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Riverbank Holding Company, LLC v. New Hampshire Insurance Company

October 3, 2012


The opinion of the court was delivered by: Gregory G. Hollows United States Magistrate Judge


Pending before the court are plaintiff Riverbank Holding Company's ("Riverbank") motion for protective order regarding the deposition of plaintiff's litigation counsel, Greve, Clifford, Wengel & Paras (Dkt. 34); defendant New Hampshire Insurance Company's ("NHIC") opposition to plaintiff's motion (Dkt. 35), and; plaintiff's reply to defendant's opposition (Dkt.37). At the hearing conducted on September 13, 2012, Lawrence Wengel and Bradley Kragel appeared for plaintiff while Stephen Liberatore appeared for defendant before the court.

As an initial matter, it should be noted that the parties failed to comply with Local Rule 251(c) which requires them to file a joint statement of their disagreement detailing their attempts to confer, specifying the precise factual dispute(s) before the court, and setting forth each party's arguments. Local Rule 251(c)(1-3). The parties are admonished to familiarize themselves with the Local Rules and comply therewith prior to filing anything with the court. Because the issue raised in the motion is well drawn, the court proceeds.

As an additional matter, the discovery deadline in this case, by which all such disputes were to be resolved, was September 5, 2012. Dkt. 12. In order to hear and rule upon this motion only, and without altering any other deadlines set by the scheduling order, the court will extend the discovery date to include the date upon which this order issues.

Upon review of the briefs submitted and after conducting oral argument, the court now issues the following order.


The instant action arises from a previous lawsuit between plaintiff and its lessees, for which plaintiff seeks recovery from defendant.*fn1 Defendant NHIC provided insurance coverage to plaintiff Riverbank in connection with real property it owned vis-a-vis an insurance policy covering the period between April, 2004 and April 2009 ("the policy"). During that time Riverbank held a lease arrangement for its property with two entities: Borman, Inc. ("Borman") was the original lessee and Pearl on the River LLC ("Pearl") was the subsequent sublessee of the same.

When litigation arose between the plaintiff, Pearl and Borman ("the underlying litigation"), and specifically after counterclaims were filed, Riverbank requested NHIC defend it pursuant to their policy. During the course of litigation NHIC failed to provide any defense and subsequently denied coverage to Riverbank on the claims it faced from Borman and Pearl. After a settlement agreement was reached in the underlying litigation, Riverbank sued NHIC for breach of contract and bad faith.

On June 6, 2012, in an order on the parties' motions for summary judgment, the District Judge held that defendant breached the insurance contract by failing to defend Riverbank in the claim brought by Pearl against plaintiff. Dkt. 31. In response to the order, NHIC tendered payment to plaintiff (issue date July 26, 2012) purportedly covering Riverbank's attorney fees and costs incurred after the Pearl cross-complaint was first tendered to NHIC. Dkt. 37-3. Though the parties agree that defendant had no duty to defend against the Borman cross-complaint (counterclaims), plaintiff continues to seek damages in connection with that claim. See Dkts. 31, 37.

On June 29, 2012 defendant served a subpoena and deposition notice on plaintiff's counsel - Greve, Clifford, Wengel & Paras, LLP - seeking testimony on its representation of Riverbank in the underlying litigation. Dkt. 34-4. Both plaintiff and counsel timely objected to the subpoena and now seek a protective order precluding defendant from deposing plaintiff's counsel. Dkt. 34.


Neither the Federal Rules of Civil Procedure nor the Federal Rules of Evidence prohibit taking the deposition of an opposing party's attorney. In fact, Rule 30(a) of the Federal Rules of Civil Procedure allow a party to depose "any person" without leave of court. And though the Rule sets forth certain exceptions to this provision, none of them exempts a party's counsel from being subject to deposition. Id. Nonetheless, because of the negative impact that deposing a party's attorney can have on the litigation process, the courts have held that taking opposing counsel's deposition should be allowed only in limited circumstances. See the seminal case of Shelton v. American Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986). Those circumstances should be limited and require a showing by the party seeking the deposition that: (1) no other means exist to obtain the information than to depose opposing counsel; (2) the information sought is relevant and non-privileged; and (3) the information is crucial to the preparation of the case. Id. Though not expressly adopted by the Ninth Circuit, the Shelton criteria has been widely used by the district courts of this circuit and many others, and we apply it here. See e.g., Massachusetts Mutual Life Ins. Co. v. Cerf, 177 F.R.D. 472, 478 (N.D. Cal. 1998) (Shelton is generally regarded as the leading case on attorney depositions), American Cas. Co. of Reading, Pa. v. Krieger, 160 F.R. D. 582, 588 (S.D. Cal. 1995) (requiring party to justify attorney deposition by applying the Shelton factors), Johnson v. Couturier, 261 F.R.D. 188, 193 (E.D. Cal. 2009) (Hollows, MJ.) ("the Shelton criteria will be utilized by this court"), U.S. v. Phillip Morris Inc., 209 F.R.D. 13,17 (D.D.C. 2002) (applying Shelton factors where litigation counsel faced deposition and questioning would expose litigation strategy), Prevue Pet Products v. Avian Adventures, 200 F.R.D. 413, 418 (N.D. Ill. 2001) (adopting Shelton approach to determining whether to permit the deposition of opposing counsel).

Here, defendant claims Riverbank's counsel is "best positioned" to provide information, relevant to the instant litigation, falling into three categories: (1) the circumstances surrounding and leading up to the settlement with Pearl and Borman, including the damages caused by defendant's failure to defend, (2) legal fees incurred by Riverbank in connection with defending claims by Pearl ...

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