EILEEN BRANSTEN, J.

Defendants Countrywide Home Loans, Inc., Countrywide Securities Corp., Countrywide Financial Corp. and Countrywide Home Loans Servicing, LP (collectively, "Countrywide") with Bank of America Corp. (collectively, "Defendants") move to compel Plaintiff MBIA Insurance Corporation ("MBIA") to produce: (1) documents and information concerning MBIA's review of loan origination and servicing practices relevant to the fifteen residential-mortgage-backed securitizations (the "Securitizations") at issue in this matter (Countrywide's Requests for Production Nos. 15-10 and 101-04; Countrywide's Interrogatories Nos. 43-47); (2) documents and information concerning MBIA's review of servicing practices relevant to the Securitizations (Countrywide's Requests for Production No. 207); (3) documents "clawed-back" by MBIA on April 6, 2010; and (4) documents which Defendants contend were improperly included on MBIA's May 27, 2010 privilege log. The parties address the documents collectively and the court will follow suit.1

Plaintiff MBIA opposes Defendants' motion. MBIA asserts that the documents sought by the Defendants are protected by one or all of the following: attorney-client privilege, attorney work product privilege and/or the trial preparation privilege.

BACKGROUND

The underlying facts of this matter have been discussed extensively in previous decisions of this court. Thus, only details necessary to this motion are referenced herein.

General Background

Fifteen Securitizations are at issue in this matter. MBIA agreed to provide financial guaranty insurance for each of the Securitizations, pursuant to a series of transaction documents (the "Transaction Documents") (Defendants' Memorandum of Law in Support of Motion to Compel Disclosure Concerning MBIA's Remediation Efforts ["Countrywide Memo."], at 4, n.1). MBIA alleges that Countrywide fraudulently induced it into providing the financial guaranty insurance on the Securitizations by misrepresenting the Securitizations' underlying loan population. MBIA contends that Countrywide misled MBIA regarding Countrywide's loan origination, underwriting and servicing practices, as well as complete and true loan profiles of the loans included in the Securitizations' loan pools (see Plaintiff's Memorandum of Law in Opposition to Defendants' Motion to Compel Disclosure Concerning MBIA's Remediation Efforts ["MBIA Memo."], at 4).

MBIA further alleges that Countrywide breached certain representations and warranties in the Transaction Documents (id. at 4-5). MBIA asserts that it has paid out over $1.4 billion on its guarantees as a result of Countrywide's actions, and contends that it is exposed to hundreds of millions of dollars in additional claims (id. at 5).

Countrywide disputes MBIA's contentions that Countrywide breached representations and warranties found in the Transaction Documents. Countrywide further asserts that any remedy by MBIA is governed by the Transaction Documents, which Countrywide contends provide that MBIA's sole remedy is to seek loan-by-loan repurchase or substitution of each allegedly defective loan (Countrywide Memo., at 4; Affirmation of Abigail K. Hemani in Support of Defendants' Motion to Compel Disclosure Concerning MBIA's Remediation Efforts ["Hemani Affirmation"], ¶¶ 4-7, Ex. A).

Countrywide notes that the Transaction Documents provide MBIA the right to inspect "all records and documentation regarding the Mortgage Loans and all accounts, insurance policies and other matters relating" thereto (see, e.g., Hemani Affirmation, Ex. C, § 3.07).

MBIA's Reviews

In 2007, the mortgage loans in the Securitizations began to experience an increase in delinquencies (MBIA Memo., at 5; see Affirmation of Jonathan B. Oblak in Opposition to Defendants' Motion to Compel Disclosure Concerning MBIA's Remediation Efforts ["Oblak Affirmation"], ¶ 8, Ex. 7). MBIA faced losses as a result (see MBIA Memo. at 5; Countrywide Memo., at 5).

On approximately August 23, 2007, MBIA retained the law firm Weil, Gotshal & Manges LLP ("Weil, Gotshal"), allegedly to advise MBIA on its rights and remedies toward the Securitizations (MBIA Memo., at 5; Affirmation of Daniel J. Mette, Esq. In Opposition of Defendants' Motion to Compel Disclosure Concerning MBIA's Remediation Efforts [" Mette Affirmation"], ¶ 3). MBIA argues that the rights and remedies for which it retained Weil, Gotshal included the possibility of legal claims asserted through litigation (MBIA Memo., at 5; Mette Affirmation, ¶ 3).

In January of 2008, Weil, Gotshal, on behalf of MBIA, retained Risk Management Group, Inc. ("RMG") and AlixPartners LLP ("AlixPartners") (Mette Affirmation, ¶ 4, Exs. A (AlixPartners Retention Letter), B (RMG Retention Letter)). MBIA couches RMG and AlixPartners as "litigation consultants" Weil, Gotshal hired to assist in fact gathering and analysis for the investigation of potential legal claims against Countrywide (MBIA Memo., at 5, Mette Affirmation, ¶ 4). RMG's and AlixPartners' engagement letters each state that the respective entities were hired in anticipation of litigation (Mette Affirmation, Exs. A at 1, B at 1, 3).

MBIA contends that Weil, Gotshal retained RMG for two tasks: (1) to perform a forensic reunderwriting of the mortgage loans underlying the Securitizations and to determine whether the loans complied with the representations and warranties in the Transaction Documents; and (2) to conduct a servicing audit to determine whether Countrywide's servicing practices complied with the Transaction Documents' requirements (MBIA Memo., at 6; Mette Affirmation, Ex. B).

MBIA further contends that Weil, Gotshal retained AlixPartners to "develop a working knowledge of Issuer's current situation in anticipation of potential litigation"; "[p]erform due diligence examinations of Issuer"; and "[a]ssist with such other matters as may be requested that fall within AlixPartners' expertise" (MBIA Memo., at 6-7; Mette Affirmation, Ex. A).

Weil, Gotshal allegedly directed and oversaw RMG's and AlixPartners' reviews and investigations (MBIA Memo., at 7). Weil, Gotshal is stated to have provided legal advice, including potential legal claims, to MBIA using the results of RMG's and AlixPartners's investigation and analysis of (Mette Affirmation, ¶ 7).

MBIA alleges that, as a result of the RMG and AlixPartners investigation, it discovered that a large percentage of the Securitizations' mortgage loans did not meet the representations and warranties in the Transaction Documents (MBIA Memo., at 7). Upon this basis, MBIA therefore issued repurchase requests to Countrywide in May, August and December 2008 in which MBIA sought Countrywide's repurchase of approximately 4,689 loans (id.). MBIA affirms that it has produced the final repurchase letters for these loans to Countrywide as well as the backup schedules detailing each loan's specific breaches of the pertinent representations and warranties (see Oblak Affirmation, ¶ 15, Exs. 19, 21).

Documents Sought by Defendants

Countrywide served MBIA three separate sets of requests for the production of documents, each of which requested documents relating to the Repurchase Analysis. Countrywide also served MBIA with interrogatories relating to the Repurchase analysis (MBIA Memo., at 10, citing Hemani Affirmation). MBIA objected to each document request and interrogatory on bases of attorney-client and attorney work product privilege. In response to the document requests, MBIA agreed to produce all responsive, non-privileged documents relating to the Repurchase Analysis. In response to the interrogatories, MBIA provided the names of the individuals at MBIA and RMG who were involved in the Repurchase Analysis and referred to the previously produced put-back schedules that depicted alleged loan deficiencies (id.).

MBIA further stated that documents relating to the Servicing Review were protected by the attorney-client and work product privileges (Hemani Affirmation, Ex. JJ).

Countrywide also seeks documents MBIA "clawed-back" on April 6, 2010 (the "Clawed-Back documents") which concern work done by RMG and AlixPartners as well as documents which Countrywide contends MBIA improperly placed on its privilege log.2

Countrywide asserts that MBIA has not shown that any of the Remediation Efforts documents are subject to the attorney-client privilege or the attorney work product doctrine. Countrywide contends that MBIA should thus be compelled to produce the documents.

ANALYSIS

I. Countrywide's Arguments To Compel

As well-stated in Spectrum Systems International Corp. v Chemical Bank, "[t]he CPLR directs that there shall be full disclosure of all evidence material and necessary in the prosecution or defense of an action'" (78 N.Y.2d 371, 376 [1991], quoting CPLR § 3101 [a]). CPLR § 3101 embodies the policy determination that liberal discovery is to be allowed and encourages fair and effective resolution of disputes on the merits (id., citing 3A Weinstein-Korn-Miller, NY Civ. Prac. ¶¶ 3101.01-3101.03).

However, CPLR § 3101 also established three categories of protected materials: "privileged matter, absolutely immune from discovery (CPLR § 3101 [b]); attorney's work product, also absolutely immune (CPLR § 3101 [c]); and trial preparation materials, which are subject to disclosure only on a showing of substantial need and undue hardship in obtaining the substantial equivalent of the materials by other means (CPLR § 3101 [d] [2]) (Spectrum Sys. Intl. Corp., 78 N.Y.2d 376-77).

The burden of establishing any right to protection is on the party asserting it. The protection claimed must be narrowly construed and its application must be consistent with the purposes underlying the asserted immunity (id. at 377).

A. Attorney-Client Privilege and Attorney Work Product Privilege

Defendants argue that the majority of documents concerning MBIA's Remediation Efforts do not seek or reflect the advice of counsel and are therefore outside of the attorney-client privilege (Countrywide Memo., at 14-15). Defendants assert their argument is supported by MBIA's interrogatory response identifying non-legal consultants and business personnel as "responsible for determining whether MBIA would ask Countrywide to repurchase loans in the Securitizations" (Hemani Affirmation, Ex. P, Response No. 29).

Defendants further contend that documents prepared by RMG and AlixPartners and/or MBIA business personnel in connection with the consultants' work are not protected by the attorney work product privilege. Defendants argue that these documents were not prepared by counsel and do not reflect an attorney's legal research, analysis, conclusions, legal theory or strategy. They argue that MBIA business personnel worked with RMG and AlixPartners to obtain RMG's and AlixPartners's advice solely on whether the underlying loans complied with Countrywide's securitization guidelines and servicing practices. Defendants further argue that the fact that Weil, Gotshal hired RMG and AlixPartners does not impute a privilege to the documents prepared by the consultants or the MBIA employees for the consultants, nor communications relating thereto.

MBIA opposes Defendants' motion and argues that RMG's and AlixPartners's work product, the communications between RMG and AlixPartners and Weil, Gotshal, RMG and AlixPartners and MBIA and Weil, Gotshal and MBIA as well as internal MBIA communications regarding the Repurchase Analysis and the Servicing Analysis — the Remediation Efforts documents — are protected by the attorney-client and attorney work product privilege as well as the trial preparation privilege.

Applicable Attorney-Client and Attorney Work Product Privileges

The fact that RMG and AlixPartners were retained by Weil, Gotshal does not automatically bring the communications to, and work product by, the consultants into the scope of privilege (see Spectrum Sys. Intl. Corp. v Chemical Bank, 157 A.D.2d 444, 448 [1st Dept. 1990]). MBIA, as the asserting party, must establish the claimed privileges (Priest v Hennessey, 51 N.Y.2d 62, 69 [1980]).

The court finds, through the following stepped analysis, that MBIA has made the requisite showing that the materials prepared by and on behalf of RMG and AlixPartners and communications relating to those prepared materials are protected by the attorney-client and attorney work product privileges.

MBIA and Weil, Gotshal

MBIA hired Weil, Gotshal to represent it with regard to MBIA's increasing losses under the Securitizations. MBIA hired Weil, Gotshal to provide MBIA with advice as to its legal rights and remedies under the Securitizations, including repurchase demands and potential legal claims (Affirmation of Gary Saunders, Esq. In Opposition of Defendants' Motion to Compel Disclosure Concerning MBIA's Remediation Efforts ["Saunders Affirmation"], ¶ 3; Mette Affirmation, ¶ 1). Communications between MBIA and Weil, Gotshal reflecting the request for and advice of counsel are protected by the attorney-client privilege (Priest, 51 NY2d at 69) and documents and material produced in furtherance of that representation are protected by the attorney work product privilege (CPLR § 3101 [c]).

MBIA/Weil, Gotshal and RMG/AlixPartners

Weil, Gotshal, in turn, hired RMG and AlixPartners to provide forensic underwriting and servicing reviews, respectively, in order to assist the law firm in its investigation of the Securitizations. Weil, Gotshal utilized the consultants' specialized expertise and knowledge (see Oblak Affirmation, ¶¶ 10-11). Weil, Gotshal directed and oversaw each entities' review (id., ¶ 13), and Weil, Gotshal is stated, and states, to have used the information provided by RMG and AlixPartners to provide legal advice regarding MBIA's potential remedies, including potential litigation claims (id., ¶¶ 10-11; Mette Affirmation, ¶¶ 4, 7).

The work completed by RMG and AlixPartners, and RMG in particular, allegedly revealed that what MBIA considered a significant portion of the loans underlying the Securitizations did not meet with the representations and warranties in the Transaction Documents (Oblak Affirmation, ¶ 13; Complaint, ¶¶ 77-83). MBIA used the results of the completed investigations in two manners. First, MBIA issued repurchase requests to Countrywide (id., ¶ 14). Weil, Gotshal drafted the repurchase requests to Countrywide (id.), with, but for the first repurchase request, the assistance of Quin Emanuel (Oblak Affirmation, ¶ 12). Second, the information allegedly revealed in the investigations was used as a basis for the instant complaint (see Amended Complaint, ¶ 80).

Communications and documents relating to the investigations performed by RMG and AlixPartners under Weil, Gotshal's direction are protected by the attorney-client and attorney work product privileges. RMG and AlixPartners possessed particular knowledge that they utilized in order to conduct their investigations. Weil, Gotshal used the results of the investigations in providing legal advice to MBIA regarding MBIA's legal rights and remedies under the Securitization's Transaction Documents. RMG's and AlixPartners's investigations were as agents of Weil, Gotshal; communications between RMG and Weil, Gotshal and AlixPartners and Weil, Gotshal are therefore privileged (Hudson Ins. Co. v Oppenheim, 72 A.D.3d 489, 489-90 [1st Dept. 2010] citing Robert V. Straus Prods. v Pollard, 289 A.D.2d 130, 131 (1st Dept. 2001]). Further, the documents produced by RMG and AlixPartners in furtherance of their respective investigations were used by Weil, Gotshal to assist in analyzing and preparing advice upon MBIA's legal remedies regarding the Securitizations. The RMG and AlixPartners-produced documents are therefore protected by the attorney work product privilege (id., quoting Santariga v McCann, 161 A.D.2d 320, 321 [1st Dept. 1990]; Oakwood Realty Corp. v HRH Constr. Corp., 51 A.D.3d 747, 749 [2d Dept 2008]; see Delta Financial Corp. v Morrison, 14 Misc.3d 428, 432 [NY Sup Ct, NY County 2006]).

As is logical, RMG and AlixPartners contacted MBIA employees in order to obtain information for the work each completed (see, e.g., Oblak Affirmation, ¶ 4, n.3; ¶ 20). As an agent for Weil, Gotshal, communications relating to RMG's and AlixPartners's work is protected by the attorney client privilege (Hudson Ins. Co., 72 AD3d at 130).

Case law has, at times, placed an emphasis on the term "solely" or "purely" in finding against privilege protection and for disclosure based upon the purpose of the document, i.e., whether that document was prepared "solely" for the purpose of litigation. However, the majority of these cases base their findings not on any requirement that the document be created only for purposes for litigation, but on a fact-specific finding that the document in question was created prior to and without an eye toward litigation. For example, in Chemical Bank v National Union Fire Ins. Co. of Pittsburgh, Pa., 70 A.D.2d 837 [1st Dept. 1979], the document in question was created in the ordinary course of insurance business and well before the demand and disclaimer gave rise to litigation (id. at 838). No privilege was therefore found. In contrast, in Warren v New York City Transit Auth., 34 A.D.2d 749, 750 (1st Dept. 1970), cited by Chemical Bank, the court found privilege protection upon a showing that an attorney's examination of accident witnesses was purely for the purposes of litigation.

The proper test for whether documents are to be accorded protection is not a didactic test as to whether the documents are created solely for purposes of litigation, but whether the documents were created primarily for the purposes of litigation (see Spectrum Sys. Intl. Corp., 157 AD2d at 448). The test is fact-specific (Spectrum Sys. Intl. Corp., 78 NY2d at 378). Privilege, once found, must not be withdrawn for the mere reason that the documents at issue were created toward a multi-faceted goal and were used for purposes other than solely for litigation. Finding that the work product of an investigation resulting in multiple avenues of legal recourse, including one other than litigation, is absolved of an otherwise applicable privilege is to force the investigating party into a modified Hobson's choice of either litigating and retaining privilege (and therefore losing possible avenues of recourse) or pursuing all recourse and losing important attorney client and/or work product privileges. Under the facts of this case, the court will not force MBIA to make such a choice.

MBIA has shown that the RMG and AlixPartners documents, and communications relating thereto, are privileged under CPLR § 3101 (b) and (c). MBIA hired Weil, Gotshal, and Weil, Gotshal the consultants RMG and AlixPartners, in pursuit of all legal remedies relating to its alleged losses under the Securitizations, including litigation. RMG and AlixPartners contacted MBIA personnel in pursuit of its investigation. MBIA will not disinherit the materials at issue from the privilege they are afforded because it has chosen to pursue multiple avenues of possible recourse. This is not a case of attempting to create privilege by hiring an attorney, but of hiring an attorney to create a case (cf. Spectrum Sys. Intl. Corp., 157 AD2d at 448).

MBIA has chosen to undertake the majority of its claims through litigation. MBIA has further chosen to mitigate its possible damages, in keeping with New York's general obligation of the injured party to do so (see Brushton-Moira Central School District v Fred H. Thomas Assocs., P.C., 91 N.Y.2d 256, 262-63 [1999]). Considering the facts before it, the court finds that the RMG and AlixPartners documents and non-fact-exclusive communications relating to those documents are privileged.

The court further finds that MBIA's conducting of due diligence upon its case prior to filing the instant complaint will not remove the documents from privilege. Parties are encouraged to examine their claims prior to approaching the court, and the time between the hiring of representative counsel and agents of counsel to investigate possible legal claims and the bringing of the complaint is not here out of the ordinary.

To the extent that repurchase demands were or are made as a result of the RMG and/or AlixPartners investigations, those repurchase demands and the documents underlying the factual bases for those demands are not privileged (Spectrum Sys. Intl. Corp., 78 NY2d at 377, citing Upjohn Co. et al. v. United States, 449 U.S. 383, 395 [1981]).

B. Trial Product Privilege

Material is subject to protection under the trial preparation privilege of CPLR § 3101 (d) if it is prepared primarily for purposes of litigation (Hoenig v Westphal, 52 N.Y.2d 605, 609 [1981]). For the same reasons that the court found the RMG and AlixPartners documents and communications relating thereto are protected by the attorney client and attorney work product privileges, so does the court find the same materials protected by the trial preparation privilege. The fact that MBIA has worked with multiple counsel in pursuing its remedies does not warrant finding otherwise.

Facts are seldom, if ever, privileged, whether provided to an attorney or not (Spectrum Sys. Intl. Corp., 78 NY2d at 377). MBIA does not here use the RMG documents as a "sword and shield," and to the extent that MBIA attempts to prove that Countrywide has not met its obligations under the Securitizations, MBIA must present factual evidence supporting its claims. Countrywide will thus be in full possession of materials necessary for their defense.

While at first blush Countrywides' argued Granite Partners v Bear, Stearns & Co., Inc. appears favorable to Countrywide, the case is distinguishable. MBIA has not used the RMG and AlixPartners documents in a way inconsistent with the principles underlying the doctrine of the applicable trial preparation privilege (Granite Partners v Bear, Stearns & Co., Inc., 184 FRD 49, 54 [SD NY 1999]), and invasion of the privilege is not necessary to determine the validity of MBIA's claim (id.). Countrywide does not have substantial need for the RMG and AlixPartners documents, as claims made by MBIA must be supported and Countrywide is and will be in full possession of documents to refute and/or examine MBIA's claims. MBIA has not placed the RMG and AlixPartners documents at issue such that their disclosure is required (see Deutsche Bank Trust Co. of Americas v Tri-Links Inv. Trust, 43 A.D.3d 56, 64 [1st Dept. 2007] [" at issue' waiver occurs when the party has asserted a claim or defense that he intends to prove by use of the privileged materials" [citation and internal quotations omitted]]); see Manufacturers and Traders Trust Co. v Servotronics, Inc., 132 A.D.2d 392, 397 [4th Dept 1987] ["the bank has not waived the attorney-client privilege by injecting privileged material into the lawsuit because the bank does not need the privileged documents to sustain its cause of action"])

MBIA has shown that the Remediation Efforts documents and communications relating thereto are also protected by the trial preparation material privilege. Countrywide has not demonstrated a reason or need to remove the documents from that privilege.

Accordingly, it is

ORDERED that the motion by Defendants Countrywide Home Loans, Inc., Countrywide Securities Corp., Countrywide Financial Corp., Countrywide Home Loans Servicing, LP and Bank of America Corp. to compel disclosure regarding MBIA's remediation efforts is denied.