Brooklyn Tabernacle v. Holland & Knight LLP

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Brooklyn Tabernacle v Holland & Knight LLP 2024 NY Slip Op 31979(U) June 6, 2024 Supreme Court, Kings County Docket Number: Index No. 520533/2020 Judge: Leon Ruchelsman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

FILED: KINGS COUNTY CLERK 06/06/2024 01:10 PM INDEX NO. 520533/2020 NYSCEF DOC. NO. 235 RECEIVED NYSCEF: 06/06/2024

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS : CIVIL TERM: CCP - - - . - - - - . - - .- .. - - - - - . - - - - - - - - - -.. - . - - - - - - . - - . X THE BROOKLYN TABERNACLE, Plaintiffs, Decision and order

- against'"" Index No. 520633/2020

HOLLAND & KNIGHT LLP, STUART M. SAFT AND JOSHUA BERENGART.EN, June . 6 , 2024 .

Defendants, . -.-- - - - - - - - - - - - -- - --.- - - - - - - - - - - -.- - - - - - - - - -.x PRESENT: HON. LEON RUCHELSMAN Motion Seq. #9

The defendant has moved pursuant to CPLR §3124 seeking the

production of documents and other discovery from the plaintiff.

The plaintiff has opposed the motion. Papers were submitted by

the parties and arguments were held. After reviewing all the

arguments this court no~ makes the following deter~ination,

The plaintiff is a non-denominational Church located at 17 Smith Street in Kings County. According to the complaint this lawsuit asserts the defendant committed legal malpractice and

breached its duty to the plaintiff regarding a series of rea:l estate transacti,ons. Specifically, the Church is the owner of a

condominium unit located nearby at 180 Livingston Street in Kings

County. The plaintiff -Sought to develop that property and on

December 17, 2014 hired the defenc:lant to provide legal services

to help the plainti;Ef w;Lth ~ "complex transa.ction" (§..§.§;, Verified

Complaint, 'lI7 [NYSCEF Doc. Nb .• 1]); The transaction consisted of

a series of stepl:l whereby th,e pl.3.int.iff would transfer the unit to an entity ca.lled That 18.0 Li vingstort LLC, a subsidiary of T.ho.r

FILED: KINGS COUNTY CLERK 06/06/2024 01:10 PM INDEX NO. 520533/2020 NYSCEF DOC. NO. 235 RECEIVED NYSCEF: 06/06/2024

legal malpractice actions: the former attorney :could, merely by

virtue of asserting a third-party claim for contribution against

the present attorney, effectively invade the privilege in every

case. Such a result would surely contravene the purpose of the

privilege/' (id) .

The defendant argues that case does not control the

discovery sought here because in that case the defendant prior

counsel placed the privileged Cormnunications iri issue while in

this i::ase the plaintiff itself put those cornmuni·cations in is.sue.

The defetrdant points to Paragraph 62 of the complaint which

alleges that ~the Church is entitled to damages in the form of

the recovery ,of attorney.s' fees 9 nd other expenses reasonably

incurred in retaining alternate counsel to perform services for

which the defendants were retained and paid and/or to cure errors

cai.1sed by the defendants' negligent conduct" (see, Verified

Complaint, 62 [NYSCEF Doc. NO. 1]). The defendant insists that

"if Other Attorneys were retained to perform the same services

for which Defendants were retained, then Other Attorneys' advice

bears on the issue of proximate causation'' (see, Reply

Memorandum, Page 9 [NYSCEF Doc. No. 231]). However, the

distinction drawn between situations whe:re the defendant attorney

puts the statements in .issue and. this cas.e where the plaintiff placed th~ comm uni ca.t ions iri is sue is. unpe.r s uas i ve. In. a.l 1 ca,s.es

the reason the original counsel see.ks ¢omrnuriications with the.

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plaintifffs new counsel is to try and argue that any dc¹.mage

sustained by the plaintiff was realJ_y caused by the new counsel.

The mere fact a plaintiff mentions the new counsel in the

complaint does not alter the motives of the defendant and does

not mean the plaintiff himself or herself waived any privilege

thereby. Indeed, the plaintiff always retains new counsel and.

always communicates with such counsel. This remains, true

regardless of any references, in the complaint, about plaintiff's

current counsel. In fact, in Jakobleff v. Cerrato. Sweeney and

Cohn (supra) the whole reason a contribution action was commenced

was precisely to shift the blame for any damages sustained to the

plaintiff's current counsel. The simple truism that plaintiff

retains new counsel prompts the request for those corilrn.unications.

The communications are placed in issue because of the litigation

itself. Thus, whether any mention of new counsel is referenced

in the complaint is entirely irrelevant.

The de£endant further insists that there are cases that

support the producti,on of C:oi:nmunications with new c.ounsel where

the original counsel has been sued f.or malpractice. In IMO

Industries Inc •• v. Ahdersoh Kill & Olick P. C., 192 Misc2d 605,

746 NYS2d. 572 [Supreme Court New York Coupty 2002] an insurance

company sued IMO 'in ca.lifcirnia alleging that a payment it rtrade to

sett.1e a clairrt should not have been .paici and s.ought recovery.

IMO retained Anderson Kill & Olick (hereinafter 'Artdersori'] and

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also another law firm Farella Braun & Martel1, LLP [hereinafter

'Farella'] to represent it in California. IMO lost the

California action and commenced a malpractice action against

Anderson in New York. Anderson sought communications between IMO

and Farella. The court held that Anderson was entitled to such

communications. The court reasoned that since the California

action had ended therefore there was n,o fear that any such commurticatioris produced would harm IMO' s ability to communicate

with its current counsel. The court analogized this scenario to

a medical malpractice action where a patient c1aims a certain

physician committed malpractice and then treated with another

physician. Surely, the patient has waived her physician-patient

privilege even regarding the second physician. The court

explained that ~the waiver in this case is clearer still, because

IMO clc,1ims that Farella and Anderson Kill concurrently

represented it in the California Action, the outcome of which is

the basis for IMO's alleged harm" (id). Indeed, other cases have

reached simil.ar conclusions (see, Goldberg v. Hirschberg, 10·

Misc3d 292, 806 NYS2d 333 [Supreme Court New York County 2005],

Bolton: v. Weil, Gotshal & Manges LLP, 4 MisC3d 1029 (A) , 7 98 NYS2d

343 [Supreme Court New York County 2.004]) .

However, those cases hav.e adopted a definition of the "at-

isst,ie" waiver .doctrine that is ·far too broad,. According to those cases, any communication between coiJ.ns.el that i's relevant is

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theteby waived; "But privileged information may be in some sense

relevant ~n any lawsuit" (Ih re ~aunty of Erie, 54~ F3d 222 [2d

Cir. 2008]). Therefore, the privilege is only waived "where a

party affirmatively places the subject matter of its own

privileged communication at issue in 1'itigatioh, so that invasion

of the privilege is required to determine the validity of a claim

or defense o:E the party asserting the privilege, arid application

of the pr:Lvilege would deprive the adversary of vital

irtfor:tnatiori" (see, Deutsche Bank Trust Company of Americas v.

Tri-Links Investment Trust, 43 AD3d 56, 837 NYS2d 15 [l"t Dept,,

2007]). "Of course, that a privileged communication contains

information relevant to issues the parties are litigating does

not, without more, place the contents of the privileged

commuriication itself "at issue" in the lawsuit; if that were the

case, a privilege would have little effect" {id). Rather, the

appropriate test whether a party ha:s placed communications in

issue to Constitute a waiver is whether the party relied upon the privileged communication as a claim or defense or as an element

of a claim or defense (id). Thus, iri Stock v. Schnader Harrison Segal & Lewis, 122 AD3d 210, ·35 NYS3d 31 [1st Dept., 2016] the

court held that comni.uriications with prior counsel do not

constitute an ''in-issue waiver'' wher.e thf:3 party ''never indi<::ated,

and expressly deny having, any intention to use the privileged

documents to ;prove any claim or defens1;3. in this·action, sl,lch u,:3e

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nf privileged materials being the sine qua non of "at issued waiver" (idr see, also, TDT Corp., v. Morgan Stanley De art Witter

& Company, 107 AD3d 451, 967 NYS2d 51 [1 st Dept., 2013]).

Further, in Lue v. Finkelstein & Partners, 67 AD3d 1187, 888

NYS2d 290 (3d Dept., 2009] the plaintiff sued his former counsel

for failing to preserve claims against one party in bankruptcy.

The defendant, former counsel, questioned plaintiff about his

successful settlement with another party. The plaintiff refused

to answer citing the attorney-client privilege with new counsel.

The court sustained the pri vileg.e holding that any settlement

reached with orte party had no bearing whether the prior counsel

failed to preserve other claims (see, also, Raphael v. Clune

White & Nelson; 146 AD2d 762, 537 NYS2d 246 [2d Dept., 198'9]).

Thus, the mere fact that communications exist between the

plaintiff and new counsel does not mean those communications have

been placed in issue by the commencement of this action. Rather,

there must be a demonstration tha:t the plaintiff relied upon

those-communications and intends to utilize those communications

to further its claims against the defendant (see, Orea: Bank v-.

Proteinas Del Pacifico, 179 AD2d 390, 577 NYS2d 841 [l8t Dept.,

1992] ) .

ln this case t.he comtilunicatidns .betwe.en the .plaintiff and St.arr do not form the .ha.sis of any of the malpractice claims at

all. The m~lprac~ic~ claims axe asserted ag~inst the d~f~ndant

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and are hot, enhanced or supported by any communications between

plaintiff ahd Starr. The complaint does seek to be reimbursed

for fees paid to Starr due to defendant's alleged malpractice.

However, that claim does not amount to a waiver of the privilege.

The case of East Ramapo Central School District v. New York .Schools Insurance Reciprocal, 150 AD3d 683, 54 NYS3d 413 [2d

Dept., 2017] is instructive. In that case the school district

was sued on the grounds it siphoned money for private

institutions at the expense of the district schools. The

insurance company .for the district disclaimed arguing no coverage

was available for intentional conduct. The district sued the

insurance company to compel them to defend and the district was

granted summary judgement. The insurance company appealed and

the court held the mere fa:ct the district sued the insurance

company for indemni£ication did not mean the district waived its

attorney-client privilege. The court explained that "although

the School District placed the reasonableness of its attorneys'

fees at i.ssue, i.t did not place at issue any legal advice i t

received from its attorneys in connect:ion with the underlying

action, its attorneys' work product, or the,tr private mental

impressions, conclusion.sf opinions, or legal theories" Cid)

~ather, \'the reas.onableness of the attorney's fees can be

determined by, . inter aiia~. an e~amination of the inyoices of the s.chool bistri.ct' s attorneys .for :the work performed in the.

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µnderlying action, all documents filed in the District Court iii. the uriderlying action, and all correspondence exchanged among the

parties i counsel in the underlying action"; ( id) . Therefore, the

privilege was not waived,

As noted, in this case the plaintiff seeks recovery of

attorney's fees paid to Starr. That request does not waive any

cornmunications between plaintiff and Starr. Therefore, based on

the foregoing, the motion seeking any communications between

plaintiff and Starr is denied.

So ordered.

ENTER:

DATED: June 6, 2024 Brooklyn N.Y. Hon. Leon Ruc'ne~man JSC

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Footnotes

[1] of 11 [* 1] Equities Group [hereinafter 'Thor'], the unit would be subdivided into two units and one unit would then be transferred back to the plaintiff. Further, the plaintiff anticipated transferring air and development rights to Thor concerning the Church's main sanctuary. Further, the plaintiff executed a no-conflict waiver allowing the defendant to represent Thor in certain condominium matters as well as the Church. Likewise, Thor also executed a no-conflict waiver. Thus, on March l}, 2015 the defendant prepared a sale purchase agreeinent whereby the condominium unit was transferred to Thor. The complaint alleges that agreement f avo.red Thor at the expense of the plaintiff. On November 13, 2017 the de£endant notified the plaintiff that i t was withdrawing its representation of the plaintiff on the grounds i t could not represent both sides of a transaction notwithstanding the no- conflict waiver. Further, on July 31, 2018 an agreement, known as the Tri-Party Agreement was entered into between the Church, Thor and a tenant of Thor named Dallas BBQ whereby the ChurCh would be permitted to move HVA.C equipment on condition i t upgraded the HVAC to benefit Dallas BBQ at its sole cost anc:i expense. That agreement lists a law firmr namely Starr and Associates [hereinafter 'Starr'] as the representative of the Chu.rch. Th.e cornpl~int, however, alleges that ".MR. Berengarte-n and HK purported to represent the church during these. negotiations/' (s.ee, Verified Complaint, ':1[33 [NYSGEF Doc . .No. lJ). 2

[2] of 11 [* 2] This action alleging legal malpractice and a breac,h of fiduciary duty was filed. The defendant now seeks communications between the plaintiff and Starr. The defendant asserts they have the right to discover the communications between Starr and the plaintiff and whether such communications can minimize or . . completely eliminate any malpractice alleged against them. The plaintiff opposes: the motion arguing that any communications between Starr and the plaintiff are privileged and are protected by the attorney-client privilege. Conclusions of Law The attorney-client privilege ''e~ists to ensure that one seeking legal advice will be able to confide fully and freely in his attorney, secure in the knowledge that his confidences will not later be exposed to public view to his embarrassment or legal detriment" (Matter of Priest v. Hennessy, 51 NY2d 62 431 NYS2d

[511] [1980]). A waiver of the attorney-client privilege may be found when the client places the subject matter of q.ny attorney client communications in issue ''or wher,e invasion of the privilege is required to determine the validity of the client's claim or defense and application of the privilege would-deprive the adversary -of v:i. tal information" (see., . Kinqston Check. Cashing Corp., v. Nussbaum Yates Berg Klein & Wolpow, LLP, 2.18 AD3d 760, 194. AD.3d 4.95 t2d b.ept., 2023J) . Thus, the attorney-client pri~ileije i~ waived ~hen a dlient asserts a malpractice claim 3 -------------------------------------------------"·'''"',',,•,;,. [* 3] 3 of 11 9 gainst its former attorney (Buxton v. Ruden, 12 AD3d 47,5, 784 NYS2d 619 [2d Dept., 2004]). However, a defendant attorney may not obtain communications .from the plaintiff's current counsel (see, Jakobleff v. Cerrato. Sweeney and Cohn, 97 AD3d 834, 468 NYS2d 895 [2d Dept., 1983]). In that case the plaintiff Gloria Jakeboleff sued her original matrimonial attorney for failing to secure certain benefits in her divorce proceeding with her husband. The defendant, former counsel, impleaded the husband as well as the plaintiff's current attorney accusing the current attorney of failing to take certain actions that were beneficial to Gloria and sought discovery from the current attorney. The current attorney objected ort the grounds any discovery would contain privileged information between him and Gloria. T!le court agreed holding that Gloria did hot waive any of her communications with her current attorney. Rather, by suing her original attorney she was placing her damages in issue permitting the ori.ginal attorney to argue Gloria failed to mitigate damages. Alternatively,_ the original attorney could sue the current attorney for contribution. The court explained that "it simply cannot be said that plaintiff hi3.s placed her privileged communications with her present attorney in issue, or that di~covery of such commun.ications is requirec:i to enable dEJfen.dants to assert a defense or to prose.cute their third-party claim. To conclude .otherwise would render the p:i:ivilege iilusory in ?1.1 4 4 of 11 [* 4]