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The Attorney Client Privilege Remains Under Siege in Coverage Litigation

April 5, 2024

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In Cadaret Grant & Co. v. Great Am. Ins. Co., No. CV216665GRBAYS, 2023 WL 4740184 (E.D.N.Y. July 25, 2023) plaintiff Cadaret sought coverage under the terms of a Financial Institution Bond issued by Great American Insurance Company for losses suffered by its clients after a representative of Cadaret engaged in a fraudulent investment scheme in which he used Cadaret client funds for his own personal purposes. Great American ultimately denied coverage, and Cadaret commenced a declaratory judgement action.

In the context of the litigation, Cadaret filed a motion to compel the production of documents withheld from discovery by Great American on the grounds of attorney-client privilege and the work product doctrine. Great American denied coverage on April 22, 2021, and the coverage action was commenced eight months later. The documents at issue were generated prior to both dates.

The individuals whose names appear on the documents are: (1) Timothy Markey a claims adjuster working for Great American; (2) Michael Graziano, Esq., an attorney working as outside counsel for Great American at the law firm of Eckert Seamans, and (3) John Ellison, Esq. an attorney working for Cadaret at the law firm of Reed Smith.

The bulk of the documents at issue were emails exchanged between Markey and Graziano between February 27, 2020, and February 12, 2021, which reveal Graziano’s involvement in Great American’s investigation of Cadaret’s claims. These emails include Markey's transmission of information regarding Cadaret's claims to Graziano and those asking that Graziano draft, for Markey, correspondence to be sent under Markey's name to counsel for Cadaret.

The remaining documents at issue are an email transmitting a draft of GAIC's coverage position, a seventeen-page letter dated March 22, 2021, from Graziano to Markey containing Graziano's legal opinion regarding coverage, and two emails following that letter.

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