Cherryhill Mgmt., Inc. v. Branham

2020 Ohio 596

CHERRYHILL MANAGEMENT, INC. Plaintiff-Appellant v. BETH ANNE BRANHAM, et al. Defendants-Appellees

Appellate Case No. 28438

COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY

February 21, 2020

Trial Court Case No. 2017-CV-925

(Civil Appeal from Common Pleas Court)

OPINION

SCOTT R. THOMAS, Atty. Reg. No. 0061040, 250 Grandview Drive, Suite 500, Fort Mitchell, Kentucky 41017 Attorney for Plaintiff-Appellant

BETH ANNE BRANHAM, 2801 Campus Drive, Dayton, Ohio 45406 Defendant-Appellee, Pro Se

DAVID C. AHLSTROM, Atty. Reg. No. 0085784, 280 North High Street, Suite 1010, Columbus, Ohio 43215 Attorney for Defendants-Appellees, Molly Kefaya and Tareq Kefaya

WILLIAM H. FALIN, Atty. Reg. No. 0038839, 1422 Euclid Avenue, Suite 630, Cleveland, Ohio 44115 Attorney for Appellee, Nationwide Mutual Insurance Company

DONOVAN, J.

{¶ 1} Cherryhill Management, Inc. ("Cherryhill") appeals from the trial court's December 17, 2018 judgment sustaining Tareq Kefaya's motion for summary judgment on Cherryhill's complaint against him for negligent entrustment and respondeat superior liability. Cherryhill also appeals from a February 12, 2019 judgment of the trial court sustaining Mollie Kefaya's motion for summary judgment on Cherryhill's complaint against her for negligent entrustment. In addition to challenging these judgments, Cherryhill challenges the trial court's refusal to allow Cherryhill to obtain discovery from the Kefayas' insurer, Nationwide Mutual Insurance Company (Nationwide). We hereby affirm the judgment of the trial court.

{¶ 2} Cherryhill filed its complaint against Beth Anne Branham and Tareq and Mollie Kefaya on February 21, 2017. Count 1 asserted a claim against Branham for negligence, Count 2 asserted a claim against the Kefayas for negligent entrustment, and Count 3 asserted a claim against the Kefayas for respondeat superior liability. The complaint alleged that on November 15, 2016, Branham, who did not have a valid driver's license, drove a 2012 Honda Accord owned by Tareq and/or Mollie Kefaya into a stationary truck leased and operated by Cherryhill in Clayton, Ohio.¹

{¶ 3} On March 17, 2017, Cherryhill filed a notice of its intent to take the depositions of one or more officers of the Kefayas' insurer, Nationwide and filed asubpoena duces tecum pursuant to Civ.R. 30(B)(5) and Civ.R. 45. The subpoena asked Nationwide to produce policy number 9234N339835 and all documents and communications relating to it and asked Nationwide to produce documents and communications related to claim number 164 890 GE or between Nationwide and any person regarding Mollie Kefaya or Branham.

{¶ 4} On March 22, 2017, the court issued a notice that Branham had not been served. On April 6, 2017, the Kefayas filed an answer and a cross-claim against Branham for indemnity and/or contribution.

{¶ 5} On April 19, 2017, Nationwide filed a motion to quash Cherryhill's subpoena duces tecum. Nationwide asserted that, while the existence and contents of the Kafayas' insurance policy was discoverable, and that policy had been produced, other information sought in Cherryhill's subpoena, such as documents relating to the insurance policy and Nationwide's investigation into the Kefayas' potential liability for and Nationwide's potential duty to cover the loss for which Cherryhill sought recovery were not discoverable and, in fact, were protected from discovery by attorney-client privilege and/or the work product doctrine. Nationwide asserted that it had denied coverage under the policy for Branham's alleged conduct.

{¶ 6} Nationwide also asserted that the subpoena should be quashed for lack of relevance. Nationwide argued that its internal investigation and communications among its insureds, agents, and adjustors, had "no bearing whatsoever on the merits of the negligence and agency claims" alleged by Cherryhill. Nationwide further asserted that the subpoena should be quashed based on applicable privileges, pursuant to Civ.R. 45(C). Nationwide asserted that the documents sought in Cherryhill's subpoena were so clearly protected from discovery by attorney-client privilege and the work product doctrine that Nationwide should not be put to the undue burden and expense of preparing a privilege log describing the nature of these documents. Finally, Nationwide argued that, if the court concluded that there were any legitimate questions as to the discoverability of the documents at issue, it should be allowed to provide a log and have the court conduct an evidentiary hearing or in camera review of the protected documents before ordering that any of them be produced.

{¶ 7} On May 3, 2017, Cherryhill opposed the motion to quash. Cherryhill asserted that Branham spent time at Mollie's home performing dog-watching services and as such, was a "regular invitee." Cherryhill argued that it was in dispute whether Branham had Mollie's express or implied permission to drive the car on the day in question. Pointing out that the accident was "a two-car collision without injuries, without any dispute about causation" and that Nationwide issued "an expedited decision * * * that no coverage existed," Cherryhill asserted that "Nationwide's claim of burden rings hollow." Cherryhill argued that, if Nationwide had followed Civ.R.45(C)(4), it would have prepared a privilege log regarding the documents allegedly protected by privilege; "instead, Nationwide ask[ed] the Court to rule blindly without any evidence from Nationwide regarding the documents it ha[d] held back."

{¶ 8} Cherryhill further asserted that, if Nationwide created a privilege log, Nationwide and Cherryhill could discuss the merits of Nationwide's objections to production. Cherryhill asserted as follows:

* * * Then Cherryhill can decide whether to explore issues further with the Court, e.g., whether good cause exists for the production of witness statements that cannot be obtained by other means, whether an insurer can claim a work product privilege for documents created after its decision that the policy didn't provide coverage, and whether the documents identified in the privilege log reflect alternate explanations for why Nationwide deemed the car to be driven without authority when no one ever reported a stolen vehicle to law enforcement authorities. Indeed, if Nationwide agrees to produce any proof of a determination by law enforcement officials that the Honda was stolen - or even proof merely that the police conducted some inquiry about whether the car was stolen - Cherryhill will withdraw its request for additional information and make this motion to quash moot.

Likewise, the log will disclose whether Nationwide's arguments are even relevant. For example, Nationwide cites precedent for the notion that an insurer's sending a report to its attorney for preparation of a defense make the document protected from disclosure. * * * Because Nationwide hasn't created a log, however, neither Cherryhill nor the Court knows whether such a document exists. Cherryhill and the Court are likewise in the dark about whether there are "statements taken by an insurer from witnesses," or "communications between the insurer and its insured," or indeed whether there is even a "coverage investigation," which Cherryhill very much doubts.

Nationwide has not given Cherryhill or this Court the information needed to rule on a motion for protective order. Having failed to carry its burden, Nationwide's motion must be denied. The Court should decline Nationwide's invitation to do the work the rule requires. [Sic.] * * *

(Emphasis sic.)

{¶ 9} On May 11, 2017, Nationwide filed a reply in support of its motion to quash. Nationwide pointed out that Cherryhill could not bring a "bad faith" claim against Nationwide under Ohio law because Cherryhill was not insured by Nationwide, as required by Ohio's "direct action" rule. Nationwide also pointed out that Cherryhill's brief in opposition did not even attempt to address the irrelevance of the information Cherryhill sought or the privileged and protected nature of that information. Nationwide argued that there was "no authority to permit a plaintiff in a negligence action to discover the defendant's liability insurer's claim file before judgment * * *."

{¶ 10} Nationwide described Cherryhill's Civ.R. 45(C)(4) argument as "misplaced, at best." Nationwide asserted that under Civ.R. 45(C)(4), the parties are required to make an effort to resolve disputes related to a subpoena only when the dispute is based on whether the subpoena creates an undue burden. However, Nationwide did not file its motion pursuant to Civ.R. 45(C)(3)(d), claiming undue burden; it filed its motion pursuant to Civ.R. 45(C)(3)(b), referring to the disclosure of privileged or otherwise protected matter. "[T]here was no rule requiring non-party Nationwide to make pre-motion [to quash] efforts to try to convince [Cherryhill] that it [was] not entitled to the records it [sought] because they [were] privileged and protected."

{¶ 11} Finally, Nationwide argued that, as a non-party to the action, Civ.R. 45 did not require it to submit or provide a privilege log; "the privileges and protections Nationwide has asserted are so clear that going to the burden and expense of preparing a privilege log that would cover all of the requested records should not be required." Nationwide also noted that it offered to provide a privilege log.

{¶ 12} On July 19, 2017, Cherryhill filed a motion for default judgment against Branham for failure to answer or appear.

{¶ 13} On November 6, 2017, Cherryhill filed subpoena to depose Cargelia Stanley, an adjuster employed by Nationwide. On November 22, 2017, Stanley moved to quash the subpoena.

{¶ 14} On November 30, 2017, the trial court referred the case to a magistrate for a damages hearing. On December 14, 2017, the court granted Cherryhill's motion to enter a default judgment against Branham in the amount of $4,858.99, plus interest and costs.

{¶ 15} On December 5, 2017,...