I. Introductory Statement.

(A) Appointing Order; Special Master's Authority To Issue R&R.

*1 On March 27, 2018 the Court entered an order (Doc. 47) (“the Appointing Order” or “AO”) appointing the undersigned as Special Master in this case. The Special Master was appointed “for the limited scope of overseeing the discovery process going forward and to preside over all discovery-related issues and disputes.” AO at 1. The Court in the AO further provided that the Special Master was authorized, with respect to any discovery dispute which could not be resolved informally, to rule on any such dispute – after briefing and with or without oral argument – by entering “... an order setting forth his recommendation and basis for his recommended decision sufficient to permit the Court's review under Fed. R. Civ. P. 53 (f)” Id. at 3-4.

(B) The Pending Motion.

On November 4, 2019, Defendant Affiliated FM Insurance Company (“Defendant” or “AFM”) filed its Motion To Quash and For Sanctions (“MTQ”), along with a brief and other supporting materials. The MTQ seeks a protective order quashing subpoenas issued by Plaintiffs Sky Harbor Atlanta Northeast, LLC (“Sky Harbor”) and Crestline Hotels & Resorts, LLC (“Crestline”) (hereineafter Sky Harbor and Crestline referred to collectively as “Plaintiffs”) to (i) AFM's lead trial counsel, James V. Chin, Esq., and (ii) Mr. Chin's current law firm, Zelle, LLC (“Zelle”).[1] Copies of the two subpoenas at issue[2] are attached to this Report & Recommendation (“R&R”) as Exhibits “A” and “B” respectively.

This case involves a property insurance claim brought by the Plaintiffs seeking recovery for alleged mold and water damage at the Hilton Atlanta Northeast Hotel in Norcross, Georgia (“the Hotel”). Plaintiff Sky Harbor is the Hotel owner, and Plaintiff Crestline manages and operates the Hotel. Defendant AFM is the insurer under the applicable insurance policies.

AFM investigated and ultimately denied the claim. A significant reason alleged by AFM for this denial is its contention that the Plaintiffs knew about the poor conditions of the Hotel which allegedly caused the claimed mold and water damage well before the claim was first submitted in September of 2015. Plaintiffs then filed this lawsuit in September of 2017 for breach of contract, bad faith and reformation. AFM answered, denying all of the Plaintiff's claims; thereafter AFM asserted counterclaims against the Plaintiffs alleging fraud and conspiracy to commit fraud, relying on information AFM contends became known to it during the litigation.[3]

*2 In the Chin Subpoena, Plaintiffs seek the following:

In the Zelle Subpoena, Plaintiffs seek the production of two separate categories of documents, as follows:

(C) The Parties' Contentions Re The MTQ.

In support of the MTQ, Defendant contends that the discovery sought by Plaintiffs impermissibly seeks privileged information protected by both the attorney-client privilege and the work product doctrine (including seeking protected opinions and mental impressions of counsel). Defendant also argues that at least some of the requested information is irrelevant (and therefore non-discoverable); and that Plaintiffs have not shown that obtaining the requested discovery from Defendant's lead trial counsel is necessary because Plaintiffs have not established that, even if the information sought is relevant, Defendant's lead trial counsel is the only source of this information. Furthermore, because Defendant believes the Plaintiffs' conduct in seeking the discovery at issue was improper, Defendant seeks an award of fees and expenses related to its bringing the MTQ.

In opposing the MTQ, Plaintiffs in a nutshell contend that Mr. Chin is not just Defendant's lead trial counsel, but that as a practical matter he and his law firm(s) “perform[ed] investigative work in the capacity of an insurance claims adjuster, rather than a lawyer.” Plaintiffs' Response In Opposition (“Pls' Brief”) at 12. Plaintiffs make this argument relying in large part on the “sheer volume of purported attorney client communications and work product withheld,” thereby concluding that this “evidences Mr. Chin's control, monitoring, investigation and handling of Plaintiffs' Insurance Claim.” Pls' Brief at 5. In a related argument, Plaintiffs contend that documentary materials' such as investigative reports, summaries and memoranda are not protected from production in discovery just because an attorney wrote them; the critical test is whether the documents were drafted for the primary purpose of rendering legal advice.

*3 Plaintiffs further argue that the discovery sought is relevant and necessary for two additional reasons, to wit:

Finally, Plaintiffs argue that even if the MTQ is granted, no fees or expenses should be awarded because their conduct was substantially justified and other circumstances would make an award of expenses unjust. Pls' Brief at 23.

Both parties have fully (and very capably) briefed their respective positions, and the Special Master also heard from both sides through oral argument. Based on the Special Master's comprehensive review of the parties' submissions and arguments, the Special Master issues the following recommendations to the Court regarding the issues raised by the MTQ.

II. Special Master's Recommendations.

(A) Recommendation Re Deposition of James Chin, Esq.

For the reasons set forth below, the Special Master recommends that the MTQ be sustained as to the issue of the Plaintiffs deposing Mr. Chin, and therefore that the Court issue a protective order prohibiting this deposition.[4]

Not surprising to this Special Master, there is an abundance of case authority on the question of deposing opposing counsel. While the cases all tend to agree that the Federal Rules do not specifically disallow the deposition of opposing counsel, see e.g. Langdale Company v. National Union Fire Insurance Company, 2013 WL 12067452 (N.D. Ga., Judge Jones, 6/20/2013) (“Langdale”), many courts nevertheless say that such depositions are “generally disfavored” and call for “special scrutiny because ‘experience teaches that countenancing unbridled depositions of attorneys constitutes an invitation to delay, disruption of the case, harassment, and perhaps disqualification of the attorney.’ ” (citations omitted). Gaddy v. Terex Corporation, 2015 WL 13545486. (N.D. Ga., Judge Duffey, 10/28/2015) (“Gaddy”).

Various federal courts have adopted different approaches when considering whether or not to permit the deposition of opposing counsel. The Eighth Circuit has adopted a tri-partite test, requiring the party seeking to depose opposing counsel to show as follows:

Shelton v. Am. Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986) (“Shelton”). The Sixth Circuit has adopted the Eighth Circuit's Shelton test. Nationwide Mut. Ins. Co. v. Home Ins. Co., 278 F.3d 621, 628 (6th Cir. 2002).

The Second Circuit has adopted a somewhat different approach, a more “flexible approach to lawyer depositions whereby the judicial officer supervising discovery takes into consideration all of the relevant facts and circumstances to determine whether the proposed deposition would entail an inappropriate burden or hardship.” See In Re Subpoena Issued To Dennis Friedman, 350 F.3d 65, 72 (2nd Cir. 2003).

*4 The Eleventh Circuit has not itself adopted a specific rule on this issue of deposing opposing counsel. However, the issue has been addressed by numerous district courts within the Eleventh Circuit, including numerous federal courts in districts in Georgia, especially in the Northern District of Georgia.

In Langdale, supra, Judge Jones applied the Shelton test and disallowed the deposition of opposing counsel. So too in Floyd v. SunTrust Banks, Inc., C.A. No. 1:10-CV-2620-RWS (N.D. Ga., Judge Story, 6/30/2011) (“Floyd”), Judge Story applied Shelton and therefore quashed the Notice of Deposition of opposing counsel. And in Bivens v. Select Portfolio Servicing, Inc., 2015 WL 11256612 (N.D. Ga., Judge Evans, 11/19/2015) (“Bivens”), Judge Evans, also relying on Shelton and on Judge Story's decision in Floyd, granted a motion to quash and prohibited the deposition of the opposing party's litigation counsel.

In contrast to these decisions by Judge Jones, Story and Evans are several decisions by Judge Duffey of this district and Judge Ashley Royal of the Middle District. In Bank of America, N.A. v. Georgia Farm Bureau Mutual Insurance Company et al., 2014 WL 4851853 (M.D. Ga., Judge Royal, 9/29/2014) (“Bank of America”), Judge Royal permitted a plaintiff in a fire insurance claim case to depose one attorney for the defendant insurer (although he denied the plaintiff's request to depose a second opposing attorney). Judge Royal declined to utilize either “the rigid Shelton rule” of the Eighth Circuit or “the more flexible” approach of the Second Circuit. Instead, he applied a “weighing and balancing test,” taking into account both the plaintiffs need for information from opposing counsel with the insurer's “interests in its attorney-client relationship.” Judge Royal discussed the applicability of the attorney-client privilege in the insurance context, noting that (as argued by the Plaintiffs in the case at bar) “no privilege attaches when an attorney performs investigative work in the capacity of an insurance claim adjuster, rather than as a lawyer.” (Id., citing Cutrale Citrus Juices, USA, Inc. v. Zurich American Ins. Grp., No. 5:03-CV-420-OC-10GRJ, 2004 WL 5215191 (M.D. Fla. 2004) [“Cutrale”]). Judge Royal went on to say that even if the attorney's assigned duties were investigative in nature, that does not preclude assertion of the attorney-client privilege. Rather, the key question is whether the investigation was related to legal services as opposed to claims adjuster type services. Interestingly, to protect attorney-client interests, Judge Royal required the plaintiff in Bank of America to submit in advance a list of the intended deposition questions for the insurer's counsel; and, while allowing one of the attorneys to be questioned, he did limit the areas about which that attorney could be interrogated.

In Gaddy, supra, Judge Duffey found Judge Royal's “weighing and balancing test” as articulated in Bank of America to be persuasive, and applying that test he permitted the plaintiff to depose the Deputy General Counsel and the Chief Legal Counsel of the Defendant. In reaching this decision to allow the deposition of these attorneys, Judge Duffey relied in large part on the fact that the attorneys involved were in-house counsel, and not litigation counsel, a fact that he noted made the issue “much less compelling” than if the attorney whose deposition testimony was sought was litigation counsel.

*5 Considering all of these authorities, as well as the circumstances of the instant case, the Special Master recommends that the deposition of Mr. Chin not be permitted for the following reasons:

Given these factors, the Special Master finds – whether applying the “rigid Shelton rule” or the “more flexible” Second Circuit test or Judge Royal's “weighing and balancing test” – that as to the Chin deposition issue the MTQ should be granted and a protective order issued barring the Plaintiff's request to depose AFM's lead litigation counsel, Mr. Chin.[5]

(B) Recommendation Re: Documents Sought by Chin Subpoena.

In the first two (2) categories of documents sought by the Chin Subpoena, Plaintiffs ask for a wide variety of “documents”, “materials” and “communications, including e-mails [and attachments thereto]” which were “received, maintained or created” by Mr. Chin “or any other person”[6] “prior to the contemplation of litigation” (emphasis added). The record is not clear exactly how early AFM became aware of the contemplation of litigation by the Plaintiffs, but it is clear that the latest date that AFM began to anticipate possible litigation being brought against it relating to the insurance claim at issue was February 1, 2016. See Affidavit of Brian C. Cook. Mr. Chin and Carlton Fields were then retained, on February 2, 2016. Id.

*6 During oral argument counsel for the Defendant represented to the Special master that because he and his firm were not retained until after AFM began to anticipate litigation, there are no responsive documents in his custody, control or possession which he or others in his firms received, maintained or created “prior to the contemplation of litigation.” Plaintiffs' counsel, while expressing some skepticism about this position, stated that if Mr. Chin was representing to the Court that he has no responsive documents to produce, Plaintiffs have no evidence to challenge that representation. Plaintiffs, in support of their “sheer volume” position, refer in their Pls Brief to many withheld items in AFM's privilege log, but all of them are dated on or after February 2, 2016, i.e., after the date that AFM contemplated the possibility of litigation; none of them are dated “prior to the contemplation of litigation.”

Thus, the Special Master concludes that the issue regarding production or quashing of the documents sought in the first two document request categories of the Chin Subpoena is a non-issue; the record reflects that no such responsive documents exist. For this reason, the Special Master recommends that the MTQ be sustained as to these two categories of documents.[7]

In the third document request category in the Chin Subpoena, Plaintiffs essentially seek production of the retainer contract between AFM and its retained outside counsel, Mr. Chin and his then firm, Carlton Fields. Plaintiffs seek this document to support their contention that Mr. Chin and his firm were retained not to render legal services, but primarily to adjust, or to lead the adjustment of, the insurance claim.

The Special Master believes that it is theoretically possible that this retainer agreement could contain language or provisions which are probative and supportive of the Plaintiff's position. However, whether or not it does contain any such probative information, it is also highly likely that the retainer contract would also include privileged attorney-client and/or work product information, including particularly mental impressions and opinions of counsel.

To balance these considerations, the Special Master recommends to the Court with respect to document category No. 3 in the Chin Subpoena that the MTQ be denied; instead Mr. Chin should be required to produce the retainer contract to the Special Master for an in camera review. If, after reviewing the document in camera, the Special Master determines that there does not exist any information therein supportive of the Plaintiffs' contentions, the document will not be produced. On the other hand, if the Special Master determines that the document does contain any information supportive of the Plaintiffs' contentions, the Special Master may (i) order its production but with redactions protecting against disclosure of privileged information and (ii) reconsider sua sponte the recommendation above regarding the deposing of Mr. Chin.

*7 For the reasons set forth above, the Special Master recommends as to the documents sought in the Chin Subpoena that the MTQ be sustained in part and denied in part. Specifically, the Special Master recommends:

(C) Recommendations Re: Zelle Subpoena.

Via the Zelle Subpoena, Plaintiffs seek two categories of documents: (i) Zelle marketing materials to existing and prospective insurance company clients; and (ii) the retainer contracts between AFM and Zelle and Mr. Chin and Zelle, which were signed years after the claim at issue in this case was adjusted. Plaintiff's allegedly seek this information to support their contention that Mr. Chin's role was primarily as an insurance investigator or adjustor, and not legal counsel. Defendant moves to quash and contends that the information sought is irrelevant. The Special Master agrees.

Evidence is relevant if “it has any tendency to make a fact more or less probable than it would be without the evidence.” Fed. R. Civ. Pro. 401. Even though relevant evidence is ordinarily discoverable, the discovery must be “proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. Pro. 26(b)(1).

As stated above, Plaintiffs seek Zelle marketing materials to existing and prospective insurance company clients. Mr. Chin, however, did not join Zelle until several years after Plaintiffs' claim with AFM was investigated, adjusted and the denial decision made. Thus, how Zelle markets itself to actual or prospective insurance clients is not probative of the reasons AFM retained Mr. Chin and his former firm, Carlton Fields, years before. Even if the information is slightly relevant, the slight relevance is certainly not proportional to the needs of the case.

Plaintiff's also seek to obtain the retainer agreements which were signed years after the adjustment was completed. The Special Master finds that retainer agreements signed years after the adjustment was completed and the claims decision made are irrelevant, or for the same reasons stated above, not proportional to the needs of the case. Notably, assuming that the second retainer agreement is the same agreement used between AFM and Carlton Fields, the Special Master's in camera review will provide the information Plaintiff's seek. See discussion supra at 13-14.

Therefore, for the reasons stated above, the Special Master recommends sustaining the MTQ as to both of the document requests.

(D) Recommendation Re: Request For An Award Of Fees And Costs.

AFM seeks an award of fees and costs pursuant to F.R.C.P. Rules 26 (c)(3) and 37 (a)(5). While the Special Master has recommended that the MTQ be granted in large part (but not totally), the Special Master believes that under all of the circumstances in this case an award of fees and expenses would be unjust. Rather, the Special Master believes it appropriate that each side bear its own fees and expenses relating to the MTQ. Consequently, the Special Master recommends that AFM's request for an award of fees and expenses pursuant to F.R.C.P. Rules 26 (c)(3) and 37 (a)(5) be denied.

*8 For the reasons set forth above, the Special Master recommends as follows:

So Recommended this 14th day of January, 2020.

EXHIBIT A

SCHEDULE A

EXHIBIT B

SCHEDULE A