NYAHSA Services, Inc., Self-Insurance Trust v. People Care Inc.NYAHSA Services, Inc., Self-Insurance Trust v. People Care Inc.
Mulvey, J. Appeal from an order of the Supreme Court (Platkin, J.), entered January 5, 2017 in Albany County, which partially granted motions by plaintiff and third-party defendants Cool Insuring Agency, Inc. and Cool Risk Management, Inc. to compel discovery.
Defendant, a home health care provider, was a member of plaintiff, a group self-insured trust that provided workers’ compensation benefits to defendant’s employees. After defendant’s membership in the trust ended, it refused to pay plaintiff an assessment in excess of $800,000 for open claims on defendant’s employees. Plaintiff commenced this collection action against defendant alleging breach of contract and unjust enrichment.* Defendant answered, counterclaimed and then commenced a third-party action against, among others, third-party defendants Cool Insuring Agency, Inc. and Cool Risk Management, Inc. (hereinafter collectively referred to as Cool),
During this collection litigation, Cool made a discovery request to produce a report commissioned by defendant’s then counsel, Whiteman Osterman and Hanna, LLP (hereinafter WOH) and prepared by a consultant, Towers Perrin, regarding Cool’s management and administration of the workers’ compensation claims of defendant’s employees. Cool also sought documents and written communication related to that report. Defendant refused to comply with the discovery request, claiming that the materials were protected by, among other things, the attorney-client privilege. Cool and plaintiff then moved to compel production of the requested report and materials. Supreme Court examined the requested materials in camera and partially granted the motions to compel, ordering defendant to disclose the report and related documents, but denied disclosure as to one email exchange between defendant’s executives and WOH attorney Joel Hodes. Defendant appeals.
Pursuant to
Defendant argues that the report was protected by the attorney-client privilege, as attorney work product and as material prepared in anticipation of litigation. Supreme Court properly rejected these claims. “The attorney-client privilege shields from disclosure any confidential communications between an attorney and his or her client made for the purpose of obtaining or facilitating legal advice in the course of a professional relationship” (Ambac Assur. Corp. v Countrywide Home Loans, Inc., 27 NY3d 616, 623 [2016], citing
The record, including the report itself, reflects that WOH, defendant’s counsel, retained Towers, an independent claims consultant, to undertake a comprehensive claims review to include the trust’s reserve practices and Cool’s administration of claims of defendant’s employees, in order to resolve the parties’ impasse over defendant’s unpaid assessments. Towers was given in-house access to Cool’s documents for this purpose in addition to supporting documentation already provided by Cool. To that end, defendant’s president sent a letter to Cool’s vice-president reflecting that the purpose of the consultant’s review of Cool’s records was to “facilitat[e] an intelligent conversation with [Cool’s] claims department,” which Supreme Court aptly characterized as a “typical business purpose.” Cool’s vice-president submitted an affidavit attesting that it was his understanding that the purpose of the consultant’s review was to verify the accuracy of the assessments billed to defendant, and that Towers assured him that it would discuss its findings with Cool; another Cool vice-president attested that Towers did share certain findings with Cool, including that it did not find any problems with inappropriate payment of claims by Cool.
As Supreme Court correctly concluded, the report “does not include any legal advice, legal analysis or discussion of legal issues” nor does it disclose confidences of defendant, and we further note that it was based almost exclusively on information provided by Cool and, as such, it is not a communication “of a legal character” (Ambac Assur. Corp. v Countrywide Home Loans, Inc., 27 NY3d at 624). Further, we discern no error in the court’s conclusion—after crediting the proof that defendant did not expect that the report would remain confidential and that the contents of the report were not, in fact, kept confidential—that the report was not a confidential communication, and that any privilege was waived (see id. at 623-624). Thus, the report was not protected by the attorney-client privilege.
With regard to the claim that the report was protected from disclosure as material prepared for litigation, defendant’s “burden was to demonstrate that [the report] was obtained solely for litigation purposes” (Curci v Foley, 149 AD3d 1388, 1389 [2017]), which “cannot be satisfied with wholly conclusory allegations” (Hewitt v Palmer Veterinary Clinic, PC, 145 AD3d 1415, 1416 [2016] [internal quotation marks and citation omitted]; see
We likewise find, after an in camera review of the sealed documents in dispute, that, with one exception, Supreme Court correctly concluded that the communications related to the report, which fall into three categories, are not exempt from disclosure. With regard to the communications between WOH and Towers, they concern factual data, methodology for the claims review and evaluation and other nonlegal matters; they were either not prepared by counsel or do not reflect any legal analysis or strategy. The exception is the correspondence in exhibit L, which reflects counsel’s legal opinion as to the report and defendant’s liability, which is privileged as attorney work product (see Kinge v State of New York, 302 AD2d at 670; Lichtenberg v Zinn, 243 AD2d at 1048). The second category, communications between defendant, WOH and Towers, concerns WOH’s retention of the consultant and its fee. It also does not contain attorney work product and were not prepared exclusively in anticipation of litigation. The court’s conclusion that the communications in these two groups were not “necessary to enable the attorney-client communication” was not an abuse of discretion (Ambac Assur. Corp. v Countrywide Home Loans, Inc., 27 NY3d at 624). The third category, emails between WOH and defendant, reveals no communications of a legal or confidential character or rendition of legal advice or opinions.
Peters, P.J., McCarthy, Rose and Rumsey, JJ., concur.
Ordered that the order is modified, on the law, without costs, by reversing so much thereof as granted the motion by third-party defendants Cool Insuring Agency, Inc. and Cool Risk Management, Inc. to compel the production of sealed exhibit L; motion denied to that extent; and, as so modified, affirmed.