THE INFORMATION SOUGHT BY DEFENDANT IN THIS SUIT BY THE INSURER TO DISCLAIM COVERAGE WAS PROTECTED BY ATTORNEY-CLIENT PRIVILEGE AS MATERIAL PREPARED IN ANTICIPATION OF LITIGATION (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, determined that the information sought by defendant (Charleus) in this insurance coverage dispute was privileged as material prepared in anticipation of litigation. Plaintiff insurance company brought this suit against the defendant, who was injured in a car accident involving its insured, to disclaim coverage because of the insured’s lack of cooperation:

“[A]n insurance company’s claim file is conditionally exempt from disclosure as material prepared in anticipation of litigation” ( … see CPLR 3101 [d] [2]). Nevertheless, material prepared in anticipation of litigation may be subject to disclosure upon “a party’s showing that he or she is in substantial need of the material and is unable to obtain the substantial equivalent of the material by other means without undue hardship” … . Here, we conclude that the materials sought by Charleus and ordered by the court to be disclosed following its in camera review constitute material prepared in anticipation of litigation … and were prepared at a time after plaintiff had already determined to reject and defend against the claim made by Charleus … .

Because the materials sought by Charleus and ordered to be disclosed by the court’s order were prepared in anticipation of litigation and because Charleus has not made a showing justifying disclosure … , we modify the order by denying the motion in its entirety and granting the cross motion. Merchants Preferred Ins. Co. v Campbell, 2022 NY Slip Op 06370, Fourth Dept 11-10-22

Practice Point: In this suit by an insurer to disclaim coverage of defendant’s injuries stemming from an accident with the insured, the information sought by defendant was prepared in anticipation of litigation and was therefore protected by attorney-client privilege.