United States District Court, S.D. California
ORDER ON JOINT MOTION FOR DETERMINATION OF DISCOVERY
DISPUTE [ECF NO. 36]
Mitchell D. Dembin United States Magistrate Judge.
this Court is the parties' Joint Motion for Determination
of Discovery Dispute filed on May 5, 2017. (ECF No. 36). The
dispute is over the extent to which Defendant is entitled to
discovery regarding Plaintiff's claim for
“Brandt fees” as damages, and the timing
of such discovery. “Brandt fees” are
attorneys' fees incurred by a plaintiff to obtain the
contract benefits under an insurance policy which are
recoverable as economic damages resulting from the breach of
the good faith covenant. Brandt v. Super. Ct., 37
Cal.3d 813, 817 (1985). Attorneys' fees expended to
recover other types of damages are not recoverable as
Brandt fees, so the attorneys' fees incurred by
a plaintiff in a bad faith action must be allocated between
recoverable fees incurred to obtain contract damages and
non-recoverable fees incurred to obtain tort damages.
seeks to compel Plaintiff to produce unredacted copies of
time records, billing invoices, and the attorney-client fee
agreement. Defendant further seeks to compel Plaintiff to
make Rule 26(a) disclosures concerning Brandt fee
asserts attorney-client privilege and attorney work product
objections. Plaintiff explains that its Brandt fees
are continuing to accrue and claims that revealing these
documents in this “active and ongoing litigation”
would prejudicially reveal Plaintiff's ongoing litigation
strategy to its adversary. Plaintiff offers to produce time
records redacted to exclude descriptions of time spent that
is not claimed as Brandt fee damages.
contends that Plaintiff waived any privilege applying to
these documents by claiming Brandt fees in this
action. Defendant asserts that “the Port must produce
un-redacted billing entries for any time that the Port
wishes to recover as damages. To the extent that the
Port determines that a particular time entry is not
recoverable because it was not time spent trying to recover
contract damages, only then is redaction appropriate.”
(ECF No. 36 at 8:23-9:2 (emphasis in original)).
is correct that “[b]y seeking to recover the fees
expended in this litigation, Plaintiffs have waived the
privileges that might have covered the information.”
Mancini v. Ins. Corp. of N.Y., Case No.
07cv1750-L-NLS, 2009 WL 1765295 at *4 (S.D. Cal. June 18,
2009) (citing Luna v. Sears Life Ins. Co., Case No.
06cv2653-DMS-CAB, 2008 WL 2484596 at *1 (S.D. Cal. Jan. 11,
2008)); see also Foremost Ins. Co. Grand Rapids, Mich. v.
Enriquez, Case No. 13cv1604-H-DHB, 2015 WL 11578510 at
*3 (S.D. Cal. March 26, 2015) (requiring production of
redacted copies of the attorney-client fee agreement and
redacted copies of invoices in addition to the summary of
fees and evidence of payments already produced); Fidelity
Nat'l Fin. Mgmt. v. Nat'l Union Fire Ins. Co.,
Case No. 09cv140-AJB-CAB, 2011 U.S. Dist. LEXIS 48697, *3
(S.D. Cal. May 5, 2011) (finding plaintiff waived privilege
claim to attorneys' fees information by claiming
reliance on Lennare Mare Island, LLC v. Steadfast Ins.
Co., Case No. 12cv2182-KJM-KJN, 2015 WL 1540631 (E.D.
Cal. April 7, 2015) and Fidelity, supra,
2011 U.S. Dist. LEXIS 48697, *3, is misplaced.
cites Lennare for its holding that
…at least some of the material [defendant] seeks to
compel, in particular, information concerning
[plaintiff's] legal bills, may relate to
[plaintiff's] litigation strategy, such as descriptions
of the legal services for which the Navy may be paying.
Because of this fact, the court finds that production of such
information is inappropriate at this pre-trial juncture.
Lennare, 2015 WL 1540631 at *6. Although this
holding appears at first blush to be directly on point, the
underlying circumstances were so different that the cited
language has no relevance to the instant dispute. In
Lennare, the defendant was not seeking billing
records, invoices, attorney-client fee agreements and Rule 26
disclosures showing the amount, description and calculation
of Brandt fees. Instead, the Lennare
defendant was seeking testimony about
reimbursement payments made to plaintiff by third
parties for incurring Brandt fees to obtain
insurance contract damages for a decontamination project.
Lennare, 2015 WL 1540631 at *1; and see
Case No. 2:12cv2182-KJM-KJN, ECF Nos. 255-2, 255-6, 263,
425). Consequently, the cited language from Lennare
is not persuasive in the context of the instant dispute.
the Fidelity case, Plaintiff argues that it stands
for the proposition that Brandt does not require
immediate disclosure and that Plaintiff can wait until some
unspecified time before trial to produce the requested
information. (ECF No. 36-2 at 4). Plaintiff is correct that
then-Magistrate Judge Bencivengo only required production of
the requested information by the close of discovery. But, at
the time of the Order in Fidelity, only 15 days
remained before the close of discovery. More significantly,
Judge Bencivengo found the Plaintiff had waived any privilege
by claiming Brandt fees, rejected Plaintiff's
request to delay production, and warned that Plaintiff should
produce the documents before the discovery period closed-just
two weeks from the issuance of the order. Fidelity,
2011 U.S. Dist. LEXIS 48697 at *3. This Court does not
interpret Judge Bencivengo's order as permitting
plaintiffs claiming Brandt fees to wait until the
close of discovery to produce their evidence, but instead
reads the opinion as suggesting that delayed production of
Brandt fees evidence could lead to sanctions.
appears that all of the magistrate judges in this District
who have considered this issue have found that the plaintiff
waived any applicable privileges by claiming Brandt
fees, and ordered production forthwith. Plaintiff has not
convinced this Court to take a different path. Consequently,
Plaintiff must produce the time sheets, billing invoices, and
fee agreement(s). Defendant concedes, however, that Plaintiff
may redact information for time entries as to which Plaintiff
does not seek to recover as damages.
Plaintiff's assertion of privilege does not shield it
from making Rule 26(a) disclosures concerning Brandt
fees. Rule 26(a) requires a party seeking damages to provide
a copy or description of documents the party may use to
support its claims, provide a computation of damages, and
make documents supporting its claimed damages available for
inspection and copying. Fed.R.Civ.P. 26(a). By asserting a
claim for Brandt fees, Plaintiff has waived any
privileges that would prevent disclosure of the documents
supporting the damages Plaintiff seeks. R&R Sails,
Inc. v. Ins. Co. of Penn., 673 F.3d 1240, 1247 (9th Cir.
2012) (finding district court did not abuse its discretion in
concluding that party failed to timely make Rule 26(a)
disclosures in support of Brandt fees demand, but
reversing sanctions award for failure to consider whether
failure was willful)). Plaintiff must comply with Rule 26(a)
with respect to its claim for Brandt fees.
Court GRANTS Defendant's motion to
compel discovery. Plaintiff is ORDERED to
produce time sheets, billing invoices, and the relevant fee
agreement(s). Plaintiff may redact billing entries or other
parts of these documents that are irrelevant to Plaintiffs
claim for damages, including billing entries for time that
the Plaintiff does not seek to recover as contract damages.
Plaintiff is ORDERED to not redact the
billing entries for any time that ...