Court Denies Motion to Depose Individual As Corporate Representative

In an Opinion, dated April 3, 2023, in Phillips Auctioneers LLC v. Grosso, Index No. 651782/2020, Justice Andrea Masley denied defendant’s motion to depose Nicola Del Roscio as the corporate representative of the Cy Twombly Foundation. The case arose out of a consignment contract between the plaintiff auction house and consignor defendant. The contract provided that plaintiff could withdraw the work at issue if there “is reasonable doubt as to its authenticity, authorship or attribution[]. . .” Plaintiff brought the action to recover an advance, withdrawal fee, and out-of-pocket expenses for the withdrawal of an alleged false artwork by Cy Twombly. Grosso counterclaimed. Grosso deposed David Baum, the Secretary and General Counsel of the Foundation, but argued that he was entitled to depose Del Roscio as well. Grosso claimed that plaintiff’s decision to withdraw the work at issue was principally informed by information from the Foundation and thus Del Roscio’s deposition was necessary. The Court rejected Grosso’s argument, explaining:

"A corporate entity has the right to designate, in the first instance, the employee who shall be examined." (Nunez v Chase Manhattan Bank, 71 AD3d 967, 968, 896 N.Y.S.2d 472 [2d Dept 2010] [citations and internal quotation marks omitted].) The party moving for an additional deposition must demonstrate that "(1) the representatives already deposed had insufficient knowledge, or were otherwise inadequate, and (2) there is a substantial likelihood that the persons sought for depositions possess information which is material and necessary to the prosecution of the case." (Id. [citations omitted].)

. . .

As Baum testified that he was the only person from the Foundation who communicated with Phillips beginning July 2019, Grosso fails to demonstrate the first element, that the representative deposed had insufficient knowledge. In fact, Baum had sufficient knowledge as he was the only person to communicate with Phillips during the relevant time period. Absent a contention that someone else from the Foundation communicated with Phillips during this time, the relevant communications are from Baum beginning July 2019. Therefore, only what Baum communicated to Phillips is relevant to the prosecution of his counterclaim (breach of Phillips' duty to disclose relevant information to Grosso) and is information that Baum was able to, and did, testify to during the Deposition. . .

Grosso poses numerous reasons why Del Roscio possesses unique information relevant to his claims and defenses, but the court rejects his contentions. Grosso believes he should have an opportunity to prove the authenticity of the Work in this action and thus Del Roscio's deposition and/or additional discovery is material (for example, information about Twombly's relationship with Grosso's father). This argument is unavailing as this breach of contract action arises out of the terms of the Consignment Agreement. This is not an action to determine with certainty that the Work at issue is authentic. Grosso's motion to depose Del Roscio as a corporate witness for the Foundation is therefore denied.

This case demonstrates the high standard to overcome a corporate entity’s right to designate the employee who shall be examined. The attorneys at Schlam Stone & Dolan frequently litigate discovery issues. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such litigation.