United States District Court, W.D. Oklahoma
TIMOTHY D. DeGIUSTI Chief United States District Judge.
the Court is Plaintiff's Motion to Compel Discovery [Doc.
No. 43]. Defendant responded in opposition [Doc. No. 48], and
Plaintiff replied [Doc. No. 50]. Upon consideration of these
filings, the Court finds no need for a hearing, and issues
breach of contract and bad faith claims arise out of an
insurance policy issued by Defendant to Plaintiff. Plaintiff
alleges that its real and personal property was damaged and
destroyed by a tornado on May 16, 2017. Plaintiff seeks to
compel the production of Defendant's entire claim file
and information regarding Defendant's loss reserves for
Plaintiff's claims. Defendant contends that
Plaintiff's request for the entire claim file is overly
broad, unduly burdensome, and purportedly requires Defendant
to produce documents that are privileged and
irrelevant. Further, Defendant argues that information
concerning its loss reserves is not relevant to
Plaintiff's claims or likely to lead to the discovery of
admissible evidence. Plaintiff clarifies in its reply brief
that it does not seek to discover communications between
Defendant and its counsel or any attorney work product, and
that to the extent any such privileged information is
contained in the claim file, Defendant may properly redact
to Fed.R.Civ.P. 26(b)(1), “[p]arties 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 ….” The considerations that
bear on proportionality include: “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.”
Fed.R.Civ.P. 26(b)(1). “Information within this scope
of discovery need not be admissible in evidence to be
discoverable.” Id. Thus, relevance for
purposes of discovery remains broader than relevance for
purposes of trial admissibility. However, discovery is not
intended to be a “fishing expedition.” See
McGee v. Hayes, 43 Fed.Appx. 214, 217 (10th
Cir. July 22, 2002) (unpublished). “[B]road discovery is
not without limits and the trial court is given wide
discretion in balancing the needs and rights of both
plaintiff and defendant.” Gomez v. Martin Marietta
Corp., 50 F.3d 1511, 1520 (10th Cir. 1995).
When the request is overly broad, or relevance is not clear,
the party seeking the discovery has the burden to show the
relevance of the request. Design Basics, L.L.C. v.
Strawn, 271 F.R.D. 513, 523 (D. Kan. 2010).
party seeking to assert a privilege has the burden of
establishing its applicability.” Motley v. Marathon
Oil Co., 71 F.3d 1547, 1550 (10th Cir. 1995);
accord In re Grand Jury Proceedings, 616 F.3d 1172,
1183 (10th Cir. 2010). In this diversity case,
Defendant's claim of attorney-client privilege is
governed by Oklahoma law. See Seneca Ins. Co. v. W.
Claims, Inc., 774 F.3d 1272, 1275 (10th Cir.
2014); Fed.R.Evid. 501. Oklahoma has codified its legal rules
regarding the attorney-client privilege, which protects
“confidential communications made for the purpose of
facilitating the rendition of professional legal services to
the client.” Okla. Stat. tit. 12, § 2502(B).
“[T]he mere fact that an attorney was involved in a
communication does not automatically render the communication
subject to the attorney-client privilege”; rather, the
“‘communication between a lawyer and client must
relate to legal advice or strategy sought by the
client.'” In re Grand Jury Proceedings,
616 F.3d at 1182 (quoting Motley, 71 F.3d at
1550-1551); United States v. Johnston, 146 F.3d 785,
794 (10th Cir. 1998).
federal court litigation, attorney work product is governed
by Rule 26(b)(3) of the Federal Rules of Civil Procedure.
See Frontier Ref., Inc. v. Gorman-Rupp Co., 136 F.3d
695, 702 n. 10 (10th Cir. 1998) (“Unlike the
attorney client privilege, the work product privilege is
governed, even in diversity cases, by a uniform federal
standard embodied in Fed.R.Civ.P. 26(b)(3).”) (internal
quotation omitted). This rule generally protects from
disclosure documents “prepared in anticipation of
litigation or for trial” by a party's attorney or
other representative. See Fed. R. Civ. P.
26(b)(3)(A). “Rule 26(b)(3) prevents discovery of an
attorney's work product unless (1) the discovering party
can demonstrate substantial need for the material and (2) the
discovering party is unable to obtain the substantial
equivalent of the material by other means without undue
hardship.” Frontier Ref., 136 F.3d at 704
(footnote omitted). The rule provides additional protection
for “the mental impressions, conclusions, opinions, or
legal theories of a party's attorney or other
representative concerning the litigation.” Fed.R.Civ.P.
asserts in its response that it produced the entire claim
file, absent privileged documents and documents created since
the commencement of litigation. Plaintiff clarifies in its
reply brief that it does not seek to discover communications
between Defendant and its counsel or any attorney work
product, and that to the extent any such privileged
information is contained in the claim file, Defendant may
properly redact it. Plaintiff does seek Defendant's
“complete claim file for this claim which should
include all of the claim adjusters' claim activity to the
present” and Defendant's loss reserves. [Doc. No.
is not required to produce documents that it has already
produced, and Defendant has produced a redacted version of
its claim file with a privilege log to Plaintiff. To
determine whether Defendant has met its burden of proving the
existence of a privilege, the Court will need to review the
unredacted documents in camera. Accordingly,
Defendant shall submit the unredacted documents to chambers
within 14 days of this Order for an in camera review
by the Court. An order will issue thereafter as to whether,
or to what extent, the documents will be released to
Court now turns to issue concerning Defendant's loss
reserves. The Court finds that discovery of Defendant's
loss reserves is relevant to Plaintiff's bad faith claim
and is proportional to the needs of the case. Fed.R.Civ.P.
26(b)(1); see e.g., Shadid, L.L.C. v. Aspen Specialty
Ins. Co., No. CIV-15-595-D, 2018 WL 3420816, at *5 (W.D.
Okla. July 13, 2018) (on a motion in limine, the court held
that evidence of the insurance company's loss reserves
was relevant to the insured's bad faith claim). Plaintiff
contends that Defendant set a $2, 575, 703.80 loss reserve on
Plaintiff's insurance claim [Doc. No. 45-5], and
Defendant's own adjuster, Ronald Murchek, preliminarily
estimated the total loss at $2.5 million [Doc. Nos. 45-3 at
2, 45-4 at 2]. Discovery of Defendant's loss reserves is
relevant to show Defendant's internal assessment of the
claim's potential value and is relevant to the subjective
component of Plaintiff's bad faith claim. See ONEOK,
Inc. v. Nat'l Union Fire Ins. Co., No.
CIV-06-200-GKF-SAJ, 2007 WL 2891519, at * 4-5 (N.D. Okla.
Sept. 28, 2007) (sustaining the plaintiff's motion to
compel and finding that the defendant's loss reserves
were discoverable because they were relevant to the
subjective intent component of the plaintiff's bad faith
claim); see also Fox v. Country Mut. Ins. Co., No.
CIV-17-1228-SLP (W.D. Okla. Nov. 27, 2018) [Doc. No. 118]
(denying the defendant's motion in limine and finding
that evidence of the defendant's loss reserves was
relevant and not substantially outweighed by any danger of
Defendant shall provide Plaintiff with the date and amount of
all reserves established for Plaintiff's claim within 14
days from the date of this Order.
on the foregoing, Plaintiffs Motion to Compel Discovery [Doc.
No. 43] is GRANTED in part and ...