HERBERT DEVAUL, Plaintiff,
v.
ERIE INSURANCE COMPANY OF NEW YORK, Defendant.
Supreme Court, Onondaga County.
LYNN LAW FIRM, LLP, By: Martin A. Lynn, Esq., M&T Bank Building, Suite 750, 101 South Salina Street, Syracuse, NY 13202, Attorneys for Plaintiff.
RUPP BAASE PFALZGRAF CUNNINGHAM LLC By: Marco Cercone, Esq., 1600 Liberty Building, Buffalo, NY 14202, Attorneys for Defendant.
DECISION AND ORDER
JAMES P. MURPHY, Justice of the Supreme Court.
Presently before the Court is the motion of Plaintiff Herbert DeVaul ("Plaintiff") seeking an Order pursuant to C.P.L.R. §§ 3124 and 3126 to compel the following disclosure from Defendant Erie Insurance Company of New York ("Defendant"):
1. Full and unredacted copies of its claims file up until October 27, 2017;
2. Full and unredacted copy of Mr. Wydra's files;
3. Mr. Wydra's report and all of defendant's internal/external communications regarding Mr. Wydra's report;
4. Full and unredacted copy of Forensic Failure Analysis records up until October 27, 2017;
5. Copy of all communications to third parties from defendant or defense counsel;
6. Ordering witnesses, Mr. Brian Wydra, Mr. Bud Mattice, Mr. Marco Cercone and Mr. James Graber to appear for court-ordered depositions;
7. Disqualifying defendant's counsel as they are witnesses; and
8. Precluding defendant from offering evidence of arson and fraud at trial and that this matter be set down for a trial on damages only.
This action was commenced by the electronic filing of a Summons and Complaint on December 20, 2017. By Order dated September 17, 2018, this Court denied Plaintiff's motion for summary judgment, without prejudice, and ordered Defendant to update its discovery responses and provide a privilege log, as appropriate, within 30 days of service of that Order.
Plaintiff alleges that his house located at 174 State Street, Phoenix, NY, suffered a fire on December 9, 2016, and at that time, Plaintiff was insured with Defendant Erie Insurance Company. After an 11-month investigation, Defendant disclaimed coverage by letter dated October 27, 2017. Defendant contends that Plaintiff committed arson and fraud.
Plaintiff has served various discovery demands upon Defendant including a subpoena served on or about April 10, 2018, on Mr. W. Brian Wydra, a non-party witness for a complete copy of his investigation file as it pertained to the fire. Plaintiff asserts that Defendant refuses to provide a copy of the investigation file, and further refuses to provide Mr. Wydra's report based upon the fact that the report was generated after the date of Defendant's denial. Defendant has further withheld hundreds of documents claiming that any communication by or involving an attorney is absolutely privileged and not subject to disclosure. Plaintiff argues, however, that when a lawyer participates in the claims investigation, including the gathering of facts, interviewing witnesses, obtaining statements and photographs, such information including the communication with third parties is not privileged.
In opposition, Defendant's attorney argues that the attorney-client privilege and attorney work product-privilege exists regardless of when a document was created. Defendant asserts that the documents as set forth in the privilege log are predominantly of a legal character created for the purpose of giving Defendant legal advice. Defendant further asserts that it did not claim the materials in anticipation of litigation privilege until after the coverage determination was made. Instead, Defendant properly asserted its right to redact attorney-client communications and thus, the documents withheld by Defendant were of a legal nature in connection with furthering the attorney-client relationship between Defendant and its attorneys.
On the return date of the motion, March 21, 2019, the Court denied Plaintiff's motion to disqualify Defendant's attorney from representing Defendant and further denied Plaintiff's motion to compel the depositions of Brian Wydra, Bud Mattice, James Graber and Defendant's attorney, Marco Cercone. The Court reserved decision on the remaining issues.[1] The Court directed Defendant to provide to the Court all documents in Defendant's possession for an in camera review. Defendant's attorney has provided to the Court those documents.
C.P.L.R. § 3101(a) entitles parties to full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof. See, Andon v. 302-304 Mott Street Associates, 94 N.Y.2d 740 (2000). It is cornerstone of New York's discovery statute. In Advanced Chimney, Inc. v. Graziano, 153 A.D.3d 478 (2d Dept. 2017), the Court observed that the payment or rejection of claims is an essential part of the regular business of an insurance company. Consequently, reports which aid it in the process of deciding whether to pay or reject a claim are made in the regular course of business. Id. at 478. Specifically, the Court stated:
Reports prepared by insurance investigators, adjusters, or attorneys before the decision is made to pay or reject a claim are not privileged and are discoverable, even when those reports are mixed/multipurpose reports, motivated in part by the potential for litigation with the insured.
Id., at 480.
The Court concluded in Advanced Chimney that the investigative report of the company hired to investigate the underlying fire was discoverable for the period up to and including the date of a denial. The Court further granted the plaintiff's motion to disqualify the attorney who conducted the investigation from further representation of the defendant in the matter since she was likely to be a witness on a significant issue of fact. Id. at 481. The Court, however, held that the law firm itself, KBR, would not be disqualified. Id.; see also, Cascade Builders Corp. v. Rugar, 154 A.D.3d 1152 (3d Dept. 2007).
It is further well settled that a party claiming such immunity or privilege has the initial burden of showing that the materials being sought were prepared solely and exclusively for litigation and were not otherwise motivated by other relevant business concerns. Id. An attorney's work product which consists of materials which are uniquely the product of a lawyer's learning and professional skills, such as materials which reflect his legal research, analysis, conclusions, legal theory or strategy, are considered work product and, therefore, immune from discovery. See, ACWOO International Steel Corp. v. Frenkel & Company, 165 A.D.2d 752 (1st Dept. 1990).
In Spectrum Systems International Corporation v. Chemical Bank, 78 N.Y.2d 371 (1991), the Court of Appeals discussed the attorney/client privilege stating:
While information received from third persons may not itself be privileged ... a lawyer's communication to a client that includes such information in its legal analysis and advice may stand on different footing. The critical inquiry is whether, viewing the lawyer's communication in its full content and context, it was made in order to render legal advice or services to the client. (Emphasis added).
Id. at 379.
Taking all of the foregoing into consideration as set forth above, Defendant has provided to the Court a complete copy of Bates-stamped documents identified as Exhibit A, which have not been produced or provided to Plaintiff. Defendant asserts these documents are not discoverable based upon the attorney/client work privilege. It should be noted that these documents include Mr. Wydra's report of his investigation of the fire at the subject premises.
With respect to Mr. Wydra's report, Defendant concedes that Mr. Wydra's investigation was completed prior to Defendant's denial, but his report was provided to Defendant after the denial per the request of Defendant's attorney. The Court finds that Defendant's calculated effort in directing Mr. Wydra to hold off on producing a written report until after the denial of Plaintiff's claim is not a meritorious basis or ground to withhold the report. Accordingly, the Court grants Plaintiff's motion in part to obtain a copy of Mr. Wydra's report, which is being redacted to exclude Mr. Wydra's opinions as to what may, or may not, have caused the fire at the subject premises. The Court has made redactions to these documents which are attached hereto as Exhibit 1.
The Court has further been provided a copy of documents identified as Exhibits C and D. Exhibit C are the documents with hand-drawn lines crossing out various sentences or paragraphs to show to the Court what was redacted from each document. Exhibit D are the documents that were provided to Plaintiff.
The Court has conducted an in camera review of the documents contained in Exhibit A. Based upon the Court's review, the Court has made a determination as to each document which is Bates stamped, and directs Defendant to provide to Plaintiff a copy of the documents set forth in the chart below that are not subject to the attorney/client privilege or other exception:
EXHIBIT A
(1) (2) (3) (4)
Bates Numbers Produce Produce Privileged Reason
Document as Complete
Redacted Document
002644 X Attorney/Client
002645 X Attorney/Client
002646 X Attorney/Client
002647 X Attorney/Client
002648 X Attorney/Client
002649 X Attorney/Client
002650 X Attorney/Client
002651 X Attorney/Client
002652 X Attorney/Client
002653 X Attorney/Client
002654 X Attorney/Client
002655 X Attorney/Client
002656 X Attorney/Client
002657
(blank page)
002658 X Attorney/Client
002659 X Attorney/Client
002660 X Attorney/Client
002661 X Attorney/Client
002662 X Attorney/Client
002663 X Attorney/Client
002664 X Attorney/Client
002665 X Attorney/Client
002666 X Attorney/Client
002667 X Attorney/Client
002668 X Attorney/Client
002669 X Attorney/Client
002670 X Attorney/Client
002671 X Attorney/Client
002672 X Attorney/Client
002673 X Attorney/Client
002674 X Attorney/Client
002675 X Attorney/Client
002676 X Attorney/Client
002677 X Attorney/Client
002678 X Attorney/Client
002679 X Attorney/Client
002680 X Attorney/Client
002681 X Attorney/Client
002682 X Attorney/Client
002683 X Attorney/Client
002684 X Attorney/Client
002685 X Attorney/Client
002686 X Attorney/Client
002687 X Attorney/Client
002688 X Attorney/Client
002689 X
002690 X Attorney/Client
002691 X Attorney/Client
002692 X Attorney/Client
002693 X
002694 X
002695 X
002696 X
002697 X
002698 X
002699 X
002700 X
002701 X
002702 X Attorney/Client
002703
(blank page)
002704 X Attorney/Client
002705
(blank page)
002706 X
002707 X
002708 X
002709 X
002710 X
002711 X
002712 X Attorney/Client
002713 X Attorney/Client
002714 X
002715 X
002716 X
002717 X
002718 X
002719 X Attorney/Client
002720 X Attorney/Client
002721 X Attorney/Client
002722 X Attorney/Client
002723 X Attorney/Client
002724 X Attorney/Client
002725 X Attorney/Client
002726 X Attorney/Client
002727 X Attorney/Client
002728 X Attorney/Client
002729 X
002730 X
002731 X
002732 X
002733 X Attorney/Client
002734 X Attorney/Client
002735 X Attorney/Client
002736 X Attorney/Client
002737 X
002738 X Attorney/Client
002739 X Attorney/Client
002740 X Attorney/Client
002741 X Attorney/Client
002742 X Attorney/Client
002743 X Attorney/Client
002744 X Attorney/Client
002745 X Attorney/Client
002746 X
002747 X
002748 X
002749 X
002750 X
002751 X
002752 X
002753 X
002754 X
002755 X
002756 X
002757 X
002758 X
002759 X
002760 X
002761 X
002762 X
002763 X
002764 X
002765 X
002766 X
002767 X
002768 X
002769 X
002770 X
002771 X
002772 X
002773 X
002774 X
002775 X
002776 X
002777 X
002778 X
002779 X
002780 X
002781 X
002782 X
002783 X
002784 X
002785 X
002786 X
002787 X
002788 X
002789 X
002790 X
002791 X
002792 X
002793 X
002794 X
002795 X
002796 X
002797 X
002798 X
002799 X
002800 X
002801 X
002802 X
002803 X
002804 X
002805 X
002806 X
002807 X
002808 X
002809 X
002810 X
002811 X
002812 X
002813 X
002814 X
002815 X
002816 X
002817 X
002818 X
002819 X
002820 X
002821 X
002822 X
002823 X
002824 X
002825 X
002826 X
002827 X
002828 X
002829 X
002830 X
002831 X
002832 X
002833 X
002834 X
002835 X
002836 X
002837 X
002838 X
002839 X Attorney/Client
002840 X Attorney/Client
002841 X
002842 X
002843 X
002844 X
002845 X
002846 X
002847 X
002848 X
002849 X
002850 X
002851 X
002852 X
002853 X
002854 X
002855 X
002856 X
002857 X
002858 X
002859 X
002860 X
002861 X
002862 X
002863 X
002864 X
002865 X
002866 X
002867 X
002868 X
002869 X
002870 X
002871 X
002872 X
002873 X
002874 X
002875 X
002876 X
002877 X
002878 X Attorney/Client
002879 X Attorney/Client
002880 X Attorney/Client
002881 X Attorney/Client
002882 X Attorney/Client
002883 X Attorney/Client
002884 X Attorney/Client
002885 X Attorney/Client
002886 X Attorney/Client
002887 X Attorney/Client
002888 X Attorney/Client
002889 X Attorney/Client
002890 X Attorney/Client
002891 X Attorney/Client
002892 X Attorney/Client
002893 X Attorney/Client
002894 X Attorney/Client
002895 X Attorney/Client
002896 X Attorney/Client
002897 X Attorney/Client
002898 X Attorney/Client
002899 X Attorney/Client
002900 X Attorney/Client
002901 X Attorney/Client
002902 X Attorney/Client
002903 X Attorney/Client
002904 X Attorney/Client
002905 X Attorney/Client
002906 X Attorney/Client
002907 X Attorney/Client
002908 X
002909 X
002910 X
002911 X
002912 X
002913 X
002914 X
002915 X
002916 X
002917 X
002918 X
002919 X
002920 X
002921 X
002922 X
002923 X
002924 X
002925 X Attorney/Client
002926 X Attorney/Client
002927 X Attorney/Client
002928 X Attorney/Client
002929 X Attorney/Client
002930 X
002931 X
002932 X
002933 X
002934 X Attorney/Client
002935 X Attorney/Client
002936 X
002937 X
002938 X
002939 X
002940 X Attorney/Client
002941 X Attorney/Client
002942 X Attorney/Client
002943 X Attorney/Client
002944 X
002945 X
002946 X
002947 X
002948 X
002949 X
002950 X
002951 X
002952 X
002953 X
002954 X
002955 X
002956 X
002957 X
002958 X
002959 X
002960 X
002961 X
002962 X
002963 X
002964 X
002965 X
002966 X
002967 X
002968 X
002969 X
002970 X Attorney/Client
002971 X Attorney/Client
002972 X Attorney/Client
002973 X Attorney/Client
002974 X
002975 X
002976 X Attorney/Client
002977 X Attorney/Client
002978 X Attorney/Client
002979 X
002980 X
002981 X
002982 X Attorney/Client
002983 X Attorney/Client
002984 X Attorney/Client
002985 X Attorney/Client
002986 X Attorney/Client
002987 X Attorney/Client
002988 X Attorney/Client
002989 X Attorney/Client
002990 X Attorney/Client
022991 X Attorney/Client
002992 X Attorney/Client
002993 X
002994 X
002995 X
002996 X
002997 X Attorney/Client
002998 X
002999 X
003000 X
003001 X
003002 X
003003 X
003004 X Attorney/Client
003005 X
003006 X
003007 X
003008 X Attorney/Client
003009 X
003010 X
003011 X
003012 X Attorney/Client
003013 X Attorney/Client
003014 X Attorney/Client
003015 X Attorney/Client
003016 X Attorney/Client
003017 X Attorney/Client
003018 X Attorney/Client
003019 X Attorney/Client
003020 X Attorney/Client
003021 X Attorney/Client
003022 X Attorney/Client
003023 X Attorney/Client
003024 X Attorney/Client
003025 X Attorney/Client
003026 X Attorney/Client
003027 X Attorney/Client
003028 X Attorney/Client
003029 X Attorney/Client
003030 X Attorney/Client
003031 X Attorney/Client
003032 X Attorney/Client
003033 X Attorney/Client
003034 X Attorney/Client
003035 X Attorney/Client
003036 X Attorney/Client
003037 X Attorney/Client
003038 X Attorney/Client
003039 X Attorney/Client
003040 X
003041 X
003042 X
003043 X Attorney/Client
003044 X Attorney/Client
003045 X Attorney/Client
003046 X
003047 X
003048 X Attorney/Client
003049 X
003050 X
003051 X Attorney/Client
003052 X
003053 X
003054 X Attorney/Client
003055 X
003056 X
003057 X
003058 X
003059 X
003060 X
003061 X
003062 X
003063 X
003064 X
003065 X
003066 X
003067 X
003068 X
003069 X
003070 X
003071 X
003072 X
003073 X
003074 X
003075 X
003076 X
003077 X
003078 X
003079 X
003080 X
003081 X
003082 X
003083 X
003084 X
003085 X
003086 X Attorney/Client
003087 X Attorney/Client
003088 X Attorney/Client
003089 X Attorney/Client
003090 X Attorney/Client
003091 X Attorney/Client
003092 X
003093 X
003094 X
003095 X
003096 X
003097 X
003098 X
003099 X Attorney/Client
003100 X Attorney/Client
003101 X Attorney/Client
003102 X Attorney/Client
003103 X Attorney/Client
003104 X Attorney/Client
003105 X Attorney/Client
003106 X Attorney/Client
003107 X Attorney/Client
003108 X Attorney/Client
003109 X Attorney/Client
003110 X
003111 X
003112 X
003113 X
003114 X
003115 X
003116 X
003117 X
003118 X
003119 X
003120 X
003121 X
003122 X
003123 X
003124 X
003125 X
003126 X
003127 X
003128 X
003129 X
003130 X
003131 X Attorney/Client
003132 X
003133 X
003134 X
003135 X
003136 X
003137 X
003138 X
003139 X
003140 X Attorney/Client
003141 X
003142 X
003143 X
003144 X Attorney/Client
003145 X Attorney/Client
003146 X Attorney/Client
The Court next considers the documents identified as Exhibits C and D described above. The Court has compared the unredacted documents (Exhibit C) with the redacted documents previously produced (Exhibit D) and makes the following findings as set forth in the chart below:
EXHIBIT C
(1) (2)
Bates Numbers Unredacted Produce Produce
Document Unredacted Redacted
Already Document Document
Produced
001496 X
001497
(blank page)
001498 X
001499 X
001500 X
001501 X
001502 X
001503 X
001504 X
001505 X
001506 X
001507 X
001508 X
001509 X
001510 X
001511 X
001512 X
001513 X
001514 X
001515 X
001516 X
001517 X
001518 X
001519 X
001520 X
001521 X
001522 X
001523 X
001524 X
001525 X
001526 X
001527 X
001528 X
001529 X
001530
(blank page)
001531 X
001532 X
001533 X
001534 X
001535 X
001536 X
001537 X
001538 X
001539 X
001540 X
001541 X
001542 X
001543 X
001544 X
001545 X
001546 X
001547 X
001548 X
001549 X
001550 X
001551 X
001552 X
001553 X
001554 X
001555 X
001556 X
001557 X
001558 X
001559 X
001560 X
001561 X
001562 X
001563 X
001564 X
001565
(blank page)
001566 X
001567 X
001568 X
001569 X
002693 X
NOW, it is hereby
ORDERED that Defendant shall provide to Plaintiff the documents delineated in Columns (1) and.(2) of Exhibit A and delineated in Columns (1), (2) and (3) of Exhibit C, within twenty (20) days of the electronic filing of this Decision and Order.
[1] The Court denies Plaintiff's request at this time to preclude Defendant from offering evidence of arson and fraud at trial.
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