Illinois Appellate Court Finds That Attorney-Client Privilege is Applicable in Insurance Coverage Dispute

The Illinois Appellate Court of the 1^st District resolved a discovery dispute in an insurance coverage lawsuit between plaintiff-insured Motorola Solutions Inc. and the defendant-insurers Zurich Insurance Co. and Associated Indemnity Corp. The court held that absent an applicable cooperation clause, attorney-client privilege applies to any appropriate documents.

This was an insurance coverage dispute between Motorola and the two insurance companies that had to do with several personal injury lawsuits brought by former employees and contractors who claimed they had been exposed to chemicals in “clean rooms” located in Motorola’s manufacturing facilities. It was argued that the court should require defendants to defend and absorb defense costs for these personal injury actions.

In litigating the insurance coverage dispute, Zurich sought several documents that Motorola claimed were privileged. In particular, Zurich sought two categories of documents concerning the time of Motorola’s notice of the claims brought against them: (1) documents pertaining to Motorola’s clean room safety program (CRSP documents); and (2) SEC Form S-1 Registration Statements detailing “significant risk factors currently known and unique to” Motorola.

The trial judge ordered Motorola to turn over the documents, but it refused. The trial court then held Motorola in friendly civil contempt and permitted the appeal. On appeal, Motorola argued that the trial court erred in ordering it to produce documents. The defendant insurance companies argued that under the Illinois Supreme Court case of Waste Management Inc. v. International Surplus Lines Insurance Co., 144 Ill.2d 178 (1991), the attorney-client privilege and work product doctrines do not apply to shield production of such documents from plaintiff’s insurers.

In the Waste Management case, the parties involved in the coverage dispute had a broad cooperation clause in their insurance policy that made attorney-client privilege unavailable based on the nature of the requested documents. However, here, the court found that the cooperation clause in Zurich’s policy did not encompass Motorola’s CRSP documents, which were created by different attorneys before the underlying lawsuits began.

In addition, the court found that the Common Interest Doctrine (a public policy doctrine explaining the special relationship and privity of contract between the insureds and insurers), does not apply to this case.

The Illinois Appellate Court reversed the trial judge’s order stating that although the documents concerning Motorola’s knowledge of the clean room risks are relevant, the court found that attorney-client privilege is nonetheless applicable.

Motorola Solutions, Inc. v. Zurich Insurance Co., 2017 IL App (1^st) 161465.

Kreisman Law Offices has been successfully handling catastrophic injury lawsuits, commercial litigation, contract disputes and motor vehicle accident lawsuits for individuals, families and the loved for more than 40 years, in and around Chicago, Cook County and its surrounding areas, including Melrose Park, Oak Lawn, Harwood Heights, Buffalo Grove, Arlington Heights, Evanston, Cicero, St. Charles, South Barrington, Skokie, Western Springs, Winnetka, Wheeling, Lincolnshire, Gurnee, Chicago (Brighton Park, Little Village, Lawndale, Humboldt Park, Portage Park, Edgebrook, Uptown, Andersonville, Rosehill, West Ridge, Hyde Park), Robbins, Midlothian and Berwyn, Ill.