B. Discovery of the Removal of Boxes After the Storm
*3 Following the unsuccessful efforts at settlement made during the May 19, 2016 conference, Allstate sought additional discovery in an effort to verify plaintiffs’ claimed losses. During the course of that discovery, Allstate learned that several days after the storm, security guards were hired to secure the Toussies’ home. (9/23/16 Tr.
[12] at 4). Once identified, these guards indicated that, contrary to plaintiffs’ representations that all had been lost or stolen, boxes of items were packed up and moved, at the Toussies’ direction, from the Toussies’ home to a secure storage facility in Secaucus, New Jersey shortly after the storm. (Id.) When Allstate raised this issue at a conference held before this Court on September 23, 2016, counsel for the Toussies represented that there were some items left in the home after the looters, but “the expensive china that was stolen was stolen ... and there was silverware left ... [that] got packed in boxes presumably.” (Id.at 8). Following the conference, the Court Ordered the Toussies to provide “a list of individuals in charge of supervising the packing of plaintiffs’ home, along with the names of the Toussie employees or the company that actually packed the boxes and current addresses.” (9/26/16 Order at 1).
[13]Allstate subsequently learned that Lockson, Inc. (“Lockson”), a moving and storage facility in Secaucus, New Jersey, had been hired to salvage property from the home and had removed approximately 200 boxes marked with alpha numeric codes and stored them temporarily. (Cntrclm ¶¶ 18-21, 183). According to the Lockson documents, the property in the boxes was cleaned, repackaged, and subsequently transported to a storage facility operated by Christie’s Fine Arts Storage Services (“CFASS”). (Cntrclm ¶¶ 30, 35). The boxes contained, among other items, a large amount of silver items, Flora Danica china, and St. Louis crystal stemware, vases, and candlesticks. (Id. ¶¶ 25-27). Of the boxes, Allstate claims that 84 boxes were subsequently removed from CFASS and remain unaccounted for. (Id. ¶¶ 189-90).
Not only did this information about the approximately 200 boxes of personal items salvaged from the home after the storm contradict the statements previously made by the Toussies and by their adjuster that the Toussies had “lost everything,” but the information received from Lockson included the names of the people who did the packing of the boxes – information that Allstate had been requesting but that plaintiffs had failed to provide despite a specific Court Order. (Allstate 4/26/17 Ltr. at 1-2; see also 9/26/16 Order at 1). Additional information obtained from Lockson further indicated that Ms. Toussie was personally involved in checking the items and yet plaintiffs failed to disclose that information to the Court despite the Court’s Order issued in an effort to obtain information about these items. (Allstate 4/26/17 Ltr. at 2-3). Plaintiffs not only failed to disclose the involvement of either Lockson or CFASS, but they submitted a letter indicating that the people who packed the boxes were employed by iMoveGreen, a defunct company. (Id. at 2). When asked to produce their American Express statements so that Allstate could verify their claims about iMoveGreen and other things, plaintiffs deliberately redacted the Lockson charges for this work. (Id.)
I. Standards for Amendment
A. Legal Standards - Motion to Amend a Pleading
Rule 15 of the Federal Rules of Civil Procedure provides that when a party seeks to amend its pleading beyond the time period allowed for an amendment as a matter of course, that party “may amend its pleading only with the opposing party’s written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2). Thus, absent the opposing party’s consent, the Rule requires a party seeking to amend its pleadings to obtain permission from the court before doing so. Id.
The letter and spirit of Rule 15(a)(2) guide the courts in the exercise of their broad discretion in deciding a motion to amend, and thus “motions to amend should generally be denied in instances of futility, undue delay, bad faith or dilatory motive, or undue prejudice to the non-moving party.” Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122, 126 (2d Cir. 2008) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)); accord McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200-01 (2d Cir. 2007). The party opposing amendment bears the burden of demonstrating good reason to deny the motion. Speedfit, LLC v. Woodway USA, Inc., No. 13 CV 1276, 2015 WL 6143697, at *3 (E.D.N.Y. Oct. 19, 2015). Nonetheless, Rule 15 expresses a strong presumption in favor of allowing amendment, providing that “[t]he court should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2).
An amendment is futile if the proposed pleading would fail to state a claim upon which relief could be granted and thus could not survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Perfect Pearl Co., Inc. v. Majestic Pearl & Stone, Inc., 889 F. Supp. 2d 453, 459 (S.D.N.Y. 2012) (citing Dougherty v. North Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002)). Thus, an amendment is futile if the proposed pleading does not contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The proposed amendment must contain “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 555). In determining whether the proposed amended pleading states a plausible claim and therefore would not be futile, this Court must accept as true all well-pleaded factual allegations and must draw all reasonable inferences in favor of the party seeking leave to amend. See DiFolco v. MSNBC Cable, LLC, 622 F.3d 104, 110-11 (2d Cir. 2010); accord 5B Charles A. Wright et al., Federal Practice and Procedure § 1357 (3d ed. 2004).
II. Allstate’s Motion to Amend
Allstate asserts that under the language of the relevant insurance policy at issue, there is no coverage available to any insured who conceals or misrepresents material facts either before or after a loss. In this case, Allstate alleges that plaintiffs concealed or misrepresented facts both before and after the storm relating to the items for which losses are being claimed, and as a consequence, Allstate contends that it is under no obligation to reimburse the Toussies for any losses relating to the items allegedly stolen from the home. Allstate also asserts that it has the right to seek reimbursement from the Toussies for items for which it has already paid. Thus, Allstate seeks to amend its Answer to add, among other things, four counterclaims and supporting factual allegations, stemming from information obtained during the course of discovery in this case.
*9 Allstate seeks to amend to add its first counterclaim for misrepresentation/breach of contract based on the Toussies’ alleged misrepresentations related to the fine arts items listed on the SPP list. Allstate alleges that it paid the Toussies the full amount of $365,450 under the SPP provision of the Policy, based on the representations of the Toussies and their agents that every item listed on their Fine Arts schedule had been lost during the storm. (Cntrclm ¶¶ 53, 54; see Ex. D to Cntrclm). However, Allstate alleges that after conducting discovery and inspecting the property found at CFASS, Allstate has identified, through matching Tiffany & Co. order numbers and pattern numbers, 45 out of 52 specific pieces of property that the Toussies claimed as lost in their SPP or Fine Arts claim as present in the CFASS unit. (Cntrclm ¶ 68 (alleging that Allstate has “found 45 items matching the descriptions of the lost SPP property in storage at CFASS”)). Allstate further alleges that there may have been additional items from the SPP claim that “were removed from CFASS by the Toussies prior to filing their lawsuit against Allstate.” (Id. ¶ 69). Based on misrepresentations by the Toussies regarding the loss of the fine arts pieces, Allstate alleges that it was induced “to pay money” to which the Toussies were not entitled. (Id. ¶ 77).
The first counterclaim alleges that under the terms of the Policy, the misrepresentations made by the Toussies that all of the property insured under the SPP Coverage had been lost “was a material fact and circumstance” (id. ¶ 80), that constitutes a breach of the Toussies’ obligations under the Policy. Specifically, under the Policy terms, Allstate will “not cover you or any other person insured under this policy who has concealed or misrepresented any material facts or circumstances, before or after a loss.” (Id. ¶ 81). As a result, Allstate alleges that it has been damaged in the amount of $365,450, plus interest. (Id. ¶¶ 79, 218-219).
Given these material misrepresentations, Allstate also seeks a declaration that “there is no coverage under the Policy for [plaintiffs’] fine arts/scheduled personal property” or for “amounts paid for wind damage, unscheduled personal property damaged by a fallen tree and living expenses,” and that plaintiffs “are required to disgorge all of the payments made by Allstate under the Policy relating to Super storm Sandy, in an aggregate amount of $1,145,487.61 (plus interest).” (Id. ¶¶ 82, 83, 213, 218, 219).
The second proposed counterclaim that Allstate seeks to add is for misrepresentation/breach of contract based on the misrepresentations related to the UPP claim. According to Allstate’s proposed second counterclaim, the Toussies sought reimbursement under the Policy in the amount of $1,658,250 – the full value of the UPP coverage under the Policy – even though the claimed UPP losses, as set forth on Exhibit D to Allstate’s motion to amend, amount to $400,000 less than the claim. (Id. ¶¶ 85, 86). Allstate alleges that the Toussies failed to inform Allstate of the alleged theft of unscheduled personal property until more than two years after the theft, prejudicing Allstate’s ability to investigate. (Id. ¶ 89).
Allstate further claims that the Toussies and their agents: 1) misstated the replacement costs of various items (id. ¶¶ 102, 103-04, 105, 146, 152); 2) misrepresented that they had lost “everything,” when in fact they knew that “millions of dollars of personal property was saved” (id.¶¶ 129, 140-41); 3) made misrepresentations as to the absence of any property left in the home to protect after the storm, even though they paid $21,600 to a security company to protect their home (id. ¶¶ 134, 135); and 4) made misrepresentations and omitted material facts and information during the course of discovery. (Id. ¶¶ 154-185). In addition, Allstate asserts that during the course of the inspection of CFASS, St. Louis crystal and Flora Danica china, listed as stolen by the Toussies, were found in the storage facility. (Id. ¶¶ 224-25). Allstate therefore seeks a declaration that as “a result of the concealment and misrepresentation of material facts and circumstances ... the Toussies have breached the terms of the Policy and there is no coverage for the UPP claim.” (Id. ¶ 231).
The third counterclaim is for breach of contract. Allstate argues that the Policy contains language stating that “ ‘Allstate does not cover you or any other person insured under this policy who has concealed or misrepresented any material facts or circumstance, before or after a loss.’ ” Thus, Allstate claims that as a result of the Toussies’ “concealment and misrepresentation of material facts and circumstances,” all coverage under the Policy is vitiated. (Id. ¶¶ 234). Allstate seeks disgorgement of $1,145,487.61 in payments previously made to the Toussies under the Policy, payments to which Allstate now argues plaintiffs were not entitled. (Id. ¶¶ 233-35).
*10 The fourth and final counterclaim alleges a breach of contract based on the Toussies’ failure to comply with the Policy requirement that they promptly report an alleged theft to the police or Allstate. (Id. ¶¶ 237-39). According to the allegations in the Counterclaims, the Policy requires that “ ‘[a]ny theft ... be promptly reported to the police.’ ” (Id. ¶ 7). Allstate alleges that the Toussies waited until February 2015 to report the theft to Allstate and did not report it to the police until July 2015. (Id. ¶¶ 237, 238, 241). Allstate alleges that the failure to promptly notify Allstate and the police of the alleged theft “violated the policy and prejudiced Allstate’s ability to investigate the alleged theft.” (Id. ¶ 242).
Plaintiffs oppose Allstate’s motion to amend on several grounds: 1) with respect to Allstate’s second proposed counterclaim, alleging a breach of contract for the UPP claim, and the fourth proposed counterclaim based on a failure to cooperate, plaintiffs argue that the amendment should be denied because Allstate has not suffered any damages, and therefore the counterclaims are futile; or, in the alternative, 2) plaintiffs argue that Allstate’s second proposed counterclaim for breach of contract based on the UPP claims and the fourth proposed counterclaim based on a failure to cooperate are duplicative of Allstate’s affirmative defenses and therefore futile. Plaintiffs oppose Allstate’s third proposed counterclaim for policy vitiated as based on a misreading of an “exclusion clause” in the Policy in that nothing in the clause suggests that misrepresentations and omissions in connection with the UPP claim means that the Toussies lost their rights under their other unrelated claims. Finally, plaintiffs argue that all of the counterclaims were brought in bad faith. (See Pls.’ 5/15/18 Mem.).
[44] Apart from the bad faith argument, plaintiffs never address Allstate’s first proposed counterclaim for misrepresentation/breach of contract based on alleged misrepresentations related to the SPP list.
The Court addresses each of plaintiffs’ responses in turn.
B. Duplicative Counterclaims
Plaintiffs also argue that the Court should deny the amendment to add the second and fourth counterclaims as duplicative of and adding nothing to the defendant’s affirmative defenses. (Id. (quoting Arista Records LLC v. Usenet.com., Inc., No. 07 CV 8822, 2008 WL 4974823, at *4 (S.D.N.Y. Nov. 24, 2008)). Specifically, plaintiffs argue that the second proposed counterclaim seeking a determination of “no coverage” as to plaintiffs’ UPP claim is duplicative of Allstate’s Ninth and Eleventh Affirmative Defenses which allege that plaintiffs’ UPP claim is barred “by the exclusions, limitations of liability and/or other terms, conditions and definitions contained in the Allstate insurance policy,” and “outside the scope of coverage.” (Id. (quoting Ans.)).
[48] Similarly, plaintiffs argue that the fourth counterclaim for failure to cooperate seeks a determination of “no coverage” based on the Toussies’ failure to cooperate with Allstate, which plaintiffs contend is duplicative of Allstate’s Tenth and Twelfth Affirmative Defenses. (Id. at 4; see Am. Ans., Affirmative Defense No. Ten (alleging that plaintiffs’ “failure to comply with the provisions, terms and conditions of the Allstate policy is a material breach of said policy, thus vitiating coverage;” Affirmative Def. No. Twelve (alleging that plaintiffs’ claims are barred by their “failure to cooperate with Allstate’s investigation of the claim ....”))).
However, as Allstate notes in its Reply Memorandum, plaintiffs’ argument that the motion to add the proposed counterclaims should be denied because the claims are “duplicative” or “add nothing to” the existing Affirmative Defenses, is factually and legally without merit. (Allstate Reply at 3-5). First, a review of the proposed counterclaims demonstrates that factually they are much more extensive and contain numerous paragraphs detailing the facts discovered by Allstate during the course of discovery, many of which Allstate asserts were unknown at the time the original Answer was filed. (Id. at 3-4).
Specifically, during the course of discovery, Allstate obtained information from a number of third-party sources, including from the storage facility, Lockson, which is where the 190 boxes of personal items were removed to originally after the storm, from CFASS, and from the subsequent inspections of the items contained in the boxes themselves, belying the plaintiffs’ claims that “everything was lost” as a result of the thieves and the storm. (Id. at 4). In addition, the plaintiffs’ own actions, including their continued refusal to provide their housekeeper’s name, and other efforts that Allstate claims were designed to block Allstate from its investigation of the claim, were not known at the time the original Affirmative Defenses were filed. This new information makes clear Allstate’s claim that plaintiffs have failed to cooperate with Allstate in violation of their responsibilities under the Policy. (Id.)
*12 As for the legal basis for plaintiffs’ objection on the grounds of duplicative affirmative defenses, Allstate notes that once again, the only case cited by plaintiffs is distinguishable. In Arista Records, the case cited by plaintiffs, the counterclaim brought pursuant to the Digital Media Control Act, 17 U.S.C. § 512, was futile because that statute did not provide for an affirmative cause of action. Arista Records LLC v. Usenet.com, Inc., 2008 WL 4974823, at *4. Moreover, unlike the allegations here, the proposed counterclaims in Arista Records simply recited the subsections of the Act and contained no additional factual allegations beyond the legal assertions contained in the affirmative defenses. Id.
Having considered the plaintiffs’ arguments, this Court respectfully recommends a finding that the second and fourth proposed counterclaims, seeking a declaration that Allstate owes no obligation to pay under the Policy due to plaintiffs’ alleged breach of the Policy through misrepresentations and a failure to cooperate, are not futile. The Court further respectfully recommends the district court find that these proposed counterclaims are not barred by Allstate’s affirmative defenses based on similar factual allegations.
C. Policy Exclusion Clause
Plaintiffs object to the amendment to add the third proposed counterclaim for policy vitiated as futile based on plaintiffs’ reading of an “exclusion clause” of the Policy. (Pls.’ 5/15/18 Mem. at 4-7). In essence, in the Policy vitiated counterclaim, Allstate is alleging that because plaintiffs concealed and/or misrepresented facts relating to the UPP and SPP claims, Allstate is entitled to disgorgement of all monies paid to plaintiffs on several claims, not just the amounts paid for the SPP claim. Plaintiffs contend that Allstate is wrong in its interpretation of this “exclusion clause,” and that exclusions in an insurance policy are subject to a “ ‘strict and narrow construction.’ ” (Id. at 5 (quoting Illinois Union Ins. Co. v. US Bus Charter & Limo Inc., 291 F. Supp. 3d 286, 293 (E.D.N.Y. 2018))). Here the clause at issue provides that: “Allstate does not cover you or any other person insured under this policy who has concealed or misrepresented any material facts or circumstances, before or after a loss.” (Id. at 5). Plaintiffs argue that by using the singular “a loss,” the Policy was intended to limit the application of this clause to the loss in connection with which the misrepresentation or omission occurred. (Id.)
Allstate notes that the misrepresentation and concealment clause of the Policy is found in the General Provisions section, and is not an exclusion; therefore, contrary to plaintiffs’ argument, the provision is not subject to strict and narrow construction. (Allstate Reply at 5). Instead, defendant argues that this provision should be interpreted in accordance with general contract principles, “giving policy language its ‘plain and ordinary meaning’....” (Id. (quoting Philadelphia Indemnity Ins. Co. v. Central Terminal Corp., No. 17 CV 1636, 2018 WL 992312 at *3 (2d Cir. Feb. 21, 2018))).
Given the history of the provision, Allstate disputes plaintiffs’ interpretation of the misrepresentation provision. Allstate concedes that the original policy language may have supported plaintiffs’ interpretation in that it contained the following language: “We do not cover any loss or occurrence in which any insured person has concealed or misrepresented any material fact or circumstance.” (Allstate Reply at 6 (quoting Policy, General: Concealment or Fraud, at 36)). However, Allstate explains that the original language was replaced in plaintiffs’ Policy by a New York Amendatory Endorsement which reads: “Allstate does not cover you or any other person insured under this policy who has concealed or misrepresented any material fact or circumstance, before or after a loss.” (Id. (quoting New York Amendatory Endorsement, at 65)). The difference in the language is that the amended language, instead of not covering “any loss in which” the fraud or misrepresentation has occurred, now declines to cover “you” (the insured) when the insured has misrepresented or concealed a material fact. Allstate argues that contrary to plaintiffs’ interpretation, “a loss” does not mandate that the misrepresentation apply to a specific loss; indeed, the language clearly applies to misrepresentations made even before a specific loss occurs. (Id. at 7).
*13 The Court finds that plaintiffs have failed to meet their burden of demonstrating that the third proposed amended counterclaim is futile. The dispute about the futility of the claim centers on competing visions of the meaning and manner of interpretation of specific language in different sets of policy documents, different versions of which were in place at different times throughout the parties’ contractual relationship. If plaintiffs believe that their interpretation of the policy language will vindicate them with respect to this counterclaim, they are free to raise such an argument during a later stage of the proceedings.
At this stage, plaintiffs have not established that any of defendant’s counterclaims, accepted as true for the purpose of this motion, fail to state a claim upon which relief could be granted or are futile and could not survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). See Growblox Sciences, Inc. v. GCM Admin. Services, LLC, No. 14 CV 2280 2016 WL 1275050, at *8 (E.D.N.Y. Mar. 31, 2016) (granting leave to amend counterclaims where the counterclaims “plausibly alleged” a cause of action); see also U.S. Gas & Electric, Inc. v. Big Apple Energy, LLC, 705 F. Supp. 2d 216, 219 (E.D.N.Y. 2010) (granting a motion to amend counterclaims where the amended claims “plausibly supported [defendant’s] claim for indemnification”).
Finally, plaintiffs oppose all of the proposed counterclaims on the grounds that Allstate filed these counterclaims in bad faith because the counterclaims rely on false allegations. (Pls.’ 5/15/18 Mem. at 7). In essence, plaintiffs argue that Allstate will be unable to prove its allegations that property listed as lost or stolen has turned up at the CFASS storage facility, noting that the property at CFASS was purchased more recently than the items stolen from the home and that the ones in storage are new and unused.
In response, Allstate contends that it has matched specific items listed on the UPP and SPP lists with items found in the boxes at CFASS. (Allstate Reply at 7). Allstate also disputes plaintiffs’ assertions that the property listed is not “ ‘new, unused and pristine.’ ” (Id.)
Obviously, an issue of fact has been raised as to whether the items in CFASS are the same items claimed as lost or stolen after the hurricane. This is not a basis to deny a motion to add a counterclaim, but rather presents a question for a trier of fact to determine after consideration of all the evidence. Absent any other evidence or even factual allegations suggesting bad faith on the part of Allstate, the Court finds no reason to deny Allstate’s motion to amend to add these counterclaims and the supporting factual allegations.
Accordingly, for the reasons set forth above, the Court respectfully recommends defendant’s motion to amend to add its counterclaims be granted.
B. Noerr-Pennington Doctrine
First, Allstate argues that the claims are barred by the
Noerr-Pennington doctrine, which Allstate argues immunizes its litigation actions from liability unless they are shown to be “objectively baseless” and intended to inflict harm on the other side. (Allstate Opp.
[51] at 6 (quoting Professional Real Estate Investors v. Columbia Pictures, Indus., Inc., 508 U.S. 49, 55, 60 (1993))).
The
Noerr-Pennington doctrine stems from the Supreme Court’s decisions in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 135 (1961) and United Mine Workers v. Pennington, 381 U.S. 657, 670 (1965), where the Court held that private entities are immune from liability under the antitrust laws, where the speech complained of is designed to influence the passage or enforcement of laws. The doctrine has since been extended to cover claims for unfair competition, tortious interference with business, and abuse of process. See, e.g., Universal City Studios, Inc. v. Nintendo Co. Ltd., 615 F. Supp. 838, 861 (S.D.N.Y. 1985); see also IGEN Intern., Inc. v. Roche Diagnostics GmbH, 335 F. 3d 303 (4th Cir. 2003). Petitioning activity under the doctrine encompasses “concerted actions before courts,” and “concerted efforts incident to litigation,” such as filing complaints and making settlement offers. Primetime 24 Joint Venture v. Nat’l Broad., Co., 219 F.3d 92, 99-100 (2d Cir. 2000); see also Ginx, Inc. v. Soho Alliance, 720 F. Supp. 2d 342, 363-64 (S.D.N.Y. 2010) (holding that a party’s right to file a lawsuit “without liability is unimpeachable unless the suit is a ‘sham,’ meaning ‘objectively baseless’ ”).
The “sham” exception to the doctrine applies when it can be demonstrated that the process of petitioning the court is being used solely as an anti-competitive tool. The claims must be “objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits.” Professional Real Estate Investors v. Columbia Pictures, Indus., Inc., 508 U.S. 49, 60 (1993). If that can be shown, then the inquiry focuses on the subjective intent of the party to interfere or cause harm to a competitor’s business. Id.
Allstate contends that in this case, there was “probable cause” to seek the issuance of a subpoena to inspect the property being stored at the CFASS. (Allstate Opp. at 8). Indeed, in setting forth the events leading up to the issuance of the CFASS subpoena, the plaintiffs’ own proposed Second Amended Complaint alleges: 1) Allstate represented to the Court that there were 190 boxes removed from the Toussies’ home after the storm based on the records obtained from Lockson; 2) that these boxes were ultimately delivered to CFASS; and that 3) Allstate needed to examine the contents of the boxes in order to determine whether there were items on the theft list or listed on the SPP rider in those boxes at CFASS. (SAC ¶¶ 30, 31). Allstate notes that the plaintiffs’ pleadings do not allege that any of these representations to the Court were false or misleading, and as such, Allstate argues that the allegations alone supported a basis for the Court to issue the subpoena and to allow Allstate’s inspection of the boxes. (Allstate Opp. at 8).
*15 In addition, Allstate argues that the Court could also consider additional facts learned from the record in the case. (Id. at 5 (citing Cortec Indus. Inc. v. Sum Holding, LP, 949 F.2d 42, 44 (2d Cir. 1991); United States v. Cavera, 550 F.3d 180, 204 (2d Cir. 2008); Byrd v. City of New York, No. 04-1386, 2005 WL 1349876, at *1 (2d Cir. June 8, 2005) (summary order))). Specifically, Allstate notes that contrary to plaintiffs’ allegations, the Court,
sua sponte, issued the initial preservation Order based on plaintiffs’ evasive and inconsistent answers regarding the 190 boxes. (Allstate Opp. at 4 (citing 10/20/17 Order)).
[52] Allstate argues that the Court’s own decision, finding that “an objective litigant” would conclude that the inspection of the boxes in CFASS was not an “objectively baseless” request under the circumstances, supports Allstate’s position in this case. (Allstate Opp. at 8).
Allstate concedes that after the inspection, when it had identified a number of boxes that contained items appearing to match the items claimed as lost by the Toussies, then Allstate made a motion to continue the preservation Order. (Id. at 9). That motion was also not objectively baseless in light of: 1) the Toussies’ stated intention to dispose of the boxes in the CFASS storage unit; 2) the allegation that Allstate had identified 58 boxes of items matching those claimed by the Toussies; and 3) the absence of any agreement between the parties that photographs would be sufficient for trial purposes. (Id.)
Having supervised the discovery and proceedings in this matter now for more than three years, this Court is more than familiar with the history of the proceedings leading up to the entry of the initial preservation Order and the subsequent extensions of that Order. Allstate is correct that the initial Order was issued by this Court
sua sponte based on the Court’s own concerns that critical evidence in the case was being spoliated and that plaintiffs were engaged in efforts to obstruct and delay discovery by Allstate into the bona fides of their claims under the theft policy. Despite plaintiffs’ claims that everything had been lost or stolen, it became very clear that security guards had been retained by the Toussies after the storm to guard something. It is undisputed that only through Allstate’s efforts using third party subpoenas, which were resisted every step of the way by plaintiffs, was it discovered that an entity had been retained by the Toussies to pack and transport 190 boxes of personal items from the Toussies’ home after the hurricane to the Lockson warehouse in New Jersey. Records obtained from Lockson showed that the boxes were subsequently transported to CFASS. A subpoena to Lockson revealed that 26 of those boxes had been invoiced as “Flora Danica china,” which was listed on the UPP as among the items that had been stolen from the home. The information received from Lockson also revealed the names of the people who did the packing of the boxes – information that plaintiffs had failed to provide despite a specific court order. (Allstate 4/26/17 Ltr. at 1-2). Plaintiffs not only failed to disclose the involvement of either Lockson or CFASS, but they submitted a letter indicating that the people who packed the boxes were employed by iMoveGreen, a defunct company, and when asked to produce their American Express statements, they deliberately redacted the Lockson charges for this work. (Id.) Information obtained from Lockson further indicated that Ms. Toussie was personally involved in checking the items and yet plaintiffs failed to disclose that information to the Court despite the Court’s Order issued in an effort to obtain information about these items. (Id.)
*16 Plaintiffs’ lack of cooperation and deliberate efforts to obstruct the gathering of relevant information by Allstate was what prompted this Court to
sua sponte issue the first preservation Order on October 20, 2017. Even assuming for purposes of this motion to amend, that defendant’s counsel stated an intention to “keep this case going for years unless plaintiffs dropped their claims,”
[53] the initial preservation Order was entered not as a result of Allstate’s conduct, but rather it was based on the plaintiffs’ continuing efforts to obstruct the discovery of information regarding the items taken from the home and to delay and complicate the process by which the inspection was to occur, including efforts to re-litigate orders previously entered by the Court. As noted in its October 20, 2017 Order, this Court found that the contents of the boxes were “highly relevant” and the Court expressed its own concerns as to whether the plaintiffs were attempting to spoliate evidence. (10/20/17 Order at 8-9). The Court noted that its concerns arose in part from the “plaintiffs’ evasive and inconsistent answers regarding 1) whether, when and by whom items were boxed and moved from the [Toussies’] home; and 2) the location of any such boxes during the course of the litigation.” (Id. at 5).
Nothing in plaintiffs’ proposed Amended Complaint suggests anything contrary to this procedural history, and indeed, despite broad, generalized claims that Allstate made misrepresentations to the Court that led to the entry of the preservation Order, plaintiffs have not alleged any specific misrepresentations or statements by Allstate that were designed to deceive the Court.
That the Court was required to extend the preservation Order several times again was not due to Allstate’s conduct or misrepresentations to the Court. Instead, there were numerous delays engendered by disputes over the procedures by which the inspection was to occur, triggering additional conferences with and orders from the Court, including plaintiffs’ demand that the defendant not move any boxes unless absolutely necessary. Scheduling delays caused in part by plaintiffs’ counsel’s unavailability, the Toussies’ request to travel to Florida, and the need for a delay while plaintiffs retained their third and fourth set of attorneys added to the delay and the need to extend the order. In addition, the Court received correspondence from Christie’s regarding the plaintiff’s behavior during the inspection which raised concerns about the good faith efforts of plaintiffs in completing the inspection.
It is true that Allstate requested an extension of the preservation Order when it learned that 60 boxes had been removed from CFASS shortly before the lawsuit was filed and that the unit was accessed eight times after the Court was informed of the information received from Lockson regarding items removed from the Toussies’ home after the storm. Although there was no way to determine if any of these boxes contained property items listed in the SPP or UPP lists, the fact of the removal and the numerous entries into the facility while discovery was ongoing raised questions about whether or not spoliation was occurring. Again, to the extent that Allstate represented to the Court that it had located items in the boxes that had been inspected that matched items on the list – an allegation that plaintiffs deny – this claim was not the crucial factor in the Court’s determination to extend the preservation Order until the inspection could be completed. Coupled with the delays and obstructive behavior of the plaintiffs, their own submissions to the Court complained of their inability to dispose of and sell the items in the warehouse. Given their stated desire to remove and dispose of items from the CFASS facility, the Court found it necessary to extend the preservation Order until the inspection was complete.
Plaintiffs did not file an objection to any of the preservation Orders at the time they were entered, nor did they seek to appeal or have the district court review the Orders until March 19, 2018, after Allstate’s inspection was completed. At that time, plaintiffs’ counsel indicated that the Toussies wished to “remove – and dispose of – their property at CFASS.” (Pls.’ 3/19/18 Ltr.). Allstate opposed the motion only insofar as 58 specified boxes were concerned, arguing that these boxes contained items matching the description of items allegedly stolen after the hurricane or that were listed on the SPP rider. Allstate argued that these boxes should be maintained as evidence for possible use at trial.
*17 Even after the inspection was complete and the Court was attempting to persuade the parties to agree on a protocol that would allow plaintiffs to sell their property, it was plaintiffs who refused to stipulate that photographs and the videotape of the inspection would be sufficient evidence at trial. (See 6/8/18 Order at 20-21 (ordering the parties to meet and confer to stipulate to exhibits to be used at trial and noting that “[f]ailure to agree will convince the Court that preservation of all of the items through trial is required”)). Based on the parties’ inability to reach an agreement, the Court lifted the preservation Order on June 8, 2018 as to 202 boxes but Ordered that the 58 boxes identified as having potential evidence needed for trial be maintained. Plaintiffs filed an objection to that Order with the district court, which affirmed this Court’s Order. Plaintiffs subsequently filed an interlocutory appeal to the Second Circuit which was dismissed on December 18, 2018.
In considering whether plaintiffs have demonstrated that the sham exception to the
Noerr-Pennington doctrine applies here, even accepting as true plaintiffs’ allegations regarding Allstate’s motives, plaintiffs have failed to allege any facts showing that Allstate’s conduct in seeking the inspection, in seeking to extend the preservation Order, and in arguing that the 58 boxes containing potential evidence should not be spoliated, was “objectively baseless.” Professional Real Estate Investors v. Columbia Pictures, Indus., Inc., 508 U.S. at 60. Not only have plaintiffs failed to show that “no reasonable litigant could realistically expect success on the merits” of Allstate’s requests, id., but even if they could, they would be unable to satisfy the second prong of the
Noerr-Pennington sham exception test, since this Court already made a finding that Allstate’s efforts to inspect these boxes and resolve the issues posed by these 58 boxes was “a good faith effort.” (10/3/17 Tr. at 11). Finally, it is unclear from the allegations in the proposed Amended Complaint how Allstate’s efforts to ensure that evidence is maintained for purposes of trial serves as an “anti-competitive tool” or that Allstate’s conduct was designed to cause economic harm to plaintiffs.
Thus, the Court concludes that the new claims in plaintiffs’ proposed Second Amended Complaint would be subject to dismissal in accordance with the
Noerr-Pennington doctrine and plaintiffs have failed to allege facts that would bring this case within the “sham exception.” Accordingly, it is respectfully recommended that the plaintiffs’ motion to file the Second Amended Complaint be denied as futile.
Even if the district court were to disagree with the
Noerr-Pennington analysis, the Court respectfully recommends that plaintiffs’ motion to amend be denied because their claims for conversion and tortious interference fail to allege the necessary elements to state a claim and therefore are futile on this independent ground as well.
Under New York law, conversion is the unauthorized exercise of control or dominion over property by someone who is not the owner of the property, which interferes with the superior possessory rights of another in that property. Schwartz v. Capital Liquidators, Inc., 984 F. 2d 53, 54 (2d Cir. 1993). A party alleging a claim of conversion must allege: 1) that the party has a possessory right or interest in the property; and 2) that the defendant’s exercise of dominion or control over the property interfered with plaintiff’s rights. See Eagle One Roofing Contractors, Inc. v. Acquafredda, No. 16 CV 3537, 2018 WL 1701939, at *16 (E.D.N.Y. Mar. 31, 2018).
Allstate argues that actions taken pursuant to a valid court order cannot give rise to a claim of conversion unless the order was obtained through intentional misrepresentations. (Allstate Opp. at 11 (citing Calamia v. City of New York, 879 F.2d 1025, 1031 (2d Cir. 1989))). In Gold Metal Products, Inc. v. Interstate Computer Services, Inc., the court held that as a matter of law, there could be no action for conversion where the property was held in escrow pursuant to a court order. 436 N.Y.S.2d 312, 313, 80 A.D. 2d 601 (2d Dep’t 1981); see also Weissman, Celler, Spett & Modin v. Fein, 639 N.Y.S.2d 805, 225 A.D. 2d 508 (1st Dep’t 1996) (dismissing conversion claim where the property was sold pursuant to a court order); Calamia v. City of New York, 879 F.2d at 1031.
*18 Although plaintiffs argue that the defendant always intended to demand that the property be maintained until trial, and that this was the deception played out before the Court, bringing this case within this exception, this argument is utterly without a basis in fact. As discussed above, the Court recognized that in order to determine whether there were any items that matched the items on the SPP rider or the UPP list of items stolen from the home, the defendant was going to have to inspect the boxes. Thus, Allstate did not engage in the unauthorized exercise of control over plaintiffs’ property; Allstate was authorized by court order to inspect the boxes. As noted, plaintiffs have failed to allege any misrepresentation by Allstate that led the Court to enter the various preservation Orders. Instead, the initial Order was entered
sua sponte by the Court and extensions were granted as necessitated by the delays in completing the inspection. Further belying plaintiffs’ argument that Allstate acted with an intent to deceive the Court is the fact that Allstate did not seek to have all of the boxes preserved after the inspection was completed; Allstate only asked that the 58 boxes which it had identified as having items similar in description to those for which reimbursement was sought be retained. Other than the unfounded allegation as to Allstate’s improper intent, there are no allegations in the proposed amended conversion claim that detail any misrepresentation made to this Court to wrongfully obtain the preservation Order.
Thus, the Court respectfully recommends that plaintiffs’ motion to add a claim based on conversion be denied because plaintiffs have failed to allege the necessary elements to state such a claim and even if they had added allegations to their pleading, the claim would still be futile.
In alleging a claim of tortious interference with business relations, plaintiffs must allege that: 1) they “had business relations with a third party; 2) the defendant interfered with those business relations; 3) the defendant acted for a wrongful purpose or used dishonest, unfair or improper means; and 4) the defendant’s acts injured the relationship.” 16 Casa Duse, LLC v. Merkin, 791 F.3d 247, 261 (2d Cir. 2015); Carvel Corp. v. Noonan, 350 F.3d 6, 17-19 (2d Cir. 2003).
Allstate contends that this claim is also futile because plaintiffs have not alleged that Allstate directed conduct toward a third party to convince them not to have business relations with the plaintiffs. (Allstate Opp. at 12). Allstate notes that “ ‘conduct constituting tortious interference with business relations is, by definition, conduct directed not at the plaintiff itself, but at the party with which the plaintiff has or seeks to have a relationship.’ ” (Id. (quoting Carvel Corp. v. Noonan, 3 N.Y.3d 182, 192, 785 N.Y.S. 2d 359, 363 (2004)).
The allegations in the proposed Second Amended Complaint only allege that plaintiffs could not sell their property to prospective buyers because of the preservation Order. (SAC ¶ 163). They do not allege that Allstate ever communicated with these unidentified prospective buyers; they simply argue that Allstate caused the plaintiff to “ ‘breach a contract by preventing plaintiff’s performance.’ ” (Pls.’ 5/15/18 Mem. at 6 (quoting Italverde Trading, Inc. v. Four Bills of Lading, 485 F. Supp. 2d 187, 201 (E.D.N.Y. 2003))). As defendant points out, tortious interference with a contract is a different claim than tortious interference with a prospective business relationship. (Allstate Opp. at 13). To allege tortious interference with contract, the plaintiffs must allege that there was an actual contract that was breached. See Kirch v. Liberty Media Corp., 449 F.3d 388, 401 (2d Cir. 2006).
Here, plaintiffs merely allege that the preservation Order prevented plaintiffs from accepting offers from prospective buyers. (SAC ¶ 163). Moreover, in order to demonstrate the third element of the test for tortious interference, plaintiffs must show that defendant engaged in “improper” means. New York courts have defined “improper means” as “amount[ing] to a crime or an independent tort.” Carvel Corp. v. Noonan, 3 N.Y.3d 182, 190, 785 N.Y.S. 2d 359, 362 (2004). In this case, plaintiffs have not adequately alleged and cannot show that defendant engaged in improper means, given this Court’s findings that the items at CFASS were in fact relevant and plaintiffs would be subject to spoliation sanctions should they sell the items identified.
Thus, the Court respectfully recommends that plaintiffs’ motion to add claims of tortious interference be denied as well.
E. Bad Faith and Untimely
*19 Finally, defendant argues that the plaintiffs’ motion to amend should be denied because the motion is untimely. Allstate argues that if plaintiffs believed that this Court’s preservation Order was improper, the remedy was to file objections with the district court. They did not do so until June 15, 2018.
Moreover, Allstate argues that plaintiffs were given numerous opportunities and extensions to file their motion, but despite the Court’s Order to file by 5:00 p.m. on June 15, 2018, plaintiffs waited until 8:15 p.m. to actually file it. Allstate asserts that ‘[t]he motion should be stricken for that reason alone.” (Allstate Opp. at 15).
Finally, Allstate contends that plaintiffs are acting in bad faith in seeking to add these claims because the proposed amendments are based on “a fabrication – an alleged ‘plot’ to drag out the case to force Plaintiffs to drop their claims.” (Id.) Allstate argues that the result would be to force Allstate to make its counsel a witness in the case, or not respond to the fabrication. (Id.) Either choice would result in prejudice to Allstate. (Id.) Moreover, to allow the amendments to proceed would open up a new round of discovery involving the six auction houses and dealers who plaintiffs claim were seeking to buy their items, further delaying the resolution of this now more than three-year old case. (Id.)
The Court need not reach these arguments because for the reasons stated above, the Court finds that the amendments would be futile in any event and recommends that the plaintiffs’ motion to amend be denied.
IV. Allstate’s Motion to Compel
On August 2, 2018, Allstate filed a motion to compel plaintiffs to produce documents responsive to Allstate’s document request number 6: “All Documents and communications concerning the Internal Revenue Service acknowledging or accepting that you suffered approximately $50 million of uninsured property losses.” (Allstate 8/2/18 Ltr.,
[54] Ex. C). Allstate seeks to compel production of these documents and, if such documents do not exist, seeks to compel responses to three of Allstate’s interrogatories. (Id., Ex. E). These interrogatories ask plaintiffs to: “Identify all persons who assisted in either the preparation or filing of the 2012 and 2013 tax returns for Robert Toussie and Laura Toussie, including any amendments and supplements thereto;” to “describe in detail each item of property that Robert or Laura Toussie represented as lost in connection with Super storm Sandy to the Internal Revenue Service;” and to “Describe in detail the insurance or other reimbursement [the Toussies] reported to the Internal Revenue Service as expected to be received in connection with the losses suffered in connection with Super storm Sandy.” (Id. (citing Interrogatories Nos. 10, 11, and 12)).
Allstate notes that plaintiffs initially responded to document request number 6 by stating that they would “ ‘produce non-privileged, responsive documents in their possession, custody, or control, to the extent any exist that have not already been produced to Allstate.’ ” (Id.at 3 (citing Ex. C)). Plaintiffs failed to produce any documents and when Allstate raised the issue, plaintiffs’ counsel stated that “ ‘plaintiffs do not have any documents responsive to this request.’ ” (Id. (citing Ex. D)).
*20 Allstate notes that Mr. Toussie “stated under oath that ‘[t]he IRS could verify that [he] lost over $50 million dollars’ in connection with Super storm Sandy.” (Id. (citing 6/9/16 Tr.
[55] at 172)). Allstate claims that “Mr. Toussie put his tax materials at issue by claiming that the IRS could vouch for his claim that he had ‘lost everything,’ ” and that the Toussies’ claims they “ ‘lost everything’ is a central aspect of both Allstate’s defenses and its proposed counterclaims.” (Id. at 1-2). Allstate notes that “[t]he identity of the property that was lost by the Toussies, the value of such property, and the insurance coverage for such property are the main issues in this case, and the Toussies made representations to the IRS regarding all these issues.” (Id.) Defendant states that it does not seek the Toussies’ “entire tax return, only portions that concern, or relate to, the IRS accepting that the Toussies suffered a $50 million uninsured property loss ...” (Allstate 8/17/18 Ltr. at 1).
[56]Allstate asserts that, given Mr. Toussie’s statements under oath that the Internal Revenue Service (“IRS”) can verify his losses, the requested documents must exist because the IRS requires that when an individual claims a casualty or theft loss, a taxpayer “must figure the loss on each item separately.” (Id. at 2) (quoting IRS Publication 584, Ex. B to Allstate 8/28/18 Ltr.)).
Plaintiffs argue in response that the motion is untimely because plaintiffs first objected to the document request on July 8, 2016 and Allstate did not bring the motion to compel until August 2, 2018. (See Pls.’ 8/14/18 Ltr. at 1).
[57] Plaintiffs further argue that “there is no dispute for this Court to resolve” because “Plaintiffs do not have any documents responsive to this request.” (Id. at 2). Finally, plaintiffs object to the request as seeking “irrelevant information” and as intending “to harass Plaintiffs.” (Id.) Plaintiffs argue that “whether Plaintiffs suffered $50 million in uninsured losses, and what they told the IRS about these losses, is not at issue in this case” and that even if this information were relevant, “any minimal relevance that this information has does not justify giving Allstate access to Plaintiffs’ private, sensitive tax information.” (Id. at 2-3).
Although tax returns are subject to civil discovery, see United States v. Bonanno Organized Crime Family, 119 F.R.D. 625, 627 (E.D.N.Y. 1988); Davidson Pipe Co. v. Laventhol & Horwath, 120 F.R.D. 455, 42-64 (S.D.N.Y. 1988), “courts, as a matter of policy should be cautious in ordering their disclosure.” United States v. Bonanno Organized Crime Family, 119 F.R.D. at 627 (citations omitted). Before a court may order disclosure of tax returns, a two-prong test must be satisfied:
[F]irst, the court must find that the returns are relevant to the subject matter of the action; and second, that there is a compelling need for the returns because the information contained therein is not otherwise readily obtainable.
S.E.C. v. Cymaticolor Corp., 106 F.R.D. 545, 547 (S.D.N.Y. 1985); accord United States v. Bonanno Organized Crime Family, 119 F.R.D. at 627.
In this case, Allstate argues that the IRS documents are relevant because the Toussies’ representations to the IRS are the “sole known instance of the Toussies formally documenting their theft and casualty losses and their expected insurance coverage at that point in time.” (Allstate 8/17/18 Ltr. at 3). The Court agrees that the documents are relevant and finds that plaintiffs have also failed to demonstrate that there are alternative sources for the information contained in the tax returns. United States v. Bonanno Organized Crime Family, 119 F.R.D. at 627 (citations omitted); see also Government Employees Ins. Co. v. Lenex Servs., Inc., No. 16 CV 6030, 2018 WL 1368024, at *12 (E.D.N.Y. Mar. 16, 2018).
*21 Accordingly, the motion to compel is granted. Plaintiffs are Ordered to produce documents responsive to Allstate’s document request number 6. If such documents do not exist, plaintiffs are Ordered to submit an affidavit indicating that they have not filed any tax returns for the years 2012, 2013, 2014, and 2015 that refer to their losses from Hurricane Sandy. Plaintiffs are also Ordered to respond to Allstate’s interrogatories numbers 10, 11, and 12.
A. Motion to Compel Deposition of the Toussies’ Housekeeper
During a court conference held on September 23, 2016, Allstate informed the Court that it had obtained information from Lockson that certain property had been removed from the Toussies’ home shortly after the storm, contrary to what had been represented to counsel during the May 19, 2016 conference. (Cntrclm ¶ 164). In an Order dated September 26, 2016, this Court required the Toussies to provide a list of the individuals involved in packing the home, along with the names of any of the Toussies’ employees who participated, and their current addresses. (Id. ¶ 165, Ex. S). The initial response, filed on September 27, 2016, represented that no one in particular was in charge of the packing of the boxes and “ ‘[r]egarding the individuals that packed the boxes, Plaintiffs do not know their names or addresses, but many of them were employed by iMoveGreen.’ ” (Id. ¶¶ 166-67 (quoting Ex. T)).
Beginning in April 2017, Allstate sought to subpoena documents from Christie’s in an effort to determine what items had been removed from the Toussie house after the flood and theft. Based on information received from Lockson storage facility, Allstate learned that Laura Toussie and the Toussies’ housekeeper had arrived at the facility and arranged for Christie’s to transport certain boxes of items to the Christie’s facility. (Allstate 4/20/17 Ltr., Ex. A). Based on this information, this Court granted Allstate’s request to issue a subpoena to Christie’s and also granted Allstate’s request to depose the Toussies’ housekeeper. (5/23/17 Order at 5-9). Although the Toussies had not identified the housekeeper by name at that time, the Court had previously Ordered the Toussies following the September 23, 2016 conference to produce the names of the people who had packed the boxes, which would have included the Toussies’ housekeeper. Thus, the name of the Toussies’ housekeeper had already been Ordered to be produced since she was someone involved in the packing of the boxes and it was plaintiffs’ responsibility to provide her name as part of the Toussies’ discovery obligation. In its May 23, 2017 Order, the Court directed the parties to complete all depositions by July 28, 2017.
*22 Allstate alleges that following the issuance of this Court’s May 23, 2017 Order, Allstate asked Mark Goidell, then the Toussies’ attorney, to provide the name of the maid/housekeeper. (Cntrclm ¶ 202). When Allstate received no response from Goidell, it contacted him again on May 26, 2017 and then again on June 5, 2017, asking for the name of the housekeeper and whether Goidell would accept service of a subpoena for her. (Id. ¶¶ 204, 295). According to Allstate, Goidell responded that the crew of women hired to clean and pack the house was supervised by “Elvira” but that he had no further information about her except that she lived in Queens or Brooklyn. (Id. ¶ 206). When informed that Allstate was seeking information about a long-term housekeeper or maid who had worked for the Toussies for a long time, Mr. Goidell responded on June 7, 2017 that “there was no long-term housekeeper or maid who assisted with the packing.” (Id. ¶ 208, Ex. Z).
When plaintiffs failed to provide her name, despite the existing Court Orders, defendant moved to compel the name of the Toussies’ housekeeper on June 13, 2017. Rather than respond, the Toussies’ then attorney moved to withdraw, and plaintiffs were given time to find new counsel. (6/28/17 Order).
[59] After several delays and requests for time to obtain and review the files, the Toussies’ third set of attorneys appeared at a telephone conference on October 3, 2017, at which time, this Court Ordered plaintiffs to provide information relating to the Toussies’ housekeeper. (10/4/17 Order).
[60] During the conference, plaintiffs’ counsel attempted to argue that the plaintiffs’ personal objection to providing the housekeeper’s name “somehow trumped the Court’s order allowing her deposition.” (Allstate 10/24/18 Ltr. at 3 (citing 10/3/17 Tr. at 7-8)). The Court denied the plaintiffs’ request and warned plaintiffs that they should not continue to relitigate issues previously decided by the Court. (See 10/3/17 Tr. at 10). On October 20, 2017, new counsel moved for an extension of time to file a response with respect to the request for the housekeeper’s information, and the Court gave plaintiffs until October 23, 2017 to provide her name and contact information. Ultimately, on October 23, 2017, plaintiffs identified the housekeeper as Gail Burnette.
Thereafter, Allstate filed a motion to compel the deposition of Gail Burnette, the plaintiffs’ housekeeper, and this Court issued a so-ordered subpoena directing Ms. Burnette to appear on December 13, 2017 for her deposition. The Order further warned that if she failed to appear, she would be required to appear before the Court on December 19, 2017. According to Allstate, on the afternoon prior to her deposition, the Toussies’ housekeeper cancelled her deposition through counsel. (Allstate 10/24/18 Ltr. at 3). When she finally did testify, she testified that she had been employed by the Toussies since the 1990s and that she participated in packing up the house after Hurricane Sandy. (Cntrclm ¶ 210). She also indicated that the last-minute delay of the deposition and retainer of counsel for her was instigated by Mr. Toussie, who paid for her lawyer. (Id.)
Allstate seeks sanctions in the form of attorneys’ fees associated with: 1) the October 23, 2017 motion to compel the housekeeper’s name; 2) the last-minute cancellation of the housekeeper’s deposition; and 3) the need to travel and prepare a second time for the rescheduled deposition.
In response, plaintiffs’ fourth set of counsel
[61] submitted a letter dated November 27, 2018, arguing that although the Court’s May 23, 2017 Order granted Allstate’s request to depose the housekeeper, the Order did not explicitly direct plaintiffs to provide the housekeeper’s name. (Pls.’ 11/27/18 Ltr. at 1). Plaintiffs argue that Allstate could have informally asked plaintiffs’ counsel for the name of the housekeeper, could have served an interrogatory or document request for the name, or served nonparties with subpoenas for the name. (Id.) Although plaintiffs concede that Allstate did informally ask plaintiffs for the information, plaintiffs claim “no order of this Court or rule of the Federal Rules of Civil Procedure required Plaintiffs to respond to this informal request, and nothing prevented Allstate from using formal discovery devices to get this information.” (Id.) Plaintiffs argue that they did not violate the Court’s May 23, 2017 Order, nor did they fail to respond to any discovery served on them. (Id.) Accordingly, plaintiffs argue that the Court lacks authority to issue sanctions.
*23 Plaintiffs also argue that the motion is untimely because Allstate made the motion to compel on June 13, 2017 and did not seek sanctions at that time, nor did it seek sanctions on May 4, 2018, when Allstate sought sanctions for other discovery-related issues.
[62] (Id. at 2). Plaintiffs further argue that this Court did not authorize Allstate to seek sanctions in its June 8, 2018 discovery Order. (Id.)
Finally, plaintiffs challenge Allstate’s request for 4 hours of attorney time and 0.6 hours of paralegal time in connection with the motion to compel. (Id. at 3). Plaintiffs contend that the motion included time spent for relief unrelated to the name of plaintiffs’ housekeeper and “could not have taken Allstate’s counsel – who has been practicing law for 17 years ... – four hours to draft. (Id. at 3). Thus, plaintiffs seek to have Allstate’s motion for sanctions denied in its entirety. (Id.)
Plaintiffs’ attitude, as expressed in counsel’s letter, is that they had “no obligation” to provide the housekeeper’s name in the absence of a formal request or a subpoena to nonparties for the information. Despite the Court’s directive at the September 23, 2016 conference to produce the names of the people involved in packing the boxes after the theft, which Allstate subsequently learned included Ms. Toussie and the housekeeper, plaintiffs did not disclose the housekeeper’s name until more than a year later. While plaintiffs’ most recent counsel cannot be faulted for lacking the historical knowledge that led up to the Court’s May 23, 2017 Order, the plaintiffs in this case have done everything short of finding themselves in contempt in an effort to hide from Allstate and the Court information relating to the disposition of their personal property following the hurricane. Not only did they delay responding to Allstate’s request for the housekeeper’s name until formally ordered to provide it, but they initially insisted that there “was no long-term housekeeper or maid who assisted with the packing.” (Allstate 6/13/17 Ltr., Ex. E). According to Allstate, Ms. Burnette, when finally deposed, testified that she had been the Toussies’ housekeeper since 1991 and that she had assisted in packing the house after the hurricane. (Allstate 12/10/18 Ltr. at 3). Thus, contrary to plaintiffs’ counsel’s assertion that the Toussies were under no obligation to produce her name, this Court’s Order of September 23, 2016, to produce the names of the people who had packed the boxes, clearly covered Ms. Burnette. Plaintiffs’ refusal to provide that information in response to that Court Order, issued long before Allstate was forced to compel her deposition is alone grounds for sanctions under Rule 37.
Moreover, as Allstate points out, requiring Allstate to serve a formal demand for discovery and then waiting 30 days for a written response would have “been wasteful and inefficient,” particularly given that the Court had directed that depositions, including that of the housekeeper, be completed within 30 days of the Court’s May 23, 2017 Order compelling the housekeeper’s deposition. Indeed, the fact that the Toussies waited months to seek reconsideration of the Order directing the housekeeper’s deposition and argued that they had “very serious objection ... to disclosing or divulging the name of this person” for reasons that they would only describe as “very important,” further demonstrates that regardless of the form in which Allstate requested the housekeeper’s name, plaintiffs would still have opposed the disclosure. Indeed, it was only after this Court indicated that plaintiffs’ continued failure to provide the information would result in an adverse inference did the Toussies reluctantly provide the name.
*24 The Court finds that the Toussies, for whatever reason, did all that they could to avoid having the housekeeper deposed. Initially, they denied the existence of a housekeeper who had any role in packing the boxes. They then opposed Allstate’s request for her contact information and sought reconsideration of this Court’s ruling that her name be provided, arguing simply that it was “important” that her name not be divulged. Only under threat of sanctions was her identity revealed and then it became clear that the Toussies sought to further delay this matter by retaining counsel for Ms. Burnette at the last-minute. Once Allstate was able to reschedule the deposition, the housekeeper testified that the last-minute retainer of counsel was arranged and paid for by Mr. Toussie. (See Allstate 10/24 Ltr. at 3). The Court finds that the last-minute cancellation of the deposition, although made at the request of Ms. Burnette’s lawyer, was orchestrated by and the result of steps taken by the Toussies to delay the deposition.
While plaintiffs complain that Allstate delayed in filing this motion for sanctions, the delays throughout this case have been largely, if not entirely, due to actions taken by plaintiffs.
[63] “Rule 37 does not establish any time limits within which a motion for sanctions must be filed....” In re Terrorist Attacks on September 11, 2001, No. 03 MD 1570, 2018 WL 4096106, at * 2 (S.D.N.Y. Aug. 27, 2018). As plaintiffs note, the main concern is that the motion be made while the conduct at issue is “fresh in [the judge’s] mind.” (Pls.’ Ltr at 2 (quoting Mercy v. Suffolk Cty, 748 F.2d 52, 55-56 (2d Cir. 1984))). Here, the events in this case are well within the recollection of this Court and any delay is not due to Allstate’s conduct. Thus, the Court respectfully recommends that Allstate’s motion for sanctions based on the events surrounding the identification and deposition of the housekeeper be granted. The recommended fee award is discussed infra at 52-61.
B. Motion to Compel Responses to Requests to Admit, and the Production of Videotapes and Attorney Notes
Allstate’s second motion for sanctions stems from a motion to compel following plaintiffs’ refusal to admit or deny defendant’s requests for admissions, refusal to provide copies of videotapes taken of the inspection of the boxes at Christie’s, and plaintiffs’ cross-motion for the production of notes taken by Allstate’s attorney and paralegal while the inspection was ongoing. Allstate asserts that the fees associated with this motion and defending the cross-motion amounted to $12,550.
Allstate claims that because plaintiffs refused to respond to Allstate’s Requests to Admit, it was required to file a motion to compel, seeking to have the Court deem admitted all of defendant’s Requests to Admit. (Allstate 10/24/18 Ltr. at 4). The Requests to Admit sought an admission from plaintiffs that the boxes inspected at the CFASS unit were property that was removed from the Toussies’ home after Hurricane Sandy. (6/8/18 Order at 22). Plaintiffs opposed the Requests to Admit on the grounds that they sought admission about irrelevant facts. (Id.) The Court found that these objections were “frivolous and utterly improper” and deemed Requests Nos. 1-11 and 15 admitted. (Id. at 23). The Court denied Allstate’s Requests to Admit Nos. 12-14, as the Court found those Requests to contain an unclear term which seemed to call for a legal conclusion. (Id.)
As part of its motion to compel, Allstate also sought production of videotapes taken by the Toussies during the CFASS inspections, which plaintiffs had refused to disclose. (Id.) Plaintiffs opposed disclosure on the basis that “they went to great expense to video tape the inspection proceedings.” (Id.) The Court Ordered plaintiffs to produce the videotapes, noting in its Order that “much of what plaintiffs have argued in their papers is frivolous and without merit” and finding that “in light of the innumerable warnings the Court has issued to plaintiffs in the past, sanctions are more than justified.” (Id. at 25-26).
*25 As for the notes taken by counsel during the Christie’s inspection, Allstate argues that it was clear that the notes taken by Allstate’s lawyers and paralegal during the inspection were work product and that in filing their cross motion, plaintiffs made no showing that would justify the need for attorney’s notes as required by the case law. Allstate notes that in its Order dated February 20, 2018, this Court “assume[d] that plaintiffs’ new counsel [was] not seeking to perpetuate the pattern of improper discovery conduct and frivolous arguments,” and thus gave both sides the opportunity to brief the issue, under the mistaken belief that plaintiffs had legitimate, substantive arguments to make. (Allstate 12/10/18 Ltr. at 1 (citing 2/20/18 Order at 3-4)). Ultimately, this Court denied plaintiffs’ request to compel production of these notes after plaintiffs sought to relitigate the relevance of Allstate’s requests concerning the property removed from plaintiffs’ home after the hurricane – an issue decided by the Court over a year earlier. This Court had previously found that this property was “the paramount issue of fact in the case,” and further found that the plaintiffs’ objections were “frivolous and utterly improper.” (2/20/18 Order at 22-23). Although plaintiffs argue that the cross-motion raised “complicated arguments,” the Court found that the notes were clearly “work product” and that plaintiffs had made “absolutely no showing of need.” Not only did plaintiff attend the inspection, it was also attended by plaintiffs’ counsel and the videographer, who recorded what transpired. Therefore, there was absolutely no need to see the notes recording the observations of Allstate’s counsel during the inspection. Similarly, to the extent that plaintiffs had argued that Allstate waived the work product protection by sharing the notes with the plaintiffs, Christie’s or their counsel, the Court found that there was no basis on which to find such a waiver.
In determining whether Allstate’s requested fee amounts are “reasonable” sanctions under the circumstances, the Court employs the “lodestar” method, multiplying the number of hours reasonably spent by counsel on the matter by a reasonable hourly rate. See Perdue v. Kenny A., 559 U.S. 542, 546, 551-52 (2010); Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011); Arbor Hill Concerned Citizens Neighborhood Ass’n v. County of Albany, 522 F.3d 182, 183 (2d Cir. 2008); Cowan v. Ernest Codelia, P.C., No. 98 CV 5548, 2001 WL 30501, at *7 (S.D.N.Y. Jan. 12, 2001), aff’d, 50 F. App’x 36 (2d Cir. 2002). Although there is a “strong presumption that this amount represents a reasonable fee,” the resulting lodestar figure may be adjusted based on certain other factors. Excellent Home Care Services, LLC v. FGA, Inc., No. 13 CV 5390, 2017 WL 4838306, at *3 (E.D.N.Y. Oct. 24, 2017) (citing Cowan v. Ernest Codelia, P.C., 2001 WL 30501 at *7; Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999)).
1. Reasonable Hourly Rate
In determining a reasonable fee, the Court is afforded considerable discretion in determining reasonable hourly rates, in part based on its experience and an understanding of the course of the litigation. See, e.g., Matusick v. Erie Cty. Water Auth., 757 F.3d 31, 64 (2d Cir. 2014)(explaining that “[w]e afford a district court considerable discretion in determining what constitutes reasonable attorney’s fees in a given case, mindful of the court’s ‘superior understanding of the litigation’ ”) (quoting Barfield v. N.Y.C. Health & Hosps. Corp., 537 F.3d 132, 151 (2d Cir. 2008)); Chen v. JP Standard Constr. Corp., No. 14 CV 1086, 2016 WL 2909966, at *15 (E.D.N.Y. Mar. 18, 2016), report and recommendation adopted, 2016 WL 2758272 (E.D.N.Y. May 12, 2016) (observing that the “[c]ourt can and should exercise broad discretion in determining a reasonable fee award”).
To calculate the presumptively reasonable fee, a court must first determine a reasonable hourly rate for the legal services performed. SeeArbor Hill Concerned Citizens Neighborhood Ass’n v. County. of Albany, 522 F.3d at 183. In Arbor Hill, the Second Circuit adopted the following factors to guide the court’s inquiry as to what constitutes a reasonable hourly rate:
1) the time and labor required; 2) the novelty and difficulty of the questions; 3) the level of skill required to perform the legal service properly; 4) the preclusion of employment by the attorney due to acceptance of the case; 5) the attorney’s customary hourly rate; 6) whether the fee is fixed or contingent; 7) the time limitations imposed by the client or the circumstances; 8) the amount involved in the case and the results obtained; 9) the experience, reputation, and ability of the attorneys; 10) the “undesirability” of the case; 11) the nature and length of the professional relationship with the client; and 12) awards in similar cases[.]
Id. at 187 n.3 (citation omitted). A number of courts within the Second Circuit have applied these factors when awarding attorney’s fees. See, e.g., Manzo v. Sovereign Motor Cars, Ltd., No. 08 CV 1229, 2010 WL 1930237, at *7 (E.D.N.Y. May 11, 2010); Adorno v. Port Auth. of New York & New Jersey, 685 F. Supp. 2d 507, 511 (S.D.N.Y. 2010); Cruz v. Henry Modell & Co., Inc., No. 05 CV 1450, 2008 WL 905351, at *3 (E.D.N.Y. Mar. 31, 2008).
*26 Courts are also instructed to balance:
the complexity and difficulty of the case, the available expertise and capacity of the client’s other counsel (if any), the resources required to prosecute the case effectively ..., the timing demands of the case, whether the attorney might have an interest (independent of that of his client) in achieving the ends of the litigation or might initiate the representation himself, whether the attorney might have initially acted pro bono ..., and other returns (such as reputation, etc.) the attorney might expect from the representation
Arbor Hill Concerned Citizens Neighborhood Ass’n v. County of Albany, 522 F.3d at 184; see also Heng Chan v. Sung Yue Tung Corp., No. 03 CV 6048, 2007 WL 1373118, at *2 (S.D.N.Y. May 8, 2007).
In this case, defendant was represented by the firm of Dentons US LLP. In accordance with New York State Ass’n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983), defendant’s counsel has submitted the Declaration of Brendan E. Zahner, Esq. (“Zahner Decl.”), along with contemporaneous billing records and documentation of expenses, setting forth the dates and amount of time during which services were rendered, the hourly rate at which the services were charged, along with the name of the attorney performing the work and a description of services performed for both motions to compel and for expenses and fees related to the cancelled deposition of the Toussies’ housekeeper. (See Zahner Decl.).
[64]In moving for fees, defendant states that “[b]ecause the actual hourly rates [counsel] charged to Allstate are substantially higher than what is awarded within the Eastern District of New York, Allstate is requesting reimbursement of its fees at the high end of the ranges previously found to be reasonable within this district.” (Allstate 10/24/18 Ltr. at 5). Defendant seeks an hourly rate of $450 per hour for Robert King, a partner with the Firm with more than 35 years of experience, an hourly rate of $300 per hour for Brendan Zahner, a senior associate with 17 years of experience, an hourly rate of $200 per hour for first year associate Stacey Petrek, and $100 per hour for paralegal Patrice Ho Sang. (Id.)
Based on the Court’s knowledge of the rates generally charged in this district, the rates per hour requested here are consistent with the rates generally awarded in this district. See, e.g., Hall v. Pro Source Techs., LLC, No. 14 CV 2502, 2016 WL 1555128, at *12 (E.D.N.Y. Apr. 11, 2016) (holding that a partner with twelve years of experience in litigating FLSA and NYLL wage and hour lawsuits should be awarded an hourly rate of $450); Bosoro v. American Comprehensive Healthcare Med. Grp., No. 14 CV 1099, 2015 WL 5676679, at *9 (E.D.N.Y. Aug. 31, 2015), report and recommendation adopted, 2015 WL 5686481 (E.D.N.Y. Sept. 25, 2015) (stating that “prevailing hourly rates in the Eastern District of New York [are] between $350 and $400 for law firm partners”); Bodon v. Domino’s Pizza, LLC, No. 09 CV 2941, 2015 WL 3889577, at *8 (E.D.N.Y. June 4, 2015), report and recommendation adopted sub nom. Bodon v. Domino’s Pizza, Inc., No. 09 CV 2941, 2015 WL 3902405 (E.D.N.Y. June 24, 2015) (holding that “recent cases have held that partners are generally entitled to recover $300 to $450 per hour”); Hui Luo v. L & S Acupuncture, P.C., No. 14 CV 1003, 2-15 WL 1954468, at *2 (E.D.N.Y. Apr. 29, 2015) (observing that the prevailing hourly rates for partners in this district ranges from $300 to $400), aff’d, No. 15 CV 1892, 2016 WL 2848646 (2d Cir. May 16, 2016); Griffin v. Astro Moving & Storage Co. Inc., No. 11 CV 1844, 2015 WL 1476415, at *8 (E.D.N.Y. Mar. 31, 2015) (collecting cases and awarding a partner at a law firm with 27 years of employment litigation experience an hourly rate of $400 after a jury trial); Lesser v. U.S. Bank Nat. Ass’n, No. 09 CV 2362, 2013 WL 1952306, at *10 (E.D.N.Y. May 10, 2013) (awarding $425 per hour in straightforward commercial litigation to lead partner with 28 years of experience ); Ferrara v. CMR Contracting LLC, 848 F. Supp. 2d 304, 313 (E.D.N.Y. 2012) (observing that “[i]n recent years, courts in this district have approved hourly fee rates in the range of $200 to $450 partners, $100 to $300 for associates and $70 to $100 paralegal assistants”); Toussie v. County of Suffolk, No. 01 CV 6716, 2011 WL 2173870, at *2 (E.D.N.Y. May 31, 2011) (approving fees at the rate of $450 per hour for a partner with 34 years’ experience). In this case, although the rates requested fall within the high end of the range, the Court finds the hourly rates to be reasonable.
2. Reasonable Number of Hours Billed
*27 In awarding attorney’s fees, it is necessary for the Court to determine the reasonableness of the number of hours expended by counsel on these matters. See, e.g., Excellent Home Care Services, LLC v. FGA, Inc., 2017 WL 4838306, at *4 (citing LaBarbera v. Empire State Trucking, Inc., No. 07 CV 669, 2008 WL 746490, at *4-5 (E.D.N.Y. Feb. 26, 2007)). In reviewing a fee application, the court “should exclude excessive, redundant or otherwise unnecessary hours.” Bliven v. Hunt, 579 F.3d 204, 213 (2d Cir. 2009) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433-35, 440 (1983)). If the court finds “that some of the time was not reasonably necessary ... it should reduce the time for which compensation is awarded accordingly.” Louis Vuitton Malletier, S.A. v. LY USA, Inc., 676 F.3d 83, 111 (2d Cir. 2012); see also Struthers v. City of New York, No. 12 CV 242, 2013 WL 5407221, at *8-9 (E.D.N.Y. Sept. 25, 2013) (reducing fees because the fees requested for responding to motion papers were “excessive”); Jemine v. Dennis, 901 F. Supp. 2d 365, 393 (E.D.N.Y. 2012) (reducing requested fees by 10% because the “quality and complexity of the submissions and calculations” did not reflect the hours expended); Ehrlich v. Royal Oak Fin. Servs., No. 12 CV 3551, 2012 WL 5438942, at *3-4 (E.D.N.Y. Nov. 7, 2012) (reducing attorneys’ fees because the attorney’s litigation of the suit made apparent his “lack of experience” and for duplicative entries); Quinn v. Nassau Cnty. Police Dep’t., 75 F. Supp. 2d 74, 78 (E.D.N.Y. 1999) (reducing one attorney’s fees by 20% and another’s by 30% for unnecessary and redundant time); American Lung Ass’n v. Reilly, 144 F.R.D. 622, 627 (E.D.N.Y. 1992) (finding that the “use of so many lawyers for relatively straightforward legal tasks was excessive and led to duplication of work,” and deducting 40% of plaintiffs’ lawyer’s hours). “In determining whether an excessive amount of time was expended on the matter, the Court may consider, inter alia, the nature and quality of the work submitted by counsel in connection with the litigation ... as well as “the straightforward nature of the work performed [and] the relative simplicity of the issues involved.” Cocoletzi v. Fat Sal’s Pizza II, Corp., No. 15 CV 2696, 2019 WL 92456 (S.D.N.Y. Jan. 3, 2019) (citing Kirsh v. Fleet St., Ltd., 148 F. 3d 149, 173 (2d Cir. 1998)).
Rather than itemizing individual entries as excessive, the court may make an “across-the-board reduction, or percentage cut, in the amount of hours.” T.S. Haulers, Inc. v. Cardinale, No. 09 CV 451, 2011 WL 344759, at *3 (E.D.N.Y. Jan. 31, 2011) (citing Green v. City of New York, 403 F. App’x 626, 630 (2d Cir. 2010)). Similarly, courts routinely apply across-the-board reductions for vague entries. See, e.g., Kirsch v. Fleet St. Ltd., 148 F.3d 149, 173 (2d Cir. 1998) (affirming district court’s 20% reduction in attorneys’ fees for “vagueness, inconsistencies, and other deficiencies in the billing records”); Moore v. Diversified Collection Servs., Inc., No. 07 CV 397, 2013 WL 1622949, at *4 (E.D.N.Y. Mar. 19, 2013) (reducing attorney’s fees by 10% due to the “vagueness and incompleteness” of some of the entries); Tucker v. Mukasey, No. 03 CV 3106, 2008 WL 2544504, at *2 (S.D.N.Y. June 20, 2008) (reducing fees by 30% in part because although some entries were detailed, others were vaguely worded or inconsistent); Marisol A. ex rel. Forbes v. Giuliani, 111 F. Supp. 2d 381, 396-97 (S.D.N.Y. 2000)(concluding that “the vagueness of some of the time records prevents the Court from determining why plaintiffs were required to expend so many hours on these tasks” and accounting for this factor by reducing fees by 15%); Cabrera v. Fischler, 814 F. Supp. 269, 290 (E.D.N.Y. 1993) (reducing fees by 30% for vague entries with insufficient descriptions of work performed), rev’d in part & remanded on other grounds, 24 F.3d 372 (2d Cir. 1994), cert. denied, 513 U.S. 876 (1994).
As noted supra, defendant’s counsel has submitted contemporaneous billing records, setting forth the dates and amount of time during which services were rendered, the hourly rate at which the services were charged, and the names of the individuals who provided these services, along with a description of the work performed in connection with the two motions to compel, including preparation and travel time for the housekeeper’s deposition. Counsel reduced the total number of hours requested by 0.2 hours to account for “emails included in the time entries.” (Zahner Decl. ¶ 4).
3. Fees and Costs Related to the Housekeeper
*28 Allstate seeks compensation for the 4 hours spent by senior associate Brendan Zahner, billed at a rate of $300 per hour, and 0.6 hours, billed at a rate of $100 per hour, spent by paralegal Patrice Ho Sang on the motion to compel the name of the Toussies’ housekeeper, which amount to a total fee of $1,260. (Id.) In addition, Allstate’s counsel spent 17.5 hours on “renewed preparation for the housekeeper’s deposition” including “time spent traveling back and forth to New York a second time.” (Id. ¶ 6). Of these 17.5 hours, 10.5 hours were spent by partner Robert King in preparing for the deposition, which he billed at the rate of $450, for a total of $4,725. (Id., Ex. D). The remaining 7 hours were spent in travel time, which he also billed at the rate of $450. (Id.)
Having reviewed the quality and complexity of defendant’s written submission in connection with the motion to compel the housekeeper’s name, including consideration of the efforts made to avoid such a motion but to no avail, and having reviewed counsel’s contemporaneous billing records, the Court finds that the $1,260 in fees in connection with the motion to compel the housekeeper’s name is appropriate and respectfully recommends that $1,260 in attorney’s fees be awarded in connection with the motion to compel the housekeeper’s name.
With respect to the attorney’s fees sought in connection with the rescheduled deposition of the housekeeper, Allstate seeks compensation for 17.5 hours of partner Robert King’s time, representing “preparation and travel, not including preparation on the day of the deposition” billed at a rate of $450 per hour for a total of $7,875.00. (Id. ¶ 6). The Court has reviewed counsel’s billing records and notes that defendant’s counsel spent 10.5 hours in preparation for the deposition. The Court respectfully recommends that counsel be awarded his requested rate of $450 per hour for the 10.5 hours of preparation. Counsel also spent 7 hours traveling to and from the deposition. Although counsel seeks reimbursement for this time at the rate of $450 per hour, the Court respectfully recommends that he be awarded fees at a reduced rate of $200 per hour for the 7 hours of travel time, for a total of $6,125.00 in fees. The Court notes that counsel does not seek, nor does the Court award, fees in conjunction with time spent conducting the rescheduled deposition, as the deposition would have been conducted at defendant’s expense even if it had not been rescheduled.
Allstate also seeks $1,525.85 in expenses incurred in connection with the cancelled deposition of the Toussies’ housekeeper. (Id. ¶ 5). The deposition was cancelled the afternoon prior to the deposition, after Allstate’s counsel had already “flown to New York from Chicago and booked a hotel room that was no longer refundable.” (Allstate 11/16/17 Ltr. at 1). Counsel therefore incurred travel and other related expenses in connection with the last-minute cancellation. According to the invoices attached to the Zahner Declaration, counsel for defendant incurred $1,525.85 in costs traveling to the cancelled deposition, including airfare, lodging and meals, local transportation and payment for the court reporter who documented the cancellation. (Zahner Decl., Ex. D). Allstate has submitted invoices and documentation demonstrating the amount spent on airfare, hotels, local transportation, and meals. Accordingly, the Court respectfully recommends that Allstate be awarded $1,525.85 in costs. In total, the Court respectfully recommends that Allstate be awarded $7,385.00 in fees and $1,525.85 in costs in connection with the housekeeper’s deposition.
4. Fees and Costs For the Second Motion to Compel
As for the second motion to compel, Allstate seeks compensation for 49.8 hours expensed in connection with the motion to compel responses to its Requests for Admissions, the production of the videotapes, and the cross-motion to compel production of the attorney’s notes. Having reviewed counsel’s records, the Court finds a reduction in fees to be appropriate. In connection with this motion, partner Robert King spent 6 hours of time, billed at $450 per hour; senior associate Brendan Zahner spent 12.8 hours, billed at $300 per hour; first year associate Stacey Petrek spent 29.1 hours, billed at $200 per hour; and paralegal Patrice Ho Sang spent 1.9 hours, billed at $100 per hour, for a total of 49.8 hours spent on the second motion to compel and in response to plaintiffs’ cross-motion. The requested attorney’s fees include more than 20 hours by associate Stacey Petrek on legal research for a four-page Motion and three-page Reply, including research on “improper objections to requests to admit ... Rule 36 and ... work product privilege.” (Id., Ex. E; see also Allstate’s May 4, 2018 Motion, ECF No. 182; Allstate’s May 11, 2018 Reply, ECF No. 188). The Court finds that, for the quantity of work product produced, and in comparison to the far fewer hours spent on defendant’s prior motion to compel, some of this time was not reasonably necessary. The Court and therefore finds that a 50% reduction in hours spent by first year associate Stacey Petrek and a 15% reduction in the hours of partner Robert King, senior associate Brendan Zahner, and paralegal Patrice Ho Sang is appropriate. The Court therefore recommends that Allstate be compensated for 14.6 hours spent by Stacey Petrek billed at a rate of $200 per hour; 5.1 hours spent by partner Robert King at a rate of $450 per hour; 10.9 hours spent by Brendan Zahner billed at a rate of $300 per hour; and for 1.6 hours by Patrice Ho Sang billed at a rate of $100 per hour. Thus, the Court respectfully recommends a total award of $8,645.00 in fees for this motion.
*29 In total, the Court respectfully recommends Allstate be awarded $7,385.00 in connection with the housekeeper’s deposition and $8,645.00 for the second motion, for a total of $16,030 in attorney’s fees and $1,525.85 in costs as a sanction for plaintiffs’ failure to comply with their discovery obligations and with this Court’s prior Orders.
Accordingly, for the reasons set forth above, the Court respectfully recommends that the district court grant defendant’s motion to amend, deny plaintiffs’ motion to amend, grant defendant’s motion for sanctions, and grant defendant’s motion to compel.
Any objections to this Report and Recommendation must be filed with the Clerk of the Court within fourteen (14) days. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(2); see also Fed. R. Civ. P. 6(a), (e) (providing the method for computing time). Failure to file objections within the specified time waives the right to appeal the District Court’s order. See, e.g., Caidor v. Onondaga Cty., 517 F.3d 601, 604 (2d Cir. 2008) (explaining that “failure to object timely to a ... report [and recommendation] operates as a waiver of any further judicial review of the magistrate [judge’s] decision”).
The Clerk is directed to send copies of this Order to the parties either electronically through the Electronic Case Filing (ECF) system or by mail.
