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Millsaps College v. Lexington Insurance Co.

United States District Court, S.D. Mississippi, Northern Division

July 24, 2017




         Millsaps College has brought this suit for damages to buildings on its campus as a result of a hailstorm that occurred on March 18, 2013. Lexington Insurance was an insurer of those buildings. Millsaps claims that it has suffered actual damages in excess of six million dollars because of that hailstorm and claims that Lexington has inadequately investigated its claim and refused to pay for covered losses and damages. Millsaps seeks actual damages, consequential and incidental damages, interest and punitive damages against Lexington. Lexington asserts that it and its consultants visited the Millsaps campus several times to inspect the damages and engaged in multiple settlement discussions with Millsaps. According to Lexington, Millsaps has been fully indemnified under the policy in the amount of $1, 946, 840.72.

         After the hailstorm, but before this suit was filed, Millsaps began consulting with W. G. Yates & Sons Construction Company and CMR Construction & Roofing, LLC about the damage to its buildings. Since this lawsuit was filed, Millsaps designated Steven M. Soule of CMR Construction and Paul Musick and Clint Bledsoe of Yates Construction as expert witnesses in this matter. This Motion concerns subpoenas that were issued to Yates Construction and CMR Roofing. Some of the documents sought are emails between Millsaps, the consultants, and Millsaps9;s legal counsel, others are between Millsaps and its consultants, some are emails between the consultants, some are the consultants9; internal emails, and one is an email between Millsaps and its legal counsel. Lexington argues that these documents are discoverable pursuant to Fed.R.Civ.P. 26(b)(4)(C), while Millsaps objects to production of these documents under the attorney/client and work product privileges. Millsaps provided a privilege log; however, the privilege claimed for every document listed is the same: “Millsaps claims a privilege and protection from discovery based on the work product doctrine, Fed.R.Civ.P. 26(b)(3), 26(b)(4) (including subparts A through D) and the attorney/client privilege. Millsaps specifically refers to and incorporates Millsaps9; Response and Objections to Subpoenas filed on August 26, 2016 [Dkt. #16]. The Response and Objections provide no further illumination beyond the boilerplate language.

         The general principles applicable to these documents are these:

         The Attorney/client Privilege - for purposes of this diversity case, Mississippi law provides the parameters of this privilege and protects:

         [A]ny confidential communication made to facilitate professional legal services to the client:

(1) between the client or the client9;s representative and client9;s lawyer or the lawyer9;s representative;
(2) between the client9;s lawyer and the lawyer9;s representative;
(3) by the client, the client9;s representative, the client9;s lawyer, or the lawyer9;s representative to another or that lawyer9;s representative, if:
(A) the other lawyer represents another party in a pending case; and
(B) the communication concerns a matter of common interest;
(4) between the client9;s representatives or between the client and a client representative; or
(5) among lawyers and their representatives representing the same client.

Miss. R. Evid. 502(b). Confidential communications are those “not intended to be disclosed to third persons other than those to whom disclosure is made in furtherance of the rendition of professional legal services to the client or those reasonably necessary for the transmission of the communication.” Miss. R. Evid. 502(a)(5). A client9;s representative is one authorized to obtain legal services on behalf of the client or to act on the advice rendered or an employee with information that the lawyer needs to render legal services. A lawyer9;s representative is one employed by the lawyer to assist in rendering legal services.

         Federal law governs the analysis of the work product doctrine in diversity cases. Dunn v. State Farm Fire & Cas. Co., 927 F.2d 869');">927 F.2d 869, 875 (5th Cir. 1991). That doctrine is codified in Fed.R.Civ.P. 26(b)(3), and it protects “documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party9;s attorney, consultant, surety, indemnitor, insurer or agent).” Experts are not specifically included in that protection. As one court noted, “The phrase ‘party or its representatives, 9; implies agency, and each of the six listed examples connotes someone acting in either an agency or fiduciary capacity for the ‘party or its representative.” Republic of Ecuador v. For Issuance of a Subpoena Under 28 U.S.C. Sec. 1782(a), 735 F.3d 1179');">735 F.3d 1179, 1184 (10th Cir. 2013). An expert would not, ordinarily, have that authority. Id; see also Republic of Ecuador v. Mackay, 742 F.3d 860, 871 (9th Cir. 2014) (general work product doctrine does not extend to testifying experts); Republic of Ecuador v. Hinchee, 741 F.3d 1185');">741 F.3d 1185, 1192 (11th Cir. 2013) (same); Davita Healthcare Partners, Inc. v. United States, 128 Fed.Cl. 584, 588 (Fed. Cl. 2016). Moreover, there is no protection for communications among a testifying expert and non-attorney employees of the party or other testifying experts. In re Application of Republic of Ecuador, 280 F.R.D. 506');">280 F.R.D. 506, 514 (N.D. Cal. 2012).

         A party is not entitled to discover facts known or opinions held by a non-testifying expert. Fed.R.Civ.P. 26(b)(4)(D). In the case of a testifying expert, however, communications between a party9;s attorney and its expert are protected, unless the communications relate to the expert9;s compensation, identify facts or data that the attorney provided and the expert considered in forming his opinion, or identify the attorney9;s assumptions that were relied upon by the expert. Fed.R.Civ.P. 26(b)(4)(C). Millsaps argues that even those communications could be withheld under another claim of privilege, relying on this sentence, “The rule does not exclude protection under other doctrines, such as privilege or independent development of the work-product doctrine.” The Court disagrees.

         The paragraph in which this sentence appears deals primarily with the protection granted to attorney communications with testifying experts. Immediately preceding the sentence quoted by Millsaps, the subject changes. “The rule does not itself protect communications between counsel and other expert witnesses, such as those for whom disclosure is required under Rule 26(a)(2)(C).” The Court is of the opinion that the sentence quoted by Millsaps, which immediately follows, explains that such communications may be protected by other means than the Rule. Other courts interpreting the more recent amendments to the Rule generally agree with this analysis. Luminara Worldwide, LLC v. Liown Electronics Co. Ltd., No., Civil No. 14-3103, 2016 WL 6914995 at *6 (D. Minn. May 18, 2016); Powerweb Energy, Inc. v. Hubbell Lighting, Inc., No. 3:12CV220, 2014 WL 655206 at *2 (D. Conn. Feb. 20, 2014); PACT XPP Technologies, AG v. Xilinx, Inc., No. 2:07CV563, 2012 WL 1205855, at *4 (E.D. Tex. Apr. 11, 2012) (“Although the amended rule explicitly provides these protections for expert witnesses who submit a written expert report under Rule 26(a)(2)(B), the Rules contemplate that privileges and protections may be available to protect communications with other types of expert witnesses . . . .”);

         This conclusion is further bolstered by the statement that closely follows: “Rules 26(b)(4)(B) and (C) do not impede discovery about the opinions to be offered by the expert or the development, foundation, or basis of those opinions.” (Emphasis added.) Millsaps9;s interpretation would make this provision nearly useless, as most communications regarding the basis for the expert9;s opinion could arguably be classified as work product. An opinion from this Court, issued prior to the 2010 amendments, further explains why this interpretation is appropriate:

The rationale behind the “bright line” rule also includes several policy concerns. The most significant of these policy concerns is that, in today9;s litigious society where it has become common for a lawyer to bring in a “hired gun” to give an expert opinion that supports the lawyer9;s theory of the case, the opposing party and the jury are entitled to know if the lawyer9;s opinion or theory of the case impacted or influenced the expert9;s opinion. This Court agrees that this concern is sufficient to override the work product doctrine. In order to guarantee effective cross-examination, and to guarantee that the jury has all information relevant to assessing the credibility of experts, lawyers should not be allowed to influence or manipulate the experts9; opinions then hide behind work product. As Magistrate Judge Alfred G. Nicols, Jr. stated in his Order of May 30, 2000:
when an attorney hires an expert both the expert9;s compensation and his “marching orders” can be discovered and the expert cross-examined thereon. If the lawyer9;s “marching orders” are reasonable and fair, the lawyer and his client have little to fear. If the orders are in the nature of telling the expert what he is being paid to conclude, appropriate discovery and cross-examination thereon should be the consequence. Such a ruling is most consistent with an effort to keep expert opinion testimony fair, reliable and within the bounds of reason.

TV-3, Inc. v. Royal Ins. Co. of America, 194 F.R.D. 585, 589 (S.D.Miss. 2000).

         The party claiming privilege has the burden of establishing the basis for the claim. Hodges, Grant & Kaufmann v. United States, 768 F.2d 719');">768 F.2d 719, 721 (5th Cir. 1985). Once the privilege has been established, the party seeking the discovery bears the burden to prove any exceptions. E.E.O.C. v. BDO USA, L.L.P., 856 F.3d 356, 362 (5th Cir. 2017). The inquiry into whether a privilege applies is highly fact-specific, and any ambiguities should be construed against its applicability. Id. With regard to material sent to testifying experts, the term “considered” should be interpreted broadly to require “disclosure of all information a testifying expert ‘generates, reviews, reflects upon, reads, and/or uses in connection with the formulation of his opinions, even if such information is ultimately rejected.9;” In re Benicar (Olmesartan Products Liability Litigation, 9 F.R.D. 139');">319 F.R.D. 139, 141 (D. N.J. 2017) (quoting Synthes Spine Co., L.P. v. Walden, 232 F.R.D. 460, 463 (E.D. Pa. 2005)).

         The documents in question consists of strings of emails that were forwarded to various people involved in this matter. In some instances, those forwarded strings are clipped together, with potentially privileged communications clipped to communications that are clearly not privileged. The fact that non-privileged communications were transmitted to counsel does not make the entire package privileged; each communication must be analyzed on its own. Id. at 363-64; N.L.R.B. v. Interbake Foods, LLC, 637 F.3d 492, 503 (4th Cir. 2011). There is no presumption that sending the communication to counsel confers a privilege on it. BDO, 856 F.3d at 365. Describing a document as describing “trial tactics, ” “strategy of counsel” will not confer the privilege, nor will the assertion that a document was prepared at counsel9;s direction. Id. Neither the attorney/client privilege nor the work-product doctrine can protect a communication that has not been shown by Millsaps to fall specifically within its ambit.

         Millsaps provided the Court with a list of names that appear in the documents presented for in camera review and the role that each of these persons played in the activities described in the email. These include Millsaps9;s lawyers and employees, employees of Yates Construction, employees of CMR, and a representative of Arthur J. Gallagher & Co., described as Millsaps9;s consulting/trial engineering expert. Obviously, these people participated in some manner in the preparation of Millsaps9;s case. With respect to EIIA, Millsaps claims that it is “a named insured as a member institution.” Not appearing in this list are representatives of Lexington; however, from Millsaps9;s Complaint, the Court understands that Cunningham Lindsey was retained to handle Millsaps9;s claim on Lexington9;s behalf, and Dave Reger is an employee of Cunningham Lindsey. Ultimately, Tom Sheets, a colleague of Reger9;s, also worked on the claim. Additionally, Lexington hired Halliwell Engineering and Young & Associates to adjust the claim. AIG is the parent company of Lexington.

         As stated earlier, Millsaps has designated Steven Soule of CMR, Paul Musick of Yates Construction, and Clint Bledsoe, also from Yates, as expert witnesses. Additionally, Millsaps has designated Tony Childress, of Childress Engineering Services. Childress stated, in his report, that he reviewed “the supplied damage assessment reports prepared by others, photographs, repair estimates as well as other provided data.” [Doc. #27-2, p. 3]. Soule, in his report, stated, “I have been provided with the estimate reports prepared by Young & Associates on behalf of Lexington Insurance and the descriptions of work listed in those reports . . . .” [Doc. #27-7, p. 1');">p. 1]. Musick and Bledsoe submitted a joint report, in which they stated, “[W]e have reviewed the reports provided by Lexington Insurance Company of their experts Halliwell Engineering & Associates, Young & Associates, as well as the analysis done by Cunningham & Lindsey.” [Doc. #27-9, p. 1');">p. 1]. They also consulted with Scott Kilby, as estimator.

         With these facts and legal principles in mind, particularly Millsaps9; burden to prove privilege, the Court has conducted an in camera review of the documents at issue, comparing them to Millsaps9;s privilege logs, and the rulings follow:

         CMR Document Production

         Bates Nos. Ruling

         8056, 8057-61, 8062-66, 8067- 8101, 8136-38 8139-41, 8998- 9003, 9574-75, 10456-60, 10461- 656, 11200-01, 11271-310, 11712- 14, 12077 Millsaps claims that these documents are not relevant to this lawsuit and that they should not have been produced. Lexington does not object to 14, 12077 this designation; therefore, these documents need not be produced.

         9343-44 These pages contain three emails. The first is from Wilber Evans of Lexington to EIIA personnel. It is discoverable as the basis for the expert opinions of the CMR and Yates personnel. The second email is merely a transmittal of the first email from an EIIA employee to a Millsaps employee. It is discoverable. The third email is from Millsaps9;s in-house counsel, Terri Hudson, to two of Millsaps9; attorneys, Michael Gwin and Clifford Ammons. The email was copied to Clint Bledsoe and Paul Musick, employees of Yates who were ultimately designated as experts, and Steven M. Soule, an employee of CMR who was ultimately designated as an expert. It was also transmitted to Scott Mesler, another employee of CMR. For purposes of applying the attorney/client privilege, Hudson could be considered a representative; however, Millsaps has not established that the then-unnamed experts and their employers would fall within that category. The broader work product doctrine could apply, however, since the information in the memo could have been considered by the expert witnesses in forming their opinions, it is not privileged.

         9494-97 These documents contain several emails between Scott Mesler, of CMR, and John Crawford, of Crawford Engineering. Neither has been designated as an expert. The string was sent from Mesler to Steve Soule, of CMR, who has been designated as expert. The attorney/client privilege claimed by Millsaps does not apply. However, the subject matter of the emails suggests that they were prepared for trial by Millsaps9; consultants and are not related to their expert testimony; therefore, they are protected by the work-product doctrine and need not be produced.

         9558-59 These pages contain two emails. The first is from Terri Hudson to Bledsoe, Musick, Ammons and Gwin, and it does not appear to be related to the experts9; opinions. Therefore, it is protected as work-product and need not be produced. The second email merely asks for available dates to meet with Lexington9;s representatives, and it is not protected.

         9572 This document contains an email from Hudson to Soule, Bledsoe, Messler, Gwin and Michael Switzer, of Millsaps, from Hudson, regarding experts. The identity of all of the recipients precludes a finding of attorney/client privilege; however, the document appears to be work product and need not be produced.

         9710-11 These documents are listed on Millsaps9;s privilege log; however, the documents are not on the list of those submitted for in camera review, and the documents do not appear in the submitted documents.

         10376 This document contains an email from Bledsoe to Soule and Mesler. It relates to the damage estimates and could have been considered by the experts in forming their testimony; ...

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