Lexington Insurance v. Swanson

240 F.R.D. 662, 2007 U.S. Dist. LEXIS 10296, 2007 WL 505688
CourtDistrict Court, W.D. Washington
DecidedFebruary 12, 2007
DocketNo. C05-1614P
StatusPublished
Cited by15 cases

This text of 240 F.R.D. 662 (Lexington Insurance v. Swanson) is published on Counsel Stack Legal Research, covering District Court, W.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lexington Insurance v. Swanson, 240 F.R.D. 662, 2007 U.S. Dist. LEXIS 10296, 2007 WL 505688 (W.D. Wash. 2007).

Opinion

ORDER ON CR 37 SUBMISSION REGARDING REQUESTS FOR PRODUCTION NO. 1 (CLAIMS FILE)

PECHMAN, District Judge.

This matter comes before the Court on a joint submission by the parties pursuant to Local Civil Rule (CR) 37. (Dkt. No. 81). Through this submission, Defendant Sandra Swanson has moved to compel Plaintiff Lexington Insurance Company (“Lexington”) to produce documents in response to her Request for Production (RFP) No. 1. Lexington has withheld production of a number of documents responsive to this RFP on the basis of attorney-client privilege, work product protection, and/or relevance. Lexington has not provided the disputed documents for an in camera review by the Court, nor has Ms. Swanson argued that an in camera review is necessary.

The Court has reviewed the materials submitted by the parties, including supplemental materials filed by Lexington. On the record before it, the Court GRANTS in part and DENIES in part Ms. Swanson’s motion to compel. The Court ORDERS as follows:

(1) The Court GRANTS Ms. Swanson’s motion to the extent she seeks production of documents withheld by Lexington solely on the basis of a so-called “ICC/Lexington” privilege assertion. Lexington shall produce such documents to Ms. Swanson within seven (7) calendar days of the date of this order.

(2) The Court GRANTS Ms. Swanson’s request to compel production of documents that have been withheld on the grounds that they contain “reserve information.” Lexington shall produce such documents to Ms. Swanson within seven (7) calendar days of the date of this order.

(3) The Court DENIES Ms. Swanson’s request to compel production of documents withheld by Lexington on the basis of “Lexington-only” privilege assertions, without prejudice to Ms. Swanson’s ability to file a renewed motion requesting an in camera review of these documents. Before any renewed motion is filed, however, the parties must meet and confer to attempt to narrow or resolve the dispute without the Court’s [665]*665intervention. Any renewed motion must be filed as a joint submission pursuant to CR 37.

Background

The background for this ease was set forth in the Court’s prior order on Lexington’s motion for partial summary judgment. To summarize, Ms. Swanson was the victim of severely negligent care at Issaquah Care Center (ICC). Ms. Swanson filed a state court action against ICC. The parties went to agreed arbitration, in which Ms. Swanson obtained a judgment in excess of $8 million against ICC. Lexington insured ICC under a policy that contained a $1 million limit per “single medical incident,” with a “3-incident, $3 million” cap.

In September 2005, Lexington filed an action against ICC in this Court, seeking a declaratory judgment regarding its coverage obligations under the policy. Lexington amended its complaint in October 2005 to add Ms. Swanson and Robin DuBrin (identified as an owner of ICC) as defendants.

In December 2005, Ms. Swanson purchased all claims that ICC may have against Lexington. After Ms. Swanson purchased ICC’s claims, Lexington amended its complaint and added a request for a declaratory judgment that it “did not violate the Washington Consumer Protection Act or otherwise commit any act of ‘bad faith’ claims handling (or allegedly related acts) in the administration of the claim.” ICC and Ms. DuBrin have been dismissed from this action by stipulation, leaving Ms. Swanson as the only defendant.1

Acting as ICC’s assignee, Ms. Swanson has asserted a number of counterclaims against Lexington. She alleges that Lexington rejected offers to settle for policy limits, refused to negotiate in good faith, failed to affirmatively explore settlement in a timely manner, failed to evaluate and advise ICC of its liability and exposure in a timely manner, failed to indemnify when the obligation to pay became reasonable or clear, improperly threatened to void coverage, and “otherwise failed to properly and reasonably handle the claims against ICC in good faith.” (Dkt. No. 39 at 8-9).

There is another matter currently pending in state court in which Lexington and Ms. Swanson are parties. In that case, Ms. Swanson is suing Lexington as the assignee of Haelen Health Systems, which is identified as ICC’s “manager and administrator.” A special master in the state court action has conducted an in camera review of the documents that Ms. Swanson is seeking through this motion. The state-court special master upheld Lexington’s privilege assertions. However, that decision is not binding on this Court and the special master’s analysis of privilege issues would be different in some respects than the analysis in this case because Ms. Swanson is suing in state court as an assignee of Haelen, rather than ICC.

The pending motion concerns Ms. Swanson’s Request for Production (RFP) No. 1, which seeks production of “all claims related files and documents.” Lexington has withheld production of a number of documents responsive to this RFP based on assertions of attorney-client privilege, work product protection, and/or relevance.

The parties have provided the Court with several different privilege logs regarding the withheld documents. Ms. Swanson has offered privilege logs that Lexington apparently provided in the state-court case in which Ms. Swanson is suing Lexington as an assignee of Haelen Health Systems. However, Lexington has also offered a revised 21-page privilege log dated December 4, 2006. The revised privilege log include assertions of “ICC/Lexington” privilege and “Lexington” privilege. Lexington’s counsel explains the revised privilege log as follows:

“ICC/Lexington” privilege indicates privileges attaching to communications or work product related to the defense of ICC in the underlying tort case. “Lexington” privilege indicates Lexington’s attorney-client communications or work product re[666]*666lated to coverage or “bad faith” issues and litigation.

(Neal Decl. at 2).

Lexington has not produced the withheld documents for in camera review. Ms. Swanson has not explicitly requested an in camera review, but has instead suggested that this motion can be resolved on the current record.

Analysis

Because federal jurisdiction in this case is based on diversity, Washington law applies to claims of attorney client privilege, while federal law governs assertions of work product protection. See United Coal Cos. v. Powell Constr. Co., 839 F.2d 958, 965-66 (3d Cir. 1988); see also Fed.R.Evid. 501 and Fed. R.Civ.P. 26(b)(3).

1. “ICC/Lexington” Privilege Assertions

The Court first considers whether Lexington may withhold documents responsive to RFP No. 1 based on assertions of what the insurer refers to as “ICC/Lexington” privilege. As noted above, Lexington has asserted “ICC/Lexington” privilege for “communications or work product related to the defense of ICC in the underlying tort case.”

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240 F.R.D. 662, 2007 U.S. Dist. LEXIS 10296, 2007 WL 505688, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lexington-insurance-v-swanson-wawd-2007.