Renovate America, Inc. v. Lloyd's Syndicate 1458 ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 RENOVATE AMERICA, INC., CASE NO. 19-CV-1456-GPC(WVG) 11 Plaintiff, ORDER ON DISCOVERY DISPUTE 12 REGARDING PRODUCTION OF 13 v. DOCUMENTS ON PLAINTIFF’S PRIVILEGE LOG 14 LLOYD’S SYNDICATE 1458; 15 [Doc Nos. 53-54.] Defendant. 16 17 18 In this discovery dispute, Defendant seeks production of roughly 40 email 19 communications Plaintiff withheld pursuant to a privilege log. These emails involve 20 Kara Ng (mostly) and Zachary Weber, Plaintiff’s former in-house counsel, and 21 Plaintiff’s insurance broker, Marsh & McLennan Insurance Agency LLC (“Marsh”). 22 Plaintiff has invoked the attorney-client privilege as to every email communication 23 and the work-product doctrine as to many of them. The Court finds these email 24 communications and their attachments are covered by the attorney-client privilege. 25 I. LEGAL STANDARD 26 State law governs attorney-client privilege issues in federal district courts 27 sitting in diversity. Fed. R. Evid. 501; Star Editorial, Inc. v. Dangerfield, 7 F.3d 856, 28 859 (9th Cir. 1993). Under California law, “evidentiary privileges such as the 1 attorney-client privilege are governed by statute.” HLC Props., Ltd. v. Sup. Ct., 35 Cal. 4th 54, 59 (Cal. 2005). California Evidence Code section 954 confers a privilege 2 on the client “to refuse to disclose, and to prevent another from disclosing, a 3 confidential communication between client and lawyer . . . .” “Confidential 4 communications include information transmitted between attorney and client, and ‘a 5 legal opinion formed and the advice given by the lawyer in the course of that 6 relationship.’” Calvert v. State Bar, 54 Cal. 3d 765, 779 (Cal. 1991) (quoting Cal. 7 Evid. Code § 952). “The attorney-client privilege attaches to a confidential 8 communication between the attorney and the client and bars discovery of the 9 communication irrespective of whether it includes unprivileged material.” Costco 10 Wholesale Corp. v. Sup. Ct., 47 Cal. 4th 725, 734 (Cal. 2009). 11 “The party claiming the privilege has the burden of establishing the 12 preliminary facts necessary to support its exercise, i.e., a communication made in 13 the course of the attorney-client relationship.” Id. at 733. “Once that party establishes 14 facts necessary to support a prima facie claim of privilege, the communication is 15 presumed to have been made in confidence and the opponent of the claim of 16 privilege has the burden of proof to establish the communication was not 17 confidential or that the privilege does not for other reasons apply.” Id. (citing Cal. 18 Evid. Code § 917(a)); Wellpoint Health Networks, Inc. v. Sup. Ct., 59 Cal. App. 4th 19 110, 123-24 (Cal. Ct. App. 1997). 20 21 “[T]o determine whether a communication is privileged, the focus of the 22 inquiry is the dominant purpose of the relationship between the parties to the 23 communication. Under that approach, when the party claiming the privilege shows 24 the dominant purpose of the relationship between the parties to the communication 25 was one of attorney-client, the communication is protected by the privilege.” Clark 26 v. Sup. Ct., 196 Cal. App. 4th 37, 51 (Cal. Ct. App. 2011) (citing Costco, 47 Cal. 4th 27 739-40). 28 1 II. DISCUSSION The Court’s first task is to determine whether Plaintiff, as the party invoking 2 the attorney-client privilege, has met its burden to make a prima facie showing of 3 applicability of the privilege. In doing so, the Court looks to the dominant nature of 4 the relationship between Plaintiff, Ng, and Weber to determine whether an attorney- 5 client relationship existed ab initio such that it could extend to communications with 6 Marsh. There is no dispute that Ng and Weber were attorneys employed by Plaintiff 7 in its legal department or that their roles included advising Plaintiff on legal matters 8 and facilitating its legal affairs. Their roles necessarily included monitoring, 9 coordinating, and advising on pending litigation against Plaintiff as well as doing 10 these same tasks with respect to insurance coverage related to litigation. As such, 11 Ng’s and Weber’s roles and relationships with Plaintiff were that of the 12 quintessential attorney and client. Thus, any communications amongst Ng, Weber, 13 and Plaintiff are shielded by the attorney-client privilege. 14 Turning to the heart of the dispute now before the Court, the question is 15 whether any communications between Ng or Weber and Marsh also enjoy the 16 protection of the attorney-client privilege given that Marsh is a third-party, and 17 disclosure of privileged communications to third parties ordinarily destroys the 18 otherwise privileged nature of the communications. Pac. Pictures Corp. v. U.S. Dist. 19 Ct., 679 F.3d 1121, 1126-27 (9th Cir. 2012). That is, however, unless that third party 20 21 “further[s] the interest of the client in the consultation or those to whom disclosure 22 is reasonably necessary for the transmission of the information . . . .” Cal. Evid. Code 23 § 952; see also Atmel Corp. v. St. Paul Fire & Marine Ins. Co., 409 F. Supp. 2d 24 1180, 1181 (N.D. Cal. 2005); Ins. Co. of N. Am. v. Super. Ct., 108 Cal. App. 3d 758, 25 765, 166 Cal. Rptr. 880 (Cal. Ct. App. 1980) (“While involvement of an unnecessary 26 third person in attorney-client communication destroys confidentiality, involvement 27 of third persons to whom disclosure is reasonably necessary to further the purpose 28 1 of the legal consultation preserves confidentiality of communication.”). The first of California Evidence Code section 952’s disjunctive test is relevant in this case. 2 The Court agrees that Amtel “does not stand for the proposition that any 3 communications between a party’s insurance broker and its counsel is 4 [automatically] protected . . . .” (Doc. No. 54 at 3-4.) However, based on the 5 declarations submitted in briefing and the Court’s review of the documents lodged 6 in camera, Marsh’s inclusion in communications on behalf of Plaintiff clearly was 7 to further Plaintiff’s interests. Specifically, as Plaintiff’s in-house counsel 8 responsible for coordinating, monitoring, and evaluating ongoing litigation against 9 Plaintiff and subsequently advising Plaintiff on the same, Ng and Weber’s 10 communications with Marsh in furtherance of those tasks with respect to insurance 11 coverage Plaintiff had secured were in turn made in furtherance of the Plaintiff’s 12 overarching interest in funding and defending litigation brought against Plaintiff. 13 The legal intricacies and requirements of satisfying insurance coverage were part 14 and parcel of that overarching interest, and Marsh clearly assisted Ng and Weber in 15 those areas on an ongoing basis. The Court’s in camera review revealed Marsh’s 16 role in guiding and advising Ng as Plaintiff sought coverage for defense costs being 17 incurred on a daily basis in the Nemore and Rowe matters among other litigation 18 matters. Thus, Marsh’s role wasn’t simply to procure insurance contracts for 19 Plaintiff but appears to have extended beyond that to advising Plaintiff’s in-house 20 21 counsel on litigation-related insurance claims and procedures. And many of the 22 communications the Court has reviewed appear to have been reasonably necessary 23 because Ng often sought information and Marsh’s advice and assistance with these 24 matters. Marsh, as an experienced insurance broker, appears to have been an 25 important entity that helped Ng with these matters. 26 Any reliance in this case on Rainbow Sandals, Inc. v. Liberty Mut. Ins. Co. is 27 misplaced because the party seeking protection in that case apparently relied only 28 on the work-product doctrine to shield its email communications with the insurance || broker. See No. SACV 14-01665-JLS(DFMx), 2015 U.S. Dist. LEXIS 186833, *1 > (C.D. Cal. Aug. 25, 2015) (“Defendant . . . moves for an order compelling . . . the 3 || production of four e-mails withheld by Plaintiff... on the grounds of attorney work 4 ||product doctrine ....” & “Rainbow’s privilege log identifies four e-mails . . . as 5 || withheld from its production under the attorney work product doctrine.”). The court 6 |[|in that case found the emails were not exchanged in anticipation of litigation and , ||thus found the work-product doctrine did not apply. And since that party had not ||also asserted the attorney-client privilege, there was no fallback position for the court g ||to consider. Here, in contrast, Plaintiff asserts the attorney-client privilege as to 19 ||every withheld email and also claims work-product protection for most emails. Even 11 |}if the Court found the work-product doctrine did not apply to any of the emails, the 12_ || attorney-client privilege is broader and does not require communications be made in 13. || anticipation of litigation. For this reason, Rainbow Sandals, Inc. is inapposite here, 14 |[as it did not involve the assertion of the attorney-client privilege to emails to an 15 |}insurance broker. In any event, given the Court’s finding that the attorney-client 16 || privilege applies here, it is unnecessary to also consider the work-product doctrine. 17 III. CONCLUSION 18 The Court finds an attorney-client relationship existed between Ng, Weber, 19 |jand Plaintiff; that their communications were protected by the attorney-client 29 privilege; and that disclosures and communications with Marsh did not destroy that 91 ||privilege. Accordingly, the Court ORDERS that Plaintiff need not disclose the 92 ||documents in its privilege log. 93 || ITIS SO ORDERED. 24 ||DATED: September 15, 2020 : UA Ss— Hon. William V. Gallo United States Magistrate Judge 27 28