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State Farm Mutual Automobile Insurance Co. v. Elite Health Centers Inc.

United States District Court, E.D. Michigan, Southern Division

June 12, 2019

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff,
v.
ELITE HEALTH CENTERS, INC., ELITE CHIROPRACTIC, P.C., ELITE REHABILITATION, INC., MIDWEST MEDICAL ASSOCIATES, INC., PURE REHABILITATION, INC., DEREK L. BITTNER, D.C., P.C., MARK A. RADOM, DEREK LAWRENCE BITTNER, D.C., RYAN MATTHEW LUKOWSKI, D.C., MICHAEL P. DRAPLIN, D.C., NOEL H. UPFALL, D.O., MARK J. JUSKA, M.D., SUPERIOR DIAGNOSTICS, INC., CHINTAN DESAI, M.D., MICHAEL J. PALEY, M.D., DEARBORN CENTER FOR PHYSICAL THERAPY, L.L.C., MICHIGAN CENTER FOR PHYSICAL THERAPY, INC., and JAYSON ROSETT Defendants.

          Avern Cohn Judge

          OPINION AND ORDER GRANTING STATE FARM MUTUAL'S MOTION FOR ORDER PERMITTING DISCLOSURE OF STATEMENTS MADE BY MARK RADOM TO AMY ROSENBERG (DEs 345, 346 (SEALED))

          ANTHONY P. PATTI UNITED STATES MAGISTRATE JUDGE.

         I. Introduction

         This matter is before the Court for consideration of Plaintiff State Farm Mutual Automobile Insurance Company's (“State Farm's”) Motion for Order Permitting Disclosure of Statements Made by Mark Radom to Amy Rosenberg (DEs 345, 346 (Sealed)), Defendant Mark Radom's response in opposition (DEs 352, 353 (Sealed)), State Farm's reply brief (DEs 358 (Sealed), 359), and the joint statement of resolved and unresolved issues (DE 460). All discovery matters have been referred to me for hearing and determination (DE 229), and a hearing was held on this motion on May 10, 2019, at which the Court entertained oral argument and took this matter under advisement. (DE 472.)

         II. Background

         A. The Rosenberg Affidavit

         On or about October 3, 2018, State Farm obtained an affidavit (hereinafter “the Affidavit”) from a nonparty witness, Amy Rosenberg (formerly Amy Radom), the ex-wife of Defendant Mark Radom. (DE 346-1 (Sealed); DE 352-9 at 2.) Rosenberg and Radom were married on April 29, 1995 and divorced on January 22, 2016. (DE 352 at 17.) The Affidavit addresses the time period before, during and after Rosenberg's marriage to Radom, and includes statements purportedly made by Radom to Rosenberg during that time period. (See DE 346-1 (Sealed).) State Farm provided a copy of the Affidavit to Radom and advised his counsel that it would not publicly disclose the Affidavit “absent either (1) confirmation from you on behalf of Radom that the foregoing statements are not privileged; or (2) a ruling from the Court.” (DE 352-9 at 2-5.)

         On October 5, 2018, Radom responded to State Farm's inquiry and objected to the disclosure of any statements in the Affidavit made by him to Rosenberg during their marriage as privileged, pursuant to the Michigan statutory marital communications privilege, MCL § 600.2162(4). (Id. at 2.) The opinion and order which follows will provide the “ruling from the Court” to which State Farm alluded.

         B. The Instant Motion

         On October 22, 2018, with leave of the Court, State Farm filed the instant motion seeking an order permitting the disclosure of statements in the Affidavit made by Radom to Rosenberg. (DEs 345, 346 (Sealed).) State Farm argues that the Affidavit contains “[c]ritical statements [that] relate to the ownership of Horizon Imaging, LLC (“Horizon”), an MRI business that played a key role in the fraud scheme at issue, ” and “describes Radom's statements to Ms. Rosenberg about businesses and people connected to the fraud scheme.” (DE 345 at 9.) State Farm contends that the statements in the Affidavit are not “confidential” statements barred by the Michigan marital communications privilege because: (1) they involve business matters involving or conveyable to third parties; (2) they discuss the division of assets during divorce; (3) the privilege does not apply to communications in furtherance of frauds on third parties; and (4) the statements regard conduct that exposes Rosenberg to liability. (Id. at 20-26.) State Farm further argues that at least two statutory exceptions apply: (1) Radom deserted or abandoned the marriage and thus cannot invoke the privilege; and, (2) Rosenberg's statements in the Affidavit were not elicited through an examination in a court proceeding, as required by MCL § 600.2162(4), and thus are not covered by the privilege. (Id. at 26-28.)

         Radom filed a response, arguing that the Affidavit improperly discloses confidential martial communications in violation of the Michigan marital communications privilege, MCL § 600.2162(4). (DE 352.) He asserts that: (1) his statements to Rosenberg during the marriage were “absolutely confidential;” (2) a “business/financial matter” exception does not apply; (3) the communications were not “regarding division of assets during divorce” or made “in furtherance of frauds on third parties;” (4) Rosenberg was not exposed to liability; and, (5) there are no applicable statutory exceptions to the privilege. (Id. at 17-27.) Radom also contends that: (6) the statements in the Affidavit are inadmissible because they are based on insufficient knowledge or speculation. (Id. at 12-17.)

         State Farm filed a reply brief reasserting its position that the statements in the Affidavit are not barred by the marital communications privilege because Rosenberg is not being “examined, ” as required by the statute, MCL § 600.2162(4), and, alternatively, that the statements are admissible because they are not “confidential, ” were made in furtherance of a crime or fraud, and exposed Rosenberg to liability. (DE 359.)

         III. Discussion

         A. Federal Rule of Evidence 501 Provides that State Law Determines the Application of Privileges in This Case

         Federal Rule of Evidence 501 provides that “in a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision.” Fed.R.Evid. 501; see also Jewell v. Holzer Hosp. Found., Inc., 899 F.2d 1507, 1513 (6th Cir. 1990) (“In a civil case involving claims based on state law, the existence of a privilege is to be determined in accordance with state, not federal law.”). Plaintiff's Complaint alleges only state law claims in this diversity case, and thus Michigan law supplies the rule of decision as to the claims and defenses and Michigan's law of privileges is applicable.

         B. Michigan's Marital Communications Privilege

         Michigan provides for a statutory marital communications privilege, [1] ...


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