Discovery Ordered from Consulting (Non-Testifying) Expert
Spring 2007
Published in Property Insurance Law Committee Newsletter, Spring 2007. Copyright © 2007 by the American Bar Association. Reprinted with permission.
In 800 Front Street Corp. v. Travelers Property Cas. Co. of Am., No. CV 06-500(LDW)(ARL), 2006 U.S. Dist. LEXIS 84160 (E.D.N.Y. Nov. 20, 2006), the Eastern District of New York granted, in part, defendant’s, Travelers Property Casualty Company of America (“Travelers”), letter of application seeking to compel third party Exponent Engineering (“Exponent”) to comply with a subpoena. Exponent had been hired by a non-party to the case to determine the cause of failure of a boiler. The court treated Exponent as a non-testifying expert and found that its investigation was subject to the work product doctrine. However, the court ordered the production of some of Exponent’s investigation materials due to the existence of exceptional circumstances because Exponent had removed the component at issue from the boiler and had kept it in its possession for two years.
The plaintiff, 800 Front Street Corporation, sued Travelers and Hartford Steam Boiler Inspection and Insurance Company (“HSB”) for insurance proceeds for damages to its premises caused when its boiler failed, resulting in the freezing of pipes and discharge of water. Liquidators ClearBid, Inc., The Gordon Company and NREL, Inc. (collectively the “Liquidators”), who had purchased the personal property from the premises and were pursuing a claim under the Travelers policy in a separate action before the Eastern District of New York Bankruptcy Court, had hired Exponent to determine the cause of the boiler failure.
Travelers engaged an expert to examine the boiler modulating valve because Travelers asserted that “whether the boiler modulating valve failed may determine whether the plaintiff’s claim is covered under the Travelers policy or the HSB policy.” Id. at *2. However, the boiler modulating valve had been removed from the building two years earlier by Exponent and was still in Exponent’s possession. Travelers sought information “concerning Exponent’s work on the component, the nature of tests performed on it, the condition under which it was kept, and the manner in which it was transported,” contending that such information was necessary for its expert’s evaluation and examination of the valve. Id. at 2-3. Exponent objected to producing any documents in response to Travelers subpoena on the basis of the work product doctrine and attorney-client privilege.
The court agreed with Travelers’ assertion that “if [its] experts’ investigation is to have any meaning, those experts must be able to determine whether the condition of the boiler modulating valve has changed during the two years it has been in Exponent’s custody.” Id. The court noted that the fact that the valve had been removed deprived Travelers’ experts from the opportunity to inspect it in its original setting and “that central to the reliability of any findings by Travelers’ 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.” Id.
Therefore, the court found that exceptional circumstances existed to warrant disclosure.
The court then evaluated Exponent’s objections based on the attorney-client privilege and work product doctrine. The court first held that the information collected by Exponent during its investigation was not protected by the attorney-client privilege because the information did not come from the Liquidators. However, the court did find that the work product doctrine was applicable.
While Travelers argued, pursuant to Ricoh Co., Ltd. v. Aeroflex, Inc., 219 F.R.D. 66 (S.D.N.Y. 2003), that because Liquidators were not a party to the specific case at hand, work performed by their consultants was not protected, the court rejected the argument. The court acknowledged that the Ricoh court stated that “[c]ourts have routinely held that documents prepared by one who is not a party to the case at bar are not protected by Rule 26(b)(3) even if the non-party is itself a party to a closely related lawsuit in which he will be disadvantaged if he must disclose in the instant suit.” 800 Front Street Corp., 2006 U.S. Dist. LEXIS 84160, at * 9-10 (quoting Ricoh, 219 F.R.D. at 69). However, the court distinguished Ricoh, noting that the non-party witness in that matter was not a party to the action, or a related action, and did not have an interest in the outcome. In contrast, Exponent was hired by the Liquidators in connection with their claim against Travelers, and the Liquidators’ claim concerned the same subject matter as the instant action.
The court, therefore, treated the Liquidators as parties to the action for the purpose of evaluating the work product doctrine. The court further found that Exponent’s work was done in anticipation of litigation concerning the claims that the Liquidators would assert against Travelers. Exponent was retained shortly after the bankruptcy court authorized the Liquidators to pursue the insurance claim, and the Liquidators filed suit against Travelers four months after Exponent completed its causation report. The work product doctrine exists to protect “‘attorneys’ mental impressions, opinions or legal theories concerning specific litigation’ from discovery.” Id. at *11 (quoting Horn & Hardart Corp. v. Pillsbury Co., 888 F.2d 8, 12 (2d Cir. 1989)).
However, in this case the court found that exceptional circumstances existed to warrant disclosure of certain information concerning the valve because it had been removed from the boiler and was in Exponent’s possession for two years. The court noted that the Liquidators did not object to Exponent testifying regarding the chain of custody or maintenance of the valve since it has been in Exponent’s custody. In addition, the court held that Travelers was “entitled to question Exponent about any tests it conducted and/or any alterations or changes made to removed components.” Id. at *12. Exponent was also ordered to produce its handwritten notes, photographs, weather synopsis, motor test protocol, color photos, negative film and 2 CDs to the extent the documents reflect or show the boiler and its component parts in their original state at or soon after the time of the incident. The court allowed Exponent to redact its opinion or conclusion as to the cause of the incident, and Exponent did not have to produce its invoices.
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