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Jamison v. Depositors Insurance Co.

United States District Court, D. Nebraska

August 22, 2016

NELLE JAMISON and JOHN PAUL JAMISON, Plaintiffs,
v.
DEPOSITORS INSURANCE COMPANY, Defendant.

          ORDER

          John M. Gerrard United States District Judge.

         This matter is before the Court on motions in limine filed by the plaintiffs (filing 168) and the defendant (filing 171). The plaintiffs' motion will be denied in its entirety, without prejudice to reasserting those objections at trial. The defendant's motion will be granted in part and denied in part, as set forth below.

         Plaintiffs' Motion in Limine

         1. Vieau Reports

         The plaintiffs object to "[t]he Vieau reports dated August 13, 2013 (Trial Ex. 20), and August 28, 2013 (Trial Ex. 22) and any and all opinions contained therein." Filing 168 at 1. "The foundation for this request is that Depositors never had the Vieau letters at the time it made its decision to deny the Jamison's claim. Indeed, the Vieau letters were not received until AFTER Mike Stumberg and Depositors made a conclusive decision that the Jamisons' claim would be denied." Filing 169 at 2.

         This objection is overruled, without prejudice to reassertion at trial. In considering whether an insurer acted in bad faith, the Nebraska Supreme Court has looked at the adjustment process as being a series of denials. See Radecki v. Mut. of Omaha, 583 N.W.2d 320, 325-27 (Neb. 1998); see also LeRette v. Am. Med. Sec., Inc., 705 N.W.2d 41, 48-49 (Neb. 2005). The issues in this case include whether there was an arguable basis for Depositors' initial denial of coverage and whether there continued to be an arguable basis for denial of coverage. The Vieau reports are relevant to the subsequent denial of coverage, and will be admitted, subject to appropriate foundation at trial and either appropriate redaction, or a limiting instruction, or both.

         2. Legal Opinions of Defendant's Counsel

         The plaintiffs object to "[t]he legal opinion and any and all legal opinions obtained by Depositors from both in house and outside counsel. Filing 168 at 1. The Jamisons contend that "[n]one of the legal opinions have been produced by Depositors, under claims of attorney client privilege." Filing 169 at 6.

         This objection will be overruled without prejudice to reassertion at trial, because it is not clear to the Court at this point what evidence is expected to be adduced. Whether the defendant consulted with counsel regarding the denial of the plaintiffs' insurance coverage may be relevant to the plaintiffs' bad faith claim: while evidence of advice of counsel is insufficient by itself to act as an affirmative defense to a bad faith claim, seeking the advice of counsel may be relevant to such a claim. Graske v. Auto-Owners Ins. Co., 647 F.Supp.2d 1105, 1110 (D. Neb. 2009).

         But generally, using advice of counsel as a defense implicitly waives attorney-client privilege with respect to the communications upon which the defense is based. See, Garcia v. Kids, No. 8:14CV119, 2016 WL 199413, at *3 (D. Neb. Jan. 15, 2016); GP Indus., LLC v. Eran Indus., Inc., No. 8:06CV50, 2006 WL 3290306, at *3 (D. Neb. Nov. 13, 2006); see also Sedco Int'l, S. A. v. Cory, 683 F.2d 1201, 1206 (8th Cir. 1982). "The attorney client privilege cannot be used as both a shield and a sword, " and a party cannot claim in its defense that it relied on advice of counsel without permitting the opposing party to explore the substance of that advice. United States v. Workman, 138 F.3d 1261, 1264 (8th Cir. 1998); accord, United States v. Beckman, No. CRIM. 11-228, 2012 WL 1870247, at *1-2 (D. Minn. May 22, 2012); Sedillos v. Bd. of Educ. of Sch. Dist. No. 1, 313 F.Supp.2d 1091, 1093 (D. Colo. 2004). And that principle is implicated when an insurer uses consultation of counsel as evidence that it did not deny coverage in bad faith. See Lee v. Med. Protective Co., 858 F.Supp.2d 803, 808-09 (E.D. Ky. 2012). As the Maryland Court of Appeals has said in a similar context,

[W]hat defendants cannot do is defend a charge of bad faith by referencing specific communications with attorneys that purportedly provided a good-faith basis for certain actions, and then refuse to allow any further investigation into those communications. This is because allowing a defendant to make the naked assertion that they consulted with their attorneys leaves the fact finder with the impression that they had shown good faith even in a situation where they had not. Such tactics would allow the defendant to use the attorney-client communication to his benefit and then refuse to answer more questions about it. This would be an abuse of the privilege-using it both as a sword and a shield.

CR-RSC Tower I, LLC v. RSC Tower I, LLC, 56 A.3d 170, 207 (Md. 2012) (citations, quotations, and emphasis omitted); see United States v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991).

         But it is not clear, at this point, whether the evidence to be expected at trial will present the defendant's consultation with counsel as a defense in a manner that implicates the attorney-client privilege with respect to the substance of that consultation. Accordingly, the plaintiffs' objection is overruled: the Court will rule on any objections presented at trial, considering the principles set forth above.

         Defendant's Motion in Limine

         1. Use of Insurance Slogans

         The defendant objects to "[a]ny statement or argument intended to inflame or arouse feelings of hostility or resentment to Depositors Insurance Company" or "Nationwide Insurance, " or "to use any advertising or advertising slogans in a derogatory manner." Filing 171 at 1. The defendant's primary concern, expressed at argument on the motions, is the use of advertising slogans such as Nationwide's in argument to the jury. The plaintiffs represent that they do not intend to make such an argument; therefore, the objection is sustained: the ...


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