Fields v. First Liberty Ins. Corp.
| Decision Date | 01 November 2012 |
| Parties | Yvonne McLaurin FIELDS, as Executrix of the Estate of Mildred Collins, deceased, Plaintiff, v. FIRST LIBERTY INSURANCE CORPORATION, Defendant. |
| Court | New York Supreme Court |
OPINION TEXT STARTS HERE
Lerner, Arnold & Winston, LLP, New York, Attorney for Plaintiff.
Feldman, Rudy, Kirby & Farquharson, P.C., Jericho, Attorney for Defendant.
It is, ORDERED that the branch of the motion by plaintiff to strike the defendant's answer is denied; and it is further
ORDERED that the branch of the motion by plaintiff for an order compelling the defendant to produce the claims notes in unredacted form, is granted to the extent that defendant is directed to produce for in camera review all the claim notes in connection with the subject insurance loss for the period from February 17, 2009 to June 2, 2010; and it is further
ORDERED that claim notes shall be provided in a sealed envelope and delivered by messenger to the court, no later than ten (10) business days after plaintiff's service upon defendant of a copy of this order with notice of entry; and it is further
ORDERED that the remainder of the motion by plaintiff to compel defendant to produce the various other documentsdemanded in the Second Notice for Discovery and Inspection dated October 12, 2011, is at this time, denied.
Mildred Collins was the owner of the property located at 21 Tilney Avenue in Medford, New York and had a homeowners policy of insurance with the defendant until her death on July 28, 2008. The homeowners policy was renewed and issued to the Estate of Mildred Collins effective February 5, 2009 through February 5, 2010. On February 6, 2009, the insured premises sustained water and mold damage as a result of pipes freezing and rupturing. After a claim was filed, the defendant retained counsel in May 2009 regarding its rights under the homeowners insurance policy and to provide legal advice with respect to the issue of whether heat had been maintained in the premises. Subsequent to an investigation, it was determined that the heat had not been maintained as required by the homeowner's insurance policy, and coverage was denied by letter dated June 2, 2010 (the “Denial Letter”). Thereafter, the Executrix of the Estate, plaintiff, Yvonne McLaurin Fields, commenced the instant action for breach of contract. Issue has been joined and discovery is in progress.
Plaintiff served the defendant with omnibus discovery demands dated October 8, 2010, which called for the production of, among other items, a complete copy of the claims file with the claim notes, and a privilege log. On February 17, 2011, defendant served its response to the demands, however, plaintiff's counsel asserts that a privilege log was not included and portions of the claim notes were redacted, without explanation.1
On June 21, 2011, the defendant produced for deposition Lance Latten, the examiner assigned to the claim and who authored the Denial Letter. Upon questioning, Latten testified that in preparation for the deposition he reviewed the claims file and the unredacted version of the claim notes, and he revealed that entries had been made after June 2, 2010. Latten's testimony prompted plaintiff to serve a Second Notice for Discovery and Inspection dated October 12, 2011 (the “Second Notice”), demanding production of, among other items, memoranda, business and personal files, diaries and computerized notes, “in full, without abbreviation or expurgation.” The Second Notice also demanded estimates, invoices, bills, proposals and inventories prepared by certain identified companies hired in connection with the damagessustained to the insured premises and its contents (hereinafter referred to collectively as “Demands # 1 through # 6”), and a privilege log.
By letter dated October 18, 2011, defendant's counsel objected to Demands # 1 through # 6 as material prepared in anticipation of litigation or on the grounds of relevance. The letter did not address the demand for the unredacted claim notes, and did not include a privilege log. Plaintiff's counsel, by letter dated November 10, 2011, advised defendant's counsel that the objections were improper and unresponsive, and demanded the production of the documents in five days; the documents were not produced and no response was received. The instant motion ensued.
Plaintiff's counsel contends that the claim notes sought are discoverable as a matter of law as any privilege shielding them from disclosure was waived when employees of the defendant reviewed the unredacted version in preparation for deposition. Counsel also contends that Demands # 1 through # 6 are discoverable and necessary in order to adequately prepare for trial. In opposition, defendant's counsel contends that the redacted claim note entries contain confidential communications between employees of the defendant and attorneys at the law firm and therefore are absolutely immune from discovery under the attorney-client privilege. The responsive documents to Demands # 1 through # 6, defendant's counsel contends, were prepared in anticipation of litigation or are irrelevant to the facts of this case.
The drastic remedy of striking the defendant's answer pursuant to CPLR 3126 is not warranted here, as plaintiff has not shown that the defendant's failure to produce documents responsive to the Second Notice was willful, contumacious or in bad faith ( see Rini v. Blanck, 74 A.D.3d 941, 902 N.Y.S.2d 185 [2d Dept.2010];Kesar v. Green Ridge Enters., 30 A.D.3d 471, 817 N.Y.S.2d 343 [2d Dept.2006] ).
The branch of the motion to compel the production of the unredacted claims notes and the various other documents is decided as follows.
“CPLR 4503(a) states that a privilege exists for confidential communications made between attorney and client in the course of professional employment, and CPLR 3101(b) vests privileged matter with absolute immunity” ( Spectrum Sys. Intl. Corp. v. Chemical Bank, 78 N.Y.2d 371, 377, 575 N.Y.S.2d 809, 581 N.E.2d 1055 [1991] ). Nevertheless, as there is a strong public policy in favor of full disclosure, a party seeking to withhold discovery on the ground of privilege has the burden of proving each element of the privilege asserted ( see id.;Matter of Priest v. Hennessy, 51 N.Y.2d 62, 431 N.Y.S.2d 511, 409 N.E.2d 983 [1980];Koump v. Smith, 25 N.Y.2d 287, 303 N.Y.S.2d 858, 250 N.E.2d 857 [1968] ). Thus, where a party alleges that documents sought for production and inspection are shielded from disclosure by the attorney-client privilege, the party seeking to withhold such documents has the burden of demonstrating that the information contained therein constitutes confidential communications between the attorney and the client for the purpose of securing legal services or advice ( see Rossi v. Blue Cross & Blue Shield of Greater New York, 73 N.Y.2d 588, 542 N.Y.S.2d 508, 540 N.E.2d 703 [1991];All Waste Sys. v. Gulf Ins. Co., 295 A.D.2d 379, 743 N.Y.S.2d 535 [2d Dept.2002];Bertalo's Rest. v. Exchange Ins. Co., 240 A.D.2d 452, 658 N.Y.S.2d 656 [2d Dept.1997] ). The attorney-client privilege is not lost because the documents also contain or refer to some nonlegal concerns ( see Rossi v. Blue Cross & Blue Shield of Greater New York, supra;All Waste Sys., Inc. v. Gulf Ins. Co., supra ). Materials prepared in anticipation of litigation are subject to a conditional privilege (CPLR 3101[d] ). To demonstrate that this privilege is applicable, it must be shown that the material was prepared exclusively in anticipation of litigation ( Bombard v. Amica Mut. Ins. Co., 11 A.D.3d 647, 783 N.Y.S.2d 85 [2d Dept.2004];Agovino v. Taco Bell 5083, 225 A.D.2d 569, 639 N.Y.S.2d 111 [2d Dept.1996] ). When such a showing is made, materials prepared in anticipation of litigation are immune from disclosure unless a party shows “substantial need” and the “inability to obtain the substantial equivalent elsewhere without undue hardship” ' (CPLR 3101[d]; Valencia v. Obayashi Corp., 84 A.D.3d 786, 787, 922 N.Y.S.2d 794 [2d Dept.2011] ). Whether a particular document is shielded from disclosure necessarily is a fact-specific determination that most often requires an in camera inspection ( see Spectrum Sys. Intl. Corp. v. Chemical Bank, supra ).
The argument by plaintiff's counsel in support of production of the claim notes centers on the fact that two of the defendant's employees, Latten and his supervisor Kim Russo, admittedly reviewed the unredacted version of the claim notes in preparation for their respective deposition testimony, and thereby waived the attorney-client privilege. This argument is unavailing. A document protected by an unqualified privilege is not waived by a party merely by allowing its own employee to review the document in preparation for a deposition ( see Fernekes v. Catskill Regional Med. Ctr., 75 A.D.3d 959, 906 N.Y.S.2d 167 [3d Dept.2010];Geffers v. Canisteo Cent. School Dist. No. 463201, 105 A.D.2d 1062, 482 N.Y.S.2d 635 [4th Dept.1984];see also U.S. v. Kovel, 296 F.2d 918 [2d Cir.1981];People v. Osorio, 75 N.Y.2d 80, 550 N.Y.S.2d 612, 549 N.E.2d 1183 [1989];Hudson Ins. Co. v. Oppenheim, 72 A.D.3d 489, 899 N.Y.S.2d 29 [1st Dept.2010] ). There is no dispute that Latten and Russo are employed by the defendant. Thus, if the redacted information contains confidential communication protected by the attorney-client privilege, the privilege was not waived.
However, the court cannot determine from the papers submitted whether the redacted information in the claim notes concerns communication primarily of a legal character or “for the purpose of facilitating the rendition of legal advice or services” ( Rossi v. Blue Cross & Blue Shield of Greater...
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