In re Professionals Direct Ins. Co.

In re Professionals Direct Ins. Co.

Opinion

 [*435]  [***1]   BOYCE F. MARTIN, JR., Circuit Judge. Professionals Direct Insurance Company petitions this Court for a writ of mandamus to vacate a discovery order issued by the district court. Professionals Direct contends that the order erroneously compels it to produce documents protected by the federal work-product doctrine and by Ohio's attorney-client privilege. Because we find that Professionals Direct has not met the heavy burden required to justify a writ of mandamus, we DENY its petition.

 [***2]  I.

Professionals Direct is the malpractice insurer for Wiles, Boyle, Burkholder & Bringardner Co., a Columbus, Ohio law firm specializing in insurance defense. In 2001, Wiles was retained by Illinois National Insurance Company to defend a suit against an employee of one of Illinois National's insureds. The defense was not successful and the plaintiffs obtained a large jury verdict, leaving  [**2] Illinois National responsible for $ 8,531,488.68 in damages. The trial court entered judgment December 30, 2002. Wiles filed a motion for judgment not withstanding the verdict or, alternatively, for a new trial on January 15, 2003. The trial court denied the motion as untimely, concluding that it had been filed outside of the 14-day period provided in the Ohio rules of civil procedure. Wiles appealed this decision to the Ohio Court of Appeals, and then to the Ohio Supreme Court.

In late 2003, while the Ohio Supreme Court's decision was pending, Wiles applied to renew its malpractice insurance policy with Professionals Direct. In its application for renewal Wiles indicated that it was not aware of any circumstances, acts, or omissions during the prior twelve months that "could reasonably be expected to result in a claim to Professionals Direct."

The Ohio Supreme Court unanimously affirmed the trial court's ruling on August 18, 2004. On September 1, Wiles notified Professionals Direct that Illinois National had a potential malpractice claim against it. Professionals Direct acknowledged Wiles's notice of a potential malpractice claim, but reserved the right to deny the claim pending an  [**3] investigation into the circumstances under which it arose. At this time, Professionals Direct retained outside counsel to advise it on potential defenses to coverage and to explore the  [*436]  possibility of seeking a declaratory judgment that Wiles was not covered by the plan. In October 2004, Illinois National settled the underlying claim and offered to settle its potential malpractice action for $ 5 million. Professionals Direct represented Wiles in settlement negotiations and executed an agreement tolling the statute of limitations to facilitate settlement discussions. ¹ 

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