Siller Wilk LLP v Red Riv. Delta LLC

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Siller Wilk LLP v Red Riv. Delta LLC 2012 NY Slip Op 33506(U) July 19, 2012 Supreme Court, New York County Docket Number: 103879/10 Judge: Richard F. Braun Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. SCANNED ON 712512012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK NEW YQRK COUNTY PRESENT: bKMI.WWRDF.IAAu# 9% PART J.SX Jus#/cs 1 Index Number . 103879/2010 SILLER WlLK vs. RED RIVER DELTA, SEQUENCE NUMBER301 1 COMPEL DISCLOSURE ~ --c FILED e k'l Thr following papen, numbered 1 to Notice of M t n ool l e AnlWWlrlQ Affldavlts - Exhlbltr INDEXNO., MOTION OATE JUL 25 2012 "/ , wgre rbdd 0 -Amdawlts cod Exhlblft , , , , +$&/A MOTION SEQ. NO. I oh&A,,/ (A&,& IN o ( m 1 . L INo(*). L IN() o.. L Rrplylng AffldavlG ..................................................................... CASE DISPOSED DENIED 2. CHECK AS APPROPRIATE: .............. MOTION IS: r]QRANTED 3. CHECK IF APPROPRIATE: ................................................ 0SEnLE ORDER 1. CHECK ONE: DO NOT POST w-' QN-FINAL DlSPQSlTlON RANTED IN PART OTHER SUBMIT ORDER 0FIDUCIARY APPOINTMENT REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART 23 Index No. 103879/10 Plaintiff, OPINION -against- RED RIVER DELTA LLC, MICHAEL CALLAHAN, HUY CHI LE, and JEAN MARC HOUMARD, RICHARD F. BRAUN, J.: FILED NEW YORK COUNTY CLERK S OFFICE This is an action to recover legal fees and for an account stated. Plaintiff Siller Wilk LLP moves (1) pursuant to CPLR 3 1 24, to compel defendants to produce certain documents in response to request no. 5 of plaintiffs first notice for discovery & inspection, dated August 5 , 2010; (2) pursuant to CPLR 2302 and 3 124, to compel Anthony Q. Fletcher, Esq., counsel for defendants, to comply with a subpoena ad testificandum, dated December 29,2012; (3) pursuant to rule 3.7 of the Rules of Professional Conduct, to disqualify Mr. Fletcher as counsel for defendants; and (4) to amend the caption to substitute plaintiffs current name, Wilk Auslander LLP , in place of plaintiffs former name. In the complaint in this action, plaintiff claims that it performed legal services for defendant Red River Delta LLC from February 2007 to September 2009 in connection with the underlying action, that defendant agreed to pay plaintiffs hourly billing rates and disbursements for the legal services, and that defendant failed to make any payments after March 2009, owing plaintiff a balance of $1 75,000. [* 3] By written settlement agreement, the parties agreed to permit defendants to pay the outstanding balance for legal services in three installments: an initial installment of $100,000, and two subsequent installments of $37,500. Defendants also agreed that the entire outstanding balance, plus any additional legal fees, expenses, and interest, would become immediately due upon defendants default in payments under the settlement agreement. Defendants paid the initial $100,000 installment. However, plaintiff contends that defendants failed to pay the remaining installments under the settlement agreement. Plaintiff also alleges that it sent written statements to defendants requesting payment of the outstanding balance, plus additional fees and expenses, but that defendants failed to pay the amount demanded. Defendants answered the complaint, generally denying the allegations in the complaint and asserting numerous affirmative defenses, including that the settlement agreement was void as against public policy because the agreement preconditioned the substitution of defendants counsel on defendants consenting to plaintiffs financial demands. Defendants allege counterclaims for conversion, breach of fiduciary duty, breach of contract, negligence, and legal malpractice. The only grounds under which defendants object to the request in plaintiffs notice to produce are attorney client privilege and attorney work product. Generally, attorney client communications and attorney work product are not discoverable under CPLR 3 101 (b) and (c). The party asserting such privileges has the burden thereon and of proving non-waiver thereof (Matter qfPriest v Hennessy, 5 1 NY2d 62, 69 [ 19801; New York Times Newspaper Div. of i Y Times Co. v Lehrer Y McGovern Bovis, 300 AD2d 169, 172 [16t Dept 20021; John Blair Communications v Reliance Capital Group, 182 AD2d 578,579 [ lstDept 19921). The attorney client privilege is deemed waived when a party puts at issue in the litigation the subject matter of the communication and where 2 -.. . .. . [* 4] . . upholding the privilege would prevent the opposing party from receiving important information in discovery (Veras Inv. Partners, LLC v Akin Gump Straws Hauer & Feld LLP, 52 AD3d 370,373 [ 1 Dept ZOOS]). Defendants have waived the privileges by in essence asserting a duress defense in their seventh affirmative defense that the settlement agreement s conditioning the change of defendants counsel on defendants conceding to plaintiffs financial demands regarding its outstanding bills for attorney s fees voided the agreement, and by asserting their counterclaims. Thus, the discovery and inspection request should be complied with. In deposition discovery of defendants, the finger was pointed at Mr. Fletcher as the person who would have certain relevant information sought by plaintiff. Given that, and his involvement with the settlement negotiations and the escrow account, his deposition should occur, with production of documents. Rule 3.7 (a) of the Rules of Professional Conduct provides that a lawyer shall not be an advocate before any tribunal in which he or she is likely to be a witness on a significant factual issue, with certain exceptions not shown to be applicable here. The Court of Appeals held in interpreting the predecessor rule that, where an attorney who will be a witness at trial has already appeared for his or her client, the lawyer must withdraw from the representation (S & S Hotel Ventures Ltd. Partnership v 777 S. H Corp., 69 NY2d 437,444 [ 19871). Disqualification of a lawyer causing a client pecuniary hardship is alone an insufficient reason to not disqualify the attorney (cf Grossman v Commercial Capital C orp.,59 AD2d 850 [ I st Dept 19771 [under the predecessor rule to rule 3.7 (a) (3)]). Mr. Fletcher should be disqualified under the circumstances here. Normally changing aparty s name in the caption to the party s new name should be allowed. Defendants have argued that this should not be permitted here in light of defendants counterclaims. 3 [* 5] The caption has been amended to the new name of plaintiff, and the caption should include the current plaintiffs name as a counterclaim defendant in light of the arguable merit to defendants' arguments as to the need to maintain plaintiffs name in the caption. Therefore, by this court's separate July 19,2012 decision and order, the motion was granted to the extent of compelling defendants to produce documents in response to request no. 5 of plaintiffs first notice for discovery & inspection, dated August 5,20 12, within 20 days of service of a copy of the July 19, 2012 decision and order, with notice of entry; compelling Anthony Q. Fletcher, Esq. to testify and produce documents at a deposition in this action in compliance with the subpoena ad testificandum, within said 20 day period; disqualifying him from representing defendants in this action; and substituting Wilk Auslander LLP as plaintiff in this action, and amending the caption accordingly. The caption has been further amended to include the name of Siller Wilk LLP as counterclaim defendant. Dated: New York, New York July 19, 2012 ' 4 RICHARD F. BRAUN, J.S.C.

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