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Houston Casualty Co. v. National Union Fire Insurance Co. of Pittsburgh, PA

United States District Court, N.D. California

December 11, 2019

HOUSTON CASUALTY COMPANY, Plaintiff,
v.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, and DOES 1 through 30, Defendants.

          ORDER RE MOTION FOR RECONSIDERATION AND ADMINISTRATIVE MOTION TO SEAL

          WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         In this insurance action, a non-party moves for reconsideration of a discovery dispute order. Defendant moves for joinder in the motion. For the reasons stated below, reconsideration is Denied.

         STATEMENT

         Defendant National Union Fire Insurance Company of Pittsburgh, Pennsylvania, was the primary insurer for Anderson Hay & Grain, an exporter of hay and straw products. Plaintiff Houston Casualty Company had the excess (Compl. ¶¶ 4, 8, 9).

         National Union issued a primary policy with a general aggregate limit of $10 million, an each-occurrence limit of one million dollars, and an each-location aggregate sub-limit of two million dollars to Anderson Hay, effective May 2014 to May 2015. Houston Casualty issued a form excess policy to Anderson Hay, effective May 2014 to May 2015 (**).

         In July 2014, Bartolo Flores collapsed while delivering alfalfa to the premises of Anderson Hay. He filed suit in Los Angeles Superior Court. National Union agreed to defend and indemnify Anderson Hay in the action. Anderson Hay retained Acker & Whipple as counsel for that underlying action. Houston Casualty requested it be included on all correspondence related to the underlying action. In August 2018, the jury returned a verdict of $3.5 million against Anderson Hay in the underlying action (id. ¶¶ 8-11, 14, 19).

         Herein, Houston Casualty asserts National Union unreasonably refused to settle the underlying action within its policy limits and accordingly alleges the following claims for relief: (1) equitable subrogation, (2) unjust enrichment, and (3) declaratory relief (id. ¶¶ 24-49).

         All agree that advice given by the law firm to National Union is discoverable, the privilege between them having been waived. The instant dispute concerns a July 31 email that was initially produced but later clawed back on the theory that it had never been sent to National Union. In October 2019, Houston Casualty filed a discovery motion regarding this email, written by attorney Stephen Acker of Acker & Whipple, providing an evaluation of the underlying action. Non-party Acker & Whipple had voluntarily produced the email to all parties during discovery. Later, however, Acker & Whipple stated that it had unintentionally produced the email, that it was protected by the work-product rule on the ground that it expressed Mr. Acker's opinions and mental impressions, and that the privilege had not been waived. The parties do not dispute that a similar discoverable email dated August 2, 2017, providing an evaluation of the action was sent to National Union.

         National Union did not appear at the hearing for the discovery motion. An order issued in favor of Houston Casualty. The order was stayed for seven calendar days, allowing Acker & Whipple or any other party to seek emergency appellate relief. On October 30, Acker & Whipple moved to stay enforcement of the October 23 order pending its motion for reconsideration, which it filed on October 31. National Union moved for joinder. The Court stayed its October 23 order pending resolution of the motion for reconsideration, but stated the email in question could be used in the deposition of any Acker & Whipple attorney and in the deposition of plaintiff's expert. This order follows full briefing and oral argument (Dkt. Nos. 40, 43-45, 49, 52-54).

         ANALYSIS

         Motions for reconsideration are governed by Civil Local Rule 7-9, which requires the movant to show one of the following:

(1) That at the time of the motion for leave, a material difference in fact or law exists from that which was presented to the Court before entry of the interlocutory order for which reconsideration is sought. The party also must show that in the exercise of reasonable diligence the party applying for ...

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