Recant v. Harwood

• Decision Date: 28 December 1995
• Citation: 222 A.D.2d 372,635 N.Y.S.2d 231
• Parties: Benjamin RECANT, Plaintiff-Respondent, v. Richard HARWOOD, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 231

635 N.Y.S.2d 231

222 A.D.2d 372

Benjamin RECANT, Plaintiff-Respondent, v.Richard HARWOOD, Defendant-Appellant.

Supreme Court, Appellate Division First Department.

Dec. 28, 1995.

L.M. Bernstein, for Recant.

E.J. Golden, for Harwood.

Before ROSENBERGER, J.P., and RUBIN, KUPFERMAN, ASCH and MAZZARELLI, JJ.

MEMORANDUM OPINION.

Order of the Supreme Court, New York County (Paula J. Omansky, J.), entered November 18, 1994, insofar as it granted plaintiff's motion to compel discovery of statements made to defendant's insurance adjuster, unanimously reversed, on the law, without costs, the motion denied, and defendant granted a protective order with respect to this material.

At issue on this appeal is whether statements made by defendant to his personal liability insurance carrier constitute material prepared in contemplation of litigation so as to exclude them from discovery pursuant to CPLR 3101(d)(2).Plaintiff, Benjamin Recant, brought this action for personal injuries sustained when he was struck by a car driven by defendant, Richard Harwood, on November 1, 1990.Following defendant's examination before trial, plaintiff demanded, pursuant to CPLR 3101(g), that defendant produce "the investigation and/or liability file of Liberty Mutual Insurance Company regarding this accident including all statements of defendantRichard Harwood taken prior to the commencement of this action."In the order appealed from, Supreme Court directed defendant to produce the file, granting leave to appeal to this Court the issue of whether the statements are protected from disclosure though initially made, in addition to any litigation purposes, for the asserted business purpose of verifying plaintiff's application for no-fault insurance benefits.

It is well settled that the primary obligation of an insurer is to provide its insured with a defense and, hence, it is said that the duty to defend is broader than the duty to indemnify (Goldberg v. Lumber Mut. Cas. Ins. Co., 297 N.Y. 148, 154, 77 N.E.2d 131).As this Court stated in New Hampshire Ins. Co. v. Jefferson Ins. Co., 213 A.D.2d 325, 326-327, 624 N.Y.S.2d 392), "the duty to defend is triggered if facts alleged in the complaint fall within the scope of coverage intended by the parties at the time the contract was made (Album Realty Corp. v. American Home Assur. Co., 80 N.Y.2d 1008, 592 N.Y.S.2d 657, 607 N.E.2d 804)."By contrast, the duty to indemnify requires a determination of liability (Muhlstock & Co. v. American Home Assur. Co., 117 A.D.2d 117, 122, 502 N.Y.S.2d 174).

Prior to the enactment of CPLR 3101(g)(L.1980, ch. 283, § 1), this Court recognized that automobile liability insurance "has as its purpose the defense and settlement of claims made against the insured because of the insured's liability at law to respond in damages for his acts or omissions in the ownership or operation of an automobile.The policy requires the insurer to represent and defend the insured in the event an action such as this is brought against him * * * In consequence, once an accident has arisen there is little or nothing that the insurer or its employees do with respect to an accident report except in contemplation and in preparation for eventual litigation or for a settlement which may avoid the necessity of litigation" (Kandel v. Tocher, 22 A.D.2d 513, 515, 256 N.Y.S.2d 898[Breitel, J.].

As noted in James v. Metro North Commuter R.R., 166 A.D.2d 266, 267, 560 N.Y.S.2d 459, there is some tension between CPLR 3101(g), requiring disclosure of business records, and CPLR 3101(d)(2), protecting material prepared in contemplation of litigation, and the two provisions "appear to be in conflict when an accident report prepared in the regular course of business is also prepared in anticipation of litigation."However, there is a "sharp distinction between accident reports which result from the regular internal operations of the business, even where the sole motive behind the business operation is litigation, in which case the reports are discoverable under CPLR 3101(g), and...