Knopf v. Esposito

Background

Norma Knopf and Michael Knopf brought this action under 42 U.S.C. § 1983, a federal civil-rights law. They alleged that the defendants conspired to corrupt a state-court official so that restrictions on the sale of a penthouse and the distribution of sale proceeds would be eliminated.

The plaintiffs moved to compel non-party attorney Matt Bronfman to produce communications with his client, non-party Michael Phillips, and co-counsel Lori Braverman. The communications occurred on January 7 and 11, 2016. The plaintiffs did not dispute that the communications were protected by the attorney-client privilege. They argued that the crime-fraud exception allowed discovery because the communications might discuss a December 29, 2015 court order relevant to the penthouse sale and to their claims.

The plaintiffs also argued that Phillips and his attorneys concealed the December 29 order from a title company. They contended that Phillips’s knowledge of the order was relevant to the motives of Sanford’s attorneys, who were defendants in this action, when they called a court employee.

Arguments and legal standard

Phillips argued that the plaintiffs had not shown probable cause to believe that the communications were made in furtherance of a crime or fraud. He also argued that the communications were irrelevant to this § 1983 action and concerned only the claims in the related case, in which the Knopfs sued him for fraudulent conveyance under New York law. Phillips alternatively requested an in-camera review, meaning private review by the court, before any production was ordered.

The court explained that the crime-fraud exception applies only when the communication itself was made in furtherance of a crime or fraud. A party seeking to overcome attorney-client privilege must show probable cause to believe both that a crime or fraud was committed and that the communications furthered it.

The court noted that the Second Circuit had previously reinstated the related case after finding that the Knopfs had submitted evidence supporting allegations that Phillips knew details of the state-court litigation and orders restricting the penthouse sale and had prevented his title company from learning all those details.

Ruling

The court denied the motion to compel for several reasons. First, it was brought too late in this action: discovery was scheduled to close on February 19, and summary-judgment motions were due on March 12. Second, the plaintiffs had not shown a sufficient connection between the requested communications from Phillips’s attorneys and their claims in this § 1983 action.

The court also found that the plaintiffs had already obtained discovery directly from the title company and had not disputed Bronfman’s description of that evidence. According to Bronfman, Sanford—not Phillips—was the channel through which the title company received material information. The court reasoned that, if Bronfman’s evidence were critical, the plaintiffs would have sought it during discovery in the related case.

The court concluded that the plaintiffs had not carried their burden to show probable cause for overcoming the privilege, sufficient relevance to the § 1983 claims, or adequate diligence to justify an in-camera review and further litigation at that stage. The motion to compel was denied.