State Farm Fire & Casualty Co. v. Admiral Insurance Co.

225 F. Supp. 3d 474, 2016 U.S. Dist. LEXIS 188482
CourtDistrict Court, D. South Carolina
DecidedFebruary 4, 2016
DocketCivil Action No. 4:15-2745-RMG
StatusPublished
Cited by8 cases

This text of 225 F. Supp. 3d 474 (State Farm Fire & Casualty Co. v. Admiral Insurance Co.) is published on Counsel Stack Legal Research, covering District Court, D. South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Farm Fire & Casualty Co. v. Admiral Insurance Co., 225 F. Supp. 3d 474, 2016 U.S. Dist. LEXIS 188482 (D.S.C. 2016).

Opinion

ORDER

Richard Mark Gergel, United States District Court Judge

The matter is before the Court on Plaintiff Maurice Robinson’s motion to compel Defendant Admiral Insurance Company (“Admiral”) to answer certain interrogatories and to produce certain documents. For the reasons given below the motion is granted in part and denied in part.

I. Background1

Mr. Robinson alleges that that Admiral’s failure to defend and to indemnify him in an underlying lawsuit was a bad-faith breach of contract. In the underlying lawsuit, James McElveen sought redress for significant physical injuries that he suffered at a fraternity hazing event hosted in Mr. Robinson’s home. Admiral provided liability coverage for the fraternity, Phi Beta Sigma, and the fraternity’s national president, Jimmy Hammock. State Farm provided homeowner’s coverage for Mr. Robinson. Admiral retained J.R. Murphy as coverage counsel, and it retained the Hood Law Firm (“Hood”) to defend Phi Beta Sigma and Mr. Hammock. State Farm retained the Hoffmeyer Law Firm to defend Mr. Robinson.

Admiral agreed to settle Mr. McE-leevn’s claims against Phi Beta Sigma and Mr. Hammock for $500,000 (half of its $1,000,000 “Each Occurrence” policy limit). Mr. Robinson was not included in that settlement. The insurance company defending Mr. Robinson, State Farm, rejected a settlement offer of $300,000 (its policy limit) and instead chose to go to trial. Mr. McEleeven won a $1,584,000 judgment. State Farm ultimately paid $975,000 to settle that judgment. Mr. Robinson filed this bad-fáith action within the Court’s diversity jurisdiction, claiming that he was an insured under the Admiral policy and therefore should have been included in the Admiral settlement. State Farm later joined his action to seek recovery for the amounts it paid.

On October 1, 2015, Mr. Robinson served Admiral with interrogatories and requests for production (“RFPs”), Admiral refuses to answer certain interrogatories (numbered 9 and 11) or to produce certain documents responsive to RFPs numbered 2, 3, and, 4. Admiral asserts that the withheld documents are protected from discovery by the attorney-client privilege and/or the work product doctrine, and that interrogatory 11 calls for the production of information protected from discovery by the South Carolina Rules of Alternative Dispute Resolution. Admiral also asserts that interrogatory '9 is too vague to answer, while Mr. Robinson asserts that Admiral’s' answer to interrogatory number 7 is deficient. Mr. Robinson has now brought the present motion to compel answer of the disputed interrogatories and production of the disputed documents.

II. Standard of Review

Rule 26(b)(1) of the Federal Rules of Civil Procedure states:

[479]*479Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

District courts have “wide latitude in controlling discovery and [their] rulings will not be overturned absent a showing of clear abuse of discretion.” Ardrey v. United Parcel Serv., 798 F.2d 679, 688 (4th Cir. 1986); Middleton v. Nissan Motor Co., No. 10-2529, 2012 WL 3612572, at *2 (D.S.C. Aug. 21, 2012).

III. Analysis

Mr. Robinson asserts that Admiral’s responses to RFPs 1-4 and to Interrogatories 7, 9, and 11 are deficient. Regarding RFPs 2, 3, and 4, he claims that Admiral’s assertions of attorney-client privilege and work product doctrine protection are improper as a matter of law. The Court will first address those attorney-client privilege and work product issues. For the reasons given below, the motion to compel as to RFPs 2, 3, and 4 will be denied as to requests for privileged communications between Admiral and Mr. Murphy but otherwise denied without prejudice so that the parties may resolve or at least narrow their disagreement with this Order’s guidance on attorney-client privilege and work product doctrine. The Court will then address the other issues raised in the disputes concerning the interrogatories and RFP 1.

A. Attorney-Client Privilege

In diversity cases, the application of the attorney-client privilege is governed by state law—in this case, the law of South Carolina. Fed. R. Evid. 501; Hattle v. Beech Aircraft Corp., 47 F.3d 106, 107 n.5 (4th Cir. 1995). “The attorney-client privilege protects against disclosure of confidential communications by a client to -his attorney.” State v. Owens, 309 S.C. 402, 424 S.E.2d 473, 476 (1992). “[T]he burden of establishing the [attorney-client] privilege rests upon the party asserting it.” Wilson v. Preston, 378 S.C. 348, 662 S.E.2d 580, 585 (2008).

Admiral has not asserted any good-faith affirmative defense that would place its communications with coverage counsel J.R. Murphy at issue. See City of Myrtle Beach v. United Nat’l Ins. Co., Civ. No. 4:08-1183, 2010 WL 3420044, at *5 (D.S.C. Aug. 27, 2010); (see also Answer, Dkt. No. 8, Aug. 26, 2015). Those communications therefore remain privileged. City of Myrtle Beach, 2010 WL 3420044, at *5 (“[T]here is no per se waiver of the attorney client privilege simply by a plaintiff making allegations of bad faith.”). Indeed, Mr. Robinson’s memorandum in support of his motion to compel fails even to articulate a reason why those communications would not be privileged. The Court therefore denies the motion to compel to the extent that it seeks discovery of privileged communications between Admiral and Mr. Murphy.

1. Admiral’s Assertion of an Attorney-Client Relationship with Hood

Admiral also asserts that it had an attorney-client relationship with Hood. The burden of demonstrating such a relationship rests with Admiral. Wilson, 662 [480]*480S.E.2d at 585. Admiral, however, fails to cite any relevant authority supporting its assertion that it had an attorney-client relationship with Hood.2 Instead, Admiral claims that Admiral, Phi Beta Sigma, and Hood shared a “tripartite relationship with respect to the defense of the underlying claim.” Admiral cites this Court’s decision in Twin City Fire Insurance to support of its contention that a “tripartite relationship” is an attorney-client relationship. See Twin City Fire Ins. Co. v. Ben Arnold-Sunbelt Beverage Co. of S.C., LP, 336 F.Supp.2d 610 (D.S.C. 2004). The issue in that case was whether “an insured [has] the right to retain independent counsel of its own choosing at the insurer’s expense where only a potential for a conflict of interest exists.” Id. at 621.

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225 F. Supp. 3d 474, 2016 U.S. Dist. LEXIS 188482, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-farm-fire-casualty-co-v-admiral-insurance-co-scd-2016.