Kooper v. Kooper

• Decision Date: 11 May 2010
• Citation: 901 N.Y.S.2d 312,74 A.D.3d 6,2010 N.Y. Slip Op. 04147
• Parties: Michael KOOPER, respondent,v.Elisabeth KOOPER, appellant.
• Court: New York Supreme Court — Appellate Division

74 A.D.3d 6

901 N.Y.S.2d 312

2010 N.Y. Slip Op. 04147

Michael KOOPER, respondent,

v.Elisabeth KOOPER, appellant.

Supreme Court, Appellate Division, Second Department, New York.

May 11, 2010.

Clair, Greifer LLP, New York, N.Y. (Bernard E. Clair and Joseph F. DeSimone of counsel), and Egan & Golden, LLP, Wainscott, N.Y., for appellant (one brief filed).Kenneth J. Weinstein, Garden City, N.Y. (Michael J. Langer of counsel), and Kasowitz, Benson, Torres & Friedman, LLP, New York, N.Y., for respondent (one brief filed).ANITA R. FLORIO, J.P., DANIEL D. ANGIOLILLO, CHERYL E. CHAMBERS, and PLUMMER E. LOTT, JJ.

ANGIOLILLO, J.

On this appeal we consider principles governing the discovery of documents from nonparties pursuant to CPLR 3101(a)(4), which provides that the party seeking disclosure must give notice stating “the circumstances or reasons such disclosure is sought or required” from the nonparty. Specifically, the question arises whether a party must establish the existence of “special circumstances” warranting discovery from a nonparty in order to successfully oppose a motion to quash a subpoena duces tecum served on that nonparty. Many of our cases continued to apply that standard after CPLR 3101(a)(4) was amended to remove the requirement that discovery from a nonparty be obtained only “where the court on motion determines that there are adequate special circumstances.” We hereby disapprove the further application of the “special circumstances” standard in this context. We, nevertheless, look behind that language in our cases and find underlying considerations which are appropriate and relevant to the trial court's exercise of its discretion in determining whether a request for discovery from a nonparty should go forward or be quashed. Here, the Supreme Court providently exercised its discretion in granting the plaintiff's motion to quash the subpoenas at issue.

The Discovery Demands, Subpoenas, and Motion to Quash

By preliminary conference order dated June 19, 2008, the parties stipulated to a schedule which required the completion of discovery and inspection by September 15, 2008. On July 11, 2008, the parties served each other with their respective notices of discovery and inspection. In addition, on July 18, 2008, the defendant served subpoenas duces tecum on five nonparty financial institutions, demanding production of documents related to any accounts held by the plaintiff, and on July 21, 2008, the defendant served an amended subpoena on one of the five institutions. The following notice appears on the face of each subpoena:

“The circumstances or reasons said disclosure is sought or required are to identify and value certain marital property, which is material and necessary in the prosecution or defense of this action.”

Copies of the six subpoenas were served on the plaintiff.

In correspondence between counsel, the plaintiff demanded the withdrawal of the subpoenas, contending that discovery from nonparties was inappropriate prior to completion of discovery between the parties and in the absence of a showing of “special circumstances.” The defendant's counsel responded that discovery from nonparties was appropriate at any time after the commencement of the action. In light of the defendant's refusal to withdraw the subpoenas, the plaintiff moved to quash them on July 30, 2008. On August 18, 2008, the defendant filed her cross motion, inter alia, pursuant to CPLR 3124 to compel the plaintiff to comply with her document demand dated July 11, 2008, and submitted arguments in opposition to the plaintiff's motion to quash. In her papers, the defendant noted that three of the five financial institutions, First Republic Bank, Smith Barney/Citigroup Global Markets, Inc., and Citicorp Credit Services, Inc., had produced the demanded documents in response to her subpoenas. While the motion and cross motion were sub judice, the plaintiff's counsel notified the defendant's counsel by letter that the plaintiff's documents in response to the defendant's discovery demand had been delivered to a copy service for reproduction and transfer onto a compact disk, and that in light of the enormous volume of documents, the plaintiff estimated that reproduction would not be complete until September 16, 2008.

On September 18, 2008, the Supreme Court issued the order appealed from, granting the plaintiff's motion to quash on the ground that the defendant had failed to tender a sufficient explanation why the discovery from nonparties was necessary. The Supreme Court also denied the defendant's cross motion in its entirety. With respect to that branch of the cross motion which was to compel the plaintiff to comply with the defendant's discovery demand, the Supreme Court noted that the “plaintiff has timely responded ... as of this date.”

In her appellate brief, the defendant concedes that, on September 24, 2008, she received from the plaintiff three compact disks containing approximately 27,000 pages of documents responsive to her document demand, as the plaintiff's counsel had promised in his earlier correspondence. The plaintiff's production of these documents thus renders academic the defendant's appeal from so much of the order as denied that branch of her cross motion which was pursuant to CPLR 3124 to compel the plaintiff to comply. Similarly, the document production by three of the five nonparty financial institutions renders academic the defendant's appeal from so much of the order as granted that branch of the plaintiff's motion which was to quash the subpoenas served on those three entities. Accordingly, those portions of the defendant's appeal must be dismissed ( see Bajrovic v. Jeff Anders Trucking, 52 A.D.3d 553, 858 N.Y.S.2d 896; Schmidt v. Maiorino, 209 A.D.2d 683, 684, 619 N.Y.S.2d 139).

We turn now to the defendant's contention that the Supreme Court improperly granted that branch of the plaintiff's motion which was to quash the subpoenas she served on the two remaining nonparty financial institutions, American Express and Principal Trust Company, f/k/a Delaware Charter Guarantee & Trust Company.

The Threshold Requirement for Discovery from Parties and Nonparties

Disclosure in New York civil actions is guided by the principle of “full disclosure of all matter material and necessary in the prosecution or defense of an action” (CPLR 3101[a] ). The phrase “material and necessary” is “to be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity. The test is one of usefulness and reason” ( Allen v. Crowell–Collier Publ. Co., 21 N.Y.2d 403, 406, 288 N.Y.S.2d 449, 235 N.E.2d 430 [internal quotation marks omitted]; see Tower Ins. Co. of N.Y. v. Murello, 68 A.D.3d 977, 889 N.Y.S.2d 852). The Court of Appeals' interpretation of “material and necessary” in Allen has been understood “to mean nothing more or less than ‘relevant’ ” (Connors, Practice Commentaries, McKinney's Cons. Laws of N.Y., Book 7B, CPLR C3101:5).

To withstand a challenge to a discovery request, therefore, the party seeking discovery must first satisfy the threshold requirement that the disclosure sought is “material and necessary,” whether the request is directed to a party ( see CPLR 3101[a][1] ) or a nonparty ( see CPLR 3101 [a][4] ). Entitlement to discovery of matter satisfying the threshold requirement is, however, tempered by the trial court's authority to impose, in its discretion, appropriate restrictions on demands which are “unduly burdensome” ( Scalone v. Phelps Mem. Hosp. Ctr., 184 A.D.2d 65, 70, 591 N.Y.S.2d 419; see Kaye v. Kaye, 102 A.D.2d 682, 691, 478 N.Y.S.2d 324) and to prevent abuse by issuing a protective order where the discovery request may cause “unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts” (CPLR 3103[a] ). Where a request for discovery from a nonparty is challenged solely on the ground that it exceeds the permissible scope of matters material and necessary in the prosecution or defense of the action, a motion to quash is properly denied if that threshold requirement is satisfied ( see Samide v. Roman Catholic Diocese of Brooklyn, 16 A.D.3d 482, 483–484, 791 N.Y.S.2d 643), or properly granted if the discovery sought is not material and necessary ( see Mendelovitz v. Cohen, 49 A.D.3d 612, 852 N.Y.S.2d 795).

Here, in this action for a divorce and ancillary relief in which the parties seek, inter alia, the equitable distribution of marital assets, “the entire financial history of the marriage is open for examination,” and “[b]road pretrial disclosure enabling both spouses to obtain necessary information regarding the value and nature of the marital assets is deemed critical if the trial court is to properly distribute the marital assets” ( Goldsmith v. Goldsmith, 184 A.D.2d 619, 620, 584 N.Y.S.2d 902; see Pagello v. Pagello, 17 A.D.3d 428, 429, 793 N.Y.S.2d 447; Kaye v. Kaye, 102 A.D.2d at 691, 478 N.Y.S.2d 324). The two subpoenas at issue seek financial records including periodic statements for any accounts in the plaintiff's name for the time period of “January 1, 2002 to the present.” This information is material and necessary as an aid to the parties in determining the value and nature of the marital assets and an aid to the trial court in properly distributing those assets. Since the defendant has met the threshold requirement, an order quashing the subpoenas may not be premised on the ground that the requested disclosure is not material or necessary to the prosecution or defense of this action.

Additional Considerations for Discovery from Nonparties

Beyond the requirement of materiality and necessity which defines the scope of permissible discovery, a disclosure request directed to a nonparty implicates considerations in addition to those governing discovery from a party. These additional...