Opinion
Index No. 650839/2017
09-16-2022
Shelley Rubin, Plaintiff, v. Nisha Sabharwal, Mohit Sabharwal, Vastra Inc., OM Vastra LLC, and OM Vastra Miami LLC, Defendants.
The Law Offices of Neal Brickman, P.C., New York, NY (Ethan Y. Leonard and Neal Brickman of counsel), for plaintiff. Certilman Balin Adler & Hyman, LLP, New York, NY (John H. Gionis, Jaspreet S. Mayall, and Nicole L. Milone of counsel), for defendants.
Unpublished Opinion
The Law Offices of Neal Brickman, P.C., New York, NY (Ethan Y. Leonard and Neal Brickman of counsel), for plaintiff.
Certilman Balin Adler & Hyman, LLP, New York, NY (John H. Gionis, Jaspreet S. Mayall, and Nicole L. Milone of counsel), for defendants.
Gerald Lebovits, J.
The following e-filed documents, listed by NYSCEF document number (Motion 005) 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 136, 139, 140, 141, 142, 143, 144, 155, 156, 157 were read on this motion to QUASH SUBPOENA.
The following e-filed documents, listed by NYSCEF document number (Motion 006) 132, 133, 134, 135, 137, 158, 159, 160, 161, 162, 163, 164, 165, 182, 185, 186, 187 were read on this motion to QUASH SUBPOENA.
The following e-filed documents, listed by NYSCEF document number (Motion 007) 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 166, 167, 168, 169, 170, 171, 179 were read on this motion to QUASH SUBPOENA.
The following e-filed documents, listed by NYSCEF document number (Motion 008) 172, 173, 174, 175, 176, 177, 178, 189, 190 were read on this motion to QUASH SUBPOENA.
BACKGROUND
Plaintiff, Shelley Rubin, is the co-founder and chair of the Rubin Museum of Art, which focuses on art of the Himalayan regions. Plaintiff alleges that she and defendant Ms. Nisha Sabharwal engaged in approximately eighty transactions over a five-year period in which the plaintiff purchased hundreds of pieces of jewelry from Ms. Sabharwal for a total amount of approximately $18 million. Plaintiff alleges that she purchased these jewelries from Ms. Sabharwal and co-defendant Vastra Inc. based upon the belief that these jewelries were "generational," "museum-quality," and of "considerable value," which she later discovered her belief was mistaken. Plaintiff alleges that the defendants fraudulently induced her to purchase such jewelries at inflated prices. Plaintiff filed this action against the defendants asserting claims of fraud, breach of contract, and unjust enrichment. On February 20, 2018, this court dismissed plaintiff's fraud-based claims, and the Appellate Division, First Department, affirmed. (Rubin v Sabharwal, 2018 NY Slip Op 30293[U] [Sup Ct, NY County Feb. 20, 2018], affd 171 A.D.3d 580 [1st Dept 2019].)
Various discovery disputes have arisen between the parties in litigating plaintiff's remaining claims, which have led in turn to the four motions at issue in this decision.
Motion sequence 005 is a motion by defendants to quash a subpoena served by plaintiff on nonparty Capital One, N.A., seeking bank records for defendants' bank accounts with Capital One; and seeking to suppress any information already obtained from Capital One pursuant to the subpoena. Motion Sequence 006 is a motion by plaintiff to quash documentary and testimonial subpoenas served by defendants on plaintiff's personal lawyer, Eileen Caulfield Schwab, Esq., and her law office. On motion sequence 007, defendants seek to quash further bank-records subpoenas served by plaintiffs on Capital One and nonparty Bank of America, NA, and to suppress any information produced to plaintiffs by the banks. Motion sequence 008 is defendants' motion to quash a nonparty subpoena served by plaintiff on Parker Pohl LLP, which served as counsel in a related action.
Additionally, in connection with the subpoenas that are the subject of motion sequence 007, defendants pointed out that those subpoenas listed Ms. Sabharwal's unredacted Social Security number and did not instruct the recipient banks to keep that number confidential. As initially filed, therefore, motion sequence 007 also sought an order imposing several confidentiality requirements on plaintiff with respect to defendants' Social Security numbers. The parties later entered into a confidentiality agreement relating to the Social Security numbers (and documents containing those numbers). Defendants have also asked this court to order plaintiff to disclose the name of the private investigative firm that procured Ms. Sabharwal's Social Security number, the methods by which the investigative firm procured the number, and any other information obtained by the investigative firm as it relates to the defendants or this action. (See NYSCEF No. 183.) The court has considered that request along with the other issues presented on motion sequence 007.
Further, during depositions of Mr. Mohit Sabharwal and of Nisha Sabharwal, defendants' counsel instructed the witnesses not to answer several questions. Plaintiff contends that counsel was not entitled under the rules governing depositions to instruct the witnesses not to answer. The parties have requested rulings from the court resolving this disagreement, and have submitted letter briefing to this court on the issue.
Motion sequences 005, 006, 007, and 008; defendant's letter request pertaining to the Social-Security-number issue; and the parties' requests for deposition rulings are consolidated here for disposition.
Defendants' motion for a protective order quashing the subpoena served on Capital One (mot seq 005) is granted. The branch of plaintiff's motion (mot seq 006) for a protective order quashing the document subpoena served on attorney Schwab and her law office is granted in part and denied in part; and the branch of that motion for a protective order quashing the testimonial subpoena is denied. Defendants' motion for a protective order quashing the further subpoenas served on Capital One and Bank of America (mot seq 007) is granted. Defendants' request for a protective order imposing confidentiality requirements with respect to defendants' Social Security numbers (mot seq 007), and defendants' related request for an order directing disclosure about how plaintiff obtained those numbers, are denied as academic given the parties' confidentiality agreement. Defendants' motion for a protective order quashing the subpoena served on Parker Pohl (mot seq 008) is granted. Plaintiff's request for an order directing Ms. Sabharwal and defendant Mohit Sabharwal to answer questions that were posed to them at their depositions, but that they declined to answer on the instructions of counsel, is granted in part and denied in part.
DISCUSSION
Motion sequences 005 and 007 address similar issues, as do motion sequences 006 and 008. This decision addresses 005 and 007 together, then 006 and 008, then the parties' joint letter request for deposition rulings.
Under New York law, a party moving to quash a subpoena "bears the initial burden to show that the information sought is utterly irrelevant or that the process will not lead to legitimate discovery." (Liberty Petroleum Realty, LLC v Gulf Oil, L.P., 164 A.D.3d 401, 404 [1st Dept 2018].) Only if that initial burden is met does the burden shift to the subpoenaing party to demonstrate that the information sought is material and necessary. The words "material and necessary" must be construed liberally to require disclosure, as long as the disclosure sought is relevant to the prosecution or defense of an action. (Matter of Kapon v Koch, 23 N.Y.3d 32, 38 [2014].) Moreover, there is no "requirement that the subpoenaing party demonstrate that it cannot obtain the requested disclosure from any other source." (Id.) Social Security numbers, however, "are almost never discoverable." (Alta Apts. LLC v Wainwright, 2004 NY Slip Op 50797[U], *5 [Civ Ct, NY County July 19, 2004].)
Suppression is not warranted even of documents that had been "improperly or irregularly obtained within the meaning of CPLR 3103 (c)," as long as such documents or information "would have to be produced in the ordinary course of discovery" such that the movant's substantial rights were not "prejudiced by the manner in which they were obtained." (Coast to Coast Energy, Inc. v Gasarch, 77 A.D.3d 589 [1st Dept 2010].)
I. The Motions to Quash on Motion Sequences 005 and 007
A. Motion Sequence 005
On this motion, plaintiff asserts that the records requested constitute "evidence of the ascribed value of the pieces sold as complained of in this action as well as provide evidence of their value and the proof of the payment for the same." (NYSCEF No. 126.) Plaintiff argues that this court previously directed discovery of the costs of procurement of the jewelry sold to the plaintiff. (NYSCEF No. 139 at 2-4, 7.)
Plaintiff also argues that it was not clear until the depositions of defendants Mr. and Ms. Sabharwal that co-defendant Vastra procured all of the jewelry sold to plaintiff from Ms. Sabharwal and paid her for such jewelries. (Id.) Per Ms. Sabharwal's Affidavit of Diligent Search (NYSCEF No. 144 at ¶¶ 6-8), Ms. Sabharwal testified that a vast majority of the jewelry that was sold to the plaintiff was procured from various suppliers, most in India and the others in New York, over the years through cash and bartering. Ms. Sabharwal testified that it was typical for these transactions in India to not be accompanied by receipts or other documentations. (NYSCEF No. 144 at ¶¶ 8.) For the instances in which receipts were given, Ms. Sabharwal testified that she did not retain the receipts and if there were receipts that reflected the foregoing transactions, Ms. Sabharwal testified that they would have been discarded some time ago, although Ms. Sabharwal states that she initially did retain them. (Id.) Defendant Mr. Sabharwal testified that Vastra then purchased the jewelry from Ms. Sabharwal, but he did not recall the price paid for the jewelry. (NYSCEF No. 156 at Tr. 72.) Mr. Sabharwal also testified that Ms. Sabharwal sold the jewelry to Vastra in batches and not as an individual transaction. (NYSCEF No. 156 at Tr. 72-73.)
Thus, plaintiff argues that given that the defendants do not have a recollection of how much Vastra paid for the jewelries from Ms. Sabharwal, that there is no record of any of the transactions involving the purchases by Vastra from Ms. Sabharwal, and the only records reflecting such transactions or the costs of the procurement of the jewelry sold to plaintiff appear to be the bank statements and bank transfer records, this subpoena is appropriate. (NYSCEF No. 139 at 5-8.)
However, it should be noted at the outset that the terms, "cost" and "value" are not interchangeable. While the bank records may demonstrate the amount Vastra paid to Ms. Sabharwal in exchange for the jewelries, Ms. Sabharwal originally procured the jewelry from various suppliers and then sold it to Vastra. The amount that Vastra paid to Ms. Sabharwal in exchange for the jewelries does not in itself equate to the value of the jewelries. In general, the value of a good is tied to its worth. Accordingly, plaintiff has not demonstrated how the bank records from January 1, 1995, until the present would shed light on the value of the jewelries. Plaintiff also noted in the original complaint that she had these jewelries previously assessed for their value. (NYSCEF No. 123 at ¶¶ 37-47.)
With respect to proof of payment, defendants stated that plaintiff's payment for the jewelries is not in dispute considering that there is no counterclaim by the defendants. (NYSCEF No. 130 at 1.) If plaintiff is seeking proof that Vastra paid for these jewelries, plaintiff has not demonstrated how that is relevant to her outstanding claims or to the value of the jewelries. Further, when plaintiff sought the dollar amounts of sales generated by Ms. Sabharwal and Vastra as it is relevant to the "impetus" and "underlying motivations" for defendants' alleged conduct, and that it shows "the depth of the improper acts and statements on the part of the defendants," this court previously did not agree that the total sales figure for Ms. Sabharwal and Vastra would shed any light on plaintiff's remaining claims against the Defendants. (NYSCEF No. 125 at 3-4.)
Accordingly, defendants' motion for a protective order (mot seq 005) quashing the subpoena duces tecum served on behalf of plaintiff upon non-party Capital One, N.A. is granted.
B. Motion Sequence 007
As on motion sequence 005, plaintiff states on motion sequence 007 that the records requested constitute "evidence of the ascribed value of the pieces sold as complained of in this action as well as provide evidence of their value and the proof of the payment for the same." (NYSCEF Nos. 150-151.) As explained above, plaintiff has not demonstrated how the bank records of those accounts maintained individually by Ms. Sabharwal or jointly by Ms. Sabharwal and Mr. Sabharwal as well as account statements from such accounts that reflect payment from Vastra from January 1, 1995, until the present would provide evidence of the jewelries' value.
Thus, defendants' motion for a protective order quashing the second subpoena duces tecum served on behalf of plaintiff upon non-party Capital One, N.A. and the subpoena duces tecum served on non-party Bank of America, N.A. and to suppress the information obtained from the subpoenas (if already provided) under CPLR 3103 (c) is granted.
With respect to defendants' Social Security numbers, the parties' confidentiality agreement with respect to this information renders academic defendants' request for this court to its own set of confidentiality restrictions on plaintiff's handling of the information. Additionally, defendants also have not provided a showing beyond speculation that the plaintiff, plaintiff's counsel, or the private investigative firm retained by plaintiff's counsel secured the defendants' Social Security numbers (or other confidential information) through improper means and thereby caused defendants an injury distinct from the interests protected by the parties' confidentiality agreement. Defendants' request for entry of an order pertaining to the Social Security numbers (either requiring disclosure of how plaintiff obtained the numbers or restricting plaintiff's handling of the numbers after they were obtained) is denied as academic.
II. The Motions to Quash on Motion Sequences 006 and 008
CPLR 4503, codifying the attorney-client privilege, provides that absent waiver by the client, an attorney or his or her employee... shall not disclose, or be allowed to disclose such communication." (CPLR 4503 [a] [1].) Given New York's liberal discovery rules, the attorney-client privilege "must be narrowly construed... and the party asserting the privilege bears the burden of establishing that it applies." (ACE Sec. Corp. v DB Structured Prods., Inc., 55 Misc.3d 544, 556 [Sup Ct, NY County 2016].) Communications from client to attorney are shielded by the privilege only when made for the predominant "purpose of obtaining legal advice and directed to an attorney who has been consulted for that purpose"-not when made to obtain an attorney's "business or personal advice." (Matter of Bekins Record Storage Co. Inc., 62 N.Y.2d 324, 329 [1984].)
In general, when communications are "made between [client] and counsel in the known presence of a third party," the communications are not privileged. (People v Osorio, 75 N.Y.2d 80, 84 [1989].) But an exception exists when communications are "made to counsel through a hired interpreter, or one serving as an agent of either the attorney or client to facilitate communication," as long as the client reasonably expects that the communications will remain confidential. (Id.; accord Robert V. Straus Prods. v Pollard, 289 A.D.2d 130, 131 [1st Dept 2001].)
CPLR 3101 (c) provides that "[t]he work product of an attorney shall not be obtainable." Attorney work product includes "[l]awyer's interviews, mental impressions and personal beliefs procured in the course of litigation." (Corcoran v Peat, Marwick, Mitchell and Co., 151 A.D.2d 443, 445 [1st Dept 1989].) It also encompasses draft pleadings, communications or advice of counsel occurring in connection with those pleadings, and statements taken from witnesses if taken to prepare for litigation. (John Blair Communications, Inc. v. Reliance Capital Group, L.P. 182 A.D.2d 578, 582 [1st Dept 1992].) The work product doctrine only applies to documents that were prepared "principally or exclusively to assist in anticipated or ongoing litigation"; it is "not designed to protect documents prepared in the 'regular course of business." (Royal Indem. Co. v Salomon Smith Barney, Inc., 2004 NY Slip Op 50739[U], *8 [Sup Ct, NY County 2004] [internal quotation marks omitted].) These documents must be "prepared by an attorney, acting as an attorney"- i.e., "peculiar to an attorney's trade and talent." (Matter of James, Hoyer, Newcomer, Smiljanich & Yanchunis, P.A. v State, 2020 NY Slip 50863[U], *15 [Sup Ct, NY County Mar. 31, 2010].) Labeling a document as "work product" does not alone make it so. (See Spectrum Sys Intl. Corp., 157 A.D.2d at 449.)
An "at-issue" waiver of the work product (or attorney-client) privilege "occurs where a party affirmatively places the subject matter of its own privileged communication at issue in litigation," such that "invasion of the privilege is required to determine the validity of a claim or defense of the party asserting the privilege, and application of the privilege would deprive the adversary of vital information." (Deutsche Bank Trust Co. of Americas v Tri-Links Inv. Trust, 43 A.D.3d 56, 63 [1st Dept 2007]). In other words, at-issue waiver occurs when the party intends to use privileged materials to prove a claim or defense. (Id. at 64. )
A. Motion Sequence 006
Defendants served a subpoena duces tecum & ad testificandum upon non-party plaintiff's personal counsel, Eileen Caulfield Schwab, Esq. and her business, Eileen Caulfield Schwab, P.C. Defendants assert that the documents requested and testimony sought from attorney Schwab are material to the defendants' defense of this instant action since plaintiff previously testified about attorney Schwab's involvement in the appraisal process of the jewelry that was purchased by the plaintiff from the defendants and that which are now the subject of this instant action. (NYSCEF Nos. 134-135.)
1. The branch of the motion seeking to quash defendants' document subpoena
For the following reasons, plaintiff's motion to quash defendants' subpoena duces tecum served upon non-party plaintiff's personal counsel, Eileen Caulfield Schwab, Esq. and her business, Eileen Caulfield Schwab, P.C. is granted as to subpoena demand Nos. 2, 3, 6 and 7 and denied as to demand Nos. 1, 4, and 5.
Demand No. 1: All appraisal reports, drafts, and/or other documents (including communications) concerning value, composition, age, authenticity, history and/or similar detail concerning each piece of Jewelry.
The plaintiff has not demonstrated how the appraisal reports sought from attorney Schwab are privileged. Thus, the appraisal reports and nonprivileged communications concerning the value, composition, age, authenticity, history and/or similar detail concerning the jewelry warrant production. If there are communications that plaintiff asserts are privileged and withheld from production, then plaintiff shall provide a privilege log regarding the same to the defendants.
Demand No. 2: All diaries, notes, calendars, and/or other documents related to the Jewelry and the transactions between Plaintiff and Defendants described in the Complaint.
With respect to calendars, as the defendants admitted that they themselves produced details of one conference call (see NYSCEF Nos. 158 & 160), the defendants should already have calendaring details of other conference calls (if any occurred) between attorney Schwab and Ms. Sabharwal or among attorney Schwab, Ms. Sabharwal and the plaintiff. And diaries and notes would potentially contain attorney Schwab's personal thoughts, impressions and potential advice to her client related to the jewelry (whether related to this action or for estate purposes). Plaintiff's motion for a protective order with respect to this demand is granted.
Demand No. 3: All communications between and/or among You and Defendants
The defendants should already have copies of all communications between attorney Schwab and the defendants. Plaintiff's motion for a protective order for this demand is granted.
Demand No. 4: All communications between Plaintiff and any third parties relating to the Jewelry, including but not limited to communications with... RubinFrost LLC.
Demand No. 5: All communications between Plaintiff and any third parties relating to the Defendants, including but not limited to communications with... RubinFrost LLC.
With respect to (4) and (5) above, while plaintiff has argued that attorney Schwab represented RubinFrost LLC, thus shielding communications from Schwab to RubinFrost (or its employees, James McCarthy, Teresa M. Ruddy, and Jessica Bailey) from production, the plaintiff has not produced evidence (in the form of a retainer agreement or otherwise) establishing that this putative attorney-client relationship existed. And defendants have produced a portion of plaintiff's deposition in which plaintiff testified that attorney Schwab was plaintiff's personal counsel and not related to the family office. (See NYSCEF No. 159, Tr. 279.)Accordingly, plaintiff's motion for a protective order is denied with respect to these demands.
Demand No. 6: All documents relating to the Jewelry
Demand No. 7: All documents relating to the Defendants that concern or involve the subject matter of the Complaint and the claims and factual allegations set forth therein, including but not limited to the Jewelry
Regarding (6) and (7) above, given the breadth of this request and that it may include work product or attorney-client privileged communications, plaintiff's motion for a protective order is granted for these demands. Should defendants depose attorney Schwab, the defendants can determine at that point whether and to what extent other relevant, unprivileged, and not-yet-produced documents exist.
2. The branch of the motion seeking to quash defendants' testimonial subpoena
Plaintiff's motion for protective order precluding the defendants from deposing attorney Schwab is denied. Plaintiff testified that attorney Schwab first got involved when plaintiff wanted to have the jewelry that is the subject of this instant action appraised for estate purposes. (NYSCEF No. 159, Tr. 87.) Defendants produced emails exchanged between attorney Schwab and Deborah Robinson of Sotheby's in which attorney Schwab asked if Sotheby's could appraise plaintiff's Indian jewelry. (NYSCEF No. 163.) Defendants further produced emails exchanged among attorney Schwab, Terry Ruddy and James McCarthy of RubinFrost, LLC, Plaintiff, and Van Gelder Jewelry discussing Fleur and Bernadette van Gelder of Van Gelder Jewelry's visit to plaintiff's museum, attorney Schwab and plaintiff visiting Van Gelder Jewelry in Amsterdam in order to learn more about the European art market and to seek their input on plaintiff's jewelry collection, attorney Schwab and the Van Gelder Jewelry discussing an evaluation trip to New York to assess plaintiff's jewelry collection, the expenses and costs associated with such trip, Van Gelder Jewelry's request for further information about the jewelry collection, and the amount of time that will be needed for the Van Gelder Jewelry to look at the plaintiff's jewelry collection. (NYSCEF No. 164.)
Considering attorney Schwab's foregoing involvement, this court agrees that attorney Schwab is a fact witness who could testify about the facts surrounding the appraisal process of the jewelry that plaintiff purchased from the defendants. However, the defendants are precluded from inquiring about any privileged communications exchanged between attorney Schwab and the Plaintiff related to the appraisal process of such jewelry. With regard to waiver, the defendants have not shown that an at-issue waiver has occurred. If plaintiff had asserted that she relied on advice of her counsel, attorney Schwab, with respect to the appraisal process, then invasion of the privilege would be necessary to support her claim. However, the excerpts of plaintiff's deposition produced by the defendants show that plaintiff's counsel had previously maintained his objections regarding any communications between the Plaintiff and attorney Schwab related to the appraisal process. (NYSCEF No. 159, Tr. 252.)
Accordingly, plaintiff's motion for a protective order categorically precluding defendants from deposing attorney Schwab or another representative of her firm, Eileen Caulfield Schwab, P.C., is denied.
B. Motion Sequence 008
Plaintiff served a subpoena duces tecum upon non-party Parker Pohl LLC seeking records that constitute evidence of the actions of the defendants, the representations made by the defendants, and the goods sold by the defendants. (NYSCEF No. 177.) Parker Pohl formerly represented Sonia Toledo in a separate lawsuit against the defendants (the Toledo Action), assertedly involving similar allegations.
Plaintiff seeks the following records: copies of discovery demands and subpoenas propounded by Parker Pohl in the Toledo Action, discovery responses received, and confidentiality orders in place in the action; discovery responses provided to opposing counsel in that action; deposition transcripts created in the course of litigating the action; copies of statements attributable to the defendants related to any of the pieces sold by them to Ms. Toledo, and copies of appraisals of any items sold by the defendants to Ms. Toledo.
Defendants' motion for a protective order quashing the subpoena served on Parker Pohl is granted. The records sought, if produced, would likely open a window to legal theory, analysis and strategy of defendants' counsel in defending the defendants in the Toledo Action and potentially for this action. This court is also skeptical that the information sought in the subpoena would necessarily lead to the discovery of evidence that would be relevant and admissible in this action.
Plaintiff asserts that the records sought in the subpoena are relevant to "Defendants' modus operandi, intent, and motives, as well as the absence of mistake or accident in her statements to Plaintiff which [directly] concern Plaintiff's claims for unjust enrichment and rescission." (NYSCEF No. 189 at 4.) However, defendants' modus operandi or intent is not a required element of plaintiffs' unjust-enrichment and rescission claims. (See Mandarin Trading Ltd. v Wildenstein, 16 N.Y.3d 173, 182 [2011] [describing elements of unjust-enrichment claim]; Simonds v Simonds, 45 N.Y.2d 233, 242 [1978] [explaining that an unjust-enrichment claim will lie even absent "any wrongful act by the one enriched"].) The First Department also recently held that a court may properly "rescind a contract for unilateral mistake if the failure to do so would enrich one party at the other's expense, and the parties can be returned to the status quo without prejudice." (Quattro Parent LLC v Rakib, 181 A.D.3d 518, 518-519 [1st Dept 2020].)
True, a unilateral mistake induced by fraud would support a claim for rescission (see Angel v Bank of Tokyo-Mitsubishi, Ltd., 39 A.D.3d 368, 369 [1st Dept 2007]); but plaintiff's fraud claims in this action have already been dismissed.
Plaintiff has not demonstrated how the documents requested in this instant subpoena, i.e., confidentiality orders, statements made by the defendants with respect to any pieces sold by them to Ms. Toledo, or copies of the appraisals with respect to the items sold by the defendants to Ms. Toledo, are relevant to plaintiff Shelley Rubin and her outstanding causes of action against the defendants in this instant action. Thus, defendants' motion for a protective order quashing the subpoena duces tecum served by plaintiff on non-party Parker Pohl LLC is granted.
III. The Disputed Instructions by Defendants' Counsel Not to Answer Deposition Questions
In addition to the discovery motions discussed above, plaintiff has requested that this court require defendants Mr. Mohit Sabharwal and Ms. Nisha Sabharwal to answer several questions that were posed to them at their depositions and that their counsel instructed them not to answer. At the court's request, the parties provided letter briefing on this issue (along with deposition-transcript excerpts). (See NYSCEF Nos. 180, 181, 183, 184.)
Defendants argue as a preliminary matter that plaintiff waived this request by failing to raise it in writing after the depositions until three months later, shortly before the scheduled end of fact discovery. This argument is not without force. At the same time, plaintiff's request for deposition-related rulings was made in parallel to the parties' several discovery-related motions; and this court has concluded, as discussed above, that a limited amount of additional fact discovery should be produced. In these circumstances, this court concludes that plaintiff's deposition-rulings request should be considered on its merits.
The parties later agreed that fact discovery would be extended beyond that deadline to the extent this court ruled in that the parties would have to provide some or all the additional discovery at issue in the current motions.
Under the Uniform Rules for the Conduct of Depositions, a witness may not generally refuse to answer a question posed at a deposition; nor may counsel defending the deposition instruct the witness not to answer. (See 22 NYCRR 221.1 [a], 221.2.) Section 221.2 of those Rules identifies three limited circumstances in which counsel may instruct the witness not to answer: (i) to "preserve a privilege or right of confidentiality"; (ii) to enforce a limitation set forth in a court order; and (iii) "when the question is plainly improper and would, if answered, cause significant prejudice to any person." (Veloso v Scaturro Bros., Inc., 68 Misc.3d 1024, 1026 [Sup Ct, NY County 2020], quoting 22 NYCRR 221.2 [a]-[c].) A "right of confidentiality," for these purposes, "encompasses only legal interests that, although not formally privileged, are akin to privileges in that they are recognized as weighty and entitled to special consideration from the courts"-not merely "information commonly understood as 'private.'" (Id. at 1029 [emphasis added].)
A. Rulings Arising from Mr. Sabharwal's Deposition
1. Defendants' counsel instructed Mr. Sabharwal on the ground of spousal privilege not to answer the question whether he had been "advised by Nisha [Sabharwal] that Ms. Rubin had decided to buy these items before [Mr. Sabharwal] prepared the invoices." Plaintiff's counsel contends that this question did not seek information shielded by the spousal privilege on the ground that it did not involve a spousal communication predicated on "the absolute confidence in, and induced by, the marital relationship." (NYSCEF No. 180 at 2, quoting People v Melski, 10 N.Y.2d 78, 80 [1961].) This court agrees.
Defendant contends that no live controversy exists with respect to this question because Mr. Sabharwal had just testified that he did not know whether plaintiff had decided to buy the items before Ms. Sabharwal prepared the invoices. (See NYSCEF No. 183 at 4.) But that testimony-which was not responsive to the question asked (see NYSCEF No. 184 at Tr. 199)-addressed only what Mr. Sabharwal knew of plaintiff's state of mind, as distinct from what Ms. Sabharwal had told him.
"[N]ot all communications between husband and wife are confidential" for purposes of New York's spousal privilege. (Roberts v Pollack, 92 A.D.2d 440, 445 [1st Dept 1983] [internal quotation marks omitted].) If a conversation between spouses concerned a business matter or the like, such that "there is no reason to suppose [they] would have been unwilling to hold [it] in the presence of any person," it is not shielded by the privilege. (Parkhurst v Berdell, 110 NY 386, 394 [1888]; accord Roberts, 92 A.D.2d at 445-446.) Defendant has not shown that the communication at issue here was one grounded in the "absolute confidence" of the marital relationship, as opposed to a more typical discussion of business affairs.
2 and 3. Defendants' counsel instructed Mr. Sabharwal not to answer two questions about communications between himself and Sandra Toledo or between Ms. Sabharwal and Sandra Toledo, on the ground that the questions sought information within the scope of a confidentiality provision included in the settlement of the related action brought by Ms. Toledo against the Sabharwals. This court concludes that the obligation to comply with this confidentiality provision constitutes a "right of confidentiality" within the meaning of 22 NYCRR 221.2, supporting counsel's instruction not to answer.
Plaintiff contends that the existence of this settlement agreement "does not mean that all communications with Ms. Toledo or actions taken with respect to Ms. Toledo are [pro]scribed." (NYSCEF No. 180 at 2.) But plaintiff has not provided a reason to think these particular questions sought information outside the scope of the Toledo settlement. Nor has defendants' answering other questions about their dealings with Ms. Toledo necessarily waived their right of confidentiality with respect to these particular questions. (See id.)
4. This court agrees with defendants that counsel properly instructed Mr. Sabharwal not to answer questions about the location of a second safe within the Sabharwals' apartment as improper and prejudicial. This court is unpersuaded by plaintiff's contention that a "genuine issue as to the existence of the two safes" requires Mr. Sabharwal to answer questions about the safe's precise location within his apartment. (Id.)
B. Rulings Arising from Ms. Sabharwal's Deposition
1. Plaintiff asked Ms. Sabharwal whether she was aware of any other shareholders of Vastra Inc. prior to its dissolution. This court agrees with defendants (NYSCEF No. 183 at 6) that counsel properly instructed Ms. Sabharwal not to answer this question given this court's prior order holding that "the identity of Vastra's officers and/or shareholders" is not discoverable because it is not itself relevant information nor would lead directly to the discovery of relevant information. (Rubin v Sabharwal, 2019 NY Slip Op 33503[U], *3 [Sup Ct, NY County Nov. 25, 2019].)
2. For similar reasons, this court agrees with defendants that counsel properly instructed Ms. Sabharwal not to answer a question about other Vastra customers to whom she sold jewelry. (See id. at *3-*4.)
Plaintiff also suggests in passing that this court reconsider that portion of its November 2019 discovery order that was based on the Court of Appeals's decision in IDT Corp. v Morgan Stanley Dean Witter & Co. (12 N.Y.3d 132, 142 [2009]). (See NYSCEF No. 180 at 4.) But the aspect of the November 2019 order that drew on IDT Corp. did not relate to the discoverability of information about other Vastra customers. (See Rubin, 2019 NY Slip Op 33503[U], *3.) Regardless, plaintiff does not provide a reason why this court should now reconsider that discovery order, years after the fact.
4. As with questions (2) and (3) asked of Mr. Sabharwal, this court agrees with defendants that counsel properly instructed Ms. Sabharwal not to answer this question, given the settlement agreement with Ms. Toledo.
The parties resolved the third deposition question on which they had initially sought a ruling. For simplicity, this decision uses the same numbering scheme as in the parties' letter briefing.
5, 6, and 7. In these questions, plaintiff sought information about statements that Ms. Sabharwal had made about the jewelry to other customers or prospective customers. The court concludes that Ms. Sabharwal should not be required to answer these questions. Information that Ms. Sabharwal gave to other customers, though it might conceivably have been relevant to plaintiff's now-dismissed fraud claim, does not bear on whether plaintiff made a unilateral mistake about the nature of the jewelry that entitles her to rescission (or to recover sums paid for the jewelry in unjust enrichment).
Strictly speaking, this particular issue was not addressed in this court's prior discovery orders. This court is not persuaded that the instructions not to answer these questions can be understood as enforcing the terms of those orders. But given the lack of relevance of the information sought in these questions, and the risk of confusion and prejudice from conflating plaintiff's surviving rescission claim with her dismissed fraud claim, the court grants defendants a protective order precluding plaintiff from questioning Ms. Sabharwal about characterizations of the jewelry that she made only to customers other than plaintiff and plaintiff's husband.
8. For the same reasons discussed in question (1) asked of Mr. Sabharwal, this court agrees with plaintiff that the spousal privilege does not shield the communications addressed by this question. Mr. Sabharwal should have to answer this question.
Plaintiff's request to require Mr. Sabharwal and Ms. Sabharwal to answer questions asked, but not answered, at their depositions is granted in part and denied in part. The parties are directed to meet and confer about whether plaintiff intends still to pursue the topics discussed here-and, if so, whether she will seek the further depositions of Mr. Sabharwal and Ms. Sabharwal on those topics, or to pose her questions in writing.
Accordingly, for the foregoing reasons, it is hereby:
ORDERED defendants' motion to quash the subpoena served on nonparty Capital One, N.A. (mot seq 005) is granted; and it is further
ORDERED that the branch of plaintiff's motion (mot seq 006) seeking to quash defendants' subpoena duces tecum served on Eileen Caulfield Schwab Eileen Caulfield Schwab, P.C. is granted in part and denied in part as set forth above; and it is further
ORDERED that the branch of plaintiff's motion (mot seq 006) seeking to quash defendants' testimonial subpoena served on Eileen Caulfield Schwab and on Eileen Caulfield Schwab, P.C., is denied; and it is further
ORDERED that defendants' motion to quash the subpoena served on nonparty Bank of America, N.A., and the second subpoena served on Capital One (mot seq 007) is granted; and it is further
ORDERED that defendants' requests for an order restricting the handling of defendants' Social Security numbers, and for an order seeking further disclosure into how plaintiff obtained those numbers, is denied as academic; and it is further
ORDERED that defendants' motion to quash the subpoena served on nonparty Parker Pohl LLC (mot seq 008) is granted; and it is further
ORDERED that plaintiff's request for an order directing defendants Mohit Sabharwal and Nisha Sabharwal to answer questions asked of them, but not answered, at their depositions is granted in part and denied in part as set forth above; and it is further
ORDERED that the parties shall meet and confer about how they intend to proceed with taking the remaining fact discovery permitted under the terms of this decision, and shall appear before this court for a telephonic status conference on October 14, 2022.