Northern District of Illinois Holds that Post-Accident Report is Not Privileged

The Northern District of Illinois recently held that a defendant’s post-accident report was not privileged in the case of Nelson v. Intercontinental Hotels Group Operating Corp., et al., 2013 WL 5890612 (N.D. Ill. Nov. 1, 2013).  The plaintiff in Nelson brought a motion to compel the disclosure of the defendants’ accident report.   In Nelson, the defendants’ employees completed a “general liability claim report form” following an accident involving a hotel guest at their property and transmitted it to their risk management group.  The plaintiff requested the post-accident report be turned over during the discovery process.  The defendants objected, citing the attorney-client privilege and the work-product doctrine.  The court reviewed the “general liability claim report form” and held that neither privilege applied and ordered the defendants to produce the document to the plaintiff.

The defendants argued that the accident report was protected under the attorney-client privilege and work-product doctrine because it was prepared pursuant to the corporate policy in anticipation of litigation and in aid of possible future litigation.  The defendants cited the Fojtasek v. NCL (Bahamas) Ltd. case for the proposition that incident reports prepared in anticipation of litigation are protected under the work-product doctrine.  Fojtasek, 262 F.R.D. 650 (S.D. Fl. 2009).  In Fojtasek, the court held that an incident report similar to the one at issue in Nelson was protected under the work-product doctrine.  The Fojtasek court relied heavily on an affidavit prepared by a manager of damages claims who explained the reason for the preparation of the incident report, including that they are prepared at the direction of legal counsel and that the reports are submitted to the legal department.  Id. at 654-55.

The Nelson court found that the incident report at issue was similar to the one involved in the Fojtasek case in that in both instances the defendants’ employees were instructed to make the report whenever a guest was involved in an accident on the defendants’ property.  However, the Nelson court held that the accident report at issue was not protected from disclosure because the defendants failed to show that it was protected by either the attorney-client privilege or the work-product doctrine.   Although the defendants properly cited the requirements for each privilege as part of their argument, they failed to provide sufficient evidence that that the incident report met those requirements.

With regard to the attorney-client privilege, the defendants have to show that the communication in question “originated in confidence that it would not be disclosed, was made to an attorney in his legal capacity for the purpose of securing legal advice or service, and remained confidential.”  Rounds v. Jackson Park Hosp. & Med. Ctr., 319 Ill.App.3d 280, 285-86 (1st Dist. 2001); see also Sandra T.E. v. South Berwyn Sch. Dist. 100, 600 F.3d 612, 618 (7th Cir. 2010).  In analyzing these elements within a corporate structure, Illinois requires corporations that assert the attorney-client privilege to show that the contested communication was made by an individual within the “corporate ‘control group.’” Hyams v. Evanston Hosp., 225 Ill.App.3d 253, 257-58 (1st Dist. 1992).

In Nelson, the defendants asserted that the report was submitted to the defendants’ “risk management team in Rhode Island” but failed to submit any additional information to satisfy the elements for defendant corporations to assert that an incident report is protected by the attorney-client privilege.  For instance, the defendants failed to show the court that the forms were communicated to risk management for the purpose of obtaining legal advice, that they were submitted in confidence, and that the information contained within the report was kept confidential.  Based on the court’s in camera inspection of the accident report, the information contained in the report was deemed not confidential in nature.  (Additionally, the Nelson court noted that the defendants did not develop any argument that the insurer-insured privilege applied.)

As for the work-product doctrine, the defendants also failed to show that this privilege applied.  The work-product doctrine protects documents prepared by an attorney or the attorney’s agent in anticipation of litigation for purposes of analyzing, evaluating and preparing a client’s case. (See United States v. Smith, 502 F.3d 680, 689 (7th Cir. 2007).  The defendants merely asserted that the forms were prepared in anticipation of litigation, which was insufficient.  The defendants in Nelson did not show any evidence that their attorneys directed the defendants’ employees to prepare the report or that the information contained in the report conveyed an attorney’s thought processes and mental impressions.

The Nelson court held that the incident report was kept in the normal course of business, per corporate policy, which might have an incidental benefit of being helpful in the event of future litigation.  However, as neither the attorney-client privilege nor the work-product doctrine applied, the court granted the plaintiff’s motion to compel and ordered the defendants to disclose the accident report.

By: Donna M. Bucko on 12/30/13

First District Appellate Court of Illinois Addresses Construction Manager Liability

The question in Calloway v. Bovis Lend Lease, Inc. is whether the defendant construction manager can be held liable for injuries to a construction worker caused by a contractor hired by the owner. Calloway v. Bovis Lend Lease, Inc. 2013 IL App (1st) 112746.  Based on the recent decision of Calloway, the answer is yes.

Liability of construction managers in this situation is analyzed under Section 414 of the Restatement (Second) of Torts which states:

“One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.”

In Calloway v. Bovis Lend Lease, Inc., the defendant construction manager argued in its appeal following a jury verdict in favor of the plaintiff that it did not entrust any work to the subcontractor who was performing work at the time of the accident because it did not hire or enter into a contract with the subcontractor Calloway v. Bovis Lend Lease, Inc. 2013 IL App (1st) 112746.

In support of its contention, the construction manager in Calloway cited the recent decision of O’Connell v. Turner Construction Co., 409 Ill.App.3d 819, 949 N.E.2d 1105 (1st Dist. 2011).  In O’Connell, a school district entered into a contract with the construction manager and the construction manager handled the bidding process for hiring subcontractors; however, the actual signatories on the contracts were the school district and the contractors and subcontractors.  The O’Connell court noted that the prerequisite to analyzing a case under Section 414 of the Restatement (Second) of Torts was whether the defendant entrusted work to an independent contractor and absent such entrustment Section 414 would not apply.  The O’Connell court noted under those facts that the construction manager did not entrust work to any contractors or subcontractors and therefore the plaintiff’s claim under Section 414 failed.

The Calloway court agreed with other federal court decisions that the issue of entrustment, like that of control, should be decided based upon whether the circumstances of each case showed that the construction manager actually entrusted work to a subcontractor and not based upon a bright-line test such as whether the construction manager actually signed a contract with the subcontractor.  The Calloway court stated that a construction manager could meet the control requirement when there is evidence that the construction manager’s actions demonstrate that it retained a sufficient level of control, even where contractual language exists formally assigning control to the independent contractor.  The Calloway court held that entrustment should be evaluated in the same manner.  Therefore, the court found that the entrustment requirement could be satisfied when the totality of circumstances demonstrated that the construction manager actually entrusted work to a subcontractor even if the construction manager did not actually sign the contract with the subcontractor.  The Calloway court stated that the defendant’s argument that entrustment could only be found if it signed the contract with the subcontractor was “overly narrow and formalistic” and therefore the court declined to adopt it.  If the defendant’s argument was accepted, the court noted that it would allow “project owners, construction managers and general contractors to easily avoid the reach of Section 414.”  Therefore, the Calloway court held that there was sufficient evidence that the defendant entrusted its work to the subcontractor to create a question of fact for the jury.

By: Donna M. Bucko on 12/30/13