FFS Data Corp. v. OLB Group, Inc.

2024 NY Slip Op 30854(U)

• Court: New York Supreme Court, New York County
• Decided: March 15, 2024
• Status: Unpublished

Opinion

FFS Data Corp. v OLB Group, Inc. 2024 NY Slip Op 30854(U) March 15, 2024 Supreme Court, New York County Docket Number: Index No. 653247/2022 Judge: Joel M. Cohen 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. INDEX NO. 653247/2022 NYSCEF DOC. NO. 281 RECEIVED NYSCEF: 03/15/2024

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 03M ----------------------------------------------------------------------------------- X

FFS DATA CORPORATION, INDEX NO. 65324 7/2022

Plaintiff, MOTION DATE 02/01/2024 - V - MOTION SEQ. NO. 018 THE OLB GROUP, INC.,

Defendant. DECISION+ ORDER ON MOTION ----------------------------------------------------------------------------------- X

HON. JOEL M. COHEN:

The following e-filed documents, listed by NYSCEF document number (Motion 018) 205,206,207, 208, 209,210,211,212,213,214,215,216,217,218,219,220,221,222,223,224,225,226,227,247, 248,256,257,258,259,260,261,262 DETERMINATION THAT DOCUMENTS ARE NOT were read on this motion for "PROTECTED INFORMATION"

PlaintiffFFS Data Corporation ("FFS") moves for an Order ruling that certain exhibits

produced by third party Manuel Sanchez in this action do not constitute "Protected Information"

(i.e., documents protected from disclosure pursuant to CPLR 3101(c), 3101(d)(2) and 4503)

under paragraph 17 of the Stipulation and Order for the Production and Exchange of Confidential

Information (the "Protective Order") entered on June 1, 2023 (see NYSCEF 105).

As relevant here, The Global Legal Law Firm ("Global Legal")-counsel for Defendant

OLB Group, Inc. ("OLB") in this case- is asserting attorney-client privilege over documents

produced over six months ago by a third party named Manuel Sanchez, whom Global Legal

subpoenaed in this matter on OLB' s behalf (the "Sanchez Production").

Global Legal submits that it has represented Mr. Sanchez and his company Merchant

Payment Solutions, LLC ("MPS") for over three years in a number of litigation and transactional

matters. According to Global Legal, that included the dual representation of both Mr. Sanchez

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and MPS, on the one hand, and OLB, on the other hand, in attempting to resolve a dispute

among them. Global Legal also submits that it represented Mr. Sanchez in producing documents

in response to the subpoena duces tecum Global Legal served on him in this case on June 2,

2023, and in defending his deposition on September 15, 2023 (NYSCEF 256 ["Huber Affirm"]

Global Legal did not review Mr. Sanchez's first production of documents prior to

producing it to FSS in July 2023 because it did not believe the Sanchez Production would

contain any attorney-client privileged information (Huber Affirm ,J,Jl2-13). FFS introduced

certain documents from that production, without objection, at Mr. Sanchez's deposition in

September 2023 (NYSCEF 214). Separately, in January 2024, FFS's counsel filed a motion to

dismiss a related action in Hawaii federal court filed by Global Legal on behalf of MPS. That

motion relied on certain exhibits from the Sanchez Production, specifically Exhibits 5-9 to the

Hawaii Declaration (the "Five Exhibits," NYSCEF 222, Ex. 5, 6, 7, 8, 9]).

Thereafter, in this case, Global Legal asserted attorney-client privilege over the Sanchez

Production, including the Five Exhibits. FFS' s instant request concerns only the Five Exhibits.

For the following reasons, Plaintiffs motion is granted.

"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" (Ambac Assur. Corp. v Countrywide Home

Loans, Inc., 27 NY3d 616, 623 [2016], citing CPLR 4503[a][l]). "Although typically arising in

the context of a client's communication to an attorney, the privilege extends as well to

communications from attorney to client." (Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d

371,377 [1991]). Such communications "'must be made for the purpose of facilitating the

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rendition of legal advice or services, in the course of a professional relationship"' (Rossi v Blue

Cross & Blue Shield of Greater NY, 73 NY2d 588, 593 [1989], citing Matter of Creekmore, l

NY2d 284,296 [1956]). "[T]he burden of establishing any right to protection is on the party

asserting it; the protection claimed must be narrowly construed; and its application must be

consistent with the purposes underlying the immunity" (Spectrum Sys., 78 NY2d at 377).

Here, even assuming that Global Legal represented Mr. Sanchez and MPS in various

matters since 2020, Global Legal has failed to demonstrate that it represented Mr. Sanchez or

MPS in their negotiations with OLB, which is the subject of the Five Exhibits at issue. In that

context, Mr. Sanchez was inquiring about OLB's outstanding payment ofMPS's January 2023

residual. The documents are commercial communications, not requests for legal advice.

Moreover, Global Legal took pains to distance itself from representing Mr. Sanchez in

the discussions with OLB. Mr. Sanchez sent a February 28, 2023 email to Global Legal making

what appears to be his first request to recover this residual payment from OLB. Global Legal

responded: "We represent OLB regarding this whole dispute. Therefore, we would have a

conflict. But we are happy to provide the role of honest broker to help you get down on the

situation." (NYSCEF 224 [emphasis added]). Following this email, Mr. Sanchez's subsequent

emails demanding payment from OLB-the Five Exhibits-at most reflect Mr. Sanchez's

requests for assistance obtaining payment from Global Legal's client, OLB. Furthermore, in

those emails, Global Legal again reiterated that it had a potential conflict of interest with its

representation of OLB (see NYSCEF 222, Ex. 7 [Mr. Huber telling Mr. Sanchez he would

mention the outstanding January 2023 commission to OLB, noting that Global Legal was "in a

potential conflict though so can't push too hard"]; Ex. 8 [Mr. Huber telling Mr. Sanchez that

"[u]nfortunately, [Global Legal] can't put [itself] in th[e residual] dispute too heavily"]).

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Global Legal does not deny that it represented OLB in connection with these

communications, whose interests at that time were clearly adverse to Mr. Sanchez. Under

similar facts, the First Department affirmed an order holding such communications are not

privileged and must be produced (Gottwald v Geragos, 205 AD3d 417,417 [1st Dept 2022]

["The emails between [defendant] and an attorney representing a third party are not privileged as

their substance was clearly in connection with the attorney's representation of the third party,

whose position at that time was adverse to defendants."] [citations omitted]).

In sum, Global Legal has not established that any of the Five Exhibits were made "for the

purpose of facilitating the rendition of legal advice or services, in the course of a professional

relationship" between Mr. Sanchez and Global Legal. This Decision does not address the

remaining documents listed in Defendants' privilege log, as no motion was made with respect to

those documents.

Accordingly, it is

ORDERED that Plaintiffs motion is GRANTED, and the Five Exhibits are determined

not to be Protected Information for purposes of the Protective Order.

This constitutes the Decision and Order of the Court.

3/15/2024 DATE JOEL M. COHEN, J.S.C. CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

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