In the recent unpublished matter of Caroline Paladino, et al. v. Auetto Enterprises, Inc., the New Jersey Appellate Division reviewed the standard for evaluating the work-product privilege in the context of an investigation conducted by an insurance carrier post-accident but pre-suit. The Court noted that there is a “multi-party, fact-specific” test. The Court stated “[t]he first inquiry is whether the materials were prepared or collected in anticipation of litigation or trial by another party or that party's representative. If so, to obtain the materials, a party must satisfy a two-part standard. The party seeking the materials must (1) show a substantial need for the discovery, and (2) demonstrate that he or she is unable, without undue hardship, to obtain the substantial equivalent of the materials.”
In Paladino, plaintiff injured herself at a catering facility and the facility notified their general liability carrier of the accident. The carrier instructed an investigator to photograph the accident scene and obtain statements from plaintiff and representatives of the defendant. The investigator additionally created a sketch of the area and obtained recorded oral statements from three employees.
Thereafter, plaintiff filed suit and in response to interrogatories, defendant disclosed the above-noted materials but declined to produce them. Plaintiff filed a motion to compel the production of said materials with the exception of a hand-drawn diagram. In an oral opinion, the trial court ordered the defendant to produce the photographs and recorded statements that were secured by the investigator. These materials were created before plaintiff’s complaint was filed and defense counsel had been assigned. The trial court reasoned that the insurer “may have” had interests apart from protecting its insured’s rights.
The Appellate Division reversed the lower court’s decision holding that the record is insufficient to determine whether plaintiff showed a substantial need for the discovery and whether she was unable, without undue hardship, to obtain the substantial equivalent of the photographs or statements. Specifically, the Court noted that in Paladino, there was a video of the accident and plaintiff’s attorney was allowed to secure photographs of the area in question. The Appellate Division noted that on remand, the trial court will need to “make a determination whether there is any showing that there was a change to the staircase that plaintiff was not able to capture in the photographs that her counsel took [.]”
The Appellate Division further noted that the trial court will also need to analyze the witness statements. The Court noted that witness statements will always satisfy the first part of the standard or show “substantial need.” The Court noted that if the witnesses recall the facts within their statements then Plaintiff may not be able to meet the second part of the standard. In contrast, if the witnesses cannot recall the circumstances of the accident, then plaintiff may be able to meet the second part of the standard.
From a defense perspective, Paladino underscores the need for quick attorney involvement of the investigation of claims to preserve any applicable claims of privilege. Further, Paladino exemplifies the importance of well-prepared witnesses at the time of depositions which could untimely serve as the “substantial equivalent” of a recorded statement.