Chemical Bank v. National Union Fire Ins. Co. of Pittsburgh, Pa.

• Decision Date: 26 June 1979
• Citation: Chemical Bank v. National Union Fire Ins. Co. of Pittsburgh, Pa., 418 N.Y.S.2d 23, 70 A.D.2d 837 (N.Y. App. Div. 1979)
• Parties: CHEMICAL BANK, Plaintiff-Appellant, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, Defendant-Respondent and Third-Party Plaintiff, v. George HYAM et al., Third-Party Defendants.
• Court: New York Supreme Court — Appellate Division

Page 23

418 N.Y.S.2d 23

70 A.D.2d 837

CHEMICAL BANK, Plaintiff-Appellant, v.NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH,PENNSYLVANIA, Defendant-Respondent and Third-Party Plaintiff, v.George HYAM et al., Third-Party Defendants.

Supreme Court, Appellate Division, First Department.

June 26, 1979.

L. M. Handelsman, New York City, for plaintiff-appellant.

S. D. D. Hamilton, New York City, for defendant-respondent and third-partyplaintiff.

Before KUPFERMAN, J. P., and SANDLER, BLOOM, LANE and LUPIANO, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County, entered November 9, 1978, denying plaintiff's motion to produce certain documents, reversed to the extent appealed from, on the law, with costs, motion granted, and defendant directed to produce the documents within 20 days after service of a copy of this Court's order with notice of entry thereof.

This is an action to recover on a surety bond issued by the defendant guaranteeing repayment of a loan plaintiff made to the Commonwealth Development and Construction Company(Commonwealth).In connection with the transaction, the defendant secured personal guarantees from Commonwealth's principals and a second mortgage on real property owned by Commonwealth.As here pertinent, the defendant alleges that the plaintiff misrepresented to it the worth of the real property and the financial reliability of the principals.

The appeal is from an order at Special Term denying plaintiff's motion pursuant to CPLR, § 3124 for an order directing the defendant to produce two documents withheld by it from plaintiff.Disclosure was resisted by defendant on the ground that one of the documents constituted an attorney's work product (CPLR, § 3101(c)) and was also material prepared for litigation (CPLR, § 3101(d)) and that the second document was material prepared for litigation.

We are satisfied that defendant failed to sustain its burden of establishing the privileged character of the documents (Koump v. Smith, 25 N.Y.2d 287, 303 N.Y.S.2d 858, 250 N.E.2d 857), and the order accordingly is reversed.

As to the document claimed to be an attorney's work product, we note preliminarily that CPLR, § 3101(c) has been uniformly given a narrow construction by the courts for reasons developed quite fully by Professor Siegel in his work, New York Practice, § 347.It suffices here to state that a statement taken from an employee by house counsel"for possible use in litigation" well before any demand for payment was made to the defendant and months before the defendant disclaimed liability, does not qualify for the absolute prohibition set forth in section 3101(c).See alsoWeinstein-Korn-Miller, N.Y.Civ.Prac. § 3101.44.

Nor are we persuaded that this statement and a financial report on one of Commonwealth's principals also secured prior to any demand for payment on the defendant and well before it disclaimed liability constitute "material prepared for litigation."It is clear that these documents were not prepared " purely for the purpose of . . . litigation"(Warren v. N.Y.C. Transit Authority, 34 A.D.2d 749, 310 N.Y.S.2d...