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First Horizon Nat'l Corp. v. Houston Cas. Co.

United States District Court for the Western District of Tennessee

October 5, 2016, Decided; October 5, 2016, Filed

No. 2:15-cv-2235-SHL-dkv

Opinion

ORDER GRANTING IN PART AND DENYING IN PART THE DEFENDANTS' MOTION TO COMPEL

Before the court is the July 14, 2016 motion of the defendant Houston Casualty Company ("HCC"), joined by defendants Federal insurance Company, AXIS Insurance Company, Alterra America Insurance Company, Everest National Insurance Company, National Union Fire Insurance Co. of Pittsburgh, PA, RSUI Indemnity Company, and XL Specialty Insurance Company (collectively "the Defendants"), to compel the plaintiffs First Horizon National Corporation ("First Horizon") and First Tennessee Bank National Association ("First Tennessee") (collectively "the Plaintiffs") to produce certain allegedly non-privileged documents and a document-by-document privilege log. (ECF Nos. 173, 195, 196.) The Plaintiffs filed a response in opposition on August 1, 2016. (ECF No. 186.) HCC thereafter filed a reply on August [*6]  15, 2016 in which the remaining defendants joined. (ECF Nos. 193, 195, 196.)

The motion was referred to the United States Magistrate Judge for determination, (ECF No. 176), and a hearing was held on August 22, 2016.1 For the reasons stated herein, the Defendants' motion to compel is granted in part and denied in part.

I. PROCEDURAL AND FACTUAL BACKGROUND

This is an insurance coverage dispute in which the Plaintiffs seek coverage from the defendant insurers for a $212.5 million dollar settlement with DOJ and HUD of a claim of violation of the False Claims Act relating to errors and omissions in underwriting and origination of HUD mortgage loans. In defense, the Defendants contend, inter alia, that the claim is "interrelated" to an earlier claim made by First Tennessee and thus barred under a later policy and that First Tennessee failed to timely notify the Defendants of the claim.

For the period of August 1, 2013 through July 31, 2014, First Tennessee, a banking institution which is a wholly owned subsidiary of First Horizon, purchased a [*7]  primary claims-made insurance policy from HCC2 and seven excess follow-form policies from the seven other insurance companies named as defendants in this lawsuit. (Sec. Am. Compl. ¶¶ 7, 29, ECF No. 103.) As part of the primary insurance coverage with HCC, First Tennessee was covered for "Financial Institution Professional Liability," ("FIPL"). The insuring provision in the HCC policy states in relevant part:

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2016 U.S. Dist. LEXIS 142332 *

FIRST HORIZON NATIONAL CORPORATION and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, Plaintiffs, vs. HOUSTON CASUALTY COMPANY, FEDERAL INSURANCE COMPANY, XL SPECIALTY INSURANCE COMPANY, ALTERRA AMERICA INSURANCE COMPANY, AXIS INSURANCE COMPANY, NATIONAL UNION FIRE INSURANCE CO. OF PITTSBURGH, PA, RSUI INDEMNITY COMPANY, and EVEREST INDEMNITY INSURANCE CO., Defendants,

Prior History: First Horizon Nat'l Corp. v. Houston Cas. Co., 2016 U.S. Dist. LEXIS 62288 (W.D. Tenn., Apr. 21, 2016)

CORE TERMS

documents, privilege log, log, communications, disclosure, insurers, auditor, document-by-document, attorney-client, waived, confidential, accountant-client, categorical, parties, motion to compel, work-product, coverage, withheld, settlement, policies, notice, Underwriters, claw, privileged, loans, insurance company, undue burden, False Claims Act, correspondence, inadvertent

Civil Procedure, Discovery & Disclosure, Discovery, Privileged Communications, Evidence, Burdens of Proof, Allocation, Undue Burdens in Discovery, Privileged Communications, Attorney-Client Privilege, Work Product Doctrine, Privileges, Attorney-Client Privilege, Waiver