148 Magnolia, LLC v Merrimack Mut. Fire Ins. Co., 2009 NY Slip Op 03793 (App. Div., 1st, 2009)
Order, Supreme Court, New York County (Jane S. Solomon, J.), entered July 23, 2008, which denied defendant-appellant Public Contracting NYC, Inc.’s motion for a protective order and to quash a subpoena served by defendant-respondent Merrimack Mutual Fire Insurance Company, unanimously affirmed, with costs.
The demanded documents consist of a file reflecting the results of an investigation performed by appellant’s insurance carrier’s agent regarding the underlying fire incident which resulted in the instant litigation. The burden of establishing any right to protection is on the party asserting it; the protection claimed must be narrowly construed; and its application must be consistent with the purposes of the underlying immunity (see Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d 371, 377 [1991]).
A trial court is vested with broad discretion regarding discovery, and its determination will not be disturbed absent a demonstrated abuse of that discretion (see Those Certain Underwriters at Lloyds, London v Occidental Gems, Inc., 41 AD3d 362, 364 [2007], affd 11 NY3d 843 [2008]; Brooklyn Union Gas Co. v American Home Assur. Co., 23 AD3d 190 [2005]). Here the motion court properly determined that the documents were not protected because appellant failed to demonstrate that the investigation was conducted solely in anticipation of litigation. Such reports of insurance investigators or adjusters prepared during the processing of a claim are discoverable in the regular course of the insurance company’s business (see Brooklyn Union Gas Co., 23 AD3d at 190; Roman Catholic Church of the Good Shepherd v Tempco Sys., 202 AD2d 257 [1994]).
Compare this decision with an earlier post on whether EUO reports prepared by counsel are privileged.
As far as no fault is concerned, it doesn’t look like any investigation conducted at the claim stage is prepared in the course of litigation. Those investigations are done to verify claims. To claim that they are done in anticipation of litigation appears to be contary to the spirit and plain wording of the no-fault regulation.
Taking it one step further, even if they were done in anticipation they are discoverable, the privilege is usually waived through a summary judgment or discovery motion. And if not waived, the materials are only “conditionally protected under CPLR 3101(d)(2).” See generally, People v. Kozlowski, 2008 NY Slip Op 07759, (Ct. App., 2008). The “test for overcoming the conditional protection of trial preparation materials, i.e., a “substantial need” because the defendants could not obtain the “substantial equivalent of the materials” without “undue hardship.” Id. In these cases, the plaintiffs’ need for the documents in unquestionable. And plaintiffs cannot get the information from any other source.