Texas Insurance Company v. Talisman Specialty Underwriters, Inc., 2:23-cv-03412

Background

This dispute arises from a breach of contract, fraud, and detrimental reliance lawsuit and countersuit between Texas Insurance Company, Inc. (TIC) and Talisman Specialty Underwriters, Inc. (Talisman), centering on an insurance policy fronting arrangement and related agreements.
Talisman’s affiliate acquired Catlin Specialty Insurance Company from North American Casualty Co., with attendant agreements regarding the issuance of insurance policies and rating contingencies.
After Catlin’s critical financial strength rating was withdrawn, Talisman alleges it was authorized to write policies in TIC’s name, but TIC contends Talisman exceeded its authority by writing unauthorized business lines.
Litigation ensued over these authority disputes, with Talisman counterclaiming and Talisman Insurance intervening for alleged unpaid reinsurance.
The present matter concerns Talisman’s motion to compel a compliant privilege log, for in camera review, and for leave to re-depose witnesses, focused on whether TIC’s privilege assertions over in-house counsel communications are proper.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Sufficiency of Privilege Log	TIC’s privilege log is insufficient, generic, and fails to address counsel’s dual business/legal roles.	The log is detailed and adequately describes the basis for privilege.	Log found adequate; no further supplementation required.
Privilege over In-House Counsel’s Communications	Silver acted in both legal and business capacities; privilege does not attach to all his communications.	All communications in negotiation/contract drafting are legal in nature.	Most Silver communications privileged if legal advice reflected.
Waiver of Privilege by "Placing at Issue"	TIC waived privilege by putting topics within Silver’s knowledge at issue in the litigation.	Privileged materials not put at issue; not relying on legal advice as a defense.	No waiver; privilege not placed at issue.
Crime-Fraud Exception	TIC’s communications should be disclosed due to alleged fraud regarding Catlin’s rating withdrawal.	No prima facie case of fraud; nothing supports application of exception.	Crime-fraud exception not met; no waiver of privilege.
Involvement of Third Parties in Privileged Communications	Third-party and consultant involvement destroys privilege.	These individuals/entities are part of client group or provided services for legal advice.	Logically encompassed; some case-by-case review as needed.
Production and Depositions	Requests compelled production of certain documents; deposing witnesses post-production.	Opposed further deposition as premature.	Must produce non-privileged emails; no depositions yet; revisit later.

Key Cases Cited

Upjohn Co. v. United States, 449 U.S. 383 (purpose of attorney-client privilege is to promote full and frank communication for legal advice)
State ex rel. Stivrins v. Flowers, 729 N.W.2d 311 (Neb. 2007) (defining attorney-client privilege under Nebraska law)
League v. Vanice, 374 N.W.2d 849 (Neb. 1985) (discussing waiver of privilege when party places information at issue)
Unland v. City of Lincoln, 530 N.W.2d 624 (Neb. 1995) (application of waiver when litigant puts knowledge into issue)
State v. Roeder, 636 N.W.2d 870 (Neb. 2001) (waiver by placing communications at issue)
Greenwalt v. Wal-Mart Stores, Inc., 567 N.W.2d 560 (Neb. 1997) (burden of establishing privilege on party asserting it)
Exxon Mobil Corp. v. Hill, 751 F.3d 379 (5th Cir. 2014) (contract negotiations by in-house counsel are subject to privilege)