United States District Court, N.D. West Virginia
MEMORANDUM OPINION AND ORDER OVERRULING
DEFENDANT'S OBJECTIONS [DKT. NO. 103]
M. KEELEY UNITED STATES DISTRICT JUDGE
pending are objections filed by the defendant, Bowles Rice,
LLP (“Bowles Rice”), to the denial of two motions
to compel by the Honorable Michael J. Aloi, United States
Magistrate Judge. For the reasons stated on the record during
the November 20, 2017, status conference, as well as those
that follow, the Court OVERRULES Bowles
Rice's objections (Dkt. No. 103).
case is the most recent in a litany of litigation flowing
from the ill-fated construction of a $2 billion, 695-megawatt
supercritical coal-fired power plant by Longview Power, LLC
(“Longview”), in Maidsville, West Virginia.
Longview financed construction of the plant, in part, by
borrowing approximately $1.1 billion. The financing was
secured by a Fee and Leasehold Credit Line Deed of Trust,
Security Agreement, and Assignment of Leases and Rents and
Fixture Filing (“Deed of Trust”), in favor of
Union Bank of California, N.A. (“Union Bank”),
which was executed and recorded in Monongalia County, West
Virginia, on February 28, 2007.
cover the Deed of Trust's priority, Union Bank obtained a
$775 million lender's policy of title insurance from the
plaintiff, First American Title Insurance Company
(“First American”). The policy has an effective
date of March 9, 2007, and includes a mechanic's lien
endorsement. Pursuant to its agency agreement with First
American, Bowles Rice actually underwrote, performed title
searches, and issued the title insurance policy on First
American's behalf. First American reinsured portions of its
liability under the policy through agreements with Old
Republic Title Insurance Company (“Old Republic”)
and Stewart Title Insurance Company (“Stewart”).
subsequent events make clear, few parties involved with
construction of the power plant escaped the project
unscathed. First, Longview became entangled in various
disputes with its contractors during the course of
construction, and the contractors filed mechanic's lien
claims in excess of $335 million in February 2012. Because
the mechanic's liens claimed priority over its Deed of
Trust, Union Bank filed a claim with First American in April
2013. Longview subsequently filed for bankruptcy protection
in the District of Delaware in August 2013.
American proceeded to litigate the issue of liability under
its insurance policy on several fronts. In May 2014, it
sought declaratory relief in California state court regarding
its obligations to Union Bank. Thereafter, Longview filed an
adversary proceeding against First American in the bankruptcy
proceeding in the District of Delaware, seeking a
determination regarding coverage under the insurance policy.
In June 2014, the Delaware bankruptcy court approved the
assignment of proceeds under the policy from Union Bank to
Longview, and it stayed First American's case in
California. In September 2014, First American commenced its
own adversary proceeding in the District of Delaware,
challenging the priority of the mechanic's liens over the
Deed of Trust.
in December 2014, First American resolved its liability in
these matters by contributing $41 million as part of a global
settlement in the Delaware bankruptcy court. First American
recovered a portion of this loss through its reinsurance
policies, but only after Old Republic and Stewart contested
their liability and forced First American to litigate the
claims. In turn, First American filed this lawsuit for breach
of contract against Bowles Rice on November 16, 2016.
particularly, First American seeks to recover its loss based
on Bowles Rice's alleged breaches of their agency
agreements. First, First American contends that Bowles Rice
knew construction had commenced on the power plant prior to
issuing the title insurance policy - thus giving rise to the
possibility of the filing of mechanic's liens that would
hold priority over the Deed of Trust - but breached its duty
to inform First American of such a critical fact. Second,
First American claims that Bowles Rice breached its duty to
indemnify it for losses associated with Union Bank's
claim under the title insurance policy.
parties have been engaged in discovery since the Court
conducted a scheduling conference in February 2017. In August
2017, Bowles Rice filed two motions to compel, which the
Court referred to Magistrate Judge Aloi (Dkt. Nos. 51; 52).
On October 23, 2017, Magistrate Judge Aloi entered a written
order denying portions of Bowles Rice's motions (Dkt. No.
Bowles Rice's Motions
first set of interrogatories, particularly Interrogatory No.
4, Bowles Rice sought the following:
Identify by name, residence and business address and
residence and business telephone number, each and every
agent, representative and/or employee of Plaintiff who
participated in the decision regarding the level at which any
reserve should be established as to any claim herein
described and state specifically the reasons and rational
relied on in support of the decision to set a reserve at the
level where it was first established and describe in detail
any and all documents which might exist which would indicate
the amount of the reserve established; when it was
established; who established the reserve; the reasons and
rationale relied on in support of the establishment of the
reserve, whether such reserve was ever changed, and if so,
how and why it was changed.
(Dkt. No. 51-1 at 7). First American responded as follows:
First American objects to this interrogatory on grounds it
seeks information that is not relevant, the request is not
reasonably calculated to lead to the discovery of admissible
evidence, and the request is not proportional to the needs of
the case. Further objecting, First American states that the
request seeks information protected by the attorney client
privilege and the attorney work product doctrine.
Rice moved to compel this information, arguing that 1)
reserve information "is relevant to determining the
reasonableness of any settlements that [First American] now
seeks to recover from Bowles Rice"; 2) without a
privilege log, Bowles Rice cannot not adequately assess First
American's work-product claims; and 3) the identity of
individuals involved with reserves "is clearly
discoverable" (Dkt. No. 51 at 8-10).
same time, in Requests for Production Nos. 4, 6, 8, 10, 12,
14, and 16, Bowles Rice sought "litigation related
documents which would not have been publicly filed"
(Dkt. No. 52 at 10). It specifically sought "all
documents reflecting all communications, emails, letters,
etc., between Plaintiff and any attorney or representative
retained by it or acting on its behalf related to" the
following actions, many of which are discussed above:
• Jarrett F. Jamison, III, et al. v. Longview Power,
LLC, et al., Civil Action No. 07-CV-20 (N.D.W.Va.);
• Jarrett F. Jamison, III, et al. v. Longview Power,
LLC, et al., Civil Action No. ...