Tomorrow’s NYLJ has an interesting article from Evan H. Krinick (of LMK fame), a partner at Rivkin Radler. In Insurance Fraud: Examinations Under Oath And Attorney-Client Privilege, Mr. Krinick discusses the circumstance where EUO reports prepared by counsel will be privileged and not discoverable. Here are some snippets. Any bold or other emphasis is mine. Anything contained in brackets or footnotes using letters, I inserted to make it easier to read.
The payment or rejection of claims is a part of the regular business of insurance companies. Toward that end, carriers rely on a wide variety of processes and individuals to determine whether claims should be paid or denied, or whether particular claims are fraudulent. In many instances, an insurer will exercise its right under an insurance policy to have its attorneys conduct an examination under oath (EUO) of an insured. An issue that commonly arises is whether a report, letter, or other documents prepared by counsel following an EUO are discoverable by the insured in the event the claim is denied and litigation ensues.…By the same token, the Court [Spectrum Systems Int'l Corp. v. Chemical Bank] recognized that the CPLR established three categories of protected materials, also supported by policy considerations: privileged matter, absolutely immune from discovery;3 attorney’s work product, also absolutely immune;4 and trial preparation materials, which were subject to disclosure only on a showing of substantial need and undue hardship in obtaining the substantial equivalent of the materials by other means.5 The Court added that the burden of establishing any right to protection was on the party asserting it.
…The Court [Spectrum Systems Int'l Corp. v. Chemical Bank]A acknowledged that the attorney-client privilege should not be used as a device to shield discoverable information, adding that an investigative report did not become privileged merely because it was sent to an attorney or merely because the investigation was conducted by an attorney. The critical inquiry, the Court declared, was whether, viewing the lawyer’s communication in its full content and context, it was made to render legal advice or services to the client.
The Court concluded that facts were selected and presented in the report as the foundation for the law firm’s legal advice, and that the communication was primarily and predominantly of a legal character. The narration related and integrated the facts with the law firm’s assessment of the client’s legal position, and evidenced the lawyer’s motivation to convey legal advice. Significantly, the Court found that the report was protected by the attorney-client privilege even though it did not focus on any imminent litigation, stating that the prospect of litigation “may be relevant to the subject of work product and trial preparation materials, but the attorney-client privilege is not tied to the contemplation of litigation.”
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As [Spectrum Systems Int'l Corp. v. Chemical Bank and Bank Hapoalim, B.M. v. American Home Assur. Co.] suggest, an insurer that invokes the attorney-client privilege in an effort to withhold documents relating to an EUO conducted by an attorney must demonstrate that it is seeking to protect confidential communications made between the attorney and the insurance company in the context of legal advice or services.8 The communications must be primarily or predominantly of a legal character and made “for the purpose of facilitating the rendition of legal advice or services, in the course of a professional relationship.”9Attorneys retained to conduct EUOs should keep these guidelines in mind when preparing and transmitting their reports. The more analysis they contain, the more they apply the facts to the law, the more they contain their legal opinions and advice, the more likely they are to be deemed non-discoverable.10
Under this analysis, it looks like SIU reports, memos, files, emails, etc. are fair game. For more information on this issue (not SIU, privilege in general), have a look at People v. Kozlowski, 2008 NY Slip Op 07759, (Ct. App., 2008), and a recent article in the NYLJ that discusses the Kozlowski case (also available in part HERE). For other cases that have addressed the privilege issue recently, click HERE.
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A. Obviously the NYLJ column isn’t large enough to really get into the case. There are other interesting aspects of that case that aren’t addressed in the article, e.g.,
We note, however, that no document other than the Schulte Roth report has been put before the Court, or described with any particularity, or analyzed by the parties in their argument to us. Chemical’s affidavits speak of memoranda of conversations with Spectrum’s president, its briefs mention unspecified investigative records, and the Appellate Division refers to Chemical documents labeled “Attorney Work Product.” A party’s own labels are obviously not determinative of work product, and the generalized descriptions–lacking identification of persons, time periods and circumstances–do not convey the information and analysis necessary to decide whether a particular document should be immunized from disclosure under CPLR 3101(c) or (d). Chemical’s offer to deliver the remaining documents for our in camera review obviously does not fill this gap.
Determining document immunity claims, and reviewing them, are largely fact-specific processes (see, e.g., Rossi v Blue Cross and Blue Shield of Greater New York, 73 NY2d 588; Matter of Grand Jury Subpoena [Bekins Record Storage Co.], 62 NY2d 324). Indeed, we join in the observation of the Appellate Division that it would have been better practice for the trial court in this case, when first considering Chemical’s motion, to have conducted an in camera review “to have allowed for a more informed determination as to whether the information was indeed protected from disclosure on any of the grounds alleged.” (157 AD2d at 446- 447.) The present record, similarly, leaves us with inadequate basis for determining whether the Appellate Division correctly concluded that Chemical’s remaining documents were neither attorney’s work product nor trial preparation materials. We therefore do not reach these issues, or the additional arguments propounded by the parties and amici curiae regarding CPLR 3101(c) and (d).