Opinion
650290/2019
09-11-2020
Mariah CAREY, Plaintiff, v. Lianna SHAKHNAZARIAN, Defendant.
Plaintiff by Reed Smith LLP (Casey Laffey, Ian Marcus Turetsky and Nicholas Mazza ), 599 Lexington Avenue, New York NY 10022 Defendant by O'Hare Panagian LLP (Robert O'Hare and Andrew Levitt ), 20 Vesey Street, New York NY 10007
Plaintiff by Reed Smith LLP (Casey Laffey, Ian Marcus Turetsky and Nicholas Mazza ), 599 Lexington Avenue, New York NY 10022
Defendant by O'Hare Panagian LLP (Robert O'Hare and Andrew Levitt ), 20 Vesey Street, New York NY 10007
Andrew Borrok, J.
The following e-filed documents, listed by NYSCEF document number (Motion 006) 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 172, 173, 180, 182, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 212, 213, 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 227, 228, 229, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 348, 349
were read on this motion to/for SANCTIONS.
Upon the foregoing documents, and for the reasons set forth below, Mariah Carey's motion is granted to the extent set forth herein.
I. The Facts Relevant to the Motion
In March 2015, Ms. Carey hired Lianna Shakhnazarian as her executive assistant (NYSCEF Doc. No. 97, Shakhnazarian tr. at 34, lines 9-12). Pursuant to a certain Confidentiality and Non-Disclosure Agreement (the NDA ), dated March 13, 2015, by and between Ms. Carey and Ms. Shakhnazarian, Ms. Shakhnazarian agreed to safeguard Ms. Carey's privacy and not disclose or publish any confidential materials to any third parties (NYSCEF Doc. No. 99 at 3).
In April 2017, Ms. Shakhnazarian made at least two video recordings and one audio recording of Ms. Carey without Ms. Carey's authorization (NYSCEF Doc. No. 100 at 5; NYSCEF Doc. No. 97, Shakhnazarian tr. at 197, lines 7-16). Ms. Shakhnazarian admits that she shared these recordings with Ms. Carey's former manager, Stella Bulochnikov, and Ms. Carey's physician, Stuart Lerner, M.D. (NYSCEF Doc. No. 100 at 6). Additionally, in an email dated October 19, 2017, from Matthew Stevens, Ms. Carey's former administrative assistant, to Ms. Carey's head of security, her business manager, and her lawyer, Mr. Stevens states that Ms. Shakhnazarian showed him video recordings of Ms. Carey of an intimate and graphic nature that she had secretly recorded without Ms. Carey's knowledge (NYSCEF Doc. No. 102). He also states that he witnessed Ms. Shakhnazarian share at least one secretly recorded video with Ms. Carey's former "managing executive," Zarina Burbacki, and her former tour manager, Yonatan Shimroni, while they were at dinner one evening (id. ).
Ms. Shakhnazarian also took pictures of Ms. Carey's private text messages (NYSCEF Doc. No. 104), shared the details of private conversations between Ms. Shakhnazarian and Ms. Carey with Ms. Burbacki and Mr. Shimroni, permitted them to eavesdrop on phone conversations with Ms. Carey's staff (NYSCEF Doc. No. 106-113), and secretly recorded (or directed her sister to record) a conversation with a member of Ms. Carey's staff (NYSCEF Doc. No. 97, Shakhnazarian tr. at 174, lines 1-23).
In 2017, Ms. Carey decided to hire a second assistant, whose duties would overlap with those of Ms. Shakhnazarian (NYSCEF Doc. No. 114, Carey tr. at 95, lines 9-22). This resulted in a reduction in Ms. Shakhnazarian's pay (id. at 95-96). On October 2, 2017, Ms. Shakhnazarian sent a message to Ms. Burbacki via the WhatsApp Messenger application (WhatsApp ), stating: "That b***h reduced my salary and I just got the payroll and found out ... I want you to tell me how to draft my email and word it to the motherf***er" (NYSCEF Doc. No. 116 at 615). Ms. Burbacki replied "don't worry ... we'll take care of it" and told Ms. Shakhnazarian that she was "[g]aining intel" from Ms. Bulochnikov, who said that she was "done with MC" (id. at 615-616). Ms. Shakhnazarian encouraged Ms. Burbacki to continue to gather information against Ms. Carey, replying, "lol collect collect" (id. at 616). The following evening, Ms. Shakhnazarian sent a WhatsApp message to Ms. Burbacki stating that she was "gonna make sure they both go down," in reference to Ms. Carey and Ms. Bulochnikov (id. at 618). She further explained to Ms. Burbacki that, "I really want to send them something from a lawyer about my overtime balance" (id. at 619).
On October 4, 2017, Ms. Burbacki sent a warning to Ms. Shakhnazarian regarding Ms. Bulochnikov via WhatsApp, stating: "Do not discuss anything with her she will trap you" and that "[s]he is being advised by lawyers what to say" (id. at 620). On October 9, 2017, Ms. Shakhnazarian sent another WhatsApp message to Ms. Burbacki, stating, "when you get a chance can you please refer me to a lawyer so I can know what I'm exactly entitled to [ ] and calculate my overtime correctly ... I want to have the numbers right when I speak to mc and her stupid management" (NYSCEF Doc. No. 118 at 643).
On October 10, 2017, Ms. Burbacki referred Ms. Shakhnazarian to a plaintiff's employment attorney (NYSCEF Doc. No. 120 at 999-1000). Ms. Burbacki advised Ms. Shakhnazarian to "ask him if he's worked with ‘LESTER knispel, rosemary manhtossian or Stella bulochnikov’ ... to make sure he doesn't have a conflict of interest" (id. at 1000). Ms. Shakhnazarian asked, "[c]an I say you referred me??" to which Ms. Burbacki, who is also an attorney, replied "I didn't tell him anything besides ‘you're my friend and I work with her boss so I am conflicted and can't give her legal advice’ " (id. at 1001). Subsequently, on October 16, 2017, Ms. Shakhnazarian sent a WhatsApp message to Ms. Burbacki, asking, "can you please refer me to a really good lawyer ... not employee I want to build my case" (NYSCEF Doc. No. 124 at 666). Ms. Burbacki replied, "yes call you in a bit" (id. ).
On October 19, 2017, Mr. Stevens sent the aforementioned email to Ms. Carey's head of security, her business manager, and her lawyer, and carbon copied Ms. Bulochnikov, with the subject line: URGENT AND EXTREMELY CONDIFENTIAL, in which he detailed allegations of misconduct by Ms. Shakhnazarian (NYSCEF Doc. No. 102). Mr. Stevens wrote:
Shortly after [Ms. Shakhnazarian] had heard about her pay decrease, she had something to show me as we were still "friends" in her mind at this point. She pulled out her phone and explained that ... she had recorded videos of [Ms. Carey] without her knowledge. The most shocking was filmed in the kitchen of [Ms. Carey's] Beverly Hills home.... While this is the most shocking of the footage, there are many videos. In the videos, [Ms. Shakhnazarian] follows [Ms. Carey] — through the dining room, down to the movie theatre, and ultimately up into [Ms. Carey's] bedroom. I immediately felt sick seeing this. [Ms. Shakhnazarian] informed me that if her pay was to be decreased or if [Ms. Carey] chose to let her go, that she would sell this footage.... I also witnessed her share this video at a dinner with [Ms. Burbacki] and [Mr. Shimroni].
(id. ).
Mr. Stevens further explained that he believed that the recordings were still on Ms. Shakhnazarian's phone and advised that her phone "needs to be confiscated IMMEDIATELY for [Ms. Carey's] protection" (id. ).
In a series of WhatsApp messages, dated October 19, 2017, the same day that Mr. Stevens sent his email regarding Ms. Shakhnazarian's conduct, Ms. Shakhnazarian told Ms. Burbacki and Mr. Shimroni "I need to talk to you guys asap" and "I feel like I'm gonna have a heart attack" (NYSCEF Doc. No. 126 at 451, 453). The following day, after learning of Mr. Stevens' email, Ms. Shakhnazarian deleted at least two of the video recordings from her phone (NYSCEF Doc. No. 97, Shakhnazarian tr. at 187, lines 3-23). As Ms. Shakhnazarian explained in her deposition testimony, "I thought to myself, Great. Matt [Stevens] and Stella [Bulochnikov] are up to something. They are setting me up. And so I panicked and I got nervous and I deleted them" (id. at 187, lines 16-19).
Ms. Carey commenced this action against Ms. Shakhnazarian by filing a summons on January 16, 2019 (NYSCEF Doc. No. 1) and a complaint on March 7, 2019 (NYSCEF Doc. No. 6), alleging that Ms. Shakhnazarian breached the NDA by, among other things, making unauthorized video recordings and disseminating confidential information to the Daily Mail. Ms. Carey served her First Request for Production of Documents on May 21, 2019 (NYSCEF Doc. No. 128), and Second Request for Production of Documents on June 28, 2019 (NYSCEF Doc. No. 129). In both sets of document requests, Ms. Carey requested the disclosure of documents from March 13, 2015 to the present (NYSCEF Doc. No. 128, ¶ 16; NYSCEF Doc. No. 129, ¶ 16).
After the action was filed, however, and after Ms. Carey served her document requests, Ms. Shakhnazarian did not search the cellphone (the 2018 Cellphone ) that she had been using since early 2018 for responsive documents. At her deposition, Ms. Shakhnazarian denied having ever backed up any of the documents from her 2018 Cellphone and said that she was not aware if anything was automatically saved to the iCloud (NYSCEF Doc. No. 97, Shakhnazarian tr. at 47, lines 8-10 and 18-21, and at 48, lines 2-4). Ms. Shakhnazarian also claims that in August 2019, she accidentally knocked over a kettle and spilled water on the 2018 Cellphone, rendering it inoperable (id. at 43-44). She does not deny that she failed to take any measures to attempt to recover the documents and communications on the device and instead asserts that she gave the 2018 Cellphone to her boyfriend to see if she could get any money toward a new phone by trading it in but cannot recall the name or location of the store where the phone was surrendered (id. at 43-45, 47-48). Ms. Shakhnazarian acknowledges that she has deleted WhatsApp messages that she deemed "unnecessary," but denies deleting any WhatsApp messages since the time when she began contemplating litigation against Ms. Carey (id. at 141, lines 14-23).
In addition, although Ms. Shakhnazarian represented that no other recordings were made or disseminated, forensic imaging of her cellphone, conducted after this motion was filed, revealed a fourth secret recording that had not previously been disclosed (NYSCEF Doc. No. 185, Laffey Reply Affirm., ¶¶ 17-30). The forensic imaging report shows that Ms. Shakhnazarian sent or attempted to send this fourth recording to a third party, but that she subsequently "unsent" the video (id. , ¶¶ 31-41). Forensic imaging also revealed that Ms. Shakhnazarian had saved copies of the exact documents, images, and videos that were leaked to the Daily Mail, including documents relating to Ms. Carey's medical treatment and private photos and videos, evidence that she previously denied having in response to Ms. Carey's discovery requests (id. , ¶¶ 46-48).
Moreover, the forensic imaging reveals that, just before she sued Ms. Carey in California for unpaid overtime and other employment related claims, Ms. Shakhnazarian sent herself a significant volume of confidential information, including the documents, images, and videos that were leaked to the Daily Mail (id. , ¶¶ 46-48). The forensic imaging also establishes that the 2018 Cellphone was enabled to be backed up to the iCloud (NYSCEF Doc. No. 224). Finally, although Ms. Shakhnazarian previously represented that she only had one email address, the forensic imaging established that she used two other email accounts: an iCloud account (the iCloud Account ) and a Gmail account (the Gmail Account ), both of which she failed to search for responsive documents (NYSCEF Doc. Nos. 224, 226; NYSCEF Doc. No. 185, Laffey Reply Affirm., ¶¶ 67-74).
II. Discussion
To prevail on a motion for sanctions for spoliation of evidence, the moving party must establish:
[1] that the party having control over the evidence possessed an obligation to preserve it at the time of its destruction, [2] that the evidence was destroyed with a "culpable state of mind," and [3] "that the destroyed evidence was relevant to the party's claim or defense such that the trier of fact could find that the evidence would support that claim or defense"
( Pegasus Aviation I, Inc. v. Varig Logistica S.A. , 26 N.Y.3d 543, 547 [2015], quoting VOOM HD Holdings LLC v. EchoStar Satellite L.L.C. , 93 A.D.3d 33, 45 [1st Dept. 2012] ). A "culpable state of mind" includes ordinary negligence for purposes of a motion for spoliation sanctions ( VOOM , 93 A.D.3d at 45 ). The relevance of materials that were intentionally or willfully destroyed is presumed ( Pegasus , 26 N.Y.3d at 547 ). If, however, the evidence was destroyed negligently, the moving party bears the burden to establish that the evidence was relevant to its claims or defenses ( id. at 547-548 ). Trial courts may, in the exercise of discretion, impose sanctions to provide relief to the affected party, including (i) preclusion of evidence favorable to the spoliating party, (ii) awarding costs associated with obtaining replacement evidence, or (iii) employing an adverse inference instruction at trial ( id. at 551, citing CPLR § 3126 ["If any party ... refuses to obey an order for disclosure or willfully fails to disclose information which the court finds ought to have been disclosed ... the court may make such orders with regard to the failure or refusal as are just"] ).
The First Department has adopted the standard set forth in Zubulake v. UBS Warburg LLC (220 FRD 212 [SD NY 2003] ), which held that, "[o]nce a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold.’ " ( VOOM , 93 A.D.3d at 41, quoting Zubulake , 220 FRD at 218 ).
Here, as set forth above, inasmuch as Ms. Shakhnazarian sent WhatsApp messages to Ms. Burbacki on October 16, 2017 asking for an attorney recommendation and stating "I want to build my case," (NYSCEF Doc. No. 124 at 666; NYSCEF Doc. No. 97, Shakhnazarian tr. at 145-146), Ms. Shakhnazarian reasonably anticipated litigation with Ms. Carey and therefore had a duty to preserve evidence as of that date. Accordingly, Ms. Shakhnazarian's destruction of at least two video recordings on October 20, 2017 and subsequent deletion of WhatsApp messages constitutes spoliation of evidence.
To the extent that Ms. Shakhnazarian argues that she was referring to building a case against Ms. Bulochnikov, not against Ms. Carey, the argument is disingenuous at best. Ms. Shakhnazarian's prior WhatsApp messages to Ms. Burbacki establish that she was also contemplating litigation against Ms. Carey relating, among other things, to her overtime pay (see NYSCEF Doc. No. 116 at 618-619; NYSCEF Doc. No. 118 at 643) and her lawsuit against Ms. Carey in California for unpaid overtime and other employment-related claims, the very litigation that is discussed in these WhatsApp messages, is proof positive of the same.
At the latest, it is indisputable that Ms. Shakhnazarian had a duty to preserve evidence by January 16, 2019 when this lawsuit was filed and Ms. Shakhnazarian discarded the 2018 Cellphone approximately seven months later in August 2019 without making any effort to preserve the documents and communications that the 2018 Cellphone contained. This constitutes spoliation and the credible evidence supports a finding that Ms. Shakhnazarian's conduct has been willful, intentional, and contumacious. The relevance of the destroyed evidence is therefore presumed ( Pegasus , 26 N.Y.3d at 547 ).
Ms. Carey has also met her burden of establishing that the destroyed evidence was relevant to her claims. Critically, this is a dispute about Ms. Shakhnazarian's alleged breach of the NDA by taking and disseminating unauthorized video and audio recordings, pictures, and communications and disclosing confidential information to various persons, including the Daily Mail. The destroyed videos were material and necessary to establish the private and invasive nature of the recordings and were the objective record of what Ms. Shakhnazarian recorded. The videos could have been used by Ms. Carey to have Mr. Stevens identify the videos as the videos that had been shared within him in violation of the NDA. Additionally, the videos could have been shown to a factfinder so that the factfinder could determine whether Ms. Carey was aware that she was being videotaped and through her silence acquiesced to being recorded by Ms. Shakhnazarian.
In addition, the deleted WhatsApp messages between Ms. Shakhnazarian, Ms. Burbacki, and Mr. Shimroni were relevant because Ms. Burbacki and Mr. Shimroni's objectivity and creditability are at issue in this case and the deleted messages may have revealed additional information regarding Ms. Shakhnazarian's recording and sharing of confidential information in violation of the NDA, including whether she shared any recordings with any other third parties.
In a letter, dated April 21, 2020, from Mark Quigley, Esq., Ms. Shakhnazarian's attorney, to Casey Laffey, Esq. and Bert Deixler, Esq., Ms. Carey's attorneys, Mr. Quigley attempted to explain, among other things, that Ms. Shakhnazarian did not previously disclose the two additional email accounts because they were inactive and had not been used by Ms. Shakhnazarian (NYSCEF Doc. No. 392). This assertion, however, was false. As discussed above, the forensic imaging of one of Ms. Shakhnazarian's prior cellphones establishes that Ms. Shakhnazarian emailed herself a significant volume of confidential documents to the undisclosed Gmail Account just days before filing a lawsuit against Ms. Carey in 2019, including documents that were leaked to the Daily Mail (NYSCEF Doc. No. 208). The forensic imaging also establishes that the undisclosed Gmail Account was even used as the Apple ID on one phone, her iPhone 6 Plus, and she used the account for services including iMessage and iCloud (NYSCEF Doc. No. 224, 228).
Mr. Quigley also submitted affidavits from personnel familiar with the firm's electronic discovery infrastructure explaining that errors with the firm's Distributed File System Replication process, by which onsite files are automatically uploaded to the iCloud, that occurred between December 2019 and February 2020, may have resulted in inadvertent deletion or delayed disclosure of approximately 900 files (NYSCEF Doc. No. 389, 390, 391). Ms. Shakhnazarian asserts that she intended to produce documents, including documents regarding the iCloud backups of her cellphones, the two previously undisclosed email accounts, and the fourth video recording, but was unable to do so as a result of the server errors. However, Ms. Shakhnazarian fails to explain why she did not produce these documents before the server errors occurred, and in the case of the documents leaked to the Daily Mail, why she went so far as to even deny that any such documents existed.
Thus, Ms. Shakhnazarian's destruction of messages and videos during the critical time when her relationship with Ms. Carey and her staff was clearly deteriorating constitutes, at best, gross negligence ( VOOM , 93 A.D.3d at 46 ), and, at worst, willful and contumacious conduct. In addition, trading in her cellphone without taking any measures to save the videos, messages, and other data after this lawsuit was filed, when Ms. Shakhnazarian had an undeniable duty to preserve evidence, was grossly negligent, if not intentional (id. , citing Zubulake , 220 FRD at 22).
Accordingly, the motion for sanctions is granted and the court shall issue appropriate adverse inference instructions at trial (Zoom , 93 A.D.3d at 48 ). A forensic examination of Ms. Shakhnazarian's current cell phone is also ordered for any evidence of any violation of the NDA, any text messages or other documents which may have been backed up on the iCloud which may be used for impeachment purposes, and any further spoliation thereof. Accordingly, the parties are directed to submit a forensic examination protocol for such examination to the court within seven days of this decision and order. Ms. Shakhnazarian shall bear the costs of this forensic examination. In addition, Ms. Shakhnazarian is ordered to pay the reasonable attorneys' fees incurred in preparing this motion ( Zacharius v. Kensington Publ. Corp. , 154 A.D.3d 450, 451 [1st Dept. 2017] [affirming award of attorneys' fees and costs of reviewing evidence and preparing motion as appropriate sanction for spoliation] ). However, sanctions for spoliation must reflect "an appropriate balancing under the circumstances" ( Voom , 93 A.D.3d at 47 ). In this case, the more drastic sanctions of striking the pleadings and preclusion are not warranted (see Arbor Realty Funding, LLC v. Herrick, Feinstein LLP , 140 A.D.3d 607, 609-610 [1st Dept. 2015] ).
For the avoidance of doubt, the court has considered Ms. Shakhnazarian's other arguments, including those made at oral argument (9/9/20) as well as Ms. Shakhnazarian's additional submissions (including those discussed above) and finds them unavailing. Ms. Shakhnazarian's argument that Dr. Lerner may have seen certain videos, or that Ms. Bulochnikov may have asked her to take the videos, or that such videos did not violate the NDA, misses the point and conflates the issue of spoliation with whether the NDA was in fact violated. With respect to Ms. Shakhnazarian's argument that she made the video at Ms. Bulochnikov's request for Dr. Lerner for the purposes of medical treatment, Dr. Lerner testified that he did not ask that a video be made and that he did not ask to see the video when he arrived (NYSCEF Doc. No. 373, Lerner tr. at 23, lines 19-20, 24-25, 27). He explained that he did not need to see the video for medical treatment purposes because he was physically present to observe his patient (id. at 30, lines 15-20). Putting aside that the NDA does not have a carve out for videos taken for medical purposes, the simple fact is that regardless of whether Ms. Shakhnazarian may have ultimately been in a position to explain why these videos were taken, as discussed above, by deleting the videos and disposing of her cellphone more than seven months after this litigation was commenced so that an engineer could not examine it and see if anything could be extracted, her actions constituted spoliation of critical evidence and severely prejudiced Ms. Carey's ability to prosecute her case.
Accordingly, it is
ORDERED that the motion for sanctions is granted and an adverse inference shall be taken in this action in accordance with the foregoing; and it is further
ORDERED that the defendant is directed to turn over her current cellphone for a forensic examination, and the parties are directed to stipulate to a forensic examination protocol within seven of this decision and order and produce the same to the court to So-Order at the Part 53 email address; and it is further
ORDERED that the defendant shall bear the cost of such forensic examination; and it is further
ORDERED that the plaintiff is directed to present to the defendant a bill of costs for the reasonable attorneys' fees and costs incurred as a result of preparing this motion for sanctions; and it is further
ORDERED that the defendant is directed to pay the plaintiff's reasonable attorneys' fees and costs awarded herein within 30 days of receipt of the bill of costs; and it is further
ORDERED that in the event that the parties cannot agree to the amount of reasonable costs and fees incurred in connection with this motion, the issue will be referred to a Special Referee to hear and determine.