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Britz Fertilizers, Inc. v. Bayer Corp.

March 9, 2009

BRITZ FERTILIZERS, INC., PLAINTIFF,
v.
BAYER CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Dennis L. Beck United States Magistrate Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO COMPEL TESTIMONY AND PRODUCTION OF DOCUMENTS FROM THEODORE HOPPE (Document 69)

Defendants Bayer Corporation and Bayer Cropscience, LP (collectively "Bayer") filed the instant motion to compel non-party deponent Theodore Hoppe to provide further testimony and production of documents requested pursuant to a subpoena on October 21, 2008.*fn1 The matter was heard on November 21, 2008, before the Honorable Dennis L. Beck, United States Magistrate Judge. Eric Sousa appeared on behalf of Plaintiff Britz Fertilizers, Inc. ("Britz"). T. Mark Smith appeared on behalf of Bayer and Theodore Hoppe appeared on his own behalf.

BACKGROUND

History of Proceeding

In December 2002, Ahmad Skouti and Walter Johnson filed an action in the Fresno County Superior Court against Britz ("Skouti"). The complaint alleged that a "tank mix" containing several agricultural chemicals, including Bayer's product Ethrel, damaged Skouti's raisin crop.

In January 2003, Britz's insurance carrier, Farmland Insurance ("Farmland"), retained Theodore W. Hoppe ("Hoppe") to represent Britz in the action. Pursuant to an indemnity provision in the Distribution Agreement between Britz and Bayer, Hoppe requested that Bayer defend and indemnify Britz in the Skouti action. Bayer concluded that it had no duty to do so; however, based on the longstanding relationship, Bayer agreed to assist in the defense. In June 2003, attorney James Rushford ("Rushford") associated in as co-counsel of record for Britz, but withdrew prior to trial.

A jury trial commenced on February 28, 2005. During trial, Britz's CFO Robert Glassman ("Glassman"), who along with Hoppe served as Britz's trial counsel, admitted liability but contested damages. On April 14, 2005, judgment was entered against Britz in the amount of $7,596,247.00, plus costs. Britz has exhausted all appeals and paid the judgment.

On March 14, 2006, Britz filed this action against Bayer seeking indemnity, declaratory relief and damages for fraud, misrepresentation and false promise. Britz filed a separate action on June 8, 2007, alleging that Bayer breached an agreement to adequately defend Britz and that Bayer was negligent in its defense in the Skouti action. The negligence claim has been dismissed and the actions have been consolidated. On February 28, 2008, Britz filed an amended complaint, restating the surviving claims for both actions. The amended complaint includes a claim for breach of contract to defend, alleging that Bayer failed "to take adequate measures to ensure that Britz received an adequate defense."

The Depositions

The first session of Hoppe's deposition took place on June 27, 2007. He refused to answer certain questions, asserting the attorney-client privilege as it related to Farmland. He also refused to answer questions about the Skouti action, asserting the work product doctrine. The deposition was not concluded.

On February 22, 2008, Judge Snyder held a hearing on Bayer's motion to compel further testimony from Glassman and David Britz regarding Britz's assertion of the attorney-client privilege regarding communication with Hoppe and Rushford. The motion was granted, with the Court finding that the attorney-client privilege did not apply and/or was waived because Britz had placed its communications with Hoppe and Rushford at issue by filing the present action. Bayer also raised the issue of Hoppe's refusal to respond to questions posed at his deposition. As an advisory ruling, the Court found that the order compelling disclosure also applied to discovery sought from Hoppe.

After this hearing, Bayer subpoenaed Hoppe for a further session of his deposition and requested production of documents. The second session commenced on May 19, 2008. Hoppe produced documents prior to the deposition, but withheld others based on the attorney-client privilege as to his relationship with Farmland, as well as the work-product doctrine. At the deposition, Hoppe maintained these objections and refused to answer certain questions.

The instant motion was filed on August 22, 2008. Although Judge Snyder heard the motion, there was no ruling. Judge Snyder recused herself on October 17, 2008, and the motion was re-set before Magistrate Judge Dennis Beck. The ...


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