Palmieri v. East Coast Power & Gas, LLC

District Court, S.D. New York·Decided October 27, 2020·No. 1:20-cv-02663·Unknown

Opinion

STEVEN L. LEVITT LEVITT Of Counsel KAREN L. WEISS LLP HON. EDWIN KASSOFF Presiding Justice, Appellate Term — NYS Supreme Court, Retired Of Counsel (1924-2015) ROSE LEVITT MICHAEL D. SCHIMEKt Law Clerk —_____ Michael R. Seidon, JD IRENE TENEDIOS* TREVOR M.GOMBERG* * MATTHEW I. KOOPERSMITH * Also Admitted In New Jersey + Also Admitted In D.C. andFlorida t Also Admitted in Texas October 26, 2020 wart CF bleR ie Ab This case has been referred by separate order to Magistrate Judge Moses for gener © onorable . onne Tams pretrial purposes. The issues raised in this letter shall thus be addressed to Judge □ United States District Court SO ORDERED. Southern District of New York {7 / 40 Foley Square, Room 2203 AM New York, New York 10007 Ronnie Abrams, U.S.D.J. October 27, 2020 Re: East Coast Power & Gas et al. adv. Palmieri Southern District of New York Case No.: 1:20-cv-02663-RA Your Honor: This firm is counsel to East Coast Power & Gas, LLC (“ECPG’”), John Knief, and Anthony Milanese, the Defendants in the above referenced matter pending before Your Honor. Pursuant to Local Civil Rule 37.2 and Your Honor’s Individual Rule 3, having engaged unsuccessfully in the meet-and-confer process, Defendants respectfully seek a telephonic pre- motion conference at Your Honor’s nearest convenience regarding 2 discrete discovery disputes, the first of which is time-sensitive. By way of brief case background, Plaintiffs pleaded case is that this is a ‘simple’ claim of non-payment of allegedly due compensation, and payment for his unredeemed Membership Interest in ECPG. First Amended Complaint (Doc. 15, para. 1) (“This case involves a company firing a longtime executive without causing [sic] after failing to pay his agreed salary for years, and then trying to enforce noncompete and nonsolicitation agreements that were expressly premised on payment of the executive’s salary.”).' As with the compensation, the Complaint alleges the valuation of the Membership Interest is set by contract, depending on whether or not termination was for cause or without cause, namely, (1) the price Plaintiff paid for such interest; or (2) a percentage of ECPG’s top line gross revenue. First Amended Complaint, paras. 20-21.

' Pending before this Court is Defendants’ Motion to Dismiss the First Amended Complaint (the “Motion’) based on, inter alia, lack of complete diversity of parties (moving papers filed at Docs. 22-24; opposition filed at Docs. 26-28; reply filed at Doc. 29). The Motion also raised that Plaintiff's unpleaded ‘alter ego’ claim — based solely on a conclusory recitation of some elements of such a claim — falls far short of the dictates of Igbal and Twombly. Although issue is not joined, Defendants’ anticipated case — whether litigated in this Court or in New York State Supreme Court — is that Plaintiff, while an executive of ECPG, engaged in extensive acts of fraud and other malfeasance causing the demise of ECPG, a company which had annual revenues of some $350 million.

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The two discovery issues are as follows: 1. Plaintiff’s Issuance of Subpoenas to ECPG’s Two Accounting Firms Seeking Irrelevant Documents and Containing Overly Broad Requests. Requested Relief: Defendants seek leave to move to quash and for a protective order as to two substantively identical documents subpoenas issued on Defendants’ accounting firms (the Subpoenas”) (copies filed herewith as Exhibit “A” (AVM DeMars) and Exhibit “B” (Bonadio Group). Because we are informed the Subpoenas were served just last week, and are returnable in under 2 weeks on November 6, 2020, and one of the non-parties is not under Defendants’ control, we respectfully seek a pre-motion conference at the Court’s earliest opportunity. The Subpoenas: While not intended to be exhaustive, the objectionable nature of some aspects of the Subpoenas is summarized for brevity below:

“Definitions” — “‘ECPG’ refers to ... The Subpoenas broadly define ECPG as including, Defendant East Coast Power & Gas, LLC | among other thing, “affiliates”, i.e., other companies including without limitation, any not named herein which Plaintiff was not an owner of, predecessor, successor, parent, affiliate, | or even employed by. There is no reason why Plaintiff subsidiary, partnership or any related should be entitled to discover, for example, entity...” (emphasis added). compensation (discussed below) that the other members of ECPG may have received from those other companies, nor has Plaintiff articulated any. Request 4 seeks “[a]]l documents The request seeks documents which are not relevant to concerning compensation paid or the claims or defenses; and is overbroad in seeking monies transferred by ECPG to nearly four (4) years of documents with unlimited Milanese and/or Knief from January 1, | scope “all documents concerning” language. 2017 to present”. Request 5 seeks “[a]]l documents The request seeks documents which are not relevant to concerning any capital contributions the claims or defenses; and is overbroad in seeking made by Milanese or Knief to ECPG nearly four (4) years of documents with unlimited from January 1, 2017 to the present”. scope “all documents concerning” language. Request 6 seeks “[a]]l documents The request seeks documents which are not relevant to concerning any capital withdrawals the claims or defenses; and is overbroad in seeking made by Milanese or Knief from ECPG | nearly four (4) years of documents with unlimited from January 1, 2017 to the present”. scope “all documents concerning” language. Request 8 seeks “[a]]l documents The request seeks documents which are not relevant to concerning any loans made by ECPG __| the claims or defenses; and is overbroad in seeking to Milanese and/or Knief from January | nearly four (4) years of documents with unlimited 1, 2017 to the present”. scope “all documents concerning” language.

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As set forth above, the Subpoenas are inherently overbroad, comprised of “all documents concerning” language and seeking four (4) years of irrelevant documents — extending to multiple forms of financial documents and the accountants’ internal work papers, for multiple business entities which never employed the Plaintiff. Plaintiff is not entitled to such “fishing expedition’, post-judgment type discovery. See, Great Amer. Ins. Co. v. TA Operating Corp., 06-cv-13230, 2008 WL 1848946, *8 (S.D.N.Y. 2008) (Francis, J.) (finding ‘alter ego’ type discovery based on “unsupported assertion[s]” constituted an improper “fishing expedition”, and in any event were “not tailored to that end and do not describe the documents to be searched with “with reasonable particularity.’). While we contend these requests are likewise improper in party discovery, “non- party discovery require[s] a stronger showing of relevance than for party discovery.” Zukoski v. Phila. Elec. Co., 93-CV-4780, 1994 WL 637345, *3 (E.D.Pa. 1994) (emphasis added). 2. Plaintiff’s Refusal to Respond to Interrogatories Permitted under Local Rule 33.3. Requested Relief: An Order compelling a response to 2 of Defendants’ interrogatories:

Interrogatory 1: “Identify the Local Civil Rule 33.3(a) permits interrogatories “seeking names and full contact information | names of witnesses with knowledge of information relevant of all customers of East Coast to the subject matter of the action”.

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Palmieri v. East Coast Power & Gas, LLC, (S.D.N.Y. 2020).

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