Summary
noting that party seeking to invoke attorney-client privilege over its real estate attorney's files must provide privilege log and demonstrate whether attorney's representation "was merely a scrivener service and assistance in the simple transfer of title or legal counseling and advice"
Summary of this case from Barkley v. Olympia Mortgage CompanyOpinion
02CV788.
April 22, 2004
Order
Before the Court is defendant's motion to compel or for an order of preclusion (Docket No. 33) and plaintiff's motion to preclude defendant from introducing certain testimony (Docket No. 36). This matter has been referred to the undersigned pursuant to 28 U.S.C. § 636(b)(1)(A) to hear and dispose of non-dispositive motions and supervise all procedural matters (Docket No. 3, Nov. 21, 2002).
Earlier, plaintiff moved to compel production of defendant's underwriting file, Docket No. 18, see Docket No. 27, Oct. 3, 2003 (granting motion), No. 31 (order of Nov. 5, 2003, granting motion).
Separately, on April 14, 2004, defendant has moved for summary judgment. Docket No. 49.
BACKGROUND
This action seeks declaratory judgment and indemnification under plaintiff's builder's risk insurance policy from defendant for mold damage to plaintiff's property. At issue is when the parties were aware of the mold on the property, whether defendant insurer was aware of that risk when it issued the policy or whether the condition predated defendant's policy. Plaintiff policyholder alleges that the mold in its building was a covered loss under its policy with defendant and defendant was aware of the mold when it issued the builder's risk policy. Defendant, however, contends that the mold commenced prior to inception of the policy (caused by long term exposure to dampness on the property) and thus not a "covered loss" under that policy.On December 30, 2003, defendant moved to compel complete responses to its Second Request for Document Production (Docket No. 33, Ex. F), alternatively to preclude plaintiff from introducing evidence from materials not produced in response to this document demand, and to resolve factual issues arising from this production in defendant's favor (that is, to find that the presence of mold prior to the inception of the insurance policy) as a sanction for plaintiff failing to respond to defendant's discovery requests. Defendant contends that plaintiff's response to Request No. 6 in the initial Request to Produce (Docket No. 33, Ex. C) only listed "representatives" of various firms, and not additional identifying information requested (Docket No. 33, Aff. ¶¶ 6, 16). Plaintiff did not supplement defendant's statements that plaintiff had in its possession, as sought in initial Request to Produce Request No. 7 (Docket No. 33, Aff. ¶¶ 7, 17). Plaintiff did not supplement the record of plaintiff's representatives being on site prior to acquisition, as sought in initial Request to Produce Request No. 8 (Docket No. 33, Aff. ¶¶ 8, 18). Defendant's Second Request Nos. 2, 3, 4 (Docket No. 33, Ex. F), seeking appraisals and inspections, copy of plaintiff's real estate attorney Phillips, Lytle's file, and real estate closing documents (respectively), were not answered. Plaintiff contends that the areas inquired into were irrelevant. (Docket No. 33, Aff. ¶ 12.) Plaintiff asserts attorney-client privilege in not responding to Requests Nos. 3, 4, Phillips, Lytle's files and the closing documents (Docket No. 33, Aff. ¶ 12), but produced no privilege log (id. ¶ 13). Defendant also seeks appraisals of property (Docket No. 33, Aff. ¶ 18), bank records of the real estate transaction in plaintiff's possession, and plaintiff's real estate attorney's file (Docket No. 33, Aff. ¶ 20).
Plaintiff argues that it produced materials responsive to defendant's demand Plaintiff refuses to produce the names and other identifying information on certain witnesses it terms as impeachment witnesses, arguing that it need not identify these witnesses until trial. As for its cross-motion to preclude (Docket No. 36), plaintiff seeks to preclude defendant from introducing certain evidence (such as undisclosed witnesses, statements from disclosed witnesses, produced documents), resolving (as a discovery sanction) in plaintiff's favor that mold was not present on plaintiff's premises prior to the inception of the policy, and granting summary judgment to plaintiff.
DISCUSSION
Federal Rule of Civil Procedure 26 requires parties to identify individuals having discoverable information and copy of documents in the possession, custody or control of the party that the disclosing party may use for its claim or defense, Fed.R.Civ.P. 26(a)(1). Parties are under a duty to amend and supplement their discovery responses, Fed.R.Civ.P. 26(e)(2). Imposition of Rule 37(d) sanctions for failure to comply with discovery demands must be weighed in light of the full record. Cine Forty-Second Street Theatre Corp. v. Allied Artists Pictures, 602 F.2d 1063, 1068 (2d Cir. 1979).
Rule 37(d) calls upon the Court to make such orders in regard to disclosure failures as are just. This Court has wide discretion to impose sanctions and determine the type of sanction to be imposed under Rule 37(d). See Reilly v. NatWest Markets Group Inc., 181 F.3d 253, 267 (2d Cir. 1999). The rule lists various sanctions including preclusion or dismissal of claims. Fed.R.Civ.P. 37(d), (b)(2)(B) (refusing to allow disobedient party to support claim or defense), (C) (striking pleadings), or (D) (contempt of court for failing to produce witness, as well as payment of opponent's reasonable expenses, and attorneys' fees). Procedurally, under Rule 37(a)(2)(B) and this Court's Local Civil Rule 37, the movant needs to make a statement of good faith efforts made to resolve a discovery dispute before making motions to compel. Each party here seeks sanctions under Rule 37 from the other party's failure to produce discovery materials.
I. Defendant's Motion
Defendant raises several categories of items that plaintiff has not produced, or produced inadequately and belatedly at the close of discovery. Defendant argues that plaintiff has been withholding documents and information from the outset of this action (Docket No. 43, Atty. Aff. ¶ 15) and making blanket refusals to produce when responding (id. ¶ 8). Defendant seeks to compel production, costs and fees, or preclusion and resolution of the central issue of when the mold was present on the affected property against plaintiff. (See Docket No. 43, Atty. Aff. ¶¶ 9, 13, 14.) Plaintiff claims that it produced materials responsive to defendant's discovery demands (Docket No. 39, Atty. Aff. ¶¶ 2-16).
A. Identifying Representatives
Within plaintiff's responses are identification of representatives of firms identified as parties with pertinent information for this case. Defendant complains that this identification is inadequate (since it was produced in scattered revelations) and late (produced finally at the eve of the discovery cut off date) (Docket No. 43, Atty. Aff. ¶ 12). Defendant seeks the sanction of preclusion from offering evidence from witnesses other than those identified in the initial response (id.).
While defendant alleged good faith efforts to avoid this motion practice (Docket No. 33, Atty. Aff. ¶¶ 9-10, 13), the dismissal of a claim or preclusion of evidence for failure to respond to a discovery request is a drastic remedy. Burnett v. Venturi, 903 F. Supp. 304, 309 (N.D.N.Y. 1995); see National Hockey League v. Metropolitan Hockey Club, 427 U.S. 639, 643 (1976) (per curiam) (dismissal as severest sanction). The referral of this action to the Magistrate Judge did not grant jurisdiction to make plenary decisions (such as precluding entry of evidence, striking claims or defenses, or reporting and recommending on motions for summary judgment). Preclusion of evidence is ultimately for the District Judge to determine. Thus, this portion of defendant's motion is denied without prejudice to raise before the District Judge.
B. Plaintiff's Counsel's Real Estate Closing File
Plaintiff generally claims attorney-client privilege to producing its real estate attorney's files (see Docket No. 39, Atty. Aff. ¶ 6), but did not serve a privilege log identifying the contents of those files and the basis for the privilege assertion (see Docket No. 33, Aff. ¶ 13; Docket No. 43, Atty. Aff. ¶ 10). See Fed.R.Civ.P. 26(b)(5). The issue here is whether the real estate attorney's files would lead to relevant information in this case that is "reasonably calculated to lead to the discovery of admissible evidence." Fed.R.Civ.P. 26 (b)(1). It is unknown the scope of Phillips, Lytle's representation of in this real estate transaction, whether it was merely a scrivener service and assistance in the simple transfer of title or legal counseling and advice. Cf. United States v. DeVasto, 52 F.2d 26, 30 (2d Cir.) (attorney allowed to testify against client, over privilege objection, about simple transfers of title where representation did not involve consultation for legal advice), cert. denied, 284 U.S. 678 (1931); Pollock v. United States, 202 F.2d 281, 286 (5th Cir.) ("Where the attorney is a mere scrivener or the transaction involves a simple transfer of title to real estate and there is no consultation for legal advice, it has been held that communications to an attorney are not privileged," citingDeVasto, supra, 52 F.2d 26), cert. denied, 345 U.S. 993 (1953). "It is well settled that in order for a communication to be absolutely privileged, a confidential communication between client and attorney, in the course of a professional relationship, must be made for the purpose of seeking or providing legal advice or assistance and the communication itself must have been primarily or predominantly of a legal character."Aetna Cas. Sur. Co. v. Certain Underwriters at Lloyd's, London, 176 Misc.2d 605, 608, 676 N.Y.S.2d 727, 730 (Sup.Ct. N.Y. County 1998) (citations omitted). The Aetna court, agreeing "with the long-held conclusion that there is no privilege where the attorney is present at a meeting as `a mere scrivener' and there is no consultation for legal advice," id. at 609, 676 N.Y.S.2d at 730 (citing Pollock, supra, 202 F.2d at 286), held that "the mere presence of counsel cannot be used `to seal off disclosure.' Id. at 608, 676 N.Y.S.2d at 730 (citing Rossi v. Blue Cross Blue Shield, 73 N.Y.2d 588, 593, 542 N.Y.S.2d 508, 510 (1989)).
Without a privilege log to know the contents of the law firm's files and to determine preliminarily whether such relevant discovery would be obtained (or a declaration from plaintiff's real estate attorneys as to their services to plaintiff) and only plaintiff's conclusory arguments that the materials are not relevant or are generally privileged, plaintiff does not counter defendant's argument that Phillips, Lytle's files might contain information about the parties' notice of the mold condition in the premises. Absent a means to assess the applicability of the privilege (or even an argument that real estate closing files of counsel some how are generally privileged), those documents must be produced.
Similarly, defendant's request for plaintiff's closing documents on this property (Docket No. 33, Ex. F, request No. 4) appear to be outside of any attorney-client privilege. These documents either are documents of the transfer of title (and not covered by the attorney-client privilege) or are products of the attorney as scrivener (assuming their authorship; if not, then the attorney-client privilege in no way applies).
C. Appraisal and Inspection Reports on Property
Relevant inspection reports and appraisals of plaintiff's property were not produced to defendant. Plaintiff argues that these documents are some how irrelevant and immaterial to this action. (Docket No. 39, Atty. Aff. ¶ 5.) But the issue in this case is when the mold was detected in plaintiff's property. It is relevant whether plaintiff detected mold, or the other parties to the underlying real estate transaction detected mold, and when (if it was detected) that detection occurred.
As with the law firm records, plaintiff should produce the appraisal and inspection records.
D. Bank Records
Defendant obtained more documents on subpoena from plaintiff's bank than it did from plaintiff when that subpoena was inadvertently sent to plaintiff, showing that plaintiff intentionally withheld documents. (Docket No. 43, Atty. Aff. ¶ 7.) As with the inadequately furnished representative information, defendant appears to seek Rule 37 sanction for plaintiff's inadequate production of bank records (as compared with the volume of material the bank itself produced). Again, such a sanction is beyond the scope of the referral of this action to the Magistrate Judge; that sanction ought to be sought from the District Judge.
E. Defendant's Own Statements
Plaintiff responded to defendant's initial request for copies of defendant's statements that it would supplement that response at a later date, but then failed to so supplement. (Docket No. 33, Atty. Aff. ¶¶ 8, 18.) Plaintiff now argues that these statements are impeachment materials and are not required for production. Plaintiff did not raise an objection initially to producing these items and should not now raise one; those documents should be produced.
Therefore, defendant's motion to compel is granted insofar as plaintiff has not responded or supplemented its response to defendant's demands, as indicated in detail above. Plaintiff is to disclose witnesses in pretrial statement pursuant to this Court's Local Civil Rule 16.1(d)(4). But defendant's motion to preclude or to find against plaintiff as matter of law as discovery sanction is denied (without prejudice to raising it to the District Judge), as well as defendant's alternative request for Report and Recommendation denying summary judgment to plaintiff (cf. Docket No. 44, at 11) since the referral from the District Judge (Docket No. 3) did not include that jurisdiction. Given the age of this case and the contentiousness of the discovery herein (leading to two waves of motion practice on discovery issues alone, see note 1, above), plaintiff has thirty (30) days from the date of this Order to produce responsive materials to defendant.
II. Plaintiff's Motions
Regarding plaintiff's cross-motion to preclude, plaintiff appears to have filed a "me too" motion in response to defendant's motion. Plaintiff, however, did not submit a statement of good faith attempt to resolve defendant's discovery disputes, see Fed.R.Civ.P. 37(a)(2)(B); W.D.N.Y. Local Civ. R. 37. On that basis alone, the motion is denied.
As for its motion for summary judgment, plaintiff fails to follow local rules regarding filing a statement of material fact or supporting memorandum of law, Local Civil Rule 56.1(a), (d). Defendant argues that discovery is on going and summary disposition is premature at this time (Docket No. 43, Atty. Aff. ¶ 21). See Fed.R.Civ.P. 56(f). In addition to the objections raised by defendant, consideration of summary judgment by the Magistrate Judge in this action is beyond the scope of the referral from the District Judge (see Docket No. 3, referral Order, Nov. 21, 2002), and appears to be premature given the present procedural state of this action.
Alternatively, defendant argues that there is a genuine issue of fact precluding summary judgment on the key issue of when mold was detected. (Docket No. 43, Atty. Aff. ¶¶ 22-25, 27 (listing alleged misinformations and misrepresentations in plaintiff's supporting affidavit).)
CONCLUSION
For the reasons stated above, defendant's motion to compel or for an order of preclusion (Docket No. 33) is granted, in part, and denied in part, as outlined above, and plaintiff's motion to preclude (Docket No. 36) is denied and plaintiff's motion for summary judgment (Docket No. 36) is denied as premature. Parties shall have thirty (30) days from the entry of this Order to produce requested discovery materials and the discovery cut off is extended to May 13, 2004, or thirty days from the entry of this Order.
So Ordered.