Coregis Insurance v. Law Offices of Carole F. Kafrissen, P.C.

Citation: 57 F. App'x 58Docket: No. 01-4517

Court: Court of Appeals for the Third Circuit; January 26, 2003; Federal Appellate Court

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Coregis Insurance Company was ordered by the District Court to produce six documents, which it contested on appeal. Coregis argued that the District Court incorrectly applied the Pennsylvania work product doctrine instead of the federal standard to four documents, failed to apply the work product doctrine to two others, concluded that none were protected under the doctrine, and improperly allowed partial disclosure of two documents under Pennsylvania attorney-client privilege. Jurisdiction over such discovery orders is granted under the collateral order doctrine when materials may be protected by work product doctrine or attorney-client privilege. Generally, the decision to compel disclosure is reviewed for abuse of discretion, but legal interpretations are subject to plenary review. 

The case revolves around a dispute between attorney Carole F. Kafrissen and her malpractice insurer, Coregis, concerning coverage for a malpractice claim. Coregis sought a declaratory judgment to limit liability based on policy provisions while Kafrissen counterclaimed for breach of contract and bad faith, requesting the insurer's entire claims file. Coregis produced most documents but withheld a November 1998 memorandum and five related documents, claiming protection under work product doctrine and attorney-client privilege. The District Court's application of the Pennsylvania work product doctrine was found to be erroneous, as federal law governs the work product privilege in diversity cases, requiring a party seeking discovery to demonstrate substantial need and inability to obtain equivalent materials without undue hardship. The documents were created in anticipation of litigation, and the critical issue is whether Kafrissen's bad faith claim connects to these documents, specifically if they include attorney mental impressions relevant to the accusations of bad faith.

Coregis argues that there is a distinction between documents related to the settlement of the underlying malpractice claim and those pertaining to the coverage action currently in litigation. The documents in question were prepared in anticipation of coverage litigation and reflect legal opinions and strategies, thus qualifying for protection under the work product doctrine. Since these documents do not pertain to the underlying claim, Kafrissen cannot demonstrate a substantial need for their disclosure, leading to the reversal of the District Court's order to produce them. The court does not address the attorney-client privilege issue, as the determination is based solely on the work product doctrine. Under Section 4003.3, discovery can include matters prepared in anticipation of litigation, but it excludes the mental impressions, conclusions, or legal theories of a party’s attorney. Kafrissen contends that Coregis waived its privileges by submitting an affidavit from counsel regarding settlement discussions. However, Kafrissen misinterprets that the affidavit puts 'advice of counsel' in issue. According to precedent, simply being relevant does not constitute placing attorney advice in issue; an affirmative action must be taken to do so. Coregis has not asserted this defense or put 'advice of counsel' in issue by submitting the affidavit.