IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Magistrate Judge Kathleen M. Tafoya

Civil Action No. 11–cv–02369–PAB–KMT

LARRY SIPES,

Plaintiff,

v. 

ALLSTATE INDEMNITY COMPANY, an Illinois corporation, 

Defendant.

ORDER

This matter is before the court on “Plaintiff’s Unopposed Motion for ‘In-Camera’ Review

of Claim Diary Redactions, Withheld Claim Diary Attachments and Withheld Claim File

Documents” (“Mot.”) [Doc. No. 110] filed April 26, 2013. Defendant filed a response on May

6, 2013 (“Resp.) [Doc. No. 121] and submitted un-redacted copies of the claim diary, withheld

attachments to the claim diary, index to claim diary, and amended log to privileged claim file

documents [Doc. No. 123, filed May 9, 2013]. The court has reviewed in camera every disputed

claim diary entry and matched every disputed attachment to the claim diary where appropriate,

as well as reviewing the document itself completely. Additionally, the court reviewed the

separately objected to documents.

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The court has been able to verify that claim diary entries dated “07/25/12, 04/30/12,

02/04/12, 01/04/12, 01/03/12” are nothing more than the exact amount, repeated on each of the

entries, that was the original payment made to “Plaintiff’s mortgagee pursuant to the lost payee

clause of the subject insurance contract.” (See Resp. at 5.) Further, no entry among those

reviewed in camera and withheld on the grounds of privilege in the claims diary indicated

“settlement authority” beyond what had already been paid to the mortgagee until the January

2013 mediation. The court disagrees with the characterization by Plaintiff that the claims file “is

completely devoid of any documentation of the basis for the decision to pay the fire loss almost

three (3) years after the occurrence.” (Mot. at 4.) Plaintiff is well-aware of the addition of a new

expert, Mr. Toth and his opinions entered in or about October 2012, and there is a notation about

the report in the claims diary that was not withheld. (See claim diary entry November 19, 2012

at 3:18 p.m.) There is no reason to believe that Ms. Kidwell will be unable to fully explain her

reasons for re-evaluation of the claim based upon Mr. Toth’s report without the requirement of

disclosing privileged material.

The Federal Rules of Civil Procedure provide that “[p]arties may obtain discovery

regarding any nonprivileged matter that is relevant to any party’s claim or defense-including the

existence, description, nature, custody, condition, and location of any documents or other

tangible things and the identity and locations of persons who know of any discoverable matter.”

Fed. R. Civ. P. 26(b)(1). Jurisdiction in this case is premised upon diversity and therefore state

law controls the determination of attorney-client privilege issues. In Colorado, the

attorney-client privilege is “established by the act of a client seeking professional advice from a

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lawyer and extends only to confidential matters communicated by or to the client in the course of

gaining counsel, advice, or direction with respect to the client’s rights or obligations.” People v.

Tucker, 232 P.3d 194, 198 (Colo. App. 2009). The privilege only applies to communications

under “circumstances giving rise to a reasonable expectation that the statements will be treated

as confidential.” Wesp v. Everson, 33 P.3d 191, 197 (Colo. 2001).

With the following exceptions, the court finds that all the claim diary entries that have

been redacted and the attachments related thereto were properly withheld either on the grounds

of attorney-client privilege or work product protection. The parties and the court have made

extensive records on the body of law associated with both privileges, and legal authority will not

be extensively repeated here. 

The following entries in the claim diary are not attorney-client privileged documents, nor

are they subject to a claim of work product protection even though litigation was in

progress/anticipated at the time. The entries do not concern advice to or from an attorney, but

instead reflect an adjuster investigating some background facts about Mr. Sipes, the policy, loss

history, etc. This is activity which is commonly associated with adjusting a claim by an

insurance company and is therefore discoverable. See Hurtado v. Passmore & Sons, 2011 WL

2533698, at *4-5 (D. Colo. June 27, 2011)(results of factual investigation not privileged). Those

diary entries occurred on: October 6, 2011 at 1:54 p.m. and on October 7, 2011 at 2:55 p.m.,

2:57p.m., 3:18 p.m. and 3:21 p.m. Therefore, the Defendant will produce those claims diary

entries to the Plaintiff on or before May 15, 2013.

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With respect to the separate documents contained on Exhibit 4 to Plaintiff’s Motion, the

documents all contain privileged information which renders them properly withheld from

discovery. One document, however, deserves special mention. The May 31, 2011 entry on

Exhibit 4 is a billing statement from Harris, Karstaedt, Jamison & Powers, P.C. to Allstate. An

attorney generally may not refuse to answer questions about the identity of a client and fee

arrangements. Lee v. State Farm Mut. Auto. Ins. Co., 249 F.R.D. 662, 684 (D. Colo. 2008). In

general, billing records are not accorded privileged status unless specific entries contain

privileged communications. For instance, information on an attorney’s billing statement that

shows the fee amount, the general nature of the services performed, and the case on which the

services were performed is not considered privileged. United States v. Hodgson, 492 F.2d 1175,

1177 (10th Cir. 1974). However, billing statement entries that reflect the client’s motive in

seeking representation, litigation strategy, or the specific nature of services provided, such as

researching particular areas of the law, are privileged. See In re Gibco, Inc., 185 F.R.D.at 299;

Roe, 281 F.R.D. at 636.

The May 31, 2011 billing statement contains entries that are specific between an attorney

and his client regarding particular events and would reveal litigation strategy if disclosed. 

Therefore the document is privileged and properly withheld from production.

It is therefore ORDERED

1. Pursuant to the court’s in camera review, Defendant shall produce documents to

Plaintiff consistent with this Order on or before May 13, 2013.

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It is further ORDERED

2. The deposition of Lori Kidwell shall be completed before May 22, 2013.

3. Any additional expert witness opinions by either party’s claim handling expert

shall be disclosed on or before June 3, 2013.

4. Any further discovery deposition of either party’s claim handling expert shall be

completed on or before June 13, 2013.

5. The dates previously set for the Trial Preparation Conference and the Trial before

District Judge Phil A. Brimmer shall not be affected by this Order.

Dated this 12th day of May, 2013.

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