Evercore Partners Inc. v. Lazard Freres & Co., INDEX NO. 109729/11

• Decision Date: 29 October 2011
• Docket Number: INDEX NO. 109729/11
• Citation: 2011 NY Slip Op 32906
• Court: New York Supreme Court
• Parties: EVERCORE PARTNERS INC. AND RALPH SCHLOSSTEIN, PETITIONER, v. LAZARD FRERES & CO., LLC, RESPONDENT.

2011 NY Slip Op 32906

EVERCORE PARTNERS INC. AND RALPH SCHLOSSTEIN, PETITIONER,

v.LAZARD FRERES & CO., LLC, RESPONDENT.

INDEX NO. 109729/11

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 56

Dated: October 29, 2011

DONNA M. MILLS, J:

In this special proceeding, Petitioners Evercore Partners Inc. ______ and Ralph Schlosstein ("Schlosstein") (collectively "Petitioners"), apply for a protective order pursuant to New York Civil Practice Law and Rules ("CPLR") Article 75, CPLR 2304 and CPLR 3103 quashing the subpoena served by Respondent Lazard Freres & Co., LLC ("Respondent" or "Lazard") on March 3, 2011, which commands Mr. Schlosstein's appearance and attendance at an arbitrator's office to testify and give evidence in connection with a pending arbitration.

BACKGROUND

Respondent is engaged in an arbitration with F. Perkins Hixon, Jr. ("Hixon"), currently pending before the Arbitration Tribunals of the American Arbitration Association, International Centre for Dispute Resolution. Mr. Hixon is a former employee of Respondent and a current employee of Evercore. Petitioners are not parties to the Arbitration.

Evercore is an independent investment banking advisory firm. In its investment business, it manages billions of assets for a broad range of institutional and high net worth investors. Petitioner Schlosstein is currently employed as Evercore's President and Chief Executive Officer.

Mr. Hixon initiated the Arbitration against Respondent seeking severance pay and other compensation to which he claims to be entitled, in connection with the termination of his employment from Respondent pursuant to various employment agreements. Respondent counter-claimed, alleging Mr. Hixon is not entitled to any pay because hebreached restrictive covenants in his agreements with Respondent that prohibited him from soliciting Respondent's employees, allegedly by contacting several then-employees of Lazard about joining Mr. Hixon at Evercore.

A relevant outstanding issue in the Arbitration is whether Mr. Hixon's alleged breach of the non-solicitation covenants in his employment agreements constituted a material breach such that it relieved Respondent of its obligations to pay Mr. Hixon pursuant to those same employment agreements. Evercore contends that it has produced hundreds of pages of documents in response to a subpoena duces tecum. Respondent issued additional subpoenas ad testificatum to compel the appearance and testimony of three Evercore employees at the Arbitration, including Mr. Schlosstein. Evercore has agreed to produce the other two employees but considers it an undue burden to require its chief executive officer to testify, and has informed the Respondents that they will not make Mr. Schlosstein available.

Petitioners now seek a protective order from this Court quashing the subpoena. Petitioner's maintain that the subpoena is unreasonable and unduly burdensome and unjustified based on the matters at issue in the arbitration.

APPLICABLE LAW & DISCUSSION

Initially the Court notes that a distinction must be made between a subpoena duces tecum and a subpoena ad testificandum. A subpoena duces tecum refers only to books and records and will issue only in a proper case, i.e., when the requested documents bear a reasonable relationship to the subject matter of the investigation (Matter of Hirschfield v Craig, 239 NY 98; Carlisle v Bennett, 268 NY 212.) A subpoena ad testificandum, however, merely requires a witness to appear and give testimony subject to any evidentiary privilege or immunity which may be asserted at the time of the examination (Matter of Hirschfield v Craig, supra). While there may be judicial...