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Kehle v. USAA Casualty Insurance Co.

United States District Court, S.D. Florida

May 30, 2018

NELIDA KEHLE, as Guardian of ANTHONY KEHLE, III, Plaintiff,
v.
USAA CASUALTY INSURANCE COMPANY, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT USAA CASUALTY INSURANCE COMPANY'S MOTION TO COMPEL BETTER DISCOVERY RESPONSES IDE 601

          WILLIAM MATTHEXVMAN UNITED STATES MAGISTRATE JUDGE

         THIS CAUSE is before the Court upon Defendant, USAA Casualty Insurance Company's ("Defendant") Motion to Compel Better Discovery Responses. [DE 60]. This matter was referred to the undersigned by United States District Judge Kenneth A. Marra upon an Order referring all discovery matters to the undersigned for appropriate disposition. See DE 13. Plaintiff, Nelida Kehle ("Plaintiff) filed a Response to the Motion [DE 63] and Defendant filed a Reply [DE 64]. The Court held a hearing on the Motion on March 12, 2018. The Court has also carefully conducted an in camera review of numerous emails at issue in this discovery dispute. The matter is now ripe for review.

         I. INTRODUCTION

         This discovery dispute involves Defendant USAA's demand that Plaintiff Kehle produce:

a. Emails, withheld by Plaintiff as privileged work product, between Mr. Steve Rothman, Esq., who represented Plaintiff in the underlying state court litigation, and Mr. Robert Major, Esq. and Mr. Fred Cunningham, Esq., who currently represent Plaintiff in the current federal litigation; and
b. Additional information requested in Interrogatories 17, 18, 19, and 22 of Defendant's First Set of Interrogatories relating to Mr. Henderson's consent to liability, the settlement agreement, and the arbitration proceedings.

         The Court assumes the reader's familiarity with its prior lengthy Order at ¶ 49 which required production of certain documents requested by Defendant related to the hybrid- Co6/e«/z/arbitration agreement at issue in this case.[1] After the entry of the Court's prior Order, certain documents were produced to Defendant, and Plaintiff served Amended Discovery Responses in light of this Court's Order. Upon receipt of those amended responses, Defendant filed the pending Motion to Compel [DE 60] which takes issue with the emails withheld by Plaintiff as work product, as well as Plaintiffs responses to Interrogatories 17, 18, 19, and 22.

         This dispute solely involves the work-product privilege. Plaintiff objects to the discovery sought by Defendant on work-product privilege grounds. Defendant asserts that Plaintiff has waived any work-product privilege due to issue injection and that Defendant has a substantial need for the documents and information to present its defense in this case.

         II. MOTION TO COMPEL. RESPONSE AND REPLY

         On February 22, 2018, Defendant filed its Motion to Compel Better Discovery Responses. [DE 60]. In addition to the emails requested, the specific interrogatories at issue are:

Interrogatory Number 17; Paragraph 15 of the Complaint in the Underlying Action (attached as Exhibit D to your Amended Complaint) states that "Henderson was operating the Vessel with and at the direction of Munson." Paragraph 15 of the Second Amended Complaint in the Underlying Action (attached as Exhibit E to your Amended Complaint) states that "Henderson was operating the Vessel with and as a personal favor to Munson." Please state with specificity the following:
(a) The reason(s) and/or circumstance(s) which caused you to revise Paragraph 15;
(b) Describe any discussions and/or communications relating to the revision of Paragraph 15; and
(c) A list of any and all documents that support your revision to Paragraph 15.

         Interrogatory Number 18: In the underlying action Mr. Henderson, Mr. Munson, and Nuncio were allegedly negligent causing injury to Mr. Kehle. Please state with specificity the following:

(a) The reason(s), circumstance(s), and supporting evidence supporting the assertion that Mr. Henderson, Mr. Munson, and/or Nuncio was negligent;
(b) The apportionment of fault you believed was attributable to Mr. Henderson, Mr. Munson, and/or Nuncio; and
(c) The specific acts that you contended Mr. Henderson performed negligently.

         Interrogatory Number 19: In Paragraph 23 of the Amended Complaint you allege that "the parties agreed to submit the issue of the amount of damages sustained by Mr. Kehle as a result of the negligence of Henderson to Binding Arbitration". Please state with specificity the following:

(a) The reasons and/or circumstances the underlying action was submitted to Binding Arbitration, including who suggested Binding Arbitration and a list of documents related thereto;
(b) Whether the issue of negligence was submitted to the Binding Arbitrator and if so please state the reason(s), circumstance(s), and evidence supporting the assertion that Mr. Henderson;
(c) The reason(s) and/or circumstance(s) why the issue of negligence was not submitted to Binding Arbitration, including a list of any and all documents related thereto;
(d) Did Mr. Henderson concede and/or admit negligence? Please state with specificity the following:
i. The reason(s) and/or circumstance(s) why Mr. Henderson conceded/admitted negligence, including a list of any and all documents related thereto; and
ii. Please describe and/or summarize any and all communications with Mr. Henderson relating to his concession/admission of negligence.
Interrogatory Number 22: Please state with specificity why Mr. Courtney Munson and Nuncio were dropped from the Underlying Action, a list of any documents relating to them being dropped, and why no other defendant was dropped from the Underlying Action.

         A. Defendant's Position as Stated in Its Motion and Reply

         As set forth in its Motion [DE 60], Defendant claims that Plaintiff has waived all of her work-product objections to the production of the emails at issue and to the responses to the interrogatories through the doctrine of issue injection. Defendant argues that because Plaintiff seeks to recover the arbitration award through a Coblentz-style agreement, [2] she has voluntarily asserted that the settlement agreement and arbitration were reasonable and in good faith. [DE 60, pgs. 1-4]. Because Plaintiff has the burden to prove the elements of reasonableness and good faith in order to recover under a Coblentz agreement, Defendant asserts that it is Plaintiff who has injected the issues into the case. Id. Therefore, Plaintiff should not be permitted to produce evidence directly related to the issues of good faith but simultaneously prevent Defendant from related discovery to rebuff her claims. [DE 60, pgs. 5-6]. Defendant asserts that it is entitled to rebuff Plaintiff s claims of good faith through "broad discovery" and the email correspondence at issue, generally categorized as "arbitration, " "settlement, " "dismissal, " and "strategy, " is necessary to determine if the Coblentz agreement at issue was tainted by bad faith, fraud, or collusion. Id. at 6.

         To support this contention, Defendant argues that Plaintiff has made the protected information, specifically, the emails between Plaintiffs prior and current counsel, highly relevant to the case because the emails show that counsel colluded in bad faith against Defendant USAA. [DE 60, pg. 5]. Defendant asserts that its preliminary discovery supports the proposition that the attorneys in this case, namely, Mr. Rothman, Mr. Major, Mr. Cunningham, and Mr. Michael Knecht, Esq., counsel for Henderson, the insured, "plotted together and jointly consulted bad faith attorneys." Id. Defendant claims that the attorneys decided to dismiss Mr. Munson from the underlying lawsuit in bad faith, and failed to hire a court reporter at the underlying arbitration in order to conceal their bad faith. Id.

         Finally, Defendant asserts that because establishing that bad faith, fraud, and collusion existed in the underlying settlement agreement is vital to its defense, Defendant should be entitled to broad discovery of the "approximately 90" emails between Mr. Rothman and Mr. Major and Mr. Cunningham.[3] Defendant claims that these emails "go to the very heart of reasonableness and good faith" [DE 60, pg. 6] and alleges that denial of discovery into issues that Plaintiff voluntarily injected into the case would be manifestly unfair. Id. Defendant asserts that Plaintiff is the primary source of evidence that her attorneys "colluded with the insured against USAA CIC" in consenting to liability, entering into a settlement agreement, and entering arbitration. Id. Defendant argues that denying it access to this highly relevant information would preclude Defendant from probing into the issues of bad faith, fraud, and collusion and would hinder its ability to defend itself against Plaintiffs claims. Id.

         B. Plaintiffs Position as Stated in Her Response

         Plaintiff filed her Response on March 2, 2018. [DE 63]. Plaintiff argues that she has not injected the issues of bad faith, fraud, and collusion into the case simply by filing suit to enforce a Coblentz agreement. [DE 63, pg. 2]. Instead, she claims, it is Defendant who has injected these issues into the litigation because Defendant is asserting bad faith, fraud, and collusion as affirmative defenses. Id. Therefore, according to Plaintiff, Defendant bears the burden of proof and is the injecting party. Id. Plaintiff argues that there is no blanket waiver of privilege merely because she has filed suit to enforce a Coblentz agreement. Id. Plaintiff further argues that the emails constitute opinion work product, which "enjoys a ...


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