On October 12, 2016, Justice Bransten of the New York County Commercial Division issued a decision in ACE Securities Corp. v. DB Structured Products, Inc., 2016 NY Slip Op. 26337, holding that a defendant’s analysis of whether various contract provisions had been breached was not protected work product, explaining:
To establish that the Breach Analyses are protected work product, DBSP must demonstrate that the documents were primarily prepared in anticipation of litigation and are, thus, privileged matter. In MBIA, the First Department held that Countrywide’s repurchase review documents were discoverable because processing repurchase requests was an inherent and long-standing part of defendants’ business. It did not matter that defendant had created a new division to respond to plaintiff’s requests, or that litigation appeared imminent, because the defendants were contractually obligated to conduct repurchase reviews and such reviews were conducted by non-lawyers. . . .
To escape the application of MBIA, Defendant argues that the First Department erroneously analogized a bank’s breach analyses to an insurer’s claims processing reports prepared before a breach, which are discoverable. Defendant argues that its Breach Analyses cannot be ordinary course documents because its ordinary course cannot be to breach agreements then investigate those breaches.
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Defendant has failed to establish that its Breach Analyses were primarily prepared in anticipation of litigation. First, Defendant argues that the documents created after November 2011 constitute work product because they were created by newly hired re-underwriting consultants at the direction of Latham. But hiring Latham in 2011 because litigation appeared imminent did not transform Defendant’s long-standing practice of repurchase analysis into work product because the Defendant remained contractually obligated to conduct repurchase reviews. Nor does the fact that Latham hired new consultants to assist in repurchase analyses require a finding that their documents constituted work product performed in anticipation of litigation.
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Put simply, DBSP had a long-standing business practice of conducting Breach Analyses; just as in MBIA, neither the introduction of lawyers nor the fear of imminent litigation converted that business function into work product because it continued to be performed by non-attorney underwriters pursuant to the Defendant’s contractual obligations. Defendant cannot withhold its Breach Analyses under the work product doctrine.