5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 6 AT SEATTLE
7 NO. 2:24-cv-1635 BRITTNEY KANE and TRAVIS KANE, wife 8 and husband and the marital community ORDER DENYING PLAINTIFFS’ composed thereof, MOTION TO COMPEL 9 Plaintiffs,
10 v.
11 MID-CENTURY INSURANCE COMPANY, a foreign corporation, dba FARMERS 12 INSURANCE; Defendant.
13 I. INTRODUCTION 14 This matter comes before the Court on Plaintiffs’ Motion to Compel Production of 15 Unredacted Claim File. Dkt. No. 14. Defendant Mid-Century Insurance Company (“Mid- 16 Century”) has produced the Kanes’ claim file, but withheld and redacted documents that it asserts 17 are subject to the attorney-client privilege and protected under the work-product doctrine, and 18 were created after Plaintiffs initiated legal proceedings against it. Having reviewed the parties’ 19 briefs filed in support of and in opposition to the Motion to Compel, the Court denies the motion 20 for the reasons that follow. 21 II. BACKGROUND 22 On September 10, 2021, Plaintiff Brittney Kane was injured in an automobile accident, 23 and settled with the insurer of the at-fault driver for $25,000, the limit of that driver’s coverage. 24 ORDER DENYING MOTION TO COMPEL 25 2 remainder of her injuries. Mid-Century disputed that Kane’s injuries exceeded the $25,000 she
3 had already been paid, and “[o]n or about March 22, 2023, Mid-Century wrote advising ‘We’ve 4 evaluated your client’s claim and do not see an Underinsured Bodily Injury exposure.’” Compl., ¶ 5 3.11. Mid-Century denied Kane’s UIM claim. 6 On or about April 21, 2023, Kane served on Mid-Century an intent-to-sue notice under the 7 Insurance Fair Conduct Act (“IFCA”), a prerequisite to suit under that statute. See Erickson Decl., 8 Ex. A. In July 2023, Kane filed a lawsuit against Mid-Century, which was ultimately litigated and 9 resolved in arbitration. After a hearing in January 2024, the arbitrator entered an award against 10 Mid-Century for $25,899.50 (over and above the $25,000 Kane had already received from the 11 tortfeasor’s insurer). Mid-Century accepted and paid the arbitration award.
12 On September 17, 2024, Kane filed the instant lawsuit against Mid-Century, asserting bad 13 faith, violations of the IFCA and the Washington Consumer Protection Act, and breach of 14 contract, based upon Mid-Century’s failure to pay UIM benefits when the claim was originally 15 tendered. In response to Plaintiffs’ discovery requests, Mid-Century produced Kane’s claim file, 16 totaling approximately 3,000 pages. However, Mid-Century redacted and withheld documents 17 dated after April 21, 2023 (the date on which Plaintiffs served their IFCA letter) that Mid-Century 18 deemed attorney-client privileged and/or work-product protected, and produced a 10-page 19 privilege log listing those documents. See Erickson Decl., Ex. B. After counsel held a discovery 20 conference that failed to resolve the dispute, this motion followed. 21 III. DISCUSSION
22 A. Standard on Motion to Compel 23 “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any 24 ORDER DENYING MOTION TO COMPEL 25 2 requested discovery is not answered, the requesting party may move for an order compelling such
3 discovery. Fed. R. Civ. P. 37(a)(1). The party that resists discovery has the burden to show why 4 the discovery request should be denied. Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 5 1975). 6 B. Whether Plaintiffs Are Entitled to Production of Unredacted Claim File 7 Plaintiffs contend that in a claim brought by an insured for breach of the duty of good faith 8 against the insurer, the insured is entitled to complete and unredacted access to her claim file, 9 “because work product and attorney-client privilege cannot be invoked to the insurer’s benefit 10 where the only issue in the case is whether the company breached its duty of good faith in 11 processing the insured’s claim.” Pls.’ Mot. at 5 (quoting Richardson v. Gov’t Emps. Ins. Co., 200
12 Wn. App. 705, 713 (2017)). Washington courts have clarified, however, that “the same reasoning 13 does not apply to UIM claims,” such as the one brought here. Id. That is because “[t]he UIM 14 insurer steps into the shoes of the tortfeasor and may defend as the tortfeasor would defend. Thus, 15 in the UIM context, the insurance company is entitled to counsel’s advice in strategizing the same 16 defenses that the tortfeasor could have asserted.” Cedell v. Farmers Ins. Co. of Washington, 176 17 Wn. 2d 686, 697–98 (2013). Accordingly, Plaintiffs’ assertion that courts start “from the 18 presumption that there is no attorney-client privilege relevant between the insured and the 19 insurer” is, in this context, incorrect. Pls.’ Mot. at 4 (citing Cedell, at 699). 20 Instead, “in the UIM context,” such as in this case, “‘there is no presumption of waiver by 21 the insurer of the attorney-client privilege.” Richardson, 200 Wn. App. at 714; see also Leahy v.
22 State Farm Mut. Auto. Ins. Co., 3 Wn. App. 2d 613, 624 (2018) (“[I]n a UIM case like this, the 23 insured must overcome a higher bar before it can discover privileged information.”). The insured 24 ORDER DENYING MOTION TO COMPEL 25 2 claim, the insurer engaged in civil fraud.1 Plaintiffs here have not only failed to make such a
3 showing; they have not even argued that the civil fraud exception applies in this case, or even 4 made reference to this standard. Nor have Plaintiffs provided any other proposed basis for 5 piercing Defendant’s attorney-client privilege. 6 As a result, Plaintiffs are seeking production of material that is presumptively attorney- 7 client privileged and work-product protected, while providing no legitimate reason for piercing 8 these privileges or compelling the documents’ production. All of the material Defendant has 9 withheld—that is, every document listed on its privilege log—was created on or after April 21, 10 2023, the date on which Plaintiffs served on Mid-Century their IFCA notice. See Erickson Decl., 11 Ex. B. Mid-Century’s counsel further avers that all withheld documents were created in
12 anticipation of litigation. See Erickson Decl., ¶ 9 (withheld documents include “internal 13 discussions regarding plaintiffs’ UIM Lawsuit, requests for legal referrals to retain counsel to 14 defend Mid-Century in the lawsuit, discovery and pleadings filed in the lawsuit, the arbitration 15 award, and discussions about how to respond to plaintiffs’ draft complaint for contractual and 16 extracontractual damages, and other issues related to the UIM Lawsuit and the present Lawsuit.”). 17 The Court concludes that Mid-Century has met its burden of demonstrating that the 18 documents it withheld are not discoverable. It has produced all of the documents in the Kanes’ 19 claim file leading up to its coverage determination; all documents it withheld were created after 20 Mid-Century denied the Kanes’ claim. In addition to being presumptively privileged, such after- 21
1 Such a showing involves a two-step process. “First, the court determines whether there is a factual showing 22 adequate to support a good faith belief by a reasonable person that wrongful conduct sufficient to evoke the fraud exception has occurred. Second, if so, the court subjects the documents to an in camera inspection to determine 23 whether there is a foundation in fact for the charge of civil fraud.” Cedell, 176 Wn.2d at 698.
24 ORDER DENYING MOTION TO COMPEL 25 1 || created documents are not in any obvious way related to the bad faith that was allegedly 2 ||committed in denying Plaintiffs’ UIM claim. See Lock v. Am. Fam. Ins. Co., 12 Wn. App.
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5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 6 AT SEATTLE
7 NO. 2:24-cv-1635 BRITTNEY KANE and TRAVIS KANE, wife 8 and husband and the marital community ORDER DENYING PLAINTIFFS’ composed thereof, MOTION TO COMPEL 9 Plaintiffs,
10 v.
11 MID-CENTURY INSURANCE COMPANY, a foreign corporation, dba FARMERS 12 INSURANCE; Defendant.
13 I. INTRODUCTION 14 This matter comes before the Court on Plaintiffs’ Motion to Compel Production of 15 Unredacted Claim File. Dkt. No. 14. Defendant Mid-Century Insurance Company (“Mid- 16 Century”) has produced the Kanes’ claim file, but withheld and redacted documents that it asserts 17 are subject to the attorney-client privilege and protected under the work-product doctrine, and 18 were created after Plaintiffs initiated legal proceedings against it. Having reviewed the parties’ 19 briefs filed in support of and in opposition to the Motion to Compel, the Court denies the motion 20 for the reasons that follow. 21 II. BACKGROUND 22 On September 10, 2021, Plaintiff Brittney Kane was injured in an automobile accident, 23 and settled with the insurer of the at-fault driver for $25,000, the limit of that driver’s coverage. 24 ORDER DENYING MOTION TO COMPEL 25 2 remainder of her injuries. Mid-Century disputed that Kane’s injuries exceeded the $25,000 she
3 had already been paid, and “[o]n or about March 22, 2023, Mid-Century wrote advising ‘We’ve 4 evaluated your client’s claim and do not see an Underinsured Bodily Injury exposure.’” Compl., ¶ 5 3.11. Mid-Century denied Kane’s UIM claim. 6 On or about April 21, 2023, Kane served on Mid-Century an intent-to-sue notice under the 7 Insurance Fair Conduct Act (“IFCA”), a prerequisite to suit under that statute. See Erickson Decl., 8 Ex. A. In July 2023, Kane filed a lawsuit against Mid-Century, which was ultimately litigated and 9 resolved in arbitration. After a hearing in January 2024, the arbitrator entered an award against 10 Mid-Century for $25,899.50 (over and above the $25,000 Kane had already received from the 11 tortfeasor’s insurer). Mid-Century accepted and paid the arbitration award.
12 On September 17, 2024, Kane filed the instant lawsuit against Mid-Century, asserting bad 13 faith, violations of the IFCA and the Washington Consumer Protection Act, and breach of 14 contract, based upon Mid-Century’s failure to pay UIM benefits when the claim was originally 15 tendered. In response to Plaintiffs’ discovery requests, Mid-Century produced Kane’s claim file, 16 totaling approximately 3,000 pages. However, Mid-Century redacted and withheld documents 17 dated after April 21, 2023 (the date on which Plaintiffs served their IFCA letter) that Mid-Century 18 deemed attorney-client privileged and/or work-product protected, and produced a 10-page 19 privilege log listing those documents. See Erickson Decl., Ex. B. After counsel held a discovery 20 conference that failed to resolve the dispute, this motion followed. 21 III. DISCUSSION
22 A. Standard on Motion to Compel 23 “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any 24 ORDER DENYING MOTION TO COMPEL 25 2 requested discovery is not answered, the requesting party may move for an order compelling such
3 discovery. Fed. R. Civ. P. 37(a)(1). The party that resists discovery has the burden to show why 4 the discovery request should be denied. Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 5 1975). 6 B. Whether Plaintiffs Are Entitled to Production of Unredacted Claim File 7 Plaintiffs contend that in a claim brought by an insured for breach of the duty of good faith 8 against the insurer, the insured is entitled to complete and unredacted access to her claim file, 9 “because work product and attorney-client privilege cannot be invoked to the insurer’s benefit 10 where the only issue in the case is whether the company breached its duty of good faith in 11 processing the insured’s claim.” Pls.’ Mot. at 5 (quoting Richardson v. Gov’t Emps. Ins. Co., 200
12 Wn. App. 705, 713 (2017)). Washington courts have clarified, however, that “the same reasoning 13 does not apply to UIM claims,” such as the one brought here. Id. That is because “[t]he UIM 14 insurer steps into the shoes of the tortfeasor and may defend as the tortfeasor would defend. Thus, 15 in the UIM context, the insurance company is entitled to counsel’s advice in strategizing the same 16 defenses that the tortfeasor could have asserted.” Cedell v. Farmers Ins. Co. of Washington, 176 17 Wn. 2d 686, 697–98 (2013). Accordingly, Plaintiffs’ assertion that courts start “from the 18 presumption that there is no attorney-client privilege relevant between the insured and the 19 insurer” is, in this context, incorrect. Pls.’ Mot. at 4 (citing Cedell, at 699). 20 Instead, “in the UIM context,” such as in this case, “‘there is no presumption of waiver by 21 the insurer of the attorney-client privilege.” Richardson, 200 Wn. App. at 714; see also Leahy v.
22 State Farm Mut. Auto. Ins. Co., 3 Wn. App. 2d 613, 624 (2018) (“[I]n a UIM case like this, the 23 insured must overcome a higher bar before it can discover privileged information.”). The insured 24 ORDER DENYING MOTION TO COMPEL 25 2 claim, the insurer engaged in civil fraud.1 Plaintiffs here have not only failed to make such a
3 showing; they have not even argued that the civil fraud exception applies in this case, or even 4 made reference to this standard. Nor have Plaintiffs provided any other proposed basis for 5 piercing Defendant’s attorney-client privilege. 6 As a result, Plaintiffs are seeking production of material that is presumptively attorney- 7 client privileged and work-product protected, while providing no legitimate reason for piercing 8 these privileges or compelling the documents’ production. All of the material Defendant has 9 withheld—that is, every document listed on its privilege log—was created on or after April 21, 10 2023, the date on which Plaintiffs served on Mid-Century their IFCA notice. See Erickson Decl., 11 Ex. B. Mid-Century’s counsel further avers that all withheld documents were created in
12 anticipation of litigation. See Erickson Decl., ¶ 9 (withheld documents include “internal 13 discussions regarding plaintiffs’ UIM Lawsuit, requests for legal referrals to retain counsel to 14 defend Mid-Century in the lawsuit, discovery and pleadings filed in the lawsuit, the arbitration 15 award, and discussions about how to respond to plaintiffs’ draft complaint for contractual and 16 extracontractual damages, and other issues related to the UIM Lawsuit and the present Lawsuit.”). 17 The Court concludes that Mid-Century has met its burden of demonstrating that the 18 documents it withheld are not discoverable. It has produced all of the documents in the Kanes’ 19 claim file leading up to its coverage determination; all documents it withheld were created after 20 Mid-Century denied the Kanes’ claim. In addition to being presumptively privileged, such after- 21
1 Such a showing involves a two-step process. “First, the court determines whether there is a factual showing 22 adequate to support a good faith belief by a reasonable person that wrongful conduct sufficient to evoke the fraud exception has occurred. Second, if so, the court subjects the documents to an in camera inspection to determine 23 whether there is a foundation in fact for the charge of civil fraud.” Cedell, 176 Wn.2d at 698.
24 ORDER DENYING MOTION TO COMPEL 25 1 || created documents are not in any obvious way related to the bad faith that was allegedly 2 ||committed in denying Plaintiffs’ UIM claim. See Lock v. Am. Fam. Ins. Co., 12 Wn. App. 2d 905, 3 (2020) (“By the time [the insured] sued, any claim investigation and evaluation had ceased. 4 || Postlitigation conduct of the insurer’s counsel is not the basis for liability for insurance bad 5 || faith.”); see also Richardson, 200 Wn. App. at 716-17 (denying motion to compel under 6 || materially similar circumstances because “[a]llowing Richardson to access privileged information 7 || between GEICO and its attorney as to events that occurred after GEICO made its decision 8 regarding the UIM claim and made after Richardson filed suit would run afoul of the purpose of 9 || the attorney-client privilege, the work product doctrine, and the purposes of discovery. Attorney 10 || work product that occurs after the filing of a lawsuit often contains the lawyer’s assessment of the 11 || case, trial strategy, and impressions of witnesses. Here, the litigation file is irrelevant to 12 || Richardson’s UIM claim. Richardson has not shown anything to the contrary”). Because Plaintiffs 13 || fail to provide the Court with any valid reason for abrogating Mid-Century’s asserted privilege, 14 || their Motion to Compel is denied. 15 IV. CONCLUSION 16 For the foregoing reasons, the Court DENIES Plaintiffs’ Motion to Compel. 17 DATED this 2" day of April, 2025. 18 9 Asner eu, Barbara Jacobs Rothstein 20 U.S. District Court Judge 21 22 23 24 || ORDER DENYING MONON TO COMPEL