Late Expert Disclosure Affidavits Permitted on Motions for Summary Judgment and in Opposition.

BILLS S5188/A6265 OF THE 2015-2016 regular sessions signed by the Governor on December 11, 2015 amends CPLR R3212 Motion for Summary Judgment, and applies to all motions made on or after December 11, 2015 and overrules those cases wherein the court ignored an expert affidavit because a CPLR §3101(d) expert exchange was not made prior to the making of the motion, the service of papers in opposition to the motion or service of papers in reply.

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Section 1. Subdivision (b) of rule 3212 of the civil practice law and rules, as amended by charter 651 of the laws of 1973, is amended to read as follows:

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(b) Supporting proof; grounds; relief to either party.   A motion for summary judgment shall be supported by affidavit, by a copy of the pleadings and by other available proof, such as depositions and written admissions. The affidavit shall be by a person having knowledge of the facts; it shall recite all the material facts; and it shall show that there is no defense to the cause of action or that the cause of action or defense has no merit.   WHERE AN EXPERT AFFIDAVIT IS SUBMITTED IN SUPPORT OF, OR OPPOSITION TO, A MOTION FOR SUMMARY JUDGMENT, THE COURT SHALL NOT DECLINE TO CONSIDER THE AFFIDAVIT BECAUSE AN EXPERT EXCHANGE PURSUANT TO SUBPARAGRAPH (I) OF PARAGRAPH (1) OF SUBDIVISION (D) OF SECTION 3101 WAS NOT FURNISHED PRIOR TO THE SUBMISSION OF THE AFFIDAVIT. The motion shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party. Except as provided in subdivision (c) of this rule the motion shall be denied if any party shall show facts sufficient to require a trial of any issue of fact. If it shall appear that any party other than the moving party is entitled to a summary judgment, the court may grant such judgment without the necessity of a cross-motion.

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Section 2. This act shall take effect immediately and shall apply to all pending cases for which a summary judgment motion is made on or after the date on which it shall have become law and all cases filed on or after such effective date.

Language in CAPITOLS is new;

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That Portion Of Insurance Company’s Claims File Created Before It Has Reasonable Grounds To Reject A Claim Are Discoverable By Its Insured.

In Melworm v. Encompass Indem. Co.,  2012 NY Slip Op 22193, decided July 16, 2012, Judge Arthur M. Diamond provides a concise and thoughtful explanation on the attorney-client privilege afforded an insurance company’s claim file, created in the contact of deciding whether to pay on a property damage claim. Here is what he had to say:

“In order to raise a valid claim of attorney-client privilege, the party seeking to withhold the information must show that it was a “confidential communication” made between the attorney and the client in the context of legal advice or services.  Documents which are “not primarily of a legal character, but [express] substantial nonlegal concerns” are not privileged. However, “[s]o long as the communication is primarily or predominantly of a legal character, the privilege is not lost merely by reason of the fact that it also refers to certain nonlegal matters” …

… First, in a dispute between the insurer and the insured pertaining to an underlying claim, the claims file is generally not privileged material and the insurer cannot claim confidentiality against the insured. … 

“[T]he payment or rejection of claims is a part of the regular business of an insurance company. Consequently, reports which aid it in the process of deciding which of the two indicated actions to pursue are made in the regular course of its business” …  Reports prepared by insurance investigators, adjusters, or attorneys … before the decision is made to pay or reject a claim are thus not privileged and are discoverable … even when those reports are “mixed/multi-purpose” reports, motivated in part by the potential for litigation with the insured …

Merely because such an investigation was undertaken by attorneys will not cloak the reports and communications with privilege … because the reports, although prepared by attorneys, are prepared as part of the “regular business” of the insurance company. … Moreover, evaluating the extent of potential liability of the insured, which would necessarily include assessment of damages, is within the ordinary course of business of an insurance company, and therefore is not privileged even though it has been conducted by retained counsel to perform examinations under oath. …

Therefore, those communications which occurred before the date that the defendants had reasonable grounds to reject the claim … are not immune from discovery.”

Attorneys For Non-Party Witnesses At Depositions Are Not Potted Plants.

Almost a year and a half ago on February 11, 2011, the Fourth Department in Thompson v Mather, 70 AD3d 1436 (4th Dept. 2011)     ruled “counsel for [a] non-party [witness]… is precluded from objecting during or otherwise participating in  … depositions.” This broad pronouncement seemed to go to far, as the Uniform Rules For The Conduct Of Depositions specifically provide that a witness’ attorneymay participate to a certain extend beyond the mere raising of objections to questions which thereafter must be answered.  The Uniform Rules For The Conduct Of Depositions 22 NYCRR §221.2 and §221.3 provide in part as follows:

 §221.2 Refusal to answer when objection is made.

 A deponent shall answer all questions at a deposition, except (i) to preserve a privilege or right of confidentiality, (ii) to enforce a limitation set forth in an order of a court, or (iii) when the question is plainly improper and would, if answered, cause significant prejudice to any person. An attorney shall not direct a deponent not to answer except as provided in CPLR Rule 3115 or this subdivision.

 §221.3 Communication with the deponent.[1]

 An attorney shall not interrupt the deposition for the purpose of communicating with the deponent unless … the communication is made for the purpose of determining whether the question should not be answered on the grounds set forth in section 221.2 of these rules and, in such event, the reason for the communication shall be stated for the record succinctly and clearly.

Thus the attorney for a non-party witness should be permitted to participate in the deposition to the extent of consulting with the non-party witness “for the purpose of determining whether [a] question should not be answered on the grounds set forth” in 22 NYCRR §221.2 and then if appropriate, direct the non-party witness not to answer.  And this is in fact what cases citing Thompson, have concluded.

Only two “reported” decisions have discussed Thompson since it was announced and both do not preclude all participation by a non-party’s attorney at a deposition. Those two cases are Sciara v. Surgical Associates of Western New York, P.C. 32 Misc.3d 904, (Erie Sup. 2011)   and St. Louis v. Hrustich 35 Misc.3d 1232(A), 2012 NY Slip Op 50982(U) (Albany Sup. 2012) 

 In Sciara, The Court did not read Thompson for the broad proposition that its language would suggest.  This Court held that

 “[r]ather, Thompson should be read in light of its facts.  There, the Fourth Department addressed attempts by a nonparty witness’s counsel to object to form and relevance. … Thus, the facts in Thompson do not support a conclusion that counsel for a nonparty witness is prohibited from protecting his or her client from an invasion of a privilege or plainly improper questioning causing significant prejudice if answered.

 Uniform Rules §§ 221.2 and 221.3 are not limited to parties but apply to “deponents.” Thus, in the event that a question posed to a nonparty fits within the three exceptions listed in section 221.2, the nonparty’s attorney is entitled to follow the procedures set forth in sections 221.2 and 221.3.”

It is also noted that in Thompson, “plaintiff moved for an order “precluding . . . [the non-party’s] counsel from objecting … except as to privileged matters or in the event that she were to deem questioning to be abusive or harassing.”

 In St. Louis, that Court added a caveat to the holding in Thompson, by saying that “[g]enerally, though a non-party witness has the right to be represented by counsel at a deposition, counsel may not object or otherwise participate in the deposition unless necessary to invoke a testimonial privilege”  Thus St. Louis does not go as far as Sciara, which I feel is the correct reading of Thompson.

 

Thus Thompson, should be read to mean only that a non-party’s attorney should not be making objections, when the question is to be answered anyways, nor making comments on the questioning.  However to the extent permitted by NYCRR §221.2 and §221.3 the non-party witness’ counsel may participate in the deposition.


[1] It is parenthetically noted that no restriction are made on the deponent initiating a communication with their attorney, even when a question is pending.

Future Medical Benefits Are No Longer Part Of The Kelly Calculation.

Workers’ Compensation carriers attacks upon their obligation to pay their equitable apportionment of the costs incurred in obtaining recoveries in personal injury lawsuits pursuant to Workers’ Compensation Law §29 continues unabated, after having lost the first round in Matter of Kelly v State Ins. Fund 60 NY2d 131 (1983).

In a personal injury action, where, the plaintiff has or is still receiving workers’ compensation benefits, the plaintiff’s workers’ compensation carrier is required to pay its equitable share of the expenses incurred in obtaining the recovery. Under Matter of Kelly, supra the carrier’s equitable share was calculated by adding the carrier’s lien (the total of indemnity and medical benefits paid) and the present value of future benefits to plaintiff which the carrier will not have to pay because of plaintiff’s recovery (“the holiday”) and then multiplying this sum by the percentage the litigation expenses (attorney’s fee and litigation costs) plaintiff incurred compare to the plaintiff’s total recovery.

Equitable Share = (Lien + Present Value of Future Benefits) * (Expenses/Recovery)

If the carrier’s equitable share turns out to be greater than its lien, it must pay the difference to the plaintiff as fresh money.

In Burns v Varriale 9 N.Y.3d 207 (2007) the Court ruled that in calculating “the holiday” that the workers’ compensation carrier received for Kelly purposes, the present value of future workers’ compensation indemnity benefits to be awarded to a plaintiff with a nonscheduled permanent, partial disability was too speculative to be included in the calculation. This holding was based upon a finding that if a plaintiff did not receive benefits for death, total disability or a scheduled loss of use, the carrier’s future benefit could not be quantified by actuarial or other reliable means” and so the future benefit was speculative, and it was improper for a court to apportion litigation costs based on that benefit. This of course did not let the workers’ compensation carrier off the hook, but just required that it’s equitable share of expenses be paid out over time, in lieu of the workers’ compensation indemnity benefits that the carrier did not have to pay.

Now in Matter of Bissell v Town of Amherst (2012 NY Slip Op 02250) the Court rules that future medical expenses as awarded by a jury are “to speculative to be included in the calculation of the future benefit to the carrier” and thus “the carrier need only pay its equitable share … once the [plaintiff] incurs and pays each medical expense.” This holding went beyond the issue framed by the Court which was “whether the [workers’ compensation carrier] is bound by the jury’s future medical expenses award, such that the [carrier’s] 33.5% share of litigation costs can be “quantified or reliably predicted” and, therefore, should be included as part of the Kelly calculation.” The Court concluded, “that the jury verdict for future medical expenses is not the proper barometer by which the Fund’s share of litigation costs may be measured,” and then as noted went on to decide that no finding was possible.

Thus, except in the cases of death, total disability or a scheduled loss of use, the Kelly calculation will not include future benefits and plaintiff will have to seek relief on a piecemeal basis in the future. And in those instances where future benefits are included, only indemnity and not medical will be included.

The Court concluded it’s decision by setting forth the next area of battle when they said:

“although the claimant cannot include future medical expenses as part of the Kelly calculation, that does not mean that the carrier is relieved of paying its equitable share of the benefit. The trial court has the discretion to “fashion a means of apportioning litigation costs as they accrue and monitoring (e.g., by court order or stipulation of the parties) how the carrier’s payments to the claimant are made,” thereby ensuring that the carrier’s equitable share of litigation costs is based on concrete, realized benefit, while concomitantly ensuring that the claimant will not wait indefinitely for the carrier’s payment of its share”

I see disputes over the need for further medical treatment and whether treatment is related to the injuries in question. Additionally these decisions will have to be resolved by the Workers’ Compensation Board, (see infra,) and if plaintiff is represented by counsel, will the additional attorney’s fees be fully or partially paid by the carrier, since the carrier normally pays those fees in full, and I have never understood those fees to be included in the workers’ compensation lien.

Interestingly, this ruling raises the question, if the evidence which was presented to a jury as to future medical expenses is too speculative for equitable apportionment calculations, why is it not too speculative for a jury to award future medical expenses in the personal injury action. The Court’s answer to that question is as follows:

“Future medical expenses—when considered in light of the benefit to the carrier, which is the focus of the Kelly analysis—cannot reliably be calculated … because it is impossible to reliably predict the future medical care the claimant will need, when the expenses from such care will accrue and how much it will cost when they do. While some of those items may reasonably be ascertained by a jury in a third-party action, there is a distinction between a nonspeculative future medical expenses award made by a jury and the benefit that the carrier receives under the Workers’ Compensation Law as a by-product of that award.”

This unsatisfactory “explanation” is clarified by the following, which shows that the Court was fashioning a practical explanation for not following the juries finding but permitting it in personal injury actions:

“In a third-party action, the injured employee will have only one opportunity to obtain a recovery for future medical expenses, and the jury assessing the medical evidence will have the chance to make but one award for such expenses, if any. By contrast, in the workers’ compensation context it is possible to wait and see what happens, and to require the carrier to pay its share of litigation costs when that share can be accurately calculated—i.e., when the actual medical expenses that the carrier has been relieved from paying are known. Moreover, whether the claimant is entitled to medical treatment pursuant to the Workers’ Compensation Law is a determination that must be made by the Workers’ Compensation Board, and such determination is not dependent upon the jury’s verdict in the third-party action.”

If You Fail To Comply With C.P.L.R. 3116, You Can’t Use A Deposition Transcript To Cross Examine A Witness, Well Maybe You Can’t.

In Ramirez v Willow Ridge Country Club, Inc., 84 AD3d 452, (1st Dept 2011) the First Department, for the first time by any Appellate Court, from what I could find, approved precluding the use of a deposition transcript during cross-examination on the ground that there had been a failure to show compliance with CPLR 3116. In its decision, the Court said:

[T]he court properly precluded the use of Jack’s unsigned deposition transcript during Jack’s cross-examination inasmuch as plaintiff failed to establish that the transcript was sent to Jack and that he failed to return it within 60 days.

CPLR 3116 (a) provides that a deposition shall be submitted to the witness who can make changes. The witness must then sign the deposition under oath. If the witness fails to sign and return the deposition within 60 days, it may be used as fully as though signed. A failure to comply with CPLR 3116 (a) results in a party being unable to use the transcript pursuant to CPLR 3117 (see Santos v Intown Assoc., 17 AD3d 564 [2005] ; Lalli v Abe, 234 AD2d 346 [1996]).

It is the burden of the party proffering the deposition transcript to establish compliance with CPLR 3116 (a) (Pina v Flik Intl. Corp., 25 AD3d 772, 773 [2006]).

The Second Department cases that the Court relied upon to preclude the use of the deposition, deal with the use of depositions on motions for summary judgment. Therefore, it would seem that any exception to the general rule that prohibits the use of unsigned depositions on a motion for summary judgment, would permit the use of such a deposition on cross-examination.

The major exception is an unsigned but certified deposition. In Delishi v. Property Owner (USA) LLC 31 Misc.3d 661, 665-666, (Sup. Kings 2011) the court researched the use of an unsigned but certified deposition on a motion for summary judgment and said:

There is also limited authority in the First and Fourth Departments that “[a]n unsigned but certified deposition transcript of a party can be used by the opposing party as an admission.” … There is logic to this position, but it is apparent from the authorities cited above that it has not commended itself to the Second Department, and this Court is bound to follow the Second Department … (citations omitted.)

But See In re Estate of Ciraolo 2005 WL 3636709, 2 (Kings Sur., 2005) where the court said, in deciding a motion for summary judgment motion, that “just as an affidavit may be used, an unsigned certified deposition may also be used. The certification of the deposition is the equivalent to an affidavit.”

So if an unsigned but certified deposition has not been sent to a witness timely, one might argue that it can be used on cross-examination as it is certified, as same is usable on a motion for summary judgment.