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A N 8 D 8 B 18 AR CE www. NYLJ.com SIN Volume 258—NO. 117 tuesday, December 19, 2017

Outside Counsel First, Second Departments Split on What Is Considered ‘Documentary ’

PLR 3211(a)(1) allows a if does not conclusively refute the defendant to “move for asserted claim. judgment dismissing one The Rule or more causes of action asserted against him on A claim will be dismissed under Cthe ground that … a defense is found- By And CPLR 3211(a)(1) where “documen- Jordan M. Muhammad ed upon documentary evidence.” Engelhardt U. Faridi tary evidence submitted conclusively The CPLR does not define the phrase establishe[s] a defense to the assert- “documentary evidence.” Commen- Departments have split on whether ed claims as a matter of ." Spoleta tators on the CPLR have attempted certain types of paper qualify as Constr. v. Aspen Ins. UK, 27 N.Y.3d 933, to fill the void by offering their own “documentary evidence.” See David 936 (2016) (quoting Beal Sav. Bank take on the issue. See, e.g., Higgitt, D. Siegel, New York Practice, 259 v. Sommer, 8 N.Y.3d 318, 324 (2007)); “CPLR 3211(a)(1) and (a)(7) Dismiss- (5th Ed. Jan. 2017 supplement) (not- see also Leon v. Martinez, 84 N.Y.2d al Motions—Pitfalls and Pointers,” ing the split between the First and 83, 88 (1994). The phrase “documen- 83 N.Y. St. B.A. J. 32, 32 (November/ Second Departments as to whether tary evidence” is not defined in the December 2011) (hereinafter Higgitt an email can suffice as documen- CPLR. See Higgitt, Practice Commen- 2011); Paige Bartholomew, “It May tary evidence under CPLR 3211(a) tary, McKinney’s Cons of NY, Look Like Documentary Evidence, (1)). The First Department has Book 7B, CPLR 3211:10 (2016) (here- But Is it Under CPLR 3211(a)(1)?,” taken a flexible approach, holding inafter Higgitt Practice Commentary, New York Commercial Division Prac- that documents that are “essentially 3211:10). tice Blog (Sept. 14, 2017); Mark A. undeniable” constitute “documen- In the First Department, “[t]o Berman, “iPhones, Twitter, Deleted tary evidence.” The Second Depart- qualify as ‘documentary,’ the paper’s Emails and ESI Under CPLR 3211(A) ment has taken a more categorical content must be essentially undeni- (1),” New York Law Journal (Nov. approach, holding that emails and able and, assuming the verity of the 4, 2014). And the First and Second correspondence such as letters do paper, and the validity of its execu- not constitute “documentary evi- tion, will itself support the ground on dence.” Even in the First Department, which the motion is based.” Amster- Jordan Engelhardt is an associate and Muhammad U. Faridi is a partner at Patterson however, motions to dismiss on the dam Hospitality Grp. v. Marshall-Alan Belknap Webb & Tyler, where they practice in the basis of documentary evidence are Assoc., 120 A.D.3d 431, 432 (1st Dep’t litigation department. Stephen P. Younger, a partner at the firm, contributed to the prepara- held to an exacting standard, and 2014) (internal quotations, brackets tion of this article. an email will not support dismissal and ellipses omitted). In the Second tuesday, December 19, 2017

Department, the test was recently records can fall on the ‘documentary However, evidence beyond the stated as follows: “in order for evi- evidence’ side of the ledger.” Higgitt pleadings may be considered in con- dence to qualify as documentary, it 2011 at 33 (collecting cases). Even if nection with CPLR 3211(a)(7) motions must be unambiguous, authentic, the evidence is considered “documen- in limited circumstances where the and undeniable.” Fox Paine & Co. v. tary,” Higgitt notes that the evidence evidence “establish[es] conclusively Houston Cas. Co., 153 A.D.3d 673, 677- must conclusively refute or establish that plaintiff has no cause of action.” 78 (2d Dep’t 2017). a defense to the cause of action for Conners 2015 (quoting Rovello v. dismissal to be granted. Higgitt 2011 Orofino Realty Co., 40 N.Y.2d 633, Commentary on the Rule at 33 (citing Beal Sav. Bank, 8 N.Y.3d 636 (1976)). According to the Advisory Com- at 324; AG Capital Finding Partners, The Split of Authority mittee on Civil Practice, a standing L.P. v. State St. Bank & Trust Co., 5 advisory committee established by N.Y.3d 582 (2005); Goshen v. Mutual Although the First and Second the Chief Administrative Judge of the Life Ins. Co. of N.Y., 98 N.Y.2d 314 Departments agree that an affidavit courts, CPLR 3211(a)(1) “was added (2002); Leon, 84 N.Y.2d 83). does not meet the requirements for to cover something like a defense To avoid “a skirmish over whether “documentary evidence” (Phillips v. based on the terms of a written con- the (a)(1) motion is founded on the Taco Bell, 152 A.D.3d 806, 807 (2d tract.” David D. Siegel, New York proper character of evidence,” Hig- Dep’t 2017) (“An affidavit is not doc- Practice, 259 (5th ed. 2010). Siegel gitt has suggested that defendants umentary evidence because its con- observes that “[t]his was not a basis also consider relying on CPLR 3211(a) tents can be controverted by other for dismissal under the pre-CPLR law,” (7) when seeking dismissal based on evidence, such as another affidavit.”); and “there is not much to tell us what evidence they believe conclusively Serao v. Bench-Serao, 149 A.D.3d 645, qualifies as ‘documentary’ under this refutes the plaintiff’s claims. Higgitt 646 (1st Dep’t 2017) (“[F]actual affida- paragraph.” Id. 2011 at 34. CPLR 3211(a)(7) provides vits do not constitute documentary Higgitt cautions in his practice com- a separate ground for dismissal where evidence within the meaning of the mentaries that, although the ordinary “the pleading fails to state a cause statute.”), the departments diverge meaning of the phrase “documentary of action.” Siegel similarly proposes with respect to whether an email evidence” would suggest that “any- that “a defendant relying on an email or other correspondence such as a thing reduced to paper could qual- should consider invoking both sub- letter can constitute “documentary ify[,] … ‘[d]ocumentary evidence’ divisions (a)(1) and (a)(7) in a CPLR evidence” under CPLR 3211(a)(1). actually encompasses precious few 3211 motion.” Siegel Jan. 2017 supple- The Second Department has repeat- documents, making CPLR 3211(a)(1) ment, supra n.3, §259. edly held that letters and emails sim- a decidedly narrow ground on which As commentators have observed, ply “fail to meet the requirements for to seek dismissal.” Higgitt Practice courts are generally limited to “an documentary evidence.” Gawrych v. Commentary, 3211:10; see also Hig- examination of the pleadings to deter- Astoria Fed. Sav. & Loan, 148 A.D.3d gitt 2011 at 32 (same); Bartholomew, mine whether they state a cause of 681, 682 (2d Dep’t 2017); see also supra n.2. action” on a motion to dismiss under 25-01 Newkirk Ave. v. Everest Natl. Higgitt further observes that “medi- CPLR 3211(a)(7). Miglino v. Bally Ins. Co., 127 A.D.3d 850, 851 (2d Dep’t cal records, letters, newspaper arti- Total Fitness of Greater N.Y., 20 N.Y.3d 2015) (same); Integrated Constr. Servs. cles, printouts of Internet web pages, 342, 351 (2013); see also Siegel Jan. v. Scottsdale Ins. Co., 82 A.D.3d 1160, and transcripts of radio and televi- 2017 supplement, supra n.3, §259; Pat- 1163 (2d Dep’t 2011) (letters are not sion interviews” “do not quality as rick M. Connors, “Use of Affidavits on considered “documentary evidence ‘documentary’” evidence, whereas CPLR 3211(a)(7) Motion,” New York within the intendment of CPLR “, deeds, leases, mortgages, Law Journal (Jan. 20, 2015) (herein- 3211(a)(1)”). For example, in affirm- stipulations of settlement, and judicial after Connors 2015). ing the denial of a motion to dismiss tuesday, December 19, 2017 in Zellner v. Odyl, the Second Depart- were described and quoted in the er claims, after Christie’s rescinded ment stated: “the email messages complaint itself to be documentary the $8.8 million sale of the “Taj Mahal submitted by the defendant did not evidence"); Art & Fashion Group v. Diamond” from the Taylor estate. The constitute ‘documentary evidence’ Cyclops Prod., 120 A.D.3d 436, 438 consignment agreement between for the purposes of CPLR 3211 (a)(1).” (1st Dep’t 2014) (“Email correspon- Christie’s and the estate contained Zellner v. Odyl, 117 A.D.3d 1040, 1041 dence can, in a proper case, suffice as a provision permitting Christie's to (2d Dep't 2014) (citations omitted). documentary evidence for purposes rescind a sale “‘at any time if Chris- The Second Department’s decision of CPLR 3211(a)(1).”). The same is tie’s in [its] reasonable judgment in Cives v. George A. Fuller Co., 97 true of letters. WFB Telecommunica- determines that the offering for sale A.D.3d 713 (2d Dep’t 2012) is instruc- tions v. NYNEX, 188 A.D.2d 257, 259 of any Property has subjected or may tive. In Cives, the plaintiff sued Fuller, (1st Dep’t 1992), lv. denied 81 N.Y.2d subject Christie's and/or Seller to any a general contractor, and Liberty 709 (1993). liability, including liability under war- Mutual Insurance Company for pay- However, even in the First Depart- ranty of authenticity or title.’” Id. at ment on invoices relating to a con- ment, emails that do not “utterly 3 (quoting consignment agreement). struction project. Id. at 713-14. Lib- refute[] plaintiff’s factual allega- The trustees argued that Christie’s erty Mutual moved for dismiss under tions” and “conclusively establish[] cancelled the sale, not due to any CPLR 3211(a)(1) based on “various a defense to the asserted claims as bona fide concern that the sale sub- letters and emails” that it claimed a matter of law” still will not support jected Christie’s or the seller to liabil- demonstrated that the payment ity, but “to appease the buyer” who bond asserted against it had never The CPLR does not was “a frequent bidder at Christie’s become effective. Id. at 6. The Second define the phrase auctions” and had “refused to bid in Department reversed the trial court’s “documentary evidence.” other upcoming auctions until the grant of dismissal, holding that “the Diamond purchase was cancelled.” letters and emails submitted by Lib- a motion to dismiss under CPLR Id. at 3-4. erty did not constitute ‘documentary 3211(a)(1). Amsterdam Hospitality In support of its motion to dismiss evidence’ under CPLR 3211(a)(1) and, Group, 120 A.D.3d at 432-33 (quot- the declaratory judgment claim under thus, should not have been consid- ing Goshen, 98 N.Y.2d at 326; Weil, CPLR 3211(a)(1) and (a)(7), Christie’s ered by the Supreme Court.” Id. Gotshal & Manges v. Fashion Boutique submitted “several emails between The First Department takes a less of Short Hills, 10 A.D.3d 267, 270-271, Christie's executives and Christie's absolute approach to email evidence. (1st Dep’t 2004)). Thus, emails can general counsel evidencing concern As the court stated in Kolchins v. qualify as documentary evidence in that the buyer could bring a meritori- Evolution Mkts., “there is no blanket the First Department, but only in the ous action against Christie's based rule by which email is to be excluded right case. on alleged misrepresentations it had from consideration as documentary A recent decision by Justice Barry made about the Diamond at the Auc- evidence under the statute.” Kolchins Ostrager of the New York County tion.” Id. at 3-4. These emails were v. Evolution Mkts., 128 A.D.3d 47, 59 Commercial Division in Berkowitz proffered in an effort to show that (1st Dep’t 2015). Thus, “emails can v. Christie’s, No. 652549/2017, 2017 Christie’s had a reasonable belief that qualify as documentary evidence if N.Y. Misc. LEXIS 4027 (Sup. Ct. N.Y. the sale could subject it to liability. they meet the ‘essentially undeniable’ Cnty. Oct. 23, 2017) is illustrative. See id. at 4. test.” Amsterdam Hospitality Group, In Berkowitz, the trustees of Eliza- Although the court considered 120 A.D.3d at 433; see also Mendoza beth Taylor’s estate sued the auc- the substance of the emails submit- v. Akerman Senterfitt, 128 A.D.3d 480, tion house Christie’s for breach of ted by Christie’s, Justice Ostrager 482 (1st Dep’t 2015) (“The court prop- , declaratory judgment, and concluded that “[t]he documentary erly deemed the above emails that breach of fiduciary duty, among oth- evidence—while powerful—is not tuesday, December 19, 2017 without some ambiguity, and fails not conclusive and thus could not her malpractice claim. Hansen-Nord v. to conclusively rebut Plaintiffs' support a motion to dismiss under Youmans, No. 651924/2014, 2015 N.Y. claims.” Id. at 6. The court noted CPLR 3211(a)(1). Misc. LEXIS 3237, at *10 (Sup. Ct. N.Y. that “according to emails between Although decisions denying Cnty. Sept. 1, 2015), appeal dismissed Christie's executives, there appears motions to dismiss under 3211(a)(1) by, 142 A.D.3d 432 (1st Dep't 2016). to [] have been at least some con- abound, emails can still be valuable Conclusion cern regarding ‘client Relations’ on such motions when they irrefut- and some equivocation as to the ably demonstrate an objective fact The time may be ripe for the Court strength of Christie’s legal position fatal to a claim. For example, in Cham- of Appeals to resolve the split of in a potential dispute with the Dia- bers v. Weinstein, No. 157781/2013, authority between the First and Sec- mond's buyer.” Id. The Berkowitz 44 Misc. 3d 1224(A) (Sup. Ct. N.Y. ond Departments on whether emails decision highlights the exacting Cnty. Aug. 22, 2014), aff'd, 135 can quality as documentary evidence standard a defendant faces when A.D.3d 450 (1st Dep't 2016), Justice under CPLR 3211(a)(1), particularly seeking dismissal under CPLR since so much business today is con- 3211(a)(1) based on documentary The time may be ripe for the ducted via email. Indeed, emails are evidence. even used in some circumstances Court of Appeals to resolve the Another recent New York County to form contracts. (New York's Elec- Commercial Division decision by split of authority between the tronic Signatures and Records Act Justice Jeffrey Oing, WL Ross & Co. First and Second Departments ("ESRA") provides that, with impor- v. Storper, No. 650107/2016, 2016 N.Y. on whether emails can qual- tant exceptions, "an electronic record Misc. LEXIS 2531 (Sup. Ct. N.Y. Cnty. ity as documentary evidence shall have the same force and effect July 7, 2016) demonstrates that an under CPLR 3211(a)(1), partic- as those records not produced by email will not constitute documen- ularly since so much business electronic means." N.Y. State Tech. tary evidence where it does not today is conducted via email. Law §305(3) (Consol. 2017). For a conclusively demonstrate grounds discussion of the exceptions, which for dismissal. In WL Ross & Co., an Peter Sherwood of the New York include documents providing for the investment firm sued Storper, a County Commercial Division held that disposition of property upon death former senior managing director, emails demonstrating that a defen- or incompetence and "negotiable for breach of non-compete clauses dant was still negotiating a transac- instruments and other instruments in the parties’ agreements. See id. tion during February to April 2012 of title," see ESRA §307(2). N.Y. State at 1-2. Storper moved to dismiss conclusively established that the Tech. Law §307 (Consol. 2017)). under theories of waiver, laches same defendant did not know that The First Department’s rule properly and equitable estoppel, pointing to the transaction had actually termi- places substance over form by per- an email from his former employer nated in 2011, and therefore could mitting courts to consider electronic congratulating him on the formation not have aided and abetted fraud. communications as documentary evi- of his new merchant banking busi- Id. And in Hansen-Nord v. Youmans, dence so long as they are essentially ness and suggesting that the par- New York County Commercial Divi- undeniable and conclusively establish a ties explore co-investments. Id. at sion Justice Anil Singh found that defense. The rule leaves the door open *5-6. Justice Oing rejected this evi- an email from plaintiff plainly show- for defendants to bring CPLR 3211(a)(1) dence, because it did “not conclu- ing that she was acting as her own motions based on other electronic com- sively establish any of defendant's attorney disproved that she had an munications such as text messages. defenses.” Id. at 6. As in Berkowitz, attorney-client relationship with the Reprinted with permission from the December 19, 2017 edition of the NEW while the defendant’s email may attorney-defendants at the relevant YORK LAW JOURNAL © 2017 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, have some probative value, it was time, and thus conclusively refuted contact 877-257-3382 or [email protected]. # 070-12-17-21