United States District Court, N.D. Alabama, Southern Division
OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.
dispute over insurance proceeds comes before the court on
Plaintiffs Jeanette Bennett's and Maggie Bell's
motion to compel Defendants CIT Bank, N.A. and CIT Group,
Inc. to produce documents and the supplement to that motion.
(Docs. 82 and 100).
the other Defendant in this case, Federal National Mortgage
Association, shared with each other emails containing legal
advice from their respective counsel. CIT withheld those
emails from discovery on asserted grounds of attorney-client
privilege. Plaintiffs move the court to compel CIT to produce
the emails because, according to Plaintiffs, CIT and Fannie
Mae waived the attorney-client privilege over the emails by
sharing the emails with each other.
explained below, the court will deny the motion to compel
because an exception to the rule that a party waives the
attorney-client privilege by disclosing privileged
communications with a third party-Alabama's so-called
“common interest doctrine”-applies to the facts
of this case. Under the common interest doctrine, CIT and
Fannie Mae did not waive the attorney-client privilege over
the emails from their counsel by sharing the emails with each
other because CIT and Fannie Mae shared a common legal
interest in the matters discussed in those emails.
STANDARD OF REVIEW
law governs the attorney-client privilege in this case.
Federal Rule of Evidence 501 provides that “in a civil
case, state law governs privilege regarding a claim or
defense for which state law supplies the rule of
decision.” The party asserting the attorney-client
privilege bears the burden of establishing “the
existence of an attorney-client relationship as well as other
facts demonstrating the claim of privileged
information.” Lynch v. Hamrick, 968 So.2d 11,
14 (Ala. 2007). And the court looks at all of the evidence
presented to determine whether communications are privileged.
Exxon Corp. v. Dep't of Conservation & Nat.
Res., 859 So.2d 1096, 1103 (Ala. 2002).
inherited a house from their mother, Catherine Getaw, after
she passed away in 2015. CIT, who serviced a reverse mortgage
loan secured by a mortgage recorded against the house,
foreclosed on the mortgage and scheduled a foreclosure sale
for November 2, 2015.
days before the foreclosure sale, a fire damaged the house.
Plaintiffs filed a claim for the fire damage against an
insurance policy issued by Foremost Insurance Company that
covered the house.
Fannie Mae purchased the house at the foreclosure sale.
Fannie Mae, through the law firm of Rutledge &
Associates, also filed a claim for the fire damage against
the Foremost policy. So both Plaintiffs and Fannie Mae
submitted claims for the same damage to the same property
under the same insurance policy.
February 22, 2016, Foremost sent attorney Rutledge a check
for $62, 262.13 made payable to “Financial Freedom, a
Division of Onew [sic] Estate of Catherine Getaw.”
Rutledge sent the check to CIT, which was then doing business
as Financial Freedom. CIT then deposited the check into its
bank and sent all of the $62, 262.13 to Fannie Mae.
assert that CIT had no right to unilaterally deposit the
check. After the court granted in part CIT's motion to
dismiss and granted in full former defendant Foremost's
motion to dismiss, two of Plaintiffs' claims in their
amended complaint remain pending in this case: (1)
declaratory judgment that only Plaintiffs are entitled to the
insurance proceeds; and (2) conversion against Fannie Mae for
allegedly wrongfully retaining the insurance proceeds.
The Two Documents at Issue in the Motion to Compel
discovery, CIT withheld several documents from production and
redacted information from produced materials on grounds of
various privileges. CIT identified those withheld documents
and redacted information on a privilege log and a
supplemental privilege log. Plaintiffs originally moved to
compel CIT to produce a large number of those withheld
documents and redacted materials. But, following a hearing
and several discussions between the parties, Plaintiffs
narrowed their motion to compel down to two documents that
the court reviewed in camera. The court describes
these two documents below.
The May 15, 2016 email sent by Fannie Mae's counsel to
Fannie Mae that Fannie Mae then shared with CIT
first document at issue in Plaintiffs' motion to compel
is an email sent to Fannie Mae by its counsel that Fannie Mae
later forwarded to CIT.
attorney at Rutledge, Eric Vester, sent an email to a Fannie
Mae employee, Ikenna Akotaobi, on May 15, 2016. The email
addressed a phone call from one of the Plaintiffs and an
insurance adjuster, and Mr. Vester also discussed relevant
months later, on July 13, 2016, Plaintiffs' attorney
reached out to Fannie Mae's counsel for the first time.
Plaintiffs' attorney sent an email to a Rutledge attorney
that stated, “I represent Jeanette Bennett and Maggie
Bell for the Estate of Catherine Getaw. We are in the process
of establishing Ms. Getaw's estate (if necessary) in
order to obtain the excess of the sale of Ms. Getaw's
property. Ms. Getaw left a Will appointing Jeanette Bennett
and Maggie Bell as co-executrixes of the estate. ...