Sometimes in-house counsel believe they can handle a case better, or more cost-effectively, than outside counsel. And sometimes, they just miss practicing law. Still, it’s better to let outside counsel do the talking…and the questioning. It’s impossible to know what motivated in-house counsel in HH Marina Development LLC v. Tarrytown Boat Club, Inc., Index No. 63137/17, to take a deposition. But it didn’t work out well. The facts are straightforward, but unusual.

Under CPLR 3106(d), the party seeking a deposition may designate “a particular officer, director, member or employee” in the notice. Defendants noticed “HH Marina Development LLC by Joseph Cotter” – HH’s President. CPLR 3106(d), however, gives the other side an opportunity to produce someone other than the designee. All that is required is to notify the other side at least ten days before and give the identity, description or title of the witness. Instead of producing Mr. Cotter, Plaintiff designated its General Counsel, Daniel Pennessi.

Plaintiff then sought to depose one of the Defendants. When the parties and counsel showed up, Defendants learned that Pennessi himself planned to ask the questions. Not surprisingly, Defendants objected, and the parties called the Court. When Pennessi could not cite caselaw supporting his position that he was entitled to take the deposition, it was postponed.

Plaintiff then moved to enjoin Defendants from refusing to proceed with depositions conducted by Pennessi. Plaintiff argued that Pennessi should be permitted to take depositions because he had no “threshold or significant testimony to provide upon which this case will be decided.” Justice Jamieson found this “puzzling” as Plaintiff had designated Pennessi as a witness. “By selecting Mr. Pennissi over Mr. Cotter,” the Court wrote, “plaintiff has demonstrated that Mr. Pennessi does, in fact, have ‘threshold or significant testimony to provide.’”

The issue presented to the Court was a case of first impression in New York. Specifically, “whether Mr. Pennessi should be allowed to conduct depositions that will be used in the same trial in which he was also a fact witness.” The Court ruled as follows:

First, Justice Jamieson rejected Plaintiff’s argument based on Rule 3.7 of the Rules of Professional Conduct. Rule 3.7 states that “[a] lawyer shall not act as advocate before a tribunal in matter in which the lawyer is likely to be a witness on a significant issue of fact…” A deposition, Plaintiff argued, is not “a tribunal.” But Justice Jamieson concluded that it was “a distinction without a difference.” Because Pennessi would be a key witness at trial, “he cannot be allowed to take the deposition of other key witnesses.”

Second, Justice Jamieson rejected Plaintiff’s suggestion that “if a deposition transcript must be read during trial, the reader can merely omit Mr. Pennessi’s name so that the jury does not know that he was the lawyer taking the deposition.” The Court found that the proposal “does not account for every possible situation, including one in which the deposition itself becomes an issue at trial.” Justice Jamieson was “not willing to risk a mistrial so that Mr. Pennessi … can take the deposition instead of counsel of record doing so.” Thus, the Court denied the motion for a protective order and ordered that Plaintiff, by counsel other than Pennessi, take the two outstanding depositions.

Takeaway: In-house counsel cannot be a witness in the case and take a deposition, too.

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Photo of Gregory Blue Gregory Blue

Greg Blue is Of Counsel to the firm. Greg focuses his practice on complex business litigation, with an emphasis on disputes involving financial fraud and misconduct, corporate governance, real estate investments, insurance coverage, and employment matters.

Greg is a 1995 graduate of The…

Greg Blue is Of Counsel to the firm. Greg focuses his practice on complex business litigation, with an emphasis on disputes involving financial fraud and misconduct, corporate governance, real estate investments, insurance coverage, and employment matters.

Greg is a 1995 graduate of The George Washington University Law School, where he was a member of the Law Review. He is admitted to practice in New York, New Jersey and California.