Court Opinion

ID: 9368098
Source: CourtListenerOpinion
Date Created: 2023-02-02 19:07:04.788093+00
Date Added: 2024-06-11T17:16:05.638462
License: Public Domain

[Cite as Drummond v. State Farm Mut. Auto Ins. Co., 2023-Ohio-283.]

                            IN THE COURT OF APPEALS OF OHIO

                                 TENTH APPELLATE DISTRICT

Rochee D. Drummond et al.,                           :

                Plaintiffs-Appellees,                :                   No. 22AP-100
                                                                      (C.P.C. No. 20CV-7039)
v.                                                   :
                                                                (REGULAR CALENDAR)
State Farm Mutual Auto                               :
Insurance Company,
                                                     :
                Defendant-Appellant.
                                                     :

                                          D E C I S I O N

                                   Rendered on January 31, 2023

                On brief: The Law Offices of Daniel R. Mordarski, LLC, and
                Daniel R. Mordarski, and Cox Law Office, LLC, and
                Michael T. Cox for appellees. Argued: Daniel R. Mordarski.

                On brief: Gallagher Gams Tallan Barnes & Littrell, LLP,
                and James R. Gallagher for appellant. Argued: James R.
                Gallagher.

                 APPEAL from the Franklin County Court of Common Pleas

JAMISON, J.
       {¶ 1}    Defendant-appellant, State Farm Mutual Insurance Company ("State
Farm"), appeals from a judgment of the Franklin County Court of Common Pleas, ordering
State Farm to provide certain discovery to plaintiffs-appellees, Rochee D. Drummond and
Gregg Drummond. For the reasons that follow, we affirm in part and reverse in part.
I. FACTS AND PROCEDURAL HISTORY
       {¶ 2}    On August 13, 2018, appellees' vehicle was hit by a vehicle operated by Austin
Yost. As a result of the vehicle collision, Rochee Drummond sustained physical injuries
including damage to her knee and ankle. The ankle injury required surgical intervention
No. 22AP-100                                                                               2

and her damaged knee required a total knee arthroplasty. Austin Yost's insurance carrier
surrendered the limits of his $100,000 insurance policy to the appellees, as there is no
dispute that Yost was at fault.
       {¶ 3}   On August 13, 2018, appellees were insured by State Farm under an
insurance policy that provided uninsured and underinsured motorist coverage with a single
person limit of $250,000. Appellees sought recovery from State Farm under the terms of
their underinsured motorist policy ("UIM"). Appellees demanded the $250,000 limit from
State Farm, less the $100,000 payment appellees received from the tortfeasors insurer and
the $4,779.93 payment previously made by State Farm under the medical payments
provision in the insurance contract. In other words, appellees demanded roughly $145,000
from State Farm under the terms of the UIM.
       {¶ 4}   In pre-suit negotiations, State Farm offered appellees $2,000 in settlement
of her claim, which meant State Farm valued her claim at $106,779.93. The parties were
unable to reach a settlement.
       {¶ 5}   On October 28, 2020, appellees filed a complaint against State Farm alleging
breach of contract and bad faith. Appellees subsequently reduced their demand by $2,000,
but no settlement could be reached.
       {¶ 6}   In February of 2020, appellees served document requests on State Farm
seeking discovery of all documents in State Farm's claims file. Following a lengthy delay in
responding, State Farm provided appellees with numerous documents but ultimately
withheld many of the documents in the claims file based on a claim of attorney-client
privilege and work product protections. State Farm did not, however, move the trial court
for a protective order, and appellees did not file a motion to compel. Rather, on July 13,
2021, State Farm filed a Civ.R. 42(B) motion seeking an order bifurcating the bad faith claim
from the breach of contract claim, and staying discovery on the bad faith claim pending
resolution of the breach of contract claim. The stated purpose of State Farm's motion was
to avoid prejudice to State Farm in its defense of the underinsured motorist claim, and
prevent the needless disclosure of privileged attorney-client communications and
confidential work product materials in the event that State Farm were to prevail on the
breach of contract claim.
No. 22AP-100                                                                                  3

       {¶ 7}   On November 2, 2021, the trial court issued an order bifurcating the breach
of contract claim and the bad faith claim upon finding, "it would prejudice the defense to
have to litigate the bad faith claim while litigating the underlying issue of economic and non-
economic damages." (Nov. 2, 2021 Entry Denying Def.'s Mot. at 1.) The trial court agreed
to bifurcate the two claims for trial, and ordered State Farm to submit the disputed
documents and a privilege log to the court for an in-camera review to determine whether
the documents were protected by any privilege.
       {¶ 8}   State Farm submitted the disputed documents and a privilege log. On
January 14, 2022, the trial court issued an order that includes the following findings and
conclusions: 1) documents in the claims file identified as Bates Nos. 222, 229, 341-343, 540-
543, 612, and 681 contain privileged attorney-client communications; 2) appellees
demonstrated good cause to obtain otherwise protected work product materials; 3) State
Farm waived attorney-client and work product privilege by failing to timely object; and 4)
in spite of the waiver, State Farm may redact certain communications and work product
materials, as set forth in this decision, before providing the documents to appellees.
       {¶ 9}   The trial court also modified its ruling on bifurcation due to prior "foot
dragging" by State Farm, discovery abuses, and further delays occasioned by the need for a
second trial on the bad faith claim. Instead of bifurcating the two claims and staying
discovery on the bad faith claim, the trial court decided to try the bad faith claim to the same
jury immediately following the verdict on the breach of contract claim.
       {¶ 10} State Farm appealed to this court from the January 14, 2022 judgment.
Appellees subsequently filed a motion to dismiss the appeal due to the absence of a final
appealable order. On April 19, 2022, this court issued a ruling on the motion. In our
memorandum decision, we set out appellees' argument as follows:
               First, they argue that the trial court ordered production of no
               materials for which State Farm had asserted privilege before
               the trial court. Second, they raise the related argument that
               State Farm failed to timely assert privilege and has
               accordingly waived any objection to the court's assessment
               thereof. Third, they argue that the materials State Farm seeks
               to protect are not, in fact, covered by attorney-client privilege,
               attorney-work-product privilege, or indeed any other
               recognized privilege.
(Apr. 19, 2022 Memo Decision at 4.)
No. 22AP-100                                                                                4

       {¶ 11} In discussing the appellees' argument in support of dismissal, we noted that
the "third proposition seeks to circumvent consideration of the merits in this appeal by
presupposing that the appeal will fail, and thus this proposition will not be considered in a
motion to dismiss." Id. This court denied the motion to dismiss the appeal upon concluding
that the appeal "is expressly taken from a provisional remedy," and the "order * * * arguably
compels production of privileged or protected documents." Id. at 4-7.
II. ASSIGNMENTS OF ERROR
       {¶ 12} Appellant assigns the following as trial court error:
              [1.] The Trial Court erred in denying State Farm's Motion to
              Stay Discovery as to the Bad Faith Cause of Action.

              [2.] The Trial Court erred in ordering State Farm to produce
              privileged and confidential information to Plaintiffs-Appellees,
              including, but not limited to, its valuation of their claim in
              advance of a trial where the value of their claim is a primary
              issue to be litigated and also to produce post suit
              communications regarding the defense of the case.

III. LEGAL ANALYSIS

       A. Assignments of Error

       {¶ 13} In both of State Farm's assignments of error, State Farm contends the trial
court erred when it denied State Farm's motion to stay discovery related to the bad faith
claim and ordering premature and/or unnecessary production of otherwise privileged
attorney-client communications and work product materials in the claims file. According
to State Farm, premature disclosure of these privileged communications and protected
materials before the jury determines the value of appellees' UIM claim will substantially
prejudice State Farm in its defense of the breach of contract claim.
       {¶ 14} Because the assignments of error are inextricably connected, we shall
consider them together.
       B. Attorney-Client Privilege

       {¶ 15} "In Ohio, the attorney-client privilege is governed by statute, R.C. 2317.02(A),
and in cases that are not addressed in R.C. 2317.02(A), by common law." State ex rel. Leslie
v. Ohio Hous. Fin. Agency, 105 Ohio St.3d 261, 2005-Ohio-1508, ¶ 18; see, e.g., State ex rel.
No. 22AP-100                                                                                            5

Dawson v. Bloom-Carroll Local School Dist., 131 Ohio St.3d 10, 2011-Ohio-6009, ¶ 27 ("In
Ohio, the attorney-client privilege is governed both by statue, R.C. 2317.02(A), which
provides a testimonial privilege, and by common law, which broadly protects against any
dissemination of information obtained in the confidential attorney-client relationship.").
       {¶ 16} Under the common law, as expressed by the Supreme Court of Ohio in Leslie,
the attorney-client privilege protects certain communications from disclosure as follows:
"(1) [w]here 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 is waived." (Sic passim.) Id. at ¶ 21.
       {¶ 17} With regard to the testimonial privilege, R.C. 2317.02(A)(2) specifies that
when "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 seeking disclosure of
the communications has made a prima-facie showing of bad faith, fraud, or criminal
misconduct by the client."1
       {¶ 18} The trial court concluded that State Farm waived any claim of attorney-client
privilege by failing to timely object to appellees' discovery requests. On appeal, appellees
argue that "[b]ecause State Farm waived the attorney work product doctrine and did not
appeal that waiver determination * * *, this Court should find the trial court did not abuse
its discretion by ordering State Farm to produce its Claim's File." (Appellees' Brief at 36.)
State Farm has argued that its assignments of error and argument challenge the finding of
waiver. We find that State Farm's merit brief clearly sets forth a challenge to waiver. Thus,
State Farm preserved its challenge to the finding on appeal.
       {¶ 19} State Farm further contends that its untimely response to discovery was
excusable in this case given the extraordinary circumstances surrounding the COVID-19
pandemic, the acknowledged cooperation of opposing counsel regarding discovery, and the
absence of a motion to compel by appellees. We agree.

1Though the trial court found appellees' made a prima-facie showing of bad faith, the issue raised by this
appeal pertains solely to allegedly privileged communications in the claims file, not testimony.
No. 22AP-100                                                                                  6

       {¶ 20} The parties agree that appellees served their first request for production of
documents and first set of interrogatories in late February of 2020. This court has
previously taken judicial notice of the COVID-19 Public Health Emergency, and the order
issued by the Franklin County Court of Common Pleas on March 13, 2020. Miller v.
Flowers, 10th Dist. No. 20AP-226, 2021-Ohio-220, ¶ 23. We also note that the cases cited
by appellee have found that a waiver of the privilege occurs where the party asserting the
privilege has failed to do so in the initial response to discovery, or repeatedly failed to
provide discovery. See Chuparkoff v. Farmers Ins. of Columbus, Inc., 9th Dist. No. 22083,
2004-Ohio-7185; Early v. Toledo Blade, 130 Ohio App.3d 302, 320-21 (6th Dist.1998).
Though we agree that State Farm's responses to the request for production of documents
and interrogatories were untimely, State Farm did assert the privilege at the first
opportunity.
       {¶ 21} In the January 14, 2022 decision, the trial court stated: "The Court takes very
seriously the attorney-client privilege, and is reluctant to disregard such claims of privilege,
even where a party has waived them through delay." (Jan. 14, 2022 Decision & Entry at 7.)
Accordingly, despite the finding of waiver, the trial court went on to review the documents
in the claims file and determined that Bates Nos. 222, 229, 341-343, 540-543, 612, and 681
were the only documents in the claims file that contained privileged attorney-client
communications.
       {¶ 22} Given the trial court's expressed reluctance to enforce a waiver in this case,
and given the extraordinary circumstances that arose while the discovery requests were
outstanding, it was not reasonable to conclude that State Farm's delay in responding to
discovery constituted a knowing and voluntary waiver of the applicable privilege.
Accordingly, out of an abundance of caution, we shall conduct a de novo review to determine
whether there were any additional attorney-client communications in the claims file, waiver
notwithstanding.
       {¶ 23} As previously noted, following an in-camera review of the claims file, the trial
court found that documents identified as Bates Nos. 222, 229, 341-343, 540-543, 612, and
681 contained attorney client communications. The trial court permitted State Farm to
redact the attorney-client communications in Bates Nos. 222, 229, 341-343, 540-543, 612,
and 681, prior to disclosing the documents to appellees. Thus, with respect to the attorney-
No. 22AP-100                                                                                 7

client communications identified by the trial court, no disclosure was ordered. State Farm
maintains, however, there are additional attorney-client communications in the claims file
that were not acknowledged by the trial court and protected from disclosure. The problem
with State Farm's argument is that State Farm failed to provide appellees or the trial court
with a privilege log containing the information necessary to determine whether any other
documents in the claims file might contain attorney-client communications.
       {¶ 24} Civ.R. 26(B)(8)(a) provides that when information subject to discovery is
withheld on a claim that it is privileged, the claim must be supported by a description of the
nature of the documents, communications, or things not produced that is sufficient to
enable the demanding party to contest the claim. The burden of showing that information
sought to be excluded under the doctrine of privileged attorney-client communications rests
upon the parties seeking to exclude it. Lemley v. Kaiser, 6 Ohio St.3d 258, 263-64 (1983).
       {¶ 25} Civ.R. 26, "essentially requires the construction of a privilege log." Hartzell
v. Breneman, 7th Dist. No. 10 MA 67, 2011-Ohio-2472, ¶ 19. "The privilege log must contain
'enough information regarding the withheld documents and the underlying attorney-client
communications "to enable the demanding party to contest the claim." ' " Total Quality
Logistics, LLC v. BBI Logistics LLC, 12th Dist. No. CA2021-04-012, 2022-Ohio-1440, ¶ 22.
"Merely stating a 'broad and generalized claim of attorney-client privilege' for all responsive
communications that are allegedly privileged is insufficient." Id. In essence, there must be
some factual basis to support the privilege claim, such as "stat[ing] that communications
were made between attorney and client for the purpose of procuring legal advice or
representation." Id., quoting Cargotec, Inc. v. Westchester Fire Ins. Co., 155 Ohio App.3d
653, 2003-Ohio-7257, ¶ 13 (6th Dist.).
       {¶ 26} On July 27, 2021, State Farm provided appellees with a "privilege log" in
response to appellees' request for production of documents briefly identifying the
responsive documents for which it had asserted the attorney-client privilege and work
product protections. Even though State Farm's privilege log in large part merely alleges a
broad and general assertion of privilege, it is reasonable to conclude that State Farm has
asserted attorney-client privilege with regard to the documents identified as Bates Nos. 222,
229, 341-343, 540-543, 612, and 681.
No. 22AP-100                                                                                8

       {¶ 27} On February 11, 2022, State Farm submitted its claims file to the trial court
for an in-camera review along with a "revised privilege log." Therein, the responsive
documents in the claims file are described alternatively as follows: "Internal impressions of
Plaintiff's injuries and damages;" "[e]ntries made after suit was filed on October 28, 2020,
regarding defense of lawsuit;" and/or "[r]eserve information and internal claim evaluation
of Plaintiff's claim." (Nov. 17, 2021 Def.'s Revised Priv. Log at 3-4.) There are no facts set
forth in the privilege log to support a finding that any of the documents contain
communications with legal counsel seeking legal advice, other than the documents
identified as Bates Nos. 222, 229, 341-343, 540-543, 612, and 681.
       {¶ 28} On January 14, 2022, the trial court issued a decision and judgment entry
denying the motion to stay discovery. The trial court essentially concluded that State Farm
had not asserted attorney-client privilege with regard to any of the additional responsive
documents in the claims file and that a review of the withheld documents revealed no
additional attorney-client communications.
       {¶ 29} Under Ohio common law, communications between an attorney and the
client are privileged where legal advice of any kind is sought by the client from the attorney
in his capacity as such, and the communication relates to that purpose. Leslie at ¶ 21. The
trial court reached the following conclusions after reviewing the claims file:
               The Court finds the Claims File only contains a few materials
               protected by Ohio's common law attorney-client privilege.
               The Court finds the great majority of the Claims File amounts
               to a series of data entry logs about prior events. The entries do
               not detail what was said or discussed, what advice was given,
               or the reasoning behind how Defendant reached its
               conclusions. Many of the pages listed in the privilege log
               merely cover contact information for certain interested
               stakeholders. Certainly, listing a phone number or email
               address cannot be considered privileged communications.
               Some of the entries in the Claims File do contain internal
               impressions of valuations. However, these data entries do not
               demonstrate how those valuations were reached, only that
               they existed. Again, these logs fall outside the scope of
               protected attorney-client communications.
(Decision & Entry at 5.)

       {¶ 30} Based upon our de novo review of the documents in the claims file, we agree
generally with the trial court's characterization of the materials in the claims file and we
No. 22AP-100                                                                              9

concur in the trial court's conclusion that they contain no attorney-client communications
other than those identified by the trial court and protected from disclosure. The documents
contain no memoranda or other form of communication directed to or received from anyone
identified as legal counsel. Indeed, our review of the remaining materials reveal nothing
that could be reasonably construed as a communication between State Farm and legal
counsel seeking legal advice. Accordingly, we hold that the trial court did not err when it
determined State Farm's claims file contained only those attorney-client communications
identified in the judgment entry and protected from disclosure.
       C. Work Product Materials

       1. Final Appealable Order

       {¶ 31} For an order granting discovery of work product materials to be a final order,
an appellant "must affirmatively establish that an immediate appeal is necessary in order to
afford a meaningful and effective remedy." Smith v. Chen, 142 Ohio St.3d 411, 2015-Ohio-
1480, ¶ 8, citing R.C. 2505.02(B)(4)(b). See also In re Special Grand Jury Investigation,
10th Dist. No. 17AP-446, 2018-Ohio-760, ("Special Grand Jury I"); In re Special Grand
Jury Investigation of Medicaid Fraud & Nursing Homes, 10th Dist. No. 18AP-730, 2019-
Ohio-2532, ("Special Grand Jury II"). "This burden falls on the party who knocks on the
courthouse doors asking for interlocutory relief." Chen at ¶ 8. Furthermore, where
appellant "does not set forth any legal authority explaining why an appeal from the final
judgment—the typical way to challenge the trial court's ruling on discovery matters—would
fail to be a meaningful or effective remedy in this case; * * * we presume an appeal in the
ordinary course would be a meaningful and effective remedy." Karr v. Salido, 10th Dist.
No. 21AP-672, 2022-Ohio-2879, ¶ 16, citing State v. Glenn, 165 Ohio St.3d 432, 2021-Ohio-
3369, ¶ 22-28. See also Special Grand Jury I at ¶ 11; Special Grand Jury II at ¶ 23-25.
       {¶ 32} State Farm contends that the disclosure of otherwise protected work product
materials before the jury determines the value of appellees' UIM claim, would materially
prejudice its defense of the breach of contract claim. State Farm maintains that an appeal
following final judgment would not provide effective relief.
       {¶ 33} At oral argument, counsel for State Farm argued convincingly that
production of work product materials relevant to the bad faith claim may reveal the mental
impressions of State Farm claims personnel regarding the value of the UIM claim and/or
No. 22AP-100                                                                                 10

the evidence State Farm believes is significant to that determination. Many of these
documents were generated after a disagreement between the parties arose as to the value of
the claim.
       {¶ 34} Immediate disclosure of attorney work product materials in the claims file
may place State Farm at a strategic disadvantage, however slight, in the trial or settlement
of the breach of contract claim. We also find that this strategic disadvantage, to the extent
that it exists, cannot be effectively remedied by this court in an appeal from a final judgment.
Thus, for purposes of the R.C. 2505.02(B)(4)(b) analysis, State Farm has provided this court
with a reasonable explanation why an appeal from the final judgment might fail to provide
State Farm with meaningful or effective remedy in this case. Accordingly, we find that the
January 14, 2022 judgment denying State Farm's motion to stay discovery on the bad faith
claim pending the determination of claim value is a final appealable order because it
compels immediate production of otherwise protected work product materials, and the
prejudice to State Farm arising from immediate disclosure, if any, is of such a nature that it
cannot be effectively remedied in an appeal following final judgment.
       {¶ 35} Turning to the merits of State Farm's assignments of error as they relate to
work product materials, we note that the work product doctrine generally protects a broader
range of materials than does the attorney-client privilege because the work product doctrine
protects all materials prepared in anticipation of trial. Frank W. Schaefer v. C. Garfield
Mitchell Agency, 82 Ohio App.3d 322 (2d Dist.1992). Civ.R. 26(B)(4) provides, however,
that "a party may obtain discovery of documents, electronically stored information and
tangible things prepared in anticipation of litigation or for trial by or for another party or
by or for that other party's representative (including his attorney, consultant, surety,
indemnitor, insurer, or agent) only upon a showing of good cause therefor."
       {¶ 36} Documents containing work product materials typically reflect mental
impressions, theories, or legal conclusions of an attorney or those working on behalf of the
attorney. In re Special Grand Jury Investigation, 10th Dist. No. 18AP-730, 2019-Ohio-
4014, ¶ 8, citing Squire, Sanders & Dempsey, L.L.P. v. Givaudan Flavors Corp., 127 Ohio
St.3d 161, 2010-Ohio-4469, ¶ 60. Additionally, information in an insurer's claims file
sought to be protected from discovery as work product must have actually been "prepared
in anticipation of litigation," and not merely in the ordinary course of business. Dennis v.
No. 22AP-100                                                                               11

State Farm Ins. Co., 143 Ohio App.3d 196, 203 (7th Dist.2001). The ordinary business
reports of an insurer during the initial investigation of a claim made by one of its insureds
are not generally considered to have been "prepared in anticipation of litigation." Id. The
party seeking protection under the work product doctrine bears the burden of establishing
that the doctrine applies. Special Grand Jury I at ¶ 12.
       {¶ 37} The trial court conducted a review of the documents in the claims file and
reached the following conclusion regarding the existence of attorney work product
materials:
              [T]he Court finds that some of the data entered in the claims
              file may potentially contain attorney work product under
              Civ.R. 26(B)(4). However, the Court finds Plaintiffs' have
              demonstrated good cause as to why the Claims File should be
              disclosed, with the minor redactions indicated above. The
              Claims File goes to the heart of Plaintiffs' bad faith cause of
              action. The Claims File also provides evidence of the timing
              surrounding the claim. Plaintiffs have specifically alleged
              "foot-dragging" by Defendant. The Claims File contains
              discoverable information that may tend to support that claim.
(Sic passim.) (Internal citations omitted.) (Decision & Entry at 6.)

       {¶ 38} State Farm argues that the trial court erred to its prejudice by ordering
disclosure of work product materials in the claims file ahead of the trial on the breach of
contract claim. We disagree.
       {¶ 39} Ordinarily, discovery orders are reviewed under an abuse of discretion
standard. Bay Emm Vay Store, Inc. v. BMW Fin. Servs. NA, L.L.C., 10th Dist. No. 17AP-
786, 2018-Ohio-2736, ¶ 11; Heinrichs v. 356 Registry, Inc., 10th Dist. No. 15AP-532, 2016-
Ohio-4646, ¶ 47. Under an abuse of discretion standard of review, an appellate court can
reverse a trial court decision only when the decision is unreasonable, arbitrary, or
unconscionable. State ex rel. Worrell v. Ohio Police & Fire Pension Fund, 112 Ohio St.3d
116, 2006-Ohio-6513, ¶ 10.
       {¶ 40} State Farm contends that a de novo standard of review applies because the
discovery order involves protected attorney work product. The case law on this issue does
not support State Farms argument, as Ohio courts have applied the abuse of discretion
standard in reviewing trial court rulings involving work product protections. Stewart v.
Siciliano, 11th Dist. No. 2011-A-0042, 2012-Ohio-6123; Brummitt v. Seeholzer, 6th Dist.
No. 22AP-100                                                                                  12

No. E-13-035, 2015-Ohio-71; Garg v. State Auto. Mut. Ins. Co., 155 Ohio App.3d 258, 2003-
Ohio-5960, (2d Dist.); Devito v. Grange Mut. Cas. Co., 8th Dist. No. 99393, 2013-Ohio-
3435, ¶ 15. In MA Equip. Leasing I, LLC v. Tilton, 10th Dist. No. 12AP-564, 2012-Ohio-
4668, this court noted that "the Supreme Court has characterized the determination of
whether materials are protected by the attorney work product privilege and the
determination of the good-cause exception to that privilege, not as questions of law, but as
'discretionary determinations to be made by the trial court.' " Id. at ¶ 16, citing State ex rel.
Greater Cleveland Regional Transit Auth. v. Guzzo, 6 Ohio St.3d 270, 271 (1983).
Accordingly, we shall apply an abuse of discretion standard in reviewing the trial court's
decision to deny the stay of discovery on the bad faith claim and compel immediate
production of work product materials.
       {¶ 41} The trial court's decision does not specify which documents in the claims
contained work product materials. The injury in this case occurred on August 13, 2018, and
appellees filed their lawsuit on October 28, 2020. Many of the documents in the claims file
are undated. Our review of the claims file reveals that appellees' forwarded their first
demand for settlement of the UIM claim in September of 2019, and State Farm made the
offer of $2,000 in January 2020.
       {¶ 42} In its merit brief to this court, State Farm describes the attorney work product
materials in the claims file as notes detailing the injury and medical treatment, notes
revealing insurance reserves for appellees' UIM claim, activity after suit was filed and
referral to defense counsel, notes discussing settlement authority, notations as to individual
entries used in evaluation of the UIM claim, and detailed analysis and evaluation of
appellees' UIM claim. State Farm asserts that disclosure of these documents to appellees
ahead of the first trial on the breach of contract claim would be "grossly prejudicial" to State
Farm's ability to defend the contract claim. (State Farm's Brief at 32.)
       {¶ 43} State Farm's representations regarding the nature and extent of the work
product materials in the claims file are somewhat exaggerated as is State Farm's claim of
prejudice. Based upon our independent review of the claims file, we are convinced that a
vast majority of the information and documents in the claims file were prepared by State
Farm claims personnel in the ordinary course of claim review, particularly those materials
generated before September 2019. Such documents do not qualify as protected work
No. 22AP-100                                                                               13

product. We find, however, that State Farm has established the claims file does contain
attorney work product materials. Our review of the specific documents identified by State
Farm in briefing to this court reveals that Bates Nos. 45, 50-53, 194, and 218-221, are
documents prepared in anticipation of litigation as they are either designated as litigation
materials or contain information recorded within the relevant time frame. These documents
reflect either data compilations supporting State Farm's valuation of the UIM claim,
narrative statements regarding State Farm's valuation of the UIM claim, or proposed
settlement authority and UIM reserves. Such information typically qualifies as attorney
work product when prepared in anticipation of litigation.
       {¶ 44} The trial court decided to try the bad faith claim to the same jury immediately
following the verdict on the breach of contract. As a practical matter, the timing of the two
proceedings means discovery related to the bad faith claim cannot be stayed.
       {¶ 45} State Farm relies on Loukinas v. State Farm Mut. Auto. Ins. Co., 1st Dist. No.
C-180462, 2019-Ohio-3300, in support of the contention that the trial court erred by
refusing to stay discovery on the bad faith claim pending the jury determination of the
breach of contract claim. In Loukinas, the insureds brought a declaratory judgment action
seeking UM coverage after they were injured by an uninsured motorist. The trial court
bifurcated the breach of contract and declaratory judgment claims from the bad faith claim,
but denied State Farm's motion to stay discovery as to bad faith.
       {¶ 46} On appeal, State Farm argued that the trial court committed reversible error
by compelling State Farm to produce evaluations contained in the claims file, and
compelling State Farm personnel to testify regarding State Farm's evaluation of the
plaintiffs' claim. According to State Farm, the claims file and testimonies included attorney-
client communications and work product materials. State Farm did acknowledge that
otherwise protected attorney-client communications and work product materials would be
discoverable in connection with proceedings related to the bad faith claim.
       {¶ 47} The court of appeals held that because the trial court bifurcated the bad faith
claim from the underlying claims, the trial court erred by compelling the insurer to disclose
otherwise privileged attorney-client communications and work product materials contained
in its claims file prior to the resolution of the declaratory judgment and breach of contract
claims. Id. at ¶ 29. The court of appeals reasoned that allowing discovery to proceed on the
No. 22AP-100                                                                                14

bad faith claim would unfairly prejudice the insurer's ability to defend the underlying
declaratory judgment and breach of contract claims. Id.
       {¶ 48} State Farm has cited similar decisions from other appellate courts holding
that bifurcation and a stay of discovery is necessary to avoid unfair prejudice to the insurer.
See Garg v. State Auto. Mut. Ins. Co., 155 Ohio App.3d 258, 2003-Ohio-5960, (2d Dist.);
Devito v. Grange Mut. Cas. Co., 8th Dist. No. 99393, 2013-Ohio-3435, ¶ 15. Both Garg and
Devito rely on Boone v. Vanliner Ins. Co., 91 Ohio St.3d 209 (2001), wherein the Supreme
Court advised that if the insurer argues its defense of the underlying coverage issue would
be prejudiced by the joinder of the bad faith claim, the insurer should move the trial court
for bifurcation and a stay of discovery on the bad faith claim. Id. at 213.
       {¶ 49} In Garg, the insured brought an action seeking insurance coverage for fire
damages to a warehouse. Grange denied coverage claiming the fire was intentionally set.
The trial court ordered Grange to produce the entire claims file because any work product
materials or attorney communications were relevant and discoverable with respect to the
bad faith claim. The Second District concluded it was an abuse of discretion for the trial
court to compel production of the claims file without bifurcating the issues of coverage and
bad faith because joinder of the two claims for trial would substantially prejudice Grange.
The court stated:
               We agree with Grange that the trial court's failure to bifurcate
               the bad faith claim for trial and to stay discovery on that claim
               would be grossly prejudicial to Grange and, thus, an abuse of
               discretion. The Gargs are not entitled to discover Grange's
               attorney-client communications and attorney work product
               materials for purposes of their breach of contract and unfair
               claims practices claims, absent waiver of those privileges.
Id. at ¶ 29.

       {¶ 50} Appellees argue that the cases cited by State Farm are distinguishable
because they involve the denial of insurance coverage rather than a simple dispute over the
value of the claim. Appellees explain that in cases alleging a bad faith denial of coverage,
prejudice to the insurer's defense of the coverage claim is presumed to arise out of the
disclosure of otherwise privileged information in advance of the trial of the breach of
contract claim. Appellees maintain that the insurer's claims file, in such cases, likely
contains detailed information regarding the manner in which the insurer determined the
No. 22AP-100                                                                                15

relevant facts, the insurer's interpretation of policy provisions, as well as the legal
arguments, theories, and strategies considered by the insurer in reaching the coverage
decision. Appellees maintain that, by contrast, there is little potential for unfair prejudice
to the insurer in cases where the only disputed issue is the value of the claim.
          {¶ 51} Brummitt, is a case where the disputed issue was the value of the insured's
UIM claim. In Brummitt, the insured's case against the tortfeasor went to trial and the jury
issued a verdict in excess of the tortfeasor's liability coverage. The tortfeasor appealed from
the jury verdict and the insured appealed from the trial court's decision to stay discovery on
the insured's bad faith claim pending the determination of the damages portion of their
case.2 The trial court had bifurcated the damages issue from the bad faith claim and stayed
discovery on the bad faith claim upon finding that a determination of the insured's actual
damages would be helpful to the trier of fact in determining whether the insurer acted in
bad faith in valuing the UIM claim. The trial court did not conduct an in-camera review of
the claims file prior to making its ruling on bifurcation and a stay of discovery.
          {¶ 52} In the appeal, the insured argued that the trial court erred when it stayed
discovery on the insured's bad faith claim against their UIM carrier and denied their motion
to compel immediate production of the claims file. The insureds maintained that the insurer
failed to show how it would be prejudiced by the production of the claims file if bifurcation
was ordered. The insurer argued that the breach of contract claim should be tried first
because the success of the bad faith was dependent on the success of the breach of contract
claim.
          {¶ 53} The court of appeals, relying on Garg, held that the trial court did not abuse
its discretion when it bifurcated the breach of contract and bad faith claims, stayed discovery
on the bad faith claim, and denied the motion to compel the claims file. Brummitt at ¶ 16.
The court of appeals noted that the insurer "specifically stated that it would be prejudiced
by discovery of the claims file because it contains defense theories and strategies including
documentation and evaluations." Id. at ¶ 32. In reaching this conclusion, the court of
appeals noted:
                   As to the claims file, the court ordered that non-privileged
                   items could be produced and that the determination as to
                   which documents were discoverable would be determined

2   The UIM policy limits exceeded the jury verdict against the tortfeasor.
No. 22AP-100                                                                              16

               through an in camera inspection. Following the trial on
               damages, the remaining documents could be produced.
(Emphasis added.) Id. at ¶ 6.

       {¶ 54} Here, the trial court elected to try the bad faith claim to the same jury
immediately following the jury verdict on the breach of contract claim. The trial court
provided the following reason for its ruling:
               The Court finds that, although it has previously bifurcated the
               underlying bodily injury UIM claim, a stay of discovery as to
               the bad faith claim would not promote judicial expedience and
               economy. To be clear, the Court ruled on November 2, 2021
               that bifurcation of the underlying accident damages and the
               bad faith claims was appropriate. For a jury to hear evidence
               of bad faith along with evidence of Plaintiffs' underlying UIM
               claim would substantially prejudice Defendant.

               The Court's concern was and is that a jury may "run wild" with
               a damages award based upon Defendants' alleged bad faith
               actions after-the-fact. However, providing the claims file at a
               later date (i.e. after the UIM/damages portion of the trial)
               would require a separate hearing, a separate jury, and
               needless delay in resolving these related causes of action.
               Given the concerns of "foot-dragging" raised by Plaintiffs, as
               well as the delay in responding to timely discovery requests,
               as indicated above, the Court prefers to move this case along
               more expeditiously than Defendant would suggest.
(Emphasis deleted.) (Decision & Entry at 7-8.)

       {¶ 55} A decision that supports the trial court's ruling in this case is Stewart. In
Stewart, the insurer acknowledged UM/UIM coverage, but withdrew an offer of settlement
upon discovering the insured may have had a previous injury. The insured filed a civil action
against the insurer alleging breach of contract and bad faith. The trial court denied the
insurers motion to bifurcate and stay discovery on the bad faith claim upon finding that
judicial economy and the potential prejudice to the insured outweighed any potential
prejudice to the insurance company arising from the disclosure of otherwise privileged
information in the claims file. The trial court had made the following specific findings in
support of the ruling:
               (1) [Insurer] failed to make any specific showing as to how it
               would be prejudiced if the breach of contract claim is not
No. 22AP-100                                                                                17

               bifurcated from the bad faith claim, (2) the breach of contract
               and the bad faith claim are necessarily intertwined to the
               extent that it would be highly prejudicial to [the insured] if
               they were bifurcated, (3) the mere fact that the two claims will
               be tried together is insufficient to find that jury confusion
               would result, (4) the testimony of [the insured's] counsel,
               which, if necessary, may disqualify counsel, would not be
               prejudicial [to the insurer], and (5) the interest of judicial
               economy weighs against bifurcation of the two claims.
Id. at ¶ 37.

       {¶ 56} The court of appeals held that the trial court did not abuse its discretion in
denying bifurcation and a stay of discovery on the bad faith claim because the trial court
expressed justifiable reasons for doing so. Id. at ¶ 38.
       {¶ 57} We note that in this case, unlike Stewart, the trial court separated the trial of
the breach of contract claim from the bad faith claim. The trial court's decision to try the
breach of contract claim before the bad faith claim effectively prevents attorney work
product materials related solely to the bad faith claim from being admitted into evidence at
the trial of the breach of contract claim. By separating the two proceedings, the trial court
eliminated the danger that the jury "could run wild" in valuing the UIM claim based on
evidence relevant to the bad faith claim. Moreover, because the jury will first hear and
determine the breach of contract claim, the parties will have the benefit of the jury verdict
on claim value before the trial of the bad faith claim commences.
       {¶ 58} Unlike the circumstances in the Brummitt case, the trial court in this case
reviewed the claims file ahead of trial on the breach of contract claim and assessed the
impact an immediate disclosure on State Farm's defense of the breach of contract claim. We
have also reviewed the information in the claims file and we cannot say that the trial court
abused its discretion when it determined that State Farm’s defense of the breach of contract
claim would not be prejudiced by the immediate disclosure of work product materials in the
claims file. State Farm's estimation of the value of appellees' UIM claim, and the opinions
of State Farm's personnel regarding settlement authority and insurance reserves are
irrelevant to the issue to be decided in the first trial. We also find that prior knowledge of
the work product materials in the claims file will provide appellees with no meaningful
insight into State Farm's litigation strategy on the breach of contract claim, as the only
disputed issue in the contract action is the value of the UIM claim. Based on our de novo
No. 22AP-100                                                                                 18

review of the specific work product materials in State Farm’s claim file, we perceive no actual
prejudice to State Farm's defense of the breach of contract claim arising from the disclosure
of these work product materials ahead of the jury verdict as to the value of the UIM claim.
Though we acknowledge the trial court’s unconventional decision to try the bad faith claim
immediately following the jury verdict as to the value of the claim gave rise to the possibility
of prejudice, no such prejudice arose in this particular case.
       {¶ 59} State Farm insists however, it was error to compel immediate production of
otherwise protected work product in the claims file because a jury verdict in State Farm's
favor in the first trial will render such disclosure unnecessary. We cannot agree with this
assertion as appellees' bad faith claim is not solely predicated on State Farm's alleged failure
to properly value the UIM claim. Indeed, appellees complaint also alleges that State Farm
acted in bad faith during the claims process when it "dragged its feet and failed to timely
provide consent to accept the liability limits, failed to timely respond to the UIM claim," and
subsequently failed to respond to appellees' continued efforts to engage in any meaningful
discussion of the claim. (Oct. 28, 2020 Compl. at 10.) Thus, a second proceeding on the
bad faith claim may yet be necessary even if jury renders a verdict favorable to State Farm
on claim value.
       {¶ 60} State Farm argues alternatively that even if this court finds that the trial court
did not err in denying a stay of discovery of the bad faith claim, certain work product
materials generated after suit was filed are not discoverable. We agree.
       {¶ 61} In State Farm's merit brief, State Farm argues that Bates Nos. 45-51, 77-78,
121-127, 197 and, 271-273 are work product materials in the claims file that were generated
after October 28, 2020, the date this lawsuit was filed. Upon an independent review of the
claims file, and in light of Boone, we find that Bates Nos. 45-51, 77-78, 121-127, 197, and 271-
273 contain work product materials relevant to the State Farm's defense of the bad faith
claim, but not otherwise probative of State Farm's alleged bad faith in handling appellees’
insurance claim. Because these post suit work product materials cast no light on State
Farm’s alleged bad faith in the handling of appellee’s insurance claim, they are not
discoverable in this litigation. Stewart at ¶ 54-56. Accordingly, we hold that the trial court
abused its discretion when it ordered State Farm to produce work product materials relevant
to State Farm’s defense of this case.
No. 22AP-100                                                                             19

       {¶ 62} This court has cautioned that " '[a] review under the abuse-of-discretion
standard is a deferential review.' " State v. Graggs, 10th Dist. No. 13AP-852, 2014-Ohio-
1195, ¶ 6, quoting State v. Morris, 132 Ohio St.3d 337, 2012-Ohio-2407, ¶ 14. Under the
particular circumstances of this case, and with the exception noted herein, we hold that the
trial court did not abuse its discretion by denying State Farm's motion to stay discovery on
the bad faith claim pending resolution of the breach of contract claim.
       {¶ 63} Based on the foregoing, State Farm's two assignments of error are sustained
in part, and overruled in part.
IV. CONCLUSION
       {¶ 64} State Farm’s first and second assignments of error are sustained in part, and
overruled in part. The judgment of the Franklin County Court of Common Pleas is affirmed
in part and reversed in part, and the case is remanded for further proceedings consistent
with this decision.
                                          Judgment affirmed in part and reversed in part;
                                                                         case remanded.

                                 KLATT, J., concurs.
                          DORRIAN, J., concurs in judgment only.
                                 _____________