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Western Horizons Living Centers v. Feland

Supreme Court of North Dakota

September 2, 2014

Western Horizons Living Centers, Petitioner
v.
The Honorable Cynthia M. Feland, Judge of the District Court, South Central Judicial District, and Dakota Travel Nurse, Inc., Respondents

Appeal from the District Court of Morton County, South Central Judicial District, the Honorable Cynthia Feland, Judge.

SUPERVISORY WRIT GRANTED.

Brenda L. Blazer (argued) and Amanda E. Peterson (appeared), Bismarck, N.D., for petitioner.

Randall J. Bakke (argued) and Bradley N. Wiederholt (on brief), Bismarck, N.D., for respondent Dakota Travel Nurse, Inc.

Gerald W. VandeWalle, C.J., Dale V. Sandstrom, Daniel J. Crothers, Lisa Fair McEvers, Ronald E. Goodman, S.J. Opinion of the Court by VandeWalle, Chief Justice. The Honorable Ronald E. Goodman, S.J., sitting in place of Kapsner, J., disqualified.

OPINION

VandeWalle, Chief Justice.

Page 37

[¶1] Western Horizons Living Centers petitioned this Court for a supervisory writ directing the district court to reverse an order compelling Western Horizons to answer discovery requests by Dakota Travel Nurse, Inc., for information involving a nursing home resident's prior lawsuit against Western Horizons. Western Horizons argues that its insurer's claims file in the prior lawsuit is protected by the lawyer-client privilege and that settlement negotiations and related documents from the prior lawsuit are not subject to discovery in this action. We conclude this is an appropriate case to exercise our supervisory jurisdiction. We direct the district court to vacate its order compelling discovery and we remand for further proceedings.

I

[¶2] Western Horizons sued Dakota Travel Nurse, a North Dakota corporation that contracts with healthcare facilities to provide licensed nursing staff, alleging Western Horizons and Dakota Travel Nurse entered a 2008 contract for Dakota Travel Nurse to provide licensed nursing staff for Western Horizons Care Center, a nursing home in Hettinger owned and operated by Western Horizons. Western Horizons claimed the parties' contract required

Page 38

Dakota Travel Nurse to " indemnify, hold harmless and defend Western Horizons against any and all claims, losses, demands, actions, administrative proceedings, liabilities and judgments, including reasonable attorneys fees, court[] costs and other expenses, arising from or associated with the action or inaction of [Dakota Travel Nurse] personnel." Western Horizons alleged Dakota Travel Nurse refused to defend or indemnify Western Horizons in a nursing home resident's prior lawsuit against Western Horizons for injuries allegedly arising from the actions or inactions of Dakota Travel Nurse personnel providing care to the resident at the time of his injury. Dakota Travel Nurse was not a party to the resident's prior lawsuit, and Dakota Travel Nurse refused Western Horizons' tender of a defense in that action. Western Horizons thereafter settled the resident's lawsuit and brought this action against Dakota Travel Nurse, seeking a monetary judgment equal to the amount paid to settle the resident's lawsuit, plus costs and reasonable attorney's fees incurred by Western Horizons in defense of that action.

[¶3] Dakota Travel Nurse denied liability and moved to compel Western Horizons to respond to discovery requests relating to the resident's lawsuit against Western Horizons. In proceedings before the district court, the parties disputed the relevant legal issues in this action and the scope of discovery. Dakota Travel Nurse claimed the parties' contractual agreement required Western Horizons to prove the action or inaction of Dakota Travel Nurse personnel caused the resident's injuries in the underlying lawsuit. Western Horizons claimed a causal analysis was not necessary:

A plain reading of the contract language requires indemnification only if it is shown that the damages " arose from" or were " associated with" either the action or inaction of [Dakota Travel Nurse] personnel. The contract does not, as [Dakota Travel Nurse] would lead the Court to believe, require a causal analysis akin to that performed in a negligence action. The terms of the contract do not call for an allocation of fault or a determination of contributory negligence to determine whether [Dakota Travel Nurse] will be required to indemnify Western Horizons for its CNAs' actions. On the contrary, all that is required is a determination that the ...

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