United States District Court, D. Arizona
Marcus Labertew; and John McDermott and Jennifer McDermott, husband and wife, Plaintiffs,
Chartis Property Casualty Company, also known as AIG Casualty Company, and 21st Century North America Insurance Company, formerly known as American International Insurance Company, Defendants.
G. Campbell United States District Judge
case involves an insurance coverage dispute and a claim of
bad faith against Defendants. Plaintiffs seek production of
certain claim file documents that Defendants have partially
redacted on work product and attorney-client privilege
grounds. The Court held a discovery conference with the
parties on March 26, 2018, and directed them to file
memoranda addressing the work product and privilege issues.
Doc. 74. Having reviewed the memoranda and relevant case law,
the Court finds that Defendants have not established work
product protection but have not waived the attorney-client
March 2010, Plaintiffs filed a complaint in state court
against Loral Langemeier asserting claims for breach of
contract, defamation, fraud, and other wrongs arising out of
their relationship in Bio-Novix, a health products business
venture. Doc. 1-1 at 2-10. Langermeier had insurance policies
with Defendants and tendered defense of the suit to them
before trial in January 2013. One month later, Defendants
issued a position letter stating that there was no coverage
for the claims asserted in the lawsuit. Doc. 76-3.
third day of trial, the parties entered into a stipulated
judgment against Langemeier in the amount of $1.5 million.
Doc. 1-16 at 27-28. The judgment was part of what is commonly
called a “Damron agreement” under
Arizona law, and included an assignment of Langemeier's
claims against Defendants to Plaintiffs. See Damron v.
Sledge, 460 P.2d 997 (Ariz. 1969).
chose to collect their judgment through a garnishment action
initiated in state court. Defendants removed the proceeding
to this Court and filed answers to the writs of garnishment,
denying that they owed funds to Plaintiffs. Docs. 6, 7.
Plaintiffs thereafter filed an amended complaint alleging
that Defendants owe Plaintiffs the $1.5 million stipulated
judgment and are liable to Plaintiffs under Damron
for alleged bad faith conduct. Doc. 42.
sought production of the underlying claim file, including all
documents related to the processing, investigation, and
denial of the claim. Doc. 79-3 at 3. Defendants produced the
claim file but redacted portions of ten pages on work product
and attorney-client privilege grounds. Id. at 4;
Doc. 76 at 2. The redacted material largely involves
communications between the claims adjuster, Elisa Wheeler,
two of her superiors, Mike Mansour and Brian Applebee, and
outside counsel, Steven Mesaros and Randy Kingery. The
redactions are as follows (listed in Bates number order):
1-2. 2/19-20/13 emails between Wheeler and Kingery (00081)
3-4. 1/29 and 1/31/13 emails between Wheeler and Mesaros
5. 2/4/13 email from Wheeler to Mansour (00116)
6-7. 2/7 and 2/12/13 emails between Mansour and Applebee
8. 1/28/13 email from Wheeler to Mesaros (00131)
9. 1/22/13 email from Wheeler to Mesaros (00140)
10-11. 1/17/13 emails between Wheeler and Mansour (00179)
12. Legal bills from counsel to Defendants (00265-70)
13. April to August 2013 claim notes (00272) (seven entries)
14. 2/12/13 claim note (00272)
15. 1/29/13 claim note ...