In the recent case of Paladino v. Auletto Enterprises, 459 N.J. Super. 365, 367 (App. Div. 2019), the New –Jersey Superior Court, Appellate Division clarified the standard for determining what pre-litigation investigation is privileged work-product and protected from disclosure. Specifically, the Appellate Division held that there is no presumptive rule that all investigative materials prepared before litigation commences are discoverable.
Plaintiff Caroline Paladino was injured on October 9, 2015 when she fell down a flight of stairs at the Defendant’s catering facility. The Defendant notified its insurance carrier, and the carrier retained a private investigator. During litigation, Defendant disclosed that its investigator had taken photographs of the staircase, diagrammed the scene, and obtained recorded statements of Defendant’s employees. However, Defendant objected to their production, asserting that they were protected by the work-product privilege. Plaintiff moved to compel the production of the photographs and recorded statements.
The Trial Court granted Plaintiff’s motion to compel and ordered that the photographs and statements be produced. Relying on Pfender v. Torres, 336 N.J. Super. 379, (App. Div. 2001), the Trial Court held that materials prepared as part of a coverage investigation, and prior to the commencement of litigation, are presumptively not protected by the work-product doctrine because the insurance carrier had interests apart from defending its insured at the time the investigation was undertaken.
The Defendant appealed. It argued that the Court should reject the rationale of Pfender and, instead, adopt the reasoning set forth in Medford v. Duggan, 323 N.J. Super. 127 (App. Div. 1999). Medford established a case-by-case test under which material prepared by an insurance carrier can be protected under the work-product doctrine if it was prepared in anticipation of litigation and the parties seeking the material cannot establish a substantial need for the information.
The Appellate Division reversed the Trial Court’s Decision. It held that there is no absolute rule that all investigation materials obtained before litigation begins is per se discoverable. Instead, the New Jersey Rules of Evidence, and both Pfender and Medford, require a multi-part, fact-specific test to determine whether the work-product privilege applies. A party seeking to challenge the work-product privilege must demonstrate (1) a substantial need for the materials and (2) that he or she is unable, without undue hardship, to obtain the substantial equivalent of the materials. However, even if produced, any mental impressions, conclusions, opinions, or legal theories by an attorney are protected from disclosure. Statements made in the normal course of business or those intended for impeachment purposes at trial are not protected. The case was remanded back to the Trial Court so that the proper analysis could be applied.
The ruling in Paladino v. Auletto Enterprises is significant as it rejects any de facto rule that all pre-litigation materials are automatically discoverable. However, the decision illustrates the importance of delineating the purpose of the pre-litigation investigation, such as whether it is to formulate a coverage determination or investigation of the claim. This holding exemplifies the practical importance of involving counsel early in the claims investigation as an added layer of protection. Indeed, a Court will be more inclined to determine that the work-product doctrine applies when pre-litigation investigations are performed by, or under the guidance of, legal counsel.
 Philip A. Garubo, Jr., Esq. is a Shareholder in GRSLBG&B’s Litigation Department. He defends a wide variety of clients in various civil actions brought forth in New Jersey State and Federal Courts. Phil can be reached at email@example.com
 Christopher Bustamante Osorio, Esq. is an Associate in GRSLBG&B’s Litigation Department. He defends a wide variety of clients in various civil actions brought forth in New Jersey State Courts. Chris can be reached at firstname.lastname@example.org