                                                                       FILED
                                                                  Nov 07 2018, 8:47 am

                                                                       CLERK
                                                                   Indiana Supreme Court
                                                                      Court of Appeals
                                                                        and Tax Court




ATTORNEYS FOR APPELLANT ZURICH ATTORNEYS FOR APPELLEES
AMERICAN INSURANCE COMPANY      Michael R. Limrick
Kevin S. Smith                  Hoover Hull Turner LLP
Church, Church, Hittle & Antrim Indianapolis, Indiana
Fishers, Indiana                Gregory A. Neibarger
Charles S. Smith                                    Bingham Greenebaum Doll LLP
Schultz & Pogue                                     Indianapolis, Indiana
Indianapolis, Indiana
Brian O’Gallagher
Cremer, Spina, Shaugnessy, Jansen &
Siegert, LLC
Chicago, Illinois
ATTORNEYS FOR INTERESTED PARTY
SCHINDLER ELEVATOR CORPORATION
Kevin C. Schiferl
Maggie L. Smith
Blake N. Shelby
Frost Brown Todd LLC
Indianapolis, Indiana


                                            IN THE
    COURT OF APPEALS OF INDIANA




Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018                Page 1 of 19
      Zurich American Insurance                                    November 7, 2018
      Company; Schindler Elevator                                  Court of Appeals Case No.
      Corporation; and KONE, Inc.,1                                29A05-1710-PL-2223
      Appellants-Defendants,                                       Appeal from the Hamilton
                                                                   Superior Court
               v.
                                                                   The Honorable Steven R.
                                                                   Nation, Judge
      Circle Centre Mall, LLC; Simon
      Property Group, Inc.; and XL                                 Trial Court Cause No.
      Insurance America, Inc.,                                     29D01-1304-PL-2892
      Appellees-Plaintiffs.




      Friedlander, Senior Judge.

[1]   In 2009, Schindler Elevator Corporation had a contract with Circle Centre

      Mall, LLC and Simon Property Group, Inc. (collectively, “the Simon

      Plaintiffs”) to maintain the escalators at the Circle Centre Mall in Indianapolis.

      KONE, Inc. had the maintenance contract before 2009. Schindler’s general

      liability insurer in 2009 was Zurich American Insurance Company. In October

      of 2009, high school student Phillip Caler fell from an escalator in the mall and

      sustained severe injuries, and, in 2011, Caler’s guardians sued the Simon

      Plaintiffs, Schindler, and KONE, claiming, inter alia, that Schindler had




      1
       Schindler and Kone are parties on appeal pursuant to Indiana Rule of Appellate Procedure 17(A), which
      provides, in part, that “[a] party of record in the trial court or Administrative Agency shall be a party on
      appeal.”



      Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018                        Page 2 of 19
      negligently maintained the escalator from which Caler had fallen and had failed
                                                                                    2
      to warn the Simon Plaintiffs of the need for fall protection.


[2]   As part of Schindler’s maintenance contract with the Simon Plaintiffs,

      Schindler agreed to name the Simon Plaintiffs as additional insureds pursuant

      to its policy with Zurich. Moreover, Zurich had a separate, so-called “fronting”

      agreement with Schindler requiring that any money that might have to be paid

      to the Simon Plaintiffs pursuant to their insurance contract was to ultimately

      come from Schindler, not Zurich. In August of 2011 and December of 2012,

      the Simon Plaintiffs asked Schindler for a defense of the Caler suit by both

      Schindler and Zurich. Schindler denied the Simon Plaintiffs’ requests on the

      basis that any request for coverage under Schindler’s policy should have been

      made to Zurich.


[3]   In March of 2013, the Simon Plaintiffs asked Zurich directly for defense and

      indemnification in the Caler suit. On April 1, 2013, the Simon Plaintiffs filed a

      complaint in Hamilton Superior Court against Schindler and KONE,

      contending that the defendants had breached their contractual duties to them in

      the Caler suit. On June 21, 2013, Zurich responded to the Simon Plaintiffs’

      request for a defense in the Caler suit with a reservation-of-rights letter, agreeing

      to defend the Simon Plaintiffs. Zurich represented that it and Schindler had

      assigned their third-party claim administrator, Broadspire Services, Inc., to



      2
        On September 29, 2013, Caler tragically succumbed to his injuries at the age of twenty. REMEMBERING
      PHILLIP CALER, https://www.texasffa.org/news/Remembering-Phillip-Caler (last visited September 13,
      2018).



      Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018                  Page 3 of 19
      “assist in the defense or resolution of this matter on behalf of both Schindler

      and SIMON.” Appellants’ App. Vol. V, p. 202. On July 25, 2013, after

      learning that Schindler was planning to settle the Caler suit, the Simon

      Plaintiffs wrote to ask whether Zurich would indemnify a settlement by the

      Simon Plaintiffs. When Zurich did not respond, the Simon Plaintiffs agreed, in

      principle, to settle the Caler suit on July 26, 2013.


[4]   On June 17, 2014, the Simon Plaintiffs and XL Insurance filed a second lawsuit

      in Marion Superior Court against Zurich and KONE’s insurer Old Republic

      Insurance Company. This lawsuit alleged the Simon Plaintiffs were additional

      insureds under Schindler’s and KONE’s insurance policies with Zurich and Old

      Republic, respectively, giving rise to duties on the part of Zurich and Old

      Republic to defend and indemnify the Simon Plaintiffs in the Caler suit. The

      Simon Plaintiffs specifically alleged that not only had Zurich and Old Republic

      breached their contractual duties to them, they had also breached their duties of

      good faith and fair dealing. The Simon Plaintiffs sought $960,310.14 in defense

      costs and $2,000,000.00 of the amount they had paid to settle the Caler lawsuit,

      or Zurich’s policy limit. On May 19, 2015, the two lawsuits filed in Hamilton

      and Marion Counties were consolidated into the Hamilton County case from

      which this appeal was taken. While the original 2013 complaint had alleged

      that Schindler and Kone had contractual duties to defend the Simon Plaintiffs,

      on March 7, 2016, the trial court permitted the Simon Plaintiffs to amend their

      complaint to allege duties to indemnify as well.




      Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018   Page 4 of 19
[5]   During the litigation, a discovery dispute arose about whether Zurich had to

      produce documents exchanged between Schindler and Zurich during the Caler

      litigation. On September 22, 2016, the Simon Plaintiffs moved to compel the

      production of many such documents, which motion Zurich and Schindler

      opposed, claiming that the documents were protected by the work-product

      doctrine and/or the attorney-client and/or insurer-insured privileges.

      Following a hearing on February 2, 2017, the trial court granted the Simon

      Plaintiffs’ motion to compel.


[6]   In response to the court’s order of February 2, 2017, Zurich produced nearly

      300 pages of documents over which Zurich had previously asserted privilege but

      continued to withhold a total of five documents (“the Group I Documents”).

      The Group I Documents, which were first sought in the Simon Plaintiffs’

      September 22, 2016, motion to compel production, are described in Zurich’s

      privilege log as follows:


      Bates Label         Date               From               To                  Subject
      ZURPRI 002-         March 11,          Kevin              Tom Quinn           The Simon
      007                 2013               Schiferl           (Schindler in-      Plaintiffs’ request for
                                             (Schindler         house counsel),     insurance coverage
                                             outside            Yohanny Nguyen
                                             counsel)           (Schindler
                                                                paralegal),
                                                                Vanessa Davis
                                                                (Schindler
                                                                outside counsel)




      Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018          Page 5 of 19
      ZURPRI 096-         April 26,          Tom Quinn          Kathleen Fuell      The Simon
      097                 2013, claim        (Schindler         (Zurich claims      Plaintiffs’ request for
                          note               in-house           adjuster), Kevin    coverage in Caler
                          enclosing          counsel)           Schiferl            suit
                          March 12,                             (Schindler
                          2013, email                           outside counsel),
                                                                John Dull
                                                                (Schindler Risk
                                                                Manager), John
                                                                Karnash
                                                                (Schindler in-
                                                                house counsel),
                                                                Thomas Sparno
                                                                (Schindler in-
                                                                house counsel),
                                                                Vanessa Davis
                                                                (Schindler
                                                                outside counsel)
      ZURPRI 218          April 25,          Kathleen           Kevin Schiferl      The Simon
                          2014               Fuell              (Schindler          Plaintiffs’ claim for
                                             (Zurich            outside counsel)    reimbursement of
                                             claims                                 attorneys fees
                                             adjuster)
      ZURPRI 235-         May 2,             Kevin      Tom Quinn                   The Simon
      237                 2013               Schiferl   (Schindler in-              Plaintiffs’ request for
                                             (Schindler house counsel),             coverage in Caler
                                             outside    Vanessa Davis               suit
                                             counsel)   (Schindler
                                                        outside counsel)
      ZURPRI 258          July 23,           Tom Quinn Kevin Schiferl               The Simon
                          2013               (Schindler (Schindler                  Plaintiffs’ request for
                                             in-house   outside counsel),           coverage in Caler
                                             counsel)   Vanessa Davis               suit
                                                        (Schindler
                                                        outside counsel)


[7]   On May 11, 2017, the Simon Plaintiffs filed a motion for sanctions against

      Zurich and requested the production of the Group I Documents and four more

      (“the Group II Documents”; collectively with the Group I Documents, “the


      Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018          Page 6 of 19
Documents”), contending that Zurich violated the trial court’s February 2,

2017, order by not producing the Documents. The Group II Documents are

described as follows:


Bates Label         Date               From       To                          Subject
ZURPRI 196-         February           Venessa    Tom Quinn                   Quarterly
202                 11, 2013;          Davis      (Schindler in-              evaluation report
                    provided to        (Schindler house counsel),             regarding
                    Zurich             outside    Judy Fritzman               Schindler’s defense
                    March 14,          counsel)   (Broadspire                 of Caler lawsuit
                    2013                          Claims
                                                  Examiner);
                                                  copied to
                                                  Yohanny
                                                  Nguyen
                                                  (Schindler
                                                  paralegal), Kevin
                                                  Schiferl
                                                  (Schindler
                                                  outside counsel)
ZURPRI 205          February           Tom Quinn Judy Fritzman                Fault
                    19, 2013;          (Schindler (Broadspire                 apportionment
                    provided to        in-house   Claims                      analysis of
                    Zurich             counsel)   Examiner),                  Schindler’s defense
                    March 14,                     Kevin Schiferl              of Caler lawsuit
                    2013                          (Schindler
                                                  outside counsel)
ZURPRI 195          March 4,           Kevin      Tom Quinn                   Email containing
                    2013;              Schiferl   (Schindler in-              analysis of an
                    provided to        (Schindler house counsel);             expert in the Caler
                    Zurich             outside    copied to Judy              suit
                    March 14,          counsel)   Fritzman
                    2013                          (Broadspire
                                                  Claims
                                                  Examiner),
                                                  Yohanny
                                                  Nguyen
                                                  (Schindler
                                                  paralegal),
                                                  Venessa Davis

Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018          Page 7 of 19
                                                                (Schindler
                                                                outside counsel)
      ZURPRI 429          June 24,           Venessa            Kathleen Fuell      Mediation
                          2013;              Davis              (Zurich claims      statement
                          provided to        (Schindler         adjuster)
                          Zurich July        outside
                          23, 2013           counsel)


[8]   On August 4, 2017, the trial court granted the Simon Plaintiffs’ motion for

      sanctions, ordering Zurich to produce the Documents within thirty days and

      pay the Simon Plaintiffs’ attorney fees, the amount of which would be

      determined after the Simon Plaintiffs submitted an affidavit of attorney fees.

      On September 1, 2017, the Simon Plaintiffs filed their attorney fee evidence.

      On September 26, 2017, the trial court ordered Zurich to pay the Simon

      Plaintiffs $14,871 as a sanction. On October 2, 2017, Zurich filed a notice of

      appeal as a matter of right pursuant to Indiana Appellate Rule 14(A)(1).


[9]   Meanwhile, on September 15, 2017, while briefing on the Simon Plaintiffs’

      attorney fee evidence was ongoing, the Simon Plaintiffs filed a motion for

      sanctions and entry of default judgment against Zurich, asking that default

      judgment be entered against Zurich as an additional sanction for Zurich’s

      failure to produce the Documents. Following a hearing on December 1, 2017,

      the trial court entered default judgment against Zurich on both counts of the

      Simon Plaintiffs’ complaint and stayed further proceedings. On January 17,

      2018, the trial court certified its December 1, 2017, order for interlocutory

      appeal. We accepted jurisdiction over this second interlocutory appeal and




      Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018         Page 8 of 19
       ordered it consolidated with the first interlocutory appeal filed on October 2,

       2018.


            I. Whether the Trial Court Abused Its Discretion in
            Concluding that the Documents Were Discoverable
[10]   “Due to the fact-sensitive nature of discovery matters, the ruling of the trial

       court is cloaked with a strong presumption of correctness on appeal.” WESCO

       Distrib., Inc. v. ArcelorMittal Ind. Harbor LLC, 23 N.E.3d 682, 712 (Ind. Ct. App.

       2014), trans. dismissed. We review a trial court’s decision regarding discovery

       matters for an abuse of discretion. Int’l Bus. Machs. Corp. v. ACS Human Servs.,

       LLC, 999 N.E.2d 880 (Ind. Ct. App. 2013), trans. denied. An abuse of discretion

       occurs “only when the trial court reached a conclusion against the logic and

       natural inferences to be drawn from the facts and circumstances before the

       court.” Burr v. United Farm Bureau Mut. Ins. Co., 560 N.E.2d 1250, 1254 (Ind.

       Ct. App. 1990), trans. denied. We do not reweigh those facts and circumstances;

       rather, we consider only the evidence most favorable to the trial court’s order.

       Estate of Lee ex rel. McGarrah v. Lee & Urbahns Co., 876 N.E.2d 361 (Ind. Ct. App.

       2007). We will affirm a trial court’s ruling “if it is sustainable on any legal basis

       in the record, even though this was not the reason enunciated by the trial

       court.” Id. at 367.


[11]   Evidentiary privileges are construed narrowly because they impede the quest for

       truth. Boulangger v. Ohio Valley Eye Inst., P.C., 89 N.E.3d 1112 (Ind. Ct. App.

       2017). “The burden to prove the applicability of the privilege is on the one who



       Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018   Page 9 of 19
       asserts it, and the privilege must be established as to each document sought.”

       Howard v. Dravet, 813 N.E.2d 1217, 1222 (Ind. Ct. App. 2004). Zurich and/or
                   3
       Schindler contend that the Documents were covered by the work-product

       doctrine and/or the attorney-client and/or insurer-insured privileges and were

       therefore undiscoverable.


       A. Whether Indiana Follows the “Trial Is the File” Approach
               to Bad-Faith-Denial-of-Coverage Claims
[12]   The Simon Plaintiffs also seem to suggest that we should apply the various

       evidentiary privileges and doctrines differently in cases where a claim of bad-

       faith denial of insurance coverage is being made. Zurich and Schindler note

       that the Simon Plaintiffs brought the trial court’s attention to the Delaware case

       of Tackett v. State Farm Fire & Casualty, 558 A.2d 1098 (Del. Super. Ct. 1988), in

       which the Delaware Superior Court of New Castle County concluded that the

       importance of information in the claims file in a case where a bad-faith denial

       of coverage is alleged essentially overrode the attorney-client privilege and the

       work-product doctrine. Id. at 1103-05. The holding is based, in part, on the

       trial court’s conclusions that, in such cases, “the trial is the file” and that a

       plaintiff cannot realistically hope to prove a bad-faith denial of coverage

       without being able to discover the claims file. Id. at 1103.




       3
        Schindler argues in its “Brief of Interested Party” that eight of the nine Documents were improperly deemed
       to be discoverable, an argument specifically adopted and incorporated by Zurich. Zurich also contends that
       the trial court abused its discretion in concluding that the Document designated ZURPRI 218 was
       discoverable.



       Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018                    Page 10 of 19
[13]   Be that as it may, the rulings of Delaware trial courts are not binding on this

       court, and, in any event, we have explicitly rejected such a rule. In Hartford

       Financial Services Group, Inc. v. Lake County Park & Recreation Board, 717 N.E.2d

       1232 (Ind. Ct. App. 1999), we declined to adopt the position that the contents

       of a claims file in a bad-faith-denial-of-coverage case could not be protected by

       evidentiary privileges, stating that “[a] simple assertion that an insured cannot

       otherwise prove a case of bad faith does not automatically permit an insured to

       rummage through the insurers’ claims file.” Id. at 1237. The Simon Plaintiffs

       offer no reason why we should depart from our holding in Hartford, and we can

       think of none. To the extent that the Simon Plaintiffs argue that the various

       evidentiary privileges and doctrines should be applied differently in this case

       and others like it, we reject that argument. Any change in the foregoing would

       have to be made by the Indiana Supreme Court.


                                    B. Work-Product Doctrine
[14]   Zurich and Schindler contend that the work-product doctrine applies to the

       Group II Documents, which comprise (1) Schindler’s quarterly evaluation

       report, which includes an evaluation of its defense in the Caler suit (ZURPRI

       196-202); (2) the fault apportionment analysis prepared by Schindler (ZURPRI

       205); (3) a report evaluating Caler’s expert (ZURPRI 205); and (4) Schindler’s

       mediation statement (ZURPRI 429).


[15]   The work-product doctrine is defined in the Indiana Rules of Trial Procedure:




       Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018   Page 11 of 19
               [A] party may obtain discovery of documents and tangible things
               otherwise discoverable under subdivision (B)(1) of this rule and
               prepared in anticipation of litigation or for trial by or for another
               party or by or for that other party’s representative (including his
               attorney, consultant, surety, indemnitor, insurer, or agent) only
               upon a showing that the party seeking discovery has substantial
               need of the materials in the preparation of his case and that he is
               unable without undue hardship to obtain the substantial
               equivalent of the materials by other means. In ordering
               discovery of such materials when the required showing has been
               made, the court shall protect against disclosure of the mental
               impressions, conclusions, opinions, or legal theories of an
               attorney or other representative of a party concerning the
               litigation.
       Ind. Trial Rule 26(B)(3).


[16]   The Group II Documents were all originally prepared by Schindler’s attorneys

       for Schindler, which is a party in this case, so the next question is whether the

       Group II Documents were prepared in anticipation of litigation or trial. “A

       document is gathered in anticipation of litigation if it can fairly be said that the

       document was prepared or obtained because of the prospect of litigation.”

       WESCO Distrib., 23 N.E.3d at 713 (citing Nat’l Eng’g & Contracting Co., Inc. v.

       C&P Eng’g & Mfg. Co., 676 N.E.2d 372, 377 (Ind. Ct. App. 1997)). “Products of

       investigation are work product because their subject matter relates to the

       preparation, strategy, and appraisal of the strengths and weaknesses of an

       action, or to the activities of the attorneys involved.” Id. (citing Nat’l Eng’g &

       Contracting, 676 N.E.2d at 376).


[17]   All four of the Group II Documents at issue were prepared by Schindler before

       it settled the Caler suit and for the express purpose of evaluating the strength of

       Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018   Page 12 of 19
       Caler’s case against Schindler, KONE, and/or the Simon Plaintiffs. The Group

       II Documents addressed, respectively, an evaluation of Schindler’s defense, a

       fault-allocation analysis regarding the four defendants, an evaluation of Caler’s

       expert, and a confidential mediation report evaluating Schindler’s litigation

       position. As described in Zurich’s privilege log, the Group II Documents

       clearly all contain mental impressions, conclusions, opinions, and/or legal

       theories of a Schindler attorney concerning Schindler’s defense of the Caler suit.

       It is difficult for us to imagine documents that would fit the definition of work

       product more squarely than these four.


[18]   The only question left before moving on is whether it matters that the Group II

       Documents were prepared in anticipation of the Caler litigation and not the

       litigation with the Simon Plaintiffs. Trial Rule 26(B)(3) does not specifically

       require that the material had to be prepared for litigation between the party

       seeking discovery and the party resisting it, only that the material in question

       was prepared “in anticipation of litigation or for trial[.]” Moreover, we have

       explicitly interpreted Trial Rule 26(B)(3) to apply to work product generated

       during prior litigation. In American Buildings Company v. Kokomo Grain

       Company, Inc., 506 N.E.2d 56 (Ind. Ct. App. 1987), trans. denied, we noted that


               [t]he primary purpose of the work product privilege is to assure
               that an attorney is not inhibited in his representation of his client
               by the fear that his files will be open to scrutiny upon demand of
               an opposing party. Counsel should be allowed to amass data and
               commit his opinions and thought processes to writing free of the
               concern that, at some later date, an opposing party may be
               entitled to secure any relevant work product documents merely


       Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018   Page 13 of 19
                on request and use them against his client. The work product
                privilege would be attenuated if it were limited to documents that
                were prepared in the case for which discovery is sought. What is
                needed, if we are to remain faithful to the articulated policies of
                                                         4
                Hickman[ v. Taylor, 329 U.S. 495 (1947) ], is a perpetual
                protection for work product, one that extends beyond the
                termination of the litigation for which the documents were
                prepared. Any less protection would generate the very evils that
                the Court in Hickman attempted to avoid.
       Id. at 62 (quoting In re Murphy, 560 F.2d 326, 334 (8th Cir. 1977)). We

       concluded that the rationale in Murphy was persuasive and so held that “the

       work-product doctrine applies to items prepared in anticipation of prior

       litigation.” Id. The Simon Plaintiffs give us no reason to depart from our

       approach in American Buildings, and we see none. Because we conclude that the

       Group II Documents are covered by the work-product doctrine, we also

       conclude that the trial court erred in ordering that Zurich disclose them. That

       leaves the five Group I Documents that Zurich and/or Schindler claim are

       covered by the attorney-client and insurer-insured privileges.


                                    C. Attorney-Client Privilege
[19]   Schindler contends that four of the five Group I Documents are covered by the

       attorney-client privilege, while Zurich contends that all five are. Indiana Code

       section 34-46-3-1 (1998) provides, in part, as follows: “Except as otherwise

       provided by statute, [attorneys] shall not be required to testify […] as to



       4
         Hickman is the case that established the work-product doctrine, concluding that “[n]ot even the most liberal
       of discovery theories can justify unwarranted inquiries into the files and the mental impressions of an
       attorney.” 329 U.S. at 510.



       Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018                      Page 14 of 19
       confidential communications made to them in the course of their professional

       business, and as to advice given in such cases.”


               The applicability of the [attorney-client] privilege must be
               established as to each question asked or document sought. [P.T.
               Buntin, M.D., P.C. v. Becker, 727 N.E.2d 734, 740 (Ind. Ct. App.
               2000)]. The essential prerequisites to invocation of the privilege
               are to establish by a preponderance of the evidence: 1) the
               existence of an attorney-client relationship and 2) that a
               confidential communication was involved. Mayberry v. State, 670
               N.E.2d 1262, 1266 (Ind. 1996). Information subject to the
               attorney-client privilege retains its privileged character until the
               client has consented to its disclosure. Id. at 1267. The privilege
               belongs to the client and can only be waived by conduct
               attributable to the client. Id. at 1267 n.5.
       Brown v. Katz, 868 N.E.2d 1159, 1166 (Ind. Ct. App. 2007). We can dispose of

       ZURPRI 218 quickly, as it is a communication from a Zurich claims adjuster to

       a Schindler attorney. Because ZURPRI 218 does not concern advice given by

       an attorney to a client, the attorney-client privilege does not apply to it.


[20]   As for the other four Group I Documents, they were all prepared by Schindler

       attorneys for Schindler and subsequently shared with Zurich. “[T]he general

       rule [is] that the attorney-client privilege is waived when privileged information

       is disclosed to a third party.” Groth v. Pence, 67 N.E.3d 1104, 1119 (Ind. Ct.

       App. 2017) (citation omitted and formatting altered), trans. denied. Indiana,

       however, has adopted the common-interest privilege, which is “an extension of

       the attorney-client privilege” that “permits parties whose legal interests coincide

       to share privileged materials with one another in order to more effectively




       Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018   Page 15 of 19
       prosecute or defend their claims.” Id. (citations omitted and formatting

       altered).


[21]   We have little difficulty in concluding that the legal interests of Zurich and

       Schindler coincide sufficiently in this case to trigger the common-interest

       privilege. Both defendants have an obvious interest in not indemnifying the

       Simon Plaintiffs to the tune of $2,000,000 if they can avoid it. While Zurich’s

       and Schindler’s interests may not always coincide in the future (if, for instance,

       Zurich seeks indemnification from Schindler pursuant to their fronting

       agreement for a payment made to the Simon Plaintiffs), they are sufficiently

       aligned for the time being. We conclude that the Group I Documents, save

       ZURPRI 218, are protected by the common-interest extension to the attorney-

       client privilege.


                                   D. Insurer-Insured Privilege
[22]   The last question we must answer is whether ZURPRI 218 is protected by the

       insurer-insured privilege, first adopted by the Indiana Supreme Court in the

       case of Richey v. Chappell, 594 N.E.2d 443 (Ind. 1992). In that case, the Court

       held that “where the policy of insurance requires the insurer to defend claims

       against the insured, statements from the insured to the insurer concerning an

       occurrence which may be made the basis of a claim by a third party are

       protected from disclosure.” Id. at 447. In this case, however, the Simon

       Plaintiffs are not third-party claimants but, rather, additional insureds of Zurich

       who are pressing a first-party claim of bad-faith denial of defense and

       indemnity. Because the Simon Plaintiffs are not third-party claimants, the

       Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018   Page 16 of 19
       insurer-insured privilege as defined by the Richey Court does not apply to

       ZURPRI 218, even though it was prepared by Zurich (the insurer) for Schindler

       (an insured). As mentioned, because privileges are to be construed narrowly,

       Boulangger, 89 N.E.3d at 1116, we will not endeavor to expand the scope of the

       Richey holding to cover the facts of this case. Zurich has failed to establish an

       abuse of discretion as to ZURPRI 218.


                                        E. Summary of Issue I
[23]   We decline the invitation, to the extent that such an invitation was extended, to

       apply the various evidentiary privileges and doctrine differently in a case where

       a bad-faith-denial-of-coverage claim has been made. We conclude that the four

       Group II Documents are not discoverable pursuant to the work-product

       doctrine. We further conclude that four of the five Group I Documents are not

       discoverable, as they are protected by the common-interest extension of the

       attorney-client privilege. Finally, we conclude that the trial court correctly

       concluded that ZURPRI 218 is discoverable, as neither the attorney-client nor

       insurer-insured privileges cover it.


                        II. Whether the Trial Court Abused its
                           Discretion by Ordering Sanctions
[24]   The trial court ordered an award of attorney fees and the entry of default

       against Zurich for what it concluded was the improper refusal to produce the

       nine Documents. We have concluded, however, that only one of the

       Documents is, in fact, discoverable. We are not at all confident that the trial



       Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018   Page 17 of 19
       court would have imposed the same harsh sanctions on Zurich based on the

       improper withholding of one document as it did on what it concluded was the

       improper withholding of nine. Consequently, we vacate the trial court’s

       imposition of sanctions without addressing the question of whether such

       sanctions would have been appropriate had Zurich improperly withheld all nine

       Documents.


                                 III. Appellate Attorney Fees
[25]   The Simon Plaintiffs request that we remand with instructions to award them

       the attorney fees incurred in defending this appeal. The Simon Plaintiffs note

       that there is some authority for the proposition that a party may be awarded

       appellate fees incurred in defending a sanction imposed for failure to comply

       with a motion to compel. See, e.g., Georgetown Steel Corp. v. Chaffee, 519 N.E.2d

       574, 577 (Ind. Ct. App. 1988) (“[I]f appellate expenses were not awardable,

       then the original award would be offset and its benefit negated.”), trans. denied.

       Because Zurich and Schindler have largely prevailed in this appeal, we decline

       the invitation to order the award of attorney fees to the Simon Plaintiffs.



                                                Conclusion
[26]   We conclude that the four Group II Documents are non-discoverable as work

       product and that four of the five Group I Documents are protected by the

       attorney-client privilege. In the end, the only one of the nine Documents that is

       discoverable is ZURPRI 218. Because we are not confident that the trial court

       would have imposed the same sanction for improperly withholding one

       Court of Appeals of Indiana | Opinion 29A05-1710-PL-2223 | November 7, 2018   Page 18 of 19
       document as it did for nine, we vacate the trial court’s award of attorney fees

       and entry of default judgment in favor of the Simon Plaintiffs. We remand for

       further proceedings consistent with this opinion.


[27]   The judgment of the trial court is affirmed in part, reversed in part, and

       remanded for further proceedings.


       Robb, J., and Altice, J., concur.




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