United States District Court, D. New Mexico
ORDER GRANTING MOTION TO COMPEL
HONORABLE CARMEN E. GARZA CHIEF UNITED STATES MAGISTRATE
MATTER is before the Court on Plaintiff's
Motion to Compel Zurich America Life Insurance Company to
Produce an Unredacted Copy of a Memorandum
("Motion"), (Doc. 101), filed February 21, 2019;
Defendant's Opposition to Plaintiff's Motion to
Compel ("Response"), (Doc. 108), filed March
14, 2019; and Plaintiffs Reply in Support of
Plaintiff's Motion to Compel ("Reply"),
(Doc. 110), filed March 28, 2019. On March 29, 2019, the
Court ordered Defendant to submit the memorandum at issue
(Bates No. ZALICOSALOOO2235) to the Court for an in
camera review, (Doc. 112), which Defendant did. In
considering the Motion, Response, Reply, record of the case,
and relevant law, the Court finds that the Motion shall be
case arises out of Defendant's denial of a life insurance
claim. (Doc. 101 at 2-3); (Doc. 108 at 4-6). The claim was a
"contestable claim" because it was made within two
years of issuance of the life insurance policy. (Doc. 101 at
2). In denying the claim, Defendant asserts that Mark Salopek
(Plaintiffs husband) materially misrepresented his health
status when he applied for the life insurance policy. (Doc.
108 at 4). In her Complaint, Plaintiff raises the following
claims: breach of contract, bad faith insurance conduct,
violation of the Unfair Insurance Practices Act, violation of
the Unfair Trade Practices Act, and negligence. (Doc. 1-1).
served discovery requests asking for Defendant's
policies, practices, and guidelines pertaining to how
Defendant handles, investigates, and denies life insurance
claims, and how Defendant rescinds or cancels life insurance
policies. (Doc. 101 at 2). In response, Defendant produced
certain documents and provided Plaintiff with a privilege
log. Id. Plaintiff's Motion pertains to a one
page email from Defendant's claims department manual. All
of the email is redacted except the date ("January 15,
2014"), who it is from ("Ed Summer"), and the
subject line ("Re: Causal Connection on Contestable
Claims"). See (Doc. 105 at 5). In its privilege
log, Defendant states the document is from Defendant's
Office of the General Counsel c/o William Edward Summer, and
describes the document as: "Portion of claim handling
manual reflecting confidential legal advice regarding the law
of Arkansas, Kansas, Missouri, Oklahoma, Rhode Island, Texas,
Utah and Wisconsin as to misrepresentations in insurance
applications." (Doc. 101 at 5).
Motion, Plaintiff states that Defendant's description in
the privilege log does not clearly establish the memorandum
is privileged because neither the author nor recipient are
attorneys and it does not appear to constitute a confidential
communication made for the purpose of providing legal advice.
Id. at 7-8. Instead, Plaintiff argues that the
memorandum appears to be instructions from Defendant's
Head of Claims regarding Defendant's claims handling
process. Id. at 8.
Response, Defendant argues the memorandum is privileged
because it advises claims handlers of the laws of several
states concerning misrepresentations in life insurance
applications. (Doc. 108 at 10). Defendant states the
information reflects legal advice that was conveyed to claims
handlers via the head of Defendant's claims handling
department. Id. at 11. In addition, Defendant
contends the memorandum is not relevant because it reflects
the law of states other than New Mexico, which is where
Plaintiffs claim arises. Id. at 12.
Reply, Plaintiff maintains that Defendant should produce an
unredacted copy of the memorandum because it is not
privileged. (Doc. 110 at 4). Plaintiff argues that
Defendant's assertion that the memorandum reflects legal
advice is insufficient to establish that the information
constituted a confidential communication made for the
purposes of providing legal advice, and the description of
the memorandum suggests it concerns business matters.
Id. at 8-11. Plaintiff also notes Defendant did not
submit any declarations to support its assertion that the
memorandum's purpose was for legal advice. Id.
at 11-12. Finally, Plaintiff argues the memorandum is
relevant because Plaintiff's claims involve a contestable
claim and alleged misrepresentations to Defendant.
Id. at 13-14.
diversity cases such as this one, state law governs the scope
of the attorney-client privilege and whether it has been
waived. Anaya v. CBS Broadcasting, Inc., 251 F.R.D.
645, 649 (D.N.M. 2007). "Under New Mexico law, the
attorney-client privilege applies to confidential
communications made for the purpose of facilitating the
rendition of professional legal services to the client."
Id. at 650. The privilege is designed to permit
clients to freely seek legal advice by encouraging them to
disclose more information to their attorneys
"uninhibited by the fear of their statements to an
attorney becoming evidence," which in turn enables
attorneys to "provide more thorough and accurate legal
advice." Bhandari v. Artesia Gen. Hosp., 317
P.3d 856, 860 (2013) (internal citations omitted.) "The
party asserting the attorney-client privilege bears the
burden of demonstrating that it applies and that it has not
been waived." Anaya, 251 F.R.D. at 650.
Court has considered the arguments by the parties and has
reviewed the memorandum at issue. The memorandum is not
written by an attorney and does not state that it conveys a
confidential communication from Defendant's counsel.
Instead, the memorandum is written by Defendant's Head of
Claims and refers to business practices for contestable
claims in states with a statute requiring that the condition
that was misrepresented contributed to the loss.
relies on Navajo Nation v. Urban Outfitters, Inc.,
2016 WL 3475340, at *3 (D.N.M. March 25, 2016) (unpublished),
for its argument that communications reflecting counsel's
legal advice to a corporation are still privileged when
shared among corporate employees. (Doc. 108 at 11). However,
in Navajo Nation, the defendant submitted affidavits
stating that the withheld documents reflected legal advice
from the defendant's counsel that the employees needed to
know in order to implement it as part of their job duties. In
contrast, here Defendant has not provided any support for its
contention that the memorandum contains confidential
communications made for the purpose of facilitating
professional legal services. See Anaya, 251 F.R.D.
at 650 ("The bald assertion that production of the
requested information would violate a privilege (provided by
law) is not enough. The party resisting discovery has the
burden to clarify and explain its objections and to provide
support therefor.") (quoting United Nuclear Corp. v.
Gen. Atomic Co., 629 F.2d 231, 293 (N.M. 1980)).
Moreover, the substance of the memorandum merely advises
claims handlers to refer contestable claims to a claim
manager and for possible legal advice. For these reasons, the
Court finds Defendant has not met its burden in proving the
memorandum is privileged.
addition, the Court finds the memorandum is relevant.
Plaintiffs claims involve a contestable claim and alleged
misrepresentations on an insurance application. While the
memorandum refers to statutes in states other than New
Mexico, it also discusses Defendant's business practices
when presented with contestable claims and the effect of a
misrepresentation. Therefore, is relevant to the claims and
defenses in this case.
IS THEREFORE ORDERED that Plaintiffs Motion to
Compel Zurich America Life Insurance Company to Produce an
Unredacted Copy of a Memorandum, (Doc. 101), is
GRANTED, and Defendant shall provide
Plaintiff with an unredacted copy of Bates No.
ZALICOSALOOO2235 by April 25, 2019.