PC Collections LLC v. Starr Indemnity & Liability Company

Opinion

5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON 7 AT SEATTLE 8 PC COLLECTIONS, LLC, Case No. C21-5754-RSL 9

10 Plaintiff, ORDER GRANTING 11 v. PLAINTIFF’S MOTION TO COMPEL 12 STARR INDEMNITY & LIABILTIY COMPANY, 13 Defendant. 14

15 This matter comes before the Court on “PC Collections, LLC’s Motion to Compel” (Dkt. 16 # 37). Having reviewed the motion, opposition, and the record contained herein, the Court finds 17 as follows: 18 I. Background 19 Plaintiff asserts insurer bad faith claims and violations of the Washington Consumer 20 Protection Act and Insurance Fair Conduct Act against Starr Indemnity and Liability Company 21 (“Starr”). Dkt. # 1, Ex. A (Complaint). On March 18, 2024, Plaintiff moved to compel 22 production of documents relating to, among other things, Starr’s investigation, evaluation, 23 processing, negotiation, and/or handling of all claims for coverage at issue. Dkt. # 37 at 4. Since 24 then, Starr has produced over 2,400 responsive documents from multiple custodians but has 25 failed to produce any documents in possession of Jonathan Toren or Cozen O’Connor. Dkt. # 43 26 at 2; id., Ex. 2 ¶ 4. Starr retained Mr. Toren at Cozen O’Connor to advise it on coverage 27 obligations under the policy. See Dkt. # 44, Ex. 2. In light of Starr’s most recent production, the 28 1 only argument before the Court is whether Starr must produce responsive, non-privileged 2 documents obtained from Mr. Toren and Cozen O’Connor along with a privilege log. Dkt. # 43. 3 II. Discussion 4 Generally, parties “may obtain discovery regarding any nonprivileged matter that is 5 relevant to any party’s claim or defense and proportional to the needs of the case.” Fed. R. Civ. 6 P. 26(b)(1). The Court has broad authority and discretion to manage this process. Hallett v. 7 Morgan, 296 F.3d 732, 751 (9th Cir. 2002). Washington courts do not apply “a blanket privilege 8 in insurance bad faith claims because of the participation of lawyers hired or employed by 9 insurers” because doing so would “unreasonably obstruct discovery of meritorious claims and 10 conceal unwarranted practices.” Cedell v. Farmers Ins. Co. of Washington, 176 Wn.2d 686, 697 11 (2013). Instead, courts apply a presumption that attorney-client privilege is “unavailable as a 12 basis for an insurer to withhold evidence of communications with its attorney during the claims 13 adjusting process.” Ingenco Holdings, LLC v. Ace Am. Ins. Co., No. C13-543RAJ, 2014 WL 14 6908512, at *3 (W.D. Wash. Dec. 8, 2014) (citing Cedell, 176 Wn.2d at 698–99). “[T]he insurer 15 may overcome the presumption of discoverability by showing its attorney was not engaged in 16 the quasi-fiduciary tasks of investigating and evaluating or processing the claim, but instead in 17 providing the insurer with counsel as to its own potential liability; for example, whether or not 18 coverage exists under the law.” Cedell, 176 Wn.2d at 699. 19 A review of the record shows it is likely that Mr. Toren was acting in a quasi-fiduciary 20 role. See e.g., Dkt. # 44, Ex. 4. Starr has not presented any argument or evidence to rebut the 21 presumption of discoverability. Accordingly, Starr must produce all documents in Mr. Toren 22 and Cozen O’Connor’s possession within fifteen (15) days of this Order. To the extent Starr 23 asserts privilege, it must submit a privilege log of withheld documents.1 24

25 1 When an insurer overcomes the presumption of discoverability, Cedell directs courts to 26 conduct an in camera review of all documents the insurer seeks to withhold. 176 Wn.2d at 246. The requirement is inapplicable to federal courts, and this Court may impose whatever 27 procedure it deems appropriate. See e.g., Ingenco Holdings, LLC v. Ace Am. Ins. Co., No. C13- 28 543RAJ, 2014 WL 6908512, at *3 (W.D. Wash. Dec. 8, 2014) (collecting cases). 1 III. Conclusion 2 For all of the foregoing reasons, the Court GRANTS Plaintiff’s motion to compel (Dkt. 3 # 37). 4 IT IS SO ORDERED. 5 DATED this 26th day of July, 2024. 6

7 A 8 Robert S. Lasnik 9 United States District Judge 10 11

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