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January 29, 2003


The opinion of the court was delivered by: John S. Martin, Jr., United States District Judge


The Silverstein Parties have moved to compel production of notes taken by a Swiss Re employee, Keith Lewis, and an Allianz adjuster, Bart Pajor, at market and steering committee meetings held on September 21, October 3, and October 10, 2001. Swiss Re and Allianz oppose this motion on the basis that the notes are protected by the attorney-client and/or work product privileges. In support of this position, Swiss Re and Allianz argue that as of September 21, 2001, the insurers represented at the meetings reasonably anticipated litigation, had hired outside litigation counsel, and had entered into a joint defense agreement. Furthermore, they contend, the non-lawyer employees and the outside adjusters who attended the meetings on behalf of various insurers did so at the direction of counsel, and took notes in order to report back to counsel.

Attorney-Client Privilege

As stated in this Court's previous decisions with respect to discovery in this action, the common interest privilege is a limited exception to the general rule that the attorney-client privilege is waived when a protected communication is disclosed to a third party. SR Int'l Bus. Ins. Co. Ltd. v. World Trade Center Properties, LLC, No. 01 Civ. 9291, 2002 WL 1334821, *3 (S.D.N.Y. June 19, 2002). In determining whether a common interest privilege applies, "[t]he key consideration is that the nature of the interest be identical, not similar, and be legal, not solely commercial." Id. (citing North River Ins. Co. v. Columbia Cas. Co., No. 90 Civ. 2518, 1995 WL 5792, *3 (S.D.N.Y. Jan. 5, 1995)). In this regard, "[a] business strategy which happens to include a concern about litigation is not a ground for invoking the common interest rule." Id. at *4 (citing In re: FTC, No. M18-304, 2001 WL 396522, at *5 (S.D.N.Y. April 19, 2001)).

It does appear that the insurers who attended the market meetings at issue here did share a common legal interest. That a joint defense agreement was not actually signed on September 21, 2000 (or even at the time of the subsequent meetings) would not, in itself, defeat this privilege. The key question, which must be determined upon the specific facts of a case, is whether an alignment of interest exists that satisfies the standard. Provided there is, "the common interest doctrine protects privileged and work product materials even if there is no `final' agreement or if the parties do not ultimately unite in a common enterprise." Katz v. AT&T Corp., 191 F.R.D. 433, 437 (E.D.Pa. 2000).

Nevertheless, the testimony at depositions and the conduct of various parties in this litigation lead to the conclusion that the meetings at issue involved business, rather than legal matters, and therefore communications at those meetings are not protected from discovery by the attorney-client privilege. That an attorney took part in business meetings does not insulate business communications made in those meetings from disclosure. Upjohn v. United States, 449 U.S. 383, 396, 101 S.Ct. 677, 686 (1981) ("A party cannot conceal a fact merely by revealing it to his lawyer."); Bank Brussels Lambert v. Credit Lyonnais (Suisse), S.A., 93 Civ. 6876, 1995 U.S. Dist. LEXIS 14808, *28 (S.D.N.Y. Oct. 10, 1995) ("Discoverability of a communication depends on its nature, rather than its source.").

Mr. Raymond Mattia of Lexington, which took the initiative in organizing the meeting, testified that

the main subject of that [September 21] meeting was to try and establish who the adjusters were going to be on the various . . . different risks that we believed we had a participation on along with . . . the other members of the market, to try to reach some agreement with them. . . . That was the main focus of getting the meeting together, was to try to determine who the adjusters were and, perhaps, some of the experts that would assist in the evaluation of anything that we would need on a go-forward basis.
(Nov. 13, 2002 letter from Barry Ostrager to the Court, Ex. 3 at 166-67).

In addition, Mr. Bart Pajor of Allianz stated,

The first meeting was somewhat disorganized because there was no agenda. All the carriers didn't know what carriers were involved. There were no adjusters that were picked. So, I believe, it was at that first meeting, I believe, it was decided that a steering committee would be picked, and, I believe, that one was.
(Nov. 22, 2002 letter from Marc Wolinsky to the Court, Ex. B at 45).

According to Mr. Pajor, the purpose of the steering committee was to "represent the market in making decisions relative to the claim adjustment and administrative issues, basically, administration claim handling." (Id. at 45-46). Mr. Pajor stated further that "we discussed the need for the market to decide on adjusters and get the process started." (Id. at 46-47). Finally, Mr. Pajor stated that he had been involved previously in adjusting claims on multilayer insurance programs and that in those situations a similar group of adjusters had been created to adjust the claims for the market. (Id. at 46).

Mr. Edward Reilly of Edward Reilly & Co., an independent adjuster retained by AIG to adjust Westfield's claim with respect to the World Trade Center, described the function of an adjuster as "one who represents the interest of the insurer as a fact-finder in the area of value, damage and assessments of — in certain circumstances, assessments of coverage." (Nov. 13 letter from Barry Ostrager to the Court, Ex. 4 at 9). He went on to state that the adjuster looks to the insurer for information regarding the meaning of the language of a policy, and accepts that information as given. Accordingly, when Mr. Reilly was asked,

Would it be fair to say that with respect to your performance of your adjusting responsibilities with respect to the losses involving the Silverstein Properties, you accepted without further inquiry, the representations made by the insurers with respect to whether and what policies they had issued?
he responded, "I was never involved in that type of decision-making or investigation; that's not my responsibility." (Id. at 74-75). Thus, an adjuster, although an agent of the insurer, would not be expected to be part of a discussion about the legal issues in this case, and the testimony presented to the Court on this motion indicates that the market and steering committee 5 meetings were, in fact, business meetings that dealt with ordinary business (claim adjustment) matters — albeit in relation to an extraordinary claim. The attorney-client privilege does not shield such discussions from disclosure.

In addition, apparently in an effort to preserve the privilege with respect to certain portions of the September 21 meeting, the attorneys who were present at that meeting asked all non-lawyers to step out so that the attorneys could meet separately for some period of time. (Nov. 13 letter from Barry Ostrager to the Court, Ex. 4 at 39-40). This fact lends further support to the conclusion that the attorneys ...

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