Are counsel’s coverage opinions privileged in a subsequent coverage action with the insured? NY’s first department indicates not necessarily.

more+
less-

On 7/31/14, the First Department held that any documents that pre-date National Union’s disclaimer are not protected from disclosure by the attorney-client privilege or the work-product doctrine or materials prepared in anticipation of litigation.  National Union Fire Ins. Co. v. TransCanada Energy, USA, Inc., 114 A.D.3d 595 (1st Dep’t 2014).

The insurers retained counsel to provide an opinion as to whether a claim was covered.  The court concluded that the record indicated that “counsel were primarily engaged in claims handling—an ordinary business activity for an insurance company.  Documents prepared in the ordinary course of an insurer’s investigation of whether to pay a claim are not privileged and do not become so ‘merely because the investigation was conducted by an attorney,’” quoting Brooklyn Union Gas Co. v. Amer. Home Assur. Co., 23 A.D.3d 190, 191 (1st Dep’t 2005).

In National Union v. TransCanada, the court concluded that certain documents were privileged because they contained legal advice.  This is consistent with its Brooklyn Union decision in which it stated that the attorney work-product doctrine applies to documents prepared by counsel acting as such and to materials “uniquely the product of a lawyer’s learning and professional skills, such as those reflecting an attorney’s legal research, analysis, conclusions, legal theory or strategy.” 

The TransCanada decision is likely to cause some mischief in coverage litigations as the parties and the courts try to navigate the confusing landscape created by the First Department’s language.  And the decision is a cautionary tale for those drafting coverage opinions and advising insurers in pre-disclaimer investigations.

 

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Melito & Adolfsen | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×
×