Sutton et al v. Saint-Sauveur Valley Resorts, Inc.

Filing 156

OPINION AND ORDER granting 143 Motion for Issuance of Letters Rogatory. Signed by Judge Christina Reiss on 1/23/2020. (kp) (Main Document 156 replaced on 1/24/2020) (jlh).

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UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT
MICHAEL I. GOLDBERG,
as court appointed receiver in Securities
and Exchange Commission v. Ariel Quiros,
et al., US. District Court ofSouth Florida,
case no. 16-21301-Gayles,
Plaintiff,
V.

LOUIS DUFOUR, LOUIS HEBERT, and
SAINT-SAUVEUR VALLEY RESORTS,
INC.,
Defendants.

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Case No. 2:17-cv-00061

OPINION AND ORDER GRANTING
PLAINTIFF'S PETITION FOR ISSUANCE OF LETTERS ROGATORY
(Doc. 143)
Plaintiff Michael I. Goldberg brings this action against Defendant Saint-Sauveur
Valley Resorts, Inc., currently known as Valley Summits, Inc. ("SSVR"), Louis Dufour,
and Louis Hebert (collectively, "Defendants") as a court-appointed receiver on behalf of
Jay Peak Hotel Suites LP ("Phase I") and Jay Peak Hotel Suites Phase II LP ("Phase II"),
which were formed pursuant to the federal EB-5 Immigrant Investor Program (the "EB-5
Program") in order to facilitate investment in Jay Peak, Inc. ("Jay Peak"), a Vermont
corporation which owns a ski resort in Jay, Vermont (the "Resort"). In June of 2008,
SSVR sold the Resort to Ariel Quiros and his corporation, Q Resorts, Inc. ("Q Resorts").
Pending before the court is Plaintiffs November 1, 2019 petition for issuance of
letters rogatory to depose Alwynn Gillett, Esq., and Janice Naymark, Esq., attorneys who
work for or formerly worked for the Canadian law firm Spiegel Sohmer and who
represented SSVR in the 2008 sale of the Resort to Mr. Quiros. (Doc. 143.) Defendants
filed an opposition on November 15, 2019, arguing that Plaintiff has failed to make a

compelling showing of why he needs to depose Attorneys Gillett and Naymark as
Plaintiff has conducted no deposition discovery to date and thus cannot demonstrate that
the information sought is not available from other sources. In addition, Defendants
contend the information sought is protected by the attorney-client privilege.
Plaintiff is represented by Joshua L. Simonds, Esq., and Keith L. Miller, Esq.
Defendants are represented by David M. Pocius, Esq., and Laurence May, Esq.

I.

Relevant Factual and Procedural Background.
Attorneys Gillett and Naymark are Canadian attorneys practicing law in Montreal,

Canada. According to Defendants, Attorney Gillett is currently employed at Spiegel
Sohmer, while Attorney Naymark has left the firm. Plaintiff asserts that these attorneys
"gave counsel to Defendants, which directly resulted in the transfer of $18 million of
investor funds, which Quiros ultimately used to acquire the [Jay Peak] resort." (Doc. 143
at 1.) Both attorneys have refused to voluntarily appear for depositions in Montreal.
Spiegel Sohmer represented SSVR in the 2008 sale of the Resort but does not
represent Defendants in this litigation. In support of his petition, Plaintiff attaches a
proposed Request for International Judicial Assistance, in which he describes the
proposed topics for examination as follows:
Gillett and Naymark will be questioned on topics regarding the events,
communications[,] and documents related to the sale of the Resort,
including the transfer of investor monies to Quiros prior to the sale, which
he allegedly tendered back to the Defendants as consideration for the sale.
Each was or may have been involved in various communications with
Quiros or his representatives and other third parties in connection with the
sale of the Resort and the pre-sale transfer of investor monies.
(Doc. 143-1 at 3.)
Plaintiff asserts that the depositions of Attorneys Gillett and Naymark will yield
relevant evidence because documents produced in discovery "indicate that the transfer of
investor funds prior to the closing was repeatedly considered and discussed between the
individual Defendants, their local counsel in Vermont[,] and [Attorneys Gillett and
Naymark] both before and after the closing on June 23, 2008." (Doc. 143 at 3-4.) In
addition, Plaintiff states that his counsel "has exhausted alternative means of obtaining
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evidence and the evidence sought cannot be obtained otherwise than through the
examination of these witnesses." Id. at 4.
Plaintiff has submitted an "Offer of Proof' which contains unredacted
correspondence produced by SSVR, including the following communications:
•

•

On May 28, 2008, Mark H. Scribner of Carroll & Scribner, P.C. emailed Attorney
Gillett, copying Defendants Dufour and Hebert as well as Attorney Naymark,
regarding the "SSVR Stock Transfer[.]" Id. at 27. In addition to forwarding the
draft assignment of the purchase and sale agreement and a promissory note "in
connection with [P]hase I," Mr. Scribner informed Attorney Gillett that he could
not provide a "comfort letter" opining that neither MSSI nor SSVR will have
"any responsibility post-closing for any of the [P]hase I or [P]hase II obligations
under the offering statements[]" due to conflicts of interest which could arise
from Mr. Scribner's representation of Jay Peak, Inc. in preparing the offerings
and continued representation of the Phase I and II investors. Id. Mr. Scribner
further highlighted that the Phase I and II limited partnerships, not MSSI or
SSVR, were the soliciting entity for the offerings, and therefore "[t]he only
'obligations' of SSVR in either offering were to transfer a piece of land to the
limited partnerships by sale or lease." Id.

•

1

On May 20, 2008, Attorney Naymark forwarded Joel Burstein, the then manager
of Raymond James & Associates ("Raymond James") and Mr. Quiros's son-inlaw, copying Marielle Laplante, account opening documents for a Phase I account
pursuant to their "conversation a few moments ago[.]" (Doc. 148-1 at 68.) She
explained that the "funds which will be transferred into this account are to be used
solely to purchase T-bills or other short term investment certificates which are
government-insured[]" and that the account may "not to be linked with any other,
nor may it be used as a basis or security for any line of credit or margin account
or other form of borrowing." Id. In closing, she stated that Defendants Dufour
and Hebert of Mont Saint-Sauveur International ("MSSI") must provide all
instructions pertaining to the account.

On June 17, 2008, Attorney Gillett emailed Fred Burgess 1 at the Burgess Law
Firm and William Kelly, copying William Stenger, Ms. Laplante, and Attorney
Naymark regarding the "Jay Peak Hotel Suites LP Phase II Account[,]" in which
she expressed concern over an email from Raymond James stating that Mr.
Stenger has opened a Phase II account at Raymond James because "[t]he term
sheet and the stock transfer agreement remain clear that no investments for Phase
II are to be accepted prior to Closing." Id. at 39. She requested confirmation that
no funds have been accepted and asked whether any Phase II "entities have now
been created." (Doc. 148-1 at 39.) Mr. Stenger responded that the Phase II

Plaintiff asserts that Mr. Burgess represented Mr. Quiros in the 2008 sale of the Resort.
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account was opened before the agreement was signed, that nothing has happened
since, and that the Phase II account contained $7 million. Attorney Gillett
forwarded Mr. Stenger's response to Mr. Scribner, copying Mr. Stenger,
Defendants Dufour and Hebert, and Attorney Naymark, asking how it was
possible that the Phase II account held $7 million because the "documentation had
errors ... and the new Phase II partnership had not been formed." Id. at 38.
•

On June 18, 2008, Attorney Naymark emailed Mr. Quiros, Mr. Burgess, Mr.
Kelly, and Mr. Burstein, copying Mark Wahl at Chittenden Bank, Mr. Scribner,
Mr. Stenger, Defendants Dufour and Hebert, Ms. Laplante, and Attorney Gillett,
regarding the transfer of Phase I and II funds to Raymond James and related
escrow obligations. She noted that the Phase II funds consist of oversubscribed
Phase I funds, transferred with the consent of investors, although she had not seen
any documentation of the oversubscriptions. Mr. Burstein responded that
Raymond James is "not supervising EB[-]5 money[]" and that "we are not escrow
agents." Id. at 55. He stated another financial institution will be supervising the
EB-5 funds and characterized Raymond James's role as "manag[ing] the
corporate assets in a prudent manner and follow[ing] instruction by the authorized
parties." Id.

•

Later on June 18, 2008, Attorney Naymark emailed Mr. Stenger, copying
Defendants Dufour and Hebert, Ms. Laplante, and Attorney Gillett, expressing
her "need to understand why the Phase II money may be freely transferred." Id.
at 58. She asked for identification of the documents the investors had signed and
the instructions they had issued when the oversubscribed Phase I funds were
transferred to Phase II because if "nothing was ever signed telling you how to
hold onto it for Phase II, then the funds are in a sort of legal limbo." Id. She
acknowledged that Phase II did not have escrow requirements and asked Mr.
Stenger if the investors knew that. Mr. Stenger replied that "we" had fourteen
investors who were holdovers from Phase I but had signed Phase II agreements.
(Doc. 148-1 at 58.) According to Mr. Stenger, "[m]oving the funds into a higher
yield secured account is within the [purview] of the Phase II program." Id.

•

On June 20, 2008, Attorney Naymark emailed Mr. Burgess and Mr. Stenger,
copying Mr. Scribner, Defendants Dufour and Hebert, Ms. Laplante, and Mr.
Burstein, to ask if anyone was working on the transfer of Phase II funds from
Chittenden Bank to Raymond James. She reviewed the sequence of events
related to the transfer in light of the fact that the Phase II partnership did not
legally exist, stating that Mr. Stenger needed to issue transfer instructions upon
Defendants Dufour's and Hebert's approval. She noted their approval would be
given "as soon as the price adjustment/operating line issue is resolved by Mr.
Quiros and the 2 Louis." Id. at 72 .

•

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Sauveur were deleted[]" so as "to ensure that no versions mentioning MSSI or
Saint-Sauveur Valley Resorts are in the possession of any investors or are being
circulated." Id. at 81.

II.

Conclusions and Legal Analysis.
A.

Standard of Review.

Under Fed. R. Civ. P. 28(b)(l)(B), a deposition may be taken in a foreign country
"under a letter of request, whether or not captioned a 'letter rogatory[.]"' A court may
issue a letter of request "(A) on appropriate terms after an application and notice of it;
and (B) without a showing that taking the deposition in another manner is impracticable
or inconvenient." Fed. R. Civ. P. 28(b)(2). "It is well settled that the decision of whether
to issue letters rogatory lies within a district court's sound discretion[,]" United States v.
Al Fawwaz, 2014 WL 627083, at *2 (S.D.N.Y. Feb. 18, 2014) (alteration and footnote

omitted), and "[ c]ourts routinely issue such letters where the movant makes a reasonable
showing that the evidence sought may be material or may lead to the discovery of
material evidence." Netherby Ltd. v. Jones Apparel Grp., Inc., 2005 WL 1214345, at* 1
(S.D.N.Y. May 18, 2005) (considering a motion for the issuance of letters rogatory to
permit third-party discovery in Canada).
Pursuant to 28 U.S.C. § l 78l(b)(2), a letter rogatory or request may be transmitted
"directly from a tribunal in the United States to the foreign or international tribunal,
officer, or agency to whom it is addressed[.]" "In considering the issuance of letters
rogatory, U.S. courts apply the discovery principles contained in [Federal Rule of Civil
Procedure] 26." Lantheus Med. Imaging, Inc. v. Zurich Am. Ins. Co., 841 F. Supp. 2d
769, 776 (S.D.N.Y. 2012). Under Fed. R. Civ. P. 26(b)(l), parties are entitled to "obtain
discovery regarding any nonprivileged matter that is relevant to any party's claim or
defense[.]" Relevant information "need not be admissible in evidence to be
discoverable." Id. "[A]s in all matters relating to discovery, the district court has broad
discretion to limit discovery in a prudential and proportionate way." EM Ltd. v. Republic
ofArgentina, 695 F.3d 201,207 (2d Cir. 2012).

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"The deposition-discovery regime set out by the Federal Rules of Civil Procedure
is an extremely permissive one to which courts have long 'accorded a broad and liberal
treatment to effectuate their purpose that civil trials in the federal courts [need not] be
carried on in the dark."' In re Subpoena Issued to Dennis Friedman, 350 F.3d 65, 69 (2d
Cir. 2003) (alteration in original) (quoting Schlagenhaufv. Holder, 379 U.S. 104, 114-15
(1964)). Depositions may be taken "regarding any matter, not privileged, that is relevant
to the claim or defense of any party[.]" Id. (emphasis in original) (citing Fed. R. Civ. P.
26(b)(l)). To the extent any claim of privilege is made, the deponent must assert that
privilege for each question posed. See In re Grand Jury Subpoena Dated Jan. 4, 1984,
750 F.2d 223, 224-25 (2d Cir. 1984) ("[T]he burden is on a party claiming the protection
of a privilege to establish those facts that are the essential elements of the privileged
relationship, ... a burden not discharged by mere conclusory or ipse dixit assertions.")
(citations and internal quotation marks omitted).
Foreign courts receiving letters rogatory "may have differing standards in
determining whether to execute letters of request with regard to pre-trial discovery."
Crouch v. Liberty Pride Corp., 2016 WL 4718431, at *2 (E.D.N.Y. Sept. 9, 2016).
Canada, which is not a party to the Hague Convention on the Taking of Evidence Abroad
in Civil or Commercial Matters, applies its own "domestic statute or common law" to
letters rogatory. Lantheus, 841 F. Supp. 2d at 777; see also Allianz Sigorta, A.S. v.
Ameritech Indus., Inc., 2016 WL 1127705, at *2 (E.D. Cal. Mar. 23, 2016) (noting
Canada is not a party to this convention). Under the Canada Evidence Act, a Canadian
court maintains the discretion to "command the attendance of [a] party or witness for the
purpose of being examined" when "any court or tribunal outside Canada, before which
any civil, commercial or criminal matter is pending, is desirous of obtaining the
testimony in relation to that matter of a party or witness within the jurisdiction of the first
mentioned court[.]" Canada Evidence Act, R.S.C. 1985, c. C-5, § 46(1).
B.

Whether Plaintiff May Depose SSVR's Former Attorneys.

Defendants do not contest Plaintiffs petition for letters rogatory on the grounds
that the information sought is irrelevant, but rather assert that Plaintiff improperly seeks
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to depose two attorneys who formerly represented SSVR in connection with the
transaction underlying Plaintiffs claims for relief. In general, "depositions of opposing
counsel are disfavored[.]" United States v. Yonkers Bd. ofEduc., 946 F .2d 180, 185 (2d
Cir. 1991); see also Kleiman ex rel. Kleiman v. Jay Peak, Inc., 2012 WL 2498872, at *5
(D. Vt. June 27, 2012) ("Despite the otherwise lenient standard for discovery, depositions
of opposing counsel are disfavored.") (citation and internal quotation marks omitted).
However, Attorneys Gillett and Naymark are not opposing counsel in this lawsuit and,
indeed, play no role in it other than as fact witnesses. See Aco Fabrica de Calcado S.A.
v. Tic-Tac-Toes Mfg. Corp., 2008 WL 11355382, at* 1 (N.D.N.Y. Apr. 22, 2008)
(allowing the deposition of an attorney that represented the plaintiff "in various matters
that occurred prior to the commencement of this litigation[]" because of the "simple and
basic relevant fact ... that [the attorney] is not the opposing trial counsel in this action").
Regardless of whether a lawyer is opposing counsel, "the fact that the proposed
deponent is a lawyer does not automatically insulate him or her from a deposition nor
automatically require prior resort to alternative discovery devices, but it is a circumstance
to be considered." Friedman, 350 F.3d at 72. The Second Circuit has instructed courts to
take "a flexible approach to lawyer depositions whereby the judicial officer supervising
discovery takes into consideration all of the relevant facts and circumstances to determine
whether the proposed deposition would entail an inappropriate burden or hardship[,]"
including:
[T]he need to depose the lawyer, the lawyer's role in connection with the
matter on which discovery is sought and in relation to the pending
litigation, the risk of encountering privilege and work-product issues, and
the extent of discovery already conducted.
Jd.2

1.

The Need to Depose Attorneys Gillett and Naymark.

Plaintiff seeks to depose Attorneys Gillett and Naymark because they "were
percipient witnesses to critical events dealing with third parties." (Doc. 148 at 3.)
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Plaintiff contends that "the discussion ... in Friedman was advisory and not dispositive."
(Doc. 148 at 3.) Plaintiff is correct that in In re Subpoena Issued to Dennis Friedman, 350 F.3d
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According to Plaintiffs Offer of Proof, Attorneys Gillett and Naymark have personal
knowledge regarding SSVR's obligations pursuant to the Phase I and II offering
memoranda; the transfer of Phase I and II funds from Chittenden Bank to Raymond
James prior to the June 2008 sale of the Resort; the role of Mr. Stenger and Defendants
Dufour and Hebert in those transactions; and the representations made by those
individual defendants as well as by Raymond James regarding the transfer and
management of those funds. Third parties are copied on portions of the communications;
however, only Attorneys Gillett and Naymark can speak to "every fact and opinion"
contained in the emails they authored. Doe v. Town of Greenwich, 2019 WL 4267692, at
*5 (D. Conn. Sept. 10, 2019) (permitting the deposition of opposing counsel regarding a
conversation between counsel and a defendant, even though similar testimony was
available through a third party, where "only [the attorney] and [the defendant] have
firsthand knowledge" of the contents). Plaintiff has thus established a need to depose
Attorneys Gillett and Naymark.
Defendants rely on Alcon Laboratories, Inc. v. Pharmacia Corp., 225 F. Supp. 2d
340 (S.D.N.Y. 2002) for the proposition that Plaintiff must exhaust all other avenues of
discovery prior to deposing SSVR's former counsel. Alcon, which is both dated and nonprecedential, is distinguishable. There, the court applied the Eighth Circuit's ruling from

Shelton v. American Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986), that a party
"must show that no other means exist to obtain the information it seeks other than to
depose opposing counsel[.]" Alcon, 225 F. Supp. 2d at 343. The Friedman court
disagreed with Shelton and rejected Shelton's application in the Second Circuit. 350 F.3d
at 72 n.4 (explaining that the court issued a non-binding opinion because two underlying
courts "have assumed that the Shelton rule has been adopted by our Court, a view with
which we disagree"). Under Friedman's "flexible approach[,]" Plaintiffs failure to
65 (2d Cir. 2003), the lawyer agreed to the deposition prior to the issuance of the Second
Circuit's opinion, rendering the opinion advisory. The Friedman court characterized its decision
as a "discussion of the merits [that] will hopefully serve the useful purpose of cautioning about
the limits of our prior rulings on a frequently litigated issue and perhaps avoid some needless
appeals." Id. at 72 n.4. The court finds Friedman's dicta persuasive.
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exhaust other discovery mechanisms is merely part of the "relevant facts and
circumstances" to be considered and does not preclude taking Attorneys Gillett's and
Naymark's depositions. Id. at 72.

2.

Attorneys Gillett's and Naymark's Roles.

Attorneys Gillett's and Naymark's depositions are not "likely to have a disruptive
effect on the attorney-client relationship and on the litigation of the case" because they
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are not counsel in this litigation. See Johnson v. City of NY., 2018 WL 6727329, at *3
(E.D.N.Y. Dec. 21, 2018) (citation omitted) (permitting the deposition of opposing
counsel where the plaintiff had two other attorneys representing him in the litigation and
where the attorney had at least secondhand knowledge concerning a "key question in this
lawsuit").

3.

The Risk of Encountering Privilege and Work-Product Issues.

Defendants claim that all of Attorneys Gillett's and Naymark's testimony
regarding the "events, communications[,] and documents related to the sale of the
Resort[]" implicates the attorney-client privilege and Canadian ethical obligations,
rendering their examination "futile[.]" (Doc. 147 at 7-8.) However, Plaintiffs Offer of
Proof reveals that SSVR has disclosed the contents of emails and letters to third parties to
whom no attorney-client privilege extends and SSVR thus appears to have waived any
attorney-client privilege that may have existed. See State v. Aiken, 2015 VT 99, ,i 20,200
Vt. 247, 255, 129 A.3d 87, 92 (ruling that a defendant "waived the attorney-client
privilege to the extent of his representations to [a third party] about his interaction with
the public defender"); Citibank, NA. v. City ofBurlington, 2013 WL 12227252, at * 1 (D.
Vt. July 30, 2013) ("Under Vermont law, the attorney-client privilege may be waived if a
party puts a communication between itself and its attorney at issue.") ( citing Chase v.

Bowen, 2008 VT 12, ,i 30, 183 Vt. 187,201,945 A.2d 901,911; Steinfeldv. Dworkin,
515 A.2d 1051, 1052 (Vt. 1986)); 232511 Invs., Ltd. v. Town ofStowe Dev. Review Bd.,
2006 WL 5868424, at *2 (Vt. Feb. 1, 2006) ("[T]he attorney-client privilege may be

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waived by disclosure to third parties, and ... such waiver extends to all other
communications on the same subject matter[.]") (unpublished entry order).
Because Plaintiff seeks to depose Attorneys Gillett and Naymark regarding nonprivileged communications, the court will not preclude their depositions. Attorneys
Gillett and Naymark may nonetheless "invoke the attorney-client privilege and refrain
from responding if asked to disclose confidential communications between [themselves]
and [their clients][.]" Kleiman, 2012 WL 2498872, at *6 (noting "it is somewhat difficult
to determine whether the attorney-client privilege applies to [the attorney's] potential
testimony" because his deposition "has not yet occurred") (emphasis in original); see also
In re Gawker Media LLC, 2017 WL 2804870, at *7 (Bankr. S.D.N.Y. June 28, 2017)

(holding that if attorneys' responses "implicate a privilege ... , the [c]ourt can address
those issues as it would in any other litigation"). The court also acknowledges that
Canadian law and ethical obligations may be implicated in the application of the
attorney-client privilege.

4.

The Extent of Discovery Already Conducted.

Plaintiff has not undertaken any other depositions in this matter as of the date of
his petition. Although the parties have exchanged written discovery, the deadline for
depositions has not expired under the Fourth Amended Stipulated Discovery Schedule
and nothing precludes the requested depositions.

C.

Scope of the Authorized Depositions.

The totality of the circumstances weighs in favor of permitting the depositions of
Attorneys Gillett and Naymark. In recognition of Defendants' concerns regarding the
breadth of the proposed topics for deposition, as well as Canadian law governing the
attorney-client privilege, the court exercises its discretion to limit their depositions to the
communications, issues, and subject matter raised in Plaintifrs Offer of Proof. See EM
Ltd., 695 F .3d at 207 (holding "the district court has broad discretion to limit discovery in

a prudential and proportionate way"); Mackenzie Architects, P. C. v. VLG Real Estates
Developers, LLC, 2017 WL 4898743, at *4 (N.D.N.Y. Mar. 3, 2017) (limiting the

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deposition of plaintiffs attorney in a trademark case "solely to the issues raised in the
counterclaims and the affirmative defenses").
CONCLUSION

Because their depositions may yield evidence that is "relevant to [Plaintiffs]
claim ... and proportional to the needs of the case," Fed. R. Civ. P. 26(b)(l), the court
GRANTS Plaintiffs petition for the issuance of letters rogatory to depose Attorneys
Gillett and Naymark. (Doc. 143.) The court further exercises its discretion to limit their
depositions to the communications, issues, and subject matter set forth in Plaintiffs Offer
of Proof. Plaintiff is directed to serve the letters rogatory at his own expense.
SO ORDERED.

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Dated at Burlington, in the District of Vermont, this _2!_ day of January, 2020.

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Christina Reiss, District Judge
United States District Court

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