United States District Court, D. Colorado
Y. Wang United States Magistrate Judge
Judge Nina Y. Wang This matter comes before the court on two
(1) Plaintiff Kenneth Olsen's (“Plaintiff” or
“Mr. Olsen”) Motion to Compel Disclosure of
Communications with Attorney Mr. Torrey
(“Plaintiff's Motion to Compel”), filed April
26, 2019, [#70]; and
(2) Defendant Owners Insurance Company's
(“Defendant” or “Owners”) Motion to
Compel Noneconomic and Impairment Damages Information
(“Defendant's Motion to Compel”), filed April
26, 2019, [#71].
undersigned considers the Motions pursuant to 28 U.S.C.
§ 636(b) and the Memorandum dated April 29, 2019 [#72].
This court concludes that oral argument will not materially
assist in the resolution of this matter. Accordingly, upon
careful review of the Motions, the applicable case law, and
the entire case file, I GRANT IN PART and DENY IN
PART Plaintiff's Motion to Compel and
DENY Defendant's Motion to Compel.
litigation arises out of an insurance dispute between Mr.
Olsen and Owners. See [#1; #3]. On or about April
23, 2017, Plaintiff was involved in a traffic collision with
a third party, Varejo Manzaneras (“Ms.
Manzaneras”). See [#3 at ¶ 5]. Plaintiff
sustained injuries because of the traffic collision,
requiring medical treatment; Plaintiff alleges his injuries
also prohibited from returning to work. See
[id. at ¶¶ 10, 15-19, 26-27]. Mr. Olsen,
through his employer at the time, was covered under
Defendant's uninsured/underinsured motorist insurance
policy. See [id. at ¶ 29].
about October 9, 2017, Owners gave permission to Plaintiff to
accept Ms. Manzaneras's $25, 000 policy limit.
See [id. at ¶ 23]. Believing this
money did not cover all his injuries and medical treatment,
Plaintiff sought benefits from Owners. See
[id. at ¶¶ 32-36]. Over the next several
months, Plaintiff continued to request benefits or an update
on the status of his benefits and provided medical bills to
Owners, but to no avail. See [id. at
¶¶ 32-62]. Plaintiff then initiated this suit,
originally filed in the Denver County District Court but
removed to this court by Owners, asserting claims against
Owners for breach of contract, unreasonable delay or denial
of insurance benefits pursuant to Colo. Rev. Stat. §
10-3-1115, and bad faith breach of an insurance contract.
See [id. at ¶¶ 69-83].
here, the Parties appeared before the undersigned for an
informal discovery dispute conference on April 10, 2019, at
which the Parties raised a host of issues regarding both
Parties' production obligations in response to written
discovery. See [#69]. As to the issues of
Defendant's production of deemed privileged communication
between its claims adjuster and it s in-house counsel and
Plaintiff's production of noneconomic and impairment
damages information, this court ordered further briefing on
the matters. See [id.]. On April 26, 2019,
the Parties filed the instant Motions to Compel.
Plaintiff's Motion to Compel seeks production of
approximately 48 documents that contain correspondence
between Owners' claims adjuster Nicholas Zeman
(“Mr. Zeman”) and its in-house counsel Andrew
Torrey (“Mr. Torrey”) that Owners has withheld as
privileged. See [#70; #83]. Defendant's Motion
to Compel seeks production of information concerning Mr.
Olsen's claimed noneconomic and impairment damages.
See [#71; #84]. Because the Motions are now ripe, I
consider each below.
to Rule 37(a)(1), a party may move for a court order
compelling disclosure or discovery, and must certify that she
“has in good faith conferred or attempted to confer
with the person or party failing to make disclosure or
discovery in an effort to obtain it without court
action.” Fed.R.Civ.P. 37(a)(1). A motion to compel may
include a party's failure to produce documents requested
pursuant to Rule 34. See Fed. R. Civ. P
37(a)(3)(B)(iv). “The party moving to compel discovery
must prove that the opposing party's answers are
incomplete[, ]” and the “party objecting to
discovery must establish that the requested discovery does
not fall under the scope of relevance as defined in Rule
26(b)(1).” Tara Woods Ltd. P'ship v. Fannie
Mae, 265 F.R.D 561, 566 (D. Colo. 2010). Ultimately,
“[t]he administration of the rule lies necessarily
within the province of the trial court with power to fashion
such orders [as] may be deemed proper to vouchsafe full
discovery for the just, speedy and inexpensive determination
of the lawsuit.” Robison v. Transamerica Ins.
Co., 368 F.2d 37, 39 (10th Cir. 1966).
Plaintiff's Motion to Compel
this is a diversity action, Colorado substantive law governs
the scope and application of the attorney-client privilege.
See White v. Am. Airlines, Inc., 915 F.2d 1414, 1424
(10th Cir. 1990) (“In a civil action based upon a state
cause of action, state law controls the determination of
privileges.”). By contrast, “the work product
privilege is governed by a uniform federal standard embodied
in Fed.R.Civ.P. 26(b)(3).” Frontier Refining, Inc.
v. Gorman-Rupp Co., Inc., 136 F.3d 695, 702 n.10 (10th
Cir. 1998) (citation and quotation omitted).
has codified the attorney-client privilege in pertinent part
as follows: “An attorney shall not be examined without
the consent of his client as to any communication made by the
client to him or his advice given thereon in the course of
professional employment . . . .” Colo.Rev.Stat. §
13-90-107(b). The law is clear that the attorney-client
privilege inures to the benefit and protection of the client
to allow a client to gain counsel, advice, or direction with
respect to the client's rights and obligations
confidentially. See Mountain States Tel. & Tel. Co.
v. DiFede (“DiFede”), 780 P.2d 533, 541
work product doctrine is reflected in Fed.R.Civ.P.
26(b)(3)(A), which generally protects “documents and
tangible things that are prepared in anticipation of
litigation or for trial by or for a party or its
representative (including the other party's attorney,
consultant, surety, indemnitor, insurer, or agent).”
Fed.R.Civ.P. 26(b)(3)(A). The party seeking to invoke the
attorney-client privilege or the work product doctrine bears
the burden of establishing that it attaches.
the attorney-client privilege nor the work product doctrine
is absolute as either ma y be waived. The burden of proving
such waiver rests upon the party seeking to overcome the
privilege. DiFede, 780 P.2d at 542; accord.
H. ex rel. Holder v. Gold Fields Mining Corp., 239
F.R.D. 652, 655 (N.D. Okla. 2005) (“[T]he majority view
is that the party claiming waiver has the burden of proof on
that issue.”). A waiver of the attorney-client
privilege or work product doctrine may be either express or
implied. A waiver may be express when a party affirmatively
consents to disclosure of the information. See,
e.g., In re Qwest Commc'ns Int'l Inc.,
450 F.3d 1179, 1185 (10th Cir. 2006) (explaining that a
client may waive the attorney-client privilege by disclosing
privileged communications to a third-party; noting,
“Any voluntary disclosure by the client is inconsistent
with the attorney-client relationship and waives the
privilege.” (citation and internal quotations
omitted)); Grace United Methodist Church v. City of
Cheyenne, 451 F.3d 643, 668 (10th Cir. 2006) (“The
work-product privilege may be waived by the voluntary release
of materials otherwise protected by it.” (citation and
quotation omitted)). Waiver may also be implied through
conduct. See, e.g., People v. Madera, 112
P.3d 688, 691 (Colo. 2005) (“Courts have found implied
waiver of the attorney-client privilege when a defendant
places the allegedly privileged communication at issue in the
litigation, because ‘any other rule would enable the
client to use as a sword the protection which is awarded him
as a shield.'” (citations omitted)).
the attorney-client privilege, work product immunity is not
automatically waived by any disclosure to a third party.
In re Sealed Case, 676 F.2d 793, 802-10 (D.D.C.
1982). The general standard for determining whether protected
work product must be disclosed is where (1) the materials are
otherwise discoverable under Rule 26(b)(1); and (2) the party
shows that it has substantial need for the materials to
prepare its case and cannot, without undue hardship, obtain
their substantial equivalent by other means. Fed.R.Civ.P.
26(b)(3). If disclosure of work product is ordered by the
court, the court must protect against the disclosure of the
mental impressions, conclusions, opinions, or legal theories
of a party's attorney or other representative concerning
the litigation. Fed.R.Civ.P. 26(b)(3)(B).
context of insurance claims and investigations, “[n]ot
every document drafted by counsel or every communication with
counsel is protected by the attorney-client privilege.”
Hurtado v. Passmore & Sons, L.L.C., No.
10-cv-00625-MSK-KLM, 2011 WL 2533698, at *4 (D. Colo. June
27, 2011) (citing Nat'l Farmers Union Prop. &
Cas. Co. v. Dist. Court For City & Cty. of Denver,
718 P.2d 1044, 1049 (Colo. 1986) [hereinafter Nat'l
Farmers Union]). “For example, the attorney-client
privilege does not protect the results of a factual
investigation conducted by counsel relating to the
origination of an insurance policy and the validity of a
claim. ” Colo. Mills, LLC v. Philadelphia Indem.
Ins. Co., No. 12-cv-01830-CMA-MEH, 2013 WL 1340649, at
*3 (D. Colo. Apr. 2, 2013) (citing Nat'l Farmers
Union, 718 P.2d at 1048-49); accord Cornhusker Cas.
Co. v. Skaj, No. 11-cv-110-S, 2012 WL 12541136, at *2
(D. Wyo. Apr. 5, 2012) (holding the work product doctrine did
not protect disclosure of the insurer's investigative
file, because doing so “would allow an insurance
company to insulate all investigative materials generated in
every case involving serious injuries long before any
coverage decisions are made or threats of litigation
arise.”). Indeed, “if a lawyer is acting in an
investigative capacity, and not as a legal counselor, with
reference to whether an insurance claim should be paid, then
neither the [attorney-client] privilege . . . nor the work
product privilege protects communications from a lawyer to an
insurance carrier.” Munoz v. State Farm Mut. Auto.
Ins. Co., 968 P.2d 126, 130 (Colo.App. 1998) (citing
Nat'l Farmers Union, 718 P.2d at 1044);
accord Smith v. Marten Transp., Ltd., No.
10-cv-0293-WYD-KMT, 2010 WL 5313537, at *2-4 (D. Colo. Dec.
17, 2010) (holding the neither the attorney-client privilege
nor work-product doctrine applied to communications by an
attorney acting as a claims investigator regarding a claim
investigation or communications with a witness).
claim investigations arising in the first-party context, like
the claim at issue here, are “made in the ordinary
course of business and are discoverable[.]”
Weitzman v. Blazing Pedals, Inc., 151 F.R.D. 125,
126 (D. Colo. 1993) (“When an insured presents a first
party claim, he is asking for payment under the terms of the
insurance contract between him and the insurance company, and
the insurance company owes him a duty to adjust his claim in
good faith. There is no initial contemplation of
litigation.”). Indeed, the roles of claims handler and
attorney are not mutually exclusive. See W. Nat'l
Bank of Denver v. Emp'rs Ins. Of Wausau, 109 F.R.D.
55, 57 (D. Colo. 1985) (noting that “investigations by
a person who is an attorney but acting in the capacity of an
investigator and adjustor for the insurance company”
prepares an investigative file in the ordinary course of the
insurer's business). The mere fact that an attorney is
involved in a communication or drafting does not
automatically render that communication or document subject
to the attorney-client privilege or work product doctrine.
See Perez v. Alegria, No. 15-MC-401- SAC, 2015 WL
4744487, at *4 (D. Kan. June 24, 2015) (rejecting a blanket
privilege objection for the basis for prohibiting his
deposition or document discovery when the attorney was also a
fact witness); Heartland Surgical Specialty Hosp., LLC v.
Midwest Div., Inc., No. 05-2164 MLB- DWB, 2007 WL
625809, at *6 (D. Kan. Feb. 23, 2007) (observing that
privilege does not necessarily attach when an attorney also
performed duties as a consultant involved in competitive
business activities and decision-making).
extent such communications are protected by the
attorney-client privilege, courts consider whether (1) the
information was provided by agents of the corporate client
“to counsel acting as counsel” at the direction
of supervisors; (2) the information was necessary for the
provision of legal advice; (3) the agents were aware that
their communications were made for the purpose of counsel
rendering legal advice to the corporate client; and (4) the
communications were treated as confidential. See Bonanno
v. The Quizno's Franchise Co., LLC, No.
06-cv-02358-WYD-KLM, 2008 WL 1801173, at *3 (D. Colo. Apr.
18, 2008) (citing Nat'l Farmers Union, 718 P.2d
at 1049 (discussing Upjohn Co. v. United States, 449
U.S. 383, 394-95 (1981))). Accordingly, the nature of the
services rendered by Owners' attorneys to Owners at any
given time drives whether the work product doctrine or
attorney-client privilege attaches, not a particular
chronology of events. See Church Mut. Ins. Co. v.
Coutu, No. 17-CV-00209-RM-NYW, 2018 WL 2388555, at *5
(D. Colo. May 25, 2018).
Olsen seeks production of several claim notes that contain
communications between Mr. Zeman and Mr. Torrey, and which
Owners has withheld as attorney-client privileged or
protected by the work-product doctrine. Mr. Olsen contends
that Mr. Zeman consulted Mr. Torrey in the ordinary course of
Owners' claim-handling process and thus Owners must
produce communications that do not seek legal advice but
rather discuss the handling of Mr. Olsen's insurance
claim. See [#70 at 6-7; #83 at 2-3]. Mr. Olsen
argues that although Mr. Torrey is Owners' in-house
counsel, he did not always provide Mr. Zeman with legal
advice, and at times acted as a claim-handler, i.e.,
authorized independent medical examinations or settlements.
See [#70 at 6-8; #83 at 2-5]. According to
Plaintiff, those communications where Mr. Torrey assisted Mr.
Zeman in the handling of Plaintiff's insurance claim are
not subject to the attorney-client privilege or work-product
doctrine. See [#70 at 6-8; #83 at 2-5].
counters that the communications at issue are subject to the
attorney-client privilege and work-product doctrine because
“Mr. Zeman was generally advised to seek legal counsel
from Mr. Torrey if he had questions about whether his
investigation of a suspicious claim would result in bad faith
liability for Owners[.]” [#80 at 5]. According to
Owners, it is immaterial whether Mr. Zeman contacted Mr.
Torrey during the claim-handling process, as the
communications concerned limiting Owners' liability in
any subsequent litigation between Mr. Olsen and Owners.
See [id. at 6-9]. That is,
“communications by an attorney that seem to ‘fall
within the responsibilities of file handler' are actually
shrouded by this ever-present threat of liability for bad
faith claims handling.” [id. at 7]. Finally,
Owners argues that the work-product doctrine also shields the
Messrs. Zeman and Torrey's communications because the
threat of litigation arose ...