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FILED: NEW YORK COUNTY CLERK 10/30/2019 12:48 PM INDEX NO. 151869/2018
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 10/30/2019
NORTON ROSE FULBRIGHT US LLP
Mark A. Robertson
Nandini Rao
1301 Avenue of the Americas
New York, New York 10019
Tel.: (212) 318-3000
Fax: (212) 318-3400
mark.robertson@nortonrosefulbright.com
nandini.rao@nortonrosefulbright.com
Attorneys for Plaintiff George Moss
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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GEORGE MOSS, :
:
Plaintiff, :
: Index No. 151869/2018
v. :
:
RALLYE MOTORS HOLDING, LLC, :
:
Defendant.
:
:
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REPLY IN FURTHER SUPPORT OF PLAINTIFF’S MOTION TO COMPEL
Plaintiff George Moss submits this reply in further support of his motion to compel
Defendant Rallye Motors Holding, LLC (“Rallye”) (i) to produce an organizational witness
prepared to testify on the topics identified in Mr. Moss’s August 26, 2019 Amended Notice of
Deposition of Rallye Motors Holdings, LLC (“Amended Notice of Deposition”), in accordance
with Commercial Division Rule 11-f; (ii) to answer questions about the health care costs and
expenses provided by Rallye to Juliana Terian and overruling the instruction to the Rallye
corporate witness by Rallye’s lawyer not to answer such questions; (iii) requiring Rallye to pay
Mr. Moss’s attorneys’ fees for Rallye’s refusal to provide a properly prepared corporate deponent,
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including the costs associated with attending the deposition and preparing the motion to compel;
and (iv) granting such other and further relief as the Court deems just and proper.
PRELIMINARY STATEMENT
Rallye’s opposition (Dkt. No. 44 (“Opp.”)) 1 to Mr. Moss’s motion to compel, (a) does not
dispute that Rallye is required to provide a witness to testify on the topics in the Amended Notice
of Deposition; (b) does not dispute that Rallye failed to provide a witness prepared to testify on
the topics in the Amended Notice of Deposition; (c) does not dispute that Rallye’s failure to
provide a witness prepared to testify on the topics in the Amended Notice of Deposition violates
Commercial Division Rule 11-f; (d) admits that Rallye’s President and CEO has information on
topics in the Amended Notice of Deposition; (e) does not dispute that Rallye has had the same
controller and external accountants and auditors for many years who could provide information
about topics in the Amended Notice of Deposition; (f) does not dispute that that an instruction not
to answer is inappropriate unless it is “plainly improper” and would cause “significant prejudice”
and does not attempt to show “significant prejudice”; and (g) does not distinguish the case law that
a litigant’s refusal to provide a prepared corporate deponent provides grounds for ordering that
litigant to pay the other party’s attorneys’ fees for attending the deposition and preparing the
motion to compel. For these reasons, the motion to compel should be granted.
ARGUMENT
I. Rallye Does not Provide Evidence to Dispute that the Court Should Compel Rallye
to Produce a Prepared Organizational Witness.
Rallye does not dispute that Commercial Division Rule 11-f requires it to prepare an
organizational witness to answer questions about identified topics. It does not dispute that its
1
Rallye’s opposition is titled “Affirmation of Good Faith Pursuant to Rule 202.7(C) and In Support of Motion for a
Protective Order Pursuant to CPLR 3103.”
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organizational witness has an affirmative obligation to educate herself including consulting
documents, past and present employees, and other sources. (Moss Memorandum of Law in
Support of Motion to Compel (Dkt. No. 41) at 8-9.) Rallye does not dispute that it did not object
to any of the topics in the Amended Notice and does not dispute that its witness did nothing to
prepare for the deposition. (Dkt. No. 41 at 9.)
As explained in Mr. Moss’s memorandum in support of his motion to compel, Topic
Number 7 in the Amended Notice was “Defendant’s decision to stop reimbursing or providing
payments for medical costs and expenses of George Moss and Joyce Moss” and Topic Number 8
was “Defendant’s failure to pay medical expenses to George Moss and Joyce Moss.” (Rao Aff.
¶ 6 (Dkt. No. 32), Ex. D.) Rallye’s opposition acknowledges that Rallye’s President and CEO,
Juliana Terian, made the decision to stop payments for the medical costs and expenses of George
Moss and Joyce Moss. (Opp. ¶ 8 (“Mrs. Terian immediately directed that all such payments be
discontinued.”).) This admission shows that Mrs. Terian has information responsive to Topics 7
and 8.
Similarly, Rallye admits that Mrs. Terian has information responsive to Topics 1, 2, and 5.
Topics 1 and 2 relate to the Service Agreement and Amendment No. 1 to the Service Agreement.
(Rao Aff. (Dkt. No. 32), Ex. D.) Topic 5 relates to Rallye’s payments for the medical costs and
expenses of Mr. and Mrs. Moss. (Id.) Rallye’s opposition states that, after reviewing the Service
Agreement and Amendment No. 1 to the Service Agreement, “Mrs. Terian instructed that Rallye
resume paying health insurance premiums for plaintiff and his wife.” (Opp. ¶ 13.) This statement
shows that Mrs. Terian has information about Topics 1, 2, and 5.
Topic Numbers 3, 4, and 5 deal with Rallye’s payment of the health care costs of Mr. and
Mrs. Moss for over 15 years after the agreements at issue were signed. (Rao Aff. (Dkt. No. 32),
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Ex. D.) Rallye does not dispute that the controller who has been employed by Rallye since 2014,
Rallye’s external accountants, and Rallye’s external auditors could be consulted about Rallye’s
payment of the health care costs of Mr. and Mrs. Moss as described in Mr. Moss’s memorandum
of law and accompanying evidence. (Dkt. No. 41 at 10; Rao Aff. (Dkt. No. 32), ¶ 16.) Given the
number of current and former agents and employees who could be consulted to prepare for these
topics, Rallye cannot credibly argue that it could not provide a prepared corporate witness.
Although Rallye asserts that no basis exists for Mr. Moss to recover his attorneys’ fees
(Opp. ¶ 17), Rallye does not attempt to distinguish the authority cited by Mr. Moss for the
proposition that courts should award legal fees where a party fails to produce a prepared witness.
See Desiderio v. Geico Gen. Ins. Co., No. 004718/12, 2018 N.Y. Misc. LEXIS 2892, at *3-5 (Sup.
Ct. Nassau Cnty. June 16, 2018) (awarding attorneys’ fees).
II. The Court Should Overrule the Instruction Not to Answer and Compel Rallye to
Answer Questions About the Health Care Expenses Paid for Juliana Terian.
Rallye does not dispute that instructing a witness not to answer is improper unless the
objecting party shows the answer would “cause significant prejudice.” See 22 N.Y.C.R.R.
221.1(a); Rodriguez v. Clarke Worley Goodman, M.D., No. 805453-2013, 2015 N.Y. Misc. LEXIS
2782, at *6 (Sup. Ct. N.Y. Cnty. July 28, 2015) (counsel’s instruction to the witness not to answer
a question on the grounds that it was “‘palpably improper’” was improper because the party offered
no showing of “significant prejudice”). In spite of that, Rallye makes no effort to show that any
question on which the Rallye witness was instructed not to answer would “cause significant
prejudice.” Therefore, Rallye should be ordered to answer questions about the health care costs
and expenses Rallye has provided or is providing to Mr. and Mrs. Terian. Id.
Rallye’s only response is based on relevance: “Mrs. Terian does not have a written
employment agreement with Rallye. What employment benefits, if any Juliana Terian received
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from Rallye is totally irrelevant to plaintiff’s claims in this action.” (Opp. ¶ 16.) Rallye, however,
does not dispute that relevance is not a permissible basis for instructing a witness not to answer a
question. See 22 N.Y.C.R.R. 221.1(a); Freidman v. Fayenson, 41 Misc. 3d 1236(A), 2013 N.Y.
Misc. LEXIS 5595, at *17 (Sup. Ct. N.Y. Cnty. Dec. 4, 2013) (instruction not to answer was
improper because Uniform Rule 221.2 does not include “relevance objections among the
enumerated bases under which a deponent may refuse to answer or an attorney may instruct a
deponent not to answer”), aff’d, in part, sub nom., Freidman v. Yakov, 138 A.D.3d 554, 30
N.Y.S.3d 58 (1st Dep’t 2016).
Even if relevance were a basis for instructing a witness not to answer, Rallye’s argument
fails. First, Rallye did not object to Topics Number 4 and 6 in the Amended Deposition Notice,
which cover the question to which the instruction not to answer was given. (Rao Aff. (Dkt. No.
32), ¶ 17.) The time to object to topics in a deposition notice is before the deposition, not at the
deposition.
Second, the question is relevant. Although Rallye asserts that the question is not relevant,
it does not explain why it is not relevant. Rallye does not dispute that New York has a policy of
broad discovery. The question and deposition topics seek information relevant to determining
Rallye’s practices with respect to the health care costs and expenses it paid for its senior executives
and what Rallye paid when Mrs. Terian’s husband, Peter Terian, was alive. 2 Rallye does not
dispute that Rallye would pay for the health care expenses of Mr. and Mrs. Terian and Mr. and
Mrs. Moss. (Rao Aff. (Dkt. No. 32), ¶ 17.) Rallye does not dispute that the point of the questions
about the health care of Mr. and Mrs. Terian paid by Rallye is to show that Rallye has paid, and
2
Mr. Terian died in 2002. (Rao Aff. ¶ 17.) He signed the agreement on behalf of Rallye that requires Rallye to pay
all health care costs for Mr. and Mrs. Moss for their entire lives, which is the agreement that has been breached by
Rallye that is the basis of the lawsuit.
(Rao Aff. Ex. A ¶¶ 16-22; Ex. H.)
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continues to pay, all the health care costs of Mrs. Terian, and while he was alive, Mr. Terian. (Id.).
Rallye does not dispute that Amendment No. 1, which is the basis of the lawsuit, references “health
insurance . . . for its senior executives generally[.]” (Rao Aff., Ex. H.) The question about the
health care costs of Mrs. Terian (the President and CEO of Rallye) that have been paid by Rallye
will show the health care costs paid for a senior executive whether or not she has an employment
contract. (Rao Aff. (Dkt. No. 32), ¶ 17.) The health care expenses that Rallye has paid and
currently pays for Mrs. Terian, its current president and a senior executive of the company, may
help to define the extent of the health care costs that Rallye is required to pay for Mr. and Mrs.
Moss under Amendment No. 1. (Id.). Rallye has failed to respond to or dispute any of these points
raised by Mr. Moss. The deposition topics are relevant and the questions on which an instruction
not to answer was asserted seek relevant information.
CONCLUSION
For the foregoing reasons, Mr. Moss respectfully requests that this Court grant his motion
to compel and issue an Order: (i) compelling Rallye to produce a witness prepared to testify about
the topics identified in the August 26, 2019 Amended Notice of Deposition of Rallye Motors
Holdings, LLC, in accordance with Commercial Division Rule 11-f; (ii) overruling the instruction
to the Rallye corporate witness not to answer questions about the health care costs and expenses
provided by Rallye to Juliana Terian and ordering Rallye’s witness to answer the questions;
(iii) requiring Rallye to pay Mr. Moss’s attorneys’ fees for Rallye’s refusal to provide a properly
prepared corporate deponent, including the costs associated with attending the deposition and
preparing the motion to compel; and (iv) granting such other and further relief as the Court deems
just and proper.
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October 30, 2019 Respectfully submitted,
NORTON ROSE FULBRIGHT US LLP
/s/ Mark A. Robertson_______________
Mark A. Robertson, Esq.
Nandini Rao, Esq.
1301 Avenue of the Americas
New York, New York 10019
Tel.: (212) 318-3000
Fax: (212) 318-3400
mark.robertson@nortonrosefulbright.com
nandini.rao@nortonrosefulbright.com
Attorneys for Plaintiff George Moss
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