Richard F. Burkhart v. Genworth Financial, Inc.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

RICHARD F. BURKHART, WILLIAM )
E. KELLY, RICHARD S. LAVERY, )
THOMAS R. PRATT and GERALD )
GREEN, individually and on behalf of )
all others similarly situated, )
)
Plaintiffs, )
)
v. ) C.A. No. 2018-0691-NAC
)
GENWORTH FINANCIAL, INC., )
GENWORTH HOLDINGS, INC., )
GENWORTH NORTH AMERICA )
CORPORATION, GENWORTH )
FINANCIAL INTERNATIONAL )
HOLDINGS, LLC and GENWORTH )
LIFE INSURANCE COMPANY, )
)
Defendants. )

ORDER RESOLVING THE REMAINING ASPECTS
OF DEFENDANTS’ MOTION TO COMPEL

WHEREAS:

1. In March 2023, defendants Genworth Financial, Inc., Genworth

Holdings, Inc., Genworth North America Corp., Genworth Financial International

Holdings, LLC, and Genworth Life Insurance Co. (together, “Defendants”) served

requests for production on the named plaintiffs, Richard F. Burkhart, William E.

Kelly, Richard S. Lavery, Thomas R. Pratt, and Gerald Green (together, “Plaintiffs”).

2. Defendants deposed Plaintiffs in September and October of 2023.

During their depositions, Mr. Kelly, Mr. Green, and Mr. Lavery discussed non-party

Harold Horwich—a transactional attorney and Mr. Kelly’s former law partner.

Questioning as to their relationships to Mr. Horwich was repeatedly cut short,
however, with Plaintiffs’ counsel (from the law firm of Shapiro Haber & Urmy LLP

or “SHU”) objecting on privilege grounds. Mr. Kelly, Mr. Green, and Mr. Lavery

testified in a manner suggesting they had varying views on the nature and extent of

their relationships with Mr. Horwich.

3. In a January 2024 and an updated February 2024 privilege log,

Plaintiffs revealed they were withholding numerous communications between

Plaintiffs and Mr. Horwich.

4. On April 19, 2024, Defendants filed a motion to compel documents and

testimony that Defendants asserted Plaintiffs had improperly withheld based on

assertions of attorney-client privilege. 1 Defendants moved to compel production of

documents and testimony regarding (1) the engagement letters between Plaintiffs

and SHU; (2) the litigation funding and/or engagement agreement entered into with

the entities providing litigation funding to SHU; (3) communications between

Plaintiffs or their counsel and Mr. Horwich; and (4) communications between

Plaintiffs and other putative class members.

5. I heard argument on the Motion on June 13, 2024. Toward the

conclusion of argument, I asked Plaintiffs to submit for in camera review all of the

documents from the privilege log that were in dispute. 2

1 Burkhart v. Genworth Fin. Inc., C.A. No. 2018-0691-NAC (“Dkt.”) 309, Defs.’ Mot. to Compel

Discovery on Fee Arrangements, Lit. Funding and Pls.’ Non-Privileged Communications (the
“Motion”).
2 References to entries on Plaintiffs’ privilege log refer to those entries included in the log

dated January 23, 2024, which was submitted to the Court with Plaintiffs’ documents for in
camera review. The documents on the privilege log are identified by number. In this order I
refer to the documents with the form “Entry [Document Number].”

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6. On August 21, 2024, I granted Defendants’ Motion as to the first two

categories of documents sought in the Motion, ordering production of the unredacted

Funding Agreement and Contingent Fee Agreements. 3 I deferred decision on the

remaining two categories of documents and testimony sought in the Motion. 4

7. I have completed my in camera review and am prepared to rule on the

remainder of Defendants’ Motion.

NOW, THEREFORE, the Court having carefully considered the Motion papers

and oral argument on the Motion, and having conducted an in camera review of the

disputed documents following argument, IT IS HEREBY ORDERED, this 18th day

of December 2024, as follows:

1. In withholding otherwise responsive documents on the basis of privilege,

the parties claiming privilege—Plaintiffs in this instance—bear the burden “to show

why and in what way the information requested is privileged[.]” 5 Plaintiffs must

“provide ‘precise and certain reasons’” why privilege applies for each document over

which privilege is claimed. 6 The requirements for preparing a satisfactory log under

Delaware law are “readily established and easily available.” 7

3 Dkt. 333, the “Memorandum Opinion.”

4 In my August 21, 2024 Memorandum Opinion I indicated that I would defer ruling on the

remainder of the Motion, pending supplemental briefing. Id. at 4 n.7. After further review
of the in camera documents I determined that additional briefing was unnecessary.
5 In re Oxbow Carbon LLC Unitholder Litig., 2017 WL 959396, at *1 (Del. Ch. Mar. 13, 2017).

6 Mechel Bluestone, Inc. v. James C. Justice Cos., Inc., 2014 WL 7011195, at *4, 9 (Del. Ch.

Dec. 12, 2014) (quoting Int’l Paper Co. v. Fibreboard Corp., 63 F.R.D. 88, 93 (D. Del. 1974)).
7 Klig v. Deloitte LLP, 2010 WL 3489735, at *5 (Del. Ch. Sept. 7, 2010).

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2. Attorney-client privilege “extends to a (1) communication, (2) which is

confidential, (3) which was for the purpose of facilitating the rendition of professional

legal services to the client, (4) between the client and his attorney.” 8

3. I have already ruled on half of the Motion. The remainder of

Defendants’ Motion argues that Plaintiffs have improperly withheld two categories

of documents as privileged, and improperly prevented deposition testimony on the

same categories. First, Defendants argue that communications with Mr. Horwich are

not privileged, because Mr. Horwich was never counsel of record in this case, certain

of the Plaintiffs did not believe he was their attorney, and some of Plaintiffs’ privilege

log entries are deficient. Second, Defendants argue that a small number of

documents between the Plaintiffs and other class members are not privileged because

they did not include an attorney and because the privilege log descriptions are

insufficient to support a claim of attorney-client, joint client, or common interest

privilege. Finally, Defendants argue that they should be permitted to take further

deposition testimony as to the documents and topics that are the subject of the

Motion.

4. All of the documents remaining at issue for this Motion involve some

communication from Mr. Horwich. Defendants first argue that Mr. Horwich did not

have an attorney-client relationship with Plaintiffs because he is not identified as

“counsel of record” in this class action, but they do not provide a basis to believe one

8 Moyer v. Moyer, 602 A.2d 68, 72 (Del. 1992) (internal quotation marks omitted); see also

Hyde Park Venture P’rs Fund III, L.P. v. FairXchange, LLC, 292 A.3d 178, 188 (Del. Ch. 2023)
(quoting Deutsch v. Cogan, 580 A.2d 100, 104 (Del. Ch. 1990)).

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must be “counsel of record” in order for attorney-client privilege to attach. It is true

that Mr. Horwich never had a formal attorney-client relationship with Plaintiffs in

this action. There is no engagement letter, nor was he paid for any representation of

Plaintiffs. Mr. Horwich also “is not entitled to be paid any fees out of any recovery in

this case.” 9 But Rule 502(a)(1) of the Delaware Uniform Rules of Evidence defines

“client” to include “a person, public officer or corporation, association or other

organization or entity . . . who consults a lawyer with a view to obtaining professional

legal services from the lawyer.” “Implicit in this language is that a person who has

consulted a lawyer may still invoke the protection of the [privilege], even if that

person did not ultimately retain the lawyer.” 10

5. It seems that, over a year before Plaintiffs commenced this action, Mr.

Kelly began communicating with Mr. Horwich, his former law partner, 11 about

Defendants. 12 Mr. Kelly had intermittent communications with Mr. Horwich about

Defendants over a period of many months. Then, in the half a year or so leading up

to commencement of this action, the nature of the interactions seems perhaps to have

evolved. Mr. Horwich sent Mr. Kelly a draft complaint to review, participated in

9 Dkt. 318, Pls.’ Opp’n to Defs.’ Mot. to Compel at 11 n. 29.

10 Benchmark Capital P’rs IV, L.P. v. Vague, 2002 WL 31057462, at *3 (Del. Ch. Sept. 3, 2002)

(internal quotation marks omitted).
11 Mr. Horwich and Mr. Kelly were law partners at Mr. Horwich’s former firm Hebb & Gitlin,

later Bingham McCutchen LLP. After leaving Bingham McCutchen, Mr. Kelly worked as in-
house counsel for nine years before retiring from the practice of law in 2017. Dkt. 310, Aff.
of T. Carter White in Supp. of Defs.’ Mot. to Compel (“White Aff.”) Ex. 14 at 8-10. Mr. Horwich
and Mr. Kelly were not working together in 2017 when Mr. Kelly began communicating with
Mr. Horwich about Defendants. Id. at 143-144.
12 Id. at 39-42.

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front-end case development for this litigation, and referred the Plaintiffs to their

counsel at SHU. 13

6. In his deposition, Mr. Kelly testified that he “believe[d] [Mr. Horwich]

would have considered me his client and I considered him my attorney.” 14 Per

Defendants, however, Mr. Green and Mr. Lavery testified at their depositions that

Mr. Horwich is not their lawyer. But Defendants omit important context from that

questioning. Notwithstanding Defendants’ blanket assertions that Mr. Green and

Mr. Lavery “testified unequivocally that Mr. Horwich is not their lawyer[,]” 15 their

testimony actually seemed to relate to whether they knew (and the extent to which

they knew) Mr. Horwich. It appears that Mr. Horwich primarily communicated with

Mr. Kelly and had limited interactions, if any at all, with the other named Plaintiffs.

Under these circumstances, it is reasonable that the other Plaintiffs might not have

known Mr. Horwich or fully understood his relationship to the case. And Mr. Green

did testify that he believed “Mr. Horwich was working with [SHU]” and that he later

“thought Hal Horwich and his firm were an integral part of this action.” 16 Having

reviewed the in camera documents, I conclude that the circumstances of Mr.

Horwich’s interactions with Mr. Kelly were, at least initially, sufficiently muddy that

Plaintiffs’ invocation of privilege was generally not improper for documents created

through May 21, 2018.

13 Id. at 61-62.

14 Id. at 40.

15 Dkt. 309, Motion at 5.

16 White Aff. Ex. 17 at 74, 79.

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7. To the extent I am giving Plaintiffs the benefit of the doubt here,

however, that ends with Entry 26 on Plaintiffs’ log. In that email, sent shortly after

the draft complaint, Mr. Horwich makes sufficiently clear that his clients are entities

other than Mr. Kelly and that Mr. Kelly and the Plaintiffs are differently situated

from Mr. Horwich’s clients. 17 It seems that a reasonable lay person—or former

attorney such as Mr. Kelly—should have been on notice after receiving that email

that Mr. Horwich and his firm did not, and would not, represent Plaintiffs or Mr.

Kelly. But there also could be arguments that Mr. Kelly retained a good faith,

reasonable belief that Mr. Horwich was nonetheless his lawyer or prospective lawyer.

Neither party had a chance to make any of those arguments, however, because

Plaintiffs obscured the nature of Mr. Horwich’s role from Defendants.

8. Plaintiffs did not identify Mr. Horwich’s clients, despite this information

being both nonprivileged and highly relevant. During oral argument, Defendants

specifically explained that they did not know what relationship Mr. Horwich had to

this case:

And so there is some relationship with Mr. Horwich in this case. We
candidly don’t know exactly what it is. It’s a little bit opaque. But

17 Although Plaintiffs have not identified Mr. Horwich’s clients, it appears that some or all of

the clients referenced in Entry 26 eventually became the “Funders” backing the current
action. I draw this inference from certain of the in camera documents, including wherein Mr.
Horwich states that he represents major medical insurance companies willing to pay the cost
of a suit brought by policyholders against Genworth. Although I include this information for
context, the specific identities of Mr. Horwich’s clients do not impact my privilege analysis.

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whatever it is, he’s not Mr. Green’s lawyer; he’s not Mr. Lavery’s
lawyer. 18

Plaintiffs should have been upfront and transparent about the identity of Mr.

Horwich’s clients. This would have enabled the parties to engage in meaningful meet

and confer discussions over the privilege dispute and then to present any unresolved

arguments to the Court in a coherent fashion. 19

9. The identity of Mr. Horwich’s clients here was not privileged. 20 Indeed,

a key players list, identifying individuals listed on a log and their roles, is a routine

component of a privilege log prepared in proceedings before this Court. I suspect

Plaintiffs were concerned that revealing Mr. Horwich’s representation and the

Funders’ identities would have, when coupled with the timing of various entries on

the log, put the Defendants on the scent of arguments that Plaintiffs would prefer

Defendants not make and discovery Plaintiffs would prefer Defendants not pursue.

Plaintiffs bore the burden of showing that the logged documents were properly

withheld as privileged, but presented Defendants with, at most, half the picture of

Mr. Horwich’s involvement in this case.

18 Dkt. 347, Transcript of June 13, 2024 Oral Argument on Defs.’ Mot. To Compel (“Tr.”) at

33.

19 Plaintiffs also failed to explain this important information to the Court. E.g., Tr. at 56-67.

20 Khanna v. McMinn, 2006 WL 1388744, at *37 (Del. Ch. May 9, 2006) (“Moreover, the fact

of Wilson Sonsini’s representation of Covad during the Certive transaction is not privileged
because the identity of one’s attorney does not constitute privileged information.”); Gotham
P’rs v. Hallwood Realty, 1999 WL 252377, at *1 (Del. Ch. Mar. 31, 1999) (“Neither the status
nor identity of an attorney whose communications are privileged are privileged facts.”).

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10. Despite all of this, it is possible that Plaintiffs and the Funders could

have shared a common interest, such that privilege between them would have been

preserved. But Plaintiffs failed to identify common interest privilege on their log,

suggesting instead that Mr. Horwich was simply a helpful lone wolf. 21 As a result,

Plaintiffs have waived any common interest privilege that could have been asserted

as to those documents. 22 There can be no privilege for any communications between

Mr. Horwich and Plaintiffs after May 21, 2018. 23

11. As to the communications between Mr. Horwich and Plaintiffs before

May 21, 2018, I have, as I noted above, reviewed the documents produced to me in

camera. Although privilege may, as a general matter, attach to these documents, it

is still the case that the communications must relate to the solicitation or rendering

of legal advice to be protected by the attorney-client privilege. I accordingly address

21 Plaintiffs’ log confirms their decision not to identify common interest was intentional, since

they chose to identify common interest for one much later entry: Entry 52, the September
20, 2018 Common Interest and Confidentiality Agreement between Plaintiffs and Litigation
Funders.

22 See, e.g., Cephalon, Inc. v. Johns Hopkins Univ., 2009 WL 5103266, at *3 (Del. Ch. Dec. 4,

2009) (“To the extent [defendant] might contend that aspects of these documents involve
matters of common interest . . . the Privilege Log fails to reflect this, and in that respect the
entry is inadequate to preserve the privilege.”).
23 My prior decision on Defendants’ Motion required production of the Funding Agreement

without redaction. That decision also noted that the Funders are competitors of Defendants.
To understand the context of that decision and this one, I believe it is critical also to
understand that this matter does not involve what I consider to be a traditional litigation
funding arrangement. Unlike a traditional litigation funder that fronts counsels’ fees in
exchange for the possibility of a positive return on the investment, the economics of the
funding arrangement here ensure the Funders will make no return at all in this action.
Instead, the Funders will, at best, simply be repaid. These facts should make clear how
distinguishable the arrangement at issue here is from the traditional litigation funding
context.

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below the pre-May 21, 2018 documents on Plaintiffs’ log that cannot properly be

withheld as privileged:

a. Entry 19 is an email chain between Mr. Kelly and Mr. Horwich

that Plaintiffs entirely withheld. The thread begins on a personal note, with

Mr. Horwich inquiring after Mr. Kelly. Mr. Horwich asks if he and Mr. Kelly

can speak, referencing Mr. Kelly’s “choice with respect to the policy.” Then Mr.

Kelly and Mr. Horwich plan to get lunch. Although the discussions that

occurred during Mr. Kelly and Mr. Horwich’s phone call and lunch may very

well be privileged, the emails setting up those meetings do not convey any legal

advice and are not properly withheld as privileged. That Mr. Horwich and Mr.

Kelly discussed “the policy” is the level of detail expected on a privilege log,

and likewise not privileged.

b. Similarly, Entry 20 contains an email thread between Mr. Kelly

and Mr. Horwich setting up a lunch meeting, which Plaintiffs entirely

withheld. There is one line in the first email in the thread conveying privileged

information, but the remainder of the thread concerns only plans for when and

where the lunch meeting will occur. The sentence beginning with “I think” in

Mr. Horwich’s April 24, 2018 email may be redacted, but the remainder of the

thread cannot properly be withheld as privileged.

c. Entry 21, which Plaintiffs withheld, does not contain anything of

substance at all. The email, from Mr. Horwich to Mr. Kelly, has no text other

than Mr. Horwich’s signature block. While the email indicates on its face that

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there was an attachment, no attachment was submitted to the Court for in

camera review. Based on the documents submitted to me, I cannot say that

this document or its attachment are protected by the attorney-client privilege.

d. The withheld email in Entry 23, sent from Mr. Horwich to Mr.

Kelly, only informs Mr. Kelly that the email has an attachment and asks for

his input. This email does not solicit or convey any legal advice and cannot be

withheld as privileged. Entry 23 also attaches a draft complaint, which is not

identified on Plaintiffs’ privilege log. Instead, the log entry generically refers

to the email and attachment as “[e]mail correspondence regarding draft

Genworth complaint[,]” without indicating the existence of an attachment.

The distinction between conveying a draft complaint and simply discussing one

seems, in these circumstances, material. I would have expected the log to

disclose that the email included an attachment, and that the attachment was

a draft complaint. Despite their less-than-forthcoming log entry, however, I

conclude that the draft complaint attached to Entry 23 can properly be

withheld.

12. Other than these documents I listed, I conclude that the remaining

communications I reviewed in camera between Mr. Horwich and Plaintiffs through

May 21, 2018, may continue to be withheld.

13. Although I have already determined that no privilege existed between

Mr. Horwich and Plaintiffs after May 21, 2018, it is worth noting that Plaintiffs’

approach to asserting privilege over these documents was overbroad and seemed, at

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times, to be unthinking. For example, more than half of the lengthy, multi-page email

thread in Entry 30 concerns efforts to schedule a lunch meeting. Even assuming the

remainder was privileged, this document clearly could and should have been

produced with redactions rather than fully withheld. And Entry 44 is an email

reading “[s]ee attached,” which in turn attaches advertising material sent from Mr.

Horwich to Mr. Pratt. The privilege log withholds the entire document as

“AC/WP” 25—as is claimed for every other log entry too, although it is hard to fathom

how that could be so.

14. As to the fourth category of documents, Defendants have argued that

communications between Plaintiffs and putative class members are not privileged

because the communications withheld by Plaintiffs did not include an attorney and

the privilege log entries are insufficient to indicate that the communications related

to the advice of counsel. Plaintiffs argue that communications between “co-clients”

outside the presence of counsel are privileged where the speaker is conveying the

advice of counsel. It is true that a communication that does not include lawyers can

nevertheless be privileged if co-clients are “discussing information of a legal nature

that they received from a communication that did, in fact, involve [] legal

representatives.” 26 The nature of the communications between class members,

however, is dependent on whether the underlying communication from counsel is

privileged.

25 The log’s key provides that “AC” means “Attorney-Client” and “WP” means “Work Product.”

26 3Com Corp. v. Diamond II Holdings, Inc., 2010 WL 2280734, at *6 n.33 (Del. Ch. May 31,

2010).

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15. Defendants raise only two documents that fit into this category, Entries

28 and 31. 27 I will discuss those documents:

a. Entry 28 is an email between Mr. Kelly and Mr. Lavery,

forwarding an earlier email from Mr. Horwich to Mr. Kelly. The forwarding

email from Mr. Kelly merely reads “[t]his is the email I referred to,” and

contains no substantive information or legal advice. The underlying email

from Mr. Horwich was sent on May 22, 2018. As I have found that no privilege

can attach to communications between Mr. Horwich and Plaintiffs after May

21, 2018, this email cannot properly be withheld as privileged.

b. Entry 31 is an email from Mr. Kelly to Mr. Lavery, forwarding an

earlier email sent from Mr. Horwich to Mr. Kelly. Neither concerns legal

advice, but rather involves discussion around scheduling a meeting between

Mr. Kelly, Mr. Lavery, and Mr. Horwich. The fact that Mr. Kelly forwarded an

email from Mr. Horwich to another Plaintiff does not make the email

immediately privileged. Regardless, the email from Mr. Horwich was sent on

June 25, 2018. As I have found that no privilege can attach to communications

between Mr. Horwich and Plaintiffs after May 21, 2018, this email cannot

properly be withheld as privileged.

16. In addition to compelling the production of documents, Defendants also

argue that Plaintiffs should be compelled to answer deposition questions regarding

the documents and topics that are the subject of the Motion. Defendants argue that

27 Dkt. 309, Motion at 13 n.6.

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Plaintiffs’ counsel restricted testimony about these topics indiscriminately, and that

much of the blocked questioning did not relate to legal advice at all. I agree that

Plaintiffs’ counsel’s objections were overbroad and prejudiced the Defendants’ ability

to properly depose Plaintiffs. 28

28 Plaintiffs’ counsel made inappropriate and lengthy speaking objections during depositions

in this case. In addition, Plaintiffs’ counsel made multiple overbroad privilege objections to
cut off questioning that could have elicited non-privileged information. For example, during
the deposition of Mr. Kelly, Plaintiffs’ counsel repeatedly instructed Mr. Kelly not to answer
questions about his communications with other class members after the commencement of
litigation, without regard to whether the subject of the conversations was actually privileged.
E.g., White Aff. Ex. 14 at 33 (“So I’m going to instruct him not to answer. To the extent your
conversations were after the litigation, don’t answer.”). During Mr. Green’s deposition,
Plaintiffs’ counsel stood by his privilege objection even after Mr. Green provided testimony
indicating that his answer to the line of questioning would not have been privileged:
MR. MC LOUGHLIN: I’m going to object and instruct you not to answer if it’s
about the litigation on privilege grounds.
MR. FORAN: On what?
MR. MC LOUGHLIN: Privilege grounds.
Q. Is Mr. Hariton a lawyer?
A. No.
Q. Are you a lawyer?
A. No.
Q. Were you going to Mr. Hariton for legal advice?
A. No.
Q. Were you conveying legal advice to Mr. Hariton?
A. I’m sorry?
Q. Were you conveying legal advice to Mr. Hariton?
A. Never. Not at all, no.
MR. FORAN: You want to revise that instruction?
MR. MC LOUGHLIN: I don’t, I don’t.

White Aff. Ex. 17 at 19. This is not to say that communications between class members can
never be privileged. For example, communications between the Plaintiffs could be privileged
if they were discussing or conveying the advice of counsel. But seemingly unthinking
objections and instructions not to answer, without regard to whether the questions seek non-
privileged information, are improper.

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17. The Court may order a witness to sit for another deposition when the

original deposition was hampered by improper or overbroad privilege objections. 29

Defendants must be allowed to depose Plaintiffs again on the limited topics addressed

in the Motion. Because the need for additional depositions stems from Plaintiffs’

counsel’s overbroad privilege objections, Plaintiffs must bear the burden of

reasonable costs for the repeat depositions.

18. In sum, the remaining aspects of the Motion following my August 21,

2024 Memorandum Opinion are resolved as follows: Plaintiffs must produce Entries

19, 20, 21, 23, 28, and 31, along with any communications involving Mr. Horwich

after May 21, 2018 otherwise identified on Plaintiffs’ privilege log. Plaintiffs must

also sit for additional depositions consistent with this Order, with reasonable costs to

be borne by Plaintiffs.

/s/ Nathan A. Cook
Vice Chancellor Nathan A. Cook

29 See, e.g., In re Appraisal of Stillwater Mining Co., C.A. No. 2017-0385-JTL, at 30-31 (Del.

Ch. June 13, 2018) (TRANSCRIPT) (ordering another deposition of a witness where “the
deposition was hampered by the privilege claim,” but limiting the second deposition to the
subject matter of the improper privilege claim because “[t]he deposition is not a total redo.”).

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