Preview
FILED: NEW YORK COUNTY CLERK 07/03/2024 09:06 AM INDEX NO. 651023/2024
NYSCEF DOC. NO. 56 RECEIVED NYSCEF: 07/02/2024
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
PRESENT: HON. GERALD LEBOVITS PART 07
Justice
---------------------------------------------------------------------------------X INDEX NO. 651023/2024
JAY LIPARI, JAY LIPARI EX REL. MASTER COLLISION
INC., and JAY LIPARI EX REL. ESTATE OF BOB LIPARI, MOTION DATE 06/20/2024
Plaintiffs, MOTION SEQ. NO. 002
-v-
ROBERT ZIGMAN, MASTER COLLISION INC., and DECISION + ORDER ON
MASTER COLLISION CONCEPTS LLC, MOTION
Defendants.
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The following e-filed documents, listed by NYSCEF document number (Motion 002) 31, 32, 33, 34, 35,
36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 53
were read on this motion to QUASH SUBPOENA .
Plaintiffs, Jay Lipari individually, Jay Lipari ex rel. Master Collision Inc., and Jay Lipari
ex rel. the Estate of Bob Lipari, brought this action against defendants, Robert Zigman and
Master Collision. Plaintiffs raise 12 causes of action, including declaratory judgment, permanent
injunction, breach of contract, unjust enrichment, and breach of fiduciary duty. Plaintiffs seek
over $4.96 million in damages.
Defendants move to quash plaintiffs’ four subpoenas duces tecum, for a protective order
suppressing all materials obtained through them, and for an award of sanctions against plaintiffs.
Defendants contend that the subpoenas were improperly served and that plaintiffs insufficiently
demonstrate a need for the subpoenas, which assertedly seek confidential financial information.
The motion is granted in part and denied in part.
1. Defendants contend that plaintiffs’ first three subpoenas (two non-party subpoenas
served on March 12, 2024, and one on April 22, 2024) were not served on all parties, as required
by CPLR 3120 (3). (NYSCEF No. 32 at 5.) Plaintiffs do not dispute this contention. Instead, they
argue that they e-filed the subpoenas. (NYSCEF No. 41 at 2.) But e-filing documents is not
equivalent to proper service. (Yellen v Berg, 2018 NY Slip Op 32512[U], *2 [Sup Ct, NY County
2018] [finding that an e-filed summons with notice does not constitute proper service].) Title 22
NYCRR 202.5-b (b) (2) provides that serving notice of entry or other documents still requires
adherence to traditional service methods unless all parties agree to accept e-service. It is unclear
whether defendants agreed to accept e-service, and plaintiffs have not clarified that the
defendants accepted e-service in opposition to the motion. Plaintiffs further argue that no notice
issue exists, because defendants knew about the subpoena that was served on March 12, 2024,
and e-filed on March 14, 2024. (NYSCEF No. 41 at 9.) The court disagrees. That a party knows
about an unserved subpoena does not excuse failure to notify in accordance with statute. (Cf.
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FILED: NEW YORK COUNTY CLERK 07/03/2024 09:06 AM INDEX NO. 651023/2024
NYSCEF DOC. NO. 56 RECEIVED NYSCEF: 07/02/2024
Macchia v Russo, 67 NY2d 592, 595 [1986] [service of summons].) Plaintiffs’ three subpoenas
served on non-parties on March 12, 2024 and April 22, 2024 (NYSCEF No. 35, 36, 37), violate
the proper service procedure under CPLR 3120 (3) and thus are quashed.
2. Defendants contend that in issuing the last subpoena (service date May 9, 2024),
seeking to obtain various financial documents, plaintiffs do not show the subpoena’s necessity
and relevance sufficient to justify disclosing confidential information. (NYSCEF No. 53 at
3.) Plaintiffs, defendants argue, do not demonstrate a “strong showing of overriding necessity”
that the information contained in these documents is unavailable from other sources and is
directly relevant to the claims at issue. (See Day v Serenity Pharm., LLC, 213 AD3d 488, 489
[1st Dept 2023], quoting A. Colish, Inc. v Abramson, 150 AD2d 210, 211 [1st Dept 1989];
Samsung Am., Inc. v Yugoslav-Korean Consulting & Trading Co., Inc., 199 AD2d 48, 48 [1st
Dept 1993].) In their memorandum in opposition, plaintiffs quote Matter of Kapon v Koch to
argue that the party resisting a subpoena bears the initial burden of establishing that the
information “sought by the non-party subpoena is ‘utterly irrelevant.’” (23 NY3d 32, 34 [2014].)
Plaintiffs misunderstand the burden of proof. The Kapon Court found that “the
subpoenaing party must first sufficiently state the ‘circumstances or reasons’ underlying the
subpoena (either on the face of the subpoena itself or in a notice accompanying it). . . .” (Id. at
34.) Here, plaintiffs do not allege on the face of the subpoena or in a notice accompanying it that
the financial information sought is unavailable from other sources and directly relevant to the
claims at issue. Therefore, plaintiffs have failed to meet the initial burden of sufficiently
justifying the subpoena, making the information sought both inadequately supported and
improperly requested. Defendants’ motion to quash the subpoena that was served on May 9,
2024 (NYSCEF No. 34), is granted.
3. Defendants seek a protective order to suppress all materials and information obtained
through the contested subpoenas. A party seeking a protective order must initially demonstrate
that the discovery sought is irrelevant or will not lead to legitimate discovery, thus causing
unreasonable prejudice. (See e.g. Liberty Petroleum Realty, LLC v Gulf Oil, L.P., 164 AD3d 401,
404 [1st Dept 2018].) Defendants’s motion papers do not demonstrate that the discovery sought
was either irrelevant or would not lead to legitimate discovery; nor that allowing discovery
would cause unreasonable prejudice. Defendants’ request for a protective order is denied.
4. With respect to defendants’ request for sanctions against plaintiffs, defendants argue
that plaintiffs’ conduct violated CPLR 3120 and was sanctionably frivolous. (NYSCEF No. 32 at
6, 7.) In Coward v Consolidated Edison, Inc., plaintiffs moved to suppress documents defendant
obtained from a non-party because defendants failed to serve the subpoena on plaintiffs. (2019
NY Slip Op 50105[U], *2 [2019] [Sup Ct, Queens County 2019].) Plaintiffs also sought
sanctions. (Id. at *2.) The Coward court denied the motion for sanctions because plaintiff did not
allege that a substantial right was prejudiced by defendant’s failure to adhere to the notice
requirements. (Id. at *2; CPLR 3120.) Similarly, defendants here have not shown that plaintiffs’
failure to adhere to the notice requirements prejudiced their substantial rights. Defendants’
motion for sanctions against plaintiffs is denied.
Accordingly, it is
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FILED: NEW YORK COUNTY CLERK 07/03/2024 09:06 AM INDEX NO. 651023/2024
NYSCEF DOC. NO. 56 RECEIVED NYSCEF: 07/02/2024
ORDERED that the branch of defendants’ motion seeking to quash the four subpoenas is
granted; and it is further
ORDERED that the branches of defendants’ motion seeking a protective order
suppressing materials obtained through the subpoenas and an award of sanctions are denied; and
it is further
ORDERED that defendants serve a copy of this order with notice of its entry on all
parties; and on the recipients of the four subpoenas by certified mail, return receipt requested,
directed to their respective last-known addresses.
7/2/2024 $SIG$
DATE
CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION
GRANTED DENIED X GRANTED IN PART OTHER
APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE
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Preview
FILED: NEW YORK COUNTY CLERK 07/03/2024 09:06 AM INDEX NO. 651023/2024 NYSCEF DOC. NO. 56 RECEIVED NYSCEF: 07/02/2024 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. GERALD LEBOVITS PART 07 Justice ---------------------------------------------------------------------------------X INDEX NO. 651023/2024 JAY LIPARI, JAY LIPARI EX REL. MASTER COLLISION INC., and JAY LIPARI EX REL. ESTATE OF BOB LIPARI, MOTION DATE 06/20/2024 Plaintiffs, MOTION SEQ. NO. 002 -v- ROBERT ZIGMAN, MASTER COLLISION INC., and DECISION + ORDER ON MASTER COLLISION CONCEPTS LLC, MOTION Defendants. ---------------------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 002) 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 53 were read on this motion to QUASH SUBPOENA . Plaintiffs, Jay Lipari individually, Jay Lipari ex rel. Master Collision Inc., and Jay Lipari ex rel. the Estate of Bob Lipari, brought this action against defendants, Robert Zigman and Master Collision. Plaintiffs raise 12 causes of action, including declaratory judgment, permanent injunction, breach of contract, unjust enrichment, and breach of fiduciary duty. Plaintiffs seek over $4.96 million in damages. Defendants move to quash plaintiffs’ four subpoenas duces tecum, for a protective order suppressing all materials obtained through them, and for an award of sanctions against plaintiffs. Defendants contend that the subpoenas were improperly served and that plaintiffs insufficiently demonstrate a need for the subpoenas, which assertedly seek confidential financial information. The motion is granted in part and denied in part. 1. Defendants contend that plaintiffs’ first three subpoenas (two non-party subpoenas served on March 12, 2024, and one on April 22, 2024) were not served on all parties, as required by CPLR 3120 (3). (NYSCEF No. 32 at 5.) Plaintiffs do not dispute this contention. Instead, they argue that they e-filed the subpoenas. (NYSCEF No. 41 at 2.) But e-filing documents is not equivalent to proper service. (Yellen v Berg, 2018 NY Slip Op 32512[U], *2 [Sup Ct, NY County 2018] [finding that an e-filed summons with notice does not constitute proper service].) Title 22 NYCRR 202.5-b (b) (2) provides that serving notice of entry or other documents still requires adherence to traditional service methods unless all parties agree to accept e-service. It is unclear whether defendants agreed to accept e-service, and plaintiffs have not clarified that the defendants accepted e-service in opposition to the motion. Plaintiffs further argue that no notice issue exists, because defendants knew about the subpoena that was served on March 12, 2024, and e-filed on March 14, 2024. (NYSCEF No. 41 at 9.) The court disagrees. That a party knows about an unserved subpoena does not excuse failure to notify in accordance with statute. (Cf. 1 of 3 FILED: NEW YORK COUNTY CLERK 07/03/2024 09:06 AM INDEX NO. 651023/2024 NYSCEF DOC. NO. 56 RECEIVED NYSCEF: 07/02/2024 Macchia v Russo, 67 NY2d 592, 595 [1986] [service of summons].) Plaintiffs’ three subpoenas served on non-parties on March 12, 2024 and April 22, 2024 (NYSCEF No. 35, 36, 37), violate the proper service procedure under CPLR 3120 (3) and thus are quashed. 2. Defendants contend that in issuing the last subpoena (service date May 9, 2024), seeking to obtain various financial documents, plaintiffs do not show the subpoena’s necessity and relevance sufficient to justify disclosing confidential information. (NYSCEF No. 53 at 3.) Plaintiffs, defendants argue, do not demonstrate a “strong showing of overriding necessity” that the information contained in these documents is unavailable from other sources and is directly relevant to the claims at issue. (See Day v Serenity Pharm., LLC, 213 AD3d 488, 489 [1st Dept 2023], quoting A. Colish, Inc. v Abramson, 150 AD2d 210, 211 [1st Dept 1989]; Samsung Am., Inc. v Yugoslav-Korean Consulting & Trading Co., Inc., 199 AD2d 48, 48 [1st Dept 1993].) In their memorandum in opposition, plaintiffs quote Matter of Kapon v Koch to argue that the party resisting a subpoena bears the initial burden of establishing that the information “sought by the non-party subpoena is ‘utterly irrelevant.’” (23 NY3d 32, 34 [2014].) Plaintiffs misunderstand the burden of proof. The Kapon Court found that “the subpoenaing party must first sufficiently state the ‘circumstances or reasons’ underlying the subpoena (either on the face of the subpoena itself or in a notice accompanying it). . . .” (Id. at 34.) Here, plaintiffs do not allege on the face of the subpoena or in a notice accompanying it that the financial information sought is unavailable from other sources and directly relevant to the claims at issue. Therefore, plaintiffs have failed to meet the initial burden of sufficiently justifying the subpoena, making the information sought both inadequately supported and improperly requested. Defendants’ motion to quash the subpoena that was served on May 9, 2024 (NYSCEF No. 34), is granted. 3. Defendants seek a protective order to suppress all materials and information obtained through the contested subpoenas. A party seeking a protective order must initially demonstrate that the discovery sought is irrelevant or will not lead to legitimate discovery, thus causing unreasonable prejudice. (See e.g. Liberty Petroleum Realty, LLC v Gulf Oil, L.P., 164 AD3d 401, 404 [1st Dept 2018].) Defendants’s motion papers do not demonstrate that the discovery sought was either irrelevant or would not lead to legitimate discovery; nor that allowing discovery would cause unreasonable prejudice. Defendants’ request for a protective order is denied. 4. With respect to defendants’ request for sanctions against plaintiffs, defendants argue that plaintiffs’ conduct violated CPLR 3120 and was sanctionably frivolous. (NYSCEF No. 32 at 6, 7.) In Coward v Consolidated Edison, Inc., plaintiffs moved to suppress documents defendant obtained from a non-party because defendants failed to serve the subpoena on plaintiffs. (2019 NY Slip Op 50105[U], *2 [2019] [Sup Ct, Queens County 2019].) Plaintiffs also sought sanctions. (Id. at *2.) The Coward court denied the motion for sanctions because plaintiff did not allege that a substantial right was prejudiced by defendant’s failure to adhere to the notice requirements. (Id. at *2; CPLR 3120.) Similarly, defendants here have not shown that plaintiffs’ failure to adhere to the notice requirements prejudiced their substantial rights. Defendants’ motion for sanctions against plaintiffs is denied. Accordingly, it is 2 2 of 3 FILED: NEW YORK COUNTY CLERK 07/03/2024 09:06 AM INDEX NO. 651023/2024 NYSCEF DOC. NO. 56 RECEIVED NYSCEF: 07/02/2024 ORDERED that the branch of defendants’ motion seeking to quash the four subpoenas is granted; and it is further ORDERED that the branches of defendants’ motion seeking a protective order suppressing materials obtained through the subpoenas and an award of sanctions are denied; and it is further ORDERED that defendants serve a copy of this order with notice of its entry on all parties; and on the recipients of the four subpoenas by certified mail, return receipt requested, directed to their respective last-known addresses. 7/2/2024 $SIG$ DATE CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION GRANTED DENIED X GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE 3 3 of 3