Attorney-Client Privilege Potentially Under Siege (NY)

The Appellate Division, Fourth Department, recently issued a decision that will have severe ramifications on insurance carriers. In Rickard v. New York Cent. Mut. Fire Ins. Co., a supplementary UIM claim, the injured party served a notice to produce for New York Central Mutual’s entire claim file, including the portions of the file that were generated after the action was filed. New York Central Mutual, claiming that the material from after the action was filed is protected, moved for a protective order, or in the alternative, for an in-camera review of the materials. The trial court denied New York Central Mutual’s motion and granted Rickard’s cross-motion to compel the entire claim file. As a result of the trial court’s decision, New York Central Mutual appealed to the Appellate Division, Fourth Department.

The Fourth Department discussed how New York Central Mutual’s objection in response to Plaintiff’s notice to produce was overly broad, in that NYMC should have identified which specific document requests were “palpably improper” instead of asserting that all materials in the claim file generated after the commencement of this action were protected. In the end, the court held that New York Central Mutual failed to meet its burden to secure the protection they requested because of the breadth of the objection. The court said, deciding what parts of a claim file are protected is a fact-specific determination. They added that this will most likely result in an in-camera review.

This case goes against the prior holding of Lalka v. ACA Ins. Co., a 2015 Fourth Department case, where the court held that all documents in the claim file created after an action has commenced are protected from disclosure.

The concern going forward is that the courts will continue to chip away at the attorney-client privilege between insurance carriers and their attorneys. For now, when objecting to demands by citing attorney-client privilege, insurers and their attorneys would be well advised to note specific bases for their objections, rather than issue blunderbuss objections to all such demands.   Thanks to Marc Schauer for his contribution to this post.  Please email Brian Gibbons with any questions.

Dance Like No One is Watching, Email Like it will be Read Aloud in Court (NY)

Technological advances often create issues previously undecided by the Courts.  The use of email to contact clients, adversaries and the Court has become increasingly popular, but also comes with a host of discovery and confidentiality issues.

Recently, in Siras Partners v. Activity Kuafu, (1st Dept. 2018), the First Department heard a case regarding the waiver of attorney-client privilege due to the content of emails sent to third-parties that were produced in discovery. The Court found that by emailing a third party about the advice of his attorney, the defendant waived attorney-client privilege not only as to that email, but as to any and all documents related to the content of the email.

While the email was sent before the commencement of the lawsuit itself, the simple fact that advice from the defendant’s attorney regarding the substance of the lawsuit was within the email was sufficient to be a waiver of attorney-client privilege.

The crux of this issue is the content of communication as well as the recipient of that information. The recipient of the email in the Siras case was a business partner and friend of the individually named defendant, which may have been why the defendant was so quick to email communication with his private counsel.

Nevertheless, this decision shows that now, more than ever, it is imperative that attorneys are diligent in monitoring their communication via email and are diligent in warning their clients about the potential pitfalls of sharing confidential and protected information even with their closest family and friends.  And frankly, the title of this post also pertains to emails and texts unrelated to litigation.

Thanks to Dana Purcaro for her contribution to this post.  Please email Brian Gibbons with any questions.