INSURER PUT ATTORNEY-CLIENT PRIVILEGE AT ISSUE, NO WORK PRODUCT IMMUNITY.

   When an insurance company put “advice of counsel” at issue with respect to its settlement of the underlying case, it thereby waived the attorney-client privilege. When the insurance carrier’s officers testified about the reasons they settled the underlying case, they helped to establish the discovery exception to work product qualified immunity, all in the case of Seneca Insurance Co. v. Western Claims, Inc.,  774 F.3d 1272 (10th Cir. 2014)(applying Oklahoma law of attorney-client privilege).

   The carrier sued an adjuster for indemnity and negligence in that case.  The carrier “affirmatively put at issue its attorney’s advice by invoking ‘advice of counsel’ to support its claims in this litigation.”  Seneca Insurance Co. v. Western Claims, Inc., 774 F.3d 1272, 1277 (10th Cir. 2014).

   The carrier in that case had to prove that the underlying settlement was reasonable in order to recover on its indemnity claim against the adjuster.  The carrier alleged that it relied on the advice of counsel that the settlement was reasonable.  This allegation was a waiver of the privilege under established law.

   The second aspect of the case was that the carrier’s own testimony further established that certain correspondence concerning the settlement was not protected from discovery as work product.  The carrier’s own officers testified that they “generally” relied on the advice of counsel rather than on their own reasons for settling the underlying case.  Seneca Insurance Co. v. Western Claims, Inc., 774 F.3d 1272, 1277 (10th Cir. 2014).  This testimony helped to build a record that there was no substantial equivalent of the evidence which could be obtained without undue hardship, and so the evidence was not protected as work product.

          Where the issue involves settling the underlying case, the law of Western Claims in Oklahoma is likely to be followed elsewhere.

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