John Silvetti, II v. Geico Casualty Company

• Court: Louisiana Court of Appeal
• Decided: July 14, 2021
• Docket: CW-0021-0096
• Status: Unknown

Opinion

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

CW 21-96

JOHN SILVETTI, II

VERSUS

GEICO CASUALTY COMPANY, ET AL.

**********

ON SUPERVISORY WRIT FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. 2019-7544 HONORABLE MARILYN CARR CASTLE, DISTRICT JUDGE

CANDYCE G. PERRET JUDGE

Court composed of Billy H. Ezell, Candyce G. Perret, and Sharon Darville Wilson, Judges.

REVERSED IN PART; AFFIRMED IN PART; AND REMANDED FOR FURTHER PROCEEDINGS. David Charles Laborde Mary Katherine Cryar Laborde Earles Law Firm, LLC P. O. Box 80098 Lafayette, LA 70598-0098 (337) 261-2617 COUNSEL FOR PLAINTIFF APPLICANT: John Silvetti, II

Lyon H. Garrison Kevin F. Truxillo J. Reed Poole, Jr. Grrison, Yount, Forte & Mulcahy, LLC 909 Poydras Street, Suite 1800 New Orleans, LA 70112 (504) 527-0680 COUNSEL FOR DEFENDANT RESPONDENT: James River Insurance Company PERRET, Judge.

Plaintiff-Applicant, John Silvetti, II, seeks supervisory writs from the trial

court’s judgment granting Defendant-Respondent’s, James River Insurance

Company (“James River”), Motion for Protective Order after an in camera review

of discovery documents at issue. After reviewing the discovery documents in

camera, we hereby reverse the trial court’s judgment in part, and affirm the

judgment in part.

STATEMENT OF THE CASE

Mr. Silvetti, while employed by Uber Technologies, Inc., was involved in an

automobile collision on December 8, 2018, with Douglas Harper. Mr. Silvetti was

operating his vehicle westbound on Derany Lane and was attempting to make a left

turn from Derany Lane onto South College Road. Mr. Harper was operating his

vehicle eastbound on South Arlington Drive, on the opposite side of South College

Road from Mr. Silvetti, and was attempting to make a left turn from South

Arlington Drive onto South College Road. Mr. Silvetti alleges that after he began

his left turn, Mr. Harper attempted his left turn and suddenly collided with Mr.

Silvetti’s vehicle. Mr. Silvetti sustained bodily injuries from the collision.

Mr. Silvetti filed a Petition for Damages on December 3, 2019, naming

several defendants, including James River—the uninsured/underinsured motorist

insurance carrier of his employer, Uber Technologies, Inc. Mr. Silvetti alleged that

Mr. Harper was an uninsured or underinsured motorist at the time of the accident

and that he provided James River with satisfactory proof of loss of his

damages/injuries. Thereafter, Mr. Silvetti claims James River acted arbitrarily and

capriciously by failing to fulfill its duty under the UM policy to tender Mr. Silvetti funds and breached its duty of good faith and fair dealing, subjecting itself to

penalties and attorney’s fees pursuant to La.R.S. 22:1892.1

Around February 5, 2020, Mr. Silvetti propounded discovery on James River

seeking information related to his bad faith claim. In addition to responding to the

discovery, James River filed a Motion for Protective Order on September 3, 2020,

seeking to protect the disclosure of certain documents enumerated in an attached

Privilege Log. Specifically, James River asserted “Propriety and Confidential

Claims Information,” “Work Product Doctrine,” and “Attorney-Client” privileges.

Mr. Silvetti opposed the motion and argued that the privileges asserted did not

apply to the documents in the Privilege Log, that the documents are contained only

in James River’s claim file, and that the information is not obtainable from any

other source.

After a hearing on the motion, the trial court ordered an in camera

inspection of the documents. On December 10, 2020, the trial court issued a

Ruling on In Camera Inspection wherein the court concluded that all documents

reviewed fell within a valid work product/anticipation of litigation claim privilege,

apart from some notes, which were identified but not specifically set forth in the

judgment.

Mr. Silvetti sought supervisory relief and alleged that the documents

enumerated in the Privilege Log are not protected by the work product/anticipation

of litigation privilege and, if the documents are protected, “shielding those

documents from discovery is still improper under Hodges [v. Southern Farm

Bureau Casualty Insurance Co., 433 So.2d 125 (La.1983)] because Plaintiff’s case

1 James River did tender $85,000.00 to Mr. Silvetti on August 19, 2020.

2 will be prejudiced without them and the substantial equivalent cannot be obtained

from any other source.” Plaintiff also asserted that James River’s answers to

several interrogatories were deficient. Mr. Silvetti requested that the trial court’s

ruling be reversed, and an order issued compelling James River to produce the

Privilege Log documents. Mr. Silvetti additionally requested that James River be

ordered to produce its claims processing procedures manual and to fully respond to

interrogatories.

On May 11, 2021, this court granted the writ as to the documents

enumerated in the privilege log, denied the writ as to the issues raised regarding the

production of James River’s claims procedure manual and answers to

interrogatories, and ordered the trial court to provide the discovery documents

reviewed in camera for an in camera review by this court.

This court has now reviewed the Privilege Log documents and finds that the

trial court erred in granting the protective order as to all of the documents

enumerated in the Privilege Log.

LAW AND DISCUSSION

Regarding the standard of review of discovery issues, this court recently

stated:

It is well established that trial courts are afforded broad discretion when regulating pre-trial discovery, which will not be disturbed absent a clear abuse of discretion. Moak v. Illinois Cent. R. Co., 631 So.2d 401, 406 (La. 1994). “Questions of law, such as the proper interpretation of a statute, are reviewed by this court under the de novo standard of review.” Louisiana Mun. Ass’n v. State, 04-227, p. 35 (La. 1/19/05), 893 So.2d 809, 836. Gray v. State Farm Mut. Auto. Ins. Co., 20-407, p. 4 (La. App. 3 Cir. 2/3/21), 311

So.3d 490, 493. “Discovery statutes are to be liberally and broadly construed to

achieve their intended objectives. In determining whether the trial court erred,

3 [courts of appeal] must balance the information sought in light of the factual issues

involved and the hardships that would be caused by the court’s order.” Lehmann v.

Am. S. Home Ins. Co., 615 So.2d 923, 925-96 (La.App. 1 Cir.), writ denied, 617

So.2d 913 (La. 1993).

The scope of discovery is provided for in La.Code Civ.P. art. 1422:

Parties may 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, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

This court in Gray, 311 So.3d at 493-94, further explained “that the scope of

discovery is broad and that privileges, which are in derogation of the broad

exchange of facts, are to be construed strictly. Gauthreaux v. Frank, 95-1033 (La.

6/16/95), 656 So.2d 634; Smith v. Lincoln Gen’l Hosp., 605 So.2d 1347

(La.1992).”

When a party pleads a privilege to exclude documents from discovery, that

party bears the burden of proving that the privilege applies. Gray, 311 So.3d 490.

Thereafter, the adverse party bears the burden of proving that the privilege is not

applicable or that there is an exception to the privilege. See generally, Bridlington

Co., L.L.C. v. S. Disposal Servs., L.L.C., 51, 138 (La.App. 2 Cir. 2/15/17), 216

So.3d 219; Broussard v. State Farm Mut. Auto. Ins. Co., 519 So.2d 136 (La.1988);

Hicks v. Somers, 567 So.2d 1137 (La.App. 5 Cir. 1990). In the current case, James

River pled several privileges for various documents listed in its Privilege Log. The

4 trial court found that the “work product/anticipation of litigation” privilege applied

to all the enumerated documents.

“In order for documents to be subject to discovery, they must be relevant,

and if prepared in anticipation of litigation, then they may only be discovered if

their non-production would unfairly prejudice the party requesting them.” Vincent

v. DS Servs. of Am., 17-492, p. 2 (La.App. 3 Cir. 1/4/18), 237 So.3d 53, 56.

Specifically, La.Code Civ.P. art. 1424(A) documents the exception to discovery for

materials prepared in anticipation of litigation:

The court shall not order the production or inspection of any writing, or electronically stored information, obtained or prepared by the adverse party, his attorney, surety, indemnitor, or agent in anticipation of litigation or in preparation for trial unless satisfied that denial of production or inspection will unfairly prejudice the party seeking the production or inspection in preparing his claim or defense or will cause him undue hardship or injustice. Except as otherwise provided in Article 1425(E)(1), the court shall not order the production or inspection of any part of the writing, or electronically stored information, that reflects the mental impressions, conclusions, opinions, or theories of an attorney.

As to relevance, we briefly note that the information in James River’s claim

file is, generally, relevant to Mr. Silvetti’s claim. In an action against a UM insurer

for the arbitrary and capricious refusal to pay a claim, “[a]ny document which

reflects the knowledge of the claim due and actions or inactions taken or discussed

by [the insurer] or its attorney during the pendency of the suit for damages would

be relevant to the subject matter of the action[.]” Cantrelle Fence and Supply Co.,

Inc. v. Allstate Ins. Co., 550 So.2d 1306, 1309 (La.App. 1 Cir. 1989). Thus, we

turn to whether the privilege applies.

In McHugh v. Chastant, 503 So.2d 791, 793 (La.App. 3 Cir. 1987)(emphasis

added)(footnotes omitted) this court stated the following regarding the anticipation

of litigation privilege as applied to a UM insurer’s claim file:

5 An insurer’s file is not created in anticipation of litigation simply because it is only compiled after an accident has occurred and, therefore, at a time when litigation must be considered a possibility. It is not the date of a document which controls whether the document is exempt from production as having been prepared in anticipation of litigation, but the content, nature, and purpose of that document. Sonier v. Louisiana Power & Light Co., 272 So.2d 32 (La.App. 1 Cir.1973).

Federal authority, which is persuasive in this area holds that not all documents prepared by an insurance company after a claim has arisen are prepared in anticipation of litigation. APL Corporation v. Aetna Casualty & Surety Co., 91 F.R.D. 10 (D.C.Md.1980); Westhemeco, Ltd. v. New Hampshire Insurance Co., 82 F.R.D. 702 (S.D.N.Y.1979); Thomas Organ Company v. Jadranska Slobodna Plovidba, 54 F.R.D. 367 (N.D.Ill.1972). These courts have recognized that insurers must conduct reviews of the factual data underlying the claim and that the reports, communications, and interoffice memos or memorandums, generated through this process are prepared in the ordinary course of business and are discoverable.

On the other hand, this court has similarly rejected the suggestion that, until

an attorney is employed, an insurer’s documents are not considered to be prepared

in anticipation of litigation, noting that “there is always potential for litigation in

the motor-vehicle accident insurance realm.” Vincent, 237 So.3d at 57.

Additional federal authority provides a standard for determining when such a

privilege applies:

It is admittedly difficult to reduce to a neat general formula the relationship between preparation of a document and possible litigation necessary to trigger the protection of the work product doctrine. We conclude that litigation need not necessarily be imminent, as some courts have suggested, as long as the primary motivating purpose behind the creation of the document was to aid in possible future litigation.

United States v. Davis, 636 F.2d 1028, 1039 (5th Cir. Unit A), cert. denied, 454 U.S. 862, 102 S.Ct. 320 (1981)(citations omitted) (emphasis added); accord In re Kaiser Alum. & Chem. Co., 214 F.3d 586, 593 (5th Cir. 2000), cert. denied, 532 U.S. 919, 121 S.Ct. 1354 (2001).

6 Factors that courts rely on to determine the primary motivation for the creation of a document include the retention of counsel and counsel’s involvement in the generation of the document and whether it was a routine practice to prepare that type of document versus whether the document was instead prepared in response to a particular circumstance. See Piatkowski [v. Abdon Callais Offshore, L.L.C., No. Civ.A 99-3759 (E.D. La. 2000)(unpublished opinion)], 2000 WL 1145825 at *2; Electronic Data Systems Corp. v. Steingraber, No. 02-CV-0225, 2003 WL 21653414 (E.D. Tex. July 9, 2003). However, the mere fact that a defendant anticipates litigation resulting from an incident does not automatically insulate investigative reports from discovery as work-product. Carroll v. Praxair, Inc., No. 05-CV-0307, 2006 WL 1793656 (W.D. La. Jun 28, 2006); see also Janicker v. George Washington Univ., 94 F.R.D. 648, 650 (D.D.C. 1982) (“The fact that a defendant anticipates the contingency of litigation resulting from an accident or an event does not automatically qualify an ‘in house’ report as work product.”). “If the document would have been created regardless of whether litigation was also expected to ensue, the document is deemed to be created in the ordinary course of business and not in anticipation of litigation.” Piatkowski, 2000 WL 1145825 at *2 (emphasis added).

Hunter v. GEICO Gen. Ins. Co., No. Civ.A 17-5070, *15 (E.D. La. 2018)

(unpublished opinion)(footnotes omitted).2

In Hunter, the court reviewed whether Geico’s claim notes were protected

from discovery. The court noted that much of the information in the notes “is of a

sort that would be kept in the normal course of business, documenting the

adjustor’s routine conversations with the insured.” Id. at p. 16. Furthermore,

“majority of the entries predate the retention of counsel by GEICO and lack any

indicia that counsel was involved in the generation of the document.” Id.

Additionally, the court notes that reserve information is typically discoverable in

claims of bad faith, citing Pinnacle Medical Services, Inc. v. Hanover Ins. Co., No.

Civ.A 06-8227, *3 (E.D. La. 2008)(unpublished opinion)3: “While the reserves are

merely statutorily-mandated estimates for accounting purposes, they are

2 2018 WL 4352823 3 2008 WL 11353743

7 nevertheless relevant, as they are valuations made by the insurers themselves

which provide the Court with insight into the insurer’s subjective assessment of the

liability.”

The Privilege Log documents in the current case contain various internal

emails between James River employees, an arbitrator, and James River’s counsel,

as well as claim notes and an internal loss report, dating from December of 2018,

one year before suit was filed, to January 2020. Many of the emails pre-date the

filing of suit and can be described as emails in the course of ordinary business. For

example, one discusses the relocation of an involved vehicle, another requests that

a claim be opened, and another requests information regarding arbitration status.

After a review of the documents, this court finds that Exhibits 1-10, and 18-20 are

not protected by the work product/anticipation of litigation privilege and the trial

court erred in granting the protective order regarding these exhibits.

Several exhibits were created after a demand letter was received and contain

information likely created in anticipation of litigation. However, said privilege is

qualified. Hodges v. S. Farm Bureau Cas. Ins. Co., 433 So.2d 125 (La.1983);

La.Code Civ.P. art. 1424(A). If Mr. Silvetti will be unfairly prejudiced or caused

undue hardship or injustice by the denial of access to these documents, then he is

entitled to their production. Id.

In McHugh, 503 So.2d at 794, the court observed that the plaintiffs’ claim

regarding the arbitrary and capricious nature of the UM insurer’s claim denial

“brings into question the insurer’s actions in evaluating plaintiffs’ claim. The file

which plaintiffs seek to discover represents a record, perhaps the only record, of

those actions.” Additionally, our courts have noted that the materials in these

documents “cannot be duplicated by depositions of the insurer’s officers or its

8 attorney who must rely upon their memory.” Hodges, 433 So.2d at 131; See also

McHugh, 503 So.2d 791; Cantrelle, 550 So.2d 1306.

To succeed with his claim, Mr. Silvetti will need to prove that he submitted

satisfactory proof of loss, that James River failed to timely tender payment, and

that James River was arbitrary and capricious in failing to pay. Thibodeaux v.

Arbie, 17-625 (La.App 3 Cir. 8/31/17), 226 So.3d 1229, writ denied, 17-1666 (La.

10/27/17), 228 So.3d 1207. The documents indicate that a demand was made on

James River around November 2019, yet an unconditional tender was not made

until August of 2020. Thus, the facts known to the insurer prior to the August

2020 tender and the actions taken by James River in evaluating Mr. Silvetti’s claim

will be important to Mr. Silvetti’s arbitrary and capricious claim. Those facts, such

as James River’s awareness of Geico’s liability limits, its possession of

information regarding Mr. Silvetti’s injuries and medical expenses, and reserve

information are included in several of the Privilege Log documents.

Exhibits 12, 13, and 21, were prepared following the receipt of a demand by

Mr. Silvetti. After review, we find that steps taken as documented by these

exhibits are important to Mr. Silvetti’s claim, and, thus, discoverable. Exhibit 11,

Large Loss Report, contains much of the above stated information. Despite the

document also containing an assessment of liability, aggravating factors, and

proposed future actions, there is no indication that this report contains the “mental

impressions, conclusions, opinions, or theories of an attorney or expert[,]” which

would remain protected. La.Code Cov.P. art. 1424(A). This document contains

information known to James River after demand was made by Mr. Silvetti and

without access to this information, Mr. Silvetti will be prejudiced in proving his

9 claim. Thus, the trial court erred in granting the protective order as to this

document.

As to Exhibits 14-16 and 22, these documents include correspondence with

James River’s attorney, or instruct certain files be sent to James River’s attorney.

These documents were clearly created in anticipation of litigation and providing

Mr. Silvetti with these documents will not assist him in proving his claim.

La.Code Civ.P. art. 1424. Additionally, though not mentioned by the trial court,

we further note that La.Code Evid. art. 506 protects “confidential communication .

. . made for the purpose of facilitating the rendition of professional legal services to

the client . . . when the communication is [b]etween the client . . . and the client’s

laywer[.]” Considering the foregoing, we find no error as to the grant of protective

order as to Exhibits 14-16, and 22.

Exhibit 17 contains Claims Notes dating from December 11, 2018, though

December 11, 2019. Many of the notes are copies of exhibits we have now found

to be discoverable. However, several of the notes are not discoverable.

Specifically, page 68, the note dated 12/11/19, “Email to DC Garrison Yount” is a

duplicate of Exhibit 22; Page 69, the note dated 12/11/19, “DC Garrison Yount” is

a duplicate of Exhibit 14; and Page 70, the note dated 12/11/19, “SHAREFILE

REQUESTED,” is a duplicate of Exhibit 15. These notes are not discoverable, and

the protective order was properly granted as to these notes. The remaining notes

we find were either not prepared in anticipation of litigation, or we find that the

disclosure of the notes is necessary as to prevent unfair prejudice and undue

hardship or injustice.

For the foregoing reasons, we reverse the trial court’s judgment in part and

deny James River’s motion for protective order as to Exhibits 1-13, 17 in part, and

10 18-21. The trial court’s judgment is affirmed as to Exhibits 14-16, 22, and those

notes specifically identified in Exhibit 17, which should be redacted prior to

production.

REVERSED IN PART; AFFIRMED IN PART; AND REMANDED FOR FURTHER PROCEEDINGS.

THIS OPINION IS NOT DESIGNATED FOR PUBLICATION. RULE 2- 16.3, UNIFORM RULES—COURTS OF APPEAL.