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Golon, Inc. v. Selective Insurance Company of Southeast

United States District Court, W.D. Pennsylvania

December 14, 2017

GOLON, INC. FORMERLY KNOWN AS, GOLON MASONRY RESTORATION, INC., Plaintiff,
v.
SELECTIVE INSURANCE COMPANY OF THE SOUTHEAST and SELECTIVE INSURANCE COMPANY OF AMERICA, Defendants.

          ORDER OF COURT DENYING DEFENDANTS' MOTION FOR RECONSIDERATION/CLARIFICATION (ECF 82) OF THIS COURT'S DECEMBER 7, 2017 MEMORANDUM OPINION AND ORDER (ECF 71 and ECF 72)

          Arthur J. Schwab United States District Court Judge

         A. Court's December 7, 2017 Memorandum Opinion and Order (ECF 71 and ECF 72)

         1. As this Court stated in its prior Memorandum Opinion denying Selective's Motion for Protective Order and granting, in part, Golon's Motion to Compel (see ECF 71), “[a]fter an in camera review of these documents (over 1, 000 pages of withheld and/or redacted documents), the Court finds itself confronted with the difficult task of balancing respect for an important mediation privilege, supported by public policy, while seeking not to allow this privilege to be misused or abused, and seeking to prevent the application of such privilege to thwart justice in this particular case.”

         2. After its thorough review of the 1, 000 plus pages, this Court found that the mediation privilege asserted by Selective was not applicable to almost all of the documents it had either withheld or redacted (see ECF 71), and thus, Ordered that three of the documents at issue remain under seal as having been properly withheld and/or redacted; but further Ordered the remaining documents at issue to be produced to Golon's attorney by Noon on December 11, 2017. See ECF 72.

         3. Further, after the detailed analysis set forth in ECF 71, and after finding the mediation privilege (and the relevancy objection as to reinsurance documents) not applicable to the overwhelming majority of the documents, the Court removed the seal thereon, and Ordered the Clerk of Court to lift the seal on all but the three privileged documents, and then, file the non-privileged documents at ECF 74. The Court also Ordered the Clerk of Court to separately re-file those three documents which were subject to the mediation privilege under seal at ECF 73.

         4. Upon the Court's entry of its Memorandum Opinion (ECF 71) and Order (ECF 72), Selective immediately filed an “Unopposed Emergency Motion” to reseal all of the documents the Court had just deemed were not subject to the mediation privilege (or Selective's relevancy-reinsurance objection). See ECF 75.

         5. Instead of complying with the Court's Order (ECF 72) directing Selective to produce all but the three protected documents to Golon's attorney by Noon on December 11, 2017 (see text Order at ECF 76), Selective openly stated that it would only produce to Golon's attorney those documents it had previously withheld on the grounds of relevancy (i.e., the reinsurance documents), and it would file a Motion for Reconsideration as to the mediation privilege documents the Court had ordered produced. See ECF 83 at p. 3.

         6. Importantly, the Court notes that without reaching the merit of this federal bad faith and breach of contract case, the “mediation privilege” documents which the Court ordered to be produced, arguably provide evidence which may support Golon's allegation that Selective engaged in “bad faith, high risk, [and] brinkmanship negotiation strategy, ” (ECF 1-1 at ¶ 41), when Selective continually refused to settle the underlying state court case within the total two-policy limits of $11 million, rejected its initial, well-respected trial attorney's advice, and tried the case to a jury verdict of $32 million.

         B. Selective's Failure to Comply with Order of Court (ECF 72)

         1. Selective failed to produce the required documents, despite the Order of Court of December 7, 2017, on or before the appointed date and time of December 11, 2017, at Noon.

         2. Instead, after the deadline had passed, at 12:05 PM, on December 11, 2017, Selective filed a Motion Seeking Reconsideration and/or Clarification of the Court's December 7, 2017 Opinion and Order Regarding Defendants' Claim of Privilege Under Pennsylvania's Mediation Privilege Statute (ECF 82) (9 pages), Brief in Support (ECF 83) (9 pages), and then later, filed a Supplemental Brief in Support (ECF 85) (10 pages).

         3. The Court will now DENY Selective's Motion for Reconsideration finding that there is no basis to grant such a Motion. The standard for granting a motion for reconsideration was set forth in Max's Seafood Café, by Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999), which requires a court to decline reconsideration of a prior decision unless there is or has been: (1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court granted the motion; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice. Selective's two Briefs only argue that this Court made a clear error of law when it determined that the mediation privilege documents did not fall within Pennsylvania's “mediation privilege, ” 42 Pa.C.S.A. § 5949.

         4. This Court does not find that its prior Opinion - which set forth the plain meaning of the mediation privilege statute and then explained how Selective's designated “mediation privilege” documents fell outside of the statute's well-defined reach (see ECF 71) - constitutes an error of law. To the contrary, while it is abundantly clear to this Court that Selective did not wish to disclose the documents, these documents do not fall within the four corners of the plain meaning of the stated privilege. Nearly all of the documents which this Court ordered produced constitute “communications” which occurred outside of the mediation but did not involve the mediator directly (i.e., reports and email between and among insurance company employees to one another about Golon's underlying mediations).

         5. This Court, again, reiterates that it considers the mediation privilege a very important privilege in jurisprudence; however, for this Court to stretch the mediation privilege beyond its plain meaning and ambit of protection, in fact, would undercut the privilege itself and exceed this Court's power and authority. Expansion of this important privilege to protect additional items, such as the reports and emails prepared and exchanged by and among Selective's insurance ...


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