The opinion of the court was delivered by: Levin, United States Magistrate Judge.
MEMORANDUM OPINION AND ORDER
At issue before the court is Plaintiff ConAgra Inc.'s
("ConAgra") Renewed Motion to Compel discovery of certain
documents withheld from production*fn1 by Defendant Arkwright
Mutual Insurance Company ("Arkwright").*fn2 For the reasons
stated below, Plaintiff's Motion is granted.
ConAgra alleges that pursuant to a proposal presented to
ConAgra by Arkwright, Arkwright agreed to insure all of ConAgra's
property for a five-year period commencing June 1, 1989. (Pl.
Mot. at 1.) ConAgra further alleges that on December 28, 1991, a
fire began in an underground public refrigerated warehouse
operated by Americold Corporation ("the Americold Facility") and
ConAgra and its subsidiaries, among others, as an outside
warehouse. Id. On March 16, 1992, a fire occurred at another
public refrigerated warehouse facility operated by United
Refrigerator Services ("the Marshall Facility"), which was used
by ConAgra and its subsidiaries as an outside warehouse. Id. As
a result of these two fires, ConAgra sustained losses at both the
Americold Facility and the Marshall Facility, and ConAgra filed
its Proof of Loss with Arkwright. Id. Arkwright denied
ConAgra's insurance claims on October 29, 1992. Id. at 2.
The Discovery Master previously held that documents created
prior to October 29, 1992 could not be withheld on the basis of
work product. However, the Discovery Master found that whether
those documents were discoverable, or protected under the
attorney-client privilege, would have to be resolved after
additional facts could be presented. Id. ConAgra has renewed
its Motion to Compel with respect to these documents for which
decision was withheld by the Discovery Master.
The central dispute between the parties surrounds whether the
documents requested by ConAgra are protected by the
attorney-client privilege.*fn3 "The attorney-client privilege is
designed to protect from discovery documents which reflect
communications between a client and his attorney, because such
communications might contain confidential information about the
client." Allendale Mut. Ins. Co. v. Bull Data Systems, Inc.,
152 F.R.D. 132, 137 (N.D.Ill. 1993). "The privilege applies to
communications both by a client to a lawyer and from a lawyer to
a client. (citation omitted) But the legal advice given to the
client must be the predominant element in the communication; the
privilege will not apply where the legal advice is incidental to
business advice. As a result, where documents or conversations
are created pursuant to business matters, they must be
disclosed." Id. See also, Allendale, 152 F.R.D. at 137; United
States v. Defazio, 899 F.2d 626, 635 (7th Cir. 1990); United
States v. International Business Machines Corp., 66 F.R.D. 206,
212 (S.D.N.Y. 1974).
ConAgra initially argues that the documents at issue are not
protected by the attorney-client privilege because of the
convoluted manner in which relevant facts were gathered,
memorialized and conveyed to Arkwright. Wayne Klocko, the author
of the letter denying ConAgra's proof of loss, decided to hire
Mark Feinberg, an attorney, with respect to the Americold loss.
Mr. Feinberg was hired as "coverage counsel" with respect to the
Americold loss, he participated jointly with Mr. Klocko at all
interviews of fact witnesses in regards to the loss and he
conducted the examinations under oath of ConAgra personnel.*fn4
(Pl. Mot. at 7.) As a matter of practice, Mr. Klocko does not
memorialize anything concerning his investigation of a loss.
Id. Consistent with this practice, there are no documents other
than those authored by Mr. Feinberg which contained the results
of the factual investigation which Arkwright was obligated to
make into the claims of ConAgra, or its decision to deny those
claims. Id. According to ConAgra, the documents prepared by Mr.
Feinberg in which Mr. Klocko's factual investigation and
conclusions were memorialized were in the form of letters
prepared by Mr. Feinberg, sent to Mr. Hachenburg, the general
counsel of Factory Mutual*fn5, and then distributed to persons
within the Arkwright organization. Id.
ConAgra claims that the manner in which Arkwright filters all
facts and decisions only through documents authored by an
attorney and asserts privilege with respect to almost every
document involving its investigation is clearly an effort to keep
relevant information from scrutiny. Id. at 9. ConAgra contends
that the withheld documents fall into four categories: the first
category includes documents generated by Arkwright counsel to
memorialize and communicate the facts discovered by Mr. Klocko in
his investigation and the conclusions that Mr. Klocko drew; the
second category includes documents generated during the
investigation of ConAgra's claim that were sent by or received by
Mr. Feinberg to and from numerous persons within the Arkwright
and Factory Mutual organizations; the third category includes
documents created by Arkwright outside counsel or sent to him
during the course of Arkwright's investigation of ConAgra's
claims; the fourth category includes documents that were not even
sent to or generated by an attorney except for two, which were.
copied to an attorney. (See Pl. Mot. Ex. 6.)
ConAgra also puts forward that under Illinois law
communications between an attorney and employees of a corporation
are privileged only if employees are members of the corporation's
. . an overly-broad attorney-client privilege has
the potential "to insulate so much material from the
truth-seeking process . . . that the privilege ought
to be limited for the corporate client to the extent
reasonably necessary to achieve its purpose." Under
the "control group" test, the corporate client must
show that the communication originated from an
employee in a position to control the decision-making
process of the corporation (citation omitted) There
are two categories of corporate employees whose
communications are protected: (1) the
decision-makers, or top management; and (2) those
employees who directly advise top management, and
upon whose opinions and advice the decision-makers
rely. (Citations omitted)
Dawson v. New York Life Ins. Co., 901 F. Supp. 1362, 1366
(N.D.Ill. 1995). See also, Consolidation Coal Co., v.
Bucyrus-Erie Co., 89 Ill.2d 103, 119, 59 Ill.Dec. 666, 673,
432 N.E.2d 250, 257 (1982); Greer Properties, Inc. v. LaSalle Natl.
Bank, 1990 WL 70424 at *1 (N.D.Ill. 1990).
Arkwright, on the other hand, places the documents withheld
from production into its own four categories: the first category
includes documents withheld on the basis that they contain
nothing other than legal advice; the second category contains
documents which contain either requests for information or the
relaying of information in connection with the provision of legal
advice; the third category includes documents which contain
Arkwright's counsel's account of meetings at which counsel for
ConAgra was present; and the fourth category consists of the
handwritten notes of the general counsel for Arkwright. (Def.
Resp. at 2-3.)
In these circumstances, it is critical to note that "the burden
is on the party opposing discovery to show that the
attorney-client privilege applies, and mere conclusory statements
will not suffice to meet that burden." Allendale, 152 F.R.D. at
139; See United States v. White, 950 F.2d 426, 430-31 (7th Cir.
1991). "Legal advice or communications, standing alone, should
not automatically receive protection. Instead, the party
asserting the privilege must show that such advice relates to
prior confidential client communications." Ziemack v. Centel
Corp., 1995 WL 314526 at *4 (N.D.Ill. 1995).