Matter of ACE Am. Ins. Co.

[*1] Matter of ACE Am. Ins. Co. 2004 NY Slip Op 51732(U) Decided on October 26, 2004 Supreme Court, New York County Abdus-Salaam, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 26, 2004
Supreme Court, New York County

In the Matter of ACE American Insurance Company



112613/04

Sheila Abdus-Salaam, J.

Upon the foregoing papers, it is ordered that this motion by nonparty OrthoNet for an order pursuant to CPLR § 3103, granting a protective order and vacating this court's prior order compelling the depositions of three nonparty witnesses, is denied and the cross-motion by petitioner for an order compelling the depositions, is granted.

The parties to the arbitration proceeding stipulated to conduct discovery from nonparties pursuant to CPLR § 3102 (b) and petitioner obtained a court order for this discovery pursuant to CPLR § 3102 (c). Movant OrthoNet, citing inter alia, Spiegel v. D.H. Blair & Co., Inc (289 AD2d 22), In the Matter of Flood

(157 AD2d 780) and De Sapio v. Kohlmeyer (35 NY2d 402) asserts that nonparty depositions in arbitrations cannot be compelled pursuant to CPLR § 3102 (c) absent a showing of exceptional circumstances. However, none of those cases address a situation where the parties had agreed to conduct nonparty discovery in aid of arbitration.

As was noted by Justice Saxe of this court in Textron, Inc v. Unisys [*2]Corporation (138 Misc 2d 124), in denying a motion by nonparty witnesses to quash commissions to take depositions with respect to an arbitration proceeding, the argument that special circumstances have not been demonstrated

" *** overlooks the rationale of CPLR 3102 (c) which contemplates a situation where one party to arbitration seeks disclosure of the other party and enlists the aid of the court when the other party resists." (Id., emphasis in original). In Textron, as here, both parties to the arbitration stipulated to the discovery. Respondents in the arbitration consented to the use of the stipulation in aid of an application by petitioner to this court for an order requiring the OrthoNet witnesses to appear and be deposed.

OrthoNet has not demonstrated that a protective order should be granted pursuant to CPLR § 3103 (a). There is no showing that the OrthoNet witnesses will suffer unreasonable annoyance or expense by appearing for depositions and also testifying at the arbitration proceeding.

Based upon the foregoing, the motion is denied and the cross-motion is granted.

Dated: October 26, 2004

J.S.C.

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