Opinion
24678/08
09-28-2011
The Omni Health & Fitness Complex Of Pelham, Inc. and FFF Real Estate, Inc., Plaintiffs, v. P/A-Acadia Pelham Manor, LLC, P/A ASSOCIATES, LLC, ACADIA REALTY TRUST, ACRS, INC., ACADIA REALTY SERVICES, INC, ACADIA REALTY LIMITED PARTNERSHIP, ACADIA STRATEGIC OPPORTUNITY FUND, LP, ACADIA STRATEGIC OPPORTUNITY FUND II, LLC, JOSEPH HOGAN, JOEL BRAUN, AARON MALINSKY, PAUL SLAYTON, RUSCIANO & SON, CORP., RUSCIANO ASSOCIATES, INC., SECOR LANE CORP, SECOR LANE COMPANY, LLC, and VJK MANAGEMENT, INC., Defendants.
Sheindlin & Sullivan, LLP By: Alla Vigdorchik, Esq. and Gregory Sheindlin, Esq. Attorneys for Plaintiffs. Shapiro Gettinger & Waldinger, LLP By: Mona Shapiro, Esq. Attorneys for Defendants.
Sheindlin & Sullivan, LLP By: Alla Vigdorchik, Esq. and Gregory Sheindlin, Esq. Attorneys for Plaintiffs.
Shapiro Gettinger & Waldinger, LLP By: Mona Shapiro, Esq. Attorneys for Defendants.
Joan B. Lefkowitz, J.
The following papers numbered 1 to 80 were read on (1) motion by plaintiffs for, inter alia, an order compelling defendants to produce the documents listed on their privilege log for in camera review by the court, and compelling defendants to produce those documents after an in camera review; and (2) motion by defendants for, inter alia, an order, pursuant to CPLR 3103 (c), granting defendants a protective order suppressing attorney-client privileged documents and information improperly obtained by plaintiffs from Curtis Johnson, precluding plaintiffs from soliciting, accepting and/or utilizing privileged or confidential information from Curtis Johnson, and precluding plaintiffs from calling Curtis Johnson as a witness at trial.
Plaintiffs' Order to Show Cause-Affirmation-Affidavits-Exhibits1-36
Answering Affidavits-Exhibits-Memorandum of Law37-41, 79
Defendants' Privilege Log80
Defendants' Order to Show Cause-Affidavit-Affirmation-Exhibits42-58
Memorandum of Law59
Answering Affirmation-Exhibits60-73
Letters and electronic mail74-78
Upon the foregoing papers and the proceedings held on July 25, 2011, this court issued a Decision and Order dated July 26, 2011, which determined certain branches of the motions, directed an in camera review of the documents listed on defendants' privilege log, and reserved decision on that branch of defendants' motion seeking a protective order as to privileged documents obtained from Curtis Johnson, a former employee of defendant Acadia Realty Trust, precluding plaintiffs from soliciting, accepting and/or utilizing privileged or confidential information from Curtis Johnson, and precluding plaintiffs from calling Curtis Johnson as a witness at trial. This court has now conducted an in camera review of the documents on defendants' privilege log, which were submitted to the court by defendants, and determines the branch of plaintiffs' motion seeking the production of those documents and the branch of defendants' motion for a protective order as to Curtis Johnson as follows:
Factual Background
In this action for, inter alia, trespass, nuisance and breach of contract, plaintiffs allege that defendants violated their right to use an easement by fencing off a common parking lot from 2006 to 2008 during construction of the Pelham Manor Shopping Plaza ("Shopping Center") in contravention of a zoning agreement and multiple orders of the Appellate Division, Second Department. Plaintiffs are tenants in a commercial building located at 872 Pelham Parkway, Pelham Manor, New York ("Omni property"), which is adjacent to the Shopping Center. Defendants are owners, lessors, lessees, tenants, developers and/or managers of the property on which the Shopping Center is located at 798-858 Pelham Parkway, Pelham Manor, New York ("Shopping Center property"). The zoning agreement, referred to by defendants as parking agreement, was executed by the owners of the Shopping Center property, the prior owners of the Omni property, and the Village of Pelham Manor. In the zoning agreement, the owners of the Shopping Center property agreed to set aside, for set-backs, roadways and automobile parking purposes for the use of the tenants and owners of certain buildings, including the Omni property. Plaintiffs contend that Appellate Division, Second Department, in three decisions , evaluated the zoning agreement and parking rights, and ruled that tenants of the property adjacent to the Shopping Center property were third-party beneficiaries to the zoning agreement and entitled to use the common parking area provided for in the zoning agreement. Plaintiffs also allege defendants' conduct was willful and intentional, and seek punitive damages.
See 6-8 Pelham Parkway Corp. v Rusciano & Son Corp. (170 AD2d 497 [2d Dept 1991]); Rusciano & Son, Corp. v Joseph Rustin's, Inc. (209 AD2d 397 [2d dept 1994]); Cornerstone Metrofit Corp. v Rusciano & Son Corp. (209 AD2d 372 [2d Dept 1994]).
In Camera Review of Documents on Defendants' Privilege Log
Defendants assert that the documents listed on the privilege log and submitted to the court for in camera review are protected from disclosure as attorney-client communications, attorney work product, material prepared for litigation, confidential business information, or is not material and necessary to the issues in the action.
The burden of establishing that certain documents are privileged and that the privilege has not been waived is on the party asserting the privilege (Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d 371, 377 [1991]; 148 Magnolia, LLC v Merrimack Mut. Fire Ins. Co., 62 AD3d 486, 487 [1st Dept 2009]; John Blair Communications v Reliance Capital Group, L.P., 182 AD2d 578 [1st Dept 1992]). The burden cannot be satisfied by counsel's conclusory assertions of privilege and competent evidence establishing the privilege must be set forth by the party asserting the privilege (Claverack Co-Op Ins. Co. v Nielson, 296 AD2d 789 [2002]; Agovino v Taco Bell 5083, 225 AD2d 569, 571 [2d Dept 1996]; Martino v Kalbacher, 225 AD2d 862 [3d Dept 1996]; Smith v Ford Foundation, 231 AD2d 456 [1st Dept 1996]). Whether a particular document is or is not protected by a privilege is necessarily a fact-specific determination, usually requiring an in camera review (Spectrum Sys. Intl. Corp., 78 NY2d at 378; Rossi v Blue Cross & Blue Shield of Greater New York, 73 NY2d at 592-593).
For a document to be privileged as an attorney-client communication pursuant to CPLR 4503 (a), the document must be primarily or predominantly a communication of a legal character, for the purpose of obtaining or rendering legal advice or services, and intended to be confidential (Spectrum Sys. Intl. Corp., 78 NY2d at 379; Rossi v Blue Cross & Blue Shield of Greater New York, 73 NY2d 588, 594 [1989]; People v Osorio, 75 NY2d 80, 84 [1989]). Communications between counsel and client which are voluntarily shared with third-parties are generally not privileged (People v Osorio, 75 NY2d at 84; People v Harris, 57 NY2d 335, 343 [1982]; Sieger v Zak, 60 AD3d 661, 662 [2d Dept 2009]). An exception, however, exists for communications made by or in the presence of "one serving as an agent of either attorney or client" (Robert v Straus Prods. v Pollard, 289 AD2d 130, 131 [2001]; Delta Fin. Corp. v Morrison, 13 Misc 3d 441 [Sup Ct, Nassau County 2006, Warshawsky, J.]), since a client has a reasonable expectation that such communications will remain confidential (People v Osorio, 75 NY2d at 84; Hudson Ins. Co. v Oppenheim, 72 AD3d 489 [2010]). Another exception to the waiver of attorney-client privilege is the common interest privilege (Liberman v Gelstein, 80 NY2d 429, 437 [2006]). The common interest privilege applies to communication between counsel and parties with respect to legal advice in pending or reasonably anticipated litigation in which the joint consulting parties have a common legal interest (Fewer v GFI Group, 78 AD3d 412, 413 [1st Dept 2010]). It does not protect business or personal communications (Carmody-Wait 2d, Common Interest, or Joint Defense, Exception § 56:190).
The attorney work product privilege (CPLR 3101 [c]) applies only to documents prepared by counsel, as an attorney, which reflect counsel's learning and professional skills, including legal research, analysis, conclusions, legal theory and strategy (Brooklyn Union Gas Co. v American Home Assur. Co., 23 AD2d 190, 190-191 [1st Dept 2005]). The attorney work product privilege, however, may be waived by a party where the party "failed to exercise due diligence and reasonable care to protect the confidentiality of these documents" (Clark-Fitzpatrick, Inc. v Long Island Railroad Co., 162 AD2d 577, 578 [2d Dept 1990]; Bras v Atlas Constr. Corp., 153 AD2d 914 [2d Dept 1989]).
Initially, the court finds that the record does not support plaintiffs' contention that defendants waived any privilege which attached to the documents listed in the privilege log since defendant Acadia Realty Trust authorized former employee Curtis Johnson to share certain information with plaintiffs during authorized negotiations. Contrary to plaintiffs' contention, the record demonstrates that defendant Acadia Realty Trust only authorized Curtis Johnson to negotiate with plaintiffs, but did not authorize the release by Mr. Johnson of copies of confidential documents. In Mr. Johnson's affidavits, upon which plaintiffs rely, Mr. Johnson merely alleges that he was authorized by Acadia Realty Trust to negotiate with plaintiffs and communicate with plaintiffs regarding the zoning agreement and parking issue. Mr. Johnson does not assert that Acadia Realty Trust authorized him to release privileged or confidential documents to plaintiffs or that Acadia Realty Trust knew he had released confidential documents and then failed to object. Notably, defendant Acadia Realty Trust had Mr. Johnson sign certain agreements containing confidentiality provisions wherein he agreed, inter alia, that, he would protect confidential information and, upon termination, would return all files and documents of the company and keep no copies. Accordingly, there is no evidence in the record that defendants failed to exercise reasonable diligence in protecting the confidentiality of the documents at issue.
In this court's Decision and Order dated July 26, 2011, this court previously rejected plaintiffs' contention that the attorney-client privilege did not attach to the documents since the communications were in furtherance of a crime or fraud. Contrary to plaintiffs' contention, the alleged violations by defendants of court orders does not constitute a crime or fraud.
After a review of the documents submitted for in camera review, the court is satisfied that defendants have demonstrated the following documents, as numbered in defendants' privilege log, are attorney-client communications which were not shared with third-parties and, therefore, are protected from discovery: 1902, 1912, 1918, 2263-2264, 2271-2272, 2414, 2441-2444, 2446-2454, 2456, 2462, 2474, 2476. Notably, the attorney-client privilege applies to information gathered by corporate counsel from the corporation's employees as to matters within the scope of counsel's legal duties where the employee is aware that the information is being gathered so the corporation could obtain legal advice and were confidential (Upjohn Co. v United States, 449 US 383, 395 [1980]). Communications between counsel and a client as to settlement negotiations are also protected from disclosure as an attorney-client communication (Matter of Bekins Record Storage Co., 62 NY2d 324, 327 [1984]). Defendants have sufficiently demonstrated that the communications of in house counsel which are at issue were predominantly legal in nature and rendered by counsel as part of their legal responsibilities to defendants (Rossi v Blue Cross & Blue Shield of Greater New York, 73 NY2d 588).
Although document 1957 appears on the privilege log, said document was not submitted to the court for in camera review. Defendants' counsel's office has informed the court that document 1957 has already been produced to plaintiffs.
As to documents 2441-2445, which were labeled by defendants as "Confidential internal legal analysis" on the privilege log, defendants have submitted sufficient evidence that those documents were created by in house counsel Carol Smrek, who is no longer employed by defendants, and were summaries of legal advice at Acadia Realty Trust meetings regarding the Shopping Center project, including advice as to the subject parking issue with plaintiff. Although Mr. Johnson in his affidavits avers that the documents are summaries of the weekly meetings and that he provided updates at the meetings as to the development of the Shopping Center, he does not contradict defendants' evidence that the entries regarding plaintiffs contained legal advice from in house counsel. Notably, the remaining portions of the documents regarding other tenants are not relevant to the issues in this matter and, therefore, it is not necessary for this court to determine if those portions of the document contained legal advice.
Robert Masters, General Counsel and Senior Vice President for multiple defendants (Acadia Realty Trust, Acadia Pelham Manor LLC [f/n/a P/A Acadia Pelham Manor LLC], and Acadia Realty Limited Partnership) submits an affidavit in opposition to plaintiffs' motion wherein he contends that documents 2441-2444 are a series of memoranda titled "Update on Pelham Tenant Deals," and were prepared by Carol Smrek, Esq., who was previously in house counsel for Acadia Realty Trust and its related entities. Mr. Masters avers that the documents were summaries of discussions at weekly meetings attended by Acadia affiliated personnel to address legal and strategic issues with respect to, among other things, municipal approval of the project, on-going litigation regarding the termination, relocation of tenants at the site, and construction. Mr. Masters asserts that at the meetings both he and Ms. Smrek gave legal advice to defendants and the discussions were privileged. Mr. Masters contends that only a few sentences in the documents pertain to plaintiffs and they are Ms. Smrek's interpretation of the zoning agreement (parking agreement) and are privileged.
Documents 1887, 1889, 1891, 1896, 1937, 1945, 1947, 1967, 1970, 2290, 2453, 2455, as numbered in defendants' privilege log, contain emails involving counsel for Acadia Realty Trust that sought or contained legal advice. Although these e-mails involved not only Acadia Realty Trust employees, but also persons employed by defendant P/A Associates, LLC, namely defendants Paul Slayton and Aaron Malinsky, the inclusion of these third-parties did not waive the attorney-client privilege. The affidavit of Curtis Johnson, the former employee of Acadia Realty Trust, establishes that P/A Associates, LLC, was an agent of Acadia Realty Trust and assisted Acadia Realty Trust in locating commercial properties for development and management. Accordingly, the fact that the communications were shared with Slayton and Malinsky did not waive the attorney-client privilege since they were agents of Acadia Realty Trust (First Amer. Commercial Bancorp v Saatchi & Saatchi Rowland, Inc., 56 AD3d 1137 [4th Dept 2008]; see Robert v Straus Prods. v Pollard, 289 AD2d 130 [1st Dept 2001]). In any event, the record also demonstrates that although the present litigation was not pending at the time of the subject emails, litigation was anticipated and defendants Acadia Realty Trust, P/A Associates, LLC, Slayton and Malinsky shared a common legal interest. Accordingly, the common interest privilege also attached to the e-mails (Fewer v GFI Group, 78 AD3d at 413) and the emails need not be produced.
Additionally, defendants have demonstrated that the following documents, as numbered in defendants' privilege log, are privileged attorney work product and protected from discovery: 2457-2461.
Defendants, however, have failed to demonstrate that any privilege attached to the following documents and, therefore, defendants shall produce those documents:
Documents 2362, 2463-2473 are e-mails between in house counsel for Acadia Realty Trust and employees of Acadia Realty Trust regarding scheduling a meeting to go over site plans and discuss parking for plaintiff. The emails are not legal in nature.
Documents 2475, 2477-2480 are site plans and a photograph of parking at the building site of the Shopping Center. Those documents do not constitute legal communications between counsel and defendants. "The mere circumstance that the documents were revealed in confidence to a lawyer does not of itself transform the papers into privileged communications" (Matter of Bekins Record Storage Co., 62 NY2d at 327).
Protective Order as to Curtis Johnson
Defendants seek a protective order suppressing attorney-client privileged documents and confidential business information improperly obtained by plaintiffs from Curtis Johnson, a former employee of defendant Acadia Realty Trust. Defendants also seek a protective order precluding plaintiffs from soliciting, accepting and/or utilizing privileged or confidential information from Mr. Johnson, and precluding plaintiffs from calling Mr. Johnson as a witness at trial. Defendants contend that they are entitled to the foregoing relief since plaintiffs improperly came into possession of privileged attorney-client communications and confidential business information that is not material or necessary to the prosecution or defense of the action. It is uncontroverted that Mr. Johnson provided plaintiffs with numerous Acadia Realty Trust documents and email communications between in house counsel and Acadia Realty Trust employees. Mr. Johnson also provided plaintiffs with affidavits detailing defendants' discussions and strategies with respect to plaintiffs' parking issue and the development of the Shopping Center.
Moreover, defendants contend that Mr. Johnson violated various agreements he executed with defendant Acadia Realty Trust by disclosing the documents and information. On October 26, 2005, Mr. Johnson executed an agreement wherein he agreed, inter alia, that, upon termination, he would return all files and documents of the company and keep no copies. On April 6, 2006, Mr. Johnson executed a Code of Business Conduct and Ethics wherein he agreed, inter alia, to protect confidential information. Finally, on July 23, 2007, at the time of his termination, Mr. Johnson executed a General Release wherein, in exchange for payments, compensation and benefits, he agreed not to disparage Acadia Realty Trust, its trustees, officers and employees.
Finally, defendants contend that plaintiffs' counsel improperly obtained and is attempting to use the privileged and confidential documents obtained from Mr. Johnson in violation of rule 1.6 of the Rules of Professional Conduct. Rule 1.6 bars a lawyer from knowingly using confidential information. Defendants also rely upon case law wherein the courts have held that an attorney who comes into possession of privileged or confidential documents of their adversary has a duty to disclose receipt of such documents. Defendants also note that the New York State Bar Association's Committee on Professional Ethics has opined that an attorney may not seek to obtain privileged documents from the former employee of an adversary's counsel. Accordingly, defendants contend that an attorney may not seek information from an adversary's former employee that would exploit the adversary's confidence or secrets.
Plaintiffs oppose this branch of defendants' motion. Plaintiffs contend that defendants authorized Mr. Johnson during his course of employment to disclose to plaintiffs the information that defendants now claim is confidential and privileged. Plaintiffs rely upon the affidavits of Mr. Johnson wherein he avers that he was authorized to disclose information to plaintiffs during his negotiations with plaintiffs. Plaintiffs also contend that defendants' verbal and written communications regarding defendants' discussions, decisions and plans with respect to plaintiffs' parking rights were not privileged or confidential since those acts were in violation of three Appellate Court decisions and were business discussions, rather than legal discussions. Finally, plaintiffs contend that defendants failed to establish that the attorney-client privilege attached to any of the communications disclosed by Mr. Johnson.
CPLR 3101(a) requires "full disclosure of all matter material and necessary in the prosecution or defense of an action." CPLR 3103(a), however, authorizes the court to "make a protective order denying, limiting, conditioning or regulating the use of any disclosure device." In determining whether disclosure is warranted, "[t]he test is one of usefulness and reason" (Scalone v Phelps Memorial Hosp. Ctr., 184 AD2d 65, 70 [2d Dept 1992]). The court must balance the importance of the plaintiff's claim for disclosure versus the consequences of disclosure (Feger v Warwick Animal Shelter, 59 AD3d 68, 70 [2d Dept 2008]). The court possesses broad discretion to deny demands that are unduly burdensome or that seek irrelevant or improper information (Feger v Warwick Animal Shelter, 59 AD3d at 70; Scalone v Phelps Memorial Hosp. Ctr., 184 AD2d at 70).
Initially, the court notes that defendants erroneously rely upon rule 1.6 of the Rules of Professional Conduct (22 NYCRR § 1200). Rule 1.6 provides that an attorney shall not knowingly reveal confidential information, which is defined by the rule as information "gained during or relating to the representation of a client, whatever its source, that is (a) protected by the attorney-client privilege, (b) likely to be embarrassing or detrimental to the client if disclosed, or (c) information which the client has requested be kept confidential" (Rules of Professional Conduct [22 NYCRR §1200] rule 1.6 [a] [3]). When the definition is read in the context of the entire rule, it is clear that it is referring only to the confidential information of the attorney's client, not to confidential information of the client's adversary or third-parties. Notably, the rule permits an attorney to reveal the confidential information upon, inter alia, the client's informed consent or when it is in the best interest of the client (Rules of Professional Conduct [22 NYCRR §1200] rule 1.6 [a] [1]-[2]). Moreover, rule 1.6 (c) provides that an attorney shall exercise reasonable care to prevent the attorney's employees, associates, and others whose services are utilized by the attorney from disclosing the confidential information of the client (Rules of Professional Conduct [22 NYCRR §1200] rule 1.6 [c]).
Nevertheless, the courts have held that counsel must not elicit privileged or confidential information from an opponent's former employee (Muriel Siebert & Co. v Intuit Inc., 8 NY3d 308 [2007]; Merrill v City of New York, 2005 WL 2923520, 2005 U.S. Dist LEXIS 26693 [SD NY, Nov. 4, 2005]; Wright v Stern, 2003 WL 23095571, 2003 US Dist LEXIS 23335 [SD NY, Dec. 30, 2003]). Where counsel has attempted to introduce privileged information obtained from an opponent's former employee, the courts have held that the proper remedy is suppression of the information (Surgical Design Corp. v Correa, 21 AD3d 409 [2d Dept 2005]; see also Parnes v Parnes, 80 AD3d 948 [3d Dept 2011] [court suppressed e-mails between defendant and counsel which were obtained byplaintiff by printing e-mails from defendant's password protected account]). In Surgical Design Corp. (21 AD3d 409), the Court suppressed letters from counsel to plaintiff, which defendants, former employees of plaintiff, had improperly retained and gave to their counsel. The court in Surgical Design Corp. (Id.) noted that it did not condone counsel's failure to notify plaintiff that he had come into possession of privileged material insofar as the material was presumptively privileged pursuant to CPLR 4503.
As noted earlier, the burden of establishing that certain documents are privileged and that the privilege has not been waived is on the party asserting the privilege (Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d at 377; 148 Magnolia, LLC v Merrimack Mut. Fire Ins. Co., 62 AD3d at 487). Additionally, the disclosure of privileged communications to a third-party, other than an agent or employee of either the party or counsel, waives any privilege (see People v Osorio, 75 NY2d at 84; Hudson Ins. Co. v Oppenheim, 72 AD3d 489). To avoid waiver of any privilege, a party must take reasonable steps to maintain the confidentiality of the communications and promptly seek to remedy the situation after learning of the disclosure (Parnes v Parnes, 80 AD3d 948, 950 [3d Dept 2011]; AFA Protective Sys. v City of New York, 13 AD3d 564, 565 [2d Dept 2004]; New York Times Newspaper Div. of New York Times Co. v Lehrer McGovern Bovis, Inc., 200AD2d 169 [1st Dept 2002]).
In the present action, the record, including numerous confidentiality agreements executed by Curtis Johnson in favor of defendant Acadia Realty Trust, demonstrates that defendant Acadia Realty Trust intended for the communications at issue to remain confidential. The fact that defendant Acadia Realty Trust authorized Curtis Johnson, a former Acadia Realty Trust employee, to negotiate with plaintiffs regarding resolution of the parking issue does not, as plaintiffs contend, equate authorization to provide plaintiffs with defendants' privileged communications regarding the parking issue either prior to or subsequent to the termination of his employment with Acadia Realty Trust. Similarly, Mr. Johnson's conclusory assertion in his affidavit sworn to on May 12, 2011, which was produced by plaintiffs, that he "believed Acadia's senior management ... knew that my job duties included disclosing information to Omni, such as the conversations regarding the parking issues which were discussed at weekly meetings to the extent I thought is was necessary to prevent or remedy Omni's concerns ..." (Ex. 5 to Affirmation of Mona Shapiro, Esq.), is insufficient to demonstrate that defendant Acadia Realty Trust waived the attorney-privilege which this court has determined attached to the discussions regarding the Omni parking issue during the weekly meetings.
Moreover, plaintiffs do not contend that defendants failed to promptly seek a remedy once they were made aware that Curtis Johnson had provided plaintiffs with confidential information. In any event, the court notes that Curtis Johnson's affidavits were sworn to on April 26, 2011 and May 12, 2011, and defendants sought a Briefing Schedule for the present motion, as required by the protocol of the Compliance Part, on May 17, 2011.
In view of the foregoing, to the extent Mr. Johnson provided plaintiffs with any of the documents which this court previously determined in this order are privileged and protected from discovery, plaintiffs are precluded from utilizing those documents or questioning Mr. Johnson at trial as to those documents. Those documents include the documents which were labeled by defendants on their privilege log as "Confidential internal legal analysis" (Defendants 2441-2445), which constitute summaries of Acadia Realty Trust's weekly meetings and were annexed to Mr. Johnson's affidavit sworn to on April 26, 2011 as Exhibit H and numbered by plaintiffs as OMNI 1866-1871, 1873-1875, 1878. Notably, those documents annexed to Mr. Johnson's affidavit contained numerous copies of the documents with different hand written notes apparently taken by participants of the meeting. For the same reason, the maps in Exhibit H which also contain handwritten notes are privileged (OMNI 1872-1876). The certificate of liability of a third-party tenant (OMNI 1877), although not privileged as an attorney-client communication, is irrelevant to the issues in the present action and plaintiffs are also precluded from utilizing that document.
After an in camera review, the court also determines as follows with respect to the documents annexed to Mr. Johnson's affidavit sworn to on April 26, 2011:
The following documents are privileged as attorney-client communications and plaintiffs are precluded from utilizing those documents or questioning Mr. Johnson with respect to those documents at trial: OMNI 1845-1850 (Ex. F); OMNI 1852-1858 (partial Ex. G).
The following documents constitute documents available to the public to which no privilege attached and defendants' motion for a protective order as to those documents is denied: OMNI 1859-1860, 1962-1863, 1861, 1864 (partial Ex. G, filed agreement and maps); OMNI 1880-1883 (Ex. I, Advertising of Shopping Center Development).
The documents annexed to Mr. Johnson's affidavit sworn to on May 12, 2011 were previously produced by defendants to plaintiff and do not appear on defendants' privilege log with the exception of OMNI 2033, which is a redacted version of defendants' document 1891. Defendants have already produced a redacted document 1891. Accordingly, defendants' motion for a protective order as to those documents is also denied.
With respect to Mr. Johnson's affidavits, those portions of the affidavits wherein Mr. Johnson provides information as to privileged communications between employees of Acadia Realty Trust and in house counsel regarding Omni's parking is suppressed and plaintiffs are precluded from utilizing the information in the action or questioning Mr. Johnson as to the information at trial. The court specifically finds that the following portions of Mr. Johnson's affidavits contain information as to attorney-client communications, which shall be suppressed: (1) affidavit dated April 26, 2011, paragraphs 28-38, 40-41, 50, 54, 57-59, as well as the third sentence of paragraph 48; and (2) affidavit dated May 12, 2011, paragraphs 9 (except 1st sentence), 11, and 12 (second through fifth sentences).
As noted earlier, the discussions regarding Omni's parking during Acadia Realty Trust's weekly meetings, which included in house counsel, are privileged attorney-client communications. The remaining information contained in Mr. Johnson's affidavits regarding discussions at the weekly meeting involve issues that are not relevant to the issues in this action. Accordingly, plaintiffs are precluded from utilizing any information provided in Mr. Johnson's affidavits with respect to Acadia Realty Trust's weekly meetings.
As to the e-mails referenced in paragraphs 13-21 of Mr. Johnson's May 2, 2011 affidavit, some of which involved in house counsel, defendants did not list the documents containing those e-mails on their privilege log and have voluntarily produced those e-mails (defendants' document 1891, 1960, 1965, 1894, 1907). Accordingly, any attorney-client privilege which may have attached to those e-mails was waived by defendants and defendants' motion for a protective order as to those e-mails is denied.
With respect to the remaining information contained in Mr. Johnson's affidavits, the court finds defendants' contention that the "confidential business information" should be suppressed to be without merit. The remaining statements in Mr. Johnson's affidavit involve, inter alia, (1) communications with other employees of Acadia Realty Trust outside the presence of counsel and did not involve confidential client information, trade secrets or proprietary information, (2) his job duties and activities at Acadia Realty Trust, (3) his factual observations of the construction site, and (4) his conversations with plaintiffs' officers. Defendants contend that this information constitutes "confidential business information", which should be suppressed since Mr. Johnson executed a confidentiality agreement and agreed to protect "confidential" information.
The courts have recognized that an employer has a legitimate interest in safeguarding trade secrets and confidential customer information (Columbia Ribbon & Carbon Mfg. Co. v A-1-A Corp., 42 NY2d 496 [1977]; Reed, Roberts Assocs. v Strauman, 40 NY2d 303, 308 [1976]; Scott Paper Co. v Finnegan, 101 AD2d 787, 788 [1st Dept 1984]). To that end, the courts have upheld confidentiality provisions in employment contracts in order to protect an employer from unfair competition from the use of the employer's confidential client information and trade secrets (Trans-Continental Credit & Collection Corp. v Foti, 270 AD2d 250, 251 [2d Dept 2000]; Webcraft Technologies v McCaw, 674 F Supp 1039 [SD NY 1987]; see Greenwich Mills Co. v Barrie House Coffee Co., 91 AD2d 398, 402-405 [2d Dept 1983]). Defendants, however, do not contend that Mr. Johnson revealed any confidential client information or trade secrets in his affidavits. Moreover, defendants failed to submit any authority in support of their contention that business communications which did not involve trade secrets or confidential client information are entitled to protection from discovery. The court was also unable to find any case law in support of defendants' contention. Accordingly, that branch of defendants' motion seeking a protective order suppressing and precluding the information provided in Mr. Johnson's affidavits is granted only with respect to the defendants' attorney-client communications.
Plaintiffs have improperly attempted to use attorney-client privileged documents and information provided to them by Curtis Johnson and have prejudiced a substantial right of defendants. Nevertheless, under the circumstances of this case, the preclusion of the documents and information, as well a protective order precluding plaintiffs from questioning Mr. Johnson at trial as to the privileged documents and information, is a sufficient remedy. Notably, Mr. Johnson is a fact witness as to, inter alia, the availability of parking during construction of the Shopping Center and his negotiations with plaintiffs regarding parking. Accordingly, that branch of defendants' motion seeking a protective order precluding plaintiffs from calling Mr. Johnson as a witness at trial is denied.
That branch of defendants' motion seeking a protective order precluding plaintiffs from soliciting, accepting and/or utilizing privileged information from Curtis Johnson is also granted. Plaintiffs' counsel is directed to refrain from seeking to elicit from Curtis Johnson any privileged communications or information of defendants. The court cannot condone the attempt by plaintiffs' counsel to utilize the presumptively privileged documents and information in the present action. The right to conduct ex parte interviews of an adversary's former employee is not a license to elicit privileged information (Muriel Siebert & Co. v Intuit Inc., 8 NY3d at 512). The court reminds plaintiffs' counsel that it is the providence of the court, not counsel, to determine whether attorney-client communications, which are presumptively privileged pursuant to CPLR 4503, are subject to discovery. Accordingly, in the future, plaintiffs' counsel is advised to avoid eliciting privileged documents and information from an adversary's former employees, and to immediately advise opposing counsel if such privileged information is provided to counsel in an unsolicited manner.
In view of the foregoing, it is
ORDERED that the branch of plaintiffs' motion seeking an order compelling defendants to produce the documents listed on their privilege log is granted only to the extent that defendants shall produce the following documents listed on their privilege log: 2362, 2463-2473, 2475, and 2477-2480, within 15 days of the date of this Decision and Order; and it is further
ORDERED that the branch of defendants' motion seeking a protective order is granted to the extent that (1) the attorney-client privileged documents and information improperly obtained by plaintiffs from Curtis Johnson, as well as documents which are irrelevant to the issues in this action, as set forth in detail in this Decision and Order, are suppressed and plaintiffs are precluded from utilizing the documents and information in the action; (2) plaintiffs are precluded from soliciting, accepting and/or utilizing privileged information from Curtis Johnson; and (3) plaintiffs are precluded from questioning Curtis Johnson at trial as to the privileged documents and information as specifically set forth in this Decision and Order; and it is further
ORDERED that the branch of defendants' motion seeking a protective order precluding plaintiffs from calling Mr. Johnson as a witness at trial is denied; and it is further
ORDERED that counsel for defendants are directed to pick up the records submitted for in camera review from the Clerk of the Compliance Part, Room 809; and it is further
ORDERED that counsel shall appear for a conference in the Compliance Part, Courtroom 800, on December 8, 2011 at 9:30 A.M., as previously scheduled.
The foregoing constitutes the decision and order of this Court.
Dated: White Plains, New York
September 28, 2011
HON. JOAN B. LEFKOWITZ, J.S.C.