J. A. Utley Co. v. Saginaw Circuit Judge

372 Mich. 367 (1964) 126 N.W.2d 696

J.A. UTLEY COMPANY
v.
SAGINAW CIRCUIT JUDGE.

Calendar No. 31, Docket No. 49,804.

Supreme Court of Michigan.

Writ denied March 5, 1964.

Heilman & Purcell (George M. Tunison, of counsel) for plaintiff J.A. Utley Company.

Stanton, Taylor, McGraw & Collison (John Davidson, of counsel), for plaintiff T & L Steel Erection Company.

O'Keefe, Braun, Kendrick & Finkbeiner (Russell A. Schafer, of counsel), for plaintiff Gypsum Erectors, Inc.

Peter F. Cicinelli and Eugene D. Mossner, for defendant.

BLACK, J.

This is an original petition for mandamus, designed to review an order for discovery. We directed that the respondent circuit judge show cause. His return was duly filed. The petition and return raise squarely the issue of "work product" we are to consider in the light of distinctive facts.

The circuit court's order was entered in 1962, pursuant to then effective Court Rule No 40 (1945). It was common to 2 pending suits for negligence; each suit having arisen out of collapse of the roof of a then under-construction new high school building. The criticized portion of such order is division 3. It reads:

"3. Defendants will further submit to plaintiff for inspection and copying purposes the following: statements made by any of their employees, following said collapse, including statements made to the defendant companies and their agents, servants and insurance carriers, pertaining to said roof collapse; all statements of witnesses obtained in connection with said accident; all reports made by defendants which includes diagrams, maps and photographs relating to said accident; production of all defendants' rules and instructions pertaining to the construction of said high school; and all plans, drawings and other data in connection with the construction of the high school in question."^[1]

The present petitioners, defendants in the 2 damage suits, informatively advise:

"The insurance companies, their investigators and their attorneys commenced immediate investigations. The public authorities likewise made immediate inquiries into the fall and collapse of the roof portion.

"The plaintiff, shortly after the accident of July 10, 1961, filed his suit by summons on October 17, 1961.

"The plaintiff's motion for discovery was filed on November 22, 1961, and on January 26, 1962, the respondent granted the motion and entered his order on February 1, 1962.

"The only part of the discovery order objected to and which is the basis of this mandamus action is that which makes the defendants produce all the statements taken by the defendants, their agents, servants, employees or insurance carriers. This refers to statements of the parties, their agents, servants and employees and all other witnesses. The discovery order also requires further objectionable production of all of the defendant's reports, diagrams, maps, photographs, rules, regulations, and instructions pertaining to the construction of the high school, including all plans, drawings and other such data."

Since issuance of our order to show cause and prior to submission of this Utley Case, the related cases of LaCroix v. Grand Trunk W.R. Co., 368 Mich. 321, and Wilson v. Saginaw Circuit Judge, 370 Mich. 404, have come to decision. Much of that which has been briefed by counsel is concluded by such decisions. Such decisions in mind, we proceed upon these presumably acceptable postulates:

The first is that the discovery of documents^[2] only is involved, and that no question of depositional practice is before us. The next is that a question of discovery of documents under former Rule No 40 is rightfully and exclusively up for consideration; also that, transitional difficulties considered, Judge Borchard intends to proceed (as to the 2 pending suits) under the discovery practice provided by former Rule No 40 rather than new and currently effective GCR 1963, 310 (he may of course do so; GCR 1963, 11.4). The last is that the only question remaining (after LaCroix and Wilson) is whether all or any portion of the documents called for by the quoted part of Judge Borchard's order are privileged, on account of the relation of attorney and client, from discovery as ordered. This brings us to grips with such remaining question.

Certainly, if such documents are thus privileged, they are exempt from discovery. The real question, then, is whether any of the documents called for by division 3 of the order form a part of the "work product" of counsel for the defendants in the 2 pending cases (they also are counsel for the respective insurers of such defendants). That question may have to be answered, finally by the respondent circuit judge, after it is determined upon further inquiry that some or any document thus called up for inspection and copying really is or is not a part of an attorney's "work product." What follows should aid due attainment of such answer.

No privilege arises when an attorney, engaged by an insurer to prepare for litigation, simply "directs" or "supervises" the taking of statements and the doing of other preparatory work by employees of the insurer. Such employees are selected, hired, and paid by the insurer, not by the attorney, and they owe primary allegiance to their employers. They are agents of the insurer rather than the attorney; their status for instant purposes being the same as that of Grand Trunk's agent when the latter took the statement discovered in LaCroix. On the other hand, when an attorney thus engaged — by an insurer prior to suit — actually hires and arranges to pay his own selected agent, say an independent adjusting firm or firm of engineers, or a private investigator, or (as in Lindsay v. Lipson, 367 Mich. 1) a physician, to investigate and take statements, or to obtain and report to such hiring attorney desired preparative information, the documentary statements and reports thus forthcoming become a part of the hiring attorney's work product, just as if the work had been done by the attorney in person or by an employee of his office.

To determine in each like case whether a document sought to be discovered is privileged, we must bear in constant mind that the professional relationship does not arise when the attorney is an ordinary agent or employee of his principal; also that the privileged relationship has to be the special and personal one the common law has always protected. For definitions, see People v. Pratt, 133 Mich. 125 (67 LRA 923), followed in Lindsay, supra.

To enjoy the privilege in the context of this case the document must be the attorney's own work product; not the product of work done by agents and employees owing primary allegiance to their employers rather than to the attorney. Such at least was the essence of our decision in the Lindsay Case, where the content of the doctor's report to the plaintiff's attorney was held privileged as against the defendants' demand for revelation thereof.

We perceive no difference between statements taken by an insurer's adjuster and a railroad's claim agent, whether the adjuster and agent, either or both, are or are not licensed attorneys. The point is, and we advert to it for emphasis, that the adjuster or claim agent is an employee of the insurer or prospective defendant; whereas the engaged attorney is not. The engaged attorney could not be such an employee since his duties are dual; one to the client and the other to the court of which he is an officer. "Within his sphere, he is as independent as a judge; he has duties and obligations to the court as well as to his client, and he has powers entirely different from and superior to those of an ordinary agent." (7 Am Jur 2d, Attorneys at Law, § 3, p 45.) When his court tells him that his work product — to be privileged — must be his own, he acts accordingly and, incidentally, in the best interests of his client.

Concededly, these views are in conflict with those of some if not many, similarly vexed courts.^[3] Too, the courts generally, as we perceive from recent annotations, are finding it difficult to decide whether, and for what reason or reasons, statements taken by employees of insurers and prospective defendants are privileged from discovery. Nonetheless, to avoid discrepant pretrial practice in the various circuits of Michigan, this Court of supervisory jurisdiction now must draw definite lines for guidance of trial counsel and trial judges. We do so here, making due note that the recent and exhaustive annotations appearing in 73 ALR2d 12, "Statements of parties or witnesses as subject of pretrial or other disclosure, production, or inspection" and 86 A.L.R. 2d 138, "Pretrial deposition — discovery of opinions of opponent's expert witnesses," have been considered with care prior to preparation of this opinion.

The writ applied for will be denied. We suggest, however, if such is desired by defense counsel in the pending cases, that the respondent judge should ascertain upon further inquiry whether some or any document called up for inspection by division 3 is or is not — in fact — some part of an attorney's "work product"; also that the judge should make formal determination of the ever-present question of discretion, that is, whether a denial in whole or in part of production and inspection as sought will unfairly prejudice the causes of the respective plaintiffs.

The question of privileged work product aside, it is always in order that the court inquire into an allegation of need for discovery of documents in lieu of investigative industry. True, for the pending lawsuits involved here, it may well be that the fact of seeming exclusive control, by the sued defendants and their insurers, of the documented information sought by plaintiffs, fully justifies the trial judge's order as it stands. But we are constrained to say generally that the suggested inquiry is due in every case where discovery of privileged or nonprivileged documents is moved and opposed. Courts should not move in any instance when the discoverer has not shown "good cause." Here the quoted showing by the plaintiffs, and the failure of the defendants and their insurers to factually deny such showing, justifies, so far at least, division 3 of Judge Borchard's order. That is the reason for our determination that no writ should issue.

Writ denied. No costs.

KAVANAGH, C.J., and DETHMERS, KELLY, SOURIS, SMITH, O'HARA, and ADAMS, JJ., concurred.

NOTES

[1] The showing made, in support of division 3 of the order for discovery, was not factually traversed by the sued defendants. It was and is claimed, with considerable vigor, that the discovery sought was "extremely broad and far more broad than was ever anticipated by the Michigan Court Rules." Key paragraph 5 of the petition for discovery reads:

"5. That many of the facts surrounding said accident are obscured and unknown; that numerous private hearings have been held and investigations conducted in connection with said school collapse which were not open to the public or to this plaintiff; that no declaration has as yet been filed in this cause of action for lack of specific information, much of which is in the knowledge and control of the defendants, their agents and employees; that in order to properly prepare a declaration in said cause in accordance with the statutes and court rules made and provided therefor, and in order to properly proceed with this cause of action, it is necessary for plaintiff to have an opportunity to make discovery, to take oral depositions, to submit written interrogatories and to inspect and examine reports, statements, papers and photographs, as more particularly herein after set forth, so that further light might be shed upon the circumstances surrounding this accident."

[2] "Documents," in this opinion, will be employed as including all papers and like tangibles which, under former Court Rule No 40, were subject to discovery. The word includes, of course, the witness statements, reports, maps, diagrams and photographs that are called for by division 3 of Judge Borchard's order.

[3] Consider, for instance, Judge Draper's introduction to the opposite result in Grand Lake Drive In, Inc., v. Superior Court of Alameda County, 179 Cal App 2d 122, 127, 128 (3 Cal Reptr 621, 86 ALR2d 129, 134):

"Unfortunately, much of the attempt to extend privilege, before the discovery acts, arose from a desire to limit ``fishing expeditions.' While it has never been logically possible to have a broad attorney-client privilege for pretrial discovery, and a narrower one for actual trial, the feeling against pretrial disclosure of one's case is discernible in the arguments and to some extent in the decisions of earlier years. Now that piscatorial excursions are licensed by the discovery act, and open angling season established in many areas, some reorientation seems indicated."