JESUS ANTONIO GARCIA and CHRISTINA ELIZABETH PALMER GERACI, Plaintiffs,
PROGRESSIVE CHOICE INSURANCE COMPANY and DOES 1 through 100, Inclusive, Defendants.
ORDER DENYING PLAINTIFF'S MOTION TO STRIKE DEFENDANT'S ANSWER [Docket No. 79]
ROGER T. BENITEZ, District Judge.
Presently before the Court is Plaintiff's Motion to Strike Defendant's Answer (Docket No. 79). For the reasons stated below, the Motion to Strike Defendant's Answer is DENIED.
I. FACTUAL BACKGROUND
This action arises out of Defendant Progressive Choice Insurance Company's denial of Plaintiff Christina Elizabeth Palmer Geraci's insurance claim.
On May 19, 2008, Geraci purchased a 2006 Jeep Grand Cherokee, VIN #1J8HS58N26C178213, from Jimmie Johnson Kearny Mesa Chevrolet. Progressive issued an automobile insurance policy, Policy No. 10079982-2 ("Policy") for the Jeep on June 2, 2008.
On August 10, 2008, Geraci called Progressive and reported that the Jeep had been stolen. According to Geraci, she and her fiance, Jesus Antonio Garcia, had driven the Jeep to a bar in the Cardiff area the prior evening. At approximately 2:00 a.m., because Geraci and Garcia were too intoxicated to drive home, a friend drove Geraci and Garcia to the friend's apartment to spend the night. When the same friend drove them back to the bar the afternoon of August 10, the Jeep was missing. The Jeep was later found by the CHP completely burned, in the Brawley area. Geraci reported the alleged theft to the Encinitas Sheriff's Department and filed a claim for the Jeep with Progressive on the following Monday. On July 27, 2009, Progressive denied coverage.
II. PROCEDURAL BACKGROUND
This action was originally filed by both Geraci and Garcia in the Superior Court for the State of California, County of San Diego. Progressive removed this action on March 7, 2011. The Complaint alleges that Progressive denied Geraci's claim for coverage in violation of the insurance contract. The Complaint asserts two causes of action: (1) breach of contract; and (2) breach of the duty of good faith and fair dealing. Garcia was dismissed without prejudice from this action on June 10, 2011.
Early in the discovery process, Progressive asserted it was not liable for breach of the implied covenant of good faith and fair dealing or for punitive damages because it relied on the advice of counsel. Progressive disclosed Teresa Starinieri, an outside attorney hired by Progressive during the investigation of Geraci's claim, as a witness. (Docket No. 30 at 19 ¶ 4 and 33 ¶ 4.) In addition, in response to Geraci's discovery demands, Progressive disclosed the claims file for the underlying insurance claim and the electronic activity notes, which included communications between Starinieri and Progressive's Fire & Theft Adjuster, Elizabeth McAndrew. ( Id. at 19 ¶ 5 and 33 ¶ 3.) These items were produced "subject to objection on grounds of attorney-client privilege." ( Id. at 33 ¶ 3.)
During McAndrew's deposition, it was discovered that there may have been some email communications between McAndrew and Starinieri that were not in the claims file. ( Id. at 21 ¶ 11 and 34 ¶ 5.) At the request of Plaintiff's counsel, Progressive searched for the emails, which were stored on an email system no longer in use. ( Id. at 34 ¶ 6.) On June 6, 2012, Progressive disclosed some of the documents that were recovered from the old email system, but withheld those documents containing privileged communications between Progressive's employees and Starinieri. ( Id. at 35 ¶ 8.) In addition, Progressive informed Geraci that it was withdrawing its previously asserted advice of counsel defense and was now claiming attorney-client and attorney work product privileges with respect to the withheld communications, identified as Item Nos. 1-109 on the amended privilege long. ( Id. at 21 ¶ 12, 35 ¶¶ 9-10, 43-58.) The amended privilege log also listed communications that were previously disclosed. ( Id. at 59-76.)
On July 12, 2012, the parties filed a joint motion for determination of a discovery dispute. (Docket No. 30.) Geraci asserted that Progressive had waived the attorney-client privilege with respect to the newly discovered emails and with respect to the communications already produced. Geraci requested that the email communications be disclosed and that Starinieri be required to testify at a deposition without claiming privilege. In the alternative, Geraci sought to re-depose witnesses, at Progressive's cost. Progressive argued that the newly discovered emails were confidential attorney-client communications, and that they had never been disclosed to outside parties. Progressive argued that as a result, there had been no waiver of privilege with respect to Item Nos. 1-109 on the amended privilege log.
Magistrate Judge Nita L. Stormes ordered Progressive to produce the documents identified as Item Nos. 1-109 on its amended privilege log ("Discovery Order"). (Docket No. 31.) The Discovery Order held that "Defendant expressly waived attorney-client privilege with respect to communications between it and Ms. Starinieri concerning Plaintiff's claim." ( Id. at 10.) Progressive moved to modify or set aside the Discovery Order. (Docket No. 37.) The undersigned denied this motion on September 27, 2012. (Docket No. 53.) Progressive filed a Petition for Writ of Mandamus with the Ninth Circuit ...