JSB Partners LLC v Colabella

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JSB Partners LLC v Colabella 2012 NY Slip Op 31202(U) April 27, 2012 Supreme Court, New York County Docket Number: 0600524/2010 Judge: Joan A. Madden 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. SCANNED ON 51712012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART Index Number : 600524/2010 JSB PARTNERS LLC INDEX NO. vs. COIABELIA. ANDREA SEQUENCE NUMBER : 005 VACATE STAYIORDER/JU DGMENT The following papem, numbered 1 to II MOTION DATE MOTION SEQ. NO. ,were road on thlt motlon to/for -AMdavita - Exhlblts An8WOrlng Affldavlta - Exhlbltr INo(8). INO(8). 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SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK : PART 11 _ _ _ _ _ _ _ _ _ _ _ _ - _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ --- - -- - X JSB Partners LLC, Plaintiff, I n d e x No. 600524/10 -againstAndrea Colabella, Steven Shapiro and Cardea Group Inc., _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _Defendants. - _ _ ____ -__- I X Andrea Colabella, Steven Shapiro, Defendants/Counterclaimants, -againstJoseph Barr, Barry Taitz, JSBP, Inc. and JSB, Counterclaim Defendants. ___________________-_________ __..+_____-__ X Joan A. Madden, J.: Defendants Andrea Colabella ("Colabella"), Steven Shapiro ("Shapiro") and Cardea Group Inc. (jointly "defendants") move for an order pursuant to CPLR 3104(d) vacating a decision and order of Referee Jeffrey Helewitz dated September 23, 2011 ("September 23 Order") which granted a June 2011 motion to compel by plaintiff JSB Partners LLC ("JSB') and, as to certain items of s u c h discovery, directed that it be produced w i t h o u t requiring that its production be f o r "attorney's eyes only." The September 23 Order also denied defendants' cross motion f o r a protective order with respect to various sets'of interrogatories and denied defendants' motion to dismiss t h e complaint and/or to compel 1 [* 3] disclosure. J S B opposes the motion and seeks an order striking defendants' pleadings or conditionally striking defendants' * pleadings for failure to comply with discovery. J S B is an executive recruiting firm in Manhattan. Colabella is a recruiter who was employed by JSB from January 7, 2008 until November 9, 2009. Shapiro was employed by JSB as a recruiter from February 7, 2006 until November 9, 2009. Defendant Cardea Group Inc. ("Cardea") is a New Y o r k corporation founded by Colabella and Shapiro to provide professional staffing. In this action, JSB alleges that Colabella and Shapiro breached their respective employment agreements by converting during their employment and for 18 months a f t e r their employment with JSB ended. The complaint s e e k s compensatory and punitive damages and injunctive relief. Defendants answered the complaint seeking the recovery of unpaid commissions pursuant to Labor Law § 190. The discovery process in this action has been arduous and, in January 2011, the court's appointed a Special Referee Jeffrey Helewitz to handle discovery disputes between the parties. March 3, 2011, after a lengthy conference with the Special Referee, the parties entered into a stipulation regarding 2 On [* 4] discovery that was subsequently so-ordered by the court ( the March 3 Stipulation ). The March 3 Stipulation resolved defendants objections to first set of interrogatories, and first set of document JSB s demands, as well as plaintiff s objections to defendants first set of interrogatories and defendants first set of document demands and required the parties p r o v i d e responses within 60 days. It further provided that the parties shall respond to all interrogatories and document requests not otherwise dealt with in this stipulation in accordance with the parties confidentiality agreement of November 17, 2010. In June 2011, J S B moved for an order, i n t e r alia, (i)striking defendants answer for failing to p r o v i d e the discovery directed in the March 3 Stipulation, and failing to respond to J S B s second set of interrogatories dated March 16, 2011, and (ii) directing that the discovery provided by the defendants n o t be subject to attorney s eyes only. Defendants, represented by new counsel, opposed the motion and cross moved for a protective order with respect to J S B s first, second and supplemental set of interrogatories, and to dismiss JSB s amended complaint for failing to provide disclosure and/or to compel disclosure. The September 23 Order denied the parties respective requests for discovery sanctions pointing out that there has 3 [* 5] o n l y b e e n one d i s c o v e r y o r d e r , a n d that o r d e r d i d n o t i n d i c a t e t h e p o s s i b i l i t y o f sanctions" ( S e p t e m b e r 2 3 Order a t 4 ) . c The Special R e f e r e e also g r a n t e d J S B ' s r e q u e s t t h a t t h e d i s c o v e r y p r o v i d e d b y JSB n o t be f o r " a t t o r n e y ' s eyes o n l y l " n o t i n g t h a t t h e March 3 S t i p u l a t i o n r e q u i r e d t h a t t h e c l i e n t p u r p o s e of d e t e r m i n i n g w h e t h e r d e f e n d a n t s ' from p l a i n t i f f ' s clients were t a k e n c o n f i d e n t i a l i n f o r m a t i o n , and t h a t t h e " a t t o r n e y ' s e y e s o n l y " d e s i g n a t i o n would " r e n d e r t h e d i s c o v e r y m e a n i n g l e s s " a s t h e a t t o r n e y s a r e " i n no p o s i t i o n t o know t h e i d e n t i t i e s of t h e p e r s o n s w i t h whom i t d e a l t " (Id, a t 4 , The S p e c i a l Referee a l s o r e j e c t e d d e f e n d a n t s ' 5). position that t h e i n f o r m a t i o n a t i s s u e s h o u l d n o t be d i s c l o s e d t o JSB on t h e g r o u n d that i t c o n s t i t u t e d a " t r a d e s e c r e t , " a n d n o t e d t h a t t h e d i s c l o s u r e w a s s u b j e c t t o a c o n f i d e n t i a l i t y agreement which h e f o u n d would p r o v i d e " a l l t h e p r o t e c t i o n t h a t [ d e f e n d a n t s ] n e e d e d r e g a r d i n g u n w a r r a n t e d u s e o f t h e names s o p r o v i d e d " (ufa t 9). The S p e c i a l R e f e r e e t h e n d i r e c t e d t h a t t h e p a r t i e s p r o v i d e t h e d i s c l o s u r e r e q u i r e d b y t h e March 3 S t i p u l a t i o n w i t h i n 60 d a y s a n d scheduled a f u r t h e r compliance conference. On S e p t e m b e r 2 8 , 2 0 1 1 , d e f e n d a n t s made t h i s m o t i o n t o v a c a t e t h e S e p t e m b e r 2 3 O r d e r , a r g u i n g t h a t t h e March 3 S t i p u l a t i o n i s "illegible," t h a t t h e d i s c o v e r y o r d e r e d i n t h e March 3 S t i p u l a t i o n w a s "too b r o a d , " a n d t h a t t h e R e f e r e e e r r e d i n 4 [* 6] denying defendants' cross-motion to dismiss the Amended Complaint. Defendants also argue that Special R e f e r e e erred in rejecting its request that the discovery be produced for "attorneys' eyes o n l y , " and that JSB should not permitted to have access to confidential information as JSB violated defendants' privacy b y accessing the individual defendants' email after they left JSB, and that, as a result, defendants have moved for injunctive relief. At the outset, it must be noted that although the March 3 Stipulation is written in s c r i p t and p a r t s a r e difficult to read, it cannot be said that it is "indecipherable" as alleged by defendants. In any event, counsel for JSB has provided a typed version of the March 3 Stipulation which defendants do not dispute accurately reflects i t s content. Moreover, as after their objections to plaintiff's discovery requests were considered and ruled upon,2 defendants agreed to provide the discovery in the March 3 Stipulation, albeit with different counsel, they arguably should not be able to challenge I The court notes that with the exception of exhibits A through D, defendants' did not include exhibit tabs, thus making it burdensome for the court to verify that the exhibits support their position. 'The Stipulation indicates that except for Interrogatories 7,9, 74, 75, 76 and 67, all of JSB's interrogatories in the first set of interrogatories were to be answered by defendants. 5 [* 7] it now. In addition, defendants' argument that the discovery ordered in the March 3 Stipulation is overly broad and/or burdensome as it requires defendants to produce discovery for 18 months after they left J S B ' s employ is unavailing. Such materials are relevant to determining whether, in violation of their employment agreements, individual defendants converted JSB's confidential information for their own use during the 18 month period. In this connection, the court notes that the relevant employment agreements provide that an employee of JSB may not, i n t e r alia, during their employment and for 18 months thereafter "solicit or accept recruitment or j o b placement business from any client or j o b candidate of JSB Partners" Employment Agreement, ¶ 9. That being said, however, a review of the interrogatories reveals that request nos. 11 through 16, 18, 19, 20, and 21 are broad and burdensome as they require defendants to provide, inter alia, detailed information regarding all contacts made with prospective clients/job candidates and all placement s e r v i c e s provided to s u c h clients/job candidates and fees paid for such services since they left JSB's employ. The response to such requests will yield detailed information regarding clients/job candidates that was n o t obtained in breach of the employment agreements. The difficulty in tailoring discovery in this matter arises out of the need to provide JSB with sufficient information 6 [* 8] to enable it to identify which contacts and placements made by defendants involved the use of J S B ' s confidential information, while not requiring defendants to p r o v i d e discovery as to all the business done by them since the individual defendants left JSB. The record shows that J S B has identified approximately 40 clients of J S B that defendants contacted or placed in alleged violation of the employment agreements. For those clients, defendants shall be required to respond to the interrogatories 11 through 16, 18, 19, 20, and 21. Defendants shall also be required to provide J S B with a list of all job candidates/clients solicited or placed by defendants for t h e 18 months after they left JSB's employ. J S B will be able t o identify those individuals From that list, or entities that were contacted and/or placed allegedly using JSB's confidential can then request the detailed information sought in the relevant interrogatories with regard to those client/candidates.3 Next, there is no basis f o r vacating the September 23 Order denying defendants' request that the information be for 3Contrary to defendants' argument, the c o u r t in HPD InC. v. Ryan, 2 0 3 A D 2 d 326 (2d Dept 1994) did not limit discovery in actions against former employees f o r breach of restrictive covenants in their employment agreements to obtaining customer l i s t s , b u t simply held that under the circumstances of that case, the trial j u d g e properly required defendant to produce a list of its customers during the two year period of the restrictive covenant. 7 [* 9] attorneys eyes only, particularly as the court h a s now limited the information required to provided to JSB in response to certain interrogatories. As the Special Referee found, the information would be worthless unless J S B is permitted to examine it to determine if the persons/entities at issue were JSB s clientsljob candidates or otherwise obtained or contacted using information n o t known in the trade or a r e discoverable only through extraordinary efforts Enic Chemicals, Inc, v. Go-, A.D.2d 820, 821 (2d Dept 1983). 95 In any event, the confidentiality agreement protects defendants from any misuse of the information. In addition, defendants motion for injunctive employ does not provide grounds for denying J S B the relevant discovery.4 Defendants also request dismissal of JSB s complaint as JSB has not adequately responded to its discovery requests. 4 While this motion was pending, the court issued a decision and order dated February 22, 2012, denying the individual defendants motion f o r a preliminary injunction except to the extent that JSB agreed not to send any further emails from the email account of the individual defendants and to advise a n y client or candidates sending emails to the accounts that the individual defendants are no longer employed by J S B . 8 [* 10] Specifically defendants allege that JSB has failed to provide (1) sufficient interrogatory answers and documentation regarding * clients and job applicants alleging taken from J S B , (2) adequate documentation as to h o u r s worked by the individual defendants and records regarding commissions owed to them, or (3) answers to certain of its interrogatories. Defendants' motion to dismiss the complaint is denied, as the record shows that JSB has provided a large portion of the discovery sought by defendants, including responses to defendants' first document demand and first and second sets of interrogatories. That being said, however, while J S B requests that the court clarify that no discovery is required of it in response to the March 7 Stipulation, on this record, the court cannot determine the merit of such request and the Special Referee should address this issue and clarify the intent of the March 7 Stipulation in this regard. In addition, the Special Referee should address the issues raised by defendants' objections to J S B ' s second set of interrogatories. In view of the above, it is ORDERED that defendants' motion is granted only to the extent that as to interrogatories 11 through 16, 18, 19, 20, and 21 of plaintiffs' first set of interrogatories, defendants shall be required to answer such interrogatories w i t h respect to the 9 [* 11] clients/job candidates previously identified by JSB, and to provide a list of clients/job candidates contacted OK placed by z defendants, from November 2009 through May 2011, s u b j e c t to defendants being required to provide further responses to interrogatories 11 through 16, 18, 19, 20, and 21 as to clients/ job placement candidates identified from the list provided by defendants as former clients or j o b placement candidates of J S B or clients/candidates otherwise obtained allegedly using J S B ' s confidential information; and it is further ORDERED that within 30 days of the date of this decision and order, defendants shall respond to the JSB's f i r s t set of interrogatories, except for items indicated in the March 7 Stipulation and as limited by the immediately preceding paragraph; and it is further ORDERED that in the event defendants fail to comply with the immediately preceding paragraph, JSB may request a conference with J u d g e Madden at which time the court will impose discovery sanctions/penalties against defendants, as provided in CPLR 3126 and as detailed in the annexed order; and it is further ORDERED that a l l further discovery motions regarding interrogatories and all opposition to such motions shall comply with the format in the annexed order or court shall not consider such motion and/or opposition; and it is further ORDERED the parties shall appear for a conference before the 10 [* 12] Special Referee on May 7, 2012 at 1O:OO am, in room 562, at which the Special Referee shall address JSB s request that it be I clarified as to whether a n y further discovery is required of it in response to the March 7 Stipulation, any issues raised by defendants objections to JSB s second set of interrogatories, and any other discovery disputes n o t resolved by the instant decision and order; a A copy of this decision and o r d e r is being mailed by my chambers to counsel for the parties. Dated: A p r i d p O 1 2 J.S.C. 11 [* 13] c ORDERED THAT all discovery motions with respect to interrogatories shall comply with the following requirements: 1. The movant shall list each demand and/or interrogatory f6llowed by the response and a concise statement regarding the legal and factual basis supporting each request. 2. The opposing party shall respond in the same format as described above by including each demand and/or interrogatory followed by movant s response and address each item with a concise statement regarding the legal and factual basis for the sufficiency of their response or objection. 3. For both the moving papers and opposing papers, each item shall have its own response and references to the grounds asserted in response to other questions are not permitted. Compliance with discovery orders, including preliminary conference orders: Failure to comply with the discovery dates and provisions in discovery orders, including preliminary conference orders, will result in the imposition of sanctions andor penalties pursuant to CPLR 3 126, including preclusion, striking the pleadings andor the determination of issues upon which the discovery is material and relevant in accordance with the claims andor defenses of the party obtaining the order and against the non-complying party. DATED: Apribg

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