The opinion of the court was delivered by: Judge Sylvia H. Rambo
This case involves breach of contract and bad faith claims arising out of a dispute over whether Plaintiff Pengate Handling Systems, Inc. is entitled to certain benefits under an insurance policy issued by Defendant Westchester Surplus Lines Insurance Company. Plaintiff has filed a Motion to Compel Discovery Responses and Deposition Testimony (Doc. 19). The questions before the court concern whether Defendant may withhold the discovery sought by Plaintiff by asserting the attorney-client and work product privileges. The attorney-client inquiry turns on whether Defendant's attorney was acting in a legal capacity, while the work product inquiry depends upon whether documents were prepared in anticipation of litigation.
The court finds that Defendant fails to show that the attorney involved was acting solely in his professional capacity as a lawyer at all times and that a number of the communications at issue are not shielded by the attorney-client privilege. However, because the court cannot discern precisely whether or when he might have been acting as a lawyer versus a claims adjuster with respect to certain communications, an in camera inspection of some documents withheld under the attorney-client privilege is appropriate. With respect to the documents withheld under the work product doctrine, the court finds that Defendant fails to show that it reasonably anticipated litigation prior to the date Plaintiff served the Writ initiating the suit.
Accordingly, the court will grant Plaintiff's motion in part and reserve ruling on the remainder pending the in camera inspection.
In October 2004, Plaintiff submitted a claim to Defendant under Plaintiff's Professional Liability Policy (hereinafter "the Policy"). (Dean Aff. ¶¶ 5, 7; see also id. at Ex. 5 -- Doc. 19, Ex. D-5.)*fn1 Defendant denied the claim in a letter dated February 7, 2005. (Id. at Ex. 3 -- Doc. 19, Ex. D-3.) On February 11, 2005, Plaintiff, through its insurance broker E.K. McConkey & Co., Inc., requested reconsideration of the coverage denial. (Id. at Ex. 4 -- Doc. 19, Ex. D-4.)
A May 13, 2005 letter from Jeffrey Sorkin of Defendant's Professional Lines Claims department to Plaintiff describes subsequent exchanges between the parties in connection with the claim, including a March 15, 2005 meeting, as well as telephone conversations that took place in late April, and early May, 2005. (Id. at Ex. 5 -- Doc. 19, Ex. D-5.) The letter includes references to the involvement of Defendant's attorney in connection with those exchanges and indicates that Defendant hired Kevin Mahoney of Baer & Associates (hereinafter collectively "Mahoney/Baer") as a consultant to evaluate a claim-related estimate provided by Plaintiff. (Id.) The May 13, 2005 letter concludes with a request for materials related to the claim. (Id.)
December 2004 correspondence between Mr. Sorkin and Patrick Tomovic at Hodgson Russ LLP indicates that the law firm was retained to provide advice regarding Plaintiff's claim. (Doc. 25, Ex. A.) A December 23, 2004 letter from Mr. Sorkin to Mr. Tomovic seeks to engage Hodgson Russ as "coverage counsel." (Id.) A December 27, 2004 letter from Mr. Tomovic to Mr. Sorkin confirms that Defendant had "expanded the engagement of [the] firm to provide coverage advice" regarding Plaintiff's claim. (Id.) Kevin Szczepanski, a Partner at Hodgson Russ, is the attorney referenced in Mr. Sorkin's May 13, 2005 letter. (See Doc. 19 ¶ 21; Doc. 25 ¶ 21.)
With respect to Mahoney/Baer's involvement, a February 23, 2005 memo from Mr. Mahoney to Mr. Szczepanski contains a proposal for "cost consulting services" involving a "replacement cost estimate." (Doc. 26 -- Def.'s Br. in Resp. to Pl.'s Mot. to Compel, Jan. 5, 2007, Ex. 1.)
Plaintiff commenced this suit in the Court of Common Pleas of York County, Pennsylvania, on May 25, 2005. (Dean Aff., Ex. 6 -- Doc. 19, Ex. D-6.) Plaintiff served Defendant with the Writ of Summons on June 21, 2005. (Id. Ex. 7 -- Doc. 19 Ex. D-7.) On May 16, 2006, Defendant removed the case to this court. (Doc. 1.) The court issued its initial case management order on July 14, 2006 (Doc. 11), which set a fact discovery deadline of February 1, 2007.*fn2 Plaintiff served Defendant with a document production request and interrogatories on July 21, 2006. (Doc 19 ¶ 5.) On September 30, 2006, Defendant responded to Plaintiff's requests with answers and objections and a five-page privilege log. (Id. ¶¶ 6-7.) Plaintiff made a follow-up request on October 30, 2006, and subsequently sought a conference call regarding that request, which the court held on November 20, 2006. (Id. ¶¶ 9-11.) In accordance with the court's instruction during that call, Defendant provided supplemental interrogatory responses and a modified privilege log on November 29, 2006. (Id. ¶¶ 12-13.)
Plaintiff filed the instant motion to compel on December 13, 2005. (Doc. 19.) The issues have been briefed and the matter is ripe for disposition.
II. Legal Standard -- Motion to Compel
Federal Rule of Civil Procedure 26 provides for the discovery of relevant, non-privileged information. See Fed. R. Civ. P. 26(b)(1).*fn3 When a party resists discovery by asserting a privilege, that party bears "the burden of proving [the privilege's] existence and applicability." In re Grand Jury Investigation, 918 F.2d 374, 385 n.15 (3d Cir. 1990). In this regard, the party must specifically show how the asserted privilege applies. See Josephs v. Harris Corp., 677 F.2d 985, 992 (1982) (The party "'must show specifically' how [the information requested] is not relevant or how [it] is overly broad, burdensome or oppressive" and a "mere statement that [the information sought] is 'overly broad, burdensome, oppressive, and irrelevant' is not adequate to voice a successful objection.").
The discovery sought by Plaintiff falls into four categories: 1) discovery withheld under the attorney-client privilege based on the involvement of Hodgson Russ; 2) discovery withheld as the attorney work product or "mental impressions" of Hodgson Russ; 3) discovery of information pertaining to Mahoney/Baer's services that has been categorized as work product; and 4) a supplemented privilege log. The court will address each in turn.
A. Hodgson Russ Communications
With respect to Hodgson Russ communications that Defendant claims are protected by the attorney-client privilege, Plaintiff seeks discovery of documents WSLIC00043, 48, 49, 54-57, 58, 63, 64, 68, 70, 79-82, 83, 90, 92, 93, 96, 97, 100-05, 110-11, 125-26, 132-34, 162, 175-78, 179, 224-25, 276, 283, 288-91, 293-334, 336, 350, 380, 388, 816, and 820. Plaintiff also seeks cooperation in scheduling depositions of Hodgson Russ attorneys regarding claim coverage testimony for events prior to June 21, 2005.
Because this is a diversity action that raises state contract and bad faith claims, Pennsylvania law governs the applicability of the attorney-client privilege. Fed. R. Evid. 501; Montgomery County v. MicroVote Corp., 175 F.3d 296, 301 (3d Cir. 1999). In Pennsylvania,
[i]n a civil matter counsel shall not be competent or permitted to testify to confidential communications made to him by his client, nor shall the client be compelled to disclose the same, unless in either case this privilege is waived upon the trial by the client.
42 Pa. Cons. Stat. Ann. § 5928. The requirements of the attorney-client privilege are:
1) The asserted holder of the privilege is or [is] sought to become a client.
2) The person to whom the communication was made is a member of the bar of a court, or his subordinate.
3) The communication relates to a fact of which the attorney was informed by his client, without the presence of strangers, for the purpose of securing either an opinion of law, legal services or assistance in a legal matter, and not for the purpose of committing a crime or a tort.
4) The privilege has been claimed and is not waived ...