In West Bend Mutual Insurance Co. v. Zurich American Insurance Co., a primary carrier, West Bend, requested voluminous documentation from what the Court called the common insured's "secondary" carrier, Zurich. The primary carrier was the plaintiff in the lawsuit, which it filed against the secondary carrier to compel it to pay that part of an excess judgment against their common insured which was in excess of the primary carrier's limits.
The secondary carrier defended on the ground that the primary carrier handled the underlying settlement negotiations in bad faith.
The primary carrier then served a request for production of voluminous documents from the secondary carrier's files, including Zurich's communications with its monitoring counsel.
Zurich's response was to claim privilege and black out or redact most of 200 or so documents, at least at first:
There is a discovery dispute, of course—“the bane of modern litigation.” [Citation omitted.] West Bend asked for the documents in Zurich's [underlying] Fleck case claim file and communications with attorney, John Moroney. Zurich was monitoring the progress of the case and retained the firm of Franco & Moroney for that purpose. Zurich, as is usually the case, made sweeping claims of attorney-client privilege and work product, and produced only heavily redacted documents. The claims were exaggerated, proving once again that excessive claims of privilege are all too commonplace in modern litigation and that they are indiscriminately and improperly used “on documents that do not truly qualify for protection.”
Ordinarily, that would be the crux of the story: unauthorized redaction and blackouts of evidence. But that is not this story.
Zurich changed its mind and its position on blacking out evidence. It produced much of the previously blacked out evidence, limiting its nondisclosure to about 80 of the original 200 documents:
West Bend has moved to compel production of clean documents and any withheld documents, arguing that “at issue” waiver applies. After an initial hearing on this dispute, Zurich had more than a moment of self-realization and “reconsidered many of the redactions made in its Privilege Log.” It then produced many previously withheld or redacted documents. And so, of the original 200 or so documents at issue [Dkt. # 20, at 12–38], only about 80 remain.
West Bend filed a motion to compel Zurich to disclose the remaining 80 documents. The primary carrier argued in part in part that Zurich could not claim attorney-client privilege because by its defense that West Bend had handled the underlying settlement negotiations in bad faith, and because Zurich's monitoring counsel presumably should have known of any bad faith, therefore, or so the primary carrier argued, Zurich had put its attorney-client communications "at issue" and therefore made them discoverable.
As a matter of law applied to the facts in the record of this case, the Magistrate Judge disagreed. The Court denied West Bend's motion to compel, succinctly holding that an excess carrier which retains counsel to monitor the underlying litigation does not thereby put is communications with the monitoring counsel at issue in any later bad faith case.
As the Magistrate Judge put it in announcing his holding in this regard:
What is strikingly absent from West Bend's brief is any explanation of how Zurich and its attorney had anything to do with West Bend's decision not to settle. The settlement negotiations were between West Bend and Mr. Fleck. It was West Bend's decision not to settle. The fact that Zurich's counsel “monitored” the proceedings is meaningless unless he had some input into West Bend's decision—and there's nothing to indicate he did. And that means, West Bend hasn't established any at-issue waiver on the part of Zurich.
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 West Bend Mut. Ins. Co. v. Zurich Am. Ins. Co., No. 17 C 2598, 2018 WL 1736153 (N.D. Ill. April 11, 2018) (Cole, USMJ).
 West Bend Mut. Ins. Co. v. Zurich Am. Ins. Co., No. 17 C 2598, 2018 WL 1736153, at *1 (N.D. Ill. April 11, 2018) (emphasis added).
 West Bend Mut. Ins. Co. v. Zurich Am. Ins. Co., No. 17 C 2598, 2018 WL 1736153, at *1 (N.D. Ill. April 11, 2018).
 West Bend Mut. Ins. Co. v. Zurich Am. Ins. Co., No. 17 C 2598, 2018 WL 1736153, at *3 (N.D. Ill. April 11, 2018).