American Mutual Liability Insurance v. Velletri Construction Corp.

Plaintiff, insurer, appeals from so much of an order of Special Term dated March 27,1953, as (1) denies plaintiff’s motion to examine defendant, the insured, before trial as to items 2, 3, 4 and 5 in the notice of motion, and (2) denies plaintiff a right to an inspection and discovery of defendant’s books itemized in such notice of motion.

*868The inspection was denied on the ground that an audit has already been made. The complaint alleges the making of the audit but the answer denies that allegation, though in an answering affidavit defendant admits an audit had been made. The denial in the pleadings, however, raises an issue as to the accuracy of the audit made and to eliminate any dispute as to the correctness thereof, the inspection should have been permitted (see Workmen’s Compensation Law, § 131). In any event plaintiff at no time made an inspection of the records referred to in items g and h. To meet the issue raised, plaintiff should not be compelled to await trial.

We think, too, the items denied in the examination of defendant before trial should have been allowed. It is true that in plaintiff’s other appeal (see ante, p. 500) we have dismissed defendant’s separate defense of negligence. But the issues raised by defendant’s denials in the answer still remain. Limitation of the examination closes to plaintiff a vital source of proof to disprove the averments contained in the defendant’s denials which present issues requiring the examination asked.

The order so far as appealed from should be modified, with costs to plaintiff-appellant, to permit plaintiff to examine defendant as to items 2, 3, 4 and 5 and to permit plaintiff a discovery and inspection of defendant’s books and records enumerated in plaintiff’s notice of motion. Settle order.

Dore, J. P., Cohn, Callahan, Bastow and Botein, JJ., concur.

Order unanimously modified in accordance with the opinion herein and, as so modified, affirmed. Settle order on notice.