IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

MEDFORD DIVISION 

OREGON SHAKESPEARE 

FESTIVAL ASSOCIATION, Case No. 1 :15-cv-01932-CL 

Plaintiff, 

v. 

GREAT AMERICAN INSURANCE 

COMPANY, 

Defendant. 

CLARKE, Magistrate Judge 

ORDER 

Plaintiff Oregon Shakespeare Festival (OSF) brings claims for breach of contract and the 

implied duty of good faith and fair dealing against an insurance provider, Great American 

Insurance Company (GAIC). The case comes before the Court on OSF's motion to compel 

discovery. For the reasons below, Plaintiffs motion (#50) is denied. 

BACKGROUND 

On August 1, 2013, Plaintiff OSF reported a claim to defendant GAIC for 4 losses that 

started in July 30, 2013. GAIC investigated the loss, and on October 15, 2013, sent OSF a letter 

informing it that the claim was not covered by the policy, and that GAIC was closing its file. 

On November 6, 2013, OSF indicated to GAIC through its insurance broker that OSF intended to 

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provide additional information regarding its claim. However OSF did not submit any additional 

information at that time. On April 28, 2014, OSF sent a letter through counsel, Attorney Michael 

Farnell, to GAIC indicating his legal opinion that if the claim were litigated, OSF would likely 

prevail and be allowed to recover attorney fees in addition to the amount of the claim. The next 

day, April 29, 2014, GAIC retained the law firm of Bullivant Houser Bailey, PC as its attorneys. 

On May 19, 2015, nearly a year later, Attorney Douglas Houser, sent a letter to Plaintiff counsel 

advising that "GAIC want[s] to be sure you and OSF understand that the OSF claim has not been 

denied and is still under investigation." GAIC conducted 14 examinations under oath between 

June 23 and June 25, 2015, and on August 10, 2015, GAIC wrote to OSF "to confirm its earlier 

denial of coverage." OSF filed its complaint in federal court on October 13, 2015. 

DISCUSSION 

The issue now before the Court is the claim of attorney client privilege and work product 

protection over GAIC's claim file and investigation regarding OSF's claim. Plaintiff OSF moves 

to compel all documents related to the claims process and coverage determination. The issue is 

made more complicated in this case by the participation of outside counsel in the claims 

investigation early in the process - a full year and a half before a coverage determination was 

finalized. Clearly, GAIC cannot shield all aspects of its claims investigation merely by involving 

an outside attorney in what would otherwise be a routine process, conducted in the ordinary 

course of business. 1 However, it is undisputed that Attorney Douglas Houser and his firm were 

hired the day after GAIC received a letter from Plaintiff counsel challenging GAIC's initial 

coverage determination and denial. The Court finds that the letter represented a clear indication 

that litigation could reasonably be anticipated if GAIC continued to deny the claim. GAIC had 

1 The Court assumes that all claims documents generated prior to GAIC's retention of the Bullivant firm 

have or will be produced. 

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every right to then retain outside legal counsel to advise it regarding the coverage issue, the 

claims process and investigation, and to have those communications protected from discovery. 

a. GAIC's privilege log is sufficient to enable the parties and the court to assess the 

claim of privilege and work product protection. 

Federal Rule of Civil Procedure 26(b )(5)(A) provides the rule for claiming privilege or 

protecting trial preparation materials. It states: 

Information Withheld. When a party withholds information 

otherwise discoverable by claiming that the information is 

privileged or subject to protection as trial-preparation material, the 

party must: 

(i) expressly make the claim; and 

(ii) describe the nature of the documents, communications, or 

tangible things not produced or disclosed-and do so in a manner 

that, without revealing information itself privileged or protected, 

will enable other parties to assess the claim. 

Fed. R. Civ. Pro. 26(b)(5)(A) (emphasis added). 

GAIC has submitted a privilege log of the documents it considered protected by the 

attorney client privilege and the attorney work product doctrine. The entries indicate, where 

applicable, the sender and the recipient, the date, the content of the communication or document, 

and the privilege that applies. While many of the entries are brief and the descriptions of the 

content are somewhat vague, they affirmatively state whether counsel was involved in the 

communication and whether legal advice was communicated or litigation strategy was discussed. 

Because the Court and the parties can adequately assess whether the privilege applies to each 

entry, the log is sufficient under the federal rules. 

b. The attorney client privilege applies to all documents itemized in defendant's 

privilege log that identify Attorney Douglas Houser as party to the 

communication and those that identify that such communication or legal advice 

is being transmitted internally. 

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The attorney client privilege protects confidential communications between attorneys and 

clients that are made for the primary purpose of giving or receiving legal advice, unless the 

protection is waived. United States v. Richey, 632 F.3d 559, 566 (9th Cir. 2011). The attorney 

client privilege exists where: 

(1) legal advice of any kind is sought (2) from a professional legal 

adviser in his capacity as such, (3) the communications relating to 

that purpose, (4) made in confidence (5) by the client, (6) are at his 

instance permanently protected (7) from disclosure by himself or 

by the legal adviser, (8) unless the protection be waived. 

Id. The party "asserting the attorney-client privilege has the burden of establishing the 

relationship and the privileged nature of the communication." Id. at 607. Because "it impedes 

full and free discovery of the truth, the attorney-client privilege is strictly construed." Id. 

(citation and internal quotations omitted). "If the advice sought is not legal advice, but, for 

example, accounting advice from an accountant, then the privilege does not exist." Id. (citing 

Weil v. Inv./Indicators, Research & Mgmt., Inc., 647 F.2d 18, 24 (9th Cir.1981)). 

It is beyond dispute that the attorney-client privilege may apply when the client is a 

corporation, organization, or entity rather than a natural person. See Upjohn Co. v. United 

States, 449 U.S. 383, 389-90 (1981). Consistent with Upjohn, the Ninth Circuit has extended 

the attorney-client privilege "to communications between corporate employees, and counsel 

made at the direction of corporate superiors in order to secure legal advice." United States v. 

Chen, 99 F.3d 1495, 1502 (9th Cir.1996). 

In this case, as discussed above, GAIC retained Bullivant Houser Bailey after threat of 

litigation by OSF. Thus, it sought legal advice from outside counsel, in his capacity as an 

attorney, regarding the coverage issue and the ongoing claims investigation. The 

communications between all the GAIC employees and Attorney Douglas Houser regarding such 

legal advice is therefore protected by the attorney client privilege unless the confidentiality of 

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those communications has been compromised, or unless the privilege has otherwise been waived. 

The Court cannot find any evidence oflack of confidentiality, or of waiver. Therefore, attorney 

client privilege applies to all documents itemized in defendant's privilege log that identify 

Attorney Douglas Houser as a sender or recipient of the communication, or identify that such 

communication or legal advice is being transmitted internally, between corporate employees. 

c. The attorney work product doctrine applies to any entries in the privilege log 

that identify documents prepared by or for the attorney after April 28, 2014. 

A qualified privilege protects the work product prepared by or for another party or by or 

for that party's representative, such as an attorney, investigator, or agent, which was created in 

anticipation for litigation. Richey, 632 F .3d at 567 (citing Admiral Ins. Co. v. US. Dist. Ct., 881 

F.2d 1486, 1494 (9th Cir .1989); and Fed.R.Civ.P. 26(b)(3)). Similar to the attorney-client 

privilege, the work product doctrine's protections are waivable and the burden of proof rests with 

the party asserting the privilege. Id.; Weil,. 647 F.2d at 25 (citations omitted). 

To qualify for work product protection, documents must: (1) be "prepared in anticipation 

of litigation or for trial" and (2) be prepared "by or for another party or by or for that other 

party's representative." In re Grand Jury Subpoena, Mark Torj!Torf Envtl. Mgmt. (J'orj), 357 

F.3d 900, 907 (2004). In circumstances where a document serves a dual purpose, that is, where 

it was not prepared exclusively for litigation, then the "because of' test is used. Id. Dual 

purpose documents are deemed prepared in anticipation of litigation if"in light of the nature of 

the document and the factual situation in the particular case, the document can be fairly said to 

have been prepared or obtained because of the prospect of litigation." Id. In applying the 

"because of' standard, courts must consider the totality of the circumstances and determine 

whether the "'document was created because of anticipated litigation, and would not have been 

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created in substantially similar form but for the prospect oflitigation. "' Id. at 908 (quoting 

United States v. Adlman, 134 F.3d 1194 (2d Cir.1998)). 

The work product doctrine affords special protections for materials that reveal an 

attorney's mental impressions and opinions ("opinion" or "core" work product). Admiral Ins. 

Co., 881 F.2d at 1494; Fed.R.Civ.P. 26(b)(3)(B). Other materials, however, may be ordered 

produced upon a showing of substantial need for the information and that it cannot be otherwise 

obtained without undue hardship. Admiral Ins. Co., 881 F.2d at 1494; Fed R. Civ. P. 

26(b)(3)(A)(ii). To obtain "opinion" work product, a party must show that the mental 

impressions of counsel are at issue and the need for the material is compelling. Holmgren v. 

State Farm Mutual Auto. Ins. Co., 976 F.2d 573, 577 (9th Cir.1992). 

In this case, the threat of litigation was clear. Plaintiff counsel Attorney Michael Farnell 

sent GAIC a letter outlining his legal opinion regarding the status of OSF' s claim and indicating 

that he believed OSF would prevail in litigation over the issues. GAIC immediately hired 

outside counsel. Therefore, any work prepared by or for that outside counsel, Attorney Douglas 

Houser, or any of his representatives, is protected by the work product doctrine. It applies to 

expert reports, attorney impressions of the case, and any communications regarding such reports 

. . or impressions. 

Additionally, Plaintiff has not shown sufficient need for the documents at issue. While 

the complaint claims that GAIC conducted its investigation of OSF's insurance claim in a way 

that was onerous and in violation of the implied duty of good faith and fair dealing, the 

allegations pertain to the voluminous document requests, numerous examinations under oath, 

and other demands made by GAIC over the lengthy period of its investigation. None of these 

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allegations put the attorney's mental impressions at issue, and none of them require discovery of 

documents for which OSF does not already have access. 

It is possible that many of the entries in the log were prepared for a "dual purpose." 

Certainly, as Plaintiff argues, the claims handling process was on-going until GAIC denied 

OSF's claim on August 10, 2015. A letter from Attorney Houser dated May 19, 2015 indicated 

that GAIC did not consider the case closed and that it would continue to process the claim. 

However, GAIC would not have hired outside counsel to advise it regarding OSF's claim but for 

the threat oflitigation indicated by Plaintiff counsel's letter in April, 2014. Therefore, any 

documents prepared by or for Attorney Houser were prepared "because of' the anticipated 

litigation. 

d. Any documents prepared only for the purpose of investigating and evaluating 

and processing OSF's insurance claim are not protected. 

Finally, the Court wants to make clear that any documents prepared by or for GAIC that 

relate only to the processing of Plaintiff's claim, without involvement by outside counsel, are 

properly discoverable, and should be produced immediately, if they have not already been 

produced. 

ORDER 

Plaintiff's motion (#50) is denied. 

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