CWCapital Cobalt Vr Ltd. v. CWCapital Invs. LLC

2024 NY Slip Op 33321(U)
CourtNew York Supreme Court, New York County
DecidedSeptember 19, 2024
DocketIndex No. 653277/2018
StatusUnpublished

This text of 2024 NY Slip Op 33321(U) (CWCapital Cobalt Vr Ltd. v. CWCapital Invs. LLC) is published on Counsel Stack Legal Research, covering New York Supreme Court, New York County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CWCapital Cobalt Vr Ltd. v. CWCapital Invs. LLC, 2024 NY Slip Op 33321(U) (N.Y. Super. Ct. 2024).

Opinion

CWCapital Cobalt Vr Ltd. v CWCapital Invs. LLC 2024 NY Slip Op 33321(U) September 19, 2024 Supreme Court, New York County Docket Number: Index No. 653277/2018 Judge: Andrea Masley Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [FILED: NEW YORK COUNTY CLERK 09/19/2024 04:21 P~ INDEX NO. 653277/2018 NYSCEF DOC. NO. 1317 RECEIVED NYSCEF: 09/19/2024

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 48 ----------------------------------------------------------------------------------- X

CWCAPITAL COBALT VR LTD., INDEX NO. 653277/2018

Plaintiff, MOTION DATE - V - MOTION SEQ. NO. 020 CWCAPITAL INVESTMENTS LLC and CWCAPITAL ASSET MANAGEMENT LLC, DECISION+ ORDER ON Defendants. MOTION ----------------------------------------------------------------------------------- X

HON. ANDREA MASLEY:

The following e-filed documents, listed by NYSCEF document number (Motion 020) 528,529,530, 531, 532,533,534,535,536,539,540,541,542,543,544,545 were read on this motion to/for MISCELLANEOUS

In motions sequence 020, CWCapital Cobalt Vr Ltd. (Cobalt) moves pursuant to

CPLR 3104 (d) to reverse Referee Gold's 1 February 16, 2024 Order. The Referee

performed an in camera review of 32 email chains 2 submitted by CWCapital

Investments LLC and CWCapital Asset Management LLC (together, CW) and

concluded that "CW's invocations of attorney-client privilege with respect to all

documents submitted for in camera review are sustained, with the following exceptions:

those documents CW has already produced, Document 17, and the redacted portion of

Document 9." (NYSCEF 532, Referee's Feb. 16, 2024 Order at 5.) The Referee stated

that

1 Honorable Steven M. Gold (ret.) was appointed as Discovery Referee by September 10, 2021 Stipulation Regarding Appointment of Discovery Master. (NYSCEF 292, Stipulation.) 2 Although CW initially asserted privilege as to 35 email chains, they have withdrawn the

assertation of privilege for documents no. 4, 20, and 24. ( See NYSCEF 532, Referee's Feb. 16, 2024 Order at n 2.) 653277/2018 CWCAPITAL COBALT VR LTD. vs. CWCAPITAL INVESTMENTS LLC Page 1 of 14 Motion No. 020

1 of 14 [* 1] [FILED: NEW YORK COUNTY CLERK 09/19/2024 04:21 P~ INDEX NO. 653277/2018 NYSCEF DOC. NO. 1317 RECEIVED NYSCEF: 09/19/2024

"The emails at issue were all written over a period of less than four weeks during which intense efforts to settle a then-pending complex commercial litigation were underway. The subject matter of the withheld emails concerns those settlement efforts, and outside litigation counsel or in-house counsel were copied on each of the withheld emails. Several of the emails contain what at first glance might appear to be financial deal terms and to be predominantly discussions of business rather than legal matters. However, the circumstances under which they were written, the fact that outside litigation counsel is the author of some of the emails and is copied on the vast majority of them, and the context I glean from my review of the entire set of emails, leads me to conclude that the emails are primarily legal in nature. To the extent various deal terms are being discussed and evaluated in the emails, it is undoubtedly in the context of the status of the pending litigation and the strengths and weaknesses of the claims and defenses asserted in that litigation. It is also clear that, in some emails, outside counsel was providing legal advice about the permissibility, as a matter of law, of some contemplated deal terms. See, e.g., Email sent at 6:05 a.m. on September 2, 2015. It accordingly follows that emails discussing possible deal terms were forwarded to outside counsel at least in part to make certain that counsel agreed that the proposed terms were legally permissible.

The New York Court of Appeals has observed that '[p]roximity to litigation ... may itself reveal that the motive in a lawyer's communication was to give legal advice.' Spectrum Syst. Intl. Corp. v. Chemical Bank, 78 N.Y.2d 371, 380 (1991). Moreover, it has long been clear that '[c]ommunications between counsel and a client as to settlement negotiations are ... protected from disclosure as an attorney-client communication.' Omni Health and Fitness Complex of Pelham, Inc. v. PIA-Acadia Pelham Manor, LLC, 33 Misc. 3d 1211 [A], 2011 WL 4985197, at *4 (Sup. Ct. Westchester Co., Sept. 28, 2022) citing In re Bekins Rec. Storage Co., Inc., 62 N.Y.2d 324, 327 (1984). Thus, under the circumstances presented here, CW's claims of privilege are supported by established case law.'' (Id. at 4-5.)

Cobalt argues that the Referee's order is contrary to the law in that "even though

the documents, on their face, did not request legal advice or convey legal advice - and

no attorney appears on at least some of them - the Referee inferred that they were for

the purpose of seeking or conveying legal advice because of the 'context' in which they

were made." (NYSCEF 529, Cobalt MOL at 14.) Cobalt seeks a reversal of the

653277/2018 CWCAPITAL COBALT VR LTD. vs. CWCAPITAL INVESTMENTS LLC Page 2 of 14 Motion No. 020

2 of 14 [* 2] [FILED: NEW YORK COUNTY CLERK 09/19/2024 04:21 P~ INDEX NO. 653277/2018 NYSCEF DOC. NO. 1317 RECEIVED NYSCEF: 09/19/2024

Referee Order to the extent that it concludes that the 30 3 documents/email chains were

privileged.

The standard of review of a discovery referee's decision is whether the decision

is clearly erroneous or contrary to law. ( CIT Project Fin. v Credit Sussie First Boston

LLC., 7 Misc 3d 1002[A], 2005 NY Slip Op 50406[U], *2 [Sup Ct, NY County 2005].)

"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 oldest among the common-law evidentiary privileges, the attorney-client privilege fosters the open dialogue between lawyer and client that is deemed essential to effective representation. It exists to ensure that one seeking legal advice will be able to confide fully and freely in his attorney, secure in the knowledge that his confidences will not later be exposed to public view to his embarrassment or legal detriment." (Ambac Assur. Corp. v Countrywide Home Loans, Inc., 27 NY3d 616, 623 [2016] [internal quotation marks and citations].)

"In order to make a valid claim of privilege, it must be shown that the information

sought to be protected from disclosure was a 'confidential communication' made to the

attorney for the purpose of obtaining legal advice or services." (Priest v Hennessy, 51

NY2d 62, 69 [1980] [citation omitted].) "The communication itself must be primarily or

predominantly of a legal character." (Spectrum Sys. Inti. Corp. v Chem. Bank, 78 NY2d

371, 378 [1991] [internal quotation marks and citations omitted].) "Conversely, one who

seeks out an attorney for business or personal advice may not assert a privilege as to

those communications." (In re Grand Jury Subpoena Served upon Bekins Record Star.

Co., 62 NY2d 324,329 [1984] [citations omitted].) Further, a communication "does not

become privileged merely because it was sent to an attorney." (Spectrum Sys. Inti.

Corp., 78 NY2d at 379; see also United States Postal Serv. v Phelps Dodge Ref. Corp.,

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Related

In Re Grand Jury Subpoena Served Upon Bekins Record Storage Co.
465 N.E.2d 345 (New York Court of Appeals, 1984)
Ambac Assurance Corporation v. Countrywide Home Loans, Inc.
57 N.E.3d 30 (New York Court of Appeals, 2016)
Priest v. Hennessy
409 N.E.2d 983 (New York Court of Appeals, 1980)
Spectrum Systems International v. Chemical Bank
581 N.E.2d 1055 (New York Court of Appeals, 1991)

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Bluebook (online)
2024 NY Slip Op 33321(U), Counsel Stack Legal Research, https://law.counselstack.com/opinion/cwcapital-cobalt-vr-ltd-v-cwcapital-invs-llc-nysupctnewyork-2024.