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Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: March 26, 2019

Court Denies Motion to Dismiss Malpractice Claim Relating to Settlement Despite Plaintiff’s Allocution to the Settlement Terms

On March 7, 2019, Justice Borrok of the New York County Commercial Division issued a decision in Rosenberg Feldman Smith, LLP v. Ninety Five Madison Co., L.P., 2019 NY Slip Op. 30582(U), denying a motion to dismiss a legal malpractice claim, explaining:

To state a claim for legal malpractice, the movant must establish that an attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney’s breach of this professional duty caused the plaintiffs actual damages.

The counterclaims raised by NFMC state a claim for legal malpractice. RPS argues that NFMC has failed to demonstrate that any of the alleged acts of malpractice proximately caused any damages to NFMC, i.e., that “but for” the alleged acts, NFMC would have achieved a more favorable outcome. The Court does not agree. NFMC alleges that RFS’s failure to conduct discovery, failure to pursue counterclaims, failure to adequately inform Ms. Sklar regarding the settlement, putting NFMC in a position where it had to settle, agreeing to settlement terms not approved by NFMC, and waiving critical rights in arbitration including the right to appeal resulted in a highly unfavorable settlement and unsuccessful arbitration proceedings and caused NFMC to incur significant monetary damages.

RPS further argues that Ms. Sklar’ s allocution in open court stating that she understood and agreed to the stipulation of settlement precludes an action for legal malpractice based on any alleged deficiencies in the settlement agreement or alleged failure to inform Ms. Sklar of any material changes to its terms. Simply put, the cases cited by RPS do not mandate this conclusion at this stage of the proceeding. Significantly, Ms. Sklar was not asked whether she was satisfied with her representation in the matter or whether she had an opportunity to discuss the proposed settlement and whether her attorneys satisfactorily answered all of her questions regarding the proposed settlement.

Finally, to the extent that RPS relies on an email dated December 7, 2017 sent by Ms. Sklar to RPS in which Ms. Sklar thanks RPS for working hard to reach a settlement and indicates that she believed this was a great result for both, this misses the point. This communication occurred prior to the arbitration proceedings and before Ms. Sklar and NFMC claim to have discovered the alleged deficiencies in the settlement agreement. Accordingly, NFMC has stated a claim for legal malpractice and the motion to dismiss is denied with respect to the first counterclaim.

(Internal quotations and citations omitted).

We both bring and defend professional malpractice claims and other claims relating to the duties of professionals such as lawyers, accountants and architects to their clients. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you have questions regarding such claims or appeals of such claims.

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Posted: March 25, 2019

Once Claim on Principal is Time-Barred, Suit to Recover Post-Maturity Interest on Principal is Time-Barred as Well

On March 21, 2019, the Court of Appeals issued a decision in Ajdler v. Province of Mendoza, 2019 NY Slip Op. 02151, holding that once a claim on a bond’s principal is time-barred, a claim for post-maturity interest on that principal is time-barred as well, explaining:

Plaintiff maintains that the logical extension of our holding in NML Capital allows him to recover post-maturity interest payments that were due after a claim for the underlying principal is time-barred, for the four years preceding the commencement of this action. In NML Capital, the recovery of post-maturity interest payments was an incident of a timely claim for recovery of principal. Thus, the Court had no occasion to opine on the viability of claims for unpaid post-maturity interest payments after the limitations period on claims for unpaid principal have expired. Now, squarely presented with this question, we clarify that under New York law, where an indenture provides that interest is due until the principal is paid, once an action to recover outstanding principal is time-barred, there can be no freestanding claim to enforce the obligation to make post-maturity interest payments.

In NML Capital, this Court was asked to consider whether Argentina’s obligation to make biannual interest-only payments to bondholders continued after maturity or acceleration of the indebtedness and, if so, whether the bondholders were entitled to CPLR 5001 prejudgment interest on payments that were not made as a consequence of the nation’s default—i.e., interest on interest. The indenture at issue in NML Capital contained language substantively identical to the central language in this Indenture, providing that Argentina was obligated to make biannual interest payments to the bondholders until the principal hereof is paid or made available for payment. We held that by its terms, the contract contemplates that the bondholders are entitled to biannual interest payments until the principal is actually repaid in full—and not merely until the bond maturity date as Argentina suggests.

Plaintiff’s reliance on NML Capital is misplaced. The statute of limitations applicable to the plaintiffs’ claim for principal in that case had not yet run, and the novel issue we addressed concerned whether the plaintiffs were entitled to prejudgment interest on overdue post-maturity or post-acceleration interest payments. To answer that question, we relied on general principles of New York law involving prejudgment interest rates establishing that when a contract specifies the interest rate until the principal is paid, in the event of breach of the obligation to pay principal, the contract interest rate governs rather than the statutory prejudgment interest rate provided in CPLR 5001(a). We reasoned by analogy that bondholders may recover prejudgment interest at the contract rate accruing on unpaid post-maturity interest payments. For timely actions, the parties’ negotiated rate governs until payment of the principal, or until the contract is merged in the judgment. Thus, contrary to plaintiff’s argument, NML Capital does not stand for the proposition that—in the absence of a timely claim for principal—a bondholder has a legally cognizable claim for unpaid post-maturity interest payments until the principal is actually repaid based on language in the Indenture that the issuer is obligated to pay interest until the principal hereof is paid or made available for payment.

Rather, the date when principal is due—ordinarily the maturity date—serves as a legally significant benchmark because it marks the event upon which the obligation to pay post-maturity interest is conditioned. The obligation to pay post-maturity interest is not a distinct promise of performance, but arises on the maturity date only if the bond issuer breaches the parties’ agreement by failing to timely repay the principal. This is consistent with our general view that, aside from the limited mortgage moratorium exception triggered by explicit legislation, the recoverability of post-maturity interest payments is tethered to a claim for principal rather than a debt capable of a distinct claim. Once a creditor can no longer establish a right to repayment of principal, there is no basis or foundation upon which to allege a right to payment of post-maturity interest. To that end, once a claim on the principal is time-barred, a suit to recover post-maturity interest payments is not viable.

The rule we reiterate today effectuates the agreement negotiated by the parties and reinforces our longstanding view of interest as generally dependent on principal. Moreover, it promotes the purposes underlying the statute of limitations. For those reasons, we conclude that once a claim on the principal is time-barred, a claim to recover unpaid post-maturity interest payments is not legally cognizable.

(Internal quotations and citations omitted) (emphasis added).

This decision is at the intersection of two aspects of commercial litigation in New York that non-lawyers seldom consider but that can be decisive: the statute of limitations and interest. If a claim is barred by the statute of limitations, it cannot be brought, no matter how meritorious. As to interest, the New York statutory rate of pre-judgment interest is 9 percent–several times the prevailing Federal Reserve funds rate. This means that, for an old claim (or a claim that has been litigated for a long time), the interest award can be as big as the base damages. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding the statute of limitations or the calculation of interest on a damages award.

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Posted: March 24, 2019

Lack of Retainer Agreement Does Not Bar Counsel from Recovering For Work on Account Stated Theory

On March 12, 2019, the First Department issued a decision in Carling v. Peters, 2019 NY Slip Op. 01713, holding that the lack of a signed retainer letter does not bar counsel from recovering for work on an account stated theory, explaining:

[Defendant] claims she could not have paid him due to the absence of a retainer agreement, but failure to comply with the letter of engagement rule does not preclude recovery of legal fees under a theory of account stated. The record before us shows that, after receiving the benefit of Carling’s services, Peters invoked the absence of a retainer agreement in an effort to evade her payment obligations, and the court was right to award him the amounts reflected in his bills.

Internal quotations and citations omitted).

People sometimes are surprised to learn that if they do not complain about a bill they receive, they can be found to have agreed to it. As this decision shows, such a claim can even be made when there is a law barring a breach of contract claim when there is not a written contract. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions about a claim based on un-objected-to invoices.

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Posted: March 23, 2019

Non-Signatories Not Bound by Agreement to Arbitrate

On February 25, 2019, Justice Scarpulla of the New York County Commercial Division issued a decision in H. Roske & Assoc., Llp v Burghart, 2019 NY Slip Op 30479(U), holding that parties that did not sign an agreement to arbitrate are not required to arbitrate a dispute, explaining:

A party may not be compelled to arbitrate its dispute with another, unless the evidence establishes the parties’ clear, explicit and unequivocal agreement to arbitrate. The threshold for clarity of agreement to arbitrate is greater than with respect to other contractual terms.

None of the defendants in this action have executed an arbitration agreement with Roske & Associates. Thus, their explicit and unequivocal agreement to arbitrate must be based on other agreements or circumstances. Defendants argue that Roske & Associates should be bound to arbitrate based on non-party Schumann’s 2004 Agreement, which contains an arbitration clause.

While there are limited circumstances in which a nonsignatory to an arbitration agreement has been compelled to participate on the arbitration of a claim which is subject to arbitration between some of the parties, interrelatedness, standing alone, is not enough to subject a nonsignatory to arbitration. Further, under the principles of estoppel, a nonsignatory may be compelled to arbitrate only in those circumstance where he or she knowingly exploits the benefits of an agreement containing an arbitration clause, and receives benefits flowing directly from the agreement.

Applying the foregoing principles here, the fact that Roske & Associates’ claims against the defendants maybe intertwined with its claims against nonparty Schumann is not sufficient to require Roske & Associates to arbitrate with defendants. Defendants have failed to submit any facts to show that Roske & Associates intended to extend the 2004 Agreement’s arbitration clause to Burghardt and Gyure, who were employed many years later and do not have employment agreements with Roske & Associates. Further, Meyenschein was never employed by Roske & Associates, and the SB Firm has no relationship at all with Roske & Associates.

Also, defendants have not produced any evidence to show that there was an expectation between the parties that the 2004 Agreement would be extended to the defendants. In fact, defendants have not even shown that they knew about the 2004 Agreement’s arbitration clause before the commencement of this action. For these reasons, defendants have failed to show that I should extend Roske & Associates’ agreement to arbitrate with non-party Schumann to defendants.

(Internal quotations and citations omitted).

Commercial litigation involves more than courts. Disputes often are–by agreement–decided by private arbitrators. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding a dispute that is subject to an arbitration agreement.

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Posted: March 22, 2019

Judicial Estoppel Bars Defendant From Taking Factual Position Different From That Taken in Earlier Actions or Proceedings

On February 28, 2019, Justice Platkin of the Albany County Commercial Division issued a decision in Whiteman Osterman & Hanna, LLP v. Preserve Assoc., LLC, 2019 NY Slip Op. 29056, holding that judicial estoppel barred a defendant from taking factual position different from that taken in earlier actions or proceedings, explaining:

An estoppel rests upon the word or deed of one party upon which another rightfully relies and so relying changes his or her position to his or her injury. In other words, a party will not be permitted to assume a contrary position in another proceeding simply because the party’s interests have changed. These principles apply with equal force where the earlier position successfully was taken before an administrative agency.

Further, a party’s affidavit that contradicts his or her prior sworn testimony creates only a feigned issue of fact, and is insufficient to defeat a properly supported motion for summary judgment.

Here, plaintiffs have established that Lawson did, at pertinent times, bind defendants in relation to matters critical to the development of the Project. This is in stark contrast to Lawson’s current testimony that he lacked such authority, as well as Lawson and Foxman’s testimony that Lawson’s only authority to bind defendants arose from formal actions of the type taken in connection with the OWDT transaction.

Plaintiffs’ proof further demonstrates that defendants, through Lawson, submitted sworn statements to OAG that were relied upon by the administrative agency in taking favorable action on the proposed Martin Act amendments. Lawson also prepared affidavits on behalf of defendants for submission to Supreme Court, Franklin County in connection with the successful continuation of a mechanic’s lien asserted against Project lands.

Having consistently obtained substantial benefits on the basis of Lawson’s representations that he was authorized to act on defendants’ behalf, defendants are estopped as a matter of law from denying Lawson’s authority to execute the Agreements and Amendments. To hold otherwise would accord defendants an unfair advantage and impose an unfair detriment on plaintiffs.

(Internal quotations and citations omitted).

As this decision shows, courts have little patience with litigants who appear to take inconsistent factual positions.

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Posted: March 21, 2019

Contract Claim Dismissed for Lack of Damages

On February 27, 2019, Justice Sherwood of the New York County Commercial Division issued a decision in Neumann v. Sotheby’s Inc., 2019 NY Slip Op. 30508(U), dismissing a breach of contract claim for lack of damages, explaining:

To sustain a breach of contract cause of action, plaintiff must show: (1) an agreement; (2) plaintiff’s performance; (3) defendant’s breach of that agreement; and (4) damages. . . . Assuming the documentary evidence failed to show the absence of a contract as alleged, the complaint must nonetheless be dismissed for failure to state a cause of action because plaintiff has not alleged any detriment to himself as a result of the breach of contract he alleges. The damages alleged – – lower market prices for Basquiat paintings in the Family Collection and receipt of less money from the Estate – – are entirely speculative and must be rejected. He has no interest in the Basquiat at issue here and he is not bound or restricted from seeking better terms from another auction house for any work in which he has an interest. What plaintiff alleges is merely an offer of favorable terms to be provided if he chooses to do business with Sotheby’s.

(Internal citations omitted).

A key element in commercial litigation is proving damages. As this decision shows, the inability to show damages can be fatal to a claim. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding proving damages.

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Posted: March 20, 2019

Court Grants Forum Non Conveniens Motion

On February 28, 2019, Justice Ostrager of the New York County Commercial Division issued a decision in Fernie v. Wincrest Capital Ltd., 2019 NY Slip Op. 30510(U), granting a forum non conveniens dismissal, explaining:

Ordinarily, nonresidents are permitted to enter New York courts to litigate their disputes as a matter of comity. However, the common-law doctrine of forum non conveniens permits a court to stay or dismiss such actions where it is determined that the action, although jurisdictionally sound, would be better adjudicated elsewhere. The burden rests upon the defendant challenging the forum to demonstrate relevant private or public interest factors which militate against accepting the litigation and the court, after considering and balancing the various competing factors, must determine in the exercise of its sound discretion whether to retain jurisdiction or not. Among the factors to be considered are the burden on the New York courts, the potential hardship to the defendant, and the unavailability of an alternative forum in which plaintiff may bring suit. The court may also consider that both parties to the action are nonresidents and that the transaction out of which the cause of action arose occurred primarily in a foreign jurisdiction.

First, the potential hardship on the various Defendants weighs in favor of dismissal. The Directors are all long-time permanent residents of the Bahamas. FJC affirmed in a written affirmation accompanying the motion that travel to New York to defend this lawsuit would impose a personal hardship on him due to a serious medical condition for which he is currently being treated. Thus, there is potential hardship on the Wincrest Defendants in forcing them to litigate this action in New York.

Second, the Bahamas is an available alternative forum in which Plaintiff may bring suit. Plaintiff and the Directors are all domiciled in the Bahamas. Defendant Wincrest is a Bahamian corporation with its principal place of business in the Bahamas. The nexus of the alleged tortious conduct occurred in the Bahamas. Further, Defendants Press Management and HedgePort have expressly consented to be sued in the Bahamas. Thus, the availability of the Bahamas as an alternative forum favors dismissal.

Third, both Plaintiff and the main Defendants in this action are residents of the Bahamas. Five of the seven parties in the action are domiciled in the Bahamas. The claims against the Wincrest Defendants are undoubtedly at the center of this lawsuit, as opposed to the more nominal conspiracy and aiding and abetting causes of action levied against Press Management and HedgePort. Thus, the Bahamian residency of the majority of the parties weighs in favor of dismissal on forum non conveniens grounds.

Fourth, litigation in New York would impose at least a minor burden on the Court due to the applicability of Bahamian law. The applicability of foreign law is an important consideration in determining a forum non conveniens motion and weighs in favor of dismissal.

Finally, this is a case primarily between Bahamian parties involving a dispute over the internal affairs of a Bahamian corporation. This Court, in the interest of comity, defers to the Bahamian interest in resolving that country’s own corporate governance issues. For these reasons, the Court grants Defendants’ motions to dismiss for forum non conveniens.

(Internal quotations and citations omitted).

Disputes regarding commercial contracts involving international parties end up being heard in New York courts. Even if the court has the power to assert jurisdiction of the parties, it can, under the forum non conveniens doctrine discussed above, dismiss the dispute so it can be heard in a forum that is more convenient for the parties. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure whether New York is the appropriate forum in which a dispute should be heard.

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Posted: March 19, 2019

Common Law Indemnification Claims Dismissed For Lack of Vicarious Liability or Fault

On March 1, 2019, Justice Ostrager of the New York County Commercial Division issued a decision in Stone & Broad Inc. v. Nextel of N.Y., Inc., 2019 NY Slip Op. 30527(U), dismissing common-law indemnification claims for lack of vicarious liability or fault, explaining:

Nextel argues that the Second Cause of Action must be dismissed because Stone’s common law indemnity claim cannot stand without proof of two critical elements: (1) vicarious liability by Stone for Nextel’s conduct; and (2) lack of fault on Stone’s part. Nextel correctly notes that the Landlord in the underlying action sued Stone for breach of its contractual duty under the Over Lease to return the premises in good condition. The Landlord did not seek to hold Stone vicariously liable for Nextel’s allegedly defective installation in that action, and Nextel was not a named party. Rather, the Landlord claimed that Stone itself had breached the Over Lease by allowing the subtenant to contract with Nextel to have equipment installed without first securing the consent of the Landlord and without ever providing notice as required by the Over Lease. Citing cases such as Dormitory Auth. of State of New York v Scott, 160 AD2d 179, 181 (1st Dep’t 1990), Nextel asserts that indemnification is not available for a party such as Stone who is charged not with vicarious liability for Nextel, but with its own breach of contract. Indeed, Nextel does not even have a relationship with Stone, as Nextel’s contract was with defendant Guliano-Park 88 Broad Street, Inc. (“GP). Stone remains free to pursue its claims against its subtenant GP, which may well make Stone whole for any damage caused by the Nextel equipment, and GP in tum may then be able to pursue any cross-claim it may have against Nextel.

Turning to the second prong for indemnification, Nextel cites Trustees of Columbia Univ. v Mitchell/Giurgola Assocs., 109 AD2d 449, 453 (1st Dep’t 1985), to argue that Stone, who itself participated at least to some degree in the wrongdoing, cannot receive the benefit of the doctrine of common law indemnification. Further, the $750,000 settlement at issue undeniably covered claims for which Nextel had no involvement, such as Stone’s alleged nonpayment of rent and fire damage allegedly caused by a different party.

Stone in opposition attempts to disown any fault, claiming that Stone’s subtenant had assumed Stone’s obligations relative to the Landlord and that the damage to the building was, in any event, caused by the negligent installation of Nextel’s equipment and not by Stone’s failure to notify the Landlord of the work and obtain consent. Stone further argues that the alleged liability of some other defendants for a portion of the settlement is not a bar to indemnification. Stone’s arguments, as well as its attempts to distinguish Nextel’s cases, fail. The two criteria for indemnification — vicarious liability by Stone for Nextel’s conduct and lack of fault on Stone’s part — have not and cannot be alleged. Indemnity involves an attempt to shift the entire loss from one who is compelled to pay for a loss, without regard to his own fault, to another party who should more properly bear responsibility for that loss because it was the actual wrongdoer. Such is not the case here. Therefore, Nextel is entitled to dismissal of the Second Cause of Action asserted against it by Stone, even though Nextel must remain a party to the case at this point based on the cross-claims asserted by various co-defendants.

(Internal quotations and citations omitted).

We frequently litigate issues relating to the advancement or indemnification of litigation expenses such as attorneys’ fees to corporate officers, directors and employees, as well as claims for common law indemnification or contribution as is described in this decision. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding a situation where you may be held liable for someone else’s negligence.

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Posted: March 18, 2019

No Yellowstone Injunction Where Tenant Cannot Cure Breach of Lease

On March 5, 2019, the First Department issued a decision in Bliss World LLC v. 10 W. 57th St. Realty LLC, 2019 NY Slip Op. 01509, holding that a tenant was not entitled to a Yellowstone injunction when it could not cure the lease breaches, explaining:

The purpose of a Yellowstone injunction, which tolls the period in which a tenant may cure a claimed violation of the lease, is for a tenant to avoid forfeiture after a determination against it has been made on the merits, because the tenant will still have an opportunity to cure.

A necessary lynchpin of a Yellowstone injunction is that the claimed default is capable of cure. Where the claimed default is not capable of cure, there is no basis for a Yellowstone injunction. Here, the claimed defaults are the tenant’s failure to procure insurance and improper assignment of the lease. The tenant provides various steps that it will take to cure if it is ultimately found to be in material violation of the insurance provisions of the lease. None of these proposed cures involve any retroactive change in coverage, which means that the alleged defaults raised by the landlord are not susceptible to cure.

With respect to the assignment of the lease, although the tenant has generally stated that it is willing to cure any assignment violation, it does not explain how it will undo the assignment or indicate whether it is willing or able to do so. Although some of our decisions have indicated that seeking late consent from the landlord remains a cure in assignment cases, even were that theoretically true, there is no claim made here that this tenant would pursue that cure.

There is an ongoing dispute between the parties regarding whether the landlord’s claimed defaults are meritorious, either because they are not really defaults or they are not sufficiently substantial. We do not resolve those disputes. The denial of a Yellowstone injunction does not resolve the underlying merits of disputes about whether there is any default warranting termination of the lease in the first instance. Consequently, it is not necessary to resolve those issues in the context of whether a Yellowstone injunction is warranted. A reversal in this case does not relieve the landlord of proving the bona fides of the claimed default or prevent the tenant from defending itself. These disputes will be resolved either in connection with the complaint and counterclaim in this action or in a subsequently commenced commercial summary holdover proceeding.

(Internal quotations omitted).

We litigate Yellowstone injunctions–a motion to prevent a landlord from evicting a commercial tenant for defaults under the lease–for both landlords and tenants. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you are involved in a dispute regarding the termination of a commercial lease because of a default under the lease.

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Posted: March 17, 2019

Business Valuation Not Protected by Attorney-Client Privilege

On February 28, 2019, the Third Department issued a decision in Galasso v. Cobleskill Stone Prods., Inc., 2019 NY Slip Op. 01483, holding that a business valuation was not protected by the attorney-client privilege, explaining:

The attorney-client privilege shields from disclosure any confidential communications between an attorney and his or her client made for the purpose of obtaining or facilitating legal advice in the course of a professional relationship. The party asserting the privilege bears the burden of establishing that the communication at issue was between an attorney and a client for the purpose of facilitating the rendition of legal advice or services, in the course of a professional relationship and that the communication was predominately of a legal character. The purpose of the privilege is to ensure that one seeking legal advice will be able to confide fully and freely in his or her attorney, secure in the knowledge that his or her confidences will not later be exposed to public view to his or her embarrassment or legal detriment. Generally, communications made in the presence of third parties, whose presence is known to the client, are not privileged. However, statements made to the agents or employees of the attorney or client, or through a hired interpreter, retain their confidential (and therefore, privileged) character, where the presence of such third parties is deemed necessary to enable the attorney-client communication and the client has a reasonable expectation of confidentiality.

. . .

[W]e are unpersuaded by plaintiff’s contention that the valuation report was protected by attorney-client privilege. Although MPI was hired by plaintiff’s counsel and the agreement between MPI and plaintiff’s counsel states that its communications would be confidential, the primary purpose for which MPI was hired was to appraise plaintiff’s stocks in defendant for estate tax filing purposes. In fact, the instant action was not commenced until after MPI expressed “serious and substantial concerns” upon completion of its appraisal. Therefore, the mere fact that MPI’s report now supports plaintiff’s legal action does not eliminate the fact that the report was not initially done for legal purposes. In fact, during a court conference, plaintiff confirmed that the valuation report did not include any legal information, nor did it disclose plaintiff’s confidences. Thus, given that the primary purpose of MPI’s valuation report was for estate tax purposes and is not of a legal character, Supreme Court properly held that it was not protected by the attorney-client privilege. We also reject plaintiff’s assertion that the Kovel privilege attaches to the valuation report because the purpose of the report was not to facilitate or clarify communications between plaintiff and his attorneys.

(Internal quotations and citations omitted).

An issue that arises in almost all complex commercial litigation is identifying evidence that should be withheld from production in evidence because it is subject to the attorney-client or other privilege. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding the attorney-client, common interest, work product or other privileges or exemptions from production of evidence.

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