Preview
UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 1 of 2 Trans ID: LCV2023925259
Michael J. Feldman, Esq. (042771996)
OLENDERFELDMAN LLP
422 Morris Avenue
Summit, New Jersey 07901
(908) 964-2486
Attorneys for Plaintiff,
WRE Consulting, LLC
:
WRE CONSULTING, LLC, : SUPERIOR COURT OF NEW JERSEY
: LAW DIVISION:
Plaintiff, : UNION COUNTY
:
v. : DOCKET NO.: UNN- L-314-22
:
CLEAN-TEX SERVICES, INC., : CIVIL ACTION
:
Defendant. : NOTICE OF MOTION TO COMPEL
: DISCOVERY AND EXTEND THE
: DISCOVERY END DATE
TO: Pearl Shah, Esq.
McGrail & Bensinger LLP
888-C 8th Avenue, #107
New York, New York 10019
Attorneys for Defendant
COUNSEL:
PLEASE TAKE NOTICE that on March 31, 2023, at 9:00 a.m. or as soon thereafter as
counsel may be heard, OlenderFeldman LLP, attorneys for Plaintiff, WRE Consulting, LLC
(“Plaintiff”), will move before the above-named Court pursuant to R. 4:18-1(b)(2) and R. 4:23-
5(c) for an Order (1) compelling Clean-Tex Services, Inc. (“Defendant”) to produce all documents
in its possession and/or control responsive to Plaintiff’s Supplemental Request for the Production
of Documents notwithstanding its objections thereto; (2) compelling Defendant to identify, under
oath, the scope of documents sought of Defendant by Plaintiff in discovery which are missing or
destroyed; (3) extending discovery for a reasonable period of time for the sole and limited purpose
of providing Defendant time to produce all documents responsive to Plaintiff’s Supplemental
UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 2 of 2 Trans ID: LCV2023925259
Request and for Plaintiff to review same to confirm that the production is complete, and for
Defendant to comply with item (2) of the Order as identified above; (4) awarding Plaintiff its
counsel fees and costs associated with the application pursuant to R. 4:23-1(c); and (5) awarding
such other relief that the Court deems just and proper.
PLEASE TAKE FURTHER NOTICE that in support of their Motion, Plaintiff will
rely upon the: Certification of Michael J. Feldman, Esq. (redacted version filed on the docket and
separate unredacted version served on counsel of record and filed with the Court UNDER
SEAL), and a letter brief in lieu of a more formal brief submitted herewith (redacted version filed
on the docket and separate unredacted version served on counsel of record and filed with
the Court UNDER SEAL).
PLEASE TAKE FURTHER NOTICE that oral argument is waived unless an opposition
is filed.
PLEASE TAKE FURTHER NOTICE that a proposed form of Order is submitted
herewith.
PLEASE TAKE FURTHER NOTICE that the original discovery end date was January
2, 2023. The discovery end date was extended once by way of the automatic 60-day extension to
March 3, 2023. This is the first motion to extend the discovery end date.
PLEASE TAKE FURTHER NOTICE that an Arbitration is scheduled for May 24, 2023.
OLENDERFELDMAN LLP
Attorneys for Plaintiff
By:/s/Michael J. Feldman
MICHAEL J. FELDMAN
Dated: March 15, 2023
UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 1 of 8 Trans ID: LCV2023925259
Michael J. Feldman, Esq. (042771996)
OLENDERFELDMAN LLP
422 Morris Avenue
Summit, New Jersey 07901
(908) 964-2486
Attorneys for Plaintiff,
WRE Consulting, LLC
:
WRE CONSULTING, LLC, : SUPERIOR COURT OF NEW JERSEY
: LAW DIVISION:
Plaintiff, : UNION COUNTY
:
v. : DOCKET NO.: UNN- L-314-22
:
CLEAN-TEX SERVICES, INC., : CIVIL ACTION
:
Defendant. : CERTIFICATION OF MICHAEL J.
: FELDMAN, ESQ., IN SUPPORT OF
: PLAINTIFF’S MOTION TO COMPEL
DISCOVERY AND EXTEND THE
DISCOVERY END DATE
MICHAEL J. FELDMAN, ESQ., of full age, certifies and says:
1. I am an attorney at law of the State of New Jersey, and a partner with the firm of
OlenderFeldman LLP, counsel for Plaintiff WRE Consulting, LLC (“Plaintiff”) in the above-
captioned action. I am fully familiar with the facts and circumstances related herein. I submit this
Certification based upon my personal knowledge, in support of Plaintiff’s Motion to Compel
Defendant, Clean-Tex Services, Inc. (“Clean-Tex” or “Defendant”) to Produce Documents in
response to Plaintiff’s Supplemental Request for the Production of Documents and to extend the
Discovery End Date for a reasonable period of time for the sole and limited purpose of providing
Defendant time to produce all documents responsive to Plaintiff’s Supplemental Request and for
Plaintiff to review same to confirm that the production is complete, and for Defendant to identify,
under oath, the scope of documents missing or destroyed.
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2. This action arose out of Clean-Tex’s knowing and intentional refusal and failure to
comply with its legal obligations in connection with services provided by Plaintiff, including
primarily, its financial obligations to Plaintiff.
3. Following the filing of the Complaint on January 28, 2022 (a true and correct copy
of which is attached hereto as Exhibit A) and Defendant’s filing of an Answer on March 8, 2022
(a true and correct copy of which is attached hereto as Exhibit B), Plaintiff served Clean-Tex with
its initial Request for the Production of Documents (“Initial Request”) on October 26, 2022. A
true and correct copy of this Initial Request is attached hereto as Exhibit C.
4. On November 23, 2022, Defendant provided its written response to Plaintiff’s
Initial Request. A true and correct copy of Defendant’s written responses as Exhibit D.
5. Thereafter, on December 23, 2022, Defendant provided Plaintiff’s counsel with an
e-mail, which attached “Defendant’s First amended discovery responses and a link to Defendant’s
first production of documents carrying the Bates designation Def_00001-02358” with some
additional information and a “sharepoint” link from Defendant’s attorney’s law firm. A true and
correct copy of Defendant’s December 23, 2022 e-mail is attached hereto as Exhibit E. Upon
receipt of the December 23 e-mail, Plaintiff’s law firm opened the link and downloaded the
documents provided in that link. As no documents were designated “Attorney’s Eyes Only” or
otherwise restricted, a copy of these documents was also provided to Plaintiff. Exhibit E.
6. On or about January 23, 2023, Plaintiff served Defendant with a “Supplemental
Request for the Production of Documents” (the “Supplemental Request”) premised upon
Defendant’s initial production of documents on December 23. A true and correct copy of the
Supplemental Request is attached hereto as Exhibit F. The Supplemental Request included
inquiries regarding Defendant’s public sale or transfer of its assets after this dispute arose to, inter
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alia, avoid its financial obligation to Plaintiff; communications involving Defendant, third-parties
and Defendant’s attorneys concerning payments to Plaintiff, transfer of Defendant’s assets, the
deletion by Defendant of e-mail accounts relevant to this litigation, spoliation of evidence by
Defendant, financial transactions engaged in by Defendant to avoid its legal obligations to
Plaintiff, a lawsuit by the New York Attorney General against, inter alia, Defendant’s owners
involving fraudulent financial actions, agreements between Defendant and its numerous related
corporate entities (i.e., those with apparently common ownership), and a few additional issues.
Exhibit F. The Supplemental Request clearly identified specific documents produced by
Defendant in its prior discovery responses which Defendant (as set forth in the next paragraph)
asserts may be subject to the attorney-client privilege. However, at no time between receiving the
Supplemental Request and providing its written responses over a month later did Defendant
contact Plaintiff and make any effort to recover/retrieve such documents, nor submit any assertion
or claim to Plaintiff that any such documents were subject to the attorney-client privilege or work
product doctrine. Rather, Defendant continued to remain silent on the issue for yet another month
(it had already been a month since the documents were produced by Defendant).
7. On or about February 27, 2023, Defendant served its written response
(“Supplemental Response”) to the Supplemental Request. A true and correct copy of Defendant’s
response to Plaintiff’s Supplemental Production is attached hereto as Exhibit G. No documents
were produced in connection with the Supplemental Response, and on its face the Supplemental
Response states that no responsive documents will be provided. Rather, the Supplemental
Response asserted numerous improper and inapplicable objections, including, generally (1) the
documents sought are not relevant to this litigation; (2) the documents are protected by the
attorney-client privilege and work product protection; and (3) that the requests prematurely
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demanded discovery that may only be appropriate post-judgment. In Supplemental Response 23,
Defendant “demands that Plaintiff destroy or return any of Defendant’s privileged communications
or documents received by Plaintiff through any means, as Defendant has not waived its privilege
for any such communications or documents.” Despite making its sole document production on or
about December 23, 2022, this was the first time that Defendant suggested that there may have
been documents its produced over 2 months earlier on December 23 which were subject to the
attorney-client privilege. However, at no time, in its Supplemental Response or thereafter, has
Defendant provided a privilege log or identified even a single document it believes is subject to
the attorney-client privilege, nor asserted why the attorney-client privilege would apply to any
such document(s).
8. Promptly upon receipt of the deficient Supplemental Response, counsel for Plaintiff
sent a deficiency letter (the “Deficiency Letter”) to counsel for Defendant on March 1, 2023. A
true and correct copy of the Deficiency Letter is attached hereto as Exhibit H. The Deficiency
Letter addressed each of Defendant’s three defective objections (including its assertion of the
attorney-client privilege) and the spoliation of evidence. The second defective objection addressed
Defendant’s late claim of some amorphous attorney-client privilege. Apart from addressing certain
specific documents and providing the relevant legal analysis, Plaintiff also asked Defendant to
identify those documents it believed were subject to the attorney-client privilege for the reasons
set forth in the Deficiency Letter. Exhibit H.
9. On or about March 2, 2023, counsel for Defendant submitted a letter in response to
the Deficiency Letter, but limited its response to the issue of the attorney-client privilege. A true
and correct copy of Defendant’s March 2 response to the Deficiency Letter is attached hereto as
Exhibit I. Defendant’s March 2 response still failed to identify any documents it believed were
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subject to the attorney-client privilege and Defendant did not advise of any intent to ever identify
such documents.
10. After investigating Defendant’s scurrilous allegations internally, on March 6, 2023,
Plaintiff’s counsel submitted a letter to Defendant in response to its March 2 letter. A true and
correct copy of Plaintiff’s counsel March 6 letter is attached hereto as Exhibit J. Plaintiff’s March
6 letter provided, inter alia, that all documents at issue were knowingly and intentionally produced
by Defendant, that there could be no inadvertent disclosure, that no documents produced by
Defendant appeared to be subject to the attorney-client privilege at this point (if they ever were),
confirmed that Defendant still has not identified any documents it believes are privileged,
responded to Defendant’s ethics threats, and again invited Defendant to discuss. Exhibit J.
Plaintiff’s March 6 letter also proposed a practical solution: Defendant would identify the
documents it produced that it believed were privileged; Plaintiff would pull those documents aside;
and the parties would ask the Court to decide the applicability of the attorney-client privilege to
such documents to the extent a dispute remained. To date, Defendant has not accepted Plaintiff’s
proposal.
11. On March 9, 2023, Defendant’s counsel responded to the Deficiency Letter
concerning issues other than the attorney-client privilege. A true and correct copy of Defendant’s
March 9 response is attached here to as Exhibit K.
12. While it remains unclear what documents Defendant contends are subject to the
attorney-client privilege, its written responses to Plaintiff’s Supplemental Request suggests that
Defendant believes the documents attached here as Exhibit L (submitted UNDER SEAL given
the allegations) may be subject to the attorney-client privilege. We do not know if Defendant
believes any other documents it already produced are subject to the attorney-client privilege, and
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since Defendant did not produce any privilege log, we do not know anything about the documents
withheld by Defendant on the basis of attorney-client privilege.
13. Attached hereto as Exhibit M is a true and correct copy of Brian Powers’ LinkedIn
page as of March 13, 2023. As set forth in more detail in the letter brief submitted herewith, most
or all of the e-mails at issue in this Motion were to or from Mr. Powers, who appears to neither be
an employee nor owner of Defendant. Rather, he works for other businesses owned by the Zahler
family – businesses which may be inextricably intertwined with Defendant and liable for its
financial obligations, whether through the concept of piercing the corporate shell, successor
liability and/or fraudulent conveyance. All e-mails involving Mr. Powers came from or were sent
to business e-mail accounts that were not Clean-Tex e-mail accounts (which accounts were used
by at least one other individual, so we know they exist).
14. Attached hereto as Exhibit N is a true and correct copy of David Zahler’s LinkedIn
profile as of March 14, 2023. As set forth in more detail in the letter brief submitted herewith, Mr.
Zahler is the owner and CEO of many of the Zahler family businesses, including Defendant.
However, unlike Mr. Powers, Mr. Zahler does list Defendant as a company he works for as CEO
(while Mr. Powers does not include Defendant, though he does include other Zahler-family owned
businesses).
15. To date, Defendant has failed and refused to provide documents responsive to
Plaintiff’s Supplemental Request.
16. The lack of response from Defendant necessitated the filing of this Motion.
17. The undersigned has made multiple good faith efforts to resolve this dispute
pursuant to R. 1:6-2(c) without motion practice. See Exhibits H and J.
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18. Plaintiff has served responses to discovery demands served by Defendant and is not
in default of any outstanding discovery obligations.
19. Related to Defendant’s failure to comply with discovery demands, Plaintiff
requests the discovery period be extended for a reasonable period of time for the sole and limited
purpose of providing Defendant time to produce all documents responsive to Plaintiff’s
Supplemental Request and for Plaintiff to review same to confirm that the production is complete,
and for Defendant to identify, under oath, the scope of documents missing or destroyed (as
acknowledged by Defendant in its responses to Plaintiff’s Request for Admissions and the
documents attached hereto as Exhibit L.
20. The extension of the Discovery End Date is warranted because of the delay caused
by Defendant’s failure to respond and to permit Plaintiff to review the delinquent discovery.
21. The current discovery period expired on March 3, 2023. An arbitration date is
scheduled for May 24, 2023. However, Plaintiff does not seek/require an adjournment of the
arbitration as a condition of the relief it seeks provided Defendant complies with its obligations
sought herein before that date.
22. Discovery was extended once by way of consent for a period of sixty (60) days. A
true and correct copy of the Clerk’s notice extending discovery is attached hereto as Exhibit O.
This is the first Motion filed in this case to extend discovery.
23. Plaintiff will be prejudiced and its ability to prosecute its claims and defenses
hampered if discovery is not extended due to Defendant’s failure to timely comply with its
discovery obligations as set forth herein.
24. Neither Defendant nor the judicial system will be prejudiced or harmed by
extending the discovery end date as requested herein.
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25. Based upon the aforementioned, and as set forth in more detail in the attached letter
brief, Plaintiff has shown exceptional circumstances pursuant to R. 4:24-1(c) to extend the
discovery end date for the reasons set forth above.
I certify that the foregoing statements made by me are true. I am aware that if any of the
foregoing statements made by me are willfully false, I am subject to punishment.
/s/Michael J. Feldman
MICHAEL J. FELDMAN
Dated: March 15, 2023
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Marguerite Kneisser, Esq.
908-964-2432
mkneisser@olenderfeldman.com
Please respond to New Jersey address
March 15, 2023
VIA ECOURTS
The Hon. Alan G. Lesnewich, J.S.C.
Union County Courthouse
2 Broad Street, 1st Floor, Rotunda
Elizabeth, New Jersey 07207
Re: WRE Consulting, LLC v. Clean-Tex Services, Inc.
Docket No.: UNN-L-314-22
Dear Judge Lesnewich:
Please accept this letter in lieu of a more formal submission on behalf of Plaintiff WRE
Consulting, LLC (“WRE” or “Plaintiff”), in support of Plaintiff’s Motion to Compel Defendant,
Clean-Tex Services, Inc. (“Clean-Tex” or “Defendant”) to Produce Documents in response to
Plaintiff’s Supplemental Request for the Production of Documents and to extend the Discovery
End Date for a period of time for Defendant to comply and for Plaintiff to review same.
BACKGROUND
This action is brought by WRE against Clean-Tex as a result of Clean-Tex’s knowing and
intentional refusal and failure to comply with its legal obligations in connection with services
provided by WRE, including specifically, its refusal to pay amounts due. To exacerbate the
foregoing, it now appears that Clean-Tex has defrauded WRE, engaged in the fraudulent transfer
of its assets to, inter alia, avoid its debt to WRE, created successor liability in the acquiring entity,
and engaged in the spoliation of evidence.
By way of background, WRE is a consulting company that provides advisory and
negotiation services related to potential economic development inducements, business tax
incentives, and benefits related to using certain company locations in New Jersey and other states
(“Services”). On or about August 10, 2017, WRE and Clean-Tex entered into a written Incentives
Negotiation Agreement (the “Agreement”) for WRE to provide Clean-Tex with its Services,
including consultations, negotiations, and other related communications with government and
appropriate parties to obtain an incentives award (an “Incentives Award”) on behalf of Clean-Tex.
In consideration for these Services, Clean-Tex was required to pay WRE in accordance with the
payment schedule set forth in the Agreement, as later amended and agreed to by the parties.
Specifically, WRE was entitled to full payment for its Services in the event Clean-Tex received an
incentives award (with the size of the payment based upon the size of the Incentives award).
New Jersey New York
422 Morris Avenue 1180 Avenue of the Americas, 8th Floor olenderfeldman.com
Summit, New Jersey 07901 New York, New York 10036 fax: 908-810-6631
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March 15, 2023
WRE provided the Services properly and in accordance with the Agreement and Clean-
Tex accepted all Services performed by WRE. On or about December 12, 2017, Clean-Tex
received an Incentives Award. Despite paying WRE approximately $436,151.11 in fees owed to
WRE as a result of receiving the Incentives Award, Clean-Tex breached its contractual obligations
by failing and refusing to pay WRE in full for its Services. As a result, on January 28, 2022, WRE
filed a Complaint against Clean-Tex for breach of contract and related claims. (March 10, 2023
Certification of Michael J. Feldman, Esq. (“Feldman Cert.”) submitted herewith, Exhibit A).
Clean-Tex filed an Answer to the Complaint and Affirmative Defenses on March 8, 2022.
(Feldman Cert., Exhibit B).
Defendant’s Answer asserts, inter alia¸ the following Affirmative Defenses: (a) “Plaintiff’s
claims are barred by the doctrine of mutual mistake”; (b) “Plaintiff’s claims are barred recovery
due to the lack of foreseeability of COVID-19, an act of God outside either of the parties’ control”;
(c) “Plaintiff’s claims are barred recovery by the doctrine of impracticability”; (d) Plaintiff’s
claims are barred recovery due to frustration of purpose”; (e) “Plaintiff’s claims are barred . . .
must be limited due to Plaintiff’s failure to properly mitigate its damages”; (f) “Plaintiff’s claims
are barred recovery because there was no meeting of the minds between Plaintiff and Defendant”;
(g) “Plaintiff’s claims are barred recovery because the relief requested would unjustly enrich
Plaintiff”; and (h) “Plaintiff’s claims are barred recovery because the relief requested is
inappropriate.” Additionally, in its Affirmative Defenses and in its First Amended Response to
Plaintiff’s First Request for Admissions, Defendant claims that it was under duress when entering
into the Incentives Agreement (12); and that “it entered into various settlement arrangements with
Plaintiff.” (Feldman Cert., Exhibit B, ¶¶ 45-49).
On October 26, 2022, WRE served Clean-Tex with its initial Request for the Production
of Documents (“Initial Requests”). (Feldman Cert., Exhibit C). Defendant provided its written
response on or about November 23, 2022 (“Initial Response”). (Feldman Cert., Exhibit D).
Thereafter, on December 23, 2022, Defendant provided Plaintiff’s counsel with an e-mail, which
attached “Defendant’s First amended discovery responses and a link to Defendant’s first
production of documents carrying the Bates designation Def_00001-02358” with some additional
information and a “sharepoint” link from Defendant’s attorney’s law firm. (Feldman Cert.,
Exhibit E). Upon receipt of the December 23 e-mail, Plaintiff’s law firm opened the link and
downloaded the documents provided in that link. (Feldman Cert., ¶ 5). As no documents were
designated “Attorney’s Eyes Only” or otherwise restricted, a copy of these documents was also
provided to Plaintiff. Id. Thereafter, the documents were reviewed first by Plaintiff.
On or about January 23, 2023, Plaintiff served Defendant with a “Supplemental Request
for the Production of Documents” (the “Supplemental Request”) premised upon Defendant’s
initial production of documents on December 23. (Feldman Cert., Exhibit F). The Supplemental
Request included inquiries regarding Defendant’s public sale or transfer of its assets after this
dispute arose to, inter alia, avoid its financial obligation to Plaintiff; communications involving
Defendant, third-parties and Defendant’s attorneys concerning payments to Plaintiff, transfer of
Defendant’s assets, the deletion by Defendant of e-mail accounts relevant to this litigation,
spoliation of evidence by Defendant, financial transactions engaged in by Defendant to avoid its
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legal obligations to Plaintiff, a lawsuit by the New York Attorney General against, inter alia,
Defendant’s owners involving fraudulent financial actions, agreements between Defendant and its
numerous related corporate entities (i.e., those with apparently common ownership), and a few
additional issues.
On or about February 27, 2023, Defendant served its written response (“Supplemental
Response”) to the Supplemental Request. (Feldman Cert., Exhibit G). No documents were
produced in connection with the Supplemental Response, and on its face the Supplemental
Response states that no responsive documents will be provided. Rather, the Supplemental
Response asserted numerous improper and inapplicable objections, including, generally (1) the
documents sought are not relevant to this litigation; (2) the documents are protected by the
attorney-client privilege and work product protection; and (3) that the requests prematurely
demanded discovery that may only be appropriate post-judgment. In Supplemental Response 23,
Defendant “demands that Plaintiff destroy or return any of Defendant’s privileged communications
or documents received by Plaintiff through any means, as Defendant has not waived its privilege
for any such communications or documents.” Despite making its sole document production on or
about December 23, 2022, this was the first time in over 2 months that Defendant suggested that
there may have been documents subject to the attorney-client privilege in its document production
to Plaintiff. However, at no time, in its Supplemental Response or thereafter, has Defendant
provided a privilege log or identified even a single document it believes is subject to the attorney-
client privilege (nor asserted why the attorney-client privilege would apply to such document.
Promptly upon receipt of the deficient Supplemental Response, counsel for Plaintiff sent a
deficiency letter (the “Deficiency Letter”) to counsel for Defendant on March 1, 2023. (Feldman
Cert., Exhibit H). The Deficiency Letter addressed each of Defendant’s three defective objections
(including its assertion of the attorney-client privilege) and the spoliation of evidence. Id. The
second defective objection addressed Defendant’s late claim of some amorphous attorney-client
privilege. Id. Apart from addressing certain specific documents and providing the relevant legal
analysis, Plaintiff also asked Defendant to identify those documents it believed were subject to the
attorney-client privilege for the reasons set forth in the Deficiency Letter.1
On or about March 2, 2023, counsel for Defendant submitted a letter in response to the
Deficiency Letter, but limited its response to the issue of the attorney-client privilege. (Feldman
Cert., Exhibit I). Defendant’s March 2 response still refused to identify any documents it believed
were subject to the attorney-client privilege. After investigating Defendant’s scurrilous allegations
internally, on March 6, 2023, Plaintiff’s counsel submitted a letter to Defendant in response to its
March 2 letter. (Feldman Cert., Exhibit J). Plaintiff’s March 6 letter provided, inter alia, that all
documents at issue were knowingly and intentionally produced by Defendant, that there could be
no inadvertent disclosure, that no documents produced by Defendant appeared to be subject to the
attorney-client privilege at this point (if they ever were), confirmed that Defendant still has not
1
The arguments and analysis concerning the attorney-client privilege is clear from the face
of the Deficiency Letter, and is also discussed below in the relevant argument section.
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identified any documents it believes are privileged, responded to Defendant’s ethics threats, and
again invited Defendant to discuss. Plaintiff’s March 6 letter also proposed a practical solution
involving Defendant identifying the documents it produced that it believed were privileged;
Plaintiff pulling those documents aside; and the parties asking the Court to decide the applicability
of the attorney-client privilege to such documents.
On March 9, 2023, Defendant’s counsel responded to the Deficiency Letter concerning
issues other than the attorney-client privilege. (Feldman Cert., Exhibit K).
While it remains unclear what documents Defendant contends are subject to the attorney-
client privilege, its written responses to Plaintiff’s Supplemental Request suggests that it believes
the documents attached to the Feldman Cert., Exhibit L (submitted UNDER SEAL given the
allegations) are subject to the attorney-client privilege. For the reasons set forth in Plaintiff’s
correspondence to Defendant as well as the reasons set forth herein, Plaintiff contends that none
of these documents ever were, or are currently, subject to the attorney-client privilege, and even if
they were subject to the attorney-client privilege, they remain subject to discovery.
For the reasons set forth herein, the above facts and circumstances reveal, in light of the
applicable law as set forth below, compel that Plaintiff’s Motion be granted in its entirety.
ARGUMENT
1. The Court Must Compel Defendant To Produce All Documents Responsive To Plaintiff’s
Supplemental Request
Defendant’s Supplemental Response failed to provide a single responsive document and
instead, Defendant asserted a number of objections which generally fall into the following three
categories: (1) Defendant improperly contends that the Request “is not reasonably expected to
yield information relevant to Plaintiff’s allegations found in the Complaint and Defendant’s
defenses made thereto”; (2) Defendant incorrectly assert the attorney-client privilege and/or the
attorney work-product doctrine without producing any privilege log or otherwise identifying the
documents it believed were privileged; and (3) Defendant incorrectly contends that “such request
prematurely demands discovery that may only be appropriate post-judgment, if at all.” (Feldman
Cert., Exhibit G). For the reasons set forth in more detail herein, each of the foregoing objections
is improper, inappropriate and fails to provide a legitimate basis for refusing to produce otherwise
responsive documents.
a. The Discovery Sought Is Highly Relevant To This Litigation
It is a “well-established principle that requests for discovery are to be liberally construed
and accorded the broadest possible latitude to ensure that the ultimate outcome of litigation will
depend on the merits in light of the available facts.” Piniero v. Div. of State Police, 404 N.J. Super.
194, 204 (App. Div. 2008). This issue of relevancy “does not refer only to matters which would
necessarily be admissible into evidence, but includes information reasonably calculated to lead to
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admissible evidence respecting the cause of action or its defense.” R.L. v. Voytac, 402 N.J. Super.
392, 408 (App. Div. 2008) (citing Pfenninger v. Hunterdon Cent. Reg’l High Sch., 167 N.J. 230,
237 (2001)). Relevancy under Rule 4:10-2(a) “is congruent with relevancy pursuant to N.J.R.E.
401, namely, a tendency in reason to prove or disprove any fact of consequence to the
determination of the action.” Ibid. (citing Payton v. New Jersey Tpk. Auth., 148 N.J. 524, 535
(1997)).
In its Supplemental Response, Defendant improperly contends that the Supplemental
Request “is not reasonably expected to yield information relevant to Plaintiff’s allegations found
in the Complaint and Defendant’s defenses made thereto.” Contrary to Defendant’s conclusory
assertion, the discovery sought is highly relevant to Plaintiff’s allegations in the Complaint,
Defendant’s defenses set forth in its Answer to the Complaint, as well as Defendant’s fraudulent
conveyance and conspiracy to conceal assets in an effort to avoid complying with its legal
obligations to Plaintiff – which itself is very relevant to the fallacy and contradictory nature of the
defenses asserted by Defendant.
The Complaint asserts breach of contract related claims against Defendant for Defendant’s
failure to pay Plaintiff for the Services rendered by Plaintiff, and accepted by Defendant without
issue, under the parties’ Agreement. (Feldman Cert., Exhibit A). In its Answer, Clean-Tex asserts,
inter alia¸ the following Affirmative Defenses: (a) mutual mistake; (b) lack of foreseeability of
COVID-19, an act of God outside either of the parties’ control; (c) the doctrine of impracticability;
(d) frustration of purpose; (e) failure to mitigate; (f) no meeting of the minds; (g) the relief
requested would unjustly enrich Plaintiff; and (h) the relief requested is inappropriate.
Additionally, in its Affirmative Defenses and in its First Amended Response to Plaintiff’s First
Request for Admissions, Defendant claims that it was under duress when entering into the
Incentives Agreement (12); and that “it entered into various settlement arrangements with
Plaintiff.” (Feldman Cert., Exhibit B, ¶¶ 45-49).
Notwithstanding the above, the documents Defendant produced provides evidence contrary
to all of the above. Defendant’s Initial Production reveals that, rather than stopping payment to
Plaintiff under its contract due to any of its asserted defendants, Defendant engaged in an
intentional pattern of conduct and strategy to dissipate its assets, to engage in fraudulent transfers
of its assets, and ultimately, engage in the fraudulent transfer of its business operations, all with
the knowledge and intent to defraud Plaintiff by trying to make itself judgment proof. Defendant’s
own documents also confirm that Defendant’s attorneys and Defendant were aware of this fact,
complicit in the decision and strategy, and provided advice in connection therewith. (Feldman
Cert., Exhibit L). Defendant also produced discovery revealing that the transaction at issue (with
FDR) would result in some co-mingling of assets, ownership, services and employees between the
acquiring entity and Defendant, thus further suggesting a fraudulent transaction with respect to
amounts owed to Plaintiff. Additionally, this discovery reveals the potential, if not a strong
likelihood, of a conspiracy between and amongst those involved in the above transaction, including
but not limited to those individuals and entities referenced in Plaintiff’s Supplemental Request –
all of which is also relevant to discredit and counter Defendant’s asserted defenses.
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Perhaps more important than the above, Defendant does not get to unilaterally decide what
“is not reasonably expected to yield information relevant to” this case and Plaintiff is not required
to reveal its entire legal strategy up front – which is why the rules of discovery are deemed to be
construed so liberally. Of course, the discovery Plaintiff seeks that Defendant has refused to
provide is expected to yield information relevant to this case and reasonably calculated to lead to
admissible evidence, and in particular with respect to the defenses Defendant has asserted. R.L.
v. Voytac, 402 N.J. Super. at 408.
Defendant’s refusal to produce the responsive documents not only raises extreme concern
about the level of this conspiracy/scheme and the harm done, but makes Plaintiff more concerned
that the documents requested were destroyed by Defendant (which seems to be part of Brian
Power’s admission that the “cleantex account is shut down. Which isn’t good.” (Feldman Cert.,
Exhibit L). Importantly, Mr. Powers does not appear to be an owner of, nor employee of, Clean-
Tex. For example, his e-mail account is never a Clean-Tex e-mail account. Rather, he uses an
“@confidenceconcerns” or “@mylucent” e-mail domain when communicating. Mr. Powers’
LinkedIn account reveals that he currently has 3 jobs at all times relevant to this dispute: (1) Vice
President of Lucent Group, LLC2 from 2016-present (thus the “mylucent” e-mail domain); (2) VP
of Operations of Confidence Management Services from 1991-present (thus the
“@confidenceconcerns” e-mail domain); and (3) Operations/sales, Central Care Solutions from
2007-present. (Feldman Cert., Exhibit M; https://www.linkedin.com/in/brian-powers-
9975b936/). There is no indication that Mr. Powers is employed by, or an owner of, Defendant.
Further, the signature line of Mr. Powers on all of his relevant e-mails indicate that he is “VP of
Operations” (i.e., his position at Confidence Management Services) – indicating that he is
communicating with Defendant’s counsel as VP of Operations of Confidence Management
Services, which is not a party to this litigation or dispute, nor does it have any contractual
relationship with Plaintiff. (Feldman Cert., Exhibit M). The foregoing is further supported by the
fact that under “VP of Operations” is Mr. Powers’ phone number, listed as 908-XXX-XXXX. This
number is listed as Mr. Powers’ number at Confidence Management Services, Inc. on filings with
the National Labor Relationships Board (see https://www.nlrb.gov/case/29-RC-068846 wherein
Mr. Powers was listed as the legal representative of the “Employer” in a union matter, with the
employer being Confidence Management Services, Inc.). By Defendant’s attorneys also sending
e-mails to Mr. Powers’ account at Lucent, and Mr. Powers using his Lucent account to
communicate with Defendant’s attorneys, Defendant is further bringing in a third party (Lucent)
into these communications.
Plaintiff’s concern with Defendant’s refusal to produce documents, and its apparent
destruction of discoverable documents, is in line with Clean-Tex’s attorney’s admission that
2
The Lucent Group describes Confidence Management Systems and Central Care Solutions
as “sister companies,” but does not list any affiliation to Defendant. (See
http://www.mylucent.com/about.html at the bottom of the page). Dun & Bradstreet lists David
Zahler as its key executive. (See https://www.dnb.com/business-directory/company-
profiles.lucent_group_llc.9d8695163e9fb70c6bec79c7431ee99e.html).
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“ ” (Feldman Cert.,
Exhibit L). In another document produced by Defendant, counsel informed Mr. Powers that he is
concerned that as a result of Clean-Tex shutting down certain accounts (losing access to files and
e-mails), there may be a “ against Clean-Tex. It seems as if
Defendant is trying to avoid a “ ,” as noted by Mr. Train-Gutierrez,
by simply taking the position that Plaintiff is not entitled to documents rather than acknowledging
that Defendant destroyed some of these documents.
In addition, the documents at issue3 are directly relevant to the substantive claims and
defenses at issue in this litigation as they provide direct evidence of: (1) why Defendant was paying
Plaintiff under the Agreement; (2) why Defendant stopped paying Plaintiff under the Agreement
(which is contradictory to Defendant’s asserted defenses); (3) Defendant’s plan and efforts to
defraud Plaintiff and the strategy to provide Plaintiff with false information; (4) successor liability
issues (as explicitly discussed with Mr. Powers and others) and fraudulent conveyance of assets,
including involving insiders at Defendant; (5) that the transaction with the acquiring entity (FDR)
may have been fraudulent in nature; and (6) that Defendant and its purported witnesses all lack
credibility in their defenses asserted and justifications for not paying Plaintiff under the
Agreement, not to mention their scheme to mislead and provide false information to Plaintiff until
Defendant became what it and its counsel hoped would be “ Given Defendant’s
Answer, the documents it otherwise produced, and its written discovery responses (in response to
Document Request and Requests for Admissions), there is no other source for all of this
information – which contradicts Defendant’s other discovery responses, but for these materials
and the remainder of the materials sought in Plaintiff’s Supplemental Request, the production of
which was denied by Defendant.
On the other hand, the documents at issue also reveal that this third party (Mr. Powers)
works for one or more other entities (Lucent, Confidence Management Services and Central Care
Solutions) owned by the Zahler-family businesses (Clean-Tex is believed to be owned by the
Zahler family pursuant to its filings in connection with the Services). (See Feldman Cert., Exhibit
N, David Zahler’s LinkedIn profile listing himself as “Founder and CEO (CMS, Central Care
Solutions, Cleantex Inc.)). The Zahler family, through its web of entities, as also alleged by the
NY Attorney General’s lawsuit against the Zahlers and their entities for other fraudulent conduct
(see, e.g., https://ag.ny.gov/press-release/2022/attorney-general-james-sues-long-island-nursing-
home-years-fraud-and-resident and related documents), appears to not only be the beneficiary of
the sale of Clean-Tex’s assets to FDR directly and through extinguishment of personal guarantees,
but also through the inextricably intertwined nature of the transaction whereby Zahler-owned
entities would continue to directly benefit financially from the sale of Clean-Tex’s assets to FDR
3
While this Motion is addressing the documents attached to the Feldman Cert., at Exhibit
L, it remains unclear what documents Defendant believes are subject to the attorney-client
privilege or the work product doctrine as Defendant refuses to identify same despite being asked
to do so several times, and after not even raising the issue for over 2 months after production, and
over 1 month after Plaintiff referenced documents which are set forth in Exhibit L.
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while keeping those proceeds out of reach of Plaintiff (as confirmed in some of the documents in
Exhibit L of the Feldman Cert.). The very fact that these communications between counsel for
Clean-Tex and an employee and officer of one or more different Zahler-owned entities is itself
very pertinent to the allegations and to the apparent fact that these entities are inextricably
intertwined and may share liability to Plaintiff.4
Based upon the foregoing, Plaintiff respectfully requests that this Court compel Defendant
to produce these highly relevant documents or provide a Certification as to whether and to what
extent these documents were improperly destroyed.
b. Clean-Tex Fails To Satisfy Its Burden That The Documents Are Privileged
Clean-Tex further incorrectly asserts the attorney-client privilege and/or the attorney work-
product doctrine in many of its responses to WRE’s Supplemental Request. (Feldman Cert.,
Exhibit G, Nos. 3, 4, 6, 7, 16, 23). As a preliminary matter, the party asserting the privilege, Clean-
Tex has the burden of proving that the documents at issue are privileged. See Hedden v. Kean
Univ., 434 N.J. Super. 1, 12 (App. Div. 2013). Far from satisfying this burden, Clean-Tex fails to
even identify a single specific document IT PRODUCED which it maintains is subject to the
attorney-client privilege or the work product doctrine as required by R. 4:10-2(e). Indeed, R. 4:10-
2(e) requires: “[W]hen a party withholds information otherwise discoverable under these rules by
claiming that it is privileged or subject to protection as trial preparation material, the party shall
make the claim expressly and shall describe the nature of the documents, communications,
or things not produced or disclosed in a manner that, without revealing information itself
privileged or protected, will enable other parties to assess the applicability of the privilege or
protection.” R. 4:10-2(e) (emphasis added). Defendant also has not produced a privilege log of
any documents which are responsive to Plaintiff’s Supplemental Request but are being withheld
on the basis of privilege.
Clean-Tex cannot rely on blanket assertions of privilege to avoid producing documents
which are relevant and critical to resolution of issues in this dispute or to conceal highly relevant
information it has already produced. Since Clean-Tex has not identified any document from either
its Initial Production or in responsive to the Supplemental Request that it maintains is privileged,
nor has it produced a privilege log, Clean-Tex has not and cannot satisfy its burden of proving that
the attorney-client privilege applies.
Based upon the foregoing, Plaintiff respectfully requests that the Court find that the
attorney-client privilege is inapplicable to the documents already produced and as a basis to refuse
4
In this regard, Plaintiff is considering simply joining FDR (the acquiring entity), the other
Zahler family members, and the other Zahler-owned entities under such claims, as well as
fraudulent conveyance and successor liability. Clearly, if Defendant’s counsel was conferring with
them on this litigation, they are inextricably intertwined. Plaintiff had hoped to gather more facts
before deciding to assert such claims, but if need be, it can do so in good faith at this time.
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to produce those documents which are otherwise responsive to Plaintiff’s Supplemental Request
and compel Defendant to produce same.
c. The Attorney-Client Privilege Is Inapplicable To Communications In Aid of The
Commission of a Fraud
The attorney-client privilege is inapplicable to the documents presumably at issue (i.e.,
those attached as Exhibit L to the Feldman Cert. AND those being withheld by Defendant)
because “[t]he attorney-client privilege does not extend to communications in the course of legal
service sought or obtained in aid of the commission of a crime or fraud,” otherwise known as the
“crime/fraud exception” to the attorney-client privilege. N.J. R. Evid. 504(2)(a). Ocean Spray
Cranberries, Inc. v. Holt Cargo Systems, Inc., 345 N.J. Super. 515, 521-22 (Law Div. 2000) citing
United States v. Zolin, 491 U.S. 554 (1989). “Fraud” includes civil as well as criminal fraud. Public
policy requires that the term fraud be given the broadest interpretation. It includes virtually all
kinds of deception and deceit, even though they might not otherwise warrant
Preview
UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 1 of 2 Trans ID: LCV2023925259 Michael J. Feldman, Esq. (042771996) OLENDERFELDMAN LLP 422 Morris Avenue Summit, New Jersey 07901 (908) 964-2486 Attorneys for Plaintiff, WRE Consulting, LLC : WRE CONSULTING, LLC, : SUPERIOR COURT OF NEW JERSEY : LAW DIVISION: Plaintiff, : UNION COUNTY : v. : DOCKET NO.: UNN- L-314-22 : CLEAN-TEX SERVICES, INC., : CIVIL ACTION : Defendant. : NOTICE OF MOTION TO COMPEL : DISCOVERY AND EXTEND THE : DISCOVERY END DATE TO: Pearl Shah, Esq. McGrail & Bensinger LLP 888-C 8th Avenue, #107 New York, New York 10019 Attorneys for Defendant COUNSEL: PLEASE TAKE NOTICE that on March 31, 2023, at 9:00 a.m. or as soon thereafter as counsel may be heard, OlenderFeldman LLP, attorneys for Plaintiff, WRE Consulting, LLC (“Plaintiff”), will move before the above-named Court pursuant to R. 4:18-1(b)(2) and R. 4:23- 5(c) for an Order (1) compelling Clean-Tex Services, Inc. (“Defendant”) to produce all documents in its possession and/or control responsive to Plaintiff’s Supplemental Request for the Production of Documents notwithstanding its objections thereto; (2) compelling Defendant to identify, under oath, the scope of documents sought of Defendant by Plaintiff in discovery which are missing or destroyed; (3) extending discovery for a reasonable period of time for the sole and limited purpose of providing Defendant time to produce all documents responsive to Plaintiff’s Supplemental UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 2 of 2 Trans ID: LCV2023925259 Request and for Plaintiff to review same to confirm that the production is complete, and for Defendant to comply with item (2) of the Order as identified above; (4) awarding Plaintiff its counsel fees and costs associated with the application pursuant to R. 4:23-1(c); and (5) awarding such other relief that the Court deems just and proper. PLEASE TAKE FURTHER NOTICE that in support of their Motion, Plaintiff will rely upon the: Certification of Michael J. Feldman, Esq. (redacted version filed on the docket and separate unredacted version served on counsel of record and filed with the Court UNDER SEAL), and a letter brief in lieu of a more formal brief submitted herewith (redacted version filed on the docket and separate unredacted version served on counsel of record and filed with the Court UNDER SEAL). PLEASE TAKE FURTHER NOTICE that oral argument is waived unless an opposition is filed. PLEASE TAKE FURTHER NOTICE that a proposed form of Order is submitted herewith. PLEASE TAKE FURTHER NOTICE that the original discovery end date was January 2, 2023. The discovery end date was extended once by way of the automatic 60-day extension to March 3, 2023. This is the first motion to extend the discovery end date. PLEASE TAKE FURTHER NOTICE that an Arbitration is scheduled for May 24, 2023. OLENDERFELDMAN LLP Attorneys for Plaintiff By:/s/Michael J. Feldman MICHAEL J. FELDMAN Dated: March 15, 2023 UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 1 of 8 Trans ID: LCV2023925259 Michael J. Feldman, Esq. (042771996) OLENDERFELDMAN LLP 422 Morris Avenue Summit, New Jersey 07901 (908) 964-2486 Attorneys for Plaintiff, WRE Consulting, LLC : WRE CONSULTING, LLC, : SUPERIOR COURT OF NEW JERSEY : LAW DIVISION: Plaintiff, : UNION COUNTY : v. : DOCKET NO.: UNN- L-314-22 : CLEAN-TEX SERVICES, INC., : CIVIL ACTION : Defendant. : CERTIFICATION OF MICHAEL J. : FELDMAN, ESQ., IN SUPPORT OF : PLAINTIFF’S MOTION TO COMPEL DISCOVERY AND EXTEND THE DISCOVERY END DATE MICHAEL J. FELDMAN, ESQ., of full age, certifies and says: 1. I am an attorney at law of the State of New Jersey, and a partner with the firm of OlenderFeldman LLP, counsel for Plaintiff WRE Consulting, LLC (“Plaintiff”) in the above- captioned action. I am fully familiar with the facts and circumstances related herein. I submit this Certification based upon my personal knowledge, in support of Plaintiff’s Motion to Compel Defendant, Clean-Tex Services, Inc. (“Clean-Tex” or “Defendant”) to Produce Documents in response to Plaintiff’s Supplemental Request for the Production of Documents and to extend the Discovery End Date for a reasonable period of time for the sole and limited purpose of providing Defendant time to produce all documents responsive to Plaintiff’s Supplemental Request and for Plaintiff to review same to confirm that the production is complete, and for Defendant to identify, under oath, the scope of documents missing or destroyed. 1 UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 2 of 8 Trans ID: LCV2023925259 2. This action arose out of Clean-Tex’s knowing and intentional refusal and failure to comply with its legal obligations in connection with services provided by Plaintiff, including primarily, its financial obligations to Plaintiff. 3. Following the filing of the Complaint on January 28, 2022 (a true and correct copy of which is attached hereto as Exhibit A) and Defendant’s filing of an Answer on March 8, 2022 (a true and correct copy of which is attached hereto as Exhibit B), Plaintiff served Clean-Tex with its initial Request for the Production of Documents (“Initial Request”) on October 26, 2022. A true and correct copy of this Initial Request is attached hereto as Exhibit C. 4. On November 23, 2022, Defendant provided its written response to Plaintiff’s Initial Request. A true and correct copy of Defendant’s written responses as Exhibit D. 5. Thereafter, on December 23, 2022, Defendant provided Plaintiff’s counsel with an e-mail, which attached “Defendant’s First amended discovery responses and a link to Defendant’s first production of documents carrying the Bates designation Def_00001-02358” with some additional information and a “sharepoint” link from Defendant’s attorney’s law firm. A true and correct copy of Defendant’s December 23, 2022 e-mail is attached hereto as Exhibit E. Upon receipt of the December 23 e-mail, Plaintiff’s law firm opened the link and downloaded the documents provided in that link. As no documents were designated “Attorney’s Eyes Only” or otherwise restricted, a copy of these documents was also provided to Plaintiff. Exhibit E. 6. On or about January 23, 2023, Plaintiff served Defendant with a “Supplemental Request for the Production of Documents” (the “Supplemental Request”) premised upon Defendant’s initial production of documents on December 23. A true and correct copy of the Supplemental Request is attached hereto as Exhibit F. The Supplemental Request included inquiries regarding Defendant’s public sale or transfer of its assets after this dispute arose to, inter 2 UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 3 of 8 Trans ID: LCV2023925259 alia, avoid its financial obligation to Plaintiff; communications involving Defendant, third-parties and Defendant’s attorneys concerning payments to Plaintiff, transfer of Defendant’s assets, the deletion by Defendant of e-mail accounts relevant to this litigation, spoliation of evidence by Defendant, financial transactions engaged in by Defendant to avoid its legal obligations to Plaintiff, a lawsuit by the New York Attorney General against, inter alia, Defendant’s owners involving fraudulent financial actions, agreements between Defendant and its numerous related corporate entities (i.e., those with apparently common ownership), and a few additional issues. Exhibit F. The Supplemental Request clearly identified specific documents produced by Defendant in its prior discovery responses which Defendant (as set forth in the next paragraph) asserts may be subject to the attorney-client privilege. However, at no time between receiving the Supplemental Request and providing its written responses over a month later did Defendant contact Plaintiff and make any effort to recover/retrieve such documents, nor submit any assertion or claim to Plaintiff that any such documents were subject to the attorney-client privilege or work product doctrine. Rather, Defendant continued to remain silent on the issue for yet another month (it had already been a month since the documents were produced by Defendant). 7. On or about February 27, 2023, Defendant served its written response (“Supplemental Response”) to the Supplemental Request. A true and correct copy of Defendant’s response to Plaintiff’s Supplemental Production is attached hereto as Exhibit G. No documents were produced in connection with the Supplemental Response, and on its face the Supplemental Response states that no responsive documents will be provided. Rather, the Supplemental Response asserted numerous improper and inapplicable objections, including, generally (1) the documents sought are not relevant to this litigation; (2) the documents are protected by the attorney-client privilege and work product protection; and (3) that the requests prematurely 3 UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 4 of 8 Trans ID: LCV2023925259 demanded discovery that may only be appropriate post-judgment. In Supplemental Response 23, Defendant “demands that Plaintiff destroy or return any of Defendant’s privileged communications or documents received by Plaintiff through any means, as Defendant has not waived its privilege for any such communications or documents.” Despite making its sole document production on or about December 23, 2022, this was the first time that Defendant suggested that there may have been documents its produced over 2 months earlier on December 23 which were subject to the attorney-client privilege. However, at no time, in its Supplemental Response or thereafter, has Defendant provided a privilege log or identified even a single document it believes is subject to the attorney-client privilege, nor asserted why the attorney-client privilege would apply to any such document(s). 8. Promptly upon receipt of the deficient Supplemental Response, counsel for Plaintiff sent a deficiency letter (the “Deficiency Letter”) to counsel for Defendant on March 1, 2023. A true and correct copy of the Deficiency Letter is attached hereto as Exhibit H. The Deficiency Letter addressed each of Defendant’s three defective objections (including its assertion of the attorney-client privilege) and the spoliation of evidence. The second defective objection addressed Defendant’s late claim of some amorphous attorney-client privilege. Apart from addressing certain specific documents and providing the relevant legal analysis, Plaintiff also asked Defendant to identify those documents it believed were subject to the attorney-client privilege for the reasons set forth in the Deficiency Letter. Exhibit H. 9. On or about March 2, 2023, counsel for Defendant submitted a letter in response to the Deficiency Letter, but limited its response to the issue of the attorney-client privilege. A true and correct copy of Defendant’s March 2 response to the Deficiency Letter is attached hereto as Exhibit I. Defendant’s March 2 response still failed to identify any documents it believed were 4 UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 5 of 8 Trans ID: LCV2023925259 subject to the attorney-client privilege and Defendant did not advise of any intent to ever identify such documents. 10. After investigating Defendant’s scurrilous allegations internally, on March 6, 2023, Plaintiff’s counsel submitted a letter to Defendant in response to its March 2 letter. A true and correct copy of Plaintiff’s counsel March 6 letter is attached hereto as Exhibit J. Plaintiff’s March 6 letter provided, inter alia, that all documents at issue were knowingly and intentionally produced by Defendant, that there could be no inadvertent disclosure, that no documents produced by Defendant appeared to be subject to the attorney-client privilege at this point (if they ever were), confirmed that Defendant still has not identified any documents it believes are privileged, responded to Defendant’s ethics threats, and again invited Defendant to discuss. Exhibit J. Plaintiff’s March 6 letter also proposed a practical solution: Defendant would identify the documents it produced that it believed were privileged; Plaintiff would pull those documents aside; and the parties would ask the Court to decide the applicability of the attorney-client privilege to such documents to the extent a dispute remained. To date, Defendant has not accepted Plaintiff’s proposal. 11. On March 9, 2023, Defendant’s counsel responded to the Deficiency Letter concerning issues other than the attorney-client privilege. A true and correct copy of Defendant’s March 9 response is attached here to as Exhibit K. 12. While it remains unclear what documents Defendant contends are subject to the attorney-client privilege, its written responses to Plaintiff’s Supplemental Request suggests that Defendant believes the documents attached here as Exhibit L (submitted UNDER SEAL given the allegations) may be subject to the attorney-client privilege. We do not know if Defendant believes any other documents it already produced are subject to the attorney-client privilege, and 5 UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 6 of 8 Trans ID: LCV2023925259 since Defendant did not produce any privilege log, we do not know anything about the documents withheld by Defendant on the basis of attorney-client privilege. 13. Attached hereto as Exhibit M is a true and correct copy of Brian Powers’ LinkedIn page as of March 13, 2023. As set forth in more detail in the letter brief submitted herewith, most or all of the e-mails at issue in this Motion were to or from Mr. Powers, who appears to neither be an employee nor owner of Defendant. Rather, he works for other businesses owned by the Zahler family – businesses which may be inextricably intertwined with Defendant and liable for its financial obligations, whether through the concept of piercing the corporate shell, successor liability and/or fraudulent conveyance. All e-mails involving Mr. Powers came from or were sent to business e-mail accounts that were not Clean-Tex e-mail accounts (which accounts were used by at least one other individual, so we know they exist). 14. Attached hereto as Exhibit N is a true and correct copy of David Zahler’s LinkedIn profile as of March 14, 2023. As set forth in more detail in the letter brief submitted herewith, Mr. Zahler is the owner and CEO of many of the Zahler family businesses, including Defendant. However, unlike Mr. Powers, Mr. Zahler does list Defendant as a company he works for as CEO (while Mr. Powers does not include Defendant, though he does include other Zahler-family owned businesses). 15. To date, Defendant has failed and refused to provide documents responsive to Plaintiff’s Supplemental Request. 16. The lack of response from Defendant necessitated the filing of this Motion. 17. The undersigned has made multiple good faith efforts to resolve this dispute pursuant to R. 1:6-2(c) without motion practice. See Exhibits H and J. 6 UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 7 of 8 Trans ID: LCV2023925259 18. Plaintiff has served responses to discovery demands served by Defendant and is not in default of any outstanding discovery obligations. 19. Related to Defendant’s failure to comply with discovery demands, Plaintiff requests the discovery period be extended for a reasonable period of time for the sole and limited purpose of providing Defendant time to produce all documents responsive to Plaintiff’s Supplemental Request and for Plaintiff to review same to confirm that the production is complete, and for Defendant to identify, under oath, the scope of documents missing or destroyed (as acknowledged by Defendant in its responses to Plaintiff’s Request for Admissions and the documents attached hereto as Exhibit L. 20. The extension of the Discovery End Date is warranted because of the delay caused by Defendant’s failure to respond and to permit Plaintiff to review the delinquent discovery. 21. The current discovery period expired on March 3, 2023. An arbitration date is scheduled for May 24, 2023. However, Plaintiff does not seek/require an adjournment of the arbitration as a condition of the relief it seeks provided Defendant complies with its obligations sought herein before that date. 22. Discovery was extended once by way of consent for a period of sixty (60) days. A true and correct copy of the Clerk’s notice extending discovery is attached hereto as Exhibit O. This is the first Motion filed in this case to extend discovery. 23. Plaintiff will be prejudiced and its ability to prosecute its claims and defenses hampered if discovery is not extended due to Defendant’s failure to timely comply with its discovery obligations as set forth herein. 24. Neither Defendant nor the judicial system will be prejudiced or harmed by extending the discovery end date as requested herein. 7 UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 8 of 8 Trans ID: LCV2023925259 25. Based upon the aforementioned, and as set forth in more detail in the attached letter brief, Plaintiff has shown exceptional circumstances pursuant to R. 4:24-1(c) to extend the discovery end date for the reasons set forth above. I certify that the foregoing statements made by me are true. I am aware that if any of the foregoing statements made by me are willfully false, I am subject to punishment. /s/Michael J. Feldman MICHAEL J. FELDMAN Dated: March 15, 2023 8 UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 1 of 16 Trans ID: LCV2023925259 Marguerite Kneisser, Esq. 908-964-2432 mkneisser@olenderfeldman.com Please respond to New Jersey address March 15, 2023 VIA ECOURTS The Hon. Alan G. Lesnewich, J.S.C. Union County Courthouse 2 Broad Street, 1st Floor, Rotunda Elizabeth, New Jersey 07207 Re: WRE Consulting, LLC v. Clean-Tex Services, Inc. Docket No.: UNN-L-314-22 Dear Judge Lesnewich: Please accept this letter in lieu of a more formal submission on behalf of Plaintiff WRE Consulting, LLC (“WRE” or “Plaintiff”), in support of Plaintiff’s Motion to Compel Defendant, Clean-Tex Services, Inc. (“Clean-Tex” or “Defendant”) to Produce Documents in response to Plaintiff’s Supplemental Request for the Production of Documents and to extend the Discovery End Date for a period of time for Defendant to comply and for Plaintiff to review same. BACKGROUND This action is brought by WRE against Clean-Tex as a result of Clean-Tex’s knowing and intentional refusal and failure to comply with its legal obligations in connection with services provided by WRE, including specifically, its refusal to pay amounts due. To exacerbate the foregoing, it now appears that Clean-Tex has defrauded WRE, engaged in the fraudulent transfer of its assets to, inter alia, avoid its debt to WRE, created successor liability in the acquiring entity, and engaged in the spoliation of evidence. By way of background, WRE is a consulting company that provides advisory and negotiation services related to potential economic development inducements, business tax incentives, and benefits related to using certain company locations in New Jersey and other states (“Services”). On or about August 10, 2017, WRE and Clean-Tex entered into a written Incentives Negotiation Agreement (the “Agreement”) for WRE to provide Clean-Tex with its Services, including consultations, negotiations, and other related communications with government and appropriate parties to obtain an incentives award (an “Incentives Award”) on behalf of Clean-Tex. In consideration for these Services, Clean-Tex was required to pay WRE in accordance with the payment schedule set forth in the Agreement, as later amended and agreed to by the parties. Specifically, WRE was entitled to full payment for its Services in the event Clean-Tex received an incentives award (with the size of the payment based upon the size of the Incentives award). New Jersey New York 422 Morris Avenue 1180 Avenue of the Americas, 8th Floor olenderfeldman.com Summit, New Jersey 07901 New York, New York 10036 fax: 908-810-6631 UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 2 of 16 Trans ID: LCV2023925259 Page 2 March 15, 2023 WRE provided the Services properly and in accordance with the Agreement and Clean- Tex accepted all Services performed by WRE. On or about December 12, 2017, Clean-Tex received an Incentives Award. Despite paying WRE approximately $436,151.11 in fees owed to WRE as a result of receiving the Incentives Award, Clean-Tex breached its contractual obligations by failing and refusing to pay WRE in full for its Services. As a result, on January 28, 2022, WRE filed a Complaint against Clean-Tex for breach of contract and related claims. (March 10, 2023 Certification of Michael J. Feldman, Esq. (“Feldman Cert.”) submitted herewith, Exhibit A). Clean-Tex filed an Answer to the Complaint and Affirmative Defenses on March 8, 2022. (Feldman Cert., Exhibit B). Defendant’s Answer asserts, inter alia¸ the following Affirmative Defenses: (a) “Plaintiff’s claims are barred by the doctrine of mutual mistake”; (b) “Plaintiff’s claims are barred recovery due to the lack of foreseeability of COVID-19, an act of God outside either of the parties’ control”; (c) “Plaintiff’s claims are barred recovery by the doctrine of impracticability”; (d) Plaintiff’s claims are barred recovery due to frustration of purpose”; (e) “Plaintiff’s claims are barred . . . must be limited due to Plaintiff’s failure to properly mitigate its damages”; (f) “Plaintiff’s claims are barred recovery because there was no meeting of the minds between Plaintiff and Defendant”; (g) “Plaintiff’s claims are barred recovery because the relief requested would unjustly enrich Plaintiff”; and (h) “Plaintiff’s claims are barred recovery because the relief requested is inappropriate.” Additionally, in its Affirmative Defenses and in its First Amended Response to Plaintiff’s First Request for Admissions, Defendant claims that it was under duress when entering into the Incentives Agreement (12); and that “it entered into various settlement arrangements with Plaintiff.” (Feldman Cert., Exhibit B, ¶¶ 45-49). On October 26, 2022, WRE served Clean-Tex with its initial Request for the Production of Documents (“Initial Requests”). (Feldman Cert., Exhibit C). Defendant provided its written response on or about November 23, 2022 (“Initial Response”). (Feldman Cert., Exhibit D). Thereafter, on December 23, 2022, Defendant provided Plaintiff’s counsel with an e-mail, which attached “Defendant’s First amended discovery responses and a link to Defendant’s first production of documents carrying the Bates designation Def_00001-02358” with some additional information and a “sharepoint” link from Defendant’s attorney’s law firm. (Feldman Cert., Exhibit E). Upon receipt of the December 23 e-mail, Plaintiff’s law firm opened the link and downloaded the documents provided in that link. (Feldman Cert., ¶ 5). As no documents were designated “Attorney’s Eyes Only” or otherwise restricted, a copy of these documents was also provided to Plaintiff. Id. Thereafter, the documents were reviewed first by Plaintiff. On or about January 23, 2023, Plaintiff served Defendant with a “Supplemental Request for the Production of Documents” (the “Supplemental Request”) premised upon Defendant’s initial production of documents on December 23. (Feldman Cert., Exhibit F). The Supplemental Request included inquiries regarding Defendant’s public sale or transfer of its assets after this dispute arose to, inter alia, avoid its financial obligation to Plaintiff; communications involving Defendant, third-parties and Defendant’s attorneys concerning payments to Plaintiff, transfer of Defendant’s assets, the deletion by Defendant of e-mail accounts relevant to this litigation, spoliation of evidence by Defendant, financial transactions engaged in by Defendant to avoid its UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 3 of 16 Trans ID: LCV2023925259 Page 3 March 15, 2023 legal obligations to Plaintiff, a lawsuit by the New York Attorney General against, inter alia, Defendant’s owners involving fraudulent financial actions, agreements between Defendant and its numerous related corporate entities (i.e., those with apparently common ownership), and a few additional issues. On or about February 27, 2023, Defendant served its written response (“Supplemental Response”) to the Supplemental Request. (Feldman Cert., Exhibit G). No documents were produced in connection with the Supplemental Response, and on its face the Supplemental Response states that no responsive documents will be provided. Rather, the Supplemental Response asserted numerous improper and inapplicable objections, including, generally (1) the documents sought are not relevant to this litigation; (2) the documents are protected by the attorney-client privilege and work product protection; and (3) that the requests prematurely demanded discovery that may only be appropriate post-judgment. In Supplemental Response 23, Defendant “demands that Plaintiff destroy or return any of Defendant’s privileged communications or documents received by Plaintiff through any means, as Defendant has not waived its privilege for any such communications or documents.” Despite making its sole document production on or about December 23, 2022, this was the first time in over 2 months that Defendant suggested that there may have been documents subject to the attorney-client privilege in its document production to Plaintiff. However, at no time, in its Supplemental Response or thereafter, has Defendant provided a privilege log or identified even a single document it believes is subject to the attorney- client privilege (nor asserted why the attorney-client privilege would apply to such document. Promptly upon receipt of the deficient Supplemental Response, counsel for Plaintiff sent a deficiency letter (the “Deficiency Letter”) to counsel for Defendant on March 1, 2023. (Feldman Cert., Exhibit H). The Deficiency Letter addressed each of Defendant’s three defective objections (including its assertion of the attorney-client privilege) and the spoliation of evidence. Id. The second defective objection addressed Defendant’s late claim of some amorphous attorney-client privilege. Id. Apart from addressing certain specific documents and providing the relevant legal analysis, Plaintiff also asked Defendant to identify those documents it believed were subject to the attorney-client privilege for the reasons set forth in the Deficiency Letter.1 On or about March 2, 2023, counsel for Defendant submitted a letter in response to the Deficiency Letter, but limited its response to the issue of the attorney-client privilege. (Feldman Cert., Exhibit I). Defendant’s March 2 response still refused to identify any documents it believed were subject to the attorney-client privilege. After investigating Defendant’s scurrilous allegations internally, on March 6, 2023, Plaintiff’s counsel submitted a letter to Defendant in response to its March 2 letter. (Feldman Cert., Exhibit J). Plaintiff’s March 6 letter provided, inter alia, that all documents at issue were knowingly and intentionally produced by Defendant, that there could be no inadvertent disclosure, that no documents produced by Defendant appeared to be subject to the attorney-client privilege at this point (if they ever were), confirmed that Defendant still has not 1 The arguments and analysis concerning the attorney-client privilege is clear from the face of the Deficiency Letter, and is also discussed below in the relevant argument section. UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 4 of 16 Trans ID: LCV2023925259 Page 4 March 15, 2023 identified any documents it believes are privileged, responded to Defendant’s ethics threats, and again invited Defendant to discuss. Plaintiff’s March 6 letter also proposed a practical solution involving Defendant identifying the documents it produced that it believed were privileged; Plaintiff pulling those documents aside; and the parties asking the Court to decide the applicability of the attorney-client privilege to such documents. On March 9, 2023, Defendant’s counsel responded to the Deficiency Letter concerning issues other than the attorney-client privilege. (Feldman Cert., Exhibit K). While it remains unclear what documents Defendant contends are subject to the attorney- client privilege, its written responses to Plaintiff’s Supplemental Request suggests that it believes the documents attached to the Feldman Cert., Exhibit L (submitted UNDER SEAL given the allegations) are subject to the attorney-client privilege. For the reasons set forth in Plaintiff’s correspondence to Defendant as well as the reasons set forth herein, Plaintiff contends that none of these documents ever were, or are currently, subject to the attorney-client privilege, and even if they were subject to the attorney-client privilege, they remain subject to discovery. For the reasons set forth herein, the above facts and circumstances reveal, in light of the applicable law as set forth below, compel that Plaintiff’s Motion be granted in its entirety. ARGUMENT 1. The Court Must Compel Defendant To Produce All Documents Responsive To Plaintiff’s Supplemental Request Defendant’s Supplemental Response failed to provide a single responsive document and instead, Defendant asserted a number of objections which generally fall into the following three categories: (1) Defendant improperly contends that the Request “is not reasonably expected to yield information relevant to Plaintiff’s allegations found in the Complaint and Defendant’s defenses made thereto”; (2) Defendant incorrectly assert the attorney-client privilege and/or the attorney work-product doctrine without producing any privilege log or otherwise identifying the documents it believed were privileged; and (3) Defendant incorrectly contends that “such request prematurely demands discovery that may only be appropriate post-judgment, if at all.” (Feldman Cert., Exhibit G). For the reasons set forth in more detail herein, each of the foregoing objections is improper, inappropriate and fails to provide a legitimate basis for refusing to produce otherwise responsive documents. a. The Discovery Sought Is Highly Relevant To This Litigation It is a “well-established principle that requests for discovery are to be liberally construed and accorded the broadest possible latitude to ensure that the ultimate outcome of litigation will depend on the merits in light of the available facts.” Piniero v. Div. of State Police, 404 N.J. Super. 194, 204 (App. Div. 2008). This issue of relevancy “does not refer only to matters which would necessarily be admissible into evidence, but includes information reasonably calculated to lead to UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 5 of 16 Trans ID: LCV2023925259 Page 5 March 15, 2023 admissible evidence respecting the cause of action or its defense.” R.L. v. Voytac, 402 N.J. Super. 392, 408 (App. Div. 2008) (citing Pfenninger v. Hunterdon Cent. Reg’l High Sch., 167 N.J. 230, 237 (2001)). Relevancy under Rule 4:10-2(a) “is congruent with relevancy pursuant to N.J.R.E. 401, namely, a tendency in reason to prove or disprove any fact of consequence to the determination of the action.” Ibid. (citing Payton v. New Jersey Tpk. Auth., 148 N.J. 524, 535 (1997)). In its Supplemental Response, Defendant improperly contends that the Supplemental Request “is not reasonably expected to yield information relevant to Plaintiff’s allegations found in the Complaint and Defendant’s defenses made thereto.” Contrary to Defendant’s conclusory assertion, the discovery sought is highly relevant to Plaintiff’s allegations in the Complaint, Defendant’s defenses set forth in its Answer to the Complaint, as well as Defendant’s fraudulent conveyance and conspiracy to conceal assets in an effort to avoid complying with its legal obligations to Plaintiff – which itself is very relevant to the fallacy and contradictory nature of the defenses asserted by Defendant. The Complaint asserts breach of contract related claims against Defendant for Defendant’s failure to pay Plaintiff for the Services rendered by Plaintiff, and accepted by Defendant without issue, under the parties’ Agreement. (Feldman Cert., Exhibit A). In its Answer, Clean-Tex asserts, inter alia¸ the following Affirmative Defenses: (a) mutual mistake; (b) lack of foreseeability of COVID-19, an act of God outside either of the parties’ control; (c) the doctrine of impracticability; (d) frustration of purpose; (e) failure to mitigate; (f) no meeting of the minds; (g) the relief requested would unjustly enrich Plaintiff; and (h) the relief requested is inappropriate. Additionally, in its Affirmative Defenses and in its First Amended Response to Plaintiff’s First Request for Admissions, Defendant claims that it was under duress when entering into the Incentives Agreement (12); and that “it entered into various settlement arrangements with Plaintiff.” (Feldman Cert., Exhibit B, ¶¶ 45-49). Notwithstanding the above, the documents Defendant produced provides evidence contrary to all of the above. Defendant’s Initial Production reveals that, rather than stopping payment to Plaintiff under its contract due to any of its asserted defendants, Defendant engaged in an intentional pattern of conduct and strategy to dissipate its assets, to engage in fraudulent transfers of its assets, and ultimately, engage in the fraudulent transfer of its business operations, all with the knowledge and intent to defraud Plaintiff by trying to make itself judgment proof. Defendant’s own documents also confirm that Defendant’s attorneys and Defendant were aware of this fact, complicit in the decision and strategy, and provided advice in connection therewith. (Feldman Cert., Exhibit L). Defendant also produced discovery revealing that the transaction at issue (with FDR) would result in some co-mingling of assets, ownership, services and employees between the acquiring entity and Defendant, thus further suggesting a fraudulent transaction with respect to amounts owed to Plaintiff. Additionally, this discovery reveals the potential, if not a strong likelihood, of a conspiracy between and amongst those involved in the above transaction, including but not limited to those individuals and entities referenced in Plaintiff’s Supplemental Request – all of which is also relevant to discredit and counter Defendant’s asserted defenses. UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 6 of 16 Trans ID: LCV2023925259 Page 6 March 15, 2023 Perhaps more important than the above, Defendant does not get to unilaterally decide what “is not reasonably expected to yield information relevant to” this case and Plaintiff is not required to reveal its entire legal strategy up front – which is why the rules of discovery are deemed to be construed so liberally. Of course, the discovery Plaintiff seeks that Defendant has refused to provide is expected to yield information relevant to this case and reasonably calculated to lead to admissible evidence, and in particular with respect to the defenses Defendant has asserted. R.L. v. Voytac, 402 N.J. Super. at 408. Defendant’s refusal to produce the responsive documents not only raises extreme concern about the level of this conspiracy/scheme and the harm done, but makes Plaintiff more concerned that the documents requested were destroyed by Defendant (which seems to be part of Brian Power’s admission that the “cleantex account is shut down. Which isn’t good.” (Feldman Cert., Exhibit L). Importantly, Mr. Powers does not appear to be an owner of, nor employee of, Clean- Tex. For example, his e-mail account is never a Clean-Tex e-mail account. Rather, he uses an “@confidenceconcerns” or “@mylucent” e-mail domain when communicating. Mr. Powers’ LinkedIn account reveals that he currently has 3 jobs at all times relevant to this dispute: (1) Vice President of Lucent Group, LLC2 from 2016-present (thus the “mylucent” e-mail domain); (2) VP of Operations of Confidence Management Services from 1991-present (thus the “@confidenceconcerns” e-mail domain); and (3) Operations/sales, Central Care Solutions from 2007-present. (Feldman Cert., Exhibit M; https://www.linkedin.com/in/brian-powers- 9975b936/). There is no indication that Mr. Powers is employed by, or an owner of, Defendant. Further, the signature line of Mr. Powers on all of his relevant e-mails indicate that he is “VP of Operations” (i.e., his position at Confidence Management Services) – indicating that he is communicating with Defendant’s counsel as VP of Operations of Confidence Management Services, which is not a party to this litigation or dispute, nor does it have any contractual relationship with Plaintiff. (Feldman Cert., Exhibit M). The foregoing is further supported by the fact that under “VP of Operations” is Mr. Powers’ phone number, listed as 908-XXX-XXXX. This number is listed as Mr. Powers’ number at Confidence Management Services, Inc. on filings with the National Labor Relationships Board (see https://www.nlrb.gov/case/29-RC-068846 wherein Mr. Powers was listed as the legal representative of the “Employer” in a union matter, with the employer being Confidence Management Services, Inc.). By Defendant’s attorneys also sending e-mails to Mr. Powers’ account at Lucent, and Mr. Powers using his Lucent account to communicate with Defendant’s attorneys, Defendant is further bringing in a third party (Lucent) into these communications. Plaintiff’s concern with Defendant’s refusal to produce documents, and its apparent destruction of discoverable documents, is in line with Clean-Tex’s attorney’s admission that 2 The Lucent Group describes Confidence Management Systems and Central Care Solutions as “sister companies,” but does not list any affiliation to Defendant. (See http://www.mylucent.com/about.html at the bottom of the page). Dun & Bradstreet lists David Zahler as its key executive. (See https://www.dnb.com/business-directory/company- profiles.lucent_group_llc.9d8695163e9fb70c6bec79c7431ee99e.html). UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 7 of 16 Trans ID: LCV2023925259 Page 7 March 15, 2023 “ ” (Feldman Cert., Exhibit L). In another document produced by Defendant, counsel informed Mr. Powers that he is concerned that as a result of Clean-Tex shutting down certain accounts (losing access to files and e-mails), there may be a “ against Clean-Tex. It seems as if Defendant is trying to avoid a “ ,” as noted by Mr. Train-Gutierrez, by simply taking the position that Plaintiff is not entitled to documents rather than acknowledging that Defendant destroyed some of these documents. In addition, the documents at issue3 are directly relevant to the substantive claims and defenses at issue in this litigation as they provide direct evidence of: (1) why Defendant was paying Plaintiff under the Agreement; (2) why Defendant stopped paying Plaintiff under the Agreement (which is contradictory to Defendant’s asserted defenses); (3) Defendant’s plan and efforts to defraud Plaintiff and the strategy to provide Plaintiff with false information; (4) successor liability issues (as explicitly discussed with Mr. Powers and others) and fraudulent conveyance of assets, including involving insiders at Defendant; (5) that the transaction with the acquiring entity (FDR) may have been fraudulent in nature; and (6) that Defendant and its purported witnesses all lack credibility in their defenses asserted and justifications for not paying Plaintiff under the Agreement, not to mention their scheme to mislead and provide false information to Plaintiff until Defendant became what it and its counsel hoped would be “ Given Defendant’s Answer, the documents it otherwise produced, and its written discovery responses (in response to Document Request and Requests for Admissions), there is no other source for all of this information – which contradicts Defendant’s other discovery responses, but for these materials and the remainder of the materials sought in Plaintiff’s Supplemental Request, the production of which was denied by Defendant. On the other hand, the documents at issue also reveal that this third party (Mr. Powers) works for one or more other entities (Lucent, Confidence Management Services and Central Care Solutions) owned by the Zahler-family businesses (Clean-Tex is believed to be owned by the Zahler family pursuant to its filings in connection with the Services). (See Feldman Cert., Exhibit N, David Zahler’s LinkedIn profile listing himself as “Founder and CEO (CMS, Central Care Solutions, Cleantex Inc.)). The Zahler family, through its web of entities, as also alleged by the NY Attorney General’s lawsuit against the Zahlers and their entities for other fraudulent conduct (see, e.g., https://ag.ny.gov/press-release/2022/attorney-general-james-sues-long-island-nursing- home-years-fraud-and-resident and related documents), appears to not only be the beneficiary of the sale of Clean-Tex’s assets to FDR directly and through extinguishment of personal guarantees, but also through the inextricably intertwined nature of the transaction whereby Zahler-owned entities would continue to directly benefit financially from the sale of Clean-Tex’s assets to FDR 3 While this Motion is addressing the documents attached to the Feldman Cert., at Exhibit L, it remains unclear what documents Defendant believes are subject to the attorney-client privilege or the work product doctrine as Defendant refuses to identify same despite being asked to do so several times, and after not even raising the issue for over 2 months after production, and over 1 month after Plaintiff referenced documents which are set forth in Exhibit L. UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 8 of 16 Trans ID: LCV2023925259 Page 8 March 15, 2023 while keeping those proceeds out of reach of Plaintiff (as confirmed in some of the documents in Exhibit L of the Feldman Cert.). The very fact that these communications between counsel for Clean-Tex and an employee and officer of one or more different Zahler-owned entities is itself very pertinent to the allegations and to the apparent fact that these entities are inextricably intertwined and may share liability to Plaintiff.4 Based upon the foregoing, Plaintiff respectfully requests that this Court compel Defendant to produce these highly relevant documents or provide a Certification as to whether and to what extent these documents were improperly destroyed. b. Clean-Tex Fails To Satisfy Its Burden That The Documents Are Privileged Clean-Tex further incorrectly asserts the attorney-client privilege and/or the attorney work- product doctrine in many of its responses to WRE’s Supplemental Request. (Feldman Cert., Exhibit G, Nos. 3, 4, 6, 7, 16, 23). As a preliminary matter, the party asserting the privilege, Clean- Tex has the burden of proving that the documents at issue are privileged. See Hedden v. Kean Univ., 434 N.J. Super. 1, 12 (App. Div. 2013). Far from satisfying this burden, Clean-Tex fails to even identify a single specific document IT PRODUCED which it maintains is subject to the attorney-client privilege or the work product doctrine as required by R. 4:10-2(e). Indeed, R. 4:10- 2(e) requires: “[W]hen a party withholds information otherwise discoverable under these rules by claiming that it is privileged or subject to protection as trial preparation material, the party shall make the claim expressly and shall describe the nature of the documents, communications, or things not produced or disclosed in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege or protection.” R. 4:10-2(e) (emphasis added). Defendant also has not produced a privilege log of any documents which are responsive to Plaintiff’s Supplemental Request but are being withheld on the basis of privilege. Clean-Tex cannot rely on blanket assertions of privilege to avoid producing documents which are relevant and critical to resolution of issues in this dispute or to conceal highly relevant information it has already produced. Since Clean-Tex has not identified any document from either its Initial Production or in responsive to the Supplemental Request that it maintains is privileged, nor has it produced a privilege log, Clean-Tex has not and cannot satisfy its burden of proving that the attorney-client privilege applies. Based upon the foregoing, Plaintiff respectfully requests that the Court find that the attorney-client privilege is inapplicable to the documents already produced and as a basis to refuse 4 In this regard, Plaintiff is considering simply joining FDR (the acquiring entity), the other Zahler family members, and the other Zahler-owned entities under such claims, as well as fraudulent conveyance and successor liability. Clearly, if Defendant’s counsel was conferring with them on this litigation, they are inextricably intertwined. Plaintiff had hoped to gather more facts before deciding to assert such claims, but if need be, it can do so in good faith at this time. UNN-L-000314-22 03/15/2023 11:12:30 AM Pg 9 of 16 Trans ID: LCV2023925259 Page 9 March 15, 2023 to produce those documents which are otherwise responsive to Plaintiff’s Supplemental Request and compel Defendant to produce same. c. The Attorney-Client Privilege Is Inapplicable To Communications In Aid of The Commission of a Fraud The attorney-client privilege is inapplicable to the documents presumably at issue (i.e., those attached as Exhibit L to the Feldman Cert. AND those being withheld by Defendant) because “[t]he attorney-client privilege does not extend to communications in the course of legal service sought or obtained in aid of the commission of a crime or fraud,” otherwise known as the “crime/fraud exception” to the attorney-client privilege. N.J. R. Evid. 504(2)(a). Ocean Spray Cranberries, Inc. v. Holt Cargo Systems, Inc., 345 N.J. Super. 515, 521-22 (Law Div. 2000) citing United States v. Zolin, 491 U.S. 554 (1989). “Fraud” includes civil as well as criminal fraud. Public policy requires that the term fraud be given the broadest interpretation. It includes virtually all kinds of deception and deceit, even though they might not otherwise warrant