In Merritt-Lewis v. Parrott, a car crash case, no. CL11-575 in Circuit Court for the City of Williamsburg and James City County, Virginia, Mr. Waterman sought contemporaneous witness statements tape-recorded by Progressive Insurance Company. On October 2, 2013, he filed Plaintiff’s Memorandum in Support of Motion to Enforce.
A. Other insurers, such as Progressive and Allstate, investigate in the routine and ordinary course and produce their witness statements.
This case is simply a microcosm of the entire liability insurance industry. All insurers take statements, photographs, etc. in the routine and ordinary course of their adjusting business, regardless the size and facts of an accident.
Undersigned counsel also was plaintiff’s counsel in Johnson v. Dickinson, No. 05-9499 pending in Circuit Court for York County, Virginia. Progressive, as Defendant’s auto liability carrier, promptly investigated in the routine and ordinary course of its adjusting business, taking statements and photographs. Progressive recorded telephone statements of defendant, plaintiff and independent eyewitness within 3-6 days of accident. Progressive acknowledged that its investigative statements and photographs were not privileged and provided them to undersigned counsel pursuant to Rule 4:9 without objection.
Another corroborative example is Garrity v. Jones, No. 1341 in the Circuit Court for Newport News, Virginia, another vehicular accident in which Allstate had $100,000.00 of coverage on its insured. Allstate’s adjuster took its insured’s statement 3 days after the accident – long before suit was filed or an attorney was involved – acknowledged it was not privileged and provided it voluntarily.
B. Privilege is construed strictly and must be proved by the proponents.
“Mere assertion that the matter is confidential and privileged will not suffice. Unless the document discloses such privilege on its face, [the proponent] must show by the circumstances that it is privileged.” Robertson v. Commonwealth, 181 Va. 520, 540 (1943).
But self-serving headings do not prove privilege. “You can call a mule ‘Man O’War,’ but that won’t make him a racehorse.” Clark v. Winn-Dixie Raleigh, Inc., 40 Va. Cir. 228, 230 (Henry Aug. 13, 1996). Cf., e.g., Cintas Corp. No. 2 v. Transcontinental Granite, Inc., 77 Va. Cir. 234, 237 (Fairfax Oct. 27, 2008)(client communications to counsel labeled “CONFIDENTIAL WORK PRODUCT” not work product).
“The proponent has the burden to establish that the ... communications under consideration are privileged and that the privilege was not waived.” Commonwealth v. Edwards, 235 Va. 499, 509 (1988). Eppard v. Kelly, 62 Va. Cir. 57, 62 (2003). “[P]rivilege is an exception to the general duty to disclose, is an obstacle to the investigation of the truth and should be strictly construed.” Edwards, 235 Va. at 509.
In the matter sub judice, Defendant Progressive, and State Farm impermissibly are floating their privilege claims solely on representations of counsel. That is insufficient.
C. Routine accident reports, witness statements, investigative reports and other claim materials are not privileged as “work product,” even if given to counsel.
The Virginia Supreme Court long has held that routine accident reports and statements are not privileged under Virginia’s “work product” doctrine – even if given to counsel.
A statement made by an employee to his employer, in the course of his ordinary duty, concerning a recent accident, and before litigation has been brought or threatened, is not privileged either in the hands of the employer or in the hands of the latter’s attorney to whom it has been transmitted. We so held in Virginia-Carolina Chem. Co. v. Knight, 106 Va. 674, 679, 680, 56 S.E. 725 .
Robertson, 181 Va. at 539 (emphasis added). In Robertson, the negligent employee’s oral and written accident-day reports to employer and his supplemental statement to insurance adjuster 2 days later were not privileged, despite their subsequent delivery to counsel. Id. at 540-541. In Virginia-Carolina, “the [written accident] report was made by an official of the defendant in the course of his ordinary duty immediately after the accident, before any action had been brought or threatened”; so was not a privileged communication. 106 Va. at 680.
The United States Supreme Court and Virginia federal courts concur that a party delivering its investigative materials to counsel does not make them work product. “[T]he fact that the [internal investigative] report was later transmitted to the Attorney General of Virginia’s office does not make the report privileged. ‘Pre-existing documents which could have been obtained by court process from the client when he was in possession may also be obtained from the attorney by similar process following transfer by the client in order to obtain more informed legal advice.’ Fisher v. United States, 425 U.S. 391, 403-04, 48 L. Ed. 2d 39, 96 S.Ct. 1569 (1976).” Darnell v. McMurray, 141 F.R.D. 433, 434 (W.D. Va. 1992).
Significantly, more recently, the Virginia Supreme Court greatly extended its salutary discovery rule. Ruhlin v. Samaan, 282 Va. 371, 375-380 (2011). In Ruhlin, the Virginia Supreme Court upheld the use of accident-related statements at trial. Id. (post-accident statement recorded by Defendant’s insurer used to refresh recollection during cross-examination at trial).
Even before Ruhlin in 2011, the spirit of Virginia-Carolina and Robertson had been embodied by the clear majority of Circuit Courts, including notably the City of Williamsburg and James City County in 2001 in a case of undersigned counsel. Internal “accident reports” prepared contemporaneously have been ruled “not work product immune from discovery”. See, e.g., Assaid v. Food Lion, Inc., No. 95-1201-R, Order at 1 (W.D.Va., May 7, 1997)(“Notice to Counsel form”); Lott v. Food Lion, Inc., (E.D.Va.); Blough v. Food Lion, Inc., 142 F.R.D. 622, 624 nn. 1-3 (E.D.Va. 1992)(Virginia), vacated and remanded on other grounds, 4 F.3d 984 (4th Cir. 1993)(unpublished opinion) (“General Liability Claim Notice to Counsel”); Lewis v. Ukrop’s Super Markets, Inc., No. CL01-9480, Bench Ruling (Williamsburg Jul. 30, 2001)(7 fall victims’ statements)(Powell, J.); Clark, 40 Va. Cir. at 230 (material captioned “prepared in anticipation of litigation”); Moore v. Farm Fresh, No. CL94-20624-RF, Order (Newport News Oct. 30, 1995); Whitehead v. Harris-Teeter, Inc., 28 Va. Cir. 367, 368 (Amherst 1992).
Virginia’s modern rule – including the attached 2008 Suffolk decision in favor of undersigned counsel against Progressive – is insurer, investigative and other claim/risk statements and materials collected routinely are in the “ordinary course of business” by laymen, not “prepared in anticipation of litigation”; and thereby are not privileged. See, e.g., Sandberg v. Virginia Bankshares, Inc., 979 F.2d 332, 355-356 (4th Cir. 1992)(Virginia)(General Counsel’s meeting notes during pending litigation); Sanford v. Commonwealth, 2009 U.S. Dist. LEXIS 66484, *10 (E.D. Va. Jul. 31, 2009)(VCU Health System Risk Management’s transcription of security incident with annotations, dictaphone recorder log, and security paper log) modified on other grounds on reconsideration 2009 U.S. Dist. LEXIS 83979 (E.D. Va. Sep. 14, 2009); Schwarz & Schwarz of Virginia, L.L.C. v. Certain Underwriters at Lloyd’s, 2009 U.S. Dist. LEXIS 33019, *5-14 (W.D. Va. Apr. 17, 2009)(all investigative and other materials before insurer “officially disclaimed coverage” 2 years post-incident); RLI Ins. Co. v. Conseco, Inc., 477 F.Supp.2d 741, 749-750 (E.D. Va. 2007)(insurer’s investigation); Front Royal Ins. Co. v. Gold Players, Inc., 187 F.R.D. 252, 256-259 (W.D. Va. 1999)(insurer’s internal claim file documents, correspondence and reinsurer information, sans reserves set); Collins v. Mullins, 170 F.R.D. 132, 134-136 (W.D. Va. 1996)(internal investigation witness statements); Darnell v. McMurray, 141 F.R.D. 433, 434-436 (W.D. Va. 1992)(state police internal investigation report); Henson v. Wyeth Labs, Inc., 118 F.R.D. 584, 586-587 (W.D. Va. 1987)(Risk Management information); State Farm Fire and Cas. Co. v. Perrigan, 102 F.R.D. 235, 238-239 (W.D. Va. 1984)(investigator and adjuster reports and opinions); Seay v. Chung, No. CL11000546-00 (Faquier Aug. 2013)(insurer’s statement of defendant); Popina v. Rice-Stewart, 2013 Va. Cir. LEXIS 12 (Virginia Beach Apr. 5, 2013)(insurer’s statement of defendant); Lyles v. Calloway, No. CL 10000070-00 (Gloucester Jul. 6, 2012)(“any statement of Defendant and/or other potential witness…taken prior to legal counsel specifically being retained on this case”); Lowe v. Norfolk So. Ry. Co., 81 Va. Cir. 221, 221-227 (Hopewell Sep. 24, 2010)(“in-house investigative documents,” including superintendent’s internal memorandum to general manager, district claims agent’s diagram, and undated computer diagram); Dudley v. Cash, 82 Va. Cir. 1, 18-19 (Augusta Mar. 25, 2010)(insured’s undated computer printout of accident report, insured’s letter and handwritten notes to insurer, insured’s telefax coversheet to insurer, insured’s loss report, insurer’s handwritten claim file notes, insured’s letter with state and local law enforcement authority reports, and insured’s letter to state police); Burr v. R.C. Paving, No. CL08-595, Order (Suffolk Dec. 2, 2008)(Progressive’s statements of defendant and witness); Cintas Corp. No. 2 v. Transcontinental Granite, Inc., 77 Va. Cir. 234, 236-237 (Fairfax Oct. 27, 2008)(multiple communications from client to counsel and others not prepared at request of counsel, including one labeled “CONFIDENTIAL WORK PRODUCT”); Hawkins v. Vann, 74 Va. Cir. 263, 263-264 (Portsmouth Oct. 16, 2007)(contemporaneous accident report); McKinnon v. Doman, 72 Va. Cir. 547, 547-548 (Norfolk Mar. 1, 2007)(insurer’s statement of defendant); Boyd v. Florey, No. CL05-881 (Chesterfield Mar. 30, 2006); Massenburg v. Hawkins, 70 Va. Cir. 13, 16 (Greensville Jun. 27, 2005); Wood v. Barnhill, 52 Va. Cir. 274, 275 (Charlottesville May 23, 2000)(insurer’s statements); Thompson v. Winn Dixie Raleigh, Inc., 49 Va. Cir. 115 (Chesterfield May 28, 1999); Whetzel v. McKee, 44 Va. Cir. 315, 316-17 (Rockingham Jan. 20, 1998)(insurer’s statement 3+ months post-accident); Estabrook v. Conley, 42 Va. Cir. 512, 513 (Rockingham Jul. 25, 1997) (insurer’s statement); Prince v. Ponderosa Steakhouse, Inc., 40 Va. Cir. 466, 472-473 (Albemarle Nov. 18, 1996)(all statements, records, documents and things prior to notice of legal representation); Wyatt v. Bulgart, No. 35032, Order (Hampton Oct. 24, 1996) (insurer’s statement of defendant 2 months after plaintiff retained counsel and sent representation notice); Taylor v. McCallister, 40 Va. Cir. 327, 328 (Alleghany Sep. 19, 1996) (insurer’s statements of parties and third-parties); Shelton v. Blair, 40 Va. Cir. 237 (Pittsylvania Aug. 16, 1996) (insurance adjuster notes); Clark, 40 Va. Cir. at 228-230 (Henry)(insurer’s accident reports, interal memoranda, correspondence, handwritten notes, and typewritten notes); Ramsey v. Gordon, 39 Va. Cir. 409, 409-10 (Lynchburg Jun. 27, 1996) (insurer’s statements of parties and witnesses within 30 days post-accident); Kanchanayothin v. Stancell, 39 Va. Cir. 189, 189-90 (Loudoun Apr. 17, 1996) (insurer’s statement of defendant 28 days post-accident); Carroll v. Blackwell, 1996 Va. Cir. LEXIS 591, *5 (Richmond Jan. 23, 1996) (all pre-suit insurer factual documents); Tanner v. Evans, No. 95-335 (Charlottesville 1996)(insurer’s statements); Billups v. Hunter, No. 31127, Order (Hampton Dec. 28, 1995); Pressy v. State Farm Mutual, No. 20693, Order (Newport News Oct. 24, 1995); Boone v. Jacobson, No. L95-181, Order (Portsmouth Sep. 14, 1995); Schuyler v. Holland, No. CL94-20049W (Newport News Sep. 12, 1995); Schoonmaker v. Rogester, No. CL-94-3969, Letter (Virginia Beach Aug. 17, 1995); Overton v. Dise, 35 Va. Cir. 177, 178 (Fairfax Nov. 9, 1994); Heischman, Inc. v. Reliance Ins. Co., 30 Va. Cir. 235, 243-244 (Albemarle Mar. 1, 1993); Whitehead v. Harris-Teiter, Inc., 28 Va. Cir. 367, 368 (Amherst Jul. 27, 1992); Malone v. Gill Mem’l Eye, Ear, Nose & Throat Hosp., Inc., No. 86-0307, Order #2 at 2 (Roanoke Nov. 6, 1986)(medical malpractice insurance adjuster’s recorded statements); and Brugh v. Norfolk & W. Ry., 4 Va. Cir. 477 (Botetourt Feb. 15, 1979). “If [defense] statements are to be given the status of work product; it is incumbent on [the defense] to state a basis for it, not merely that it is because [the defense] say it is.” Dudley v. Cash, 82 Va. Cir. at 19 (Augusta Mar. 25, 2010)(Defendant “must either provide a basis for finding that his statements are work product, or he must produce them”).
Indeed, “not every document generated by an attorney is protected by work product immunity.” Adair v. EQT Production Co., 285 F.R.D. 376, 382 (W.D. Va. 2012)(emphasis added). Cf., Sandberg, supra, 979 F.2d at 355-356. In Adair, emails of a lawyer who was General Counsel, was Deputy General Counsel and/or reported to General Counsel were not work product despite his affidavit that “the matter involved legal issues. . . and the potential for claims of litigation” and his that employer “anticipated that litigation could ensue,” since he did not prepare them “because of the prospect of litigation”. 285 F.R.D. at 382. (italics in original)(“work product doctrine must be established by specific facts and not conclusory statements”). In Sandberg, the Fourth Circuit Court of Appeals held that (despite affidavit) defendant failed to bear its burden of proving its General Counsel’s internal meeting notes while suit was pending purposely were made in “anticipation of litigation” versus in “ordinary course of business”; that “litigation is an ever-present possibility in American life”; and that “the document must be prepared because of the prospect of litigation”. 979 F2d at 356 (italics in original).
The 2010 opinion in Lowe delineates that “anticipation of litigation” in the abstract is not the legal touchstone; rather, it must be proved to be the motivating factor. “[E]ven if it were reasonably foreseeable to the superintendent at the time he was preparing the form that the incident would result in litigation, the Defendant has failed to show that he was preparing this particular form with that result in mind.” 81 Va. Cir. At 226. “[T]he internal memorandum and the two diagrams were not prepared in anticipation of litigation. They were prepared pursuant to the company’s regular reporting process and simply provide objective documentation of the incident, which helps both parties.” Id. at 227. Accord, Collins, supra, 170 F.R.D. at 134-136.
Ramsey hits the insurance industry nail on the head in finding witness statements to be “obtained in the ordinary course of business”: “The gathering of such information is essential for the insurance industry to properly adjust claims and establish reserves, and the availability of statements obtained in the process is often essential to the integrity of the fact finding process when litigation ensues.” 39 Va. Cir. at 409-410. Likewise, Whetzel debunks and rejects the fallacy of non-attorney “anticipation of litigation” bent: “as a practical matter, it creates a new and clearly-defined exemption from the normal rules of discovery for insurance carriers by effectively ruling that all information obtained by an insurance carrier, even when counsel is not involved and no litigation has been filed and when the injured party, in many cases, has not even retained a lawyer would be automatically exempt from discovery because of the very nature of the insurance company’s business.” 44 Va. Cir. at 317. Similarly, Estabrook debunks the non-attorney “anticipation of litigation” argument:
Although it may not be irrational in the litigious society in which we live to assume that litigation will follow any accident, this assumption cannot be the predicate for the sweeping product protection. To accept such a proposition would create a de facto new class of privileged material which would cover virtually all types of routine accident investigations. If there is going to be such a sweeping change in trial practice, in must come from a General Assembly.
42 Va. Cir. at 513. Hence the great divide between “routine and ordinary course of business” and “anticipation of litigation” reasonably is the insurer receiving a formal notice of claim or, at the least, being directed by counsel – neither of which occurred in the matter sub judice.
Correspondingly, healthcare provider accident reports and witness statements also are not privileged under Virginia’s “work product” doctrine. See, e.g., Fleming v. Mountain States Health Alliance, 2012 U.S. Dist. LEXIS 72795, *16-17 (W.D. Va. May 25, 2012)(Virginia law)(Variance Report and Incident Report Followup not privileged); Flinchum v. INOVA, 84 Va. Cir. 530, 536 (Fairfax Jun. 19, 2012)(“any documents regarding the facts surrounding the Defendant’s stay and her death”); Lordahl v. Centra Health, Inc., No. CL05-006262, Order at 1-2 (Amherst May 28, 2008)(“incident reports, unusual occurrence reports, and their equivalent,” plus “all factual information contained in defendant’s risk management system…, including without limitation statements made by [plaintiff], his family, and the defendant’s staff” not privileged); Matthews v. Maryview Hosp., Inc., 74 Va. Cir. 283, 285 (Portsmouth Oct. 25, 2007)(incident report and witness statements discoverable); Witzke v. Martha Jefferson Surgery Ctr., L.L.C., 70 Va. Cir. 217, 218-220 (Albemarle Feb. 15, 2006); Justis v. Sentara, Order (Williamsburg Apr. 30, 2007); Brown v. Lab. Corp. of Am., 67 Va. Cir. 232, 235 (Rockingham Apr. 7, 2005) (reports prepared 1-3 months after death were “routine” and unprotected, despite deceased’s representative obtaining the medical file and going to a lawyer); McDonald v. Sentara Med. Group, 64 Va. Cir. 30, 37 (Norfolk Mar. 4, 2004)(investigative reports and photographs); McMillan v. Renal Treatment Ctr., 45 Va. Cir. 395, 396-397 (Norfolk Apr. 27, 1998); Benedict v. Cmty. Hosp., of Roanoke Valley, 10 Va. Cir. 430, 437-439 (Roanoke Feb. 29, 1988); Atkinson v. Thomas, 9 Va. Cir. 21, 23 (Virginia Beach Sep. 25, 1986). Similarly unprotected under “work-product” doctrine are healthcare provider incident report databases, see, e.g., Licare v. Riverside, Order (Newport News Aug. 3, 2007)(Tench, J.); Seibert v. Riverside, Second Order (Newport News Jul. 23, 2007)(Pugh, J.); and Riverside v. Johnson, Order (Newport News Feb. 15, 2005) (Pugh, J.); “sentinel event” reports and other pre-suit investigative materials. See, e.g., Morel v. Mary Immaculate, Order at 3-4 (Newport News Jan 8, 2008) (Pugh, J.); Licare v. Riverside, Order (Newport News Aug. 3, 2007) (Tench, J.); Seibert v. Riverside, Second Order (Newport News Jul. 23, 2007) (Pugh, J.); Brown v. Riverside, Order (Newport News Jan. 8, 2002)(Hubbard, J.); and McDonald v. Sentara Med. Group, 64 Va. Cir. 30, 37-38 (Norfolk Mar. 4, 2004)(investigative reports and photographs).
D. “Substantial need” is an exception to any work product privilege.
Sanford v. Commonwealth, 2009 U.S. Dist. LEXIS 83979 (E.D. Va. Sep. 14, 2009) articulates the “substantial need” exception of Virginia’s work product doctrine. Notably “the qualified immunity for fact work product is ‘little more than an anti-freeloader rule’,” and “the seeking party’s burden is not terribly demanding”. Id. at *8 (emphasis added). Virginia’s work product privilege is based Federal work product doctrine and still looks to it for precedent.
Sanford held various investigative statements to be privileged as work product where “in response to threats of litigation allegedly made by decedent’s family members on the day of the incident …, VCU Risk Management took numerous interviews of persons associated with the incident.” Id. at *4. After initial hearing, the Court found plaintiff had shown substantial need re the privileged statements of 2 MCV administrators taken on the day of incident, which included “two event chronicles and an email”. Id. at *5-6.
The Court granted plaintiff leave to demonstrate substantial need re the remaining privileged materials. After supplemental hearing, the Court in Sanford found plaintiff also provided substantial need for Risk Management’s interview statements of: (1) 2 party nurses taken 3 days post-incident; (2) a resident physician taken 4 days post-incident; (3) a consulted psychiatrist taken 5 days post incident; (4) an on-call physician taken 2 weeks post-incident; and (5) all police officers taken as follow-up more than 1 month post-incident. Id. at *6-25.
Sanford highlighted controlling Fourth Circuit authority on the uniqueness of contemporaneous materials and the sufficiency of time/memory lapse re substantial need:
Statements of either the parties or witnesses taken immediately after the accident and involving a material issue in an action arising out of that accident, constitute ‘unique catalysts in the search for truth.’ ****
[T]he lapse of many months and the dimming of memory provides much reason for counsel to examine any substantially contemporaneous declarations or admissions.
Id. at *9-10 (quoting National Union Fire Ins. Co. v. Murray Sheet Metal Co., Inc., 967 F.2d 980, 985 (4th Cir. 1992) and McDougal v. Dunn, 468 F2d 468, 474 (4th Cir. 1972)(insurer’s statements). Cf., Goosman v. A. Duie Pyle, Inc., 320 F.2d 45, 52 (4th Cir. 1963). Sanford also condemned “an overbroad privilege”: “it would not be reasonable to expect a layperson, injured in an accident, to immediately hire an investigator or an attorney to record the contemporaneous statements of the party allegedly responsible for the accident.” Id. at *10-11.
Sanford rejected as irrelevant that Risk Management versus administrative personnel prepared the investigative statements. “The applicable law makes no such distinction.” Id. at *12.
Sanford also rejected that depositions years or even months after-the-fact were the supposed “subjective equivalent” of statements taken days or even a month post-incident “while events were still fresh… in mind,” even though “the deposition[s] provided some useful information”. Id. at *17-24. The Court observed how depositions tended to be fraught with “forgetfulness,” “inconsistencies,” and “ambiguities”; and that contemporaneous statements “could also strengthen the Plaintiff’s case by providing material to impeach,” “clarity,” and otherwise. Id. at 15 (italics in original).
E. Failure to tender Plaintiff a “privilege log” and the Court for in camera review all responsive things withheld constitutes bad faith vitiating any claim of privilege.
Va. Sup. Ct. Rule 4:1(b)(6), entitled “Claims of Privilege or Protection of Trial Preparation Materials,” mandates on point:
When a party withholds information otherwise discoverable under these Rules by claiming that it is privileged or subject to protection as trial preparation material, the party shall make the claim expressly and shall describe the nature of the documents, communications, or things not produced or disclosed in a manner that, without reviewing information itself privileged or protected, will enable the other parties to assess the applicability of the privilege or protection.
(emphasis added). Cf, e.g., Lowe, supra, 81 Va. Cir. at 221; and Cintas, supra, 77 Va. Cir. at 236. Each item on that required “privilege log” must be “described with sufficient specificity,” or the claim of privilege fails:
It is apparent from the record that these items contain numerous discrete pieces of information gathered by various individuals at various dates for various purposes. Neither privilege log provides specific information with regard to any of these discrete pieces of information. Absent such information, Plaintiff cannot adequately assess the applicability of the privileged claimed for those items. Therefore, Defendant has not met her burden under Rule 4:1(b)(6) with respect to these items.
Eppard v. Kelly, 62 Va. Cir. 57, 58 (Charlottesville 2003).
“Parties seeking to challenge a claim of privilege have sparse information at their disposal. Because they do not actually have access to the privileged documents, they must rely on the opposing party’s description of them in the privilege log. ‘Accordingly, the descriptions in the log must satisfy the claiming party’s burden [of proving work product privilege].’ ePlus Inc. v. Lawson Software, Inc., 280 F.R.D. 247, 252 (E.D. Va. 2012)(quoting Rambus, Inc. v. Infineon Techs AG, 220 F.R.D. 264, 272 (E.D. Va. 2004)).” Adair v. EQT Prod. Co., 285 F.R.D. 376, 381 (W.D. Va. Sep. 14, 2012). Cf., e.g., Sanford, supra, 2009 U.S. Dist. LEXIS 83979 at *3-5; and Schwarz, supra, 2009 U.S. Dist. LEXIS 33019 at *3.