Summary
sanctioning party under Hyde Park and Chambers based on party's frequent and conscious "failure to meet its discovery obligations" and awarding adversary its reasonable legal fees
Summary of this case from Brick v. HSBC Bank USAOpinion
02 Civ. 5461 (NRB)(KNF)
March 1, 2004
MEMORANDUM AND ORDER
I. INTRODUCTION
In this action for breach of an insurance contract, brought under the court's diversity jurisdiction, cross motions for discovery sanctions have been filed by defendant Federal Insurance Company ("Federal") and by plaintiff Invision Media Communications, Inc., and INTV, Inc. (collectively "INTV"). INTV has also moved to compel Federal to: (a) disclose documents that Federal has identified as protected by the attorney-client privilege and/or the work product doctrine; (b) produce individuals for depositions; and (c) respond to specified interrogatories and document requests.
INTV, Inc and Invision Media Communications, Inc., have placed in the record a Certificate of Merger issued by the Secretary of State of Delaware, indicating that they merged into one entity on May 5, 2000. For ease of reference only, the Court will refer to the plaintiffs in the singular form as "INTV."
Federal contends that the plaintiff has: (i) made false statements regarding the location and existence of its documents; (ii) failed to disclose or to disclose timely requested documents; (iii) destroyed evidence relevant to this action; and (iv) committed other violations of the Federal Rules of Civil Procedure and the Individual Rules of Practice of the assigned district judge and of this Court for which sanctions are required. As a sanction for these alleged violations, Federal has requested that the action be dismissed, that the plaintiff be precluded from offering evidence on damages it is alleged to have suffered as a consequence of the breach of contract, and/or that a monetary sanction be imposed on the plaintiff.
For its part, INTV maintains that Federal has improperly asserted the attorney-client privilege and/or the work product doctrine in refusing to disclose 85 documents sought by the plaintiff. Accordingly, the plaintiff has moved to compel disclosure of those documents, and has requested that, if necessary, the Court conduct an in camera review of the documents that have been withheld from disclosure. The plaintiff contends that Federal and its counsel have obstructed discovery intentionally by: withholding documents from disclosure improperly; failing to respond to interrogatories adequately; and making false statements regarding the existence of documents. As a sanction for this alleged misconduct, the plaintiff seeks monetary sanctions and an order striking the defendant's Answer.
For the reasons discussed below, Federal's request for monetary sanctions is granted. INTV's request for an order compelling Federal to disclose documents is granted, in part, and denied in part. INTV's request for an order compelling Federal to supplement its responses to the plaintiff's discovery demands, pursuant to Rule 26(e) of the Federal Rules of Civil Procedure, is granted. INTV's request for an order compelling Federal to produce individuals for depositions is granted in part, and denied in part. Its request for sanctions is denied.
II. BACKGROUND
INTV is a Delaware corporation engaged in the business of providing television and internet-related production and recording facilities. Prior to the autumn of 2001, INTV maintained offices or other facilities in at least four buildings in Manhattan: 5 West 37th Street, 8 West 38th Street, 600 Broadway and 632 Broadway. INTV alleges that, during the two-week period following the September 11, 2001 attack on the World Trade Center, civil authorities either closed or restricted access to the sections of Manhattan in which INTV's facilities were located. Due to the lack of access to its facilities, INTV contends that it experienced a substantial decrease in revenue, because it lost business, and experienced a substantial increase in its expenses, stemming from efforts it made to safeguard its facilities and to resume normal business operations.
On or around October 2, 2002, INTV filed an insurance claim with Federal, an Indiana corporation that had previously issued to INTV a policy insuring INTV against certain risks of loss associated with the facilities it maintained at the above-referenced locations. INTV also reported to Federal that it needed an advance payment on its claim urgently, in the amount of $200,000, because of cash flow problems it was experiencing. On or about October 8, 2002, Federal approved advance payments to INTV on its claim, totaling $65,000. On October 30, 2002, Craig Notte, an attorney representing INTV, sent a letter ("Notte Letter") via facsimile to Scott Pringle ("Pringle"), an agent at Federal who was working on INTV's claim. In part, the letter contained the following information:
As you are well aware, INTV suffered enormous losses because of September 11th, and as a result, is on the brink of going out of business. Specifically, because of impossible cash flow problems, INTV is about to lose possession of its television production studio at 632 Broadway to its owner unless INTV immediately pays rent and utility arrears, plus other costs associated with its possession. INTV's studio at 632 Broadway generates a substantial portion of INTV's monthly revenue, and if it is lost, INTV's fate will be sealed.
The irreparable harm facing INTV must propel you to act immediately. Unless a substantial sum is paid to INTV tomorrow, INTV's damages will be magnified to the point where it will be forced out of business. INTV would then have no choice but to pursue all available legal remedies against Chubb [an insurance company affiliated with the defendant]. The sum to be paid immediately must not be less than $200,000, which is a fraction of its total claim.
Over the next several months, Federal continued to adjust INTV's claim. During that time, INTV reduced the size of its staff. Furthermore, between November 2001 and April 2002, INTV moved out of its West 37th Street, West 38th Street and 632 Broadway facilities. Attempts to settle the insurance claim were unsuccessful, and INTV filed an action in the New York State Supreme Court, New York County, in June 2002. The defendant removed that action to this court on July 17, 2002.
On October 1, 2002, Federal's counsel, H. Christopher Boehning ("Boehning"), served a request for production of documents on INTV's counsel, Barbara A. Matarazzo ("Matarazzo"), requesting, inter alia:
*** 4. All documents concerning the payment of insurance premiums by Plaintiffs to Federal.
5. All documents, including time sheets, pay stubs, overtime requests or records, concerning work performed by employees of Plaintiffs during the year 2001.
6. All documents, including bank statements and cancelled checks, concerning or reflecting payments by Plaintiffs to their employees during the year 2001.
***
17. All documents concerning payment of any bills or invoices by the Plaintiffs to the landlord or landlords of 600 Broadway, including cancelled checks or bank statements. *** 24. All electronic mail communications sent or received by Plaintiffs during August 2001, September 2001 and October 2001.
In its response to the corresponding document requests noted above ("Plaintiffs Document Request Response"), INTV stated the following:
4. Documents concerning the payment of insurance premium are attached hereto as Exhibit C. All checks from 2001 have been put in storage.
5. The overtime hours that employees worked were accounted for in the spreadsheet previously provided as part of proof of loss. The 2001 time sheets are in storage. Upon retrieval, if any are responsive to this inquiry, they will be provided.
6. Checks for employee payments not in storage are attached hereto as Exhibit D. The remaining responsive documents are in storage and will be provided when obtained.
***
17. The documents (checks, statements and bank statements) in Plaintiff's possession are attached hereto as Exhibit K. When other documents in storage become available, they will be provided.
***
24. None in plaintiff's possession as all electronic mail is archived on servers for two weeks only.
Attached to the Plaintiffs Document Request Response were copies of bank statements for the period February 24, 2001, through September 25, 2001, as well as copies of a number of checks, for an account at Chase Manhattan Bank ("Chase").
The plaintiff maintains that during November 2002, agents of the plaintiff twice visited the storage facility used by the plaintiff and searched for the documents referenced above. In a letter to Boehning dated December 12, 2002, Matarazzo wrote:
I want to update you on the completion of our document production. I am informed by my client that their bank is in the process of reprinting the requested statements and checks from their microfiche. The e-mails have proven impossible to obtain, as the information no longer exists on the computers.
I am now advised by the bank that the documents should be available by mid-January.
In a subsequent letter to Boehning, Matarazzo stated again that her client could not find the relevant checks and bank statements in storage, and that copies of the same had been requested from the plaintiff's bank. In a December 18, 2002 letter, Matarazzo also reminded Boehning that she had previously advised him that "the 2001 time sheets were in storage and my client has not yet been able to locate it [sic]."
In response to the Matarazzo letters, Federal demanded that all responsive documents be produced by December 27, 2002, and that INTV identify, inter alia, the bank that was reproducing the checks and statements and the name and address of the storage facility referred to in the Plaintiffs Document Request Response. Additional correspondence followed. However, Federal became dissatisfied and wrote to the assigned district judge, who directed that INTV produce a witness to testify about the chain of custody of the documents which INTV had been unable to locate.
On January 15, 2003, the plaintiff disclosed additional bank statements and copies of checks. The plaintiff acknowledged that its disclosure, insofar as it related to checks, was still incomplete due to difficulties the bank was experiencing in reproducing legible copies of its microfiche records. Matarazzo stated that the bank estimated that it would require an additional two or three months to reproduce the 262 checks requested, and that the cost of doing so would be $18 per check. The plaintiff objected to having to pay the cost of reproducing the checks.
Matarazzo's letter also stated that the requested bank statements that Federal had requested were enclosed with that letter, "in total." However, the documents attached to that letter did not include bank statements for the periods September 26, 2001, through October 23, 2001, and May 23, 2002, through June 24, 2002. According to the defendant, it alerted the plaintiff to the omission of the September 26, 2001 bank statement in a letter dated January 22, 2003. The defendant brought the omission to the attention of the court in a February 11, 2003 letter.
On January 21, 2003, the plaintiff's general counsel, Carlin Ross ("Ross"), was deposed by Federal about the chain of custody regarding the documents that the plaintiff had been unable to locate. Ross testified that when INTV closed its West 37th Street facility in November or December of 2001, she placed all physical documents maintained there into boxes and they were transported to INTV's West 38th Street facility. Ross testified further that subsequently, when INTV closed its West 38th Street facility, she placed the documents located there into boxes, which were then transported to INTV's 600 Broadway facility. She noted that the documents in these boxes — which included "[a]ll of our contracts, all of our banking records, tax returns, employee — any kind of employee files or payroll taxes or bank account files" — were placed into filing cabinets at 600 Broadway, where they remained, as of the date of the deposition, with the exception of some "old marketing materials," which were discarded. Ross stated that none of INTV's documents were in storage as of the date of the deposition, and none had ever been in storage prior to that date. Ross explained that previously, until November 2002, she had believed that two boxes of documents from INTV's West 37th Street and West 38th Street facilities, that contained checks, bank statements and equipment leases, were transported to a storage facility in New Jersey rather than to 600 Broadway. Ross also identified the name and the location of the New Jersey storage facility that INTV used. She explained further that, two individuals had inspected the storage facility on INTV's behalf in November 2002, but did not find any documents in the storage unit(s) rented by INTV. Ross also testified that when INTV closed its West 38th Street facility in or around January 2001, she directed that the hard drives of computers used by individuals no longer employed by INTV be "wiped," i.e., permanently erased.
On January 30, 2003, the defendant requested that it be permitted to inspect INTV's New Jersey storage facility and the items housed there. The defendant also requested permission to inspect the 600 Broadway facility for the purpose of examining and photographing the physical plant and INTV's computer equipment. The plaintiff objected to the requested inspections.
The assigned district judge referred this action to the undersigned for the purpose of resolving the parties' discovery disputes. Thereafter, the Court held a conference with the parties on March 18, 2003 ("March 18th Conference"). At the conference, Federal indicated that it wanted to expand the scope of its inspection at INTV's 600 Broadway facility to include an inspection of the contents of the plaintiffs file cabinets at that location. After a lengthy discussion about the appropriate scope of Federal's inspection, the Court directed that the inspection could proceed, but would be limited to the relevant documents at 600 Broadway that pertained to the period January 2001 through June 2002.
During the conference, the plaintiffs counsel explained that INTV never created time sheets for its employees and that the only time sheets it did create were for independent contractors it employed during the period September 2001 through October 2001. At the conference, Federal also renewed its request for the plaintiffs September 26, 2001 — October 23, 2001 bank statement. The plaintiff's counsel responded that the bank statement for that period had already been disclosed to the defendant. However, she agreed to disclose another copy of the bank statement to Federal by March 21, 2003, and did so on that date.
Ross attended the March 18th Conference and sat at plaintiffs counsel's table. Later, in an affidavit dated May 22, 2003, Ross stated that during the conference, she "advised Ms. Matarazzo that we did not create time sheets for our salaried employees, that the independent contractors would fill out time sheets, and that we had already provided those to the defendant with the proof of loss."
On March 26, 2003, the defendant conducted an inspection of INTV's 600 Broadway facility. During the inspection, the defendant began to examine and photograph the contents of a file cabinet. However, a representative of the plaintiff objected and the inspection of documents was halted. An inspection of the plaintiff's storage space in New Jersey was also undertaken. No documents were found during the storage facility inspection.
On April 3, 2003, the Court held another conference with the parties. During that conference, Matarrazo represented to the Court that no relevant INTV documents were housed at the 600 Broadway facility. She stated that all such documents were located at her office. The Court inquired of Matarazzo why she had not revealed this fact at the March 18th Conference. Matarazzo explained that, at that time, she did not know whether any undisclosed relevant documents were housed at that location.
Thereafter, the instant motions were filed. While the motions were being briefed, the defendant agreed to modify its request for checks by limiting it to those issued during September and October 2001, and the plaintiff agreed to pay the reproduction fees charged by its bank. According to the plaintiff, some, but not all, of the checks from that period were disclosed to Federal on May 12, 2003, and the plaintiff continued to seek the balance from its bank.
III. DISCUSSION
Rule 26(g)(2) of the Federal Rules of Civil Procedure provides that:
Every discovery . . . response . . . made by a party represented by an attorney shall be signed by at least one attorney of record in the attorney's individual name, whose address shall be stated. . . . The signature of the attorney or party constitutes a certification that to the best of the signer's knowledge, information, and belief, formed after a reasonable inquiry, the . . . response . . . is: (A) consistent with these rules and warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; (B) not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation; and (C) not unreasonable or unduly burdensome or expensive, given the needs of the case, the discovery already had in the case, the amount in controversy, and the importance of the issues at stake in the litigation.
Fed.R.Civ.P. 26(g)(2) (emphasis added).
The Advisory Committee Notes for Rule 26 explain further the duty imposed by the provisions of the Rule quoted above:
Rule 26(g) imposes an affirmative duty to engage in pretrial discovery in a responsible manner that is consistent with the spirit and purposes of Rules 26 through 37. In addition, Rule 26(g) is designed to curb discovery abuse by explicitly encouraging the imposition of sanctions. The subdivision provides a deterrent to both excessive discovery and evasion by imposing a certification requirement that obliges each attorney to stop and think about the legitimacy of a discovery request, a response thereto, or an objection. The term "response" includes answers to interrogatories and to requests to admit as well as responses to production requests.
Fed.R.Civ.P. 26(g) Advisory Committee Notes to 1980 Amendment.
Rule 37 of the Federal Rules of Civil Procedure provides that if a party fails to obey a discovery order a court may make such orders in regard to the failure as are just, including dismissal of the action or entry of an order striking some or all of a party's pleadings. Fed.R.Civ.P. 37(b). "Even in the absence of a discovery order, a court may impose sanctions on a party for misconduct in discovery under its inherent power to manage its own affairs." Residential Funding v. DeGeorge Financial Corp., 306 F.3d 99, 106-107 (2d Cir. 2002). Where "the nature of the alleged breach of a discovery obligation is the non-production of evidence, a district court has broad discretion in fashioning an appropriate sanction." Id., at 107. In particular, the court's inherent power includes "the ability to assess attorney's fees when a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons." DLC Management Corp. v. Hyde Park, 163 F.3d 124, 136 (2d Cir. 1998) (quoting Chambers v. NASCCX 501 U.S. 32, 45, 111 S.Ct. 2123, 2133) (internal quotation marks omitted).
In light of the above, the parties' respective motions for sanctions are addressed below, as are the plaintiff's motions to compel the defendant to respond to the plaintiff's discovery demands.
Defendant's Sanctions Motion
In this action, Federal contends that INTV has intentionally concealed employee time sheets, checks, electronic mail, and other material that would help establish or disprove the losses INTV alleges it suffered in the wake of the September 11, 2001 attack upon the World Trade Center. Federal alleges that in the course of doing so, INTV disobeyed discovery orders, made false statements under oath, and made inaccurate representations to Federal in an attempt to hinder its investigation into the facts underlying this action. However, the Court finds that the plaintiff's misconduct, in this case, does not warrant the most severe sanction, dismissing the action, and does not warrant sanctions pursuant to Fed.R.Civ.P. 37.
In order to determine whether sanctions short of dismissal and pursuant to the Court's inherent powers to manage its own affairs are appropriate, it is necessary to determine whether the plaintiff breached its discovery obligations and, if so, whether it has done so in bad faith.
The Court's review of the parties' submissions, and of the record in this action reveals at least four instances in which INTV has made false or misleading statements, either in response to formal or informal document requests from its adversary, or in response to inquires made by the Court.
In response to a request for "time sheets . . . concerning work performed by employees during the year 2001," Defendant's First Request for Production of Documents ¶ 5 ("Defendant's Request for Documents"), INTV stated that "[t]he 2001 time sheets are in storage." Plaintiffs Document Request Response ¶ 5. This response implied that INTV kept time sheets for its employees during 2001. If, as INTV now persuasively maintains, it created time sheets solely for the independent contractors it engaged and not for any of its employees, the response it made to Federal's request was misleading and caused the defendant to believe that time sheets that had not been disclosed existed. The plaintiff argues that shortly after September 11, 2001, and many months before the commencement of this action, Ross informed an accountant and a claims adjuster working for Federal that INTV's "regular salaried" employees did not keep time sheets. The next mention of this fact by INTV appears to have occurred at the March 18th Conference held by the Court, nearly six months after the date of Federal's document request.
Matarazzo contends that INTV's document request response "was referring to the time sheets filled out by independent contractors." However, Federal's document request was expressly directed to time sheets maintained by INTV for its employees, not its independent contractors. Moreover, according to Ross, the time sheets that did exist had already been disclosed to Federal as part of INTV's insurance claim. Under the circumstances, and especially in view of the controversy that ensued as a consequence of the misunderstanding created by INTV through its response to Federal's document request, a reasonable response to the defendant's document request would have indicated that no time sheets were kept for employees.
In response to a request for "[a] 11 electronic mail communications sent or received by Plaintiffs during August 2001, September 2001 and October 2001," Defendant's Request for Documents ¶ 24, INTV stated that no electronic mail was in the plaintiffs possession because electronic mail was retained for two weeks only. Plaintiffs Document Request Response ¶ 24. On December 12, 2002, Matarazzo represented to Federal that "[t]he e-mails have proven impossible to obtain, as the information no longer exists on the computers." These statements were false, as demonstrated by the plaintiffs eventual disclosure of electronic mail documents found on computers in its possession. INTV did not disclose that it possessed electronic mail for the relevant period until January 21, 2003, when Ross was deposed. A reasonable inquiry by the plaintiffs counsel prior to responding to Federal's document request or preparing the December 12, 2002 letter would have alerted counsel that the plaintiff possessed electronic mail that fell within the scope of Federal's document request.
On January 15, 2003, INTV represented falsely to Federal that INTV was providing Federal with copies of all bank statements encompassing the period July 27, 1999, through July 23, 2002; the September 26, 2001 — October 23, 2001 Chase bank statement was omitted from that disclosure. In response, Federal brought the omission to INTV's attention on January 22, 2003, and February 11, 2003. Only after the defendant sought an order from the Court, at the March 18th Conference, compelling disclosure of the withheld bank statement, did INTV disclose that document. Moreover, the plaintiff's general counsel has continued to display an unwillingness to investigate matters thoroughly before making representations to the Court in connection with this matter. In her May 22, 2003 affidavit, Ross still maintains that the plaintiff's production of bank statements on January 15, 2003, included the September 26, 2001, Chase bank statement. A simple review of the material in plaintiffs January 15, 2003, disclosure, that is part of the affidavit of INTV's litigation counsel, makes it plain that this is not the case. In view of the repeated notice provided to the plaintiff, INTV's conduct with respect to disclosing this bank statement can only be regarded as a knowing failure to respond to Federal's document request.
The plaintiff led the Court and Federal to believe, inaccurately, that as of March 18, 2003, relevant documents were housed at 600 Broadway. Ross testified at her deposition on January 21, 2003, that boxes of documents, including "[a]ll of our contracts, all of our banking records, tax returns, employee . . . files or payroll taxes," had been placed into file cabinets at 600 Broadway, and remained at that location. It was not until either the time of Federal's inspection of the 600 Broadway facility, or shortly after it occurred, that INTV revealed that no relevant documents were located at 600 Broadway because all such documents were located at Matarazzo's office. For her part, Matarazzo maintains that she was unaware at the time of the March 18th Conference, whether additional responsive documents might be located at 600 Broadway. However, Ross, who was also present at the March 18th Conference, either did not know what relevant documents, if any, remained at 600 Broadway, or simply opted not to advise Matarazzo as she addressed the Court.
While it is true, that the first time the defendant raised the issue of inspecting files at 600 Broadway was during the March 18th Conference, the conference was held many months after the filing of this action and after several months of controversy regarding the location of documents generated during 2001 and 2002. The parties were required by Fed.R.Civ.P. 26 to ascertain the location of relevant documents long before March 18, 2003. Moreover, it appears that at some point between March 18, 2003, and the March 26, 2003 inspection, Ross and Matazarro became aware that no relevant documents were located at 600 Broadway. Yet there is no evidence in the record before the Court that INTV made any effort to inform Federal of this fact before it expended resources on the inspection. The plaintiff's conduct, in this regard, was not consistent with its discovery obligations.
In addition to the four instances of discovery misconduct outlined above, the defendant contends that numerous other actions or omissions by the plaintiff also warrant sanctions. The Court has reviewed each of these contentions and finds, based on the evidence in the record, that none rises to the level of sanctionable conduct. Perhaps the most serious additional contention is that the plaintiff caused evidence to be spoliated when Ross directed that the computer hard drives that had been used by terminated employees be erased in January 2001. However, in order to prevail on this point, the defendant would need to make some showing that relevant evidence might have been deleted. The defendant has not done so.
Nevertheless, the four instances of misconduct outlined above are sufficient to warrant the imposition of sanctions against the plaintiff. In each of these four instances, the plaintiff has disregarded its discovery obligations, made misleading statements regarding the existence and location of relevant evidence, and/or failed to make reasonable inquiries into matters pertinent to the pretrial discovery phase of this litigation. The plaintiff's conduct has resulted in several months of unnecessary delay, and numerous hours of unnecessary work on the part of the parties and the Court. The frequency and clarity of the plaintiff's discovery failures persuades the Court that the plaintiff's failure to meet its discovery obligations was conscious, and was a bad faith effort to hinder Federal's investigation of the facts underlying this action. Accordingly, it is appropriate for the Court to impose sanctions. See DLC Management Corp., 163 F.3d at 136 ("a pattern of behavior which could reasonably be construed as a bad faith effort to thwart plaintiffs' discovery efforts" supports a finding that plaintiffs consciously disregarded discovery obligations, meriting sanctions).
In order to compensate the defendant for resources expended pursuing discovery requests unnecessarily, and in order to provide a reasonable deterrent to conduct such as that exhibited by the plaintiff, INTV will be directed to pay the costs and reasonable attorney's fees that the defendant incurred in connection with: a) the March 18th Conference; b) Ross' January 21, 2003 deposition; c) Federal's March 26, 2003 inspection of 600 Broadway; and d) making this sanctions motion.
Plaintiffs Motion to Compel
In response to INTV's request for documents, Federal has withheld 85 items that it alleges are covered by the attorney-client privilege and/or the work product doctrine. These items stem from the work of John Nocera ("Nocera"), an attorney hired by Federal in November 2001 to perform legal work in connection with the insurance claim underlying this action.
The work product doctrine is set forth in Rule 26 of the Federal Rules of Civil Procedure:
[A] party may obtain discovery of documents and tangible things otherwise discoverable under subdivision (b)(1) of this rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means.
The work-product doctrine "is intended to preserve a zone of privacy in which a lawyer can prepare and develop legal theories and strategy with an eye toward litigation, free from unnecessary intrusion by his adversaries." United States v. Adlman, 134 F.3d 1194, 1196 (2d Cir. 1998) (internal quotation marks omitted). "Where a document was created because of anticipated litigation, and would not have been prepared in substantially similar form but for the prospect of that litigation, it falls within Rule 26(b)(3)." Id. at 1195.
The purpose of the attorney-client communication privilege is to protect only those confidential communications exchanged between an attorney and his or her client that are necessary for the client to obtain and the attorney to provide informed legal advice. The privilege, designed to facilitate openness and full disclosure between the attorney and the client, shields from discovery advice given by the attorney as well as communications from the client to the attorney. See e.g., Upjohn Co. v. United States, 449 U.S. 383, 101 S.Ct. 677 (1981).
Federal claims that all 85 documents identified in its privilege log are within the scope of the work product doctrine. The Notte Letter, dated October 30, 2001, informed Federal that unless it paid INTV an advance of $200,000 "tomorrow," INTV's fate would be "sealed," and "INTV would then have no choice but to pursue all available legal remedies against" the insurer. In the context of the underlying dispute, the Court finds that the threat of litigation contained in the Notte Letter was sufficient to place Federal in reasonable anticipation of litigation by INTV. The plaintiff claims that after this letter was sent to Federal, the defendant hired Nocera to perform claims adjuster work with respect to its claim for coverage. However, the Court finds, based on the record evidence, that Nocera was hired to provide legal services to Federal in preparation for the anticipated litigation with INTV.
A review of the privilege log shows that 84 of the documents listed in the log were either created by Nocera or prepared under his direction after November 5, 2001, the date on or around which Nocera was hired. The descriptive entries for the documents noted in the log indicate that they are covered by the work product privilege asserted by Federal. The Court finds that the proof offered by the plaintiff to establish that Nocera held himself out to the plaintiffs representatives as a mere claims adjuster is insufficiently persuasive to rebut the evidence produced by the defendant to establish that Nocera was engaged to provide legal services. Therefore, the defendant need not disclose to the plaintiff the 84 documents referenced above, perforce of the work product privilege.
The remaining document allegedly within the scope of the work product doctrine is described in the privilege log as a "Spreadsheet created by an accountant in anticipation of litigation." Raymond McErlean ("McErlean") is identified as its creator. The evidence in the record before the Court shows that McEarlean worked on the INTV insurance claim both before and after Nocera was hired. The entry in the privilege log that corresponds to McErlean's spreadsheet does not indicate the date on which the document was created. Therefore, the Court finds that Federal has not provided sufficient information to support its claim that this document is protected from disclosure by the work product doctrine. The defendant has asserted no other ground for withholding this document from disclosure. Accordingly, the defendant must disclose the McErlean spreadsheet to the plaintiff expeditiously.
The defendant also asserts that 51 of the 84 documents protected by the work product doctrine also fall within the scope of the attorney-client privilege. A review of the defendant's privilege log shows that 45 of these 51 documents were communications between Nocera and an agent of his client concerning litigation. Based on a review of the descriptive entries noted in the log, the Court finds that these documents are covered by the attorney-client privilege. The descriptive information provided regarding the remaining six documents, entry numbers 58, 76, 82, 83, 84 and 85, indicates that they are not confidential communications between an attorney and his client. The items are documents drafted or notes taken by Nocera regarding matters other than privileged communications with his client. This is insufficient to support a finding that the attorney-client privilege attaches to them.
The plaintiff also seeks an order compelling defendant to produce for depositions Nocera, McErlean, Pringle, and Mark Zimmerman ("Zimmerman"), an employee of Federal. The defendant maintains that depositions of Nocera and McErlean need not occur because those individuals are not parties to this action and have not been served with subpoenas commanding them to appear for depositions. Subpoenas for these individuals were served on the defendant's counsel, but there is no evidence in the record indicating that defendant's counsel represents Nocera or McErlean or that it agreed to accept service of the subpoenas on their behalf. Accordingly, the plaintiff's request is denied with respect to Nocera and McErlean. The defendant also maintains that the depositions of Pringle and Zimmerman should not proceed until the defendant has deposed certain employees of INTV. Without more, this is not an adequate basis for declining to proceed with depositions.See Fed.R.Civ.P. 26(d). Accordingly, the parties should confer, and, thereafter, select the earliest mutually convenient times at which depositions of Pringle and Zimmerman can be taken.
INTV also seeks an order requiring Federal to supplement its disclosures made pursuant to Rule 26(a) of the Federal Rules of Civil Procedure, as well as its response to INTV's interrogatories. In particular, INTV contends that the insurance policy issued to it by the defendant was not disclosed, that the defendant has failed to provide a computation of the "plaintiffs" damages, and that the defendant's identification of responsive documents was inadequate. The defendant states that it has disclosed the insurance policy to the plaintiff. There is no need for it to do so again. Rule 26(a)(1)(C) requires that each party disclose "a computation of any category of damages claimed by the disclosing party." Accordingly, the defendant need not disclose a computation of damages claimed by the plaintiff, as the plaintiff is not the disclosing party. Rule 26(a)(1)(B) requires that each party provide to other parties "a copy of, or a description by category and location of, all documents, data compilations, and tangible things that are in the possession, custody, or control of the party and that the disclosing party may use to support its claims or defenses, unless solely for impeachment." The plaintiff's interrogatories, in pertinent part, request substantially the same information. The defendant maintains that the description of documents provided in its Rule 26(a) disclosures, dated October 7, 2002, satisfies Rule 26(a)(1)(B) and is an adequate response to the plaintiff's interrogatories. The Court finds that the defendant's description of pertinent documents to be insufficient. For example, one "category" of documents listed in the defendant's Rule 26(a) disclosures is "Plaintiffs underwriting files." Given the nature of the claim underlying this action, that is too broad a category to satisfy the requirements of Rule 26(a). The Advisory Committee Notes to the 1993 Amendment to Rule 26 state that in order to satisfy Rule 26(a)(1)(B),
an itemized listing of each exhibit is not required, the disclosure should describe and categorize, to the extent identified during the initial investigation, the nature and location of potentially relevant documents and records, including computerized data and other electronically-recorded information, sufficiently to enable opposing parties (1) to make an informed decision concerning which documents might need to be examined, at least initially, and (2) to frame their document requests in a manner likely to avoid squabbles resulting from the wording of the requests. . . .
Accordingly, the defendant is directed to supplement its responses to the plaintiff's discovery demands.
Plaintiffs Sanctions Motion
INTV contends that Federal has: 1) made intentional misrepresentations regarding the existence of underwriting guidelines and about the privilege attached thereto; 2) made intentional misrepresentations regarding the existence of discoverable documents at the New Jersey storage facility; 3) abused meet-and-confer conferences between the plaintiff and the defendant that were intended to resolve discovery disputes without court intervention; and 4) failed wrongly to disclose the documents identified in the defendant's privilege log that were discussed above. For each of these acts or omissions, INTV contends that Federal should be sanctioned.
The Court has considered these contentions and, based on the record as a whole, the Court is not persuaded that the defendant engaged in conduct warranting that sanctions be imposed. Therefore, the plaintiff's motion for sanctions is denied.
IV. CONCLUSION
For the reasons set forth above, Federal's motion for sanctions against INTV is granted. Federal shall, within two weeks of the date of this Memorandum and Order, submit competent evidence to the plaintiff, in the form of affidavits or otherwise, of the costs and reasonable attorney's fees it incurred in connection with: (i) the March 18th Conference; (ii) Ross' January 21, 2003 deposition; (iii) Federal's March 26, 2003 inspection of 600 Broadway; and (iv) making its sanctions motion. INTV shall tender payment to Federal for the above-noted costs and reasonable attorney's fees within ten days of its receipt of the defendant's proof of its costs and fees. Should INTV challenge the reasonableness of Federal's claimed costs and fees, it must advise the Court, in writing, prior to the expiration of the ten-day period, so that the Court may resolve the matter.INTV's motion to compel Federal to disclose documents withheld on the ground of privilege is granted in part, and denied in part. INTV's motion to compel Federal to supplement its responses to the plaintiff's discovery demands is granted. INTV's motion to compel Federal to produce individuals for deposition is granted in part, and denied in part. INTV's motion for sanctions against Federal is denied.
SO ORDERED.