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800 Front Street Corp. v. Travelers Property Casualty Co. of America

November 17, 2006


The opinion of the court was delivered by: Lindsay, Magistrate Judge


Before the court is the defendant Travelers Property Casualty Company of America's ("Travelers") letter application seeking to compel a third party, Exponent Engineering, to comply with a subpoena served on it on August 3, 2006. Exponent opposes the motion by letter dated October 27, 2006. Non-parties, ClearBid Inc., The Gordon Company and NREL, Inc. (referred to in the motion papers as the "Liquidators") have also joined in the opposition. For the reasons set forth below, the motion is granted, in part.


The plaintiff, 800 Front Street Corporation, commenced this action on December 27, 2005, in the Nassau County Supreme Court, seeking to recover insurance proceeds for damage caused to its premises when the boiler failed resulting in the freezing of pipes and the discharge of water. The defendant removed the action to this court on February 6, 2006. The plaintiffs also seek coverage in this matter from the defendant, Hartford Steam Boiler Inspection and Insurance Company ("HSB"), the issuers of a boiler and machinery policy.

The defendant Travelers has engaged an expert to examine the boiler modulating valve, which Travelers suspects may have failed causing the boiler to shut down and lead to the incident. Travelers contends that "whether the boiler modulating valve failed may determine whether the plaintiff's claim is covered under the Travelers policy or the HSB policy." However, the boiler modulating valve was removed from the building two years ago by Exponent, a science and engineering firm, hired by the Liquidators to determine the cause of the boiler failure.*fn1 Travelers contends that information concerning Exponent's work on the component, the nature of tests performed on it, the conditions under which it has been kept, and the manner in which it was transported, is necessary for its expert to perform a meaningful inspection and test of the valve. Travelers also seeks the opinions and conclusions reached by Exponent as a result of that work.

Exponent has objected to producing any documents in response to the subpoena based on the work product doctrine and the attorney-client privilege. Exponent also contends that producing the information would require Exponent to provide intellectual property without compensation. The Liquidators join in the opposition on the same grounds. Although Exponent has not prepared a privilege log, Exponent has outlined the documents that are in dispute as follows: (1) a letter report from Exponent to the Liquidator's attorney; (2) e-mail communications with counsel and within Exponent regarding Exponent's work; (3) handwritten notes prepared by Exponent employees in the course of their investigation; (4) annotated photographs; (5) weather synopsis; (6) motor test protocol; (7) color photos; (8) four rolls of negative film; (9)2 CDs; (10)

Exponent's invoices for the work.


Although Exponent was neither hired by a party to this action, nor has stated whether it will be asked to testify on the Liquidator's behalf, the court will treat Exponent as a non-testifying expert for the purpose of this motion because Judge Wexler's has already determined that the Liquidator's claim is likely to be consolidated with this action and the parties have cited to Rule 26(b)(4)(B) in the motion papers. Fed R. Civ. P. 26(b)(4)(B) governs the discovery of non-testifying experts. Specifically, the rule provides:

A party may, through interrogatories or by deposition, discover facts known or opinions held by an expert who has been retained or specifically employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial, only . . . upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.

The policy considerations underlying this rule include the view that each side should prepare its own case, at its own expense, and that parties should feel free to use experts to properly evaluate their case without fear that it may "yield grist for the adversary's mill." See Long Term Capital Holdings v. United States , 2003 U.S. Dist. LEXIS 14579 * 2 (D. Conn. May 6, 2003). However, non-testifying expert are not immune from discovery where exceptional circumstances can be shown by the party seeking the discovery.

"There are two situations where exceptional circumstances are commonly identified: (1) where the object or condition observed by the non-testifying expert is no longer observable by the expert of the party seeking discovery, and (2) where it is possible to replicate discovery on a contested issue but the cost would be prohibitive." See Vincent v. Mortman, 2006 U.S. Dist. LEXIS 60442 (D. Conn. Aug. 11, 2006). Travelers contends that "if [its] experts' investigation is to have any meaning, those experts must be ale to determine whether the condition of the boiler modulating valve has changed during the two years it has been in Exponent's custody." The court agrees. To begin with, the fact that the part was removed deprives Travelers of the opportunity to inspect the part in its original setting. This information is solely within Exponent's possession. Moreover, common sense dictates that central to the reliability of any findings by Traveler's experts is their ability to account for any possible alterations to the valve resulting either from the manner in which it was maintained or tested while in Exponent's control. Once again this information is known only by Exponent. Accordingly, the court finds that exceptional circumstances exist to warrant disclosure.

Having determined that exceptional circumstances exist, the court's analysis turns to the objections of Exponent and the Liquidators based on the attorney-client privilege and the work product doctrine. First, the court agrees that the information collected by Exponent during the course of its work is not protected by the attorney-client privilege. Exponent was hired by the Liquidator's attorneys to determine the cause of the boiler failure. In that role, Exponent took possession of the boiler modulating valve and performed certain test to determine if the boiler had failed. Exponent's information did not come from the Liquidators, and the parties do not argue otherwise. Thus, the information generated by Exponent is not protected by the attorney-client privilege. See U.S. Postal Serv. v. Phelps Dodge Ref. Corp., 852 F. Supp. 156, 161 (E.D.N.Y. 1994)(work performed by engineering firm not covered by the attorney-client privilege where consultant's opinion was based on factual and scientific evidence rather than client confidence).

Exponent and the Liquidators also invoke the work product doctrine. Fed. R. Civ. P. 26(b)(3) provides that, "[s]ubject to the provisions of subdivision (b)(4) of this rule, a party may obtain discovery of documents and tangible things . . . prepared in anticipation of litigation or for trial by or for [a] party, or by or for that . . . party's representative (including the . . . party's attorney, consultant, surety, indemnitor, insurer or agent). . . only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case . . ." In determining whether the work product doctrine applies, a court must establish whether the documents were prepared or obtained by a party in anticipation of litigation. See Occidental Chemical Corp., v. OHM Remediation Serv. Corp., 175 F.R.D. 431, 434 (W.D.N.Y. 1997). As with the attorney-client privilege, the party invoking the work product privilege bears the burden of ...

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