Opinion
359612 359676
01-26-2023
BRYAN PUNTURO, FAWN PUNTURO, and B&A HOLDINGS, LLC d/b/a PARKSHORE RESORT LLC, Plaintiffs-Appellees, v. BRACE KERN, Defendant-Appellant, and SABURI BOYER and DANIELLE KORT f/k/a DANIELLE BOYER, Defendants.
UNPUBLISHED
Grand Traverse Circuit Court LC No. 2017-032008-CZ
Before: RIORDAN, P.J., and MARKEY and REDFORD, JJ.
PER CURIAM.
In Docket No. 359612, defendant Brace Kern appeals by leave granted the trial court's December 7, 2021 order denying his motion for a protective order and directing him to appear inperson for his deposition. In Docket No. 359676, Kern appeals by leave granted the trial court's December 7, 2021 order denying his motion to disqualify plaintiffs' counsel Jonathan Moothart. On appeal, Kern argues that the trial court erred by not allowing him to be remotely deposed due to his COVID-19 concerns and by declining to disqualify Moothart because Moothart is a necessary witness in this matter. We disagree on both counts. Therefore, we affirm the trial court and remand to that court for further proceedings.
I. FACTS
On February 16, 2017, plaintiffs filed their complaint against defendants, alleging as follows. Plaintiff Bryan Punturo ("Punturo") is a 50% owner of Parkshore Resort, a hotel and 1 conference facility, and his spouse, plaintiff Fawn Punturo is employed by Parkshore Resort. In 2014, defendant Saburi Boyer ("Boyer") attempted to eliminate competition for his nearby parasailing business, and his activities in this regard included signing an agreement with Punturo providing that the Punturos would not operate a competing parasailing business in the area. Shortly thereafter, Boyer became "financially overextended" and stopped making required payments to the Punturos pursuant to that agreement. When Boyer defaulted on the payments, Punturo threatened to, and then eventually did, commence a legal action against Boyer. Boyer, on the advice of his counsel, defendant Brace Kern, contacted the Grand Traverse Prosecutor Office and the Michigan Attorney General, accusing Punturo of violating the Michigan Antitrust Reform Act (MARA), MCL 445.711 et seq. This led to a criminal investigation against Punturo, which was covered by media outlets, and eventually the Attorney General filed a criminal extortion charge against Punturo. In addition, Kern "aggressively talked" to the media about the case and filed a civil action on behalf of Boyer against Punturo, which alleged violations of MARA. Both the criminal and civil cases were subsequently dismissed. In the matter before us now, the Punturos sought damages exceeding $25,000 from defendants, claiming that defendants made defamatory representations to the media about the events at issue.
In March 2017, defendants moved for summary disposition, essentially arguing that Kern and Boyer gave legitimate statements of opinion to the media or otherwise provided fair and accurate reports of matters contained in the public record. The trial court denied the motions for summary disposition, and after granting leave to appeal, this Court affirmed. Punturo v Kern, unpublished per curiam opinion of the Court of Appeals, issued October 16, 2018 (Docket Nos. 338727, 338728, 338732). Our Supreme Court directed oral argument on the application but ultimately denied leave to appeal. Punturo v Kern, 506 Mich. 1009 (2020).
Facts Relevant to Docket No. 359612
On September 22, 2021, plaintiffs noticed Kern's deposition for November 30, 2021, stating that the deposition would be conducted at the board room of the Cambria Suites Hotel in Traverse City and that "there will be room enough for social distancing and wearing masks is acceptable."
On November 10, 2021, Kern moved for a protective order, requesting that his deposition be conducted virtually. The motion explained that "Mr. Kern has two small daughters at home -the oldest is three and a half years old and the baby is eight months old - who cannot be vaccinated, on account of whom Mr. Kern takes significant precautions, both professionally and personally, to protect his family from COVID-19." The motion added that all previous court hearings, as well as "certain depositions," have been conducted by Zoom without objection from plaintiffs. The motion argued that the trial court should order Kern's deposition be conducted virtually "to mitigate the risk to Mr. Kern's family."
On November 19, 2021, plaintiffs filed a response, arguing that Kern previously had been uncooperative with respect to depositions; that Kern was recently photographed at an outdoor restaurant table with a few other people, thus showing that his purported concern with COVID-19 was exaggerated; and that "[i]t is important to Plaintiffs to take this deposition in person due to the documents and subject matter involved." Plaintiffs added that all participants would wear masks to protect against the spread of COVID-19 if Kern requested it. 2
On November 22, 2021, the trial court held a Zoom hearing to consider the matter. At the hearing, the trial court asked Kern's counsel whether there was "anything special" about the children that made them susceptible to COVID-19, and counsel indicated that the only concern was their vaccination status. The trial court ruled in favor of plaintiffs with the following exchange:
The Court: . . . I don't for a minute believe that Mr. Kern needs to be protected from in-person contact just because he's got little kids. Lots of people have little kids. If you're to pick any age group that has less - the least exposure, it's little kids. So this is ridiculous.
This is - on the other hand, there's no good reason not to do it by Zoom. What's the problem?
Mr. Moothart: The problem, your Honor, is that I've got a lot of documents that I'm going to want to show them. I don't want to have to give them to them in advance, and I don't want to have to scroll them up and down the screen on - on a Zoom call.
* * * The Court: . . . I've done - we've done several non-jury trials by Zoom. And I try - we don't do that anymore, because it is logistically complex and difficult; and inevitably something gets lost that can't be presented. It's not the way to do it.
I don't see any reason why it should be - he is the key witness - a key defendant, Mr. Kern, and I think that an opportunity to show him documents and question him about it is appropriate. So I'll order that it occur in person. I will order that all - all people present must wear a mask.
On December 7, 2021, the trial court entered an order providing that "Kern's deposition shall proceed in person and not remotely, with all participants wearing a mask and remaining six feet apart."
Two days later, Kern moved to stay the deposition pending an appeal. On December 16, 2021, the trial court denied the motion. On December 17, 2021, Kern filed an application for leave to appeal and a motion to stay his deposition. The same day, this Court granted the motion to stay. Punturo v Kern, unpublished order of the Court of Appeals, entered December 17, 2021 (Docket No. 359612). We later granted the application. Punturo v Kern, unpublished order of the Court of Appeals, entered January 31, 2022 (Docket No. 359612). 3
On July 8, 2022, plaintiffs moved to dismiss the appeal as moot because the CDC had recently approved two COVID-19 vaccines for children six months or older. We denied the motion. Punturo v Kern, unpublished order of the Court of Appeals, entered August 12, 2022 (Docket No. 359612.)
The news article included with the motion indicated that the FDA approved the vaccines on June 17, 2022.
Facts Relevant to Docket No. 359676
On August 13, 2021, Kern moved to compel the deposition of Moothart, in significant part regarding telephone communications between the two about a potential settlement of the earlier case, or alternatively rule in limine that plaintiffs could not introduce "any evidence or argument of the settlement discussions in the Anti-Trust Case" because Moothart was a necessary witness in that regard. In the motion, Kern explained as follows:
2. Plaintiffs' theory of the case as pled in their Complaint turns on several events directly involving their attorney Jonathan Moothart:
a. Mr. Moothart filed the lawsuit for breach of the contract that is at the heart of the statements at issue.
b. The Michigan Attorney General contacted Mr. Moothart to notify him that Punturo was being investigated "for criminal antitrust activity."
c. Mr. Moothart defended Punturo in the civil action the Boyers filed against Punturo ("Anti-Trust Case") and was responsible for the litigation strategy in that case.
d. Mr. Moothart was the recipient of the allegedly "extortionate" settlement demand in the Anti-Trust Case that Punturo asserts is evidence of Mr. Kern's malicious intent.
e. Mr. Moothart initiated and surreptitiously recorded a call with Mr. Kern about the settlement demand in the Anti-Trust Case.
f. Mr. Moothart was the recipient of an email repeating the allegedly extortionate settlement demand.
g. Mr. Moothart provided the Attorney General with a transcript of the recording of the allegedly "extortionate" settlement demand.
3. In his deposition, Punturo admitted he had no personal knowledge of the phone call or email or of his counsel providing the email and recording of the call to the Attorney General....[Citations omitted.]4
Accordingly, Kern argued, plaintiffs "must either allow Mr. Moothart to be a witness subject to discovery or agree not to introduce at trial any argument or evidence of the 'extortionate' settlement negotiations."
In response, plaintiffs argued that Kern failed to satisfy his burden of showing that a deposition of opposing counsel was warranted due to "need and propriety." Plaintiffs stated that they had a voice identification expert, Barry Dickey, who would testify at trial that the voice on the recording of the allegedly extortionate settlement demand matched Kern's voice. In addition, plaintiffs stated, they would attempt to supplement Dickey's testimony with telephone company records. Plaintiffs argued that "[w]hatever else might be argued about the evidence on this point, it is clear that Attorney Moothart is no expert on either voice recognition or the tone and tenor of Defendant Kern's voice, and he has nothing to offer more than the evidence outlined above."
At a motion hearing on August 26, 2021, Kern's counsel explained that not only did she want to examine Moothart at trial about the foundation for the recording, she also wanted to examine him about why he decided to record the settlement conversation in the first instance. After a short recess, the trial court ruled in favor of Kern, stating as follows:
Okay. This is a motion about compelling the deposition of Mr. Moothart, and obviously deposing the other side's attorney is kind of doubtful as to producing anything that's appropriate. But apparently there is a conversation that will be testified to, in the form of a tape - which Mr. Moothart represents and apparently has - claims to have expert opinion to support this claim, was the voice of - of Brace Kern, one of the defendants, which - in which Mr. Kern attempts to use his clients' potential cooperation in the Punturo criminal case to extract a better settlement in the antitrust case between Punturo and the other defendants - Boyers. It seems to me Mr. Moothart will have to testify about the tape, how - its provenance, how it was made, it wasn't doctored, and so forth.
I don't think it's going to be evidence of the conversation. It may even be - maybe he should be required to testify about how the conversation came about, and about the conversation itself. I don't think that we need to go any broader than that. Attempts to interrogate him as to what - what his plans were in the - in the antitrust litigation . . . I don't think those are necessary and appropriate questions.
On September 12, 2021, the trial court entered an order providing that "Jonathan Moothart must answer questions in deposition concerning conversations between him and Kern about the Antitrust Case, including any discussions to settle the Antitrust Case, and the circumstances and motivations behind Mr. Moothart's recording of any communications with or from Kern."
On September 17, 2021, Kern moved to disqualify Moothart as plaintiffs' counsel under MRPC 3.7, which provides that "[a] lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness," so long as disqualification would not work a "substantial hardship on the client." In the accompanying brief, Kern argued that "Punturo hopes to introduce the recording of the 'extortion-by-settlement-demand' phone call between Moothart and Kern, but he has admitted that he was not there when the call was recorded and does not know how it was 5 recorded. The only person able to provide evidence concerning the method and reasons for the recordings is Moothart." (Emphasis in original.)
On September 24, 2021, the Boyers filed a brief in support of Kern's motion. In the brief, the Boyers argued that Moothart was a witness "to the underlying words and deeds involved in this libel/abuse of process case.... For example, in one of the media articles [in the Northern Express] complained of by Plaintiffs, Mr. Moothart apparently told a reporter that he disagreed with Judge Phillips' statements that Mr. Punturo's conduct was" 'nasty, mean-spirited and reprehensible[.]'" (Emphasis in original.)
On September 27, 2021, the trial court held a hearing on Kern's motion. At the hearing, the trial court granted Kern's motion, reasoning as follows:
Well, first, the necessary witness. Well, the problem was with validating the providence of this tape I sense is almost an uncontested issue really. But now they've got information Mr. Moothart said things in the very press pieces that are the basis of the defamation claim by his client and Mr. Moothart then can be questioned about those things. And not only can he be asked questions about those things and possibly about the background and the negotiations between Mr. Moothart and Mr. Kern to put this all in perspective.
So I think under the circumstances Mr. Moothart is kind of heavily involved in this case as a witness, and therefore - and is not as an uncontested issue.
In terms of hardship on the client, it would have been better if this had been done a lot earlier followed by not doing it on that basis, but in any event, certainly Mr. Puncturo [sic] can retain other counsel....
On October 4, 2021, the trial court entered an order providing that "[f]or the reasons stated on the record, Jonathan Moothart is disqualified from serving as counsel for Plaintiffs at the trial of this case."
On October 22, 2021, plaintiffs moved for reconsideration of the order. In the motion, plaintiffs asserted that the trial court decided to grant Kern's motion on the basis of an argument not raised by Kern himself-the argument that Moothart was a necessary witness to explain his comments to the Northern Express. Plaintiffs further asserted that "[t]he Northern Express article has been in Boyers' possession for over four years and the only reason to wait this long to claim that it requires Moothart's disqualification is a purely tactical one." Plaintiffs reiterated their previous arguments as well.
At a November 22, 2021 hearing, the trial court decided to deny Kern's motion, stating that "I think if this had been raised in a timely manner, I would have granted the motion." However, the trial court explained,
until this disqualification was filed a few months ago, nobody raised the issue - except I idly asked a question about it. If I were smarter, I wouldn't have said nothing. But in any event, that seems like a long delay. And it is prejudicial, in the same that Mr. Moothart has invested a lot in this case.6
The plaintiff has paid him to invest a lot in the case. A new lawyer will have to get up and running, get started on it. There are apparently some lawyers in the underlying case, who may have a head start. But it seems to me that it is unfair to wait until the last minute.
On December 7, 2021, the trial court entered an order memorializing its ruling from the bench.
On December 22, 2021, Kern filed an application for leave to appeal. We granted the application and consolidated the two appeals. Punturo v Kern, unpublished order of the Court of Appeals, entered March 18, 2022 (Docket No. 359676).
II. DISCUSSION-DOCKET NO. 359612
Kern argues that the trial court abused its discretion when it declined to enter a protective order providing that his deposition must be remotely conducted. We disagree.
"We review for an abuse of discretion a trial court's decision on a motion for a protective order." Alberto v Toyota Motor Corp, 289 Mich.App. 328, 340; 796 N.W.2d 490 (2010). "The trial court abuses its discretion when its decision is outside the range of reasonable and principled outcomes." Heaton v Benton Constr Co, 286 Mich.App. 528, 542; 780 N.W.2d 618 (2009).
MCR 2.302(C)(2) provides as follows:
(C) On motion by a party or by the person from whom discovery is sought, and on reasonable notice and for good cause shown, the court in which the action is pending may issue any order that justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following orders:
* * *
(2) that the discovery may be had only on specified terms and conditions, including a designation of the time or place ....
When the trial court decided this motion, MCR 2.305(F), which governs discovery subpoena to a non-party, provided as follows:
Notwithstanding any other provision of this rule, until further order of the Court, a subpoena issued under this rule may require a party or witness to appear by telephone, by two-way interactive video technology, or by other remote participation tools.
The trial court did not abuse its discretion by ordering Kern to be deposed in-person. It is true that "depositions by videoconference have emerged as the preferred method of coping with the complications and perils this pandemic has wrought." Faford v Grand Trunk Western RR Co, 335 FRD 503, 506 (ED Mich, 2020). However, the trial court was familiar with the complex nature of this case, as well as the practical difficulties with remotely interviewing a witness when 7 that witness must be shown documents. The abuse-of-discretion standard contemplates that the trial court is better positioned than an appellate court to understand such matters, which is why the standard presumptively defers to the trial court's decision. See generally, Maldonado v Ford Motor Co, 476 Mich. 372, 389; 719 N.W.2d 809 (2006). Further, Kern did not identify any unique health circumstances of his young children, beyond the fact that a vaccine was not yet approved at the time. In addition, the trial court's order provided that the deposition would occur "with all participants wearing a mask and remaining six feet apart." This is a reasonable accommodation that considered the practical difficulties with a remote deposition on one hand, and the health concerns of the pandemic on the other hand.
Accordingly, the trial court did not abuse its discretion when it refused to enter the protective order requested by Kern.
We note that the abuse-of-discretion standard must consider the facts at the time of the decision itself. See, e.g., People v Rockwell, 188 Mich.App. 405, 410; 470 N.W.2d 673 (1991); Bay Co Pros v Bay Co Dist Judge, 102 Mich.App. 543, 549-550; 302 N.W.2d 225 (1980). Therefore, the current availability of COVID-19 vaccines for young children does not factor into our analysis.
III. DISCUSSION-DOCKET NO. 359676
Kern argues that the trial court abused its discretion when it denied his motion to disqualify Moothart as plaintiffs' counsel. We disagree.
"The trial court's findings of fact in regard to a motion for disqualification of counsel are reviewed for clear error." People v Tesen, 276 Mich.App. 134, 141; 739 N.W.2d 689 (2007). "However, this Court reviews de novo the trial court's application of the relevant law to the facts." Id. The ultimate decision on a motion for disqualification is reviewed for an abuse of discretion. See People v Petri, 279 Mich.App. 407, 424; 760 N.W.2d 882 (2008).
MRPC 3.7 provides, in relevant part:
(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness except where:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services rendered in the case; or
(3) disqualification of the lawyer would work substantial hardship on the client.
The Comment to MRPC 3.7 provides, in relevant part:
Combining the roles of advocate and witness can prejudice the opposing party and can involve a conflict of interest between the lawyer and client.8
The opposing party may properly object where the combination of roles may prejudice that party's rights in the litigation. A witness is required to testify on the basis of personal knowledge, while an advocate is expected to explain and comment on evidence given by others. It may not be clear whether a statement by an advocate-witness should be taken as proof or as an analysis of the proof.
* * *
[P]aragraph (a)(3) recognizes that a balancing is required between the interests of the client and those of the opposing party. Whether the opposing party is likely to suffer prejudice depends on the nature of the case, the importance and probable tenor of the lawyer's testimony, and the probability that the lawyer's testimony will conflict with that of other witnesses. Even if there is risk of such prejudice, in determining whether the lawyer should be disqualified due regard must be given to the effect of disqualification on the lawyer's client. It is relevant that one or both parties could reasonably foresee that the lawyer would probably be a witness. The principle of imputed disqualification stated in Rule 1.10 has no application to this aspect of the problem.
The trial court may deny a motion for disqualification when "the testimony allegedly sought from the attorney was available from other competent sources," and "the party seeking disqualification had not previously stated an intent to call the attorney as a witness." In re Susser Estate, 254 Mich.App. 232, 238; 657 N.W.2d 147 (2002). That is, "attorneys are not necessary witnesses if the substance of their testimony can be elicited from other witnesses and the party seeking disqualification did not previously state an intent to call the attorney as a witness." Tesen, 276 Mich.App. at 144. "The testimony of the disqualified attorney need not be absolutely crucial for a disqualification motion to be granted, but neither can it be so insignificant that it raises suspicions that the motion is a tactical device." Kubiak v Hurr, 143 Mich.App. 465, 471; 372 N.W.2d 341 (1985). "The party seeking disqualification bears the burden of demonstrating specifically how and as to what issues in the case the likelihood of prejudice will result." Id.
Kubiak addressed DR 5-101(B) and 5-102, the relevant substance of which is largely now reflected in MRPC 3.7.
Other state courts have held that the right to seek disqualification of opposing counsel is waived when the moving party unduly delays filing the motion. See, e.g., Zayas-Bazan v Marcelin, 40 So3d 870, 872-873 (Fla Dist Ct App, 2010) ("A party can waive his right to seek disqualification of the opposing party's counsel by failing to promptly move for disqualification upon learning of the facts leading to the alleged conflict."); Antelope Valley Groundwater Cases, 30 Cal App 5th 602, 625; 241 Cal.Rptr 3d 692 (2018) ("[I]t is clear that attorney disqualification can be impliedly waived by failing to bring the motion in a timely manner.") (quotation marks and citation omitted). "If the opposing party makes a prima facie showing of extreme delay and prejudice, the burden then shifts to the moving party to justify the delay." Antelope Valley, 30 Cal App 5th at 625 (quotation marks and citations omitted). 9
In this case, as the trial court explained, the complaint was filed in 2017, but Kern did not move for disqualification until 2022. This is a five-year delay. Even considering the fact that the proceedings in the trial court were essentially suspended for a period of time while the earlier appellate process was ongoing, there still was a multiyear delay in filing the motion. If Moothart is disqualified at the current stage of the proceedings, plaintiffs would undoubtedly be prejudiced because a new attorney would have to become familiar with the extensive pretrial litigation. This suggests that disqualification of Moothart would "work substantial hardship" on plaintiffs. See MRPC 3.7(a)(3).
To excuse this delay, Kern raises the following two points. First, plaintiffs were presumably aware, given their complaint and initial disclosures, that Moothart would likely be a fact witness at trial. Second, Kern was unaware that Punturo did not have personal knowledge of the allegedly extortionate settlement demand until Punturo was deposed in July 2021. Neither of these excuses has merit. With regard to the first excuse, Kern himself was in possession of those documents and the information reflected therein early in these proceedings. Thus, Kern implicitly admits that he was aware of the possibility that disqualification would be warranted when this case was initiated in 2017. Yet he did not move for disqualification until 2022. The first excuse, therefore, actually weighs against Kern.
With regard to the second excuse, Punturo only could have had personal knowledge of the allegedly extortionate settlement demand if he was listening to that settlement discussion as it occurred. While this is certainly possible, it is unlikely. In other words, Kern defends his multiyear delay in filing the motion for disqualification by arguing that he needed confirmation, through Punturo's deposition, of the high likelihood that Punturo was not personally listening to the settlement discussion at issue. This weak rationale suggests that the true purpose of the motion for disqualification is to achieve a tactical advantage by removing Moothart from the case after he was involved with it for several years.
In any event, Kern's counsel admitted during oral argument in this Court that the voice on the telephone call was his. Thus, it would seem that Moothart would be giving testimony on an "uncontested issue" for the purposes of MRPC 3.7(a)(1).
To summarize, regardless of whether Moothart is "a necessary witness" for the purposes of MRPC 3.7(a), he may still represent plaintiffs if "disqualification of the lawyer would work substantial hardship on the client." MRPC 3.7(a)(3). The trial court apparently determined that disqualification would work a "substantial hardship" on plaintiffs because Moothart "has invested a lot in this case," and a new attorney would have to become familiar with this litigation for the approaching trial. Further, as explained, this delay was attributable to Kern, and he has not offered a sufficient excuse or justification for it. Given these facts, the trial court did not abuse its discretion by denying his motion to disqualify Moothart.
IV. CONCLUSION
The trial court did not abuse its discretion when it denied Kern's motion for a protective order providing that his deposition must be remotely conducted, nor did it abuse its discretion when it denied Kern's motion to disqualify Moothart as plaintiffs' counsel. Therefore, we affirm 10 the trial court and remand to that court for further proceedings consistent with our opinion. We do not retain jurisdiction. 11