Commercial Division Blog
Posted: December 10, 2013 / Categories Commercial, Discovery/Disclosure
Counsel and Client Sanctioned For Deposition Misconduct
On December 4, 2013, Justice Bransten of the New York County Commercial Division issued a decision in Freidman v. Fayenson, 2013 NY Slip Op. 52038(U), sanctioning counsel and his client for deposition misconduct.
The decision in Friedman involved several issues, including counsel conduct at depositions. The court stated the basic rule as follows:
Uniform Rule 221.2 addresses the limited context in which a deponent may refuse to answer a question posed at a deposition when an objection is made. It provides that a deponent shall answer all questions at a deposition, except (i) to preserve a privilege or right of confidentiality, (ii) to enforce a limitation set forth in an order of a court, or (iii) when the question is plainly improper and would, if answered, cause significant prejudice to any person. Attorneys may not instruct a deponent not to answer unless CPLR 3115 or 22 NYCRR 221.2 provides a basis for doing so. When a deponent refuses to answer a question, or an attorney instructs a deponent not to answer, such refusal or instruction shall be accompanied by a succinct and clear statement of the basis therefor. Also, where a deponent does not answer a question, the deposition proceeds, and the examining party shall have the right to complete the remainder of the deposition.
(Internal quotations and citations omitted).
The court then listed the alleged instances of misconduct and analyzed whether they were improper (they were) and for that reason sanctioned the offending counsel and his client. The discussion of the misconduct at issue is a long one, but it illustrates many different types of improper deposition conduct that likely will be familiar to most readers. In hopes that it will serve both as a reminder of the sort of conduct that is over the line and a reminder that Rule 221.2 can have teeth, we have repeated the relevant part of the decision below:
1. The First Instruction Not to Answer
Attorney Wertheim asked Evgeny Freidman about the number of instances in which the TB & S Firm had performed legal services for Naum Freidman and Evgeny Freidman. Evgeny Freidman asked Attorney Wertheim to clarify his question, stating, "I'm not confused. I want you to ask the correct question." Attorney Wertheim replied, "Tell me what the correct question is." As Evgeny Freidman began to answer, Attorney Cohen interrupted by saying, "Stop. Proceed with your next fact question."
Respondents argue that this statement was made in an effort to stop bickering between Evgeny Freidman and Attorney Wertheim. Notwithstanding Respondents' characterization, bickering is not an enumerated basis for directing a deponent not to answer. Respondents also contend that the record shows that this was, in fact, not an instruction not to answer. The Court disagrees. Attorney Cohen's instruction to stop was made during Evgeny Freidman's answer, and was therefore an instruction to Evgeny Freidman not to answer.
Accordingly, the First Instruction Not to Answer was improper.
2. The Second Instruction Not to Answer
Attorney Wertheim asked Evgeny Freidman whether, prior to the deposition, he had searched for certain e-mails, and Evgeny replied that he had not. Attorney Wertheim asked Evgeny Freidman why he had not searched and as Evgeny Freidman was answering, Attorney Cohen objected and directed Evgeny Freidman not to answer, stating that the question was "not a fact question" and that "discovery issues are to be dealt with between counsel."
Respondents argue that the question was not a factual one, but an improper question about current legal theory or strategy concerning the witnesses [sic] legal discovery obligations. Respondents further argue that the objection and qualified instruction not to answer are now moot because the e-mails at issue were subsequently produced in discovery. Although Respondents assert that Attorney Wertheim's question was improper as per Rule 221.2, they do not set forth authority establishing its impropriety, nor do they explain how that question would, if answered, cause significant prejudice to any person. Moreover, it is not clear that the question impermissibly sought information regarding Respondents' legal strategy. The decision to not search for e-mails could well have been motivated by considerations distinct from the discovery process or the advice of counsel related thereto.
Accordingly, the Second Instruction Not to Answer was improper.
3. The Third Instruction Not to Answer
Attorney Wertheim asked whether Evgeny Freidman intended to take any steps to get new tenants for the Korm property. Attorney Cohen objected and said, "Stop. Once again, this issue has been dealt with most recently, and it's currently being dealt with between counsel." Respondents contend that Attorney Cohen objected on the grounds that the matter was not factual, but a one [sic] based on current and future legal theory or strategy, and was at that time being discussed and addressed between the parties' respective counsel outside and apart from the depositions. Respondents also assert, without citation to the deposition transcript, that Attorney Wertheim admitted he was improperly using the deposition to circumvent that legal process and to find out from the witness the Freidmans' legal strategy with respect to the evictions and replacements of the Korm's tenants.
Here, the instruction not to answer does not fall within any of the three enumerated categories of Uniform Rule 221.2. To the extent that Respondents assert the third category, they have not articulated how Attorney Wertheim's question "would, if answered, cause significant prejudice to any person." Moreover, the mere use of the phrase "legal theory or strategy" does not necessarily make it the case that a line of questioning relates to legal theory or strategy, particularly where, as Movants observed, while Respondents' strategy' about how to manage this lawsuit is undoubtedly proprietary their strategy about how to manage Korm's tenants is not. The Court concludes that the decision of whether to lease property or seek out new tenants, even as to property that is the subject of litigation, is a business decision related to that property, as opposed to a component of the legal strategy related to the litigation.
Accordingly, the Third Instruction Not to Answer was improper.
4. The Fourth Instruction Not to Answer
Attorney Wertheim asked Evgeny Freidman whether Naum Freidman owned a company which managed New York City taxi medallions. Following Evgeny Freidman's question seeking to clarify during which periods of time Attorney Wertheim was asking about Naum Freidman's ownership, Attorney Cohen objected and explained that "without your establishing how this is in any way related to your client's counterclaims, I'm going to instruct my witness, my client not to answer, and we can mark it for a ruling."
Respondents argue that the objection and instruction not to answer was justified by Attorney Wertheim veering his questioning into a fishing expedition to question Evgeny Freidman about his father's businesses. Respondents further argue that this line of questioning is unrelated to the pleadings and counterclaims and that a deposition is not a device for unrestricted fishing expeditions.
Uniform Rule 221.2 does not include fishing expeditions or relevance objections among the enumerated bases under which a deponent may refuse to answer or an attorney may instruct a deponent not to answer. While Respondents may believe that Attorney Wertheim's questions nonetheless fall into one or more of the enumerated bases under Uniform Rule 221.2, they have not specified which, if any, apply here, nor do their arguments otherwise indicate an applicable basis for an instruction not to answer.
. . .
Accordingly, the Fourth Instruction Not to Answer was improper.
5. The Fifth Instruction Not to Answer
Attorney Wertheim asked Evgeny Freidman about the contents of certain letters, and Evgeny Freidman explained that the letters refer to Mr. Fayenson being cute and sneaky with the fact that if we don't both appear, that rent checks should be deposited into a bank account at which time he could take all of the monies and do as he wishes." Evgeny Freidman then stated that he could not recall whether the bank account in the letters was the account related to Korm based solely on the account number, Attorney Wertheim asked, "If it was the bank account of Korm, assume for argument's sake for purposes of my question that it was the bank account of Korm, is there anything cute or sneaky about asking the tenants to deposit their rent payments into the bank account of Korm?" Before an answer was given, Attorney Cohen objected and directed Evgeny Freidman not to answer the question, stating that the question was "wholly improper based on his testimony that he does not know by heart the bank account number. Just rephrase the question."
Respondents now argue that the instruction not to answer was justified because Attorney Wertheim was asking hypothetical questions and mischaracterizing the witness's testimony.
Merely characterizing the question as improper when the instruction is made, without more, is insufficient to satisfy Uniform Rule 221.2(iii), which requires that the question be plainly improper and that answering the question would cause significant prejudice to any person. Neither Attorney Cohen's statements made at the deposition nor the arguments made by Respondents in their briefs, explain how answering the question would cause significant prejudice to any person.
Moreover, as one court observed, objections are not in accordance with the rules when made at a deposition in response to a fact witness being asked opinion and/or hypothetical questions based on the witness's business experience. That court further held that the witness should have been instructed to answer such questions. The letters about which Attorney Wertheim was asking were dated May 7, 2009, approximately 13 years after Evgeny Freidman assumed the role of co-manager of Korm. Accordingly, hypothetical questions based on the business experience acquired by Evgeny Freidman over that period, such as questions related to the practice of collecting rent from tenants of Korm's property, are permissible.
Accordingly, the Fifth Instruction Not to Answer was improper.
6. The Sixth Instruction Not to Answer
In response to a question about whether Jacob Fayenson and Naum Freidman had equal management power in the operation of Korm, Evgeny Freidman stated that they "were supposed to be equals. Right. We don't know what Mr. Fayenson did on his overtime. We don't know." Referring to the statement about "what Mr. Fayenson did on his overtime," Attorney Wertheim then asked, "What was the purpose of that statement?" Attorney Cohen objected and instructed Evgeny Freidman not to answer. Subsequent to that instruction, however, the deposition transcript shows that Evgeny Freidman answered Attorney Wertheim's question, and, in fact, elaborated on his answer.
Respondents' contention that there in fact was no instruction not to answer here, is simply incorrect. The record shows that in response to Attorney Wertheim's question about the purpose of Evgeny Freidman's statement, Attorney Cohen stated, "Objection. Don't answer." Respondents have not established or otherwise identified a permissible basis under Uniform Rule 221.2 for that instruction not to answer.
Accordingly, the Sixth Instruction Not to Answer was improper.
7. The Seventh Instruction Not to Answer
Attorney Wertheim asked Naum Freidman a series of questions about whether payments that Naum Freidman received from Evgeny Freidman were deposited into a bank account, and, if so, into which account they were deposited. When asked why, in response to Movants' discovery requests, Naum Freidman did not obtain bank records reflecting these deposits, Naum Freidman answered that he could not recall into which account they had been deposited or whether he had received the payments in cash or check. Attorney Wertheim then asked Naum Freidman to provide a list of bank accounts into which the payments could have been deposited. Before Naum Freidman was able to respond, Attorney Cohen objected, and a brief discussion between Attorneys Wertheim and Cohen followed, after which Attorney Cohen stated that "I believe [Naum Freidman] just testified that he does not specifically recall. If he deposited it into a specific bank account and if so which one. Based on that testimony, you do not have a right to inquire of him to identify his personal bank accounts."
Respondents argue that the instruction not to answer was appropriate because "Mr. Wertheim . . . mischaracterized Mr. [Naum] Freidman's testimony as having definitely been deposited by Mr. Freidman into his bank account and asked him improperly to list all his personal bank account numbers." (Respondents' Mem. Opp. at 23.) Respondents further assert that the issue is now moot because Naum Freidman later recalled that the payments were made in cash and that they were deposited in a safe deposit box.
Once again, the Court finds that the instruction not to answer was improper. The basis for Attorney Cohen's objection does not fall within one of the enumerated categories in Uniform Rule 221.2.
Moreover, as discussed above, the First Department has indicated that depositions, as opposed to document discovery, are the appropriate means by which a party should determine whether certain unknown documents exist. Thus, Attorney Cohen's question regarding possible deposit locations for the payments at issue would be permissible because the answer might lead to document discovery, such as account statements referencing these deposits.
Furthermore, Attorney Wertheim's question to Naum Freidman before Attorney Cohen's instruction not to answer was "list the bank account that this money could have been deposited in." The use of the word "could" indicates that the money could have, but need not have been, deposited into any one of the accounts that Naum Freidman might have identified, had he been allowed to answer. As a result, that question does not mischaracterize Naum Freidman's prior testimony.
. . .
Accordingly, the Seventh Instruction Not to Answer was improper.
8. The Eighth Instruction Not to Answer
Following the exchange discussed with respect to the Seventh Instruction Not to Answer, Attorney Wertheim asked Naum Freidman whether he had reported any of the cash payments that he received from Evgeny Freidman to the Internal Revenue Service. Attorney Cohen objected and directed Naum Freidman not to answer the question, stating that Attorney Wertheim was "not an agent for the IRS" and that the question had "been covered that morning" such that "further inquiry along those lines was improper."
Here, the instruction not to answer was improper. The enumerated bases for such an instruction under Uniform Rule 221.2 do not apply. Notably, the fact that Attorney Wertheim is not an agent for the IRS does not provide a basis for an instruction not to answer or a speaking objection.
Also, while Respondents contend that the question was answered by Naum Freidman earlier in his deposition, the prior question and answer to which respondents refer was whether Naum Freidman had "declared these deposits into his checking account as income on his tax returns," to which Naum Freidman replied that he "declared all the money which he received during the year to his accountant and he do [sic] his job." That question and answer is distinct from the one at issue here, namely, whether Naum Freidman reported any of the cash payments that he received from Evgeny Freidman to the Internal Revenue Service, particularly in light of Naum Freidman's correction to his testimony based on his recollection during the lunch break that he had, in fact, received cash from Evgeny Freidman and had deposited that cash in a safe deposit box.
Accordingly, the Eighth Instruction Not to Answer was improper.
9. The Ninth Instruction Not to Answer
In the final instruction not to answer, Attorney Cohen objected and stopped Naum Freidman from answering a question about whether he had reviewed any documents in preparation for his deposition, asserting an objection on the basis of attorney/client privilege.
Privilege is a recognized basis for instructing a deponent not to answer a question under Uniform Rule 221.2. However, courts have held that parties are entitled to ask questions regarding what documents a deponent reviewed prior to his deposition and when such documents were reviewed. While there is certainly a question as to whether such documents, if any, are privileged and therefore undiscoverable, the question as to whether any documents were reviewed is permissible.
Accordingly, the Ninth Instruction Not to Answer was improper.
B. Speaking Objections and Other Statements
Uniform Rule 221.1(a) sets forth the general rule regarding objections made during depositions and provides that "no objections shall be made at a deposition except those which, pursuant to subdivision (b), (c) or (d) of Rule 3115 of the Civil Practice Law and Rules, would be waived if not interposed, and except in compliance with subdivision (e) of such rule." Section (a) further provides that objections made at a deposition shall be noted by the officer before whom the deposition is taken, and the answer shall be given and the deposition shall proceed subject to the objections and to the right of a person to apply for appropriate relief pursuant to Article 31 of the CPLR."
Uniform Rule 221.1(b) addresses the manner in which spoken objections are made at depositions and provides that every objection raised during a deposition shall be stated succinctly and framed so as not to suggest an answer to the deponent and, at the request of the questioning attorney, shall include a clear statement as to any defect in form or other basis of error or irregularity. That section also addresses statements made at a deposition which are not objections and provides that except to the extent permitted by CPLR Rule 3115 or by this rule, during the course of the examination persons in attendance shall not make statements or comments that interfere with the questioning.
Uniform Rule 221.3 governs communications by an attorney with a deponent during a deposition, and provides that an attorney shall not interrupt the deposition for the purpose of communicating with the deponent unless all parties consent or the communication is made for the purpose of determining whether the question should not be answered on the grounds set forth in section 221.2 of these rules. Moreover, in the event of such a communication, the reason for the communication shall be stated for the record succinctly and clearly.
Movants argue that Attorney Cohen made improper speaking objections, instructed the deponents to leave the room on several occasions, helped deponents answer questions, and made other inappropriate statements during the depositions.
Respondents, in turn, argue that their offers to send deponents out of the room were made so that the clarification of the reasoning behind an objection or instruction not to answer would not suggest an answer to the witness. Respondents also argue that Attorney Cohen did not attempt to help deponents answer questions. In addition, Respondents argue that Attorney Wertheim has been uncivil, unprofessional, and abusive at various junctures throughout this case.
Based on a review of the deposition transcripts, the Court finds that Attorney Cohen committed multiple violations of Uniform Rules 221.1 and 221.3. For example, at one point during Evgeny Freidman's deposition, Attorney Cohen objected to a question, stating, "Objection. If you understand the question you can answer." Similarly, during Naum Freidman's deposition, Attorney Wertheim asked, "Do you recall whose account the checks were drawn on?" After a clarifying question and answer, Naum Freidman began to say, "From which account, so . . . ," at which point Attorney Cohen stated without objecting, "If you recall," and Naum Freidman then answered, "No, I don't recall." Courts have characterized statements and objections of this type as "suggestive" or "coaching," and have found them to be improper. . . . .
Each of the statements above violates Uniform Rule 221.1(b) because each is suggestive of the answer that the deponent does not understand the question or does not recall the answer. Moreover, neither statement provides a basis for an objection, and neither statement is permissible under Uniform Rule 221.3.
At another point, following Evgeny Freidman's answer, Attorney Cohen said, "Hold it. Wait a second," and a discussion ensued during which Attorney Cohen stated that "as long as there is no open question it's not inappropriate for my client to confer with me." Uniform Rule 221.3 clearly provides that an attorney may not interrupt a deposition, without reference to whether a question is pending, to speak with his or her client, except to determine whether the question should not be answered on the grounds set forth Uniform Rule 221.2 or with consent of all parties. There is no indication that Attorney Cohen's interruption was made for the purpose of determining whether a question should not be answered under Uniform Rule 221.2, and based on Attorney Wertheim's subsequent statement, "you can't caucus every few minutes to gather your thoughts about the question whether there is a question pending or not," the interruption was not made with consent of all parties.
In a similar example during the same deposition, Attorney Cohen requested a recess and one was taken, and the record shows that during the recess, Evgeny Freidman spoke with his attorney. Upon their return, Attorney Wertheim asked whether Evgeny Freidman wished to clarify his testimony based on his meeting with Attorney Cohen, and Evgeny Freidman replied that he did not wish to do so, and Attorney Cohen said nothing. Here too, Attorney Cohen violated Uniform Rule 221.3 which requires that when an attorney interrupts a deposition to speak with his or her client, the reason for the communication shall be stated for the record succinctly and clearly.
These examples, among others, lead the Court to conclude that Respondents violated Uniform Rules 221.1 and 221.3.
C. Evgeny Freidman's Conduct During Naum Freidman's Deposition
Movants contend, and the record shows, that Evgeny Freidman interrupted Naum Freidman's deposition with a series of profane remarks after Attorney Wertheim refused to accede to Evgeny Freidman's request that the parties take a lunch break. Specifically, Evgeny Freidman requested a break because Naum Freidman had been examined for two hours and needed to eat because of his medical condition. After being instructed not to speak, Evgeny Freidman interrupted Attorney Wertheim as he prepared to resume his questioning of Naum Freidman, challenging Attorney Wertheim to call the Court, referring to Attorney Wertheim as a "fucking wimp" and a "pussy," and stating that Attorney Wertheim should "pick up the fucking phone and call the Court."
Despite Respondents' characterization to the contrary, Evgeny Freidman's conduct and statements violate Uniform Rule 221.1(b), which provides that except to the extent permitted by CPLR Rule 3115 or by this rule, during the course of the examination persons in attendance shall not make statements or comments that interfere with the questioning.
(Internal quotations and citations omitted).