Hinshaw & Culbertson, LLP v e-Smart Tech., Inc.

Annotate this Case

Download PDF

Hinshaw & Culbertson, LLP v e-Smart Tech., Inc. 2012 NY Slip Op 30751(U) March 26, 2012 Sup Ct, New York County Docket Number: 113108/09 Judge: Judith J. Gische 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] TW I fo&W # 3 I i u' 55 .-, [* 2] SUPREME COURT OF THE STATE OF N W YORK E GOUNW OF N W YORK: IAS PART 10 E ~~~ ~~~~~ DECISIONI ORDER index No.: 1 1 3 1 W O g 009 Seq. No.: Hinshaw & Culbertson, LLP, Plaintiff-Counterclaim Defendant. -again& &mart Technologies, Inc. and IVI Smart Technologies, Inc., Dafendants-Counterclaim Plalntlff. -- ----.-- - I - X e-Smart Technologies, Inc. and II V Smart Tachnologles, Inc., T.P. Index No.: 591 16&08 P Party Plaintiffs -3galnst- MAR 27 2012 Marande E. Fritz and Mamnda E. Fritz, P.C., NEW YORK COUNTY CLERK'S OFFICE 3MParty Defendants. .- Pursuant to CPLR 2219(a) the follawing nurnbarerd papers were considered by the court on this motion and cross-motlon: PAPERS NUMBERED 1 osc...................................................................................................................................... EKL affirm.,exhibits.............................................................................................................. 2 Noiw of Croas-Motion, MLL affirm., MG "atfld.",exhibits.................................................... 3 EKL affirm. In further support and in opp. To X-motion, exhlbits.........................................4 Upon the fomgolng papers the decision and order of the court I as follows: s The motion and crosa-motion before the court raise various discovery disputes between the parties. In the underlying action, plalntiff Hlnshaw & Culbertson LP (IH & C") are seek to recover fees for legal sewlcba rendered to defendants &mart Page 1 of 10 [* 3] Technologies, Inc. and IVI Smart Technologies, Inc. (mllectively "Smart"). Smart interposed counterclaims and asserted a thlrd party claim against Maranda E.Frtk and Maranda E. F r b , P.C.(collectively 'Fritz'). H & C and Fritz are jointly represented. By decision and order of this court, dated March 8, 2011, the court narrowed Smart's couhterclalms and third party claims to SEC and Wells notice based claims for malpractice and breach of fiduciary duty with respect to a single document, Although thousands of documents have been produced, no deposltlons have yet taken place. The parties have reached an impasse on the issues addressed in these motions, 1. Disputes regardlng the production of Metadata H & C requests that Smart reproduce, in "nattve format," the discovery already requested and provided. Most of the discovery already produced Is In electronic format and H & C is seeklng i8 the metadata embedded in such documents. It argues that because Smart's principle, Mary Grace,altered highly relevant &mailer, it ia entitlad to such addltlonal data. Smart denies that Ms. Gram altered any e-mails, but states that It if3 willing to provide such metadah, provided that it also recehres the metadata assodated wlth H & C's Miscovery production. Smart% prior document requests expressly request rnetadata, which has never been objected to by H & C. Nonetheless the documents actually produced by H & C did not contaln any metadata. H & C I s unwilling to provide such metadata, arguing that because Smart cannot make a threshold showing that it altered any documents, production of e-discovery In lb native format 1 not warranted. 6 For the reasons that follow, the court holds that the motion and cross-motion are Paga 2 of 10 [* 4] both granted to the extent that each party is directad to produce its document discovery in a format that includes the metadata. The documents, in thelr natlve format, shall be re-produced by each party no later than 60 days after this decisbn appears on the S u p m e Court Records On-line Library (%troll"), It is now recognized that nearty every electronic document contains metadata, which is secondary Informatlon, not apparent on the face of a document, that describes an elactronlc document's characterlstlcs, orlglns and usage. lrwln v. O n o m C o u a Resource Rec~vew72 AD3d 314 (4' dept. 2010). Meta-data can include such , information as the name of a file, tts Imation, file type, flle slze, the identrty of its author, and file creation dates, including historical information about modifications or edits. Metadata is consideEd part of an electronlc document and Is discoverable. Nassau Atisoclatas. I LC v. RC Dolner, 30 Miac3d 1224(A) (NY Co. Sup Ct 2011); Dam11 E I m Drises. Inc. v. Hewleu P d - Co,, 3 3 Misc3d 1202(a)(Monme Co.Sup. Ct. 201 1); TA Ahern Contrs. Corn,v. Dormitory A u 'm, 24 Misc3d 418 (NY Co. Sup. 2009). Contrary to H & Cs contention, there is no authority that any additional showing, ' that the electronic document ha8 been altered or fabricated, i necessary before the s produdon of metadata should be ordered by a court Buck Consultants. LLC v. Cva ao nald Consultina. LLC,(2007 WL 3236192 [N.Y. Co. Sup. 2007J) relled upon by H & C does not stand far such proposition. While the mantpulatlon of the efectronic data provided the basis for the court ordering production of matadah In that particular case, the court dM not hold that meta-data Is only producible when such manipulation or fabrlcation of electronic evidence occuw. As that appellate division, flrst department noted in m a r v. C r e m (80 AD3d Page3 of 10 [* 5] 75 11" dept. 20111) discovery of electronidly stored information is commonplace, and there are court rules that address Is retention and production. The consklerations t about whether meta-data should be pmducd, however, are the 8ame standards that apply to the productfon of ail dlsmvery in a case. The salient consideration8 am whether it is material and necessary in the pmeartlon or defense of an actlon. CPLR Q 3101(a). Dlsdosure of meta-data is required if it "bears on the controversy and wlll assist preparation for trial by sharpenlng the issues and reduclryl delay and prolixity. The test is one of usefulness and reason. Allen v. Cwll-Berrln Collier Publ, Co,, 21 N.Y.2d 403,406 (1968). While certainly meta-data is discoverable to determlne If and when dmmenta may have been altered, that Is not the only reason for produdon. Qeneraf information about the creation of a document, including who authored a document and when it was created, is pedigree information often Important for purposes of determining admissibility at trial. Moreover, in this case, although plafnttffs clearly requested electronlc information with metadata, no timely abjection was ever raised. Nor i any s valid reason raised as to Its production at this time. Consequently, both partie8 are obligated to m-produce the electronically stored documents they orlgjnally produced, but this time in a format that fnciudas the metadata. Neither party ha8 raised any issue about who bears the cost of such production. Accordhgly, the uaual rule, that the producing party bears the cost of production shall apply. ~ @ - ~ & io ~ t W - tW M -(In dept 2012). Paga4of 10 I F@ u B . CAD3d m W I- [* 6] 2. Disputes regardlng Clalms of Attbmey-Client Privilege Smart claims that it withheld the production of certain documents based upon the assartlon of attorney client prtvliege. H & C claims that by previously producing otherwise privileged material, the attorney client privilege has been waived. Smart claims that the material provided was not pdvlleged (and the privilege was not otherwise waived) because, although it lnduded cornmunirntianswfth attorneys, third parties were also copied on the communications. The attorney cllent privilege is one of the oldest of common law privileges that b now embodied as a statute In CPLR 54503. urn Sys. Intl. Corp, v, C h e m &&, 78 NY2d 371 (lael). It requlres that there, be an attorneycllent relatiomhip. Not all communications between an attorney and a diant, however, are privileged. The inforrnatlon must be of a confidential nature, made for the purpose of obtaining legal advice or services. pemle v. Mttchd 58 NY2d 388 (1883); P rlwt v, HennesSy, 51 NY2d 62 (1980). Communications relating solely to nowlegal matters are not privileged. Peo~la Belne, 59 AD3d 307 (4" dept 1977). Nor are materials v. dlsclosd to third partlei. Netherbv w. Y. G.V. T r a d a m InVMmQ Ltg, 261 nta, AD2d 151 (I" IQQQ). dept. In order to claim that an otherwise responsive dowment may be withheld from discovery based on privilege, the party asserting the privilege is requlred to create a privilege log with sufficient identifylng informatlonfor the court to attempt to asaxtaln the bona fides of the clalm. In the absence of such a log, the court i unable to rule on s privilege issues - CPLR $3122; Stenovich v. W a c u t o n . R w n 8 K&, 105 MIsc2d 90 (NYCo. Sup Ct. 2003). Once a log is prepared, the court may still require Page 5 of 10 [* 7] an in camera revfew of the wlthhald documents. SDactrum SYS.Intl. Gorp. v, Chemical Wlsupra. As to the issue of waiver, the documents attached as exhlbit J to the motion which H & C claims demonstrate waiver, do not on their face, dearly delineate what they are and to who they were sent. Some of the copies are garbled and illegible. Nor b Smart's attorney's condusory statement that the documents ware sent to thlrd parbies probatlve an the Issue of waiver. Neither party identlfioa for the court what these documents are, to whom they wera sent, when they were sent and other essential Information t a would allow the court to make any ruling on the issue of waiver. ht On the issue of waiver, therefore, the court grants the motion only to the extent that Smart I directed to provide H & C with a privilege log wkhln 30 days after thls s dedslan and order is posted to SCROLL. After such production, H & C may renew Its motion regarding the production of such documents. The renewed motion and any opposition thereto, however, must contaln suWlcient factual information for the court to make the appropriate ruling. 3. Disputes over Wells letter and communications with SEC Smart claims that such documents are 'confldantial" be cause^ they are part of a non-public investigation. H 8 C claims that because Smart has already agreed to produce them, It should be compelled to do so at thls time. Smart cites no authority for its claim that such documents, absent m e other m applicable privilege, are immune from disclosure In thls action. See: SEC v. Collin8 6 Aikman Corn., 258 FRD 403 (SDNY 2 0 ) A party'a designation of a document as 09. mnfldential will not prevent a court from ordering Its discovery K otherwise approprlatb. Page6of 10 [* 8] e g9 (1' dept. 2009). 69 AD3d . , Smart does not deny that it had previously agreed to produce this materlal. The can be ordered produced on this basis alone. Even if it had not a g r d to such production, however, the court would direct that this materlal be provided, because they are not protected. The motlon is, therefore, granted to the extant that Smart is directed to produce the Welb letter and other communications with the SEC regarding such letter wlthln 30 days after this declslon appears on SCROLL. 4. Other Documents Both partles accuse the other of not producing document8 that were requested of It. A party i tquired to produce only those document that are in their custody, s conlrol or possession. CPLR 3120(1); 1 f - 103 AD2d 395 (2"ddept. 1984). There b no exemption from producing documents Inc., that the other side may also have. If the documents cannot be located, the party who has bean called upon to produce them should provide a sworn statement, made by someone with personal knowledge, detailing the search that had been made, which is sufficient to support a conclusion that a good faith effort was made to supply the requested records. Ackson v, Citv of New Yo& 185 AD2d 788 (1" dept. 1QQ2); I Motrrr. Corn, v. Varldernillen, 32 M i d 1206 (A}(NY Sup Ct. Suffolk Co. 2017). To the extent Smart withheld any documents because it believed that H & C had the documents already, it is required to produce them within 30 days of the date this decision and order appears on SCROLL, Mary Gram's *affidavit",subrnttted on this motion, which purports to claim that Page7of 10 [* 9] Smart has produced everything that it has, is mjected. An affidavit cannot be notarized over the phone. Nor does Edward K. Lsncini's affirmation, submitted in reaponse to the crossmotion, satlsfy the requlrament of a good faith sworn statement fo the efforts made to locate responsive documents. In any event, his argument, that based on the number of pieces of papers H & C has a h d y produced, the court should conclude ft has complied with discovery, is mjected. Both parties are dlrected to again search for all categOrle8 of requested documents and update their production wlth any additional documents they find that are responsive. Along with any newly found documents, they should provide a good faith amdavit aa otherwlse Ident'med herein, which articulate not onty the efforts made before these motions were brought but also those made to comply with this order, in connection with locating responslve d0~Ument8.The parties should provide the documenh and affidavitswithin 30 days of this order appearing on SCROLL. 5. Priority of Depoaitlons H 8r C wants to change the prlorrty of depositions so that it cBn depose Mary Gram before any of its witnesses are deposed. The reason asserted Is that it belleves that Ms. Grace will assert her 5" Amendment privilege, which it believes will provide a basis for Itti motion for summary judgment. The court does not believe that H & C's litigation strategy provides a special circumstancesufficientfo change the depasition priority set out in the CPLR. Bucci v, Lvdon, 110 AD2d 520 ( I ddept. 1086); . n v, %o Mulen. 29 AD3d 1195 (3"'dapt. 2008). Accordingly, the motion to change the deposition priority is denied. The parties are directed to proceed to depositions which am to be completed no later than June 22, Page 8 of 10 [* 10] 2012. Conclusion In accordance with hforegoing the motion and cross-motion are granted in part and denled in part as follows: [ I ] Both parties are directed to produce the documents they already have produced in thelr name format, no later than 80 days after this decision appears on SCROLL: [Z] Smart i directed to provide H & C with a privilege log within 30 days after s this deckion and order appears on SCROLL. After such production, H & C may renew Its motion regarding the production of such documents; [3] Smart Is directed to produce the Wells letter and other comrnunlcatlonswith the SEC regarding such letter within 30 days after thls dedslon appears on SCROLL. [4] To the extent Smart withheld any documents because it bslkved that H & C had the documenta already, it is required to produce them within 30 days of the date thIs decision and order appears bn SCROLL. [6] Bath parties are directed to again search for all categories of requested documents and update their produdon with any additional documents they find that are responsive. Along wkh any newly found documents they should each provide a goad falth affdavlt, as otherwise Mantifled herein, which artiwlates not only the efforts made before these motions were brought but also those made to camply wtth thls order, In connection with locating responsive documents. The parties should provide the documents and affldavits within 30 days of this order appearlng on SCROLL. [e] There will be no change in the prlority of deposittons. The parties are dir&d Page 9 of 10 [* 11] to pr& to depositions, which am to be completed no later than June 22,2012. [nA status conferenca is schedukd for June 28,2012 at 0:QOa.m. No further notices will be sent. The Note of lrrsue shall be filed on June 29,2012. Any requested relief not expressly granted herein Is denied. Thls ConstiMes the dedslon and order of the court. Dated; New York, New York March 28,2012 SO ORDERED: FILED NEW YORK COUNTY CLERK'S OFFICE Page 10of 10

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.