NYAHSA Servs., Inc. Self Ins. Trust v Defendant Inc., 12/27/2016 (Platkin, J.).

Discovery; Disclosures; Attorney-Client Privilege; Attorney Work-Product

By: Michael Joseph | Staff Writer

Plaintiff is a group self-insured trust (“GSIT”) consisting of employers in the home health-care industry operating in New York State who are required to provide workers’ compensation insurance to their employees. Defendant was a member of the GSIT for eight years. After leaving the GSIT, Defendant received an invoice from Plaintiff’s administrators alleging Defendant owed $800,000.00 in additional contributions to the GSIT arising from open claims on Defendant’s employees. Fearing litigation, Defendant retained counsel. Defendant authorized its counsel to retain a consultant to review the disputed invoice as well as the Plaintiff’s administrator’s management of Defendant’s employees’ workers’ compensation claims. Defendant’s counsel assured Defendant that this review would be protected by privilege. A review of the invoice was conducted and a report of the review’s findings was issued to counsel and copied to Defendant (the “report”). Eventually, Plaintiff brought a collection action against Defendant seeking the $800,000.00. Defendant brought a third-party action against Plaintiff’s administrators alleging that they failed to manage its employees’ workers’ compensation claims. Thereafter, Plaintiff’s administrators filed a Notice for Discovery And Inspection seeking the production of the report, and the documents and communications related thereto.

Defendant opposed the motion with two arguments: (1) the report was protected form disclosure because it was prepared in anticipation of litigation and/or constituted attorney work-product; and (2) the documents related to the preparation of the report were protected by attorney-client privilege, as attorney work-product or were prepared in anticipation of litigation. Plaintiff and its administrators claimed that the report’s purpose was to verify the accuracy of the invoice and facilitate continued negotiations in settling the balance of the invoice.

Ultimately, the Court held that the report was not protected by attorney-client privilege because (1) the report lacked any confidential or legal information; and (2) the report was unnecessary to facilitate communication between the attorney and client. The Court also held that the report was not attorney work-product because an outside consultant prepared it. Finally, the Court held that the report was not a material prepared exclusively for litigation because it was also prepared to further negotiations in resolving the amount owed on the invoice. The Court also held that the communications between Defendant and its counsel, with one exception, were not privileged because these communications contained nothing of legal character. For the same reason the Court held that the communications between Defendant’s counsel and the consultant were not privileged. The Court further reasoned that the consultant’s participation was unnecessary to foster effective communication between counsel and Defendant. Similarly, the Court ruled that these communications were not attorney work-product because they did not reflect counsel’s legal research or analysis. Finally, the Court found that by copying Defendant to the communications between Defendant, its counsel, and the consultant, privilege was waived.

NYAHSA Servs., Inc. Self Ins. Trust v Defendant Inc., 12/27/2016 (Platkin, J.).

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