11l
disclosure to their attorneys 11nd to protect not only the giving of professional advice to
those who cnn act on it but also the giving of information to the lawyer to enable him to
give sound nnd informed advice." Corey l'. Norman, Hansou & DeTroy, 1999 ME 196, ~
4 18, 742 A.2d 933 (quotation marks and internal citntions omitted). Pursuant to M.R.
Evid. 502 (b):
A client has a privilege to reft1se to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendi lion of professional legal services to the client ( 1) between the client or the client's representative and the client's lawyer or the lawyers representative, or (2) between the lnwyer and the lawyer's representative, or (3) by the client or the client's representative or the lawyer or a representative of the lawyer to a lawyer or n representfltive of a lawyer representing another party in a pending nclion and concerning a matter of common interest therein, or (4) between representatives of the client or between the client and a representative of the client, or (5) among lawyers and their representatives representh'tg the same client. 1
The "burden of establishing the existence of privilege is on [the) party objecting
to (its] discovery." Pierce v. Grove lvfjg. Co., 576 A.2d 196, 199 (Me. 1990).
Nevertheless, the privilege belongs to the client nnd "[o]nce it is waived, it Cfllmot be
later revived." Field & Murray, Maine Evidence § 502.5 at 220 (6th ed. 2007); Kohl's
Dept. Stores, Inc. v. LibertyMut.lns. Co, BCD-CV-12-13 (Bus. & Consumer Ct. Oct. 11,
2012, Humphrey, C.J.).
IV. DISCUSSION
A. Documents Protected from Discovery by the Work-Product Docttine
Under the stnndard set forth in Springfield Terminal, the party seeking protection
from the work product doctrine must demonstnlte that the documents were prepared
exclusively to assist in aoticipatcd or ongoing litigation. 2000 IviE 126, 1f 16, 754 A.2d
353. Based on the court's In camem review of the subject documents, the court finds that
the following are protected by the work product doctline:
1 A "client" is o person, public officer, or corporotion, nssocintion, or other orgnnizntion or eutily, either public or privnte, who is rendered professionnllegnl services by n lawyer, or who consults n lnwyer witu n ''iew to obtaining professional lcgnl services from the lnwyer. M.R. Evid. 502(n)( 1).
5 November 21, 2005 ACE lumdwritten notes regarding conference call with Stuart Rogers (of Marsh, Irving's insmance broker) and Ralph Mlloio (of Covington & Burling) regarding MTBE suits. 2
ACE IHmdwritten notes regt~rding status of MTBE suits and Irving's suit ag11inst its primary insurers pending in the Stnte of New Hampshire Superior Court. 3
• ACE handwritten notes concerning discussions with counsel for insurers and/or insurers' representatives regarding action captioned 1J11ing Oil. Limited, et al. v. Nat'! Union Fire Ins. Co. of Pittsburgh. PA, et al., State of New Hmnpshire Superior Court. '1
At the time these documents were created, ACE was aware of Irving's lawsuit
ag11inst its underlying primary insurers in Now Hampshire Superior Court. By November
of 2005, counsel for Irving had contacted ACE in attempt to resolve Irving's dernnnd for
excess coverage from ACE. In light of the nature of the documents nnd the factual
sit1.mtion of this particular case, the documents can reasonably be said to have been
prepared or obtained beccwse of the prospect of litigation. Springfield Terminal, 2000
"NfE 126, ~ 17, 754 A.2d 353. Plaintiffs must now satisfy the burden of estnblishing thnt n
substt~ntial need for the above documents exists. 5 ld. ~ 15.
1. Irving Entities' Substantial Need
Under M.R. Civ. P. 26(b)(3) a party seeking discovery of materials protected by
the work product privilege must demonstrate a substantial need for the materials exists
and that "the pnrty is unnble without undue hardship to obtain the substantial equivalent
2 Sea (Def. 's Amd. Priv. Log. 8.) .ISee (Def. 's Amd. Priv. Log. 22.) ~See ld. 5 The Irving Entities contend thol ACE hos uot come tbrwnrd with ndmissible evidence thnt the ln•ing-reloled clnim fJ.!es were prcpnred principolly or C;'\Clusively in onlicipntion of litigntion. PlointiiTs further question the Yolidity of stntements mndc by ACE's in-house counsel John Roth. Plaintiffs co111end thnt Mr. Roth is not personally fnmilior with ACE's hnndling of the Irving Entities' insuronce clnims nnd nbsent such knowledge, Mr. Roth is merely speculoting nbout U1e documents. However, the court tmds tho! this nrgumeut is vitinted l>y the court's ill camera review of the subjec"t documents.
6 of the materials by other means." !d. ''[T]he clearest basis for 1)roduction is when crucial
information is in the. exclusive control of the opposing party." Ban:v P. USAA, 989 P.2d
1172, 1177 (1999).
The court agrees that it is particularly difficult to demonstrate a violation of the
Unfair Claims Settlement Practices Act 6 when one party is in exclusive control of the
only evidence on the matter. Some jurisdictions allow a per se finding of substantial
need where a bad faith allegation has been made. Inre Sec1/ed Case, 676 F.2d 793, 807
(D.C. Cir. 1982); Duplan Co11J. v. Deering Milliken, Inc .. 540 F.2d 1215, 1219-20 (4th
Cir. 1976)).
However, in Gagne v. Ralph Pill Electl'lc Supply Company, the United States
District Court for the District of Maine adopted the view of the Second Circuit which
requires "one who seeks to override the [work product] docuine to present sufficient facts
to establish probable cause to believe that a crime or fraud was committed and that the
documents were prepared nnd \ISCd ns part of 1111 ongoing scheme of crime or fraud." 114
F.R.D. 22, 27-28 (D. Me. 1987) (citing In re John Doe C01p., 675 F.2d 482 (2<1 .Cir.
1982)). AJthough no allegations of crime or fraud are made here, the Court will require
Plnintiff.<; to present the court with probable cause to believe that ACE acted in bad faith
11nd violated the Unfair Claims Settlement Practices Act.
In this case, the gnwamen of Plaintiffs' Complaint seeks to determine whether
ACE conducted a good-faith investigation of Plainliffs' claims and what steps ACE took
to investigate. Plaintiffs contend that ACE has viol11ted the Unfair Cl11ims Settlement
Practices Act by knowingly misrepresenting terms and effects of certain coverage and
repeatedly failing to determine its defense responsibilities to the Plaintiffs in active 6 2<1-A M.R.S.A § 2436-A.
7 IviTBE lawsuits. Plftintiffs argue that ACE's claim files nre necessary 11s
contemporaneous documentary record of ACE's investigation. See Gould v. Trawlers,
fnc., 1991 Me. Super. LEXIS 214 (Me. Super. Ct. Sept. 27, 1991) (finding substantial
need where bad fnith claim was alleged).
It is established law in Maine that "the analysis of an insurer's duty to defend
involves solely a comparison of the allegations in the underlying complaint with the
provisions of the insurance policy." Mitchell v. Allstate Ins. Co., 2011 ME ·133, ~ 8, 36
A.3d 876. "Under the comparison test ... no investigation of the insured's clnim is
required to determine whether a duty to defend exists." Anderson v. VIrginia Sur. Co.
Inc., 985 F. Supp 182, 192 (D. Me. 1998). In this cnse, ACE WHited five yenrs to deny
coverage for the MTBE Lawsuits based 011 information apparent from the face of the
policies And the underlying complaints.
The court finds that the Pl"nintiffs have presented the requisite probable cause to
overcome the work product doctrine and to compel discovery of the above-mentioned
documents. The court believes thAt access to snid documents might provide the Plaintiffs
with the infonnatior1 they need to evaluate ACE's handling of the i'viTBE claims nnd
detennine if there wns a violation of the Unfair Claims Settlement Practices Act.
However, notwithstanding the Plaintiffs' substantinl need for the protected documents,
the couri hns redacted language containing "mental impressions, conclusions, opinions,
or legal theories." Springfield Terminal Ry. Co. v. Dep't ofTmnsp., 2000 ME 126, ~ 14,
754 A.2d 353, 357.
Further, Plnintiffs contend that they need certain documents to refresh the
recollection of former ACE employees such as Anne Grny and Kara Fag11n. , Both are no
8 longer employed by ACE and Plaintiff's contend that it is likely that that they will need
to refresh the witness' memory. ACE relies on Davis v. Eme1yAir Freight C01p., for the
assertion that speculative and unsubstantiated assertions of alleged faulty memory of a
witness do not suffice to establish substantial need. 212 F.R.D. 432, 436-37 (D. Me.
2003).
The court agrees that broad unsubstantiated assertions of utuwailability or faulty
memory are insufficient to alise to a substantial need. However, in this case, the
Plnintiffs have sought production of documents to refresh the recollection of witnesses
who are no longer employed in their relevant positions with ACE. Thus, it is reasonnble
to conclude that these witnesses may be unable to remember facts relevant to the
Plaintiffs' deposition. Further, the Plaintiffs have indicated that the depositions will take
place in Canada. To promote efficiency, and prevent repeated depositions, the court finds
that the Plaintiffs have presented more than a mere unsubstantiated assertion of faulty
memory. Thus, the Plaintiffs have a substantial need for said documents.
B. Documents Subject to the Attorney-Client Privilege
The Plaintiffs have requested numerous documents that ACE claims are protected
by the attorney-client privilege. These documents include joint defense/common interest
conununicntion between Anne Gray of ACE and counsel for Plaintiffs' primary insurers,
ns well as e-mails between Kara Fagnn of ACE and outside counsel Michael Goodhue.
The court nddresses each in turn.
1. Joint Delense Communiccrfion
The specific joint defense communication documents ACE claims are protected
by the attomey-client privilege include the following documents:
9 February 6, 2006, joint defense communication between Anne Gray of ACE and counsel for insurers' nnd/ or insurers' representatives regarding action captioned Irving Oil Limited, eta/. v. Ncr!'! union Fh·e Ins. Co. ql Pittsburgh, PA, era/., State ofNcu• Hampshire Superior Court. 7
March 1, 2006, e-mail correspondence between Anne Gray of ACE and co\msel for insurers' aud/ or insurers' representatives regarding action captioned lrl'ing Ott Limited, et al. v. Nat '!union Fire Ins. Co. of Pittsburgh, PA, eta/., State of New Hampshire Superior Court. 8
Both of the above c-mails contRin communication between Anne Gray of ACE and
counsel for Plaintiffs' prirnmy insurers concerning joint defense stmtegy. Generally,
disclosing attomey-client communications to a third-party undermines the nttorney-client
privilege. Uniled States v. Ackert, 169 F.3d I 36, 139 (2d Cir. 1999) (stating that "the
attorney-client privilege generally applies only to communications between the attorney
and the client"). However, in Mnine, the "common interest" mle is embedded in the
attorney-client privilege. Said rule preserves the confidentinlity of privileged information
if disclosures are made to certain third parties and their attorneys, concerning a matter of
common interest in 11 pending action. The rule states:
A client has a privilege to refuse to disclose, tmd to prevent any other person from disclosing, the contents of nny confidential communicntion ... [b]y the client, the client's representative, the client's lawyer, or the lnwyer's representative to a lawyer representing another party in a pending action concerning a matter of conunon interest therein.
M.R. Evi
The common-interest docttine is "not an independent basis for privilege, but an
exception to the general mle that the attorney-client privilege is waived when plivileged
information is disclosed to a third-party. Ccrva/laro v. United States, 284 F.3d 236, 250
(1st Cir. 2002). In order for the common interest exception to apply, "the party nsserting
7 See (Def. 's Autd. Priv. Log. 8-9.) 8 Sea (Def. 's Amd. PriY. Log. ll.)
10 the privilege must show that (t) the communications were made in the course of a joint
defense effort, (2) the stntements were designed to further the effort, and (3) the privilege
has not been waived." United States v. Bay State Ambulance and Hosp. Rental Serv. Inc.,
874 F.2d 20, 28 (1st Cir. 1989). "To qualifY for the privilege, the communication must
have been made in confidence." ld.; see also Ken's Foods, Inc. v. Ken's Ste
Inc., 213 F.R.D. 89, 93 (D. Mass. 2002).
The policy behind the doctrine is to prevent disclosure when the attorneys shlll'e
their respective legal strategies. In re 1'eleglobe Communications Corp., 493 F.3d. 345,
365 (3d Cir. 2007); Restntement (Third) of the Law Governing Lawyers§ 76 cmt. d. ("A
person who is not represented by n lawyer and who is not himself or herself a lawyer
cannot participate in a common-interest Hrnmgemen(); 2 Weinstein's Fed. Evid. §
503.21 [2], at 503-68 ("The [common-interest] privilege applies to conummications made
by the client or client's lm1•yer to a lawyer l'epresenlfng another in a mallei' of common
interest.") (emphasis added and quotations omitted).
ACE contends that the e-mail communication is privileged as all of the parties to
the e-mails shared a common interest in litigation defense against the Irving Entities.
Further, the distribution list consisted exclusively of client representatives and counsel.
However, a plain reading of M.R. Evid. 502(b)(3) reveals that the doctrine only protects
commo11 interest communication in two relatively mmow circumstances: first, when a
client or a representative of a client sends confidential information to a lawyer
representing another party in a pending action concerning a matter of common interest
therein; and second, when a lawyer for a client sends confidential infonnation to a lawyer
11 representing another pnrty in a pending action concerning a matter of common interest
therein. 9
In Mnine, courts exmnine the plain meaning of statutory language. "Only if the
statutory language is ambiguous-that is, reasonably susceptible to more than one
interprctntion-wil! [the court] consider other indicia of legislative intent. Gr(l]in v.
Griffin, 2014 IviE 70, ~ 18,92 A.3d 1144; Sunshine v. Brett, 2014 :ME 146, ~ 13, 106
AJd 1123. In tllis case, Anne Gray was an employee of ACE. There is no indication
that counsel for ACE was cc'd or included in the e-mail chain. The court finds that this
type of transaction, while protected by the Restatement, is not protected under a plain
rending of Rule 502(b)(3). Thus, under the strict confines of the Rule, the fact that
ACE's counsel wns not present vitiates any claim to the attorney-client privilege under
the common interest doctrine. The court finds thftt the common interest rule does not
11pply to protect the above-mentioned e-mails.
9 Iu Kohl's Department Stores, Inc. v. Liberty Mutual Insumnce, the Busiuess aud Consumer Court opplied the more expansive Restntement (Third) of Low Governing LRwyers, which slates: "[u]nder the privilege, nuy member of n client set- n client, the client's ogeul for commlmicntion; the client's lawyer, and the lawyer's ogeut ... con exchmtge colllnl\uticntions witl1 members of o similar client set." BCI;>-CV -12-13 (Bus. & Consumer Ct. Oct. 11, 2012, Humphrey, C. J.) nt 6 (quoting Restatement (Third) of the Lnw Governing Lnwyers § 76 cmt. d.). However, the Kohl's cose is distinguishable in that it concerned n matter of first impression in Mnine where nn insurer provided 11 defense to ils insured, ond the insured ond insurer subsequently coopernted in the preparnlion of litigation. Tho court reasoned:
[T)hc insurer and the insured should be oble to communicate freely with respect to the titigntion to the e;-..'tent of their common interest without feor thnt the ptointiff in o subsequent . . . titigntion could seek discovery of those commuuicotions. To hold otherwise would hamstring an insured in defense of clnims ogoiust it ond significantly jeopardize the opport\mity for settlelllent of the litignlion.
!d. Becouse the Rule 502(b)(3) doos not contemplate the insurer-insured join! defense relationship, the court odoptcd tho more 1expnnsive Restatement. However, the relationship between ACE nnd the Plnintiffs' primary insurers is in the court's view the type of relationship contemplntcd by the mle ond thus Ute court will follow the Rule accordingly.
12 Defendants also assert that the documents Are protected as work product, but
based on the Plaintiff's demonstration of substantinl need, tbe court finds that the
documents are discoverable work product.
2. AC"E 's Conmumication wilh Michael Goodhue
The Plaintiffs seek production of e-mail correspondence between ACE's
representative Kara Fagan, and Attorney Michael Goodhue. The e-rnails are described
ns:
• · E-mail correspondence between Kal·a Fagan (of ACE) and outside cotmsel retained to represent and advise ACE with respect to coverage issues related 10 to MTBE suits.
Generally, when an insurer hires a licensed Rttomey to perform the investigntion nnd
handling of a policyholder's claim, the nttorney-client privilege will only attach to
communications mndc for the purpose of securing legal advice. In re Te/eglobe
Commc 'ns C01p., 493 F.3d 345, 359 (3d Cir. 2007). An insurer may not assign its
ordinnry business functions to an attorney in an attempt to "clonk with privilege matter.s
that would otherwise be discoverable." Merrill Jewe!Jy Co. v. St. Pc111l Fire & M(ltine
Ins. Co., 49 F.R.D. 54, 57 (S.D.N.Y. 1970). The court !lgrees thnt insurers should not be
~tllowed to create a "blanket obstruction to discovery of its claims investigation" merely
by Wring outside counsel to conduct that investigation. Mission Nat 'I Ins. Co. v. Lilly,
liZ F.R.D. 160, 163 (D. tvlinn. 1986).
Plnintiff contends that ACE has failed to provide the court with any admissible
evidence that the communication with outside counsel from 2005-2009 is privileged
communict~tion for the purpose of obtaining legal advice. ACE contends that it _, 10 Snid c-mnils ore dnted: Augt1sl 7, 2007; Aug\JSI 21, 2007; Febnwry 7, 2008; Felm1nry II, 2008; Fcbntm-y 14, 2008; nnd April 2, 2008. See (Def. 's Amd. Priv. Log 15-20.)
13 communicated with outside counsel for two purposes. First to provide ACE with legal
advice with respect to Irving's pending coverage litigation; lHld second, to provide ACE
with legal advice regnrding its obligations, if any, to provide Irving excess coverage for
the llllderlying MTBE Sltits. The Plaintiffs contend that Goodhue was not counsel for the
underlying litigation, but counsel for the underlying claim investigation.
Afler conducting in camera review of the subject documents, the court finds that
the e-mails mtd memoranda submitted to this court between Kara Fagan and Attorney
Goodhue are protected by the attomey-client privilege. It is clear that the c-mails
submitted to the court contain legal substantive and procedural advice concerning MTBE
litigntion.
3. No Exception to lhe Attomey-Client Privilege Applies
This court declines to adopt a per se rule that mere allegations of unfair cl<1ims
sel!lemcnt prnctices pierces the attorney-client privilege. Tho Attorney-client privilege is
"the oldest of the plivi!eges for confidential communication known to the common law ..
. . Its purpose is to encourage full atld frank comm\mication between nttomeys and their
clients nnd thereby promote broader public interests in the observance of lnw and . I administration of justice." In re Molion to Quash Bar Counsel Subpoena, 2009. lvffi 104,
~ 13, 982 A.2d 330 (quotation mtnks and internal citations omitted). The court finds that
the Plaintiffs have established more than "mere nllegntions" of unfair claims practices.
Rather, as mentioned above, the court finds that the Plaintiffs have established probable
cause that such viol<1tions exist.
The court <1lso declines to extend the crime/fl'aud exception to the attorney-client
privilege to encompass violations of the Unfair Claims Settlement Practice.<> Act where
14 only probable cnuse of said violftlions exists. 11 The Law Court has instructed that in
order to trigger the crime/frnud exception, a party must prove by a preponderance of the
evidence that the exception applies to pierce the attorney-client privilege. In reMotion to
Quash Bar Cmmsel Subpoena, 2009l'viE 104, ~ 19,982 A.2d 330.
While the LRw Court has not had the opporhmity to rule directly on this issue, in
Fermra & DiMercurio, Inc. v. St. Paul Metcmy Ins. Co., the United States District Court
for the District of Massachusetts refused to Rpply the crimelft·aud exception to unfair
claim settlement conduct. 173 F.R.D. 7, 12 (D. Mass. 1997). Like Maine, Massachusetts
recognizes that "facts establishing the clime/fraud exception must be proved by a
prepondernnce of the evidence." !d. (quotations omitted). The Court maintained the
mmow reading of the evidentiaty tule to include only a "crime or fraud" and found that
"it is inappropriate to extend the exception to an unfair and deceptive trade practices
claim."/d. 12-13.
Even assuming for purposes of argument, thnt the tort of nn unfnir claims
settlement practice during claim processing and/or effecrunting settlements is sufftcient to
warnmt applying the crime/fraud exception, the court finds tlu1t the Plnintiffs nevertheless
fail to show that ACE sought'the assistance or advice of counsel "in furtherance of ft
crime or fraud." M.R. Evid. 502 (d)( I). Under Mnine law, the Plaintiffs must show, by a
p1·eponderance of the evidence, that ACE consulted counsel "in furtherance of a crime or
fm\Jd". !d.
While probable cause of a violation of the Unfair Claims Settlement Practices Act
may warrant the piercing of work product protection, the Plaintiffs have failed to meet 11 In MAine, the crime frnud exception npplies where "the services of the:'! lnwycr were sought or oblnined to enoble or oid ouyonc to commit or plnn to commit whnt the client knew or rensouably should hnve known to ben crime or froud. M.R. Evid. 502(d)(l).
15 the prepondemnce burden necessary to pierce the attorney-client privilege. Thus, the
court finds that the documents are protected by the attorney-client privilege and do not
fall within any exception to the privilege recognized by Maine law.
C. Documents Subject to the Relevancy Standard Under M.R. Civ. P. 26(b)( 1)
1. Reinsurance bl[ormatlon and Communication
The Plaintiffs have requested discovery of certain communication between ACE
and ACE's reinsurer. ACE has identified these documents as: "Correspondence with
ACE's reinsurer that post-dates Irving's fiHng suit ng11inst ACE and concerns Irving's
suit against ACE." 12 ACE claims that the documents are protected by both the work-
product doctrine and the attorney-client privilege. The Plaintiffs argue that any privilege
was pierced upon fumishing the document to the reinsurer. After reviewing the
documents in camem the court finds that .these documents are partially protected to the
extent that the documents contain opinion work-product. Although Rule 26 makes
ordinary work product discoverable where there is a substantial need, the Rule
specifically protects opinion work-product from disclosure even in the face of undue
hardship.· Therefore, after cmeful review, the CO\H't has redacted the reinstmmce
communications to the extent that they include the "mentAl impressions, conclusions,
opinions, or legal theories" of ACE or its attorneys. The remaining portion of the
documents are discovemblc so long as they are relevant to the underlying litigation.
a. Relevance o[Reinsurance Commtmicallons
Case law across the United States is unsettled as to whether reinsurnnce
information is relevant in a coverage dispute. Some courts find that reinsumnce
documents and an insurer's communication with its reinsurers are relevant and therefore 11 See (Dcf. 's Amd. Priv. Log. 25.)
16 discovernbl e. See. e.g., Regence Group v. T!G Specialty Ins. Co., 20 I0 \VL 476646, at
*3 (D. Or. Feb. 4, 2010) (allowing discovery of "[d]ocuments exchanged between [the
insurer] and its reinS\Irers about th[e] underlying litigation"); Cigna Ins. Co. v. Cooper
Tire & Rubber, lnc., 180 F. Supp. 2d 933, 936 (N.D. Ohio 2001) (discovery relating to
reinsurance is relevant 1111d discoverable). However, other courts have explicitly held that
reinsurance information is not relevant in a coverage dispute. These cotuts note that a
policyholder is not a party to the reinsurance contract and does not have any tights under
that reinsurance contract. See, e.g., Leksi, Inc. v. Fed. Ins. Co., 129 F.R.D. 99, 106
(D. N.J. 1989) (the relevance of reinsurance "is very tenuous and its production is not
compelled"); Rhone-Poulenc Rorer, Inc., v. Home Indent Co., 139 F.R.D. 609, 613
(E.D. Pa. 1991) on recons/demlion In part, No. CIV. A. 88-9752, 1991 WL 237636 (B.D.
Pa. Nov. 7, 1991) (denying request for reinsurance information where "vngue and limited
monetiHY demands nre insufficient to bring the reinsurance agreements" within the scope
of discovery).
In this case, the court finds that the communication betwee.n ACE and its
reinsurers that post-dates Irving's filing of the underlying action is relevant to the
underlying litigation and discoverable. 13 Pursuant to M.R. Civ. P. 26(b)(l):
"[p]arties obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition und location of nny books, documents, or other tangible things and the identity and location of persons baving knowledge of any discovernble matter. It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appenrs reasonably ct~lculated to lead to the discovety of admissible evidence. 13 See (Def 's Amd. Priv. Log 25.) The court hns only considered reinsurnuc.c docmnents thnt post-dote the flliog of the underlying sui!. Reinsuroncc documeuls pre-doting the oct ion were 110t submitted to this court for In camero review.
17 M.R. Civ. P 26(b)(l). The term "relevant infom1ation" within Rule 26 "includes any
matter that is or may become an issue in the litigation." Whitffngham v. Amherst College,
164 F.R.D. 124, 127 (D. Mass. 1995). Further, "[t]he party resisting production bears
the burden of establishing lack of relevancy or undue burdett" Aponle-Navedo, eta/. 11.
Nalco Chemical Co., eta/., 268 F.R.D. 31, 36 (D.P.R. 20 10). In this case, the Plaintiff
has alleged a violation of the Unfair Claims Settlement Practices Act. It is clear that
ACE's communicHiions with reinsurers are relevant to this claim as it may reveal ACE's
internal evaluation of the claim. The reinsurance communication may further reveal thllt
ACE has taken inconsistent position with the Plaintiffs, which may provide for the unfair
claims violation. Fireman's Fund Ins. Co. v. Superior Coul'l, 233 Cal. App. 3d 1138,
1141 (1991) (noting the trial court "abused its discretion in ordering disclosure of ...
reinsurance documents without first reviewing them in camera."). Thus, after reviewing
the subject documents in ccrmem, the court finds that they are relevant 1111d therefore
discovere'lble subject to the courts redaction of "mental impressions, conclusions,
opinions, or legal theories" of ACE or its attorneys.
2. Pricing and Ratingln{ormationu
Pl11intiffs seek the production of documents containing certain pricing and rating
informntion. 15 ACE contends that said documents are irrelevant to the underlying action
and did not submit them to this court for in camem review. At the February 12, 2015 ·
oral argument on this matter, ACE explained that the documents contain proprietary
market information. However, given the lenient standard for relevance under Rule
14 It is !he uuderstnnding of Ute court thntlhc pnrties have come to nu ngreemenl concerning !he discovcrnbility of ACE's stnndord fonn louguoge oud policies. Therefore, Ute court hos omitted nunlvsis ns to this infonnolion. 15 S~e (Def. 's Amd. Priv. Log I, 5.)
18 26(b)(l), the court finds thnt these documents nrc relevant as they may provide evidence
of the values assigned to the Plaintiffs' clnims and nil ow for assessment of any bad faith
in the processing of the Plnintiffs' claims. Becnuse of the sensitive nntme of the
information the Plaintiffs have demonstrated consistent willingness to abide by
confidentiality reqt1ests nnd ngree to reasonable protective orders.
3. Publica/ions and Articles Concerning
Finally, Plaintiffs seek discove~y of copies of pub Iications and ~trlicles on
coverage issues related to MTBE suits. ACE contends that these documents are protected
by the work-product doctrine because the nrticles were selected nnd obtained in
anticipation of litigation nnd discovery of such will reveal ACE's mental impressions. 16
Opinion work product "typically includes items such 11s attorney's legal strategy, intended
lines of proof, evaluation of strengths and weaknesses of his case, nnd inferences be
draws from interviews of witnesses, and is normally accorded absolute protection from
discovery." Fmzier v. Se. Pennsylvani(t Tra11Sp. Auth., 161 F.R.D. 309 (E.D. PR. 1995).
Moreover, the court understnnds "it is not just the work.of the attorney that is protected
[by the work product doctrine]. Also protected nre documents created by the party or the
party's represcmtatives, as long as they are created in anticipntion of litigation." See M.R.
Civ. P. 26(b)(3). Springfield Terminal Ry. Co, v. Dep't ofTransp., 2000 lviE 126, ~ 18,
754 A.2d 353, 358.
However, in this case, bRsed on the minim11i description provided by ACE, the
articles and publications consist of non-protected factm1l in.fonuation, nnd thus, must be
produced. The mere f11ct thnt an llttomey or a party representative reviews an article or
publicntion does not menn th
19 Rather only confidential communications made with legal objectives arc privileged.
Thus, because these documents are relevnnt to the underlying action, they 11re
discoverab Ie.
V, CONCLUSION
Based on the foregoing, the court GRANTS plaintiffs Motion to Compel as to the
following documents:
• November 21, 2005 ACE hnndwritten notes regarding conference call with Stunrt Rogers (of Mnrsh, Irving's insurance broker) nnd Ralph Muoio (of Covington Burling) regarding MTBE suits. 17
ACE handwri"en notes regarding stnnrs of MillE suits nnd Irving's suit niainst its primary insurers pending in the St11te of New Hampshire Superior Court. 1
ACE handwritten notes concerning discussions with counsel for insurers 11nd/or insurers' representatives regarding action captioned lrl'ing Oil Limited, eta/. v. Nat 'I Union Fire Ins. Co. of Pillsburgh. PA, et al., Slate of New Hampshire Superior Court. 19
• Febmary 6, 2006, joint defense communication between Anne Gray of ACE and counsel for insurers' and/ or insurers' representatives regarding action captioned lrvllig Oil Limited, eta/. v. Nat'lunion Fire Ins. Co. of Pi!lsburgh, PA, eta/., Sterle ofNew Hampshire Superior Court. 20
• M11rch I, 2006, e-mail correspondence between Anne Gmy of ACE and counsel for insurers' 1111d/ or insurers' representatives regarding action captioned Irving Oil Limited, eta/. v. Nat'/ union Fire Ins. Co. ofPtllsburgh, PA, eta!., State of New Hampshire Superior Court. 21
• Correspondence with ACE's reinsurer that post-elates Irving's tiling suit against ACE 11nd concerns Irving's suit agninst ACE. 22
Pricing nnd Rnting Information 23 17 See (Dcf. 's Auld. Priv. Log. 8.) 1 ~ See (Dcf. 's Amd. Priv. Log. 22.) 19 See fd. 20 See (Def. 's Amd. Priv. Log. 8-9.) 21 See (Def. 'sA mel. Priv. Log. II.) 22 See (Amd. Priv. Log 25.) 23 See (Amcl. Priv. Log l, 5.)
20 Articles and publications on MTBE obtained 11nd ptinted by ACE representative. 2'1
The court DENIES Plaintiffs' motion ns to the following documents:
• E-m11il correspondence between Kara Fngan (of ACE) and outside counsel retained to represent and advise ACE with respect to coverage issues related to MTBE suits. 2s .
The court will set up a conference call with co\msel to discuss the logistics for production of redacted documents. The court would like to 11lso discuss with counsel the status of certnin documents referred to Plaintiff's motion that were not submitted for in camera review (including non-MTBE claims files and underwriting files) to ensure tbat this order has nddrcssed all of the disputed documents.
Pursuant to M.R. Civ. P. 79(n), the clerk is hereby directed to incorporate this order into
the docket by reference.
Dntcd: lVInt•ch 17,2015 '},~~ Justce, Business & Cotlslel' Com·t
21 ' Sec(Def. 's•Amd. Priv. Log 23.) 25 Snid e-mnils nre doted: August 7, 2007; August 2 t, 2007; Febmnry 7, 2008; Febmnry J t, 2008; Fcbn111ry 14, 2008; ond April 2, 2008.
21 Entered on the Docket: J '1.f3· 1·'( Copies sent via Maii_Eiectronically v Irving Oil Limited, and Highlands Fuel Delivery, LLC v. Ace INA Insurance BCD-CV-2009-35
Counsel: John Ciraldo, Esq. David McConnell, Esq. Jennifer Pincus, Esq. One Canal Plaza, Suite 900 PO Box 426 Portland, ME 04112-0426
Counsel: Harold Friedman, Esq. Brett Leland, Esq. One Portland Square PO Box 586 Portland, ME 04112-0586 AND Laurence Leavitt, Esq. 25 Pearl Street PO Box 4726 Portland, ME 04112-4726