Trustar Funding, LLC v. Mruczynski et al

Filing 213

ORDER re 204 207 The Court grants Commonwealth's request, pursuant to Fed. R. Civ. P. 30(b)(4), and Orders that the parties shall conduct the deposition of Commonwealths Rule 30(b)(6) witness remotely by video and that Commonwealth shall pay the expenses of the videographer and any other related expenses as offered in its letter of 10/21/11. So Ordered by Magistrate Judge Cheryl L. Pollak on 11/30/2011. (Caggiano, Diana)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

-_........................ _._--------------------)(
RP FAMILY, INC,

ORDER

Plaintiff,
-against-

10 CV 1149 (DLI) (CLP)
COMMONWEAL TI I LAND TITLE
INSURANCE COMPANY, a division of
FIDELITY NATIONAL TITLE
GROUP, INC,
Defendant.

--------------_._._------------------------------){
TRUSTAR FUNDING, LLC &
EMERALD ISLE LENDING
COMPANY, INC,
PlaintitTs,
-against10 CY 1727 (DLI) (CLP)
DARIUSZ MRUCZYNSKI, et a!.,
Defendants.

----------------------------------------------_._){
On March 12,2010, plaintiff RP Family, Inc, ("RP Family") filed this action against
defendant Commonwealth Land Title Insurance Company, a division ofFidclity National Title
Group ("Commonwealth"). Plaintiff seeks insurance compensation for losses incurred when
plaintiff paid to purchase a property for which the seller no longer possessed the title due to
having previously conveyed title to another party. On May 14,2010, Commonwealth filed a
third party complaint against third party defendants Warren Sussman and Pacific Title. Inc.
(collectively, "Sussman").
Under Rule JO(b)(6) of the Federal Rules of Civil Procedure, Sussman seeks to depose a
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Commonwcalth-designated witness "on the underwriting process.'" (Commonwealth I.et.' at 2).
By letter motion dated October 21, 2011, Commonwealth requests an Order, pursuant to Fed. R.
Civ. P. 30(bX4), directing that the deposition of Commonwealth's Rule 3O(hX6) witness - who
works in Omaha, Nebraska - be conducted remotely. Specifically, Commonwealth proposes that
the witness be deposed via videoconference at Commonwealth's expense rather than be required
to travel to New York. (Commonwealth Let. at I). Based on the discussion vvith the parties
during the conference held on November 2, 2011, it appears that Commonwealth's designated
witness is an employee of the corporation but not a corporate officer.

DISC) JSSION
Under the Fcderal Rules of Civil Procedure, the Coun has the discretion to designate the
location for depositions. Fed. R. Civ. P. 26;

~

Sugarhill Records Ltd. v. Motown Record Corn.,

105 F.R.D. 166, 171 (S.D.N. Y. 1985); Finkelstein v. Sees. Indus. Automation Corn., No. 05 CV

5195, 2006 WL 3065593, at ·1 (E.D.N.Y. Oct. 27, 2006). In federal diversity litigation, the
general presumption is that an individual defendant will be deposed at his or her place of
residence, see. Cop .. Gulf Union Ins. Co. of Saudi Arabia v. M!V LACERTA, No. 91 CV 2814,
1992 WL 51532, at ·5 (SD.N.Y. Mar. 9, 1992); Mill-Run Tours. Inc. v. Kh!iShoggi, 124 F.R.D.

547, 550 (SD.N.Y. 1989), or if a corporate defendant, at the place of business or where the

'At the status conference held on November 3, 2011, the parties agreed to limit the scope
of the deposition to the specific underwriting topics discussed at the conference.
'Citations to "Commonwealth Let." refer to defendant/third party plaintiff
Commonwealth Land Title Insurance Company's October 21, 2011 letter application for a video
deposition.

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officer's residence is located, See SugarllHl Records Ltd. v. Motown Record Corv., 105 F.R.D.
at 171; see also Estate of Gerasimenko v. Cape Wind Trading Co., 272 F.R.D. 385, 388
(S.D.N.Y. 2011) (stating: "[Tllle usual rule. , . in federal litigation, is that in the absence of
special circumstances, a party seeking discovery must go where the desired witnesses arc
nonnally located') {quoting In re Fosamax Prods, Liab. Litig ,No.1 :06--MD-1789, 2009 WL
539858, at °1 (S.D.N.Y. Mar. 4, 2009) (internal quotations omitted». "This rule applies with
equal force to 30{b){6) witnesses." Estate ofGerasimenko v. Cape Wind Trading Co., 272
F.R.D. at 388. The rationale behind this presumption is that the plaintiff chooses the forum in
which to initiate the action and the defendants are therefore not present before the coun by
choice. Therefore, plaintiff should bear any burden of inconvenience presented by the action.
See Federal Deposit Ins Co, v. La Antillana, S.A., No. 88 CV 2670, 1990 WL 155727, at *\
(S.D.N.Y. Oct. 5, 1990).
A party may overcome this presumption by satisfying a three factor test to detennine
",nether ''peculiar circumstances" have been shown.

~

Six West Retail Acquisition v. Sony

Theatre Mgmt. Com., 203 FRO. 98, 107 (S.D.N.Y. 2001) (citing Mill-Run Tours, Inc. v,
Kha:;hQggi, 124 F.R.D. at 550 and Gulf Union Ins. Co, of Saudi Arabia v. MN LACERTA, 192
WL 51532, at *5). The three factors to be considered are cost, convenience, and litigation
efficiency. See Six West Retail Acquisition v. Sony Theatre Mgmt. Com" 203 F.R.D. at 107.
In this Calle, neither Sussman nor Commonwealth is a plaintiff. Commonwealth was sued
by RP Family and subsequently impleaded Sussman as a third-party defendant. Since neither
Commonwealth nor Sussman chose the forum, the general presumption of location is not entirely
applicable. However, in exercising its discretion, the Coun considers the rationale underlying
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the preswnption and the three factors as instructive.
Moreover. in this case the witness to be deposed is neither a party nor a corporate officer.
An employee of a corporate party who is not an officer, director, or managing agent is not subject
to deposition by notice. Instead, these employees are treated in the same way as any olher nonparty witnesses and ''must be subpoenaed pursuant 10 Fed. R. Civ. P. 45." Schindler Eleyator
Corp v. Otis Elevator, No. 06 Civ. 5377, 2007 WL 1771509 al·2 (S.D.N.Y. June 18,2007).
Rule 45(d)(2) of the Federal Rules of Civil Procedure provides: "A person to whom a subpoena
for the taking of a deposition is directed may be required 10 attend at any place vvithin 100 miles
from the place where the person resides, is employed or transacts business in person, or is served,
or at such olher convenient place as is fixed by an order of the court." Fed. R. Civ. P.
45(d)(2)(c)(3)(A). Fed. R. eiv. P. 45(c)(3) states that "on timely mOlion the court ... shall quash
or modify the subpoena if it. .. (ii) requires a person who is not a party or an officer of a party to
travel to a plaee more than 100 miles from the place where that person resides, is employed or
routinely transacts business in person."
Rule 45 applies to all non-officer employees, including those designated as Rule 30(b)(6)
witnesses via a subpoena served upon a corporation. See Sianford v. Kuwait Airlines Corn., No.
85 Civ. 0477,1987 WL 26829, al·3 (S.D.N.Y. 1987) (ciling Cates v. LTV Aerospace Corn.,
480 F.2d 620, 623-24 (5th Cir. 1973) (hnlding that "a person designated by an organization
pursuant to Rule 30(b)(6) could not be required to travel outside the limits imposed by Rule
45(d)(2)").
Sussman argues that Commonwealth's 30(b)(6) vvitness should be required to travel to
New York, rather than requiring the lawyers to lravel to Omaha, Nebraska where the witness is

4

located. However, Sussman has failed to demonstrate that there is a basis - either given the cost,
convenience or considerations of litigation efficiency - that would justify ordering
Commonwealth's JO(b)(6) witness to travel from his home and place of business in Omaha.
Indeed, under Rule 45, the Court lacks authority to order this non-party witness to appear given
that he is located outside the 100 mile limit which governs the subpoena power of the Court
Ordinarily, the Court would simply order the attorneys to travel and the deposition to proceed
where the witness was located, but in this case, Commonwealth has proposed that in licu of
requiring either the witness or the lawyers to travel, Commonwealth will arrange to make the
witness available for video deposition, and Commonwealth has further agreed to pay the costs of
such a video deposition.
The Federal Rules specifically provide for the taking of depositions by telephone or other
remote means. See Fed. R. Civ. P. 30{b){4). Indeed, "[tJelephone depositions are a
'presumptively valid means of discovery.'" Zito v. Leasecomm Com, 233 F.R.D. 395, 398
(S.D.N.Y. 2006). Since Rule 30{b)(4) does not specify the standards to be considered in
determining whether to grant a request to take a telephonic deposition,

= Sts:;phens v. 1199

S.E I.V. AFL-CIO, No. CV 07-240490, at *1 (E. nN. Y. July 19, 2011), the decision to grant or
deny such an application is left to the discretion of the Court, which must balance "claims of
prejudice and those of hardship," Estate ofGerasimenko v. Cape Wind Trading Co., 272 F.R-D.
at 388 (quoting Nounande v. Grippo, No. 01 Civ. 7441, 2002 WL 59427, at * 1-2 (S.D.N.Y. Jan.
16,2002», and conduct a "careful weighing of the relevant facts." !d. (citing Abdullah v.
Sheridan Square Press, Inc., 154 F.R.D. 591, 592 (S.D.N.Y. 1994)).
In this case, Sussman objects to the proposal to conduct a video deposition, contending

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that Commonwealth's application should be denied because "Commonwealth does not conlend
that il will be suffer (.<k) any potential financial hardship if it is compeHed to produce a
deposition witness in New York. (Sussman Let. at 2). However, h[aJUlhorization to take
telephonic depositions docs not depend upon a showing of hardship by the applicant," Zito v.
Leasecomm Com .. 233 F.R.D. at 398 (citing &Ivan; Enterprises. Inc. v, Undervoillters at Uoyd"
No. 95 Civ. 4864, 2000 WL 1568255, at·2 (S.D.N.Y, Oct. 19,2000), and, in any event, it is the
hardship and inconvenience to the witness that is of concern. Indeed, the goal of Rule 45 is to
"prevent inconvenience to the flesh-and-blood human beings who are asked to testify, not the
legal entity for whom those human beings work." Price Waterhouse LLP v. First Am. Corn., 182
F.RD. 56, 62 (S.D.N. Y. 1998) (noting that Rule 45(c)(3)(A) treats a person who is an employee
and not an officer of a party as it does a non-party witness);

~ Jl!jQ

Stanford v. Kuwait Airlines

£Qm., 1987 WL 26829, at·3 (holding that Rule 45 protects nonparty witnesses from being
inconvenienced by being compelled to travel inordinate distances to have their depositions
taken).
Although Sussman argues that the trip from Omaha to New York is only "a 2 hour and 29
minute flight" and an expense unlikely to cause "financial hardship" for "a company like
Commonwealth" (Sussman Let. at 2), this argument ignores the inconvenience to the human
being serving as Commonwealth's Rule 30{b)(6) witness, and it is clear that this witness would
likely lose two days traveling from Omaha to New York and back.
Sussman also argues that its "right to observe, interact with, and personally evaluate the
witness" will be denied if required to conduct the deposition remotely. (Sussman LeI. at 2).
However, in rejecting the same argument, the courts in Robert Smalls v. Hamilton and
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Norrnande v Gripoo held that "accepting Plaintiffs' arguments absent a particularized showing of
prejudice would be tantamount to repealing [Fed.R.Civ.P. 30(b)(4)]." Robert Smalls v.
Hamilton, No. 09 Civ. 7171, 2010 WI. 2541177, at *4 (S.D.N.Y. June 10, 2011); NOTmande v,
Grippo, 2002 WL 59427, at '2. In fact, anticipating that a defendant might "consider it
important to view the demeanor of [plaintiff's witness] during a deposition," the court in Zito v.
Lcasecomm Corp. specifically suggested a videoconference as the preferred means for
conducting the deposition of a witness who would face hardship by being asked to travel to a
distant city. 233 F.R.D. at 398.
Although some courts have expressed concern that Rule 45's proscription of travel over
100 miles for non-party witnesses can create an "incentive [for parties to try] to avoid [a Rule
30(b)(6)] Subpoena simply by producing employees who are not corporate officers as their party
representatives," Aristocrat Leisure Ltd. v. Deu1sche Bank Trust Co. Am.'s, 262 F.R.D. 293, 303
(S.D.N.Y. 2009), here there has been no suggestion that Commonwealth is deliberately selecting
a witness in Omaha in order to prevent his personal appearance. Sec Fed. R. Civ. P. 30{bX6)
(providing that the corporation shall designate the person competent to testify on behalf of the
corporation); Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Am.'s, 262 F.R.D. at 303
(noting that [wJhether the appropriate person is an officer of the corporation is within the
discretion of the corporate party and not a requirement of the subpoena itself).
This Court agrees that such "evasive hehavior... is clearly not what Rule 45 was intended
to promote," Aristocrat Leisure Ltd. v, Deutsche Bank Trust Co. Am.'s, 262 F.R.D. at 303, but

based on the representations of counsel at the conference, the individual who has been selected as
the 30(b)(6) witness to answer these questioos appears to be the most<;'ompetent

7

Commonwealth has offered to produce another 30(b)(6) witness in New York to testify on
different topics, bUllhere appears to be no comparable employee located in New York with the
requisite knowledge necessary to answer the questions at issue. Moreover, the Court finds that
Commonwealth, by offering 10 pay for the expense of conducting the deposition by video, has
demonstrated good faith in attempting to accommodate both the concerns of convenience to the
witness and the concerns of cost and litigation efficiency raised by Sussman.
CONCLUSION
Accordingly, the CoIll1 grants Commonwealth's request, pursuanl 10 Fed R. C,V. P.
30(b)(4), and Orders that the parties shall conduct the deposition of Commonwealth's Rule
30(bX6) witness remotely byvideo and that Commonwealth shall pay the expenses of the
videographer and any other related expenses as offered in its letter ofOctobcr 21, 2011.

SO ORDERED.
Dated: Brooklyn, New York
November 30, 2011

/s/ CHERYL POLLAK
-k"'= I
Cheryl L~lak
United S s Magistrate Judge

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