In Curtis Park Group, LLC, v. Allied World Specialty
Insurance Co., 2021 WL 1022703 (D. Colo. March 17, 2021), the United States
District Court for the District of Colorado held that a report produced by an
engineering expert retained by the contractor was discoverable in an action
between owner and its insurer, as the report was not created in anticipation of
litigation and therefore was not work product.
Plaintiff Curtis Park Group, LLC, (“Curtis Park”) was the
owner of a condominium project in Denver, Colorado. Milender White Residential
LLC, (“Millender White”) was the project’s general contractor. During
construction, the project’s concrete slab cracked. Milender White retained Vertex
Companies, Inc. (“Vertex”), a structural engineer, to peer review the design
and investigate the cracking. Vertex determined the cracking was not attributable
to any construction defect and proposed repairs.
Curtis Park made a claim for the cracking to its insurer,
Allied World Insurance Company (“Allied World”), and submitted costs associated
with Vertex’s investigation as a part of its claim. Allied World denied the claim and Curtis Park
sued for coverage.
Allied World subpoenaed Vertex’s “entire and complete
physical file.” Milender White objected and moved to quash the subpoena, arguing
the report was protected by the work product doctrine.
Milender White argued the report was protected, as it was
used by both Milender White and Curtis Park to evaluate potential litigation
over the cause of the cracking. Milender White noted the Court had previously
ruled that communications between Curtis Park’s counsel and Milender White’s
counsel were protected by the attorney-client privilege, as Curtis Park had to
communicate with Milender White to submit its insurance claim. Milender White
argued Vertex was an expert engaged for the same reason and therefore the
Report was protected.
Allied World argued the Report was not created in
anticipation of litigation, but was instead created during the construction
process. Allied World argued the Report was needed by Milender White to
evaluate the cause of the cracking and the needed repairs, not to evaluate
Milender White’s potential liability.
The Court agreed with Allied World. The Court found that, prior
to litigation, Milender White retained Vertex as a design peer reviewer and to
propose repairs for the cracking. The Court also found Vertex’s services
fulfilled a business need, as opposed to a legal need. The Court explained that
Milender White had an obligation to investigate the cracks and provide a report
to the project owner. This obligation existed outside of litigation and was
predominantly business oriented.
This case serves as an important reminder of the distinction
between experts hired for construction and those hired for litigation. This issue arises frequently, as parties want
the benefit of using the expert’s analysis in the field and in related litigation.
In order to protect pre-litigation
expert reports, parties should consider having counsel contract directly with
the expert or expressly state in the retention agreements that they are being
retained in anticipation of litigation.
