Rossi v. Blue Cross and Blue Shield of Greater New York

• Decision Date: 12 May 1988
• Citation: 140 A.D.2d 198,528 N.Y.S.2d 51
• Parties: , 15 Media L. Rep. 1477 Dennis ROSSI, M.D., Plaintiff-Respondent, v. BLUE CROSS AND BLUE SHIELD OF GREATER NEW YORK, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 51

528 N.Y.S.2d 51

140 A.D.2d 198, 15 Media L. Rep. 1477

Dennis ROSSI, M.D., Plaintiff-Respondent, v. BLUE CROSS AND BLUE SHIELD OF GREATER NEW YORK, Defendant-Appellant.

Supreme Court, Appellate Division First Department.

May 12, 1988.

A.V. Goldstein, New York City, for plaintiff-respondent.

K.B. Pollak, New York City, for defendant-appellant.

Before KUPFERMAN, J.P., and ROSS, ROSENBERGER, ELLERIN and SMITH, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County (William McCooe, J.), entered October 23, 1987, which directed disclosure of a document, dated May 2, 1985, reversed, on the law and the facts, and the motion for a protective order granted, without costs.

The issue here is whether a memorandum prepared by defendant's associate in-house counsel is barred from discovery as privileged. (CPLR 3101(b) and (c); CPLR 4503(a)).

The underlying action is for defamation. Plaintiff is a physician who specializes in the field of radiology. In April 1984 he began using a Diasonics NMR, a/k/a MRI scanner, for diagnostic purposes. Defendant allegedly declined to reimburse patients for the medical cost of the scan and told claimants:

Your contract does not cover procedures which are experimental or whose effectiveness is not generally recognized by an appropriate governmental agency.

Nothwithstanding the statement that the procedure was experimental and not recognized, the scanning procedure had been approved for use by the Federal Food & Drug Administration, National Center for Devices & Radiological Health.

The memorandum prepared by Edward T. Blaney, Jr. (now deceased) addresses the issue of a possible lawsuit against defendant based on the company's rejection of claims for services performed by plaintiff, Dr. Rossi. Mr. Blaney transmitt the memorandum to defendant's Medical Director, to the Vice-President of Professional Affairs, and to the Corporate Vice-President and General Counsel. The memorandum is clearly an internal, confidential document. Nothing indicates that anyone outside the defendant company had access to it. In the document Mr. Blaney makes evaluations and offers legal advice. It also contains information obtained from other employees of defendant.

First, this confidential communication in which an attorney in defendant's employ offers legal advice to his client qualifies, pursuant to CPLR 4503(a), as a communication "made between the attorney ... and the client in the course of professional employment...." and is privileged. Case law has similarly stated that to be privileged, the "communication must be made for the purpose of obtaining legal advice and directed to an attorney who has been consulted for that purpose" [ Matter of Grand Jury Subpoena (Bekins Record Storage Co., Inc.), 62 N.Y.2d 324, 329, 476 N.Y.S.2d 806, 465 N.E.2d 345 (1984); Matter of Priest v. Hennessy, 51 N.Y.2d 62, 431 N.Y.S.2d 511, 409 N.E.2d 983 (1980) ]. In Allied Artists Picture Corporation v. Raab Productions, Inc., 38 A.D.2d 537, 327 N.Y.S.2d 167 (1st Dept.1971) the First Department held that the attorney-client privilege was properly invoked to protect interoffice memoranda prepared by defendant's in-house counsel which were legal in nature. Nothing suggests that this is a situation where a document was passed on to a defendant's attorney in order to avoid its disclosure. ( Radiant Burners v. American Gas Association, 320 F.2d 314 (1963), cert. den., 375 U.S. 929, 84 S.Ct. 330, 11 L.Ed.2d 262 (1963).

In defining the scope of the attorney-client privilege, the Court of Appeals has stated the following:

First, it is beyond dispute that no attorney-client privilege arises unless an attorney-client relationship has been established. Such a relationship arises only when one contacts an attorney in his capacity as such for the purpose of obtaining legal advice or services ... Second, not all communications to an attorney are privileged. In order to make a valid claim of privilege, it must be shown that the information sought to be protected from disclosure was a "confidential communication" made to the attorney for the purpose of obtaining legal advice or services ... Third, the burden of proving each element of the privilege rests upon the party asserting it.... Finally, even where the technical requirements of the privilege are satisfied, it may, nonetheless, yield in a proper case, where strong public policy requires disclosure. Matter of Priest v. Hennessy, 51 N.Y.2d 62, 68-69 [431 N.Y.S.2d 511, 409 N.E.2d 983] (1980).

In Matter of Priest v. Hennessy, the Court of Appeals ruled that the attorney-client privilege did not bar disclosure of legal fees received by lawyers representing alleged prostitutes whether those fees were paid by the clients or a third person.

In the case of Matter of Jacqueline F., 47 N.Y.2d 215, 417 N.Y.S.2d 884, 391 N.E.2d 967 (1979), the Court of Appeals directed disclosure of a client's address on public policy grounds. There, the Court of Appeals determined that an attorney should disclose the address of his client, an aunt of the infant, whose custody was sought by her natural parents. Shortly after her birth, the infant had been placed with the paternal aunt because of the illness of the mother. Subsequently, the aunt, without the knowledge of the natural parents, obtained letters of...