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Little Italy Development, LLC v. Chicago Title Insurance Co.

October 17, 2011

LITTLE ITALY DEVELOPMENT, LLC,
PLAINTIFF,
v.
CHICAGO TITLE INSURANCE CO., ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Judge Patricia A. Gaughan

Memorandum of Opinion and Order

INTRODUCTION

This matter is before the Court upon Plaintiff Little Italy Development LLC's Motion to Compel Production of Documents (Doc. 36). This is an insurance coverage dispute. For the reasons that follow, the motion is GRANTED in PART and DENIED in PART.

FACTS

Only those facts necessary for a resolution of the instant motion are set forth herein. Plaintiff, Little Italy Development LLC ("LID"), brings this lawsuit against defendants, Chicago Title Insurance Company and Fidelity National Title Group, Inc. (collectively, "Chicago Title")*fn1 . LID purchased a title insurance policy from Chicago Title.

On July 9, 2009, Little Italy Preservation Partners sued LID regarding the use of an easement over LID's property. It appears that the complaint in that matter contained seven claims. LID tendered the defense of the litigation to Chicago Title pursuant to the policy. Chicago Title agreed under a reservation of rights to defend only count six, which alleged a public prescriptive easement.

On November 17, 2010, Chicago Title informed LID that, under Ohio law, it had no duty to provide a complete defense

LID issued discovery requests to Chicago Title. Chicago Title asserted the attorney-client privilege and work-product doctrines in response to certain requests. LID now moves the Court to compel responses to the requests and Chicago Title opposes the motion.

ANALYSIS

1. Attorney-client privilege

LID argues that the Ohio Supreme Court's holding in Boone v. Vanliner Ins. Co., 744 N.E.2d 154 (Ohio 2001), creates an exception to the attorney-client privilege. According to LID, the Ohio Supreme Court concluded that "claims file materials that show an insurer's lack of good faith in denying coverage are unworthy" of attorney-client privilege protection. In response, Chicago Title argues that the Ohio legislature's amendment to O.R.C. § 2317.02 overrules the holding in Boone and requires LID to make a prima facie showing of bad faith before the exception to the attorney-client privilege may be invoked.

Ohio law applies in analyzing the parties' dispute as to the application of the attorney-client privilege. Under Ohio law, the attorney-client privilege is "governed by both common law and statute." In re Professionals Direct Ins. Co., 578 F.3d 432, 440 (6th Cir. 2009). In Boone, the Ohio Supreme Court opined as follows:

...[W]e hold that in an action alleging bad faith denial of insurance coverage, the insured is entitled to discover claims file materials containing attorney-client communications related to the issue of coverage that were created prior to the denial of coverage. At that stage of the claims handling, the claims file materials will not contain work product, i.e., things prepared in anticipation of litigation, because at that point it has not yet been determined whether coverage exists.

Boone, 744 N.E.2d at 158.

After the issuance of Boone, the Ohio legislature amended O.R.C. § 2317.02(A), to include subpart (2). The statute reads, in relevant part:

The following persons shall not testify in certain respects:

(A)(1) An attorney, concerning a communication made to the attorney by a client in that relation or the attorney's advice to a client, except that the attorney may testify by express consent of the client or, if the client is deceased, by the express consent of the surviving spouse or the executor or administrator of the estate of the deceased client. However, if the client voluntarily testifies or is deemed by section 2151.421 of the Revised Code to have waived any testimonial privilege under this division, the attorney may be compelled to testify on the same subject.

(2) An attorney, concerning a communication made to the attorney by a client in that relationship or the attorney's advice to a client, except that if the client is an insurance company, the attorney may be compelled to testify, subject to an in camera inspection by a court, about communications made by the client to the attorney or by the attorney to the client that are related to the attorney's aiding or furthering an ongoing or future commission of bad faith by the client, if the party ...


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