I. Introduction

*1 This matter is before the Court upon the motion to compel discovery from Plaintiff Builders Mutual Insurance Company (“Builders Mutual”) [Doc. 33] filed by Defendants GCC Construction, LLC (“GCC Construction”) and Tahini Main Street, LLC (“Tahini”), (collectively, “Defendants”). This Court has subject matter jurisdiction pursuant to diversity of citizenship with an amount in controversy exceeding $75,000 under 28 U.S.C. § 1332.

By way of background, Builders Mutual insured a structure located at 27 West Main Street in Chattanooga, Tennessee (“the Structure”), under an insurance policy (“the Policy”) issued by Builders Mutual to GCC Construction and Tahini. Builders Mutual initiated this declaratory judgment lawsuit under Tennessee state law to establish that it does not owe coverage under the Policy to GCC Construction and Tahini for the alleged damage to the Structure. GCC Construction and Tahini have filed counterclaims pursuant to Tennessee state law against Builders Mutual for, among other claims, breach of contract and bad faith failure to pay their claim under the Policy. Pursuant to the terms of the Policy, if the Structure suffered a “collapse” within the meaning of the Policy, then there is coverage under the Policy. If there was no collapse, then there is no coverage under the Policy.

GCC Construction and Tahini move to compel certain documents from Builders Mutual's claims file relating to the claim for damage to the Structure. Builders Mutual asserts the documents are protected by the work-product doctrine or the attorney-client privilege, or both. It has provided a privilege log and copies of the documents at issue for the Court's in camera review. The Court reviewed the documents submitted and conducted a hearing on this matter on July 24, 2023. At the hearing, Attorneys Chris Varner was present for GCC Construction, Robert Uhorchuk was present for Tahini, and James Smith was present for Builders Mutual. Based on the undersigned's review of the privilege log and documents, and discussion with counsel at the hearing, the Court will grant in part and deny in part the motion to compel.

II. Background

The relevant timeline in this case is as follows:

III. Discussion

A. Standard of Review

Where a district court exercises diversity jurisdiction under 28 U.S.C. § 1332, the court applies federal law to resolve work-product claims and state law to resolve attorney-client claims. In re Powerhouse, LLC, 441 F.3d 467, 472 (6th Cir. 2006).

The work product doctrine is codified in Fed. R. Civ. P. 26(b)(3). This rule provides in relevant part:

To determine whether the work product privilege applies to documents prepared by insurance companies or their agents, the Court looks to the “driving force” behind the document. See In re Professionals Direct Ins. Co., 578 F.3d 432, 439 (6th Cir. 2009)(“Making coverage decisions is part of the ordinary business of insurance and if the ‘driving force’ behind the preparation of these documents was to assist Professionals Direct in deciding coverage, then they are not protected by the work-product doctrine”); Rinaldi Fast Foods, Inc. v. Great American Ins. Co., 123 F.R.D. 198, 202 (M.D. N.C. 1988) (“An insurance company cannot reasonably argue that the entirety of its claims files are accumulated in anticipation of litigation when it has a duty to investigate, evaluate and make a decision with respect to the claims made on it by its insured”); Caremark Inc. v. Affiliated Computer Serv. Inc., 195 F.R.D. 610, 616 (N.D. Ill. 2000) (“[i]f a document would have been created regardless of whether litigation was anticipated or not, it is not work product.”); Guidry v. Jen Marine LLC, 2003 WL 22038377 *5 (E.D. La. Aug. 22, 20003) (“if the party asserting the privilege cannot make a factual showing that the primary purpose of the insurance investigation was in anticipation of litigation, the court may conclude that the investigation was conducted in the ordinary course of investigating a potential insurance claim.”).[1]

*3 If the driving force behind the creation of the documents at issue was claims adjudication, then the work-product doctrine does not protect against discovery. A party asserting the work product privilege bears the burden of establishing that the documents he or she seeks to protect were prepared ‘in anticipation of litigation.’ ” United States v. Roxworthy, 457 F.3d 590, 593 (6th Cir. 2006) (quoting In re Powerhouse Licensing, LLC, 441 F.3d 467, 473 (6th Cir. 2006)).

Under Tennessee law, for the attorney-client privilege to apply, the party asserting the privilege must show:

Cincinnati Ins. Co. v. Crown Labs., Inc., No. 2:08-cv-240, 2011 WL 3924888, at *3 (E.D. Tenn. July 29, 2011) (citing Humphreys, Hutcheson & Moseley v. Donovan, 568 F. Supp. 161, 175 (M.D. Tenn. 1983) (construing Tenn. Code Ann. § 23–3–105)). The privilege also applies to the attorney's communications to the client when such communications to the client would reveal the substance of the client's confidential communications. Cincinnati, 2011 WL 3924888, at *3 (citing Boyd v. Comdata Network, Inc., 88 S.W.3d 203, 213 (Tenn. Ct. App. 2002)).

B. Resolution of the Motion to Compel

During the aforementioned hearing on July 24, 2023, in which a court reporter was present, the Court walked through each item at issue on Builder Mutual's privilege log and gave its reasons for granting or denying the motion to compel as to that particular item. The parties were given the opportunity to make their arguments on the record as to each item[2] on the privilege log.

For the reasons stated by the Court in the July 24, 2023 hearing, it is hereby ORDERED that:

Accordingly, this motion to compel is GRANTED IN PART and DENIED IN PART for the reasons set forth in discussions with counsel during the hearing on July 24, 2023.[3] As to those items which must be produced, Builders Mutual shall produce said items to Defendants’ counsel by Friday, July 28, 2023.

SO ORDERED.