Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker
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Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker 2005 NY Slip Op 30471(U) December 16, 2005 Sup Ct, NY County Docket Number: 602229199 Judge: Marcy S. Friedman Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] [* 2] SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY - - PART 57 ULICO CASUALTY COMPANY, Index No.: 602229199 Plain tlff(s), against WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER, and WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP, Defendant(s). Present Justice, Supreme Court In this action for legal malpractice and breach of fiduciary duty, among other claims, defendants Wilson, Elser, Moskowitz, Edelman & Dicker, and Wilson, Elser Moskowitz, Edelman & Dicker LLP move for an open commission to take the deposition of out-of-state, non- party witness Robert Georgine ( Georgine ), the former Chief Executive of ULLICO h c . ( ULLICO ), the parent company of plaintiff Ulico Casualty Company ( Ulico ). CPLR 3 101(a) provides that [tlhere shall be full disclosure of all matter material and necessary in the prosecution or defense of an action. It is well settled that the words material and necessary are to b e interpreted liberally to require disclosure of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity. The test is one of usefulness and reason. (Allen v. C r s w m r Publ. Co, s 21 NY2d 403,406 [ 19681.) A party is thus entitled to full disclosure of all material and necessary evidence, or information leading to [such] evidence. p o r thway Eng g, Inc. v. Felix Indus., Inc.,77 NY2d 332,335 [1991]; Matter of Estate of Matthews v. Bank ofNY, 266 AD2d 290 [2d Dept 19991.) [* 3] Here, defendants claim that they are entitled to question Georgine about his knowledge, as chief.executive officer of ULLICO, of the business dealings of plaintiff subsidiary company. Defendants also allege that Georgine engaged in financial improprieties that affected plaintiffs profitability, and that the effect of Georgine s financial dealings is relevant to the issue of plaintiffs claim for damages for lost business, which is approximately $35 million. In opposition, plaintiff submits an affidavit from Georgine in which he asserts that he was not involved in the day-to-day operations of plaintiff and has no recollection of the financial reports or condition of plaintiff company for the period 1996 through 2001. (Georgine Aff., 77 3, 6.) Plaintiff also argues that in view of the parties stipulation to conduct depositions of numerous non-parties, including the former president of plaintiff and the former chief legal officer of ULLICO, who do have knowledge of plaintiffs day-to-day operations, Georgine s deposition is not necessary to obtain the information sought by defendants. In reply, defendants submit deposition testimony of Charles Sorbani, former president of plaintiff, and Mark Rattner, former president of PIA, that Georgine was involved in management decisions related to plaintiffs operations. Georgine s wholly conclusory, carefully worded denial of involvement in plaintiffs day-to-day management cannot serve to avoid discovery. In view of the liberal approach t4 disclosure endorsed by the courts, this court finds that the information sought from Georgine as to the management and operations of plaintiff and as to plaintiffs financial condition may lead to evidence sufficiently related to the defenses in the case to make its discovery useful and reasonable. I Nor may Georgine avoid a deposition based on his unsubstantiated assertion as to his medical condition. 2 [* 4] On the record on this motion, the court will not, however, authorize defendants to depose Georgine regarding his alleged self-dealing (e.g., stock transactions and personal loans) that came to light after December 2001, the cut-off date for the damages sought by plaintiff. Defendants claim that the scandal that rocked Ulico, Inc. in 2003, involving accusations of unfair dealing and insider trading on the part of Georgine and others, undermined their own clients confidence and trust in the Ulico companies. (Brennan Aff. In Support, 77 8, 13.) However, defendants do not offer a plausible explanation as to how a 2003 scandal could have affected profitability prior to 2001. To the extent that defendants claim is that Georgine s alleged self-dealing predated plaintiff s 2001 cut-off date for damages, and that the self-dealing had a quantifiable financial impact on Ulico s profitability prior to the cut-off date, they rely solely on innuendo and make no showing whatsoever, by expert testimony or otherwise, that the particular items of selfdealing that they have cited (e.g., stock transactions and personal loans) may or could have affected profitability under generally accepted accounting principles. Defendants will, however, be granted leave to seek to make such showing. It is hereby ORDERED that defendants motion to take the deposition of Robert Georgine is granted; and it is hrther ORDERED that the deposition shall be limited to the management and operations of plaintiff, and plaintiffs financial condition prior to December 2001; and it is further ORDERED that this order is without prejudice to a motion, if defendants are so advised, to extend the scope of the deposition to Georgine s alleged self-dealing with ULLICO or plaintiff in the period prior to December 2001, Provided that: Such motion shall be made upon papers which shall 1) specifically set forth the relevance of the alleged self-dealing to the issues in this 3 [* 5] action; and 2) if defendants claim is that the self-dealing had a quantifiable financial impact on Ulico s profitability prior to December 2001, defendants shall make a competent showing as to the basis for this claim for each identified item of self-dealing about which defendants seck to inquire. In the event defendants seek to expand the scope of Georgine s deposition beyond that authorized by this order, they shall so move prior to cornmencement of Georgine s deposition; and it is further ORDERED that, pursuant to CPLR 3 108, a Commission shall issue in this action to a Judge of the Circuit Court for Montgomery County, Maryland, or any other authorized person who may administer oaths pursuant to the laws of that state, to take the deposition upon oral questions under oath of Robert Georgione, a resident of Silver Spring, Maryland, as a non-party witness in this action and that hehhe return the transcript of the testimony subscribed by the witness, certified to be correct, annexed to said commission with any exhibits produced and proved before h i d e r , to the Clerk of the Supreme Court of the State of New York, County of New York, 60 Centre Street, New York, New York 10007, by certified or registered mail, with all convenient speed. Dated: New York, New York December 16, 2005 4
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