Western States Insurance v. O'Hara

828 N.E.2d 842, 357 Ill. App. 3d 509, 293 Ill. Dec. 532
CourtAppellate Court of Illinois
DecidedMay 10, 2005
Docket4-04-0697
StatusPublished
Cited by23 cases

This text of 828 N.E.2d 842 (Western States Insurance v. O'Hara) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Western States Insurance v. O'Hara, 828 N.E.2d 842, 357 Ill. App. 3d 509, 293 Ill. Dec. 532 (Ill. Ct. App. 2005).

Opinions

JUSTICE KNECHT

delivered the opinion of the court:

Plaintiff, Western States Insurance Company (Western States), appeals the order of the circuit court of Adams County holding it in contempt for failing to comply with an order directing it to produce certain documents to defendants Jessica, Richard, and Mary Ann O’Hara (collectively O’Haras) — its insureds — and Robert, Mary, Anthony, and Lori Hilgenbrinck (collectively Hilgenbrincks) — parties in another vehicle, some of whom claim injury. Western States contends the court’s orders are in error because (1) the documents are protected from discovery by the attorney-client privilege and the work-product doctrine and (2) the court erred by holding the privilege log inadequately described the documents withheld. Western States further asks this court to vacate the contempt order. We affirm and remand for further proceedings.

I. BACKGROUND

In June 2001, Western States issued an automobile liability policy (policy) to Richard and Mary Ann O’Hara with a $500,000 limit for all claims. During the policy period, Jessica O’Hara, the daughter of Richard and Mary Ann O’Hara and an insured under the policy, was involved in an accident while driving her parents’ vehicle. Jessica’s vehicle collided with a vehicle driven by Robert Hilgenbrinck. As a result of the accident, a number of people were injured. Those suffering physical injuries included Robert and Mary Hilgenbrinck and their grandson Andrew Hilgenbrinck, as well as Megan Lovelace and Melissa Wingerter, who were passengers in Jessica’s vehicle. Robert’s vehicle was also damaged, as well as a tree at the site of the accident.

The injuries resulting from the accident were severe. For example, Lovelace suffered a spinal fracture, leaving her paralyzed from the waist down. According to a letter from the Hilgenbrincks’ counsel, the Hilgenbrincks suffered injuries as well. Mary’s arm was nearly severed; her leg and ankle were fractured. Robert sustained broken facial bones, a skull fracture, and a broken jaw. Andrew Hilgenbrinck suffered a fractured rib, a nearly severed ear, and internal injuries.

Two days after the accident, OneBeacon Insurance Company (One-Beacon), an affiliate of Western States, hired the firm of GAB Robins to investigate the accident on its behalf. On November 20, 2001, David K. Carter, a claims examiner with OneBeacon, contacted Michael J. Duffy with the law firm of Tressler, Soderstrom, Maloney & Priess (Tressler firm). The Tressler firm was hired to represent Western States in regard to its obligations to the O’Haras following the accident. Neither Duffy nor anyone from the Tressler firm provided legal advice to the O’Haras regarding the accident.

Western States paid $10,101 to settle the property-damage claim for Robert’s vehicle. Western States also paid $480 to settle a claim for property damage to a tree at the site of the accident.

Western States also paid $489,419 to settle the claim based on Lovelace’s injuries. This payment purportedly exhausted the $500,000 policy limit. Before settling the Lovelace claim, Western States contacted counsel for the O’Haras, F. Donald Heck, Jr., by telephone and letter. According to Western States’ brief on appeal, Heck was hired by Western States to represent Jessica in the criminal proceedings following the accident. The letters, dated February 7, 2002, and March 29, 2002, solicited input from Heck and confirmed Heck’s agreement to settle the Lovelace claim. The O’Haras did not object to the settlement.

On July 15, 2003, the Hilgenbrincks filed a lawsuit against Jessica. The Hilgenbrincks sought damages for injuries allegedly sustained in the accident.

Upon notification of the lawsuit, Western States retained counsel to defend Jessica under a reservation of rights. On October 20, 2003, Western States filed suit, seeking a declaratory judgment that it had no obligation to defend or indemnify Jessica in the Hilgenbrinck action because the policy limits had been exhausted by settling the Lovelace claim. The O’Haras filed a counterclaim, with claims including breach of contract and bad-faith refusal to settle, as well as affirmative defenses. The Hilgenbrincks asserted affirmative defenses.

Discovery began. Defendants served interrogatories and requests for production on Western States. In its January 30, 2004, response, Western States asserted certain materials were protected by the attorney-client and work-product privileges. Western States, for example, refused to produce documents relevant to its consideration of claims against the O’Haras and documents related to the settlement of the Lovelace claim.

On February 9, 2005, the O’Haras responded to Western States and asserted Western States’ objections to the production lacked reasonable basis. The O’Haras asked Western States to supplement its discovery responses.

Western States subsequently produced a 21-page privilege log, as well as additional documents. The parties dispute the sufficiency of the privilege log, which describes the substance of documents as, for example, “regarding coverage claim,” “regarding claim status,” “regarding setting reserve,” and “regarding coverage opinion.”

Following correspondence between the parties, which did not resolve the dispute, on March 23, 2004, the O’Haras moved to compel production or, in the alternative, for an in camera inspection of those documents Western States claimed to be protected. In its motion, the O’Haras asserted Western States had waived any protection of privilege and work product by placing at issue whether the settlement with Lovelace was reached in good faith. The O’Haras further asserted the privilege did not protect discovery by them under the common-interest doctrine. The Hilgenbrincks also moved to compel production of these documents.

On April 26, 2004, the trial court granted the O’Haras’ motion to compel. The court concluded “the insured has a right to see these files and that the privilege is — claim of privilege is, in fact, defeated.” The court further held “there is a common interest and that it is at issue” and concluded the declaratory action should not go forward without Western States sharing the information. On the common-interest doctrine, the court further held, “I don’t think Tressler or Western States can insulate themselves from the advice and coverage obligations by hiring the Tressler firm and hiring the separate firm to represent O’Hara.”

As to the'Hilgenbrincks, the trial court did not grant the motion to compel in its entirety. The court acknowledged the distinction in Western States’ relationship with the O’Haras and its relationship with the Hilgenbrincks. The court ordered Western States to disclose “in totality as to David Carter, Shirley LeFever, and Michael Duffy as responded to in their answer to interrogatory [No.] 9.” (Western States’ response to interrogatory No. 9 listed Carter, LeFever, and Duffy as the individuals involved in the decision to settle the Lovelace claim.) In addition, according to the terms of the order, the court held, as to the remaining documents, the court would perform an in camera inspection to determine if further disclosure is necessary. The documents were to be produced within 15 days.

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Western States Insurance v. O'Hara
828 N.E.2d 842 (Appellate Court of Illinois, 2005)

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Bluebook (online)
828 N.E.2d 842, 357 Ill. App. 3d 509, 293 Ill. Dec. 532, Counsel Stack Legal Research, https://law.counselstack.com/opinion/western-states-insurance-v-ohara-illappct-2005.