The opinion of the court was delivered by: Wm. R. Wilson, Jr. United States District Judge
Pending are Third-Party Defendant ConArgra Poultry Company's ("ConAgra") Motion for a Protective Order,*fn1 and Defendant and Third-Party Plaintiff, the Missouri & Northern Arkansas Railroad Company, Inc.'s ("MNAR") Motion to Compel.*fn2
ConAgra asserts the attorney-client privilege and asks for an order protecting its attorneys, Bill Walmsley and Tom Thompson, from compulsory depositions. MNAR asks that ConAgra be compelled to respond to its requests for production.
This case arose as a result of personal injuries suffered by Kenneth Burress ("Burress") when he was hit by a boxcar at work. At the time of the accident, Burress was working for, and operating a switch engine owned by ConAgra.
Burress sued MNAR,*fn3 who then filed a third-party complaint against ConAgra,*fn4 seeking indemnification under the terms of an Industry Track Agreement ("Agreement"). ConAgra denied that the Agreement applied because of MNRA's negligence.*fn5
Burress and MNAR settled the tort claim for $5,000,000. After this settlement, ConAgra amended its answer, and affirmatively asserted that the settlement was unreasonable.*fn6
Summary Judgment was granted in favor of MNAR on the basis that the accident and the related losses were covered by the indemnity provisions of the Agreement. However, the issue of the settlement's reasonableness was held over for trial.
As a general rule, a party does not waive the attorney-client privilege by simply bringing or defending a lawsuit.*fn7 The attorney-client privilege is generally waived when the client asserts claims or defenses that put his attorney's advice at issue in the litigation.*fn8 To waive the privilege, a party must do more than deny allegations, he must affirmatively raise new factual or legal issues that involve privileged communications.*fn9 But, the issue need not be raised as an affirmative defense or by the party's pleadings.*fn10
A protected communication is not placed in issue just because it is relevant.*fn11 Instead, the privilege is waived when the party attempts to prove the claim or defense by disclosing or relying on attorney client communication.*fn12 In other words, the waiver principle is applicable where a party puts his understanding of the law in issue.*fn13 Moreover, a defendant may not use the privilege to prejudice his opponent's case by disclosing selected communications for self-serving purposes.*fn14 Thus, the privilege may be waived when a party asserts a claim that, in all fairness, requires examination of each party's protected communications.*fn15
ConAgra asserts that the waiver principle applies only to MNAR because it has the burden to prove that the settlement was reasonable. While I agree that MNAR has the burden of proof, I do not agree that MNAR is the only party that has waived the attorney-client privilege.
ConAgra objected to the mediation between Burress and MNAR as unreasonable, and, after the mediation ended in settlement, ConAgra questioned the reasonableness of the settlement.*fn16 ConAgra's alleged legal understanding of the true extent of liability and damages is at the heart of its refusal to indemnify MNAR. Thus, ConAgra has asserted a claim that puts its attorneys' advice at the center of this litigation. Accordingly, MNAR has a right to discover the basis for ConAgra's legal conclusion that the whole settlement ...