MacCartney, Jr. v. O'Dell et al

Filing 117

OPINION & ORDER: The Court has reviewed the factual record in this case, including the parties' pleadings and accompanying exhibits, as well as Magistrate Judge Davison's July Order and the applicable legal authorities, and concludes that t he findings and reasoning provided are not clearly erroneous or contrary to law. Accordingly, the Court DENIES the Defendants' request to modify or set aside the Order. Accordingly, the Order is affirmed and Defendants' objections (ECF No. 101) are denied. (Signed by Judge Nelson Stephen Roman on 2/27/2017) (mml)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

DOC#:

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HAROLD Y. MacCAR1NEY, JR,

USDCSDNY
DOCUMENT
ELECTRONICALLY FILED
FILED: l. 2-1 {'/.ot J .

Plaintiff,
-againstKEVIN D. O'DELL and CHRISTOPHER J. WALSH,
individually and doing business as MacCARTNEY,
MacCARTNEY, KERRIGAN & MacCARTNEY, LAW
OFFICE OF KEVIN D. O'DELL, P.C., and WILLIAM
K. KERRIGAN, individually and doing business as
MacCARTNEY, MacCARTNEY, KERRIGAN &
MacCARTNEY,

No. 14-cv-3925 (NSR)
OPINION & ORDER

Defendants.
NELSON S. ROMAN, United States District Judge
Plaintiff Harold Y. MacCai1ney, Jr. brings this action alleging breach of fiduciary duty,
breach of New York partnership law, unjust enrichment, and an accounting claim arising out of
the dissolution of a former law practice partnership. 1

Before the Com1 are objections by

Defendants Kevin O'Dell and Kevin O'Dell, P.C. (the "O'Dell Defendants") to Magistrate Judge
Davison's July 19, 2016 Oral Decision (the "July Decision"), which granted, in relevant pait, full
disclosure of cases managed independently by the O'Dell Defendants and not referred to MMKM,
the firm where both Plaintiff and O'Dell Defendants formerly worked. For the following reasons,
Defendants' objections to the July Order are DENIED.
BACKGROUND
The Court assumes familiarity with the factual background of this case as set fo11h in the

1 Plaintiffs breach of fiduciary duty and aiding and abetting a breach of fiducimy duty, breach of contract, breach of
New York partnership law, and accounting claims against O'Dell and/or Kevin O'Dell P.C. (the O'Dell Law Office),
as well as Plaintiffs breach of contract claim against Defendant Kerrigan ("KelTigan"), were dismissed in this Court's
Febrnary 29, 2016 Opinion & Order ("February Order"), ECF No. 57.

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February Order, and notes only the following relevant facts, which are not in dispute.
Plaintiff brings this action to recover money allegedly owed as part of a payout resulting
from his withdrawal as a partner from his former law firm, MMKM. On February 29, 2016, as to
the O’Dell Defendants, this Court dismissed all but the unjust enrichment claim. (See February
Order.) On June 22, 2016, the O’Dell Defendants filed written responses to Plaintiff’s First and
Second Document Production Requests, which were initially served prior to the February 2016
Opinion. (See Declaration of Brian Belowich in Support of Defendants’ Objection Pursuant to
FRCP 72(a), Exs. G, H, I, ECF No. 102, [hereinafter (“Belowich Decl”)]; see also ECF Nos. 8690.) On June 24, 2016, Plaintiff sent a letter to Magistrate Judge Davison in which he took issue
with Defendants’ responses to the production requests. (Belowich Decl. Ex. J.) Specifically,
Plaintiff argued that he should be entitled to documents concerning both the cases that were
referred by Defendant O’Dell P.C. to the MMKM, as well as the cases that were handled
independently by the O’Dell Defendants (the “Non-Referred Cases”). (See id.; Defs.’ Mem. in
Support of Defs.’ Objection Pursuant to FRCP 72(a), at 5, ECF No. 101, [hereinafter (“Defs.’
Mem.”).)
On July 5, 2016, the O’Dell Defendants responded to Plaintiff’s letter, objecting to the
disclosure of any documents concerning the Non-Referred Cases on the basis that the documents
were privileged, confidential, and irrelevant to the extent that they related to causes of action
dismissed in the February 2016 Opinion, that the requested documents did not relate to Plaintiff’s
unjust enrichment claim as pled in the Amended Complaint, and that Plaintiff is not entitled to
them. (See Belowich Decl. Ex. K; Defs.’ Mem., at 5-6.) On the same day, Plaintiff responded that
the documents concerning the Non-Referred Cases related to his claims against Defendant

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Kerrigan and the amount owed to Plaintiff, and that the documents were not privileged, irrelevant,
or non-discoverable. (See Belowich Decl. Ex. L.)
On July 19, 2016, Judge Davison held a discovery conference to resolve this dispute. At
the conference, Judge Davison heard arguments from both Plaintiff and the O’Dell Defendants
regarding the disclosure of documents pertaining to the Non-Referred Cases, and found as
follows:
[the files pertaining to the Non-Referred Cases] have everything to do with the
claims that Mr. MacCartney is making with respect to Mr. Kerrigan and this alleged
breach of fiduciary duty by failing to collect monies owed from your client. In
other words, even if Mr. MacCartney does not have a direct claim against your
client in this case, it seems to me that those [documents] are evidentiary as to the
claims that Mr. MacCartney is trying to make against Mr. Kerrigan and the
Kerrigan law firm. In other words, he’s claiming that the firm was entitled to a cut
of the cases, the income that [the O’Dell Defendants were] generating. And even if
they don’t want to go after him for it, he thinks that he’s entitled to his cut of it…
And I will point out that this is also relevant to the crossclaims which have been
interposed against your client by these other defendants… It seems to me that what
plaintiff has a legitimate need to know is when cases were initiated, how they were
resolved and perhaps whether firms resources were utilized in prosecuting the case.
(See Belowich Decl., Ex. M, Transcript of July 19, 2016 Conference Before Magistrate
Judge Davison, (“July Order”), at 21, 23, 25.) At the conference, Defendants contended that,
because MMKM employees were permitted to hold employment outside of the firm, there could
be no claim against Defendant Kerrigan that could support discovery of files for cases not referred
to MMKM. (See id. at 22:4-11.) Recognizing that the parties dispute whether Defendant O’Dell
was permitted to engage in work outside of the firm, and noting that defendants are entitled to
argue that this work was authorized and that MMKM was not entitled to its proceeds, Judge
Davison found that Plaintiff was still permitted to discovery with regard to “what those cases were
and what kind of fees they generated.” (Id. 22:24-23:5.) Based upon this, the Judge directed the
O’Dell Defendants to provide full disclosure of documents relating to both the referred and Non-

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Referred Cases, with the exception of documents protected by attorney-client privilege. (See id.
25:22-26:10.)
The O’Dell Defendants subsequently filed the present motion to set aside the portion of
Magistrate Judge Davison’s decision regarding the disclosure of documents relating to the NonReferred Cases. (See Def. Mem., at 7.)
STANDARD OF REVIEW FOR A MAGISTRATE JUDGE’S PRETRIAL ORDER
Under 28 U.S.C. §636(b)(1)(A), a district court may refer certain non-dispositive pretrial
matters pending before the court to a magistrate judge for determination. An order on a discovery
issue is a non-dispositive order. When a party submits objections to a magistrate judge’s nondispositive order, the district court must review the objections and “modify or set aside any part of
the order that is clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a); 28 U.S.C.
§636(b)(1)(A).
A decision is clearly erroneous where “although there is evidence to support it, the
reviewing court on the entire evidence is left with the definite and firm conviction that a mistake
has been committed.” BPP Wealth, Inc. v. Weiser Capital Mgmt., LLC, 14-CV-1848, 2015 WL
4999524, at *3 (2d Cir. Aug. 24, 2015) (summary order) (citing New York Progress & Protection
PAC v. Walsh, 733 F.3d 483, 486 (2d Cir. 2013) (internal quotation marks omitted). A magistrate
judge’s ruling is contrary to law if it “fail[s] to apply or misapplies relevant statutes, case law, or
rules of procedure.” Thai Lao Lignite (Thailand) Co., Ltd. v. Government of Lao People’s
Democratic Republic, 924 F. Supp. 2d 508, 511–12 (S.D.N.Y. 2013) (internal citation omitted).
“A showing that ‘reasonable minds may differ on the wisdom of granting the [moving party’s]
motion’ is not sufficient to overturn a magistrate judge’s decision.” Edmonds v. Seavey, 08-CV5646 (HB), 2009 WL 2150971, at *2 (S.D.N.Y. 2009) (citing Cagle v. Cooper Cos., Inc., 91-CV-

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7828 (HB), 1996 WL 514864, at *1 (S.D.N.Y. Sept. 10, 1996)). This standard affords magistrate
judges “broad discretion in resolving nondispositive disputes and reversal is appropriate only if
their discretion is abused.” Ritchie Risk–Linked Strategies Trading (Ireland), Ltd. v. Coventry
First LLC, 282 F.R.D. 76, 78 (S.D.N.Y. 2012) (internal quotation omitted). Accordingly, “[t]he
party seeking to overturn a magistrate judge’s decision thus carries a heavy burden.” Samad Bros.,
Inc. v. Bokara Rug Co., Inc., 09-CV-5843, 2010 WL 5095356, at *1 (S.D.N.Y. Dec. 13, 2010)
(internal citation omitted).
DISCUSSION
The document requests in dispute are Plaintiff’s First Request for Production of
Documents, Request No. 5, and Second Request for Production of Documents, Request Nos. 10
and 11, which require, in relevant part, the production of documents concerning the Non-Referred
Cases from September 2008 through September 2012. 2 (See Defs.’ Mem., at 7; Belowich Decl.
Exs. G, H.)
Defendant argues that Plaintiff’s requests for documents related to the Non-Referred Cases,
are improper because they seek the disclosure of information: 1) relating to causes of action that
were dismissed and 2) outside of the scope of Plaintiff’s only remaining cause of action against
O’Dell Defendants, to the extent that the documents sought predate Plaintiff’s September 13, 2012
retirement, the alleged accrual date for Plaintiff’s unjust enrichment claim, by four years. (Defs.’
Mem., at 8, 11.)
Federal Rule of Civil Procedure 26 governs the scope of relevant discovery between
litigants. This rule is liberally construed and is necessarily broad in scope in order “to encompass
any matter that bears on, or that reasonably could lead to [an] other matter that could bear on, any

2

O’Dell was hired at MMKM in September 2008. (See Def.’s Mem., at 2.)

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issue that is or may be in the case.’” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351
(1978). “[D]iscovery is not limited to issues raised by the pleadings, for discovery itself is
designed to help define and clarify the issues … Nor is discovery limited to the merits of a case,
for a variety of fact-oriented issues may arise during litigation that are not related to the merits.”
Oppenheimer Fund, Inc., 437 U.S. at 351. It is well-established within this Circuit that the rule
will be satisfied if there is “any possibility” that the information sought may be relevant to the
subject matter of the action. Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1367 (2d Cir.
1991) (quoting Mallinckrodt Chem. Works v. Goldman Sachs & Co., 58 F.R.D. 348, 353 (S.D.N.Y.
1973)); see also Maresco v. Evans Chemetics, Div. of W.R. Grace & Co., 964 F.2d 106, 114 (2d
Cir. 1992) (noting that the scope of discovery under Rule 26(b) is “very broad”). Furthermore a
request for discovery is considered relevant if there is a possibility that the information sought may
be relevant to the “any party’s claim or defense.” Henry v. Morgan’s Hotel Grp., Inc., 15-CV1789, 2016 WL 303114, at *3 (S.D.N.Y. Jan. 25, 2016); In re Air Crash Near Clarence Ctr., N.Y.,
09-CV-769, 2013 WL 6073635, at *1 (W.D.N.Y. Nov. 18, 2013) (“[p]arties may obtain discovery
regarding any nonprivileged matter that is relevant to any party’s claim or defense”) (citations
omitted).
Given the breadth of the discovery rule and the broad discretion afforded magistrate judges
when resolving discovery disputes, this Court finds that Magistrate Judge Davison was well within
his discretion to decide this discovery dispute as he did. As noted above in the excerpt of the July
19 Order, Magistrate Judge Davison found that the documents concerning the Non-Referred Cases
may be relevant to, at the very least, Plaintiff’s claims against Defendant Kerrigan. This is
sufficient to warrant disclosure under Rule 26, and the disclosure provided is reasonable. 3 As to

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Defendants attempt to fit their arguments into the framework of review by arguing that Magistrate Judge Davison’s
decision was “erroneous and contrary to law” due to its reliance on “mischaracterizations” of “fact and law” is

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Defendants’ contention that Magistrate Judge Davison’s decision is erroneous on the basis that the
documents sought are confidential such that disclosure would be prejudicial, the Court finds that
Magistrate Judge Davison struck a reasonable balance by precluding disclosure of any documents
or portions thereof protected by attorney-client privilege. Defendants have not set forth any rule
or precedent indicating this ruling is clearly erroneous. See Colton v. United States, 306 F.2d 633,
639 (2d Cir. 1962) (“blanket refusal on the grounds of the attorney-client privilege to produce
anything was unjustified …. [T]he attorney-client privilege protects only those papers prepared by
the client for the purpose of confidential communication to the attorney or by the attorney to record
confidential communications, and [plaintiff] has not made the necessary showing that the papers
he refused to produce are of such nature.”). On these bases, the Court finds Magistrate Judge
Davison’s July Order is reasonable, and is neither “clearly erroneous” nor “contrary to law.” 4
CONCLUSION
The Court has reviewed the factual record in this case, including the parties’ pleadings and
accompanying exhibits, as well as Magistrate Judge Davison’s July Order and the applicable legal
authorities, and concludes that the findings and reasoning provided are not clearly erroneous or
contrary to law. Accordingly, the Court DENIES the Defendants’ request to modify or set aside

unavailing. (See Defs.’ Reply Mem. in Support of Defs.’ Objection Pursuant to FRCP 72(a), at 7-8, ECF No. 110.)
There is no indication the Court’s rulings were dependent upon these “characterizations,” whether or not they are in
fact incorrect.
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Defendants argue that Plaintiff mischaracterizes Talley v. Lamb, 100 N.Y.S.2d 112 (Sup. Ct. 1950), and that it is
inapplicable here. (See, e.g., Defs.’ Mem., at 11-12.) This Court disagrees. Lamb indicates that in some
circumstances, employers are entitled to an accounting and a portion of fee generated by employees who manage cases
independently, where the employer has not provided the employee with explicit permission to keep that fee. Relatedly,
Defendants argue that documents submitted as part of their previous motion to dismiss establish that Plaintiff knew
O’Dell P.C. was an active law firm. (Defs.’ Mem., at 6.) That Plaintiff knew of O’Dell P.C.’s existence does not
mean he was aware that Defendant O’Dell “maintained an active law practice at O’Dell P.C.” and managed
undisclosed cases independently. (See id.) As Judge Davison notes, there is a dispute of fact as to these points, see
supra page 3.

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the Order. Accordingly, the Order is affirmed and Defendants' objections (ECF No. 101) are
denied.

Dated:

February·2], 2017
White Plains, New York

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