Raphael v. Aetna Cas. and Sur. Co., No. 90 Civ. 0938 (RPP).

• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
• Citation: 744 F. Supp. 71
• Docket Number: No. 90 Civ. 0938 (RPP).
• Parties: Alan RAPHAEL, Plaintiff, v. The AETNA CASUALTY AND SURETY COMPANY, Defendant.
• Decision Date: 04 September 1990

744 F. Supp. 71

Alan RAPHAEL, Plaintiff,
v.
The AETNA CASUALTY AND SURETY COMPANY, Defendant.

No. 90 Civ. 0938 (RPP).

United States District Court, S.D. New York.

September 4, 1990.

744 F. Supp. 72

COPYRIGHT MATERIAL OMITTED

744 F. Supp. 73

Solinger Grosz & Goldwasser, P.C. by John C. Grosz, New York City, for plaintiff

Feldman & Rudy by Stuart D. Markowitz, Roslyn Heights, N.Y., for defendant.

Otto G. Obermaier, U.S. Atty., S.D.N.Y. (Craig A. Stewart, Asst. U.S. Atty., of counsel), New York City, for the Government.

OPINION AND ORDER

ROBERT P. PATTERSON, Jr., District Judge.

Plaintiff sues for breach of an insurance contract involving an alleged car theft. Defendant now moves pursuant to Fed.R. Civ.P. 12(b)(6), 12(c) and 12(h)(2) to dismiss the complaint insofar as it seeks $500,000 in punitive damages and any attorney's fees. The Government has intervened requesting an order quashing the subpoenas served by plaintiff on the Federal Bureau of Investigation ("FBI") and Special Agent Beekman or, in the alternative, an order staying discovery pending resolution of an ongoing criminal investigation. For the reasons set forth below, defendant's and the Government's motions are granted. The complaint is dismissed pursuant to Fed.R.Civ.P. 12(h)(3) for failure to meet the amount in controversy requirement.

BACKGROUND

On September 5, 1989, plaintiff alleges he discovered the theft of his 1987 black Jaguar, four-door sedan, Model XJ6 Vandem Plas. According to his deposition testimony, he last saw the vehicle on Friday, September 1, 1989, around 10:00 a.m. when he parked it across the street from his girlfriend's apartment located in Yonkers, New York. When he returned to Yonkers on the morning of Tuesday, September 5, 1989, to pick up the car, it was missing. The record does not disclose why he failed to use his car over the entire Labor Day weekend.

On September 5, plaintiff reported the theft to the Yonkers Police Department and to his insurer, Aetna. Two days later, plaintiff filed a statement of loss with Aetna claiming a loss of $46,827.60, equivalent to the purchase price of the Jaguar. Grosz Aff., Exh. C.

744 F. Supp. 74

Aetna assigned investigator Donald Pisculli to the claim. By letter dated November 7, 1989, Aetna disclaimed all coverage under plaintiff's policy for loss of the Jaguar, stating, "Our investigation has determined discrepancies in the reported disappearance of your vehicle." Grosz Aff., Exh. D. At his deposition on May 10, 1990, Pisculli revealed that the basis for denying the claim was information provided to him by FBI Special Agent Mary Ellen Beekman. Pisculli Dep., Tr. at 58.

Beekman essentially informed Aetna that she had observed the Jaguar on September 1, 1989, at a garage located in the vicinity of 102nd Street and Tenth Avenue in Manhattan and that the vehicle was driven to Florida the following day, September 2, 1989, in connection with a "Dominican car theft ring." Grosz Aff. ¶ 7. Beekman had also learned from an informant facts suggesting that the vehicle may have been present at the garage for eight days prior to September 2, 1989, and that the car had been delivered as an "insurance give-up." Id. at ¶ 7.

Plaintiff Alan Raphael was subsequently indicted under seal by a federal grand jury on July 13, 1990, "for conduct that was the subject of the FBI investigation...." Maloney Supp.Decl. ¶ 2.

The parties agreed to waive oral argument on the Government's motion to quash the subpoenas.

DISCUSSION

MOTION TO QUASH

Plaintiff has served subpoenas on the Federal Bureau of Investigation and Special Agent Beekman seeking production of:

1. Each document relating or referring to the Jaguar, including: (a) all notes and memoranda relating or referring to the observation of the Jaguar by Beekman, the F.B.I., or any informant, on or about September 1, 1989 or at any time prior thereto; and (b) all notes and memoranda comprising, relating or referring to each communication with any person, or to any investigation, concerning the whereabouts of the Jaguar at any time after August 15, 1989.

2. Each document relating or referring to any investigation by Beekman or the F.B.I. concerning the Jaguar and/or Raphael.

3. Each document relating or referring to each communication between or among Beekman, the F.B.I., any informant and Aetna concerning the Jaguar and/or Raphael.

Beekman Decl., Exh. 1. The Government argues that enforcement of the subpoenas would compromise an ongoing criminal investigation of a major interstate automobile theft ring operating out of New York. The investigation is being conducted by FBI Agent Beekman in conjunction with the United States Attorney's Office for the Southern District of New York. A federal grand jury has indicted several persons including plaintiff in connection with the activities being investigated.

1. Law Enforcement Investigatory Privilege

The law enforcement investigative privilege, a qualified common law privilege under Fed.R.Civ.P. 26(b), exists to prevent "the harm to law enforcement efforts which might arise from public disclosure of ... investigatory files." Black v. Sheraton Corp., 564 F.2d 531, 541 (D.C.Cir.1977). See, e.g., Friedman v. Bache Halsey Stuart Shields, Inc., 738 F.2d 1336 (D.C. Cir.1984); United States v. Winner, 641 F.2d 825, 831 (10th Cir.1981). The privilege serves to preserve the integrity of law enforcement techniques and confidential sources, to protect witnesses and law enforcement personnel, to safeguard the privacy of individuals under investigation and to prevent interference with the investigation. In re Department of Investigation of New York, 856 F.2d 481, 484 (2d Cir. 1988). Law enforcement operations have little hope of being effective if conducted in full public view.

When the government invokes the law enforcement investigative privilege, the court must balance the public interest in...