Valaree Doehne, V Empres Healthcare Mgmt, Llc ( 2015 )

FILED
COURT OF' APPEALS
DIVISION II
2015 AUG i 1 AM 9. 11
STATE OF WASHINGTON
BY
0,5ptlTy
IN THE COURT OF APPEALS. OF THE STATE OF WASHINGTON
DIVISION II
VALAREE DOEHNE, No. 46467 -5 -II
Respondent,
V.
EMPRES HEALTHCARE MANAGEMENT, UNPUBLISHED OPINION
LLC, a Washington Limited Liability
Company d/ b/ a FRONTIER
REHABILITATION and EXTENDED CARE
CENTER; EMPRES WASHINGTON
HEALTHCARE, LLC, a Washington Limited
Liability Company d/b/a FRONTIER
REHABILITATION and EXTENDED CARE
CENTER; and EVERGREEN
WASHINGTON HEALTHCARE
FRONTIER, LLC, a Washington Limited
Liability Company d/b/ a FRONTIER
REHABILITATION and EXTENDED CARE
CENTER,
LEE, J. — Empres Healthcare Management LLC, EmpRes Washington Healthcare LLC,
and Evergreen Washington Healthcare Frontier LLC appeal an order compelling their disclosure
of the first paragraph of a document that they assert is protected by the attorney- client privilege.
They also argue that the final sentence of the paragraph is protected from discovery under the work
product doctrine. We agree that the paragraph as a whole is protected by the attorney- client
No. 46467 -5 -II
privilege and that its final sentence is protected opinion work product, and we reverse the trial
court' s order compelling discovery of this material.
FACTS
Evergreen Washington Healthcare Frontier LLC operates the Frontier Rehabilitation and
Extended Care Center in Longview ( Frontier facility). EmpRes Healthcare Management LLC
EmpRes) is based in Vancouver and provides management services to .the Frontier facility.'
EmpRes has an in-house legal department in Vancouver and a risk management director (formerly
Dick Pflueger) who acts as a conduit between the legal department and insurers regarding liability
issues, including workers' compensation and third -party liability.
On the night of February 2, 2010, Valaree Doehne left the Frontier facility after visiting
I' her husband and tripped over a cement wheel stop in the parking lot. She went back into the
facility for treatment of her injuries but soon was taken by ambulance to the hospital.
In the days following Doehne' s accident, EmpRes' in-house legal department directed
Pflueger to conduct an investigation into the incident. At Pflueger' s request, Heather Clarno, an
administrative assistant to EmpRes' regional operations manager, performed an investigation and
prepared a one- page report of her findings. She provided this report to EmpRes' risk management
and legal departments.
In 2013, Doehne filed an amended complaint for damages against the Frontier facility and
the companies providing it with operating and management services. Doehne alleged in her
complaint that at the time of her fall, it was dark and the parking lot and sidewalk outside the
EmpRes was formerly known as EHC Management, LLC but we refer to it as EmpRes throughout
this opinion for the sake of clarity.
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Frontier facility were not well lit. She also alleged that the wheel stop was not well marked or
painted.
Doehne subsequently sought discovery of any written statement or report made to anyone
at the Frontier facility concerning the incident, including the production of "all memos, documents,
logs, notes or other written or electronic memorialization of reports." Clerk' s Papers ( CP) at 12-
13. The defendants objected on the basis that Doehne' s request involved work product and
privileged material.
Doehne then moved to compel production of the requested material. The defendants
responded that the documents being withheld on claim of privilege related to Pflueger' s post -
incident investigation. Their attorney filed a declaration stating:
Mr. Pflueger maintained a paper file regarding this incident. This file
includes two incident reports from individuals at the facility, which he believes he
requested to present to the in-house legal department as part of its analysis of the
incident. The paper file also includes analysis about plaintiff' s demand that
defendants pay for her medical expenses, as well as other documents analyzing the
possibility of settling plaintiff' s potential claims prior to her filing a lawsuit. In
addition, withheld email correspondence involving Mr. Pflueger includes in-house
attorneys and/ or paralegals as a sender or recipient.
CP at 53 ( citations omitted).
During the hearing on Doehne' s motion to compel, the defendants explained that the two
incident reports in Pflueger' s file included Clarno' s report and one written by a nurse at the Frontier
facility who treated Doehne after her fall.' The defendants argued that Clamo' s report was
prepared in anticipation of litigation because Doehne had asked the Frontier facility to pay her
The defendants did not seek review ofthe trial court' s order requiring them to disclose the nurse' s
report.
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medical expenses after sustaining her injuries. The trial court requested an in -camera review of
Clarno' s report and invited the parties to submit additional authority or evidence regarding whether
the report was privileged.
The defendants filed a declaration from Clarno stating that she had not been present at the
Frontier facility at the time of Doehne' s injuries and had no personal knowledge of the incident.
Clarno added:
In the days following the incident, I performed an investigation and
prepared a one -paged type report regarding my findings. I prepared this
investigation and incident report consistent with how I generally performed these
tasks for my employer on anticipated worker' s compensation claims. The report
was prepared for and provided to the risk management and legal departments of the
management company in Vancouver. My investigation and report were performed
in anticipation of litigation by Ms. Doehne.
CP at 70.
Following in -camera review of the Clarno report, the trial court ruled that the second, third,
and fourth paragraphs were protected work product and not discoverable because they were
clearly made in anticipation of litigation." Verbatim Report of Proceedings ( VRP) at 41. The
trial court also ruled that the first paragraph was not protected work product and required its
production. The court entered an order compelling discovery that did not specifically address the
Clarno report.
The defendants moved for reconsideration, arguing that the trial court' s oral ruling failed
to address whether the Clarno report was an attorney- client privileged communication. After
arguing that the attorney- client privilege applied, the defendants asserted in the alternative that the
final sentence of the first paragraph in Clarno' s report should be protected from discovery as
opinion work product. In its order denying reconsideration, the trial court stated that the first
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paragraph of Clarno' s report was " not protected by the attorney[ -]client privilege nor by the work
product doctrine and is therefore discoverable." CP at 103.
The defendants sought discretionary review and sent this court a redacted copy of Clarno' s
report for in -camera review. We granted the defendants' motion for discretionary review and now
consider whether the attorney- client privilege or the work product doctrine protects the Clarno
report from disclosure.
ANALYSIS
A. STANDARD OF REVIEW
The attorney- client privilege is codified in RCW 5. 60.060( 2)( a), and the work product rule
is set forth in CR 26( b)( 4). Issues of statutory construction are questions of law that we review de
novo. Fellows v. Moynihan, 175 Wash. 2d 641, 649, 285 P.3d 864 ( 2012); Jane Doe v. Corp. of
President of Church ofJesus Christ ofLatter -Day Saints, 122 Wash. App. 556, 563, 90 P.3d 1147
2004), review denied, 153 Wash. 2d 1025 ( 2005). We review de novo the interpretation of court
rules as well. Hundtofte v. Encarnaci6n, 181 Wash. 2d 1, 13, 330 P.3d 168 ( 2014).
We review the trial court' s application of the law in a discovery order for abuse of
discretion. Cedell v. Farmers Ins. Co., 176 Wash. 2d 686, 694, 295 P.3d 239 ( 2013). A court abuses
its discretion when its decision is manifestly unreasonable or based on untenable grounds. Dana
v. Piper, 173 Wn. App. 761, 769, 295 P.3d 305, review denied, 178 Wash. 2d 1006( 2013). A court
necessarily abuses its. discretion when basing its decision on an erroneous view of the law or
applying an incorrect legal analysis. Dana, 173 Wash. App. at 769.
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B. ATTORNEY- CLIENT PRIVILEGE
Washington' s attorney- client privilege is set forth in RCW 5. 60. 060( 2)( a):
An attorney or counselor shall not, without the consent of his or her client, be
examined as to any communication made by the client to him or her, or his or her
advice given thereon in the course of professional employment.
The purpose of this privilege is to encourage clients to make full disclosure to an attorney
so that the attorney can render effective legal assistance. Pappas v. Holloway, 114 Wash. 2d 198,
203, 787 P.2d 30 ( 1990); R.A. Hanson Co. v. Magnuson, 79 Wash. App. 497, 502, 903 P.2d 496
1995), review denied, 129 Wash. 2d 1010 ( 1996). The attorney-client privilege applies to any
information generated by a request for legal advice, including documents created by clients with
the intention of communicating with their attorneys. West v. Dep' t ofNatural Res., 163 Wash. App.
235, 247, 258 P.3d 78 ( 2011), review denied, 173 Wash. 2d 1020 ( 2012). The privilege does not
protect documents that are prepared for some purpose other than communicating with an attorney.
Hangartner v. City of Seattle, 151 Wash. 2d 439, 452, 90 P.3d 26 ( 2004). The burden of showing
the .existence of an attorney- client relationship and that the requested information involves a
privileged communication falls on the party asserting the privilege. R.A. Hanson Co., 79 Wash. App.
at 501.
Clarno' s report was part of the post -incident investigation performed by EmpRes' risk
management director at the direction of the company' s in-house legal department. The attorney-
client privilege may apply to communications between in-house counsel and multiple lower -level
employees in an organization when those communications are made in order to secure legal advice.
Upjohn Co. v. United States, 449 U.S. 383, 394- 95, 101 S. Ct. 677, 66 L. Ed. 2d 584 ( 1981); see
also Hasso v. Retail Credit Co., 58 F.R.D. 425, 428 ( E. D. Penn. 1973) ( employee' s communication
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No. 46467 -5 -II
to corporation' s attorney, made at the direction of his superiors in the corporation, was privileged).
The defendants maintain that because Clarno was acting on EmpRes' behalf in its attempt to obtain
advice from in-house counsel, her report was privileged. See Upjohn, 449 U.S. at 389- 90 ( client
of in-house attorney is company itself).
Doehne argues that Clarno prepared her report for her employer rather than a specific
attorney and that the report was neither communication nor advice between a client and an.
attorney. Doehne points out that Clarno stated in her declaration that she prepared her report
consistent with how I generally performed these tasks for my employer." CP at 70. Doehne adds
that even if Pflueger presented Clarno' s report to in-house counsel as part of his investigation, the
act of passing documents to an attorney does not make them privileged communications between
a client and an attorney. See In re Det. of Williams; 147 Wash. 2d 476, 494, 55 P.3d 597 ( 2002)
party could not create privilege by giving Social Security records to his attorney).
The defendants respond that Pflueger assembled the file. that included Clarno' s report to
assist in-house counsel in " analyzing the possibility of settling plaintiff's potential claims prior to
her filing a lawsuit." . CP at 53. While Clarno may have prepared her report consistently with the
manner in which she prepared other reports, the purpose rather than the manner of preparation
guides our analysis. That purpose was to obtain legal advice for EmpRes, which functioned as
both employer and client in this case.
The defendants compare Clarno' s report to notes that a nurse and teacher made after
witnessing a medical crisis during a school field trip in Soter v. Cowles Pub' g Co., 162 Wash. 2d
716, 174 P.3d 60 ( 2007). In that case, the nurse and teacher provided their notes to the school
district' s attorneys and investigator with the understanding that these materials would be
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privileged. Id. at 747. These notes were privileged because they were " created by clients, in
anticipation of litigation, with the intention of communicating information to the attorneys." Id.
The record here does not show whether Clarno understood that her report would be
privileged. However, as in Soter, Clarno did prepare the report " for and provided [ it] to the risk
management and legal departments ... in anticipation of litigation." CP at 70. Clamo' s report
also is comparable to the incident report at issue in Flynn v. University Hospital, Inc., 172 Ohio
App. 3d 775, 876 N.E.2d 1300 ( 2007). In Flynn, a nurse prepared a report about a patient' s surgery
for attorneys in the hospital' s risk management department. Id. at 778. Because the nurse prepared
the report for the purpose of notifying the hospital' s legal counsel of possible claims, the report
was protected by the attorney- client privilege. Id. at 779- 80; see also Cleveland Clinic Health
Sys.— E. Region v. Innovative Placements, Inc., 283 F. R.D. 362, 368 ( N. D. Ohio 2012) ( attorney-
client privilege generally covers incident reports prepared for hospital risk management
department).
The purpose of EmpRes' risk management position "is to act as a conduit between the legal
department and insurers regarding liability issues, including workers' compensation and third -
party liability, with the goal of avoiding litigation and minimizing liability." CP at 59. The record
shows that Clarno' s report was prepared to assist in-house counsel in addressing issues of liability
and potential litigation. See Flynn, 172 Ohio App. 3d at 779- 80 ( privilege applied where hospital
demonstrated that report was a communication prepared by its employee for the use of its attorneys
in anticipation of litigation). We hold that the first paragraph of the Clarno report is protected by
the attorney- client privilege and that the trial court abused its discretion in compelling the
paragraph' s disclosure.
No. 46467 -5 -II
C. WORK PRODUCT
Although our resolution of the first.issue does not require our resolution of the second, we
briefly address the work product issue. The defendants' work product argument is directed at the
final sentence of the first paragraph in Clarno' s report. They maintain that because this sentence
is a mental impression or opinion, it is exempt from disclosure without any consideration of
Doehne' s need for the information.
Work product refers to documents prepared in anticipation of litigation. Soter v. Cowles
Pub' g Co., 131 Wn. App. at 882, 893. 130 P.3d 840 ( 2006), aff'd, 162 Wash. 2d 716, 174 P.3d 60
2007). It consists of factual information and mental impressions, research, legal theories, opinions
and conclusions. Soter, 131 Wn. App. at 893. The court may allow a party to discover factual
information prepared in anticipation of litigation upon a showing of substantial need for the
materials in preparing the party' s case and an inability to obtain the substantial equivalent without
undue hardship. CR 26( b)( 4); Heidebrink v. Moriwaki, 104 Wash. 2d 392, 395, 706 P.2d 212 ( 1985).
Opinion work product, however, enjoys nearly absolute immunity, and a court may release it only
in very rare and extraordinary circumstances. CR 26( b)( 4); Soter, 131 Ohio App. at 894. Mental
impressions embedded in factual statements. should be redacted. Limstrom v. Ladenburg, 136
Wash. 2d 595, 612, 963 P.2d 869 ( 1998).
Work product documents need not be prepared personally by counsel; they can be prepared
by or for the party or the party' s representative as long 'as they are prepared in anticipation of
litigation. CR 26( b)( 4); Soter, 131 Wash. App. at 894. There is an exception to the work product
rule for records created during the ordinary course of business. In re Det. of West, 171 Wash. 2d 383,
405, 256 P.3d 302 ( 2011). This exception prevents parties from exploiting the work product rule
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by adopting routine practices whereby all documents appear to be prepared in anticipation of
litigation. Heidebrink, 104 Wash. 2d at 400.
The trial court concluded that three of the four paragraphs in the Clarno report were
prepared in anticipation of litigation. Doehne does not challenge this conclusion. We question
whether paragraphs in a single document can be prepared for different purposes. Nevertheless, we
turn to Doehne' s argument that the Clamo report was prepared in the ordinary course of business
and thus is exempt from work product protection.
To identify " ordinary course of business" documents, we look at the parties involved and
their expectations. Soter, 131 Wash. App. at 896; see also West, 171 Wash. 2d at 405 ( test is whether,
in light of the document and the facts, the document can fairly be said to have been prepared or
obtained because of the prospect of litigation). Here, Clarno prepared a report about Doehne' s
accident for distribution to the company' s risk management and legal departments. This document
would not have been prepared but for Doehne' s injuries. The lawyers' participation was not
merely incidental, and Empres' anticipation of potential litigation was reasonable. See Cleveland
Clinic Health Sys., 283 F. R.D. at 369 ( plaintiffs' anticipation of litigation was objectively
reasonable where patient was admitted to emergency room, was not fully connected to monitoring
system, and was found dead the next day).
We conclude that the entire Clarno report was prepared in anticipation of litigation and that
the trial court abused its discretion in compelling the discovery of the final sentence of the first
paragraph, which clearly constitutes opinion work product. And, as stated, the entire first
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paragraph is protected from disclosure by the attorney-client privilege.
We reverse the trial court' s order compelling discovery of this information.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW 2. 06.040,
it is so ordered.
h
Lee, J.
We concur:
Maxa, P' J.
Sutton, X
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