Opinion
1145782004
Decided April 4, 2005.
Thomas M. Curtis, Esq., New York NY, for the Plaintiffs.
Edward A. Wiener, Esq., New York NY, for Non-Party Witness.
Upon consideration of the above-enumerated papers and after oral argument, the motion to quash or modify subpoenae issued by plaintiffs on proposed non-party witness Sherwood Gordon is granted to the extent set forth below and is otherwise denied.
Factual and Procedural History
Plaintiffs Angelika Frantzen Schlosser and Claudia Frantzen, mother and daughter, bring a lawsuit against Angelika's former husband, Lawrence Schlosser, and his business associate Brian Crawford, seeking to impose a constructive trust on certain property located in Montauk, New York, as well as other relief. According to the verified complaint, Lawrence Schlosser, a "highly educated real estate entrepreneur who has been instrumental in structuring many complex real estate transactions," gave the Montauk home to his then-wife Angelika in 1982 in celebration of their 1981 marriage (Not. of Mot. Ex. B, Ver. Compl. [hereinafter "Ver. Compl."]
¶¶ 7, 16, 18). In 1991 he informed her that because he owed money to various creditors, he would seek to protect the home by transferring it to a company under his control (Ver. Compl. ¶ 35). Thereafter, he began a series of transactions involving the deed to the property which ultimately led to two foreclosure proceedings in 1990 and 1994 (Ver. Compl. ¶¶ 35-60). Although both Lawrence and Angelika were named defendants in the first foreclosure proceeding, Angelika claims she never had actual knowledge of the lawsuit and that she was never served with process. She further avers that she never retained Sherwood Gordon, the attorney who filed his appearance in September 1990 on behalf of both husband and wife (Ver. Compl. ¶¶ 51-56). The second foreclosure proceeding which apparently ended in summary judgment for the creditor, was also defended by Sherwood Gordon, but did not name Angelika as a defendant (Ver. Compl. ¶¶ 58-61). The deed to the property was transferred to a new entity formed by Lawrence and Gordon (Ver. Compl. ¶¶ 63), and after further transactions, was ultimately transferred in 1998 to co-defendant Crawford (Ver. Compl. ¶¶ 64-76).
At the time of her divorce in October 2003, Angelika believed herself the equitable owner of the Montauk residence and seeks to impose a constructive trust on the property. In addition, she believed that under the terms of divorce settlement, Lawrence could not assert any claims against the home and did not realize that the actual import of the terms of the divorce settlement waives her claims to the property (Ver. Compl. ¶¶ 8, 93-94, 96). She thus seeks in the second cause of action to rescind the divorce stipulation of settlement as concerns the claim to the property. The third cause of action alleges that beginning in 1999, Lawrence formed various business entities in his step-daughter Claudia's name to which she agreed because of their close familial relationship, and for which she signed a durable general power of attorney appointing Lawrence to act in her place and stead as concerns those entities (Ver. Compl. ¶¶ 102-108). She has never received any income or payments from any of the businesses, was never informed of the natures of the businesses, and now knows that there are several actions against certain of the entities and at least two judgments (Ver. Compl. ¶¶ 109-111). Although she has revoked the power of attorney, Lawrence has failed to turn over the books and records of the business entities and she seeks an accounting between her and Lawrence and a declaration of the rights and obligations of each as concerns every entity formed under her name (Ver. Compl. ¶¶ 117).
Plaintiffs served a notice to take the deposition and combined subpoena and subpoena duces tecum, dated October 13, 2004, upon non-party witness Sherwood Gordon, who the complaint alleges is a long-time business associate of Lawrence Schlosser as well as the attorney who represented him in both foreclosure proceedings (Ver. Compl. ¶¶ 55, 59, 78). The notice, which includes the caption and index number of the litigation, required Gordon's attendance on November 15, 2004, and the production of certain types of documents "with respect to evidence material and necessary in the prosecution of this action." (Not. of Mot. Ex. A, Notice of Deposition and Combined Subpoena). Gordon now moves for a protective order denying or limiting the scope of the subpoenae pursuant to CPLR 3103 and to quash or modify pursuant to CPLR 2304.
It is noted that although he makes this motion, he has previously on November 15, 2004, cashed plaintiffs' counsel's check in the amount of $61.00 which, according to the subpoena, "represent[ed] one day's witness fee and $0.23 per mile for 200 miles" (Not. of Mot. Ex. A, Combined Subpoena at 2; see, Aff. in Opp. Ex. 1). Under CPLR 2303, the fees for the first day of testimony by subpoena must be tendered in advance.
Analysis
Plaintiffs argue that Gordon has improperly moved for relief when, pursuant to CPLR 3122(a), he should have served a response on plaintiffs within 20 days after service of the notice and subpoenae, stating "with reasonable particularity" his reasons for his objections. Plaintiffs further argue that because Gordon desires to withhold documents from inspection, he is required to indicate the legal ground for withholding each document at issue and to produce a privilege log which states the type of document, the general subject matter, its date, and other information that can identify it (CPLR 3122[b]).
Gordon argues that CPLR 3122 applies only to subpoenae duces tecum for the production of documents, and that because he was served with a combined subpoena and subpoena duces tecum, he is correct to bring a motion to quash the subpoenae pursuant to CPLR 2304 and CPLR 3103 (Wiener Reply Aff. ¶ 7). As an initial matter, the Court notes that Gordon's objections to the subpoenae, as will be discussed below, have little to do with plaintiffs' demand for his testimony, but rather with the scope and nature of the documents demanded for inspection, and thus concern the contents of the subpoena duces tecum. Of more import, however, is that the 2003 amendments to the statute allow a subpoena duces tecum to be served either separately or joined with a subpoena for testimony (CPLR 2305 [b]). A subpoena duces tecum issued during discovery pursuant to CPLR 3120(1), when served along with a subpoena for testimony, is also governed by CPLR 3111, which states that in the course of discovery, a "subpoena may require the production of books, papers, and other things in the possession, custody or control of the person to be examined to be marked as exhibits, and used on the examination." Objections to subpoenae issued pursuant to CPLR 3120 must follow the procedure articulated in CPLR 3122, which Gordon has failed to do.
This is because a person served with a subpoena duces tecum will be found to comply if he or she sends a substitute with the books, documents or things, but a joint subpoena for testimony and subpoena duces tecum, served upon the specific individual whose testimony is needed concerning the items, will gain the attendance of the individual with knowledge of the documents potentially at issue ( see, Siegel, Supplementary Practice Commentaries, McKinney's Cons. Laws of NY, Book 7B, CPLR 2305, 2005 Supp Pamphlet at 97).
Nonetheless, in the interest of judicial economy, Gordon's motion will be addressed in its entirety. He moves to quash or modify the subpoenae, setting forth three arguments. First is that the subpoenae and notice to take deposition bear the same date as the summons and complaint and were issued prior to issue having been joined which, Gordon argues, is prejudicial and improper (Not. of Mot. Wiener Aff. ¶ 3). However, pursuant to CPLR 3106(a) and CPLR 3111, the time period during which the disclosure devices such as a deposition upon oral questions and discovery and inspection of documents runs from the commencement of the action up through the filing of the note of issue ( see, Connors, McKinney's Cons. Laws, Book 7B, Practice Commentaries, CPLR § 3102, C3102:3, p. 493 [2005]). The instant action was commenced by filing of the summons with notice and complaint with the County Clerk on October 13, 2004 upon the purchase of an index number. (CPLR 203[c]; CPLR 304). Gordon does not allege that the notice and subpoenae were served prior to October 13, 2004, but rather that they were similarly dated that day and then served on about October 26, 2004 (Not. of Mot. Wiener Aff. ¶ 3). According to plaintiffs' counsel, both defendants were served with copies of the notice of deposition and subpoena (Curtis Aff. in Opp. ¶ 5), and defendant Crawford served his answer on about November 17, 2004, although co-defendant Schlosser has apparently failed to answer (Curtis Aff. in Opp. ¶ 4). On its face, movant's argument confuses commencement by filing with commencement by service. Here, contrary to what movant argues, the action was in fact commenced on the 13th by filing, prior to service on the 26th of the notice of deposition and subpoenae. Nothing improper was done by plaintiffs in this regard and there is no prejudice to either defendant in serving the notice and combined subpoenae after the commencement by filing of the action. Movant points to no statutory basis or other precedent for his argument that the plaintiffs must wait for joinder of issue to serve the notice and subpoenae, when as here the deposition was noticed for a date after the commencement by filing of the action and service was timely made after commencement.
Subpoenae are "available for the pre-trial stages of litigation as part of the arsenal of disclosure devices, where [their] primary use is to compel the testimony of nonparty witnesses" (Siegel, McKinney's Cons. Laws, Book 7N, Practice Commentaries, CPLR § 2301, C2301:2, p. 235 [1991]).
Second, Gordon argues that the combined subpoenae are facially defective in that they do not "state the circumstances or reasons such disclosure is sought or required," as required by CPLR 3101(a)(4). He cites De Stafano v. MT Health Clubs, 220 AD2d 331 (1st Dept. 1995), among others decisions, which quashed subpoenae for lack of notice concerning the circumstances or reasons that the disclosure was sought. In response, plaintiffs point to Schroder v. Consolidated Ed., 249 AD2d 69, 70 (1st Dept. 1998), which holds that while CPLR 3101(a)(4) requires disclosure by a non-party "upon notice stating the circumstances or reasons such disclosure is sought," there is no need for the movant to set forth "special circumstances," which the statute had required prior to its 1984 amendment ( see, BAII Banking Corp. v. Northville Indus., 204 AD2d 223, 225 [1st Dept. 1994]), and which the Second Department still requires ( Schroder, 249 AD2d at 70, citing Dioguardi v. St. John's Riverside Hosp., 144 AD2d 333, 334 [2nd Dept. 1988]).
CPLR 3101(a)(4) does not elucidate what "circumstances or reasons" should be included in a subpoena. According to two commonly relied-upon treatises on New York law, a subpoena should include the date and time of the deposition, a statement that the presence of the individual is requested "to testify and give evidence as a witness," and the names of the parties ( see, Carmody-Wait, New York Prac. with Forms [2d], § 54:5; Bender's Forms for Civ. Prac. [2005], Form CPLR 2301:6). Neither treatise suggests, as Gordon argues, that a subpoena must include particularized information concerning the nature of the proceeding or a specific reason for requesting the witness's testimony or documents. It is sufficient that the non-witness is informed that a lawsuit has been commenced by a particular plaintiff against a particular defendant and that the witness is needed to testify and give evidence that is relevant to that proceeding, all of which was done in this instance.
Gordon's third argument is that the requests in the combined subpoenae are overbroad, without sufficient specificity, and involve attorney-client privilege. The combined subpoenae set forth six categories of items requested and for each category, asks for "all books, papers and things. . . . concerning the transactions between the parties to the action of which you have knowledge" (Not. of Mot. Ex. A). The first item consists of eleven companies, delineated by name. The second and third items concern the two foreclosure actions filed in Supreme Court, Suffolk County in 1990 and 1994. The fourth consists of records of loans made by Gordon, his wife, or any business entity controlled by them, to the defendants from 1979 to the present. The fifth consists of records of all mortgages held by Gordon, his wife, or any business entity controlled by them, to secure the loans referenced in the fourth item. The sixth consists of "all other business dealings or arrangements" between Gordon, his wife, or any business entity controlled by them, and the defendants from 1979 to the present.
As concerns the first item of the combined subpoenae, Gordon argues that some of the companies' records date back to 1979, that there is no limitation on the subject matter or time of the documents requested or any explanation for how the documents are supposed to relate to the present action, and that some of them may fall under the attorney-client privilege (Wiener Aff. ¶ 6). He cites Ayubo v. Eastman Kodak Co., Inc., 158 AD2d 641 (2nd Dept. 1990), which held that a subpoena seeking all records of claims or actions against Kodak based on its use of certain chemicals which the plaintiff alleged were inherently dangerous, was overly broad, and argues that in the instant case, the subpoena is improper for failing to delineate a specific period of time. Plaintiffs argue that the alleged series of events began in 1979, and that the entities listed are those referred to in the first and third causes of action. Given the nature of plaintiffs' claims, their request for documents concerning the transactions between the parties to the action as concern the named companies is appropriate, although plaintiffs have not established their need for documents as far back as 1979. The verified complaint alleges that in 1991, the first of several companies was created by Lawrence Schlosser to hide assets (Ver. Compl. ¶ 36, referring to Kirwinia Properties Ltd.), and therefore, the time frame is narrowed to the period 1990 to October 2004.
The year 1979 is notable in the verified complaint only for that being the year when Claudia Frantzen Schlosser began living with her mother in the parties' Washington Square North apartment (Ver. Compl. ¶ 3).
As concerns the second item requesting all documentation in the 1990 foreclosure action, plaintiffs argue that pursuant to Wallace v. Wallace, 216 NY 28, 36 (1915), the attorney-client privilege that existed between Sherwood Gordon and the Schlossers has been waived. As Wallace explains, when the same attorney acts for two parties having a common interest, and each communicates with the attorney, the communications are privileged as to third parties, but not as between the two original parties. Here, of course, Mr. Schlosser and Gordon represented themselves to third parties as acting in interest with Mrs. Schlosser in the 1990 action, while she contends they acted without her knowledge. The essence of this action is that Gordon was never her attorney. Since Wallace is premised on the notion that one of the clients with the privilege can waive it, and since Mrs. Schlosser maintains she was not Gordon's client, applying Wallace to this case would be inconsistent with her position in this lawsuit. Therefore, this requested item shall be permitted, but subject to the production of a privilege log, which, if necessary, can be reviewed in camera. Obviously any documents which duplicate publicly filed documents from that lawsuit are not privileged. The third item, requesting all documentation concerning the 1994 foreclosure proceeding, differs in that Angelika was not a party to that action and Lawrence Schlosser has not waived his privilege (Wiener Aff. ¶ 9). Again, it is not clear that all documents contained in the file would be of a privileged nature. Accordingly, Gordon is directed to serve on plaintiffs within 20 days of the date of entry of this order, a privilege log pursuant to CPLR 3211(b), after which plaintiffs may make a motion to compel if they believe there are documents which are not privileged and seeking in camera review.
Items 4-6 are objected to by Gordon on the grounds that they ask for "all business dealings or other arrangements" for a 25-year period and are either a form of harassment or a fishing expedition, and are improperly broad and without specificity (Wiener Aff. ¶¶ 10-111, citing Reuters Ltd. v. Dow Jones Telerate, Inc., 231 AD2d 337 (1st Dept. 1997). Item 4 demands records of all loans made by Gordon, his wife, or any business entity controlled by either of them, to either defendant from 1979 to October 2004. Item 5 demands records of all mortgages held by Gordon, his wife, and any business entity controlled by either of them, to secure loans identified in item 4. Plaintiffs have not established a need for documents earlier than 1990 and therefore items 4 and 5 are limited to the period 1990 through October 2004. To the extent the introduction of the notice is unclear, these items are restricted to loans, businesses, etc. related to the Montauk residence at issue in this case and to the 11 businesses referenced in the subpoenae. Similarly, item 6, which concerns records of "all other business dealings or arrangements" between Gordon, his wife, any business entity they control, and either defendant, is limited to the period 1990 through October 2004 and as pertains to the Monatuk residence at issue in this case and to the 11 businesses referenced in the subpoenae. For items 4-6, Gordon may serve on plaintiffs within 20 days of the date of entry of this order, a privilege log pursuant to CPLR 3211(b), after which plaintiffs may make a motion to compel or for in camera review. Accordingly, it is
ORDERED that the motion to quash or modify the subpoena is granted to the extent set forth herein and is otherwise denied.
This constitutes the decision and order of the court. The court has mailed copies of this decision to counsel appearing on the motion.