575 S.W.3d 476
Mo. Ct. App.2019Background
- Shelter (insurer) withheld certain claim-file documents as attorney-client privileged and work product during bad-faith settlement litigation brought by Brennan and the Browns.
- Connie Morley, Shelter’s senior litigation attorney and corporate representative, testified in deposition that Shelter’s settlement decisions relied in part on advice from outside counsel and her supervisor.
- Brennan moved to compel unredacted production, arguing privilege was waived (by Morley’s testimony and other doctrines), the materials were created in the ordinary course of business, the files belonged to the insured (Brennan), and the materials were not work product.
- The court conducted an in camera review of the disputed documents.
- Court found the contested documents reflected legal advice about Shelter’s own liability and were protected by attorney-client privilege; Shelter had not voluntarily waived privilege.
- Court ordered production only in redacted form and denied broader writ relief or prophylactic prohibition of future documents.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver by deposition testimony | Morley’s testimony that Shelter relied on counsel impliedly waived privilege | Disclosure under cross-exam is not voluntary; Shelter did not affirmatively rely on counsel as an affirmative defense | No waiver — deposition disclosure under cross was not voluntary and Shelter didn’t assert reliance as an affirmative defense |
| Implied waiver by putting privileged matter at issue | Argument that consultation with counsel put privileged communications "at issue" (citing Hearn/Lee) | Missouri rejects broad implied-waiver rule that would eviscerate privilege for insurers | Denied — court declines to adopt broader implied-waiver rule used in some jurisdictions; protects privilege |
| Ordinary-course-of-business exception | Documents prepared by attorney acting as claims adjuster are not privileged | Attorney was retained specifically to provide legal advice for settlement strategy, not as a claims adjuster | Denied — attorney acted as legal advisor, not ordinary-claims personnel; privilege applies |
| Insured’s ownership of claim file / bad-faith exception | Brennan claims insured entitlement to claim file overcomes privilege (citing Grewell and out-of-state exceptions) | Missouri law does not waive privilege for insureds; Grewell does not displace privilege | Denied — insured access to file does not defeat attorney-client privilege; in camera review shows documents relate to insurer’s liability and stay privileged |
| Work-product protection | Brennan contends materials are not work product | Documents already found privileged; work-product analysis therefore unnecessary/applicable | N/A for discovery — documents protected (attorney-client and/or work product); Brennan’s need not shown sufficient to overcome privilege |
Key Cases Cited
- Behrendt v. 337 S.W.3d 729 (Mo. App.) (voluntary nature of waiver; waiver under cross-examination not voluntary)
- State ex rel. Great American Ins. Co. v. Smith, 574 S.W.2d 379 (Mo. banc) (policy favoring protection of attorney-client privilege)
- Peabody Coal Co. v. 863 S.W.2d 607 (Mo. banc) (importance of preserving attorney-client relationship and privilege)
- State ex rel. Ford Motor Co. v. Westbrooke, 151 S.W.3d 364 (Mo. banc) (work-product rule and Rule 56.01(b))
- State ex rel. Atchison, Topeka and Santa Fe Ry. Co. v. O'Malley, 898 S.W.2d 550 (Mo. banc) (distinguishing attorney-client privilege from work product)
- Grewell v. State Farm Mut. Auto. Ins. Co., 102 S.W.3d 33 (Mo. banc) (insured’s right of access to claims file does not automatically override privilege)
- State ex rel. St. John's Reg'l Med. Ctr. v. Dally, 90 S.W.3d 209 (Mo. App. S.D.) (discussion of "at issue" waiver and fairness doctrine)
- Friedman v. Provaznik, 668 S.W.2d 76 (Mo. banc) (work-product doctrine prevents exploiting opponent’s litigation preparation)