The opinion of the court was delivered by: RICHARD OWEN
In this action for a declaratory judgment brought by International Insurance Company against its insured, Newmont Mining Corporation to declare certain environmental-impairment liability policies void or not affording coverage, the carrier seeks certain discovery from the company which opposes it on the ground of attorney-client privilege.
It appears that the company itself defended two separate environmental actions brought against it by the State of Colorado and the EPA after International declined coverage and failed to provide a defense. International, in this action now seeks materials from the company in those two actions which would normally be within the attorney-client privilege asserting, however, the "common interest" exception to the rule.
Relying principally on Waste Management, Inc., v. International Surplus Lines Ins. Co., 144 Ill. 2d 178, 579 N.E. 2d 322, 161 Ill. Dec. 774 (Ill. 1991), the Magistrate Judge below applied the exception and ordered the materials turned over. This appeal followed.
I conclude that while the insurer had the same "desire" as its insured to have a successful defense of the said actions, for if coverage was later determined to exist, it would be responsible for any obligation of its insured remaining, this in my view is an insufficient "common interest" to warrant invasion of the attorney-client relationship with the privilege attaching to confidential communications which the law rather zealously protects.
The "common interest," logically viewed, and New York law supports, which makes the privilege inapplicable, is where an attorney actually represents both the insured and the insurer -- joint representation -- and accordingly both clients are working together with a single attorney toward a common goal. See, e.g. Goldberg v. American Home Assurance Co., 80 A.D.2d 409, 439 N.Y.S.2d 2 (App. Div., 1st Dept. 1981). That is not the situation before me.
Consequently, whatever validity Waste Management, supra, has in any other situation, I conclude it has no force here.
Accordingly, paragraph 2 of the order of the Magistrate Judge dated December 17, 1991 is reversed on the law and International's motion is denied, the insured's assertion of the attorney-client privilege to the materials discussed therein being sustained.
United States District Judge
UNITED STATES DISTRICT COURT FOR THE SOUTHERN ...