Beach Tv Properties Inc. v. Soloman

B
                            UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

THE ATLANTA CHANNEL, INC.,                         :
                                                   :
       Plaintiff,                                  :       Civil Action No.:      15-1823 (RC)
                                                   :
       v.                                          :       Re Document Nos.:      210, 221
                                                   :
HENRY A. SOLOMON, et al.,                          :
                                                   :
       Defendants.                                 :

                            MEMORANDUM OPINION & ORDER

   GRANTING NATIONAL CASUALTY COMPANY’S MOTION TO QUASH SUBPOENA; DENYING
                        PLAINTIFF’S MOTION TO COMPEL

                                       I. INTRODUCTION

       This longstanding legal malpractice action involves allegations that Defendant Henry A.

Solomon failed to completely fill out a form that he filed with the Federal Communications

Commission (“FCC”) in December of 1999. Two discovery motions are before the Court: a

motion to quash subpoena filed by non-party National Casualty Company (“National Casualty”),

see National Casualty’s Mot. Quash (“Mot. Quash”), ECF No. 210, and a motion to compel filed

by Plaintiff Atlanta Channel, Inc. (“ACI”), see Pl.’s Mot. Compel, ECF No. 221. Both motions

address the same general subject matter. ACI seeks documents and communications related to

the malpractice action sent between Mr. Solomon and his insurance company, National Casualty.

Mr. Solomon and National Casualty both oppose production of these materials and primarily

argue that the work product privilege, along with the common interest doctrine, protect against

disclosure. For the reasons set forth below, the Court finds that, at least at this stage, the work

product privilege applies and protects the documents from disclosure. Accordingly, National

Casualty’s motion to quash is granted and ACI’s motion to compel is denied.
                                     II. BACKGROUND 1

       ACI filed this suit to recover damages from the erroneous filing of an incomplete form—

an application for a Class A license for a Low Power Television Station—with the FCC on

December 29, 1999. See 2d Am. Compl. ¶¶ 26–27, ECF No. 69. ACI alleges that Mr. Solomon,

who was responsible for filing the form, left several questions blank resulting in the FCC

rejecting the application.

Id. ¶¶ 28–29, 32.

ACI claims damages of at least $25,000,000 as a

result of the rejection.

Id. ¶ 70.

Because of a decade-long administrative appeal process,

resolution of the claim against Mr. Solomon depends on application of the statute of limitations

and untangling a factual dispute about Mr. Solomon’s employment status and retirement. See

Beach TV Props., Inc. v. Solomon, 

306 F. Supp. 3d 70

, 89 (D.D.C. 2018) (explaining factual

issues that must be resolved by fact finder for claim against Mr. Solomon).

       ACI also brought claims against one of Mr. Solomon’s former partners, Melodie Virtue,

and her law firm, Garvey, Schubert & Barer (the “Garvey Defendants”), for their alleged failure

to alert ACI about the potential malpractice claims against Mr. Solomon. See 2d Am. Compl. ¶¶

80–87. The claims against the Garvey Defendants are contingent on the jury finding that the

statute of limitations bars ACI’s claim against Mr. Solomon. See

id. Of particular importance

here, the Garvey Defendants assert as their Ninth Affirmative Defense that ACI’s claims against

them “are limited to the amount it could actually have been able to collect on any judgment

obtained against Defendant Henry Solomon, either through available insurance proceeds or

assets of Defendant Henry Solomon available to satisfy such judgment.” Garvey Defs.’ Ans. at


       1
          The Court assumes familiarity with its prior opinions—under a different case caption
that reflects a prior plaintiff—and limits its discussion of the factual and procedural background
to only those points relevant to the present motions. See, e.g., Beach TV Props., Inc. v. Solomon,

324 F. Supp. 3d 115

, 118 (D.D.C. 2018); Beach TV Props., Inc. v. Solomon, No. 15-cv-1823,

2016 WL 6068806

, at *1–4 (D.D.C. Oct. 14, 2016).


                                                2
10, ECF No. 99. The Garvey Defendants claim that any judgment entered against Mr. Solomon

“would have been uncollectable in whole or in part.”

Id. at 11.

       Counsel for ACI suggests that the Ninth Affirmative Defense puts at issue Mr. Solomon’s

insurance policy with National Casualty, settlement offers made by ACI, responses to those

settlement offers, and any other evidence supporting a claim of bad faith against National

Casualty. See W. James Mac Naughton Letter to Court at 1–2, ECF No. 203-1. ACI has offered

to settle the case for the policy limit of $7,000,000, but apparently Mr. Solomon and National

Casualty have not responded to the offer.

Id. at 2.

ACI believes the refusal to settle the claim for

the policy limit may create a viable bad faith claim against National Casualty.

Id. Because the Garvey

Defendants’ Ninth Affirmative Defense addresses what amounts are collectible, counsel

for ACI argues that a “presentation of evidence necessary to determine whether Mr. Solomon (or

ACI) has a viable claim for bad faith against National Casualty for failure to settle at the policy

limits and, therefore an obligation to pay the [e]xcess.”

Id. at 2.

       In pursuit of such a claim, ACI issued a subpoena to National Casualty seeking

“correspondence or communication between National Casualty and [Mr.] Solomon” regarding

this lawsuit, a separate lawsuit related to the scope of insurance coverage, 2 Mr. Solomon’s

insurance policy, settlement offers, and reservation of rights letters. Subpoena Duces Tecum at

6, 3 ECF No. 210-2. ACI also seeks production of documents “regarding any loss reserves made

by National Casualty” related to this lawsuit.

Id. ACI seeks essentially

the same documents

from Mr. Solomon. See Solomon Objs. and Resp. to Pl.’s Reqs. for Produc., ECF No. 233-3.



       2
        This separate lawsuit remains pending before this Court. See Nat’l Casualty Co. v.
Henry A. Solomon, et al., No. 20-cv-699 (D.D.C.).
       3
           The Court here cites the page numbers electronically generated by the case filing
system.


                                                  3
ACI also seeks to compel Mr. Solomon to answer the following request for admission:

“Defendant Henry A Solomon would accept [an offer to settle this action for $7,000,000] if

advised by National Casualty that it consented to his acceptance of the [o]ffer and would pay the

$7,000,000 from the proceeds of the [insurance policy from National Casualty].” See Solomon

Objs. and Resp. to Pl.’s Reqs. for Admis. at 3, ECF No. 233-4.

                                    III. LEGAL STANDARD

       A person or entity served with a subpoena may move to quash or modify the subpoena

under Federal Rule of Civil Procedure 45(c)(3). “Rule 45(c)(3)(A)(iii) provides that a court may

quash a subpoena if it ‘requires disclosure of privileged or other protected matter, if no exception

or waiver applies.’” W. Bay One, Inc. v. Does 1-1,653, 

270 F.R.D. 13

, 14 (D.D.C. 2010)

(quoting Fed. R. Civ. P. 45(c)(3)(A)(iii)). Under Rule 45, “when subpoenaed information is

withheld based on a claim of privilege, the claim of privilege must ‘describe the nature of the

withheld [information] in a manner that, without revealing the information itself privileged or

protected, will enable the parties to assess the claim.’”

Id. at 15

(quoting Fed. R. Civ. P.

45(d)(2)). The burden of persuasion on a motion to quash is borne by that movant.

Id. A party may

file a motion to compel discovery if another party has failed to respond to a

proper discovery request. Fed. R. Civ. P. 37(a). “Courts consider the prior efforts of the parties

to resolve the dispute, the relevance of the information sought, and the limits imposed by Rule

26(b)(2)(C) when deciding whether to grant a motion to compel.” Barnes v. District of

Columbia, 

289 F.R.D. 1

, 5–6 (D.D.C. 2012). “When the opposing party refuses to respond to a

discovery request, the burden shifts to the opposing party to show that the movant’s request is

burdensome, overly broad, vague or outside the scope of discovery.” United States v. Kellogg

Brown & Root Servs., Inc., 

284 F.R.D. 22

, 27 (D.D.C. 2012). Under Rule 26, a party “may




                                                  4
obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or

defense and proportional to the needs of the case.” Fed. R. Civ. Pro. 26(b)(1). “An appellate

court will reverse a grant or denial of a motion to compel only if it finds that the district court

abused its discretion.” Kellogg Brown, 284 F.R.D at 27 (citing Lipscomb v. Winter, No. 08-cv-

5452, 

2009 WL 1153442

, at *1 (D.C. Cir. Apr. 3, 2009)).

                                          IV. ANALYSIS

       The Court first discusses the application of the attorney work product privilege and

common interest doctrine to the requested documents. This analysis is applicable to both

pending motions. The Court will then address ACI’s request for documents relating to National

Casualty’s loss reserve for this case. Finally, the Court will turn to ACI’s motion to compel a

response to its request for admission.

                  A. Work Product Privilege and Common Interest Doctrine

       “The attorney work-product privilege protects ‘the files and the mental impressions of an

attorney . . . reflected, of course, in interviews, statements, memoranda, correspondence, briefs . .

. and countless other tangible and intangible ways.’” Rockwell Int’l Corp. v. U.S. Dep’t of

Justice, 

235 F.3d 598

, 604–05 (D.C. Cir. 2001) (quoting Hickman v. Taylor, 

329 U.S. 495

, 510–

11 (1947)). The work product privilege “protect[s] the adversary trial process itself” because

“the integrity of our system would suffer if adversaries were entitled to probe each other’s

thoughts and plans concerning the case.”

Id. at 605

(quoting Coastal States Gas Corp. v. Dep’t

of Energy, 

617 F.2d 854

, 864 (D.C. Cir. 1980)). While disclosure alone can waive the attorney-

client privilege, “it is well-settled that it is more difficult to waive the attorney work-product

privilege than it is to waive the attorney-client privilege.” Feld v. Fireman’s Fund Ins. Co., 

991 F. Supp. 2d 242

, 252 (D.D.C. 2013); see, e.g., In re Sealed Case, 

676 F.2d 793

, 814 n.83 (D.C.




                                                   5
Cir. 1982) (rejecting the theory “that the work product privilege would be waived for all material

as to which the attorney-client privilege had also been waived”); Permian Corp. v. United States,

665 F.2d 1214

, 1219 (D.C. Cir.1981) (contrasting “the strict standard of waiver in the attorney-

client privilege context” with “the more liberal standard applicable to the work product

privilege”); United States v. AT&T, 

642 F.2d 1285

, 1299 (D.C. Cir. 1980) (“We do not consider

the strict standard of waiver in the attorney-client privilege context . . . to be appropriate for work

product cases.”); United States v. Deloitte LLP, 

610 F.3d 129

, 139 (D.C. Cir. 2010) (“While

voluntary disclosure waives the attorney-client privilege, it does not necessarily waive work-

product protection.”). Under D.C. Circuit precedent, “the work-product privilege is waived

when the proponent takes action that would ‘undercut the adversary process.’” Feld, 991 F.

Supp. 2d at 252 (quoting 

Deloitte, 610 F.3d at 140

). Such action includes “plac[ing] prior

attorney work product squarely ‘at issue’ in the case.”

Id. The common interest

doctrine “is an extension of the attorney-client privilege that

protects from forced disclosure communications between two or more parties and/or their

respective counsel if they are participating in a joint defense agreement.” Intex Recreation Corp.

v. Team Worldwide Corp., 

471 F. Supp. 2d 11

, 15–16 (D.D.C. 2007) (quoting United States v.

Hsia, 

81 F. Supp. 2d 7

, 16 (D.D.C. 2000)). The doctrine “protects communications between the

parties where they ‘are part of an on-going and joint effort to set up a common defense strategy’

in connection with actual or prospective litigation.”

Id. at 16

(quoting Minebea Co., Ltd. v.

Papst, 

228 F.R.D. 13

, 15 (D.D.C. 2005)). It applies “to communications and documents

protected by the work product doctrine.”

Id. “[T]he party asserting

the privilege must show that

(1) the communications were made in the course of a joint defense effort, (2) the statements were




                                                  6
designed to further the effort, and (3) the privilege has not been waived.” 

Minebea, 228 F.R.D. at 16

.

         ACI claims the requested documents are relevant to the Garvey Defendants’ Ninth

Affirmative Defense and that no privilege prevents disclosure. ACI has a multi-step argument

about the relevance of the documents. First, as noted above, ACI offered to settle this case for

the policy limit of $7,000,000. ACI Opp’n Mot. Quash at 2, ECF No. 216. Second, ACI

believes that National Casualty’s rejection of this settlement offer may give rise to a bad faith

claim 4 against the insurance provider.

Id. Third, a successful

claim of bad faith would

potentially make National Casualty liable for damages greater than the policy limit.

Id. Fourth, the Garvey

Defendants’ Ninth Affirmative Defense puts Mr. Solomon’s ability to pay any

damages beyond the policy limit at issue.

Id. at 4.

Therefore, any evidence supporting a

potential claim of bad faith against National Casualty is relevant to the Garvey Defendants’

Ninth Affirmative Defense.

Id. ACI believes evidence

supporting a potential claim of bad faith

can only be found in the documents it seeks and, as such, it claims it has demonstrated a

substantial need for the materials that overrides any work product or common interest

protections. See

id. at 13.

ACI also argues that Mr. Solomon and National Casualty have failed

to establish a common legal interest and that National Casualty’s lawsuit seeking declaratory

judgment destroys any common interest claim. See

id. at 13–17.

         Mr. Solomon and National Casualty primarily argue that the work product privilege

protects the documents ACI seeks from disclosure. National Casualty points to two cases




         4
        ACI does not discuss what law would govern such a claim or provide any description of
the elements of a claim of bad faith.


                                                 7
decided by the Alabama Supreme Court 5 that stand for the proposition that the contents of an

insurance file, when prepared in anticipation of litigation, are shielded from disclosure by the

work product privilege. See Mot. Quash at 3–5 (citing Ex parte Nationwide Mut. Fire Ins. Co.,

898 So. 2d 720

(Ala. 2004) and Ex parte State Farm Mut. Auto. Ins. Co., 

386 So. 2d 1133

(Ala.

1980)). Furthermore, National Casualty filed a declaration that confirms National Casualty

agreed to defend Mr. Solomon in 2015, has defended him continuously since that time, and only

opened his claim file after the Complaint in this action was filed. See Decl. of Larry D. Mason

(“Mason Decl.”) ¶¶ 3, 4, 7, ECF No. 210-1. The declaration also states that the “claim file

includes information directly received from Solomon’s defense counsel, including, for example,

defense counsel’s communications regarding legal analysis, pre-trial and trial defense strategy,

settlement and case value/risk evaluations, defense counsel’s mental impressions, and attorney

work product relevant to all stages of the litigation.”

Id. ¶ 8.

Mr. Solomon argues that the broad

protections of the work product privilege apply to the requested documents and that no actions

have been taken to waive that protection. See Solomon’s Opp’n Mot. Compel at 6–9, ECF No.

233. In support of his opposition, Mr. Solomon filed a privilege log that details the privilege

claims for the requested documents, all of which include a claim of the work product privilege.

See Solomon’s Privilege Log, ECF No. 233-3.

       The Court find that the work product privilege and common interest doctrine apply to the

requested documents. The materials submitted by Mr. Solomon and National Casualty support

the claim of work product privilege because the requested materials were produced because of



       5
          National Casualty’s motion also refers to an erroneous party. See Mot. Quash at 2
(“Consequently, Cahaba’s subpoena must be quashed . . . .”). This error suggests that the
citation of Alabama law may reflect that the argument was copied-and-pasted from another case
by counsel.


                                                 8
ongoing litigation and contain counsel’s mental impressions, litigation and trial strategy, and

legal analysis. See 

Deloitte, 610 F.3d at 137

(stating that the D.C. Circuit “appl[ies] the ‘because

of’ test, asking whether . . . the document can fairly be said to have been prepared or obtained

because of the prospect of litigation”). Ordering disclosure would undermine the adversary

process because it would allow ACI to review years of correspondence related to litigation

strategy just months before trial. See 

Rockwell, 235 F.3d at 604

–05. The common interest

doctrine applies because National Casualty has “agreed to defend Henry A. Solomon,” and has

“continuously defended Mr. Solomon” since December 2015. Mason Decl. ¶¶ 3–4. National

Casualty and Mr. Solomon share an obvious legal interest—National Casualty’s liability rises

and falls with Mr. Solomon’s. Mr. Solomon’s confidential disclosure of work product to

National Casualty in this situation, where National Casualty is paying his legal bills and shares

an interest in the outcome of the case, makes sense. For this reason, even if the common interest

doctrine did not apply, the Court does not find that disclosure of the work product materials to

National Casualty would waive the privilege. See 

Deloitte, 610 F.3d at 140

(“Voluntary

disclosure does not necessarily waive work-product protection, however, because it does not

necessarily undercut the adversary process.”). Because of the relationship between National

Casualty and Mr. Solomon, disclosure of work product in this case is not “inconsistent with the

maintenance of secrecy from the disclosing party’s adversary.”

Id. (quoting Rockwell, 235

F.3d

at 605). Furthermore, the lawsuit brought by National Casualty against Mr. Solomon and ACI

seeking declaratory judgment does not waive the work product privilege here because that matter

does not place the work product in this case squarely at issue. See 

Feld, 991 F. Supp. 2d at 252

.

       ACI’s claim of substantial need for the documents does not override the work product

protection. In support of its position, ACI relies on a case involving an actual claim of bad faith




                                                 9
against an insurance company and a case where the work product privilege was upheld. See

Holmgren v. State Farm Mut. Auto. Ins. Co., 

976 F.2d 573

, 575 (9th Cir. 1992) (reviewing

judgment in “action for unfair claim settlement practices”); Logan v. Commercial Union

Insurance Company, 

96 F.3d 971

, 977 (7th Cir. 1996) (holding that “a mere allegation of bad

faith is insufficient to overcome the work product privilege”). There is no claim of bad faith

here. ACI’s bare belief that National Casualty’s rejection of its settlement offer constitutes

evidence of bad faith is insufficient to override the work product privilege. Although the Court

can follow ACI’s multi-step rationale for needing the documents, it is too attenuated to dissolve

important work product protections. It would be manifestly unjust to force disclosure of Mr.

Solomon’s work product simply because the Garvey Defendants pled a particular affirmative

defense. Accordingly, the Court finds that the documents requested in the subpoena issued to

National Casualty and sought through ACI’s motion to compel are protected by the work product

privilege and common interest doctrine.

                                  B. Loss Reserve Documents

       ACI’s subpoena also seeks “documents regarding loss reserves made by National

Casualty” related to this lawsuit. Subpoena Duces Tecum at 6. National Casualty responds to

this request by arguing that most courts have rejected attempts at discovery of an insurer’s

reserves. Mot. Quash at 5–6. National Casualty urges the Court to adopt the reasoning in First

Horizon Nat’l Corp. v. Certain Underwriters at Lloyd’s, No. 211-cv-02608, 

2013 WL 11090763

(W.D. Tenn. Feb. 27, 2013). 6 In that case, the court found that “reserves are of marginal

relevance” because they amount to mere estimates and are not based on full knowledge of the



       6
        First Horizon involved claims against insurers for breach of contract and bad faith.
First Horizon, 

2013 WL 11090763

, at *1.


                                                 10
facts.

Id. at *9.

The court also found that reserve documents would likely constitute privileged

materials.

Id. Pointing to a

different body of cases, ACI contends that the loss reserve

documents are relevant and discoverable. ACI’s Opp’n Mot. Quash at 5–7.

        At this point, because there is no claim of bad faith pending against National Casualty,

the Court will not require production of the loss reserve documents. All the cases cited by ACI

involved actual claims of bad faith against an insurance provider. See Nicholas v. Bituminous

Cas. Corp., 

235 F.R.D. 325

, 328 (N.D. W. Va. 2006) (noting complaint alleged failure “to

attempt in good faith” to settle); Fireman’s Fund Ins. Co. v. Great Am. Ins. Co. of New York, 

284 F.R.D. 132

, 139 (S.D.N.Y. 2012) (explaining relevance of reserve documents to support

plaintiff’s claim of failure to settle in good faith); U.S. Fire Ins. Co. v. Bunge N. Am., Inc., 

244 F.R.D. 638

, 645 (D. Kan. 2007) (stating that “the actual amounts of the Insurers’ loss reserves . .

. could, at the least, lead to admissible evidence relating to . . . their good or bad faith in handling

and investigating [the] claims”); Bernstein v. Travelers Ins. Co., 

447 F. Supp. 2d 1100

, 1107

(N.D. Cal. 2006) (addressing claims that insurer acted “in bad faith”); Dogra v. Liberty Mut. Fire

Ins. Co., No. 2:14-cv-01841, 

2015 WL 5086434

, at *1 (D. Nev. Aug. 25, 2015) (involving “‘bad

faith’ claim[s] against Liberty Mutual”). ACI’s theory about a hypothetical claim of bad faith

does not implicate the precedent cited. Accordingly, the Court will not require National Casualty

to produce the documents. See Indep. Petrochemical Corp. v. Aetna Cas. & Sur. Co., 

117 F.R.D. 283

, 288 (D.D.C. 1986) (denying motion to compel production of loss reserve documents); but

see Athridge v. Aetna Cas. & Sur. Co., 

184 F.R.D. 181

, 192–93 (D.D.C. 1998) (allowing

discovery of loss reserve documents to support claim of bad faith).




                                                  11
                                C. ACI’s Request for Admission

       Finally, ACI seeks to compel Mr. Solomon to answer the following request for

admission: “Defendant Henry A Solomon would accept [an offer to settle this action for

$7,000,000] if advised by National Casualty that it consented to his acceptance of the [o]ffer and

would pay the $7,000,000 from the proceeds of the [insurance policy from National Casualty].”

Solomon Objs. and Resp. to Pl.’s Reqs. for Admis. at 3. Mr. Solomon responded to the request

for admission as follows:

       Objection, on the grounds that Request for Admission does not seek admission of
       facts, the application of law to fact, or opinions about either as intended by Fed. R.
       Civ. P. 36, but instead seeks an admission as to a hypothetical fact situation that has
       not occurred to date. Subject to and without waiving that objection, denies as
       phrased, and states that if National Casualty desires to negotiate a settlement,
       Defendant Solomon, subject to advice of counsel, would likely in advance of the
       negotiations provide his consent in writing to settlement.

Id. ACI argues that

Mr. Solomon “cannot evade stating his current intent (a relevant fact

question) on the grounds of ‘a hypothetical fact situation that has not occurred to date.’” ACI’s

Mot. Compel at 6. In response, Mr. Solomon argues that “[a] request for admission based on a

hypothetical set of facts is improper.” Solomon Opp’n Mot. Compel at 10 (citing Abbott v.

United States, 

177 F.R.D. 92

, 93 (N.D.N.Y. 1997)).

       Requests for admission may ask an opposing party to admit matters relating to “facts, the

application of law to fact, or opinions about either.” Fed. R. Civ. P. 36(a)(1)(A). ACI’s request

unquestionably depends on a hypothetical fact situation, even as ACI attempts to portray the

request as one about Mr. Solomon’s current intent. ACI has not supported with any precedent its

position that Mr. Solomon must respond to the request for admission based on a hypothetical




                                                 12
situation. 7 Mr. Solomon, in opposition, points to several cases from various districts that

concluded hypothetical requests for admission are improper. See Solomon Opp’n Mot. Compel

at 10 (citing 

Abbott, 177 F.R.D. at 93

; Buchanan v. Chicago Transit Auth., No. 16-cv-4577, 

2016 WL 7116591

(N.D. Ill. Dec. 7, 2016); Morley v. Square, Inc., No. 4:10-cv-2243, 

2016 WL 123118

(E.D. Mo. Jan. 11, 2016); Storck USA, L.P. v. Farley Candy Co., Inc., No. 92-c-552,

1995 WL 153260

(N.D. Ill. 1995)). The Court will follow the on-point cases and accordingly

deny ACI’s request to compel a further response on the request for admission.

                                       V. CONCLUSION

       For the foregoing reasons, National Casualty’s motion to quash subpoena (ECF No. 210)

is GRANTED and ACI’s motion to compel (ECF No. 221) is DENIED.

       SO ORDERED.


Dated: November 18, 2020                                           RUDOLPH CONTRERAS
                                                                   United States District Judge




       7
          In reply, ACI attempts to analogize the request for admission here with the narrow
scenario where discovery has been allowed concerning “hypothetical negotiations” used in
patent cases to establish lost royalties. See ACI’s Reply Mot. Compel at 3–4, ECF No. 234.
ACI does not, however, offer any precedent about requests for admission involving hypothetical
factual scenarios outside of that narrow context or attempt to explain why the Court should not
follow the cases of broader applicability cited by Mr. Solomon.


                                                 13

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