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District Court Orders In Camera Examination of Privilege Log Documents, Overturning Magistrate’s Order

Posted on November 10th, 2017

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Follow our posts to learn about eDiscovery newsIn Keathley v. Grange Insurance Co., of Mich., No. 15-cv-11888 (Dist. Ct. E.D. Mich., March 30, 2017),  Plaintiff seeks to recover under an insurance policy issued by Defendant Grange Insurance Company (“Grange”) for water damage Plaintiff claims happened at her home as a result of burst pipes. Grange has denied coverage for a variety of reasons, including that the Plaintiff allegedly failed to exhibit the damaged property to Grange. Plaintiff has filed numerous motions to compel discovery, and most recently filed a motion for sanctions for Grange’s alleged failure to comply with the magistrate judge’s discovery orders. Dissatisfied with the magistrate judge’s unfavorable resolution of her motions, Plaintiff filed objections to the orders.

Plaintiff objects to the Magistrate’s Order denying Plaintiff’s motion with respect to Defendant’s alleged vague privilege log. The Court sustains this objection. While Michigan law recognizes that communications between an insurance company and its lawyer are privileged, the Court acknowledged that attorneys acting as insurance claims investigators are not protected by that privilege. For that reason, the Court orders an in camera examination of specific select documents on Defendant’s privilege log.

Plaintiff objects to that portion of the Magistrate Judge’s Order that denied Plaintiff’s request for spoliation sanctions and attorneys fees. Plaintiff argues that the Magistrate Judge should have ordered that Grange face spoliation sanctions for its failure to produce photographs that its inspector allegedly took while surveying the damage at Plaintiff’s home. Specifically, Plaintiff requested that the Court order that the jury be instructed that the missing photographs would have depicted damage and broken pipes in Plaintiff’s home at the time of his inspection. The Defendant claims by the time the inspector came to Plaintiff’s house, the damage had been repaired, so there was no way the photos would be relevant. Plaintiff disagrees, so there is a genuine issue of material fact. The court affirmed the Magistrate Judge’s Order finding that Plaintiff was not entitled to spoliation sanctions at this stage but that Plaintiff is entitled to limited additional discovery regarding how Defendant lost the photographs at issue, including to depose someone from Defendant’s IT department knowledgeable about Defendant’s system for uploading photographs.  Following that deposition, the court ordered that Plaintiff may choose to renew its motion for spoliation sanctions if it so desires.

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