Opinion
Index No.: 706833/2016
09-25-2019
45-34 PEARSON STREET LIC, LLC and 45-34 PEARSON SHLAF LLC, Plaintiff(s) v. SHAI OHANA, YECHESKEL ELIAS, CADIT JACOBI a/k/a CADIT ELIAS, RENOVATIONS ARE US LLC, PEARSON STREET FUNDING LLC, SANTANDER BANK, N.A., AM FEURMAN LLC, MJA FINANCIAL LLC, JOHN DOES 1 through 30 and ABC CORPS. 1 through 30. Defendant(s) PEARSON STREET FUNDING LLC, AM FEURMAN LLC and MJA FINANCIAL LLC, Third-Party Plaintiff(s) v. ALAN GERSON and BRUCE MONTAGUE & PARTNERS Third-Party Defendants(s)
NYSCEF DOC. NO. 609 Short Form Order Present: HONORABLE MARGUERITE A. GRAYS Justice Motion Date.: July 9, 2019 July 16, 2019 Motion Cal. No's: 28 & 31 Motion Seq. No's: 20 & 22
The following papers numbered EF514- EF589 read on this motion by Santander Bank, N.A. ("Santander Bank"), to quash plaintiffs' subpoena duces tecum seeking information pertaining to certain bank accounts; and separate motion by plaintiffs to preclude the testimony of Arthur J. Israel, Esq., as an expert witness on behalf of third-party defendants Alan Gerson, Esq., and Bruce Montague & Partners (collectively, "the Gerson third-party defendants").
| PapersNumbered | |
|---|---|
| Notice of Motion - Affidavits - Exhibits | EF514-523,547-549 |
| Answering Affidavits - Exhibits | EF553-564, 567-586 |
| Reply Affidavits | EF588-EF589 |
Upon the foregoing papers it is ordered that the motions are combined herein for disposition, and determined as follows:
Plaintiffs in this, inter alia, fraud action seek damages based upon an alleged fraudulent scheme by defendants Shai Ohana, Yescheskel Elias and Cadit Jacobi (collectively "the Ohana defendants"), to refinance property located at 45-35 Pearson Street, Long Island City, New York ("the property"). The vacant land property is owned by 45-34 Pearson Street LIC ("the Company") but, in obtaining the fraudulent loans, Ohana, Elias and Jacobi represented that Ohana was the sole owner of the Company. Specifically, the complaint alleges that the Ohana, defendants used fake documents to take out four successive fraudulent mortgage loans in the Company's name from the Lender defendants.
The instant motions are calendared as sequence numbers "20" and "22". As such, the Court need not cite the extensive procedural history of this case. As pertinent to the instant motion, on May 6, 2019, plaintiff served on defendant Santander a Subpoena Duces Tecum requesting documents and certain information, and/or a declaration that no such document[s] exists, following the examination before trial of Santander's witness and non-party Steven T. Wolf . Plaintiffs thereafter sent an email to Santander memorializing their requests, and a supplemental document production in response to the same was served. Plaintiffs thereafter sent a series of emails to Santander repeatedly requesting, among other things, the items to which Santander and Wolf objected during their depositions, and continue to refuse to provide. By the instant motion, Santander seeks a protective order to quash plaintiffs' trial subpoena duces tecum. The motion is opposed by plaintiffs. Facts
There are five Santander bank accounts pertinent to the instant motion. The first Santander account, ending in 4090, was opened by the Company on February 9, 2015, by Arik Mor and Uriel Zichron, who were present at the Santander branch. Defendant Elias was also present, and a signatory on this account.
The Second Santander account, ending in 3929, was opened on November 20, 2015, by defendant Jacobi, the wife of Elias, who had no connection whatsoever to the plaintiffs. While Mor and Zichron knew of this account, they believed that Elias had opened it and it had the same signatories as the First Santander account. Mor testified that neither he nor Zichron knew that Jacobi had opened the account or that she was the authorized signatory.
The "Secret" Santander account, ending in 4100, was opened on April 11, 2016- 4 days prior to the final mortgage loan transaction - by Jacobi, who was the sole signatory. Neither the Company, Mor nor Zichron knew about this account until just prior to the commencement of this litigation.
On or about March 21, 2016, Jacobi opened an account at Santander in the name of Real Estates Are Us, ending in 4046, on which she was the sole signatory, and into which Jacobi transferred some of the proceeds of the four mortgage loan transactions from the Secret Santander account. Proceeds from this account were eventually liquidated by Jacobi in cash, or transferred to other entities controlled by the Ohana defendants, including defendant Renovations Are Us' accounts at Wells Fargo.
In addition, Jacobi opened an account at Santander in the name of Constructions Are Us, ending in 3961, into which she transferred some of the proceeds of the four mortgage loan transactions from the Secret Santander Account. Proceeds from this account were eventually liquidated by Jacobi in cash, or transferred to other entities controlled by the Ohana defendants including defendant Renovations Are Us' accounts at Wells Fargo.
Plaintiffs submit that the existence of the last two accounts were not disclosed by Santander in the course of discovery, and that they only fortuitously discovered these accounts in response to a subpoena they served upon Wells Fargo. Plaintiffs served their first Request for Production of Documents and Things upon Santander on or about December 1, 2016, with responses due December 21, 2016. In their initial document requests, plaintiffs sought, inter alia, documents concerning any accounts opened by Elias and Jacobi, which include information sought in Request Nos. 2, 3 and 4 of the Trial Subpoena, and communications from or to Ohana, Elias, Jacobi and Renovations, which include the information sought in Requests Nos. 2, 3, 4 , 5 and 7 of the Trial Subpoena. To date, the information sought has not been disclosed.
Motion by Santander
CPLR 3101(a) clearly provides that there shall be full disclosure of all evidence material and necessary in the prosecution or defense of an action, regardless of the burden of proof (see Spectrum Systems International Corporation v Chemical Bank, 78 NY2d 371; Quevedo v Eichner, 29 AD3d 554). The Court of Appeals has held that the words "material and necessary" be liberally interpreted to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay. The test shall be one of "usefulness and reason" (see Andon v 302-304 Mott Street Assocs., 94 NY2d 74 0, 74 6 [2000]; Spectrum Systems International Corporation v Chemical Bank, supra; Allen v Crowell-Colller Publ. Co., 21 NY2d 403, 406 [1968]; Parise v Good Samaritan Hosp., 36 AD3d 678 [2007]).
"An application to quash a subpoena should be granted '[o]nly 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' " (Anheuser-Busch, Inc. v Abrams, 71 NY2d 327, 331-332 [1988]; see Myrie v Shelley, 237 AD2d 337, 338 [1997]; cf. Ayubo v Eastman Kodak Co., 158 AD2d 641, 642 [1990]). It is well settled that the purpose of a subpoena duces tecum is to compel the production of specific documents that are relevant and material to facts at issue in a pending judicial proceeding (see Velez v Hunts Point Multi-Service Center, Inc., 29 AD3d 104, 112 [2006]). "It is ... well settled that a motion to quash a subpoena duces tecum should be granted only where the materials sought are utterly irrelevant to any proper inquiry" (Id.; see New Hampshire Ins. Co. v. Varda, Inc., 261 AD2d 135, 135 [1999]). "Moreover, the burden of establishing that the requested documents and records are utterly irrelevant is on the person being subpoenaed" (Gertz v Richards, 233 AD2d 366, 366 [1996]).
Here, the defendant has not met the burden of establishing the information requested is utterly irrelevant. Rather, plaintiffs have shown the that information is material and relevant to the ongoing controversy (see Tech. Multi Sources, S.A. v Stack Glob. Holdings, Inc., 44 AD3d 931, 932-33 [2007]). In addition, Santander failed to make any showing that the information being sought was confidential in nature (Id.). Accordingly, the motion to quash the subpoena duces tecum is denied. Motion by Plaintiffs
The motion by plaintiffs to preclude the testimony of Arthur J. Israel, Esq., as an expert witness on behalf of the Gerson third-party defendants, is granted. The opinion proposed to be proffered by the Gerson third-party defendants' legal malpractice expert is improper since it is the function of the court to determine whether defendants' performance constituted malpractice (see Dimond v Salvan, 78 AD3d 407, 408 [2010]; Russo v Feder, Kaszovitz, Isaacson, Weber, Skala & Bass, 301 AD2d 63, 68-69 [2002]). Essentially, the affiant-attorney would be offering a legal opinion as to what performance or absence thereof constitutes legal malpractice. But making those determinations is the function of a Court (Id.). "[E]xpert witnesses should not ... offer opinion as to the legal obligations of parties ...; that is an issue to be determined by the trial court. Expert opinion as to a legal conclusion is impermissible" (Colon v Rent-A-Center, Inc., 276 AD2d 58, 61 [2000]). An expert may not be utilized to offer opinion as to the legal standards which he believes should have governed a party's conduct (Marx & Co., Inc. v Diners' Club Inc., 550 F2d 505, 509 [1977]). The proposed testimony affidavit also raises an additional concern. It is tinged with the sense that since the affiant would have done things differently, therefore the attorney being challenged was incompetent. Such a contest of strategies is easily reduced to a malpractice standard that impermissibly compares the defendant-attorney's choice of strategies with the afterthoughts later offered by plaintiff's now-favored attorney, for whom bias is a necessary concern, rather than measuring counsel's performance against the much more objective standard of the profession's commonly prevailing practices" (Russo v Feder, Kaszovitz, Isaacson, Weber, Skala & Bass, LLP, 301 AD2d at 68-69). Accordingly, the motion to preclude is granted. Conclusion
The motion by Santander to quash the subpoena duces tecum is denied.
The motion by plaintiffs to preclude the testimony of Arthur J. Israel, Esq., the proposed expert witness designated by the Gerson third-party defendants, is granted. Dated: SEP 25 2019
/s/_________
J.S.C.