Mandarin Oriental, Inc. v. HDI Global Insurance Company
1:23-cv-04951
S.D.N.Y.Jun 10, 2025Background
- Mandarin Oriental, Inc. operates hotels in major U.S. cities and held commercial property insurance policies from HDI Global Insurance and Assicurazioni Generali.
- The policies contained a special endorsement (Endorsement No. 3) that covered business interruption losses due to the presence of infectious disease within a five-mile radius.
- Mandarin submitted claims for significant losses due to COVID-19, seeking coverage under the policies’ sublimits for each hotel.
- The insurers hired McLarens (adjuster) and J.S. Held (forensic accountant) to investigate, and retained Zelle LLP as counsel.
- Defendants withheld approximately 500 documents as privileged during discovery; Mandarin moved to compel production of certain documents related to reserves, reinsurance, and internal/external communications.
- The court considered the motion after in camera review of exemplar documents and parties’ briefing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Reinsurance communications | Relevant to bad faith and internal assessment; should be produced | Not relevant; no communications withheld, but will review if any found | Relevant; must produce responsive communications unless another privilege applies |
| Reserve information | Highly relevant to show insurer’s beliefs; not privileged as created in ordinary course | Setting reserves is routine, embeds legal advice; privileged or work product | Relevant; not protected by privilege or work product; must be produced |
| Communications with adjusters/accountants sans counsel | Should not be privileged if not containing legal advice or not confidential | Privileged if related to counsel’s advice or investigation | Most such communications (per exemplars) not privileged if not soliciting/providing legal advice; specific emails ordered produced |
| Internal insurer communications | Should not be privileged absent legal advice solicitation or confidentiality intent | Some internal emails privileged due to counsel’s involvement | Only communications soliciting/providing legal advice or reflecting such advice are privileged; particulars detailed per exemplar |
Key Cases Cited
- Upjohn Co. v. United States, 449 U.S. 383 (recognized scope of attorney-client privilege)
- In re Grand Jury Proceedings, 219 F.3d 175 (burden on party asserting privilege)
- Schaeffler v. United States, 806 F.3d 34 (work product protection for documents prepared for litigation; also applies to dual-purpose docs)
- Spectrum Sys. Int’l Corp. v. Chem. Bank, 78 N.Y.2d 371 (New York law for attorney-client privilege; communications must be for legal advice)
- Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 160 F.R.D. 437 (attorney-client privilege standards, federal law)