United States District Court, D. Minnesota
W. Berglund, Esq., and Meghan M. Rodda, Esq., Grotefeld
Hoffman Schleiter Gordon Ochoa & Evinger LLP,
Minneapolis, MN, on behalf of Plaintiff.
A. Harrington, Esq., Jon R. Steckler, Esq., and Thomas P.
Harlan, Esq., Madigan Dahl & Harlon, PA, Minneapolis, MN,
on behalf of Defendant.
MEMORANDUM OPINION AND ORDER
MONTGOMERY U.S. DISTRICT JUDGE
matter is before the undersigned United States District Judge
for a ruling on Plaintiff Peerless Indemnity Insurance
Company's (“Peerless”) Objection [Docket No.
53] to Magistrate Judge Leo I. Brisbois' January 4, 2017
Order [Docket No. 52] (“Order”). Peerless objects
to the portion of Judge Brisbois' Order that concluded
Peerless' attorney-client privilege was not maintained
and that its Amended Redaction Log was insufficient. For the
reasons stated below, Peerless' Objection is sustained in
part and overruled in part.
The Underlying Dispute
was Sushi Avenue, Inc.'s (“Sushi”) workers
compensation insurance carrier for two policy periods. Order
at 2. For the first policy period, March 19, 2013 through
March 19, 2014, Peerless estimated the premium would be $39,
630. Id. For the second period, March 19, 2014
through February 15, 2015, the premium was estimated to be
$46, 864. Id. The contract provided that Peerless
would determine the final premium at the end of each policy
term, “using the actual, not the estimated, premium
basis and the proper classifications and rates that lawfully
apply to the business and work covered by the policy.”
Id. Sushi was to pay Peerless the difference between
the estimated and final premium. Id.
is in the business of selling sushi and related products in
kiosks located in supermarkets in Minnesota and other states.
Sushi contracts with individuals who operate the kiosks.
Id. at 1-2. That contract obligates the kiosk
operators to carry workers compensation insurance that is
sufficient to protect both the kiosk operators and Sushi from
potential claims. Id. at 2. Sushi claims that the
kiosk operators are independent contractors rather than
employees of Sushi.
April 2, 2014, Dawn Mathison (“Mathison”), a
Senior Premium Auditor with Liberty Mutual Insurance
(“Liberty”), the parent company of Peerless,
conducted an audit of the first policy period. Id.
After reviewing payroll, tax filings, and the contract
between Peerless and Sushi, Mathison concluded the kiosk
operators were Sushi employees, not independent contractors.
As a result, the first policy premium was increased by $389,
354. Id. at 2-3.
and Sushi could not resolve the additional audit premium for
the first policy period. Workers compensation coverage for
the second policy period was cancelled effective March 18,
2015. Id. at 4. In April 2015, Mathison began a
cancellation audit for the second policy period, eventually
concluding that Sushi owed an additional premium of $357,
640. Id. The parties continue to disagree whether
the kiosk operators are employees of Sushi or independent
November 13, 2015, Peerless filed this breach of contract
suit based on Sushi's failure to pay the additional
premiums. Id. at 5. Peerless seeks a declaratory
judgment that the kiosk operators are employees of Sushi and
should be included when calculating Sushi's workers
compensation insurance premiums. Id.
discovery, Sushi requested Peerless produce documents
relating to Peerless' assertion that the kiosk operators
are Sushi employees rather than independent contractors.
Id. at 6. In response to this request, Peerless
produced documents in both redacted and unredacted form, but
also declined production of certain documents, citing
attorney-client privilege or the work product doctrine.
Id. Peerless' redaction log dated June 7, 2016,
identified 37 documents protected by privilege or work
product doctrine. Id. On September 8, 2016, Sushi
told Peerless that its claims of privilege were improper
because the documents referenced in the redaction log did not
identify an attorney as either a creator or recipient of the
communication. Id. Sushi requested that Peerless
produce unredacted versions of documents identified on the
redaction log. Peerless declined and instead offered to
provide an Amended Redaction Log to better explain its
assertions of privilege. Id. at 7.
depositions conducted on September 14 and 15, 2016, Sushi
learned of other unproduced communications it believed were
responsive to its document requests. Id. After
receiving a September 16, 2016 deficiency letter, Peerless
produced nearly 6, 000 pages of documents between September
16 and October 7, 2016. Id. One of the documents
produced is a September 3, 2014 email that Peerless now
claims is privileged. Id. at 8.
October 18, 2016, Peerless produced an Amended Redaction Log
adding 258 additional documents Peerless claimed were
protected by attorney-client privilege or the work product
doctrine. Id. The log, however, did not further
explain why the documents did not need to be produced.
sent another deficiency letter on October 24, 2016.
Id. In that letter, Sushi again complained about the
substance of Peerless' Amended Redaction Log and
additionally demanded further document production.
Id. In response, Peerless claimed the redacted
documents were properly withheld. Id. Peerless also
stated that the September 3, 2014 email was inadvertently
produced and requested it be ...