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Hammond v. Lyndon Southern Insurance Co.

United States District Court, W.D. Oklahoma

November 18, 2019

KYLI HAMMOND, Plaintiff,



         Three discovery motions are fully briefed and pending before the Court; they were the subjects of an in-chambers conference of counsel and a hearing held September 24, 2019. The parties were successful in resolving some issues by mutual agreement, as stated on the record at the hearing. The remaining issues were argued and submitted for decision.

         After careful consideration, the Court rules as follows:

         1. Defendants' Motion to Quash Deposition Subpoena Duces Tecum [Doc. No. 16], filed pursuant to Fed.R.Civ.P. 45(d)(3)(iii) and Fed.R.Civ.P. 26(c).

         Defendants assert claims of attorney-client privilege and work-product protection to prohibit the disclosure of records by one of their attorneys, Gary D. Hammond. “The 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, the 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 rules regarding this 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). Defendants' claim to protect their attorney's work product is governed by Fed.R.Civ.P. 26(b)(3).[1]

         Upon consideration of the issues presented by the Motion and the parties' arguments, the Court finds that Plaintiff is not entitled to discover the requested documents. Mr. Hammond was engaged to advise Defendants regarding a bankruptcy case that Plaintiff filed while this lawsuit was pending in state court. Plaintiff seeks to obtain records of communications between Mr. Hammond and his clients or co-counsel regarding this litigation or Plaintiff's bankruptcy case; any notes he made about the cases; and his time records, billing statements, or records of compensation received for the representation.[2]Oklahoma law plainly protects Mr. Hammond's communications with his clients and co-counsel regarding the representation. See Okla. Stat. tit. 12, § 2502(B)(1), (5). Federal law protects his case-related notes and materials unless Plaintiff can show a substantial need for them. See Fed. R. Civ. P. 26(b)(3)(A)(ii); see also Frontier, 136 F.3d at 703 (Rule 26(b)(3) “protects materials prepared for any litigation . . . as long as they were prepared by or for a party to the subsequent litigation”) (internal quotation omitted, emphasis in original).

         Plaintiff's quest for disclosure focuses on Mr. Hammond's conduct of contacting the bankruptcy trustee to inquire “about the status of the bankruptcy case and to see if there was a path towards a resolution of the lawsuit, ” meaning this case. See Hammond Dep. 62:12-18, 82:1-5. Plaintiff contends this conduct should be considered post-litigation bad faith conduct by Defendant Lyndon Southern Insurance Company, acting through Mr. Hamond, that was part of a continued investigation of Plaintiff's insurance claim during the litigation and part of the insurer's bad faith conduct with respect to the claim. See Pl.'s Resp. Br. at 4, 7, 9-12, 15-16. At bottom, Plaintiff's position is: “Mr. Hammond was not performing legal work” but was “performing a business act in an attempt to save Defendants money.” Id. at 17.[3]

         The Court rejects Plaintiff's position regarding Mr. Hammond's work, which lacks pertinent factual and legal support and is inconsistent with bankruptcy practice. Mr. Gould, as the trustee of Plaintiff's no-asset, Chapter 7 bankruptcy estate, was responsible for evaluating and deciding how to resolve contingent claims against third parties, like the ones in this lawsuit. See In re Hammond, BK-18-12615, Pet. (Bankr. W.D. Okla. June 22, 2018) (listing assets of only exempt personal property and the claims in this case); see also In re Kane, 628 F.3d 631, 636-37 (3d Cir. 2010) (debtor's disclosure of “contingent assets such as causes of action pursued against another party . . . allows the trustee and the creditors to determine whether to pursue these assets on the creditors' behalf”) (internal quotations and citations omitted); Cadle Co. v. Mims (In re Moore), 608 F.3d 253, 266 (5th Cir. 2010) (“In a “no-asset” case such as this, litigation claims represent the last prospect of recovery for the estate.”). Mr. Gould was the logical person for Mr. Hammond to call to obtain information that would assist him in advising Defendants about how to proceed with the defense of this case. Plaintiff points to no facts or evidence suggesting that, when Mr. Hammond called Mr. Gould in November 2018, Mr. Hammond was engaged in investigating or adjusting an insurance claim rather than rendering legal services to Defendants with respect to this lawsuit.[4] In short, the Court finds that Plaintiff has presented nothing to suggest that Mr. Hammond was involved in a post-litigation, ongoing investigation of Plaintiff's insurance claim, as argued in her brief and at the hearing.

         For these reasons, the Court finds no basis to deprive Defendants of the protections of the attorney-client privilege and the work-product doctrine for Mr. Hammond's work. Therefore, Defendants' Motion to Quash is GRANTED.

         2. Plaintiff's Motion to Compel Against Defendant Lyndon Southern Insurance Company [Doc. No. 18], filed pursuant to Fed.R.Civ.P. 37(a).[5]

         Upon review of the Motion and consideration of the parties' arguments, the Court finds as follows regarding documents requested by Plaintiff from Defendant Lyndon Southern Insurance Company (“Lyndon Southern”):

Request for Production No. 11 - Correspondence, contracts, and compensation of attorney Gary Hammond. Mr. Hammond's engagement letter and documents showing fees paid to him are not confidential communications. See United States v. Hodgson, 492 F.2d 1175, 1177 (10th Cir. 1974); see also United States v. Anderson (In re Grand Jury Subpoenas), 906 F.2d 1485, 1492 (10th Cir. 1990). These documents may be relevant to a claim or defense and, therefore, are discoverable.[6] Other correspondence exchanged between Mr. Hammond and Lyndon Southern may contain confidential communications, and billing documents may reflect attorney work product. To withhold relevant documents from production, however, Lyndon Southern must produce a privilege log in compliance with Fed.R.Civ.P. 26(a)(5)(A).
Request for Production No. 2 - Pre-contract promotional or sales materials provided to Lyndon Southern by Defendant Jupiter Managing General Agency, Inc. (“Jupiter”) that preceded their business relationship. Defendants have produced copies of the relevant contracts, and have agreed to produce 30-day reports of accounting information regarding their relationship from 2015 to 2017. The Court finds this production is sufficient and proportional to Plaintiff's need for discovery about the issues in the case. Lyndon Southern need not produce any additional, “courtship” materials regarding its relationship with Jupiter.
• Request for Production No. 9 - Documents showing reinstatement fees received in Oklahoma since 2015. This request seeks information to support Plaintiff's claims against Jupiter related to cancellation notices and billing practices. Lyndon Southern represents that it did not charge, collect, or receive such fees. Plaintiff does not dispute this representation. The Court finds that, to the extent Lyndon Southern has any responsive documents, their production is not proportional to the needs of the case, considering the ...

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