Summary
In Zurich, however, the documents at issue were "litigation material prepared for the liability trial and counsel's work product relevant to that action," id. at 204, not post-verdict documents created in anticipation of bad-faith litigation between the insurers, as is the case here.
Summary of this case from Ohio Casualty Group v. American Int'l Specialty Lines Ins. Co.Opinion
February 2, 1988
Appeal from the Supreme Court, New York County (Kristin Booth Glen, J.).
Appellant, the issuer of an excess insurance policy, seeks to recover damages from respondent, issuer of the primary insurance policy, for respondent's alleged bad-faith refusal to settle a claim against appellant's insured prior to trial. Following a jury verdict against the insured, the claim was settled for $132,500 of which appellant paid $112,500. Appellant now challenges Supreme Court's decision to grant respondent's untimely motion for a protective order. Respondent maintains that the order was properly granted because appellant's notice and demand was overly broad and because the material sought is privileged under CPLR 3101.
We note at the outset that respondent's failure to timely seek a protective order forecloses all inquiry into the propriety of appellant's discovery demands unless they are "palpably improper" (Wood v Sardi's Rest. Corp., 47 A.D.2d 870, 871 [1st Dept 1975]). Although appellant's discovery requests are framed in the broadest of terms, the documents sought relate to a specific subject matter and are therefore sufficiently identifiable to satisfy the requirements of CPLR 3120 (a). (Matter of Bird, 100 A.D.2d 784 [1st Dept 1984]; Scheinfeld v Burlant, 98 A.D.2d 603 [1st Dept 1983].) The requests in the notice of demand were not, therefore, palpably improper and respondent should have been ordered to comply therewith.
Respondent's assertion of the litigation and work product privilege for the materials sought by appellant is unavailing in this bad-faith action between issuers of primary and excess insurance policies. In Hartford Acc. Indem. Co. v Michigan Mut. Ins. Co. ( 93 A.D.2d 337 [1st Dept 1983], affd 61 N.Y.2d 569), this court reaffirmed that the primary carrier owes the same fiduciary obligation to the excess insurer which the primary insurer owes to its insured. Where it is alleged that the insurer has breached that duty to its insured, the insurer may not use the attorney-client or work product privilege as a shield to prevent disclosure which is relevant to the insured's bad-faith action (Colbert v Home Indem. Co., 24 A.D.2d 1080 [4th Dept 1965], affg 45 Misc.2d 1093). Thus, the same principle obtains in a bad-faith action between the excess insurer and the primary insurer. Respondent's insured, the owner of the vehicle, and the driver of the vehicle who is also covered under the owner's policy, and appellant's insured, the driver's employer, were all represented by the law firm retained by respondent. The litigation materials prepared for the liability trial and counsel's work product relevant to that action were prepared on behalf of all three of those defendants, including appellant's insured. Respondent does not claim that there was any conflict of interest among the three defendants which required separate strategies or materials for their defenses.
We agree that the first five interrogatories were improper as they relate to the enforcement of a judgment which may be rendered against respondent. Other arguments raised by the parties on appeal have been considered and rejected.
Concur — Murphy, P.J., Sullivan, Ross, Rosenberger and Smith, JJ.