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SUPREME COURT - STATE OF NEW YORK

Present:HON. TAMMY S. ROBBINS

Acting JusticeTRIAL/IAS , PART 47NASSAU COUNTYASHLEY ANDREE, an Infant by her Mother, and

Natual Guardian, CHRISTIAN ANDREE, asassignee of EDWARD WRIGHT, M.D. and

EDWARD WRIGHT, M. , Individually,

Plaintiffs

-against- INDEX NO. 7059/04MOTION SEQ. NO. 003, 004

005 , 006, 007, 008MOTION SUBMIT: 11/22/06RITA DEMOPOULOS , M. , LEWIS JOHS AVALLONE

AVILES & KAUFMAN , LLP, DEBORAH A. AVILES , and

MEDICAL LIABILITY MUTUAL INSURANCE COMPANY

Defendants.

Motion(sequence # 3) by plaintiffs for a protective order, vacating the notice to admit is granted to

the extent indicated below. Cross-motion(sequence # 4) by defendant Medical Liability Mutual Insurance

Company to compel plaintiffs to respond to the notice to admit is granted to the extent indicated below.

Motion(sequence #5) by defendants Lewis, Johs, Avallone, Aviles & Kaufman, LLP and Deborah Aviles

Esq. for summar judgment dismissing the complaint and all cross-claims is granted in par and denied in

par. Motion(sequence #6) by plaintiffs to compel defendant Medical Liability Mutual Insurance

Company to produce an unredacted version of the claim fie of Medical Malpractice Insurance

Association with respect to the action previously brought by plaintiff Andree against plaintiff Edward

Wright, M.D. is granted. Cross-motion(sequence # 7) by defendant Rita Demopoulos , M.D. for sumar

judgment dismissing the complaint is granted. Cross-motion(sequence # 8) by defendant Medical

Liabilty Mutual Insurance Company for summary judgment dismissing the complaint is denied.

This is an action for legal malpractice, breach of contract, bad faith failure to settle the underlying

medical malpractice action, and negligence. Plaintiff Ashley Andree was born at Winthrop Hospital

almost three months prematurely on July 4, 1989. Plaintiff Edward Wright, M.D. was the obstetrician

who attended Ashley s mother, Christine, and delivered Ashley. At some time before or during her birth

Ashley suffered anoxia, that is an extreme deficiency in oxygen. The anoxia caused Ashley to sustain

brain damage which resulted in cerebral palsy, spastic diplegia, and other related conditions.! In

November, 1994 , Ashley brought a medical malpractice action against Dr. Wright and Winthrop in

Supreme Cour, Nassau County.

Dr. Wright had a primar medical malpractice liabilty policy in the amount of$1 000 000 issued

by defendant Medical Liability Mutual Insurance Company("Mutual"). Mutual retained a law firm

defen ant Lewis , Johs , Avallone , Aviles & Kaufman, LLP("Lewis , Johs ) to represent Dr. Wright in the

malpractice action. Defendant Deborah Aviles was the member of Lewis Johs primarily responsible for

handling the case. Dr. Wright also had an excess liability policy in the amount of $1 ,000 000 issued by

the Medical Malpractice Insurance Association("MMIA").2

Mutual' s policy provided that

, "

No claim or suit shall be settled or compromised by the company

except with the written consent of the insured." On September 8 , 1997 , Dr. Wright signed a consent to

Cerebral palsy is a disability resulting from damage to the brain before , during, or shortly

after birth and outwardly manifested by muscular incoordination and speech disturbances.Spastic diplegia is a condition characterized by involuntar and abnormal muscle contractions as

well as paralysis of the ars or legs on both sides of the body(See , Merriam Webster s Medical

Desk Dictionar, hereinafter cited as "MDD"

MMIA has been dissolved, and Mutual succeeded to MMIA' s rights and obligations

under the excess policy.

settle form, authorizing Mutual to settle Ashley s claim within the policy limits. However, according to

Lewis Johs , Mutual took a "no-pay" position with regard to the case because the insurer concluded that

Dr. Wright had a valid defense based upon Ashley s prematurity. On Februar 4 , 1998 , just before the

trial was about to begin, Ashley s attorney, lames Wilkens, stated on the record that plaintiff would accept

000 000 in settlement from Dr. Wright and $1 000 000 in settlement from the hospital

, "

as separate

entities." Mr. Wilkens stated that the "demand" would be held "available" until the star of testimony the

following morning. Mr. Wilkens also stated that plaintiff would negotiate "separately with each of the

defendants." However, no settlement was reached, and the action proceeded to trial.

Plaintiffs theory of malpractice was that Dr. Wright delivered Ashley in the labor room instead of

a delivery room at Winthrop Hospital. Testimony at trial established that the delivery rooms at Winthrop

have specialized equipment, not available in the labor rooms , which is used to treat newborns who are not

breathing properly or receiving sufficient oxygen. I:his equipment includes radiant warmers , oxygen

masks , and intubation tubes for the resuscitation ofa newborn. Defendant Rita Demopoulos , M.D. is

a pathologist whom Lewis, Johs hired as an expert witness on behalf of Dr. Wright. At trial , Dr.

Demopoulos testified that she had examined certain pathology slides prepared from tissue taken from

Christine s placenta.3 Dr. Demopoulos testified that based upon her analysis of the slides, she concluded

that Christine had an abnormal placenta which caused Ashley to receive insuffcient oxygen while she was

in her mother s womb , a few weeks prior to the time of her delivery. The significance of this testimony

was that, if oxygen deprivation had occured prior to the time of birth, the resulting brain damage had not

been caused by Dr. Wright' s decision to deliver the baby in the labor room.

The placenta is a vascular organ that unites the fetus to the mother s uterus and mediates

the exchange of material between the mother and the fetus , including oxygen(MDD).

However, on cross-examination testimony was elicited that the slides which Dr. Demopoulos

examined may not have been from Ashley s birt, but rather may have been from that of her younger

brother Christopher, who was born in 1992. The slides from Christopher s birth showed a normal

placenta, servicing a healthy fetus.

The slides had been provided to Dr. Demopoulos by Winthrop. Winthrop had a numbering system

for pathology slides corresponding to the year in which the slides were prepared. Thus , the slides

corresponding to Christopher s birth contained the digits " " while the slides corresponding to Ashley

birth contained the digits "89. " When confronted with the discrepancy, Dr. Demopoulos at first insisted

that

, "

The slides that I looked at were ' 89 slides (T. at 79). However, Dr. Demopoulos subsequently

conceded that ifthe ' 92 slides were in fact the ones which she had examined

, "

I looked at the wrong slides

on the wrong baby then (T. at 80). Dr. Demopoulos requested that "the right slides" be presented to her

so that she could affirm or disavow her opinion(T. at 83). However, this was not done. Nor was t

reason for Dr. Demopoulos ' mix-up of the slides explained on redirect examination.

Outside the jur s presence, Ms. Aviles subsequently moved for a mistrial. The mistrial motion

was joined in by Winthrop s attorney, Raymond Furey. Mr. Furey represented to the court that he had

determined that Winthrop had provided the wrong slides to Lewis Johs(T. at 7). Ms. Aviles stated that

Dr. Demopoulos had "questioned me" concerning the slides , but "not knowing the hospital' s procedure , I

have to rely on what the hospital gives me (T. at 12). Nonetheless , neither attorney was able to explain

why Dr. Demopoulos claimed that the slides which she had examined showed an abnormal placenta. The

trial judge , Hon. John P. Dune , offered Ms. Aviles the opportunity of reopening her case and offering

additional evidence concerning "what the true situation is regarding the exhibits " but Ms. Aviles refused

to do so(T. 15-16). Judge Dunne denied the application for a mistrial. Ms. Aviles subsequently

requested a "curative charge" to the effect that the defense through no fault of its own had been provided

with the wrong slides. Ms. Aviles further requested that, because Dr. Demopoulos ' opinion was based

upon "erroneous information " her testimony be stricken(T. at 12- 13). The court granted the application

to strike and gave a curative instruction to the jury in essentially the language requested by Ms. Aviles.

After the close of evidence , the case against Winthrop was dismissed. The sole deparure from

good and accepted medical practice which was submitted to the jur was that Dr. Wright delivered Ashley

in the labor room instead of a delivery room. The jur found that this deparure from good and accepted

medical practice was a substantial factor in causing Ashley s injur and retued a verdict against Dr.

Wright for $15 000 000. Although Judge Dune reduced the verdict to $7 500 000 , he refused to grant

a new trial because the "revelation certainly could have been anticipated in the exercise of due diligence.

A structured judgment was entered in the amount of$6 215 129. , representing $5,474 338 damages

that is the present value ofthe re~uced verdict, $740 266.53 in interest from verdict to judgment, and

525 costs and disbursements.

The Appellate Division affirmed the judgment on November 13, 2000(Andree v. Winthrop

University Hospital 277 AD2d 265 (2d Dep t 2000)). Lewis Johs represented Dr. Wright in the

Appellate Division, although another law firm was also involved in the appeal on an of counsel basis.

Lewis Johs applied for leave to appeal to the Cour of Appeals, but leave to appeal was denied by that

cour on June 5 , 2001(96 NY2d 713).

On August 10 , 2001 , Mutual paid Ashley $2 316 161.08 in parial satisfaction of the judgment.

This payment represented the $2 000,000 coverage under the primar and excess policies, $314 636.

interest, and $1 525 costs and disbursements. Plaintiffs allege that on September 5 , 2001 , Ms. Aviles

wrote to Ashley s trial counsel, inquiring on Dr. Wright's behalf concerning a satisfaction of judgment.

However, no satisfaction was granted, and Dr. Wright remained personally liable for the balance of the

judgment or $3,898 968.45. Dr. Wright subsequently paid Ashley an additional $400 000, which

amounted to all of his non-exempt assets. By written agreement dated March 24 2004 , Dr. Wright,

represented by new counsel, assigned to Ashley 96.5% his claims against Lewis Johs , Dr. Demopoulos

and Mutual.4 The agreement furher provides that in consideration of the assignment of the claims

plaintiff wil not enforce the judgment against Dr. Wright.

This action was commenced on May 21 , 2004 by Ashley as assignee of Dr. Wright's claims and

Dr. Wright individually. Plaintiffs allege in their first cause of action that Lewis Johs committed

malpractice by, among other things, failing to ensure that Dr. Demopoulos had the correct pathology

slides and failing to recommend that Mutual accept Ashley s offer of settlement. In their second cause

of action, plaintiffs allege that Dr. Wright was a third-pary beneficiar ofthe contract between Lewis Johs

and Mutual whereby Lewis Johs promised to exercise due care in the representat!on of Dr. Wright.

Plaintiffs allege breaches of this contract corresponding to the deparures from proper legal representation

which plaintiffs allege in the first cause of action. In the third cause of action for bad faith failure to

settle , plaintiffs allege that Mutual failed to place Dr. Wright's interest on an equal footing with its own

and acted in bad faith in refusing to settle for the policy limits. In the fourth cause of action, plaintiffs

allege that Dr. Demopoulos was negligent in failing to discover that she had been provided with the wrong

pathology slides. In the fifth cause of action, plaintiffs allege that Dr. Wright was a third-part beneficiar

of the contract between Lewis Johs and Dr. Demopoulos. Plaintiffs allege breaches of this contract

corresponding to the failures to exercise due care which plaintiffs allege in the fourth cause of action.

The purose of the 3.5% retention was to allow Dr. Wright to recoup the $400 000

payment.

Legal malpractice

An action for legal malpractice requires proof of three essential elements: 1) the negligence of the

attorney, 2) that the negligence was the proximate cause of the loss sustained, and 3) proof of actual

damages(Prudential Ins. v. Dewey, Ballantine , Bushby, Palmer Wood 170 AD 2d 108 , 114 pst Dep

1991)). In order to establish negligence, plaintiff must show that the attorney failed to exercise the

ordinar reasonable skil and knowledge commonly possessed by a member of the legal profession(Darby

& Darby v. VSI International, Inc. 95 NY 2d 308 , 313 (2000)). What constitutes ordinar and reasonable

skil and knowledge canot be fixed with precision but should be measured at the time ofthe

representation(Id). To establish the elements of proximate cause and actual damages, plaintiff must show

that but for defendant' s negligence , plaintiff would have achieved a more favorable result(Iocovello

Weingrad Weingrad AD3d 208 (1 st Dep t 2004)). Thus, to establish a prima facie case of attorney

malpractice , a p'laintiff who was a defendant in the underlying action must establish that but for the

attorney s unprofessional conduct, there would have been a defendant' s verdict or a smaller damage

award. Lewis Johs and Aviles assert that they did not fail to exercise the degree of care, skil , and

diligence commonly possessed by members of the legal profession. More specifically, defendants argue

that they properly relied on their expert witness and had no way to anticipate that she had examined the

wrong slides. An attorney may rely upon the genuineness of physical evidence produced by an adversar

where the item presents reasonable assurances ofauthenticity(People v. Julian 41 NY2d 340 (1977)).

However, because the labeling on the slides did not correspond to Ashley s year of birth and the expert

witness herself expressed some concern, an attorney of ordinar prudence might have raised a question as

to the authenticity of the specimens.

Defendants further argue that once their motion for a mistral was denied, striking the testimony

of Dr. Demopoulos and requesting a curative instruction was a proper method of eliminating potential

prejudice. Because strategic decisions are for the attorney, the selection of one among several reasonable

courses of action does not constitute malpractice(Rosner v. Paley, 65 NY2d 736 (1985)). However, the

issue of the advisability of moving to strike the expert' s testimony and requesting a curative instruction

did not arise until after Ms. A viles declined the trial judge s offer to reopen her case. Defendants have not

come forward with any evidence as to what the actual slides would have shown or whether they were stil

available at the time of the trial. Dr. Demopoulos might have confirmed her opinion after reviewing the

correct slides. Thus , there remains the significant possibilty that Ms. Aviles uneasonably refused the

opportunity to rehabiltate her expert witness and offer scientific evidence which could have changed the

entire complexion of the case.

Lewis Johs fuher argues that Ashley s agreement not to enforce the judgment against Dr. Wright

was tantamount to a release. Thus , Lewis Johs argues that because Dr. Wright did not owe any fuher

liability to Ashley, he did not suffer any damage and had no malpractice cause of action to assign.

However, the $400 000 payment certainly constitutes "out of pocket" damages on Dr. Wright' s par.

Moreover, the assignment agreement does not release Dr. Wright from the liability which the judgment

represents but is only a covenant on Ashley s par not to enforce the judgment.

The cour notes that defendants wil frequently assign bad faith claims against their insurer to the

plaintiff in the underlying lawsuit in exchange for a covenant not to execute on the judgment(See

Pavia

State Farm Ins. Co. 82 NY2d 445 (1993)). There is no public policy prohibiting a defendant from

assigning not only a bad faith claim against his insurer but also a malpractice claim against his attorneys in

exchange for a covenant not to enforce the unpaid portion of the judgment(Greevy v. Becker, Isserlis,

Sullvan Kurtz 240 AD2d 539 (2d Dep t 1997)). Assignment of bad faith or malpractice claims to the

plaintiff is a useful mechanism for avoiding supplementar proceedings in the underlying action. To

construe a covenant not to enforce the judgment as a release would frstrate the intention of the paries to

the agreement and result in a windfall to the reckless insurer or the negligent attorney(Pinto v. Allstate Ins.

Co. 221 F.3d 394, 403 (2d Cir. 2000)).

The cour concludes that defendants Lewis Johs and Aviles have not caried their burden of

making a prima facie showing of entitlement to judgment as a matter of law with respect to the legal

malpractice claim(Alvarez v. Prospect Hospital 68 NY2d 320 324 (1986)). Defendants ' Lewis Johs and

Aviles ' motion for sumar judgment dismissing the complaint is denied as to the first cause of action

alleged in the complaint. It follows that defendants ' motion is also denied to the extent that it seeks the

dismissal of cross-claims fied by the other defendants.

An attorney may be liable for breach of contract if the attorney makes an express promise to the

client to obtain a specific result or an implied promise to exercise due care in performing services required

by the contract(Santull v. Englert, Reily McHugh 78 NY2d 700 , 706 (1992)). However

, "

a breach of

contract claim premised on the attorney s failure to exercise due care or to abide by general professional

standards is nothing but a redundant pleading of the malpractice claim (Levine v. Lacher Lovell-Taylor

256 AD2d 147 , 151 (1st Dep t 1998)). Plaintiffs do not allege that in the contract with Mutual, Lewis

Johs promised to obtain any specific result or to perform any services other than defending Dr. Wright in

the underlying malpractice action. The court concludes that the claim against Lewis Johs and Aviles for

breach of contract is nothing but a redundant pleading of the malpractice claim. Accordingly, summar

judgment is granted to defendants Lewis J ohs and A viles dismissing the second cause of action in the

complaint.

Timeliness of claims against Dr. Demopoulos

In moving to dismiss the complaint or for summar judgment, Dr. Demopoulos claims that the

complaint is bared by the statute of limitations. Dr. Demopoulos argues that whether the claim against

her is predicated upon negligence or breach of contract, the claim accrued on the date that she testified in

the underlying action, Februar 10 , 1998. Since this action was commenced on May 21 , 2004 , defendant

argues that the claim is bared, applying either the three year negligence or six year contract statute of

limitations. Plaintiffs argue that the claims are timely based upon the continuous representation doctrine

because Dr. Wright's commencing an action against Dr. Demopoulos would have disrupted his

relationship with Lewis Johs.

The continuous representation doctrine, like the continuous treatment rule , its counterpar with

respect to medical malpractice claims, recognizes that a person seeking professional advice has a right to

repose confidence in the professional' s abili and good faith. Thus , the patient or client, as the case may

, canot realistically be expected to question and assess the techniques employed or the maner in

which the professional services are rendered(Shumsky v. Eisenstein 96 NY2d 164 , 167 (2001)). The

doctrine also appreciates the client' s dilemma if required to sue the attorney while the attorney

representation on the matter at issue is ongoing. The client is not expected to jeopardize his pending case

or his relationship with the attorney handling the case during the period of the representation(Id). Thus

the rule of continuous representation tolls the ruing of the statute of limitations on the malpractice claim

until the representation on the underlying matter is completed. However, the doctrine of continuous

representation does not apply where the client is unaware of the need for any further legal services in

connection with the underlying claim. In that situation, the client is not faced with the dilemma of

jeopardizing his case by proceeding against the attorney(Id. at 168-69).

Lewis Johs continued to represent Dr. Wright on appeal , even after Dr. Demopoulos ' analysis of

the wrong slides was discovered and the jur retured its verdict. However, Lewis Johs made no attempt

to cover-up Dr. Demopoulos ' error and indeed made her mistake the basis of motions for a mistrial and to

set aside verdict. Moreover, as a physician familiar with the study of pathology, Dr. Wright well

appreciated the significance of Dr. Demopoulos ' testimony. Since the basis of Dr. Wright's appeal was

prejudice arising from misconduct on the par of his expert witness , commencing an action against Dr.

Demopoulos for negligence or breach of contract would not have disrupted his relationship with his

appellate attorneys. The cour concludes that because Dr. Wright was not in the dilemma which the

continuous representation doctrine is designed to address, the doctrine is not available to toll the statute of

limitations as to Dr. Wright' s claims against Dr. Demopoulos. Dr. Demopoulos ' motion for sumar

judgment dismissing the complaint on the ground of the statute of limitations is granted.

Bad Faith

An insurer may be held liable for damages to its insured for the bad faith refusal of a settlement

offer(Smith v. General Accident Ins. Co. 91 NY2d 648 (1998)). Liability for bad faith refusal to settle

stems from the general principle that a covenant of good faith and fair dealing is implied in all contracts

including insurance policies. This liability is also based on a recognition of the control an insurer

maintains over claims against the insured(Id. at 653). When the insurer is confronted with a settlement

offer within the policy limits, an inherent conflict arses between the insurer s desire to settle the claim for

as little as possible , and the insured' s desire to avoid personal liabilty in excess of the policy limits(Id).

In order to establish a bad faith refusal to settle , the insured must show that the insurer s conduct

constituted a "gross disregard" of the insured' s interests. The insurer must have engaged in a deliberate or

reckless failure to place on equal footing the interests of its insured with its own interests when

-..

considering a settlement(Id).

Bad faith will be established where liability is clear and the potential for recovery far exceeds the

insurance coverage(Pavia v. State Farm Ins. Co. supra, 82 NY2d at 454). However, the insurer is not

obligated to accept settlement whenever an injur is severe and the policy limits are significantly lower

than a potential recovery(Id). The cour must consider all the facts and circumstances relating to the

insurer s investigation of the claim and whether it made an informed evaluation of the risks of refusing

settlement. Among the factors to be considered are the plaintiff s likelihood of success on liability in the

underlying action, the potential magnitude of damages, and the financial burden each par may

exposed to as a result of a refusal to settle(Id. at 454-55). Additional factors include the thoroughness of

the insurer s investigation of the claim and the insured' s potential defenses and the other information

available to the insurer when the offer was made(Id). The fact that the offer to settle is time-restricted may

also be considered(Id. at 449). While the failure of an insurer to keep its insured informed of settlement

negotiations can constitute some evidence of bad faith, such evidence alone is insufficient to establish a

prima facie case(Smith v. General Accident Ins. Co. supra, 91 NY2d at 655).

In moving for summar judgment dismissing the bad faith claim, Mutual stresses that it conducted

eight "in house" reviews of the medical evidence during the two and a half year period preceding the time

of trial. Certain factors indicated that the case was defensible. Chrstine had become pregnant by artificial

insemination and had two prior pregnancies terminated. She also had some early contractions, spotting

during her first trimester, and amionitis. Dr. David Anunziato , a physician who reviewed the case on

behalf of Mutual, regarded all these factors as possible causes of premature labor and anoxia in utero.

However, Dr. Wright was the covering doctor for Chrstine s obstetrician, perhaps suggesting that he was

This condition apparently refers to an infection in the amniotic fluid.

't.

not sufficiently familiar with the patient or her prenatal records. Additionally, Dr. Wright's prescriptions

of sedation and an enema for Christine upon her admission were subject to question, as was his decision to

deliver the baby in the labor room. In June, 1995 , Dr. Jerome Davis, another claim reviewer for Mutual

noted that Dr. Wright himself was seriously il and might not be able to handle the "vicissitudes" of trial.

There also appears to have been some concern on the part of counsel as to whether Dr. Wright would be

an "effective" witness at trial. Finally, although Lewis Johs considered the case to be defensible, the firm

evaluated the case at $500 000 and acknowledged that a verdict in excess of $1 ,000 000 was possible.

Based upon this evidence, a jur could find that Mutual recklessly placed its own interests ahead of those

of Dr. Wright.

Under the doctrine of election of remedies, a par may be precluded from seeking inconsistent

remedies which proceed on inconsistent and irreconcilable claims ofright(Simon v. Boyer 51 AD2d 879

Dep t 1976)). Mutual argues that because plaintiffs asserted that their damages were caused by

Lewis , Johs ' malpractice , plaintiffs are precluded from proceeding on a bad faith claim against Mutual.

However, contrar to Mutual' s position, plaintiffs ' theories that Mutual was in bad faith in refusing to

settle, and Lewis, Johs committed malpractice at trial are neither inconsistent nor irreconcilable.

As noted above, an insurer s liability for bad faith refusal to settle stems from the covenant of good

faith and fair dealing which is implied in all contracts. Thus, when the claim of bad faith refusal to settle

was first recognized, it was characterized as a form of breach of contract action(See Gordon

Nationwide Mut. Ins. Co. 30 NY2d 427 (1972)). Under settled principles of contract law, a contracting

par' s liability for damages is limited to those that are reasonably foreseeable at the time that the contract

is formed(Board of Education v. Sargent 71 NY2d 21 , 28 (1987)). More recent cases have characterized

an insurer s liabilty for bad faith refusal to settle as sounding in tort(See Batas v. Prudential Ins. Co. , 282

...

Ad2d 260 (pt Dep t 2001)). However, to the extent that bad faith refusal to settle is a tort, plaintiffs are

required to prove only that defendant' s refusal to settle was a substantial factor in causing Dr. Wright to

suffer loss. Thus, plaintiffs would be relieved from the burden of establishing that the full extent of

damages was foreseeable(Derdiarian v. Felix Contracting Corp. 51 NY2d 308 315 (1980)). In any

event, the cour canot rule as a matter of law that malpractice by trial counsel was not foreseeable when

Mutual refused to settle the underlying action. The cour concludes that Mutual has not caried its burden

of establishing entitlement to judgment as a matter of law on plaintiffs ' bad faith claim. Defendant

Mutual' s motion for sumar judgment dismissing the complaint is denied.

Notice to admit

On May 16 , 2006 , Mutual served a notice to admit on plaintiffs, containing foureen separate

requests for admissions. The essential facts which Mutual seeks to establish are 1) the settlement demand

of$2 OQO 000 was not made until the day before Dr. Wright was to testify and was not available after Dr.

Wright began to testify, and 2) before the jur retured a verdict, Ms. Aviles requested that plaintiff

stipulate to cap the verdict at $2 milion, but plaintiff did not agree to do so.

CPLR 3123 provides that a par may serve a written request for admission of, among other

things, the genuineness of any papers or documents or the truth of any matters of fact set forth in the

request, as to which the par requesting the admission reasonably believes that there can be no substantial

dispute at the trial and are within the knowledge of the other pary or can be ascertained upon reasonable

inquiry. The device is intended for use with "clear-cut matters of fact" and not for contested ultimate

issues which constitute the very subject ofthe lawsuit(Orellana V New York 203 AD2d 542(2d Dep

1994)).

Mutual' s summar of counsel' s statements appears accurate when viewing only the "cold

record" (People v. Stultz 2 NY3d 277 , 284 (2004)). However, counsel's statements , and Mutual'

response thereto , must be interpreted in the context of all the facts and circumstances relevant to possible

settlement of the case. Defendant may properly request that plaintiff admit the authenticity of the

transcript, so as to avoid the necessity of calling the court reporter. However, this discovery device is not

intended to require plaintiff in advance ofthe trial to accept defendant's characterization of trial counsel'

statements. Rather the record speaks for itself.

Accordingly, plaintiffs motion for a protective order and defendant's motion to compel a response

to its request for admissions are both granted only to the extent that: within 20 days of service of a copy of

this order, defendant shall serve upon plaintiffs ' counsel copies of the transcripts for those days of the

proceedings which defendant requests that plaintiffs admit authenticity. Plaintiffs shall admit authenticity

or serve errata sheets , including page and line numbers , for each transcript within 20 days of service of the

transcripts. The motions for a protective order and to compel a response are otherwse denied.

MMIA' s claim fie

On May 19 2006 , plaintiffs requested that Mutual produce an unedacted copy ofMMIA' , that is

the excess insurer , claim fie in the underlying action. After the underlying action was commenced

MMIA had retained the law firm of Murhy & Higgins, LLP to represent its interests. Mutual opposes

production of communications between MMIA and its attorneys on the ground of the attorney-client and

attorney work product privileges.

CPLR ~ 4503 provides that unless the client waives the privilege, an attorney shall not disclose a

confidential communication made between the attorney and the client, nor shall the client be compelled to

disclose such communication in any action. Thus, the attorney-client privilege protects confidential

"t,

communications between a lawyer and a client relating to legal advice sought by the client(In re Nassau

County Grand Jury, 4 NY3d 665 , 678 (2005)). The person who asserts the privilege has the burden of

proving these elements(Id). The attorney-client privilege fosters the open dialogue between attorney and

client that is deemed essential to effective representation(Spectrum Systems Intern 'I Corp. v. Chemical

Bank 78 NY2d 371 , 377 (1991)). Whether a particular document is or is not protected is necessarily a

fact-specific determination, which ordinarily requires in camera review(78 NY2d at 378). However, the

cour declines to conduct an in camera review on the present motion.

Where a liability insurer provides counsel for its insured, the insured is the client. Therefore

communications between the insurer and the insured' s attorney wil not be protected by the attorney-client

privilege in a subsequent bad faith action(Woodson v. American Transit Ins. Co. 280 AD2d 328 (pt Dep

2001)). A bad faith action may be maintained against a primar insurer not only by an insured exposed

to personal liability, but also by an excess carer whose coverage has been reached(Indemnity Ins. Co.

Transcontinental Ins. Co. 24 AD3d 121 (pt Dep t 2005)). An excess carier pursuing a bad faith action

wil not be protected by the attorney-client privilege , if the carer has placed in issue its attorney

knowledge of information relating to bad faith on the par of the primary insurer(American Reliance Ins.

Co. v. Nat l Gen. Ins. Co. 149 AD2d 554 (2d Dep t 1989)). Thus, the attorney who represented the

excess carier in connection with the settlement of the underlying lawsuit wil be subject to a

deposition(Id). Since Dr. Wright was Lewis Johs ' client , communications between Mutual and Lewis

Johs are not protected by the attorney-client privilege. Had MMIA not been dissolved, and the excess

insurer had commenced its own bad faith action against Mutual , communications between MMIA and

Murphy & Higgins would not have been protected, at least to the extent that the communications related

to efforts to settle on the par of Mutual. Mutual characterizes the nature of the legal services performed

by Murphy & Higgins for MMIA as determining "whether a settlement or judgment was likely to reach

the excess coverage." Communications concerning this subject would of necessity have been inextricably

intertwined with the issue of whether Mutual was proceeding in good faith to evaluate and possibly settle

the underlying claim. The nature of the communications between MMIA and its law firm were not

effected by the dissolution of the insurer and the transfer of its rights and obligations to Mutual. Thus

Mutual does not have standing to assert the attorney-client privilege with respect to any of the

communications between MMIA and its counsel. Because Mutual has not cared its burden of proving

that the communications were confidential and related to legal advice sought by the client, the court

concludes that the communications are not protected by the attorney-client privilege.

CPLR ~ 310 provides that

, "

the work product of an attorney shall not be obtainable" through

discovery. This absolute immunity from discovery covers the lawyer s mental impressions and legal

analysis(Spectrum Systems Intern l Corp. v. Chemical Bank supra, 78 NY2d at 381). "The exemption

should be limited to those materials which are uniquely the product of a lawyer s learing and professional

skils, such as materials which reflect his legal research, analysis, conclusions , legal theory or strategy

(Hoffman v. Ro-San Manor 73 AD2d 207 , 211 (1 Dep t 1980)). The court notes that the material which

plaintiffs seek is contained in the insurer s claim file , not in the case fie of an attorney. Defendant has not

cared its burden of establishing that MMIA' s claim file contains attorney s work product. Plaintiffs

motion to compel Mutual to produce an unredacted copy ofMMIA' s claim fie is granted.

Dated: November 28 , 2006

This shall constitute the decision and order of the cour.

l,VHON. T A.M S. ROBBINS

ENTEREDDEC a 1 2006

NASSAU COUNTYCOUNTY CLERK' S OfFIce

LIST OF MOTION PAPERS - SEQ# NUMBERS 3 THROUGH

ANDREE -V- DEMOPOULOS - 7059/04

Papers Seq # 3Notice of Motion - Protective Order (Seq 3) - John Daly of Counsel /PlaintiffAffirmation in Further Support- John Daly of Counsel/PlaintiffMemo of Law in Opposition/Support ofX/Motion to Compel(Seq#4)-Deft. Med. Mut. Liability

Papers Seq # 4Cross Motion to Compel (Seq #4)- Deft. Med. Mut. Liability (Kaufman, Borgeest & Ryan)Affrm. of Good Faith - Deft. Med. Mut. Liabilty

Papers Seq # 5Motion for Sum. Judg. (Seq #5) - Deft. Lewis , Johs , Avallone (Shayne, Dachs, Stanisci)Memo of Law in Support - Deft. Lewis , Johs , Avallone (Shayne , Dachs , Stanisci)Affrm. in Opposition for Seq#5 and Seq# 7 - Offce of Gar A. Barbanel (Plaintiff)Memo of Law in Opposition for Motion Seq#'s 5 , 7 and 8 Offce of Gar A. Barbanel (Plaintiff)Affirm. in Opposition for Seq#5 and Seq# 7 - John Daly of Counsel/Plaintiff

Papers Seq # 6Motion to Compel (Seq #6) - John Daly of Counsel/PlaintiffAffirm. in Opposition- Deft. Med. Mut. Liabilty (Kaufman, Borgeest & Ryan)Memo of Law in Opposition - Deft. Med. Mut. Liability (Kaufman, Borgeest & Ryan)Reply Affrmation - Offce of Gar A. Barbanel (Plaintiff)

Papers Seq # 7

Cross Motion to Dismiss/Summ. Judg. (Seq #7)- Deft. Demopoulos (Goldsmith Richman)Memo of Law - Deft. Demopoulos (Goldsmith Richman)Affirm. in Opposition - Deft. Lewis , Johs , Avallone (Shayne, Dachs , Stanisci)Reply Affrmation - Deft. Demopoulos (Goldsmith Richman)

Papers Seq # 8Motion for Summ. Judg. (Seq #8) - Deft. Med. Mut. Liabilty (Kaufman, Borgeest & Ryan)Memo of Law in Support - Deft. Med. Mut. Liability (Kaufman, Borgeest & Ryan)Affrm. in Opposition - Deft. Lewis , Johs, Avallone (Shayne , Dachs, Stanisci)Affidavit of Robert Horvath - Deft. Med. Mut. Liability (Kaufman, Borgeest & Ryan)Affidavit of John Dwyer, MD- Deft. Med. Mut. Liability (Kaufman, Borgeest & Ryan)Reply Affirmation (x 2)- Deft. Med. Mut. Liability (Kaufman, Borgeest & Ryan)Memo of Law to Opp. of Deft. Lewis, Johs - Deft. Med. Mut. Liabilty (Kaufman, Borgeest)Reply Memo of Law in Support - Deft. Med. Mut. Liabilty (Kaufman, Borgeest & Ryan)Surreply to Motion Seq #' s 5 , 7 and 8 - John Daly of Counsel /Plaintiff