Opinion
No. 602386–14.
01-12-2017
RUSS & RUSS, P.C., Plaintiff, v. Joseph CHUANG, Uni–Rty Corporation, and Golden Plaza Limited Partnership, Defendants.
Daniel P. Rosenthal, Esq., Massapequa, for Plaintiff. A. Ernest Tonorezos, Esq., (On Counter Claims Only), Wilson Elser Moskowitz Edelman & Dicker, LLP, New York. Kaiser Saurborn & Mair, P.C., Henry L. Saurborn, Jr., Esq., New York, for Defendants.
Daniel P. Rosenthal, Esq., Massapequa, for Plaintiff.
A. Ernest Tonorezos, Esq., (On Counter Claims Only), Wilson Elser Moskowitz Edelman & Dicker, LLP, New York.
Kaiser Saurborn & Mair, P.C., Henry L. Saurborn, Jr., Esq., New York, for Defendants.
DANIEL PALMIERI, J.
The following papers have been read on this motion:
| Notice of Motion, dated 10–5–16 | 1 |
| Affirmation in Support, dated 10–5–16 | 2 |
| Affirmation in Opposition, dated 11–5–16 | 3 |
| Affirmation in Reply, dated 11–14–16 | 4 |
This motion by the plaintiff for a protective order quashing a subpoena served on Daniel P. Rosenthal, Esq. is granted, without prejudice to defendants to service of a properly made and noticed subpoena, and without prejudice to plaintiff or Mr. Rosenthal to move to quash any such subpoena.
On its own motion, the Court hereby disqualifies Daniel P. Rosenthal from further representation of the plaintiff.
In this action to collect legal fees. the Court agrees with Mr. Rosenthal that the purported subpoena served on him violates CPLR 3101(a)(4), and is invalid on its face. Pursuant to the statute, a party may obtain discovery from a nonparty in possession of material and necessary evidence, so long as the nonparty is apprised of the circumstances or reasons requiring disclosure. The notice requirement "obligates the subpoenaing party to state, either on the face of the subpoena or in a notice accompanying it, ‘the circumstances or reasons such disclosure is sought or required’ ". Matter of Kapon v. Koch, 23 NY3d 32, 39 (2014), quoting CPLR 3101(a)(4) ; see Velez v. Hunts Point Multi–Serv. Ctr., Inc., 29 AD3d 104, 111 (2006). That was not accomplished here, and thus the motion should be granted. Needleman v. Tornheim, 88 AD3d 773 (2d Dept.2011). The documents sought by way of "Schedule A" are not, in this Court's view, sufficient as notice; the subpoena calls for a personal appearance before a notary public, clearly implying that testimony will be taken, without providing the required notice as to why the testimony is being sought.
However, on the merits the Court is not prepared to say that no discovery should be had of Mr. Rosenthal.
In Kapon the Court of Appeals abrogated the law of the Appellate Division, Second and Third Departments that had required the party issuing a subpoena to a non-party to demonstrate not only that the material sought was "material and necessary" to the prosecution or defense of an action, but also that the disclosure could not be obtained from sources other than the non-party. Kapon v. Koch, supra, at 37–38, citing, inter alia, Kooper v. Kooper, 74 AD3d 6, 16–17 (2d Dept.2010).
The Court instead agreed with the rule that had developed in the First and Fourth Departments that all that need be shown is that the disclosure was "material and necessary"—i.e., that it is relevant. It held that a motion to quash should be granted " ‘only where the futility of the process to uncover anything legitimate is inevitable or obvious'... or where the information sought is ‘utterly irrelevant to any proper inquiry’ ". Id, at 38, citing Anheuser–Busch, Inc. v. Abrams, 71 N.Y.2d 327, 331–332 (1988) [internal citations omitted].This does no more than place subpoenas on the same footing as discovery sought from a party, that is, that the information sought must be relevant to the claims made. The non-party bears the initial burden on a motion to quash once the notice requirements of CPLR 3101(a)(4) are met. See Kapon v. Koch, supra, at 39. While the Court agrees with the movant concerning the notice, it does not agree that he or the plaintiff has met the test on the merits.
Initially, and contrary to plaintiff's position, discovery is still open in this case as it has not been certified and no note of issue has been filed. The conference order upon which it relies (dated February 18, 2016) noted that pretrial discovery by way of authorizations and discovery and inspection was "Completed, pending EBTs " (emphasis added). Obviously, depositions may lead to further demands from any party, and frequently do. Accordingly, although the subpoena at issue should be quashed as facially defective, there is no barrier to seeking disclosure from Mr. Rosenthal and the test, as noted above, is the same as would be applied to any potential witness.
In that regard, he has not denied that he participated in the underlying case, and that billing resulted from that participation. Although stating that he did not individually represent the defendants in that matter, he also notes that "any work I performed regarding those matters, were as an "Of Counsel Attorney" to Russ & Russ, P.C.", clearly implying that he did, in fact, perform work in concert with the firm.Further, sections of the deposition taken of Jay Russ, apparently a principal of plaintiff professional corporation, indicate that Mr. Rosenthal possesses knowledge of billing procedures that he, Mr. Russ, does not have. When shown summary time records of the underlying case, and was questioned about documents upon which they were based, he testified that he was not the one who prepared them, although he would have provided information. He stated that either Mr. Rosenthal or a clerical person would have done so. When defendants' counsel asked "So if we wanted to speak to the person who prepared this, who would you go about identifying who actually did that?" the response was "I would say to you that Mr. Rosenthal probably knows more about the preparation of these documents specifically than I do ... I would ask him ... I think Mr. Rosenthal would know more about these documents than anyone else." Russ EBT, at 50–52. Mr. Russ also testified as to a close working relationship with Mr. Rosenthal, who apparently had free access to the firm's affairs and records.
As this is, as noted above, a collection action for fees generated in the underlying case, disclosure concerning how bills sent to the defendants were generated, and the documentation that underlies those bills, cannot be deemed "utterly irrelevant to any proper inquiry." Kapon v. Koch, supra, at 38. Given the law cited above, Mr. Rosenthal's own acknowledgment that he he performed work in the underlying matters, and the sections of the Russ EBT noted above, there is a basis for the inquiry sought. Defendant may thus serve on Mr. Rosenthal a properly made subpoena in compliance with statute.
Nevertheless, defendants' counsel is warned that this should not be interpreted to give him free reign on all matters touching on Mr. Rosenthal's relationship to the plaintiff, and the underlying case, but rather must be tailored to address only the issues framed by the complaint and in the counterclaims regarding which Mr. Rosenthal can be seen, in good faith, to have knowledge thereof.Neither the plaintiff nor Mr. Rosenthal will be enjoined from moving again to quash a subpoena that is overly broad or appears to be no more than the classic "fishing expedition" disfavored by the courts.
Given the foregoing, however, the Court is constrained to disqualify Mr. Rosenthal from further participation as plaintiff's attorney under the advocate-witness Professional Rule. That Rule provides that "A lawyer shall not act as an advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact", unless one of the exceptions given applies. 22 NYCRR 1200 [3.7(a) ]. The only one of those exceptions that might apply is (2), which is that "the testimony relates solely to the nature and value of legal services rendered in the matter." The "matter" here, however, is the collection action and counterclaims, and the testimony would concern not services rendered in this present action but the billing in the underlying action, so the exception does not apply.
It is clear that Mr. Rosenthal has discoverable knowledge of a "significant issue of fact" in the dealings between the plaintiff and the defendants in that underlying action, and is subject to being called as a witness, which disables him from continuing in his role as counsel. NY Kids Club 125th Avenue, LLC v. Three Kings, LLC, 133 AD3d 680 (2d Dept.2015), citing, inter alia, Rules of Professional Conduct [22 NYCRR 1200.0 ] rule 3.7(a); Skiff–Murray v.. Murray, 3 AD3d 610 (3d Dept.2004) ; Stober v. Gaba & Stober, 259 A.D.2d 554 (2d Dept.1999). Mr. Rosenthal contends that he acts "of counsel" to the plaintiff firm, and here appears as no more or less than the lawyer for the plaintiff. The advocate-witness Rule therefore must apply. Further, given the obvious conflict with this Rule, the Court may and will act sua sponte. See Kantrowitz, Goldhamer & Graifman, PC v. Ayrovainen, 122 AD3d 908 (2d Dept.2014) [collection action for legal fees; sua sponte disqualification based on finding in related action]. The Court stresses that this is no reflection on Mr. Rosenthal as an effective advocate, but rather indicates the need of both the parties and the Court to adhere to the Professional Rules.
In view of the disqualification, all activity in this matter is stayed for a period of 30 days so that the plaintiff may engage new counsel to prosecute its action. The conference scheduled for February 15, 2017 is adjourned to March 14, 2017, at 9:30 a.m.
All contentions not discussed either are unnecessary to the result reached here or are without merit. Any requests for relief not specifically addressed are denied.
This shall constitute the Decision and Order of this Court.