In motion sequence No. 34, Non-Party EisnerAmper ("Eisner") moved for an order, pursuant to CPLR 3103, striking the subpoena duces tecum, dated April 5, 2011 (the "Subpoena"), served upon Eisner by plaintiff, or, in the alternative, limiting the scope of the Subpoena. After that motion was decided from the bench on June 8, 2011, disputes arose between plaintiff and Eisner regarding compliance with the court's June 8 order, culminating in an order to show cause seeking to hold Eisner in contempt for failing to produce in accordance with the order (motion sequence #36).

The instant action was initially commenced in May of 2006 by Diedrich Holtkamp, the limited partner of a real estate partnership, against, inter alia, the partnership, Parklex Associates ("Parklex"). Subsequently, in four amended complaints, additional limited partners were added as plaintiffs and additional defendants were added, including Parklex's general partner, Parklex Associates, Inc. ("PAI"), PAI's controlling principal, Fred Deutsch ("Deutsch"), various family members and business enterprises of Deutsch, and the attorneys and accountants that assisted in effecting the sale in May of 2006 of Parklex's primary asset, a commercial office building at 112-[*2]114 East 32nd Street in New York County.^[FN1]

The gravamen of the action is that the defendants colluded to defraud plaintiff's limited partners of their right to the proceeds of the $55 million sale by, among other things, secreting the sale proceeds in shell entities, advancing allegedly fraudulent arguments regarding Deutsch's membership interest in Parklex and failing to file accurate tax returns. At the time of the sale, Parklex, Deutsch and PAI were represented by Sukenik, Segal & Graff P.C. ("SS & G"). In July of 2006, SS & G and Deutsch were named as defendants in the first amended complaint, requiring SS & G to withdraw as counsel for Parklex. In August of 2006, Flemming Zulack Williamson Zauderer LLP (the "Flemming Firm") was retained by Deutsch to represent himself, his son, and certain Deutsch-related entities, including 244 East LLC ("244 East"). In September of 2006, the Flemming Firm was also retained to represent Parklex and PAI. The Flemming Firm represented Parklex until February of 2007, when the firm of Barger & Wolen, LLP was retained and substituted as counsel for Parklex. Although the Flemming Firm withdrew from representing Parklex, it continued to represent PAI, Deutsch, his family members and his related businesses.

In a letter dated March 20, 2007, on behalf of its clients listed on Schedule A to the letter,^[FN2] the Flemming Firm retained Eisner as an accounting expert to assist in providing legal advice to the clients (the "Eisner Engagement Letter"). The Eisner Engagement Letter provides for complete confidentiality of all communication relating to the services rendered and further, that any written materials prepared by Eisner are the property of counsel. The intent of this letter is clearly to secure the attorney-client privilege for Eisner's advice pursuant to United States v Kovel, 296 F2d 918 (2d Cir 1961).

In August of 2007, the parties agreed to a litigation moratorium pending the exchange and analysis of documents and settlement negotiations. On or about October 1, 2007, Gerald Paul, Esq. of the Flemming Firm, sent plaintiff's counsel draft computations and data relating to the sale of Parklex's property and the tax consequences to the partners depending on alternative analyses of the financial data. The report, entitled, "Holtkamp v. Deutsch, et al Amounts Owed to Deutsch and Deutsch Entities by Parklex" (the "Book"), prepared by Eisner, was intended to be used for "discussion and settlement purposes only."

The litigation moratorium lasted nearly two years and culminated in the execution of a settlement agreement, which was approved by this court on April 13, 2009. Deutsch ultimately defaulted upon the settlement and a confession of judgment for over $15 million was entered in Supreme Court, New York County on July 20, 2009, which has not been fully satisfied. The [*3]Flemming Firm continued to represent Deutsch and PAI and Deutsch-related entities until August 13, 2009, when it withdrew as counsel and Hartman & Craven LLP was substituted. Pursuant to the terms of the settlement, the action was restored, litigation resumed and discovery remains ongoing.

In response to plaintiffs' motion, on February 22, 2011, this Court granted the Parklex limited partners, who were the named plaintiffs at that time, leave to file a fourth amended complaint substituting the limited partnership, Parklex, as plaintiff in place of the individual limited partners, removing many prior defendants, including 244 East and Voxonic Incorporated, against which the action had been discontinued,^[FN3] and adding some new defendant parties. Both the original plaintiff limited partners, and the new general partner of Parklex, Parklex Replacement General Partner, Inc. ("PRGPI"), which was created to replace PAI following the settlement, have been represented by the Scher Law Firm throughout this litigation. The Flemming Firm represented Parklex only briefly between September 2006 and February 9, 2007, when it was substituted by independent counsel for Parklex, Barger & Wolen, LLP. The Scher Firm became counsel to Parklex following the settlement of April, 2009. Thus, there was no attorney-client relationship between Parklex and the Flemming Firm at the time Eisner was engaged and, indeed, Parklex is not listed in the Eisner Engagement Letter as a client for which the attorney-client privilege attached to Eisner's work under Kovel. In fact, at the time the Book was prepared, the interests of the Flemming Firm's clients were adverse to those of plaintiff's limited partners. Moreover, as determined in this Court's decision and order dated December 14, 2010, in the related case brought by Parklex against the Flemming Firm (index No. 30174/2009), in which this Court dismissed a third-party action for contribution and indemnification against the Scher Law Firm, there could be no attorney-client relationship between Parklex and the Scher Law Firm prior to its retention following the settlement of April 13, 2009.

Plaintiff has purportedly waived any attorney-client privilege with respect to communications with the Flemming Firm on behalf of itself and those former defendant entities now owned by Parklex as a result of enforcement of the judgment against Deutsch, effectively concomitantly waiving the privilege for other defendants represented by the Flemming Firm. However, to permit Parklex to waive an attorney-client privilege with respect to the legal advice of the Flemming Firm provided to its true clients during the period that the Flemming Firm represented those clients as defendants in an action adverse to those clients brought by Parklex's predecessors in interest, the limited partners, would subvert the purpose of such privilege, which is actually owned and controlled by the clients listed in the Eisner Engagement Letter (see Tekni-Plex, Inc. v Meyner & Landis, 89 NY2d 123, 138-39 [1996]; People v Osorio, 75 NY2d 80,84 [1989]; CPLR 4503; see Alexander, Practice Commentaries (McKinney's Cons Laws of NY, Book 7B, CPLR C4503:1)).^[FN4] [*4]

On April 5, 2011, plaintiff Parklex served the non-party Subpoena upon Eisner, seeking documents produced to, and relied upon, by the accounting firm in its preparation of the Book, including drafts of the Book, notes made regarding its preparation, retainer agreements, billing statements, time sheets and raw data. The Subpoena also sought communications between Eisner and defendant parties and counsel, including the Flemming Firm, as well as members of Marcum & Kleigman LLP ("Marcum") (Deutsch's former accountants), and members of Wormser, Keily, Glaf & Jacobs, LLP (the "Wormser Firm") (Deutsch's former tax counsel). A copy of the Subpoena was served upon defendants in this action, but was not served upon the Flemming Firm, which is not a party to this action.

On May 25, 2011, in response to the Subpoena, Shari Savitt, Esq., General Counsel to Eisner, wrote a letter to Austin Graff, Esq., counsel to plaintiff, stating that Eisner was objecting to the Subpoena as (1) it improperly sought information beyond the scope of what is "material and necessary in the prosecution or defense of an action"; (2) certain documents relating to the Flemming Firm's representation of Deutsch and Deutsch-related entities were privileged; (3) certain confidential documents could not be produced without a protective order; (4) certain instructions contained in the Subpoena exceeded the requirements of the CPLR; (5) certain document requests were unduly burdensome; (6) certain document requests could be obtained from other less burdensome sources, and (7) plaintiff should be required to pay for all "reasonable production expenses" prior to Eisner's production (Ex. 3 to Eisner's Motion to Strike).

Through its General Counsel, Eisner subsequently moved to strike the Subpoena on the grounds that plaintiff sought communications and documents protected by United States v Kovel, 296 F2d 918 [2d Cir 1961],^[FN5] or, in the alternative, for a protective order, suspending the [*5]disclosure of the information requested in the Subpoena pending the resolution of attorney-client privilege, work product and confidentiality issues raised in the pending related action, Parklex Associates v Flemming Zulack Williamson Zauderer LLP, Index No. 30174/09 (Sup Ct, Kings County). Upon the return date, June 8, 2011, Eisner appeared by Vincent J. Syracuse, Esq. and Maryann Stallone, Esq. of the firm of Tannenbaum, Helpern, Syracuse & Hischtrit, LLP (the "Tannenbaum firm"), which is also representing the Flemming Firm in the related action. Also appearing were attorneys for defendants the Wormser Firm and Stechel and for defendants Marcum, Ashe and Azuritti, none of whom took any position with respect to the motion. Neither Deutsch, nor any of the other Flemming clients listed on the Eisner Engagement Letter, appeared, though they were all served.

Plaintiff opposed Eisner's motion and stated on the record that it waived any privilege that may be owed to Parklex and the two entities formerly owned by Deutsch, 244 East and Voxonic Incorporated.^[FN6] Following oral argument, in open court, Eisner's motion to quash or, in the alternative, for a protective order, was denied with respect to the data provided to Eisner in order to prepare the Book, which are Parklex's own business and financial records, but was granted to the extent of permitting Eisner to redact and submit a privilege log for "any requested information which Eisner contends is somehow protected under KoveI," to be subject to in camera inspection. Eisner was directed to "provide all the documentation and analysis that it performed with regard to that accounting analysis and the book," but excluding, as potentially [*6]covered by the attorney-client privilege, any direct communications between Eisner and the Flemming Firm (Transcript of 6/8/11 at 28).^[FN7] Although counsel for Eisner indicated that electronic searches for the requested information had not been done, this Court directed that the data to which Parklex was entitled be provided by July 11, 2011.^[FN8]

By letter dated July 8, 2011, counsel for both Eisner and the Flemming Firm, Vincent Syracuse, Esq., advised plaintiff and all other parties to the instant litigation, that, with respect to the Subpoena, "Eisner will not withhold any documents form [sic] its production based upon Kovel, work product, attorney client or other applicable privilege, including the Joint Defense Agreement dated as of August 7, 2006, and as subsequently amended from time to time. Documents responsive to the Subpoena will be made available for inspection and copying at our offices starting on Monday July 11th." Mr. Syracuse requested that contact "at least one day in advance" precede the inspection.

A flurry of e-mails followed this letter, beginning at 5:11 P.M. on July 8, 2011 with a communication from plaintiff's counsel, Jonathan Scher, Esq., to "Kevin" of Sage Document Services Group LLC, which was copied to Mr. Syracuse and numerous other individuals who represented the parties to this litigation or were otherwise involved, instructing Kevin to copy and bates-stamp all documents, contained in 20 boxes, and to copy the discs of electronic data, creating paper copies, also to be bates-stamped, "as fast as possible", beginning at 10:00 A.M. on Monday, July 11. David Kanfer of the Tannenbaum firm responded to Mr. Scher at 5:14 P.M. on the 8th that his "vendor [wa]s not permitted to come to [their] office on Monday under any circumstances", suggesting that if Scher wanted everything copied, an estimate would be obtained from their own vendor which would perform the copying at plaintiff's expense. Mr. Scher responded at 6:00 P.M., accusing Eisner of creating unnecessary "burdens" and "delays" and threatening to "call the Court on Monday" if his vendor was turned away. At 7:06 P.M. on the 8th, Mr. Syracuse sent Mr. Scher an e-mail re-iterating that plaintiff's copier would not be admitted on Monday, denying Scher's accusations of delay, indicating that he would get an estimate from his printer on Monday and would be available for a conference with the Court, but that any further e-mails from Mr. Scher would be "ignored." At 7:18 A.M. on Saturday, July 9, Mr. Scher sent a further e-mail to Mr. Syracuse sarcastically suggesting that the firm had improperly insinuated itself into the management of "discovery compliance of a non-party" in order to delay and questioning the legitimacy of their raising the Kovel issue, threatening to prepare an order to present to the court on Monday. Apparently the parties and their counsel [*7]were able to resolve their differences without court intervention as no communication was received by the court. In excess of forty-eight thousand pages of documents were produced to plaintiff on or about July 14.

However, plaintiff's counsel subsequently discovered that certain electronically stored information, which had been provided to Eisner for preparation of the Book, had not been produced, including a memory stick containing Quickbook files, two CDs provided to Eisner by accountant Marcum & Kliegman and a UBS drive, all of which contained Quickbook files. Austin Graff, Esq. of the Scher Law Firm communicated, initially, orally, on July 18 with Maryann Stallone, Esq. of the Tannenbaum firm regarding the missing items, following up by letter dated July 22 addressed to Mr. Syracuse which concluded: "If we do not receive copies of the Memory Stick, two CDs, and the UBS drive on July 26, 2011, then we will move for contempt and seek attorneys' fees for having to file the Motion." In response, Mr. Syracuse e-mailed Mr. Graff on Monday, July 25 at 7:03 P.M. advising that inquiry had revealed "that certain materials may not have been accessed as part of Eisner's search for responsive documents. We are reviewing the additional materials that have been located and will produce them after our review is completed." Mr. Syracuse concluded: "we will not hesitate to seek sanctions against you and your firm if you choose to waste valuable time and resources by making what you know would be a totally unwarranted and frivolous motion." There was no further communication between counsel regarding these materials and no effort was made to obtain informal court intervention pursuant to Rule 14 of the Statewide Rules of the Commercial Division (22 NYCRR 202.70) or Rule 18 of the Kings County Commercial Division Rules prior to the filing of the threatened contempt motion.

On August 4, 2011, plaintiff's counsel presented an Order to Show Cause seeking to punish Eisner for contempt of court "for failing to comply with the Court's Order of June 8, 2011," to sanction Eisner for failure to comply, and a direction to turnover "a digital version in native format" of all Quickbooks files in its possession. Aware, as was plaintiff's counsel, that the Court would be unavailable to hear such motion after August 12 until after Labor Day due to vacation, notwithstanding considerable reservation as to the propriety of such application in the circumstances, I signed the Order to Show Cause, returnable August 11. The Order directed that Eisner was to deliver the requested digital version of Quickbooks to counsel on the return date or before, in the expectation that the problem would be cured well in advance of the return date and the motion, withdrawn.

The Order to Show Cause was served, as directed, on August 5. According to Mr. Syracuse, counsel had already completed review of the material and was about to deliver it for copying. The supplemental discovery items were delivered to the vendor for copying on August 5 and delivered to plaintiff's counsel on August 8, but Mr. Scher refused to withdraw his contempt motion. By letter dated August 5, which was e-mailed as well as mailed, Mr. Kanfer notified Mr. Scher that the supplemental documents were already undergoing copying and were to be delivered to him on Monday, August 8, requesting that the Order to Show Cause be immediately withdrawn. Mr. Kanfer denied any deliberate attempt to delay production, noting that the Scher firm had failed to respond timely to discovery demands made in the related case, and warning that if Eisner was forced to respond "to your frivolous motion, we will seek sanctions against you and your firm", including attorneys' fees. [*8]

Mr. Scher responded to Mr. Kanfer and Ms. Stallone by letter dated August 6, noting counsel's "action to purge Eisner of its contempt", but sarcastically contesting each of the representations made by counsel for Eisner in explaining the reasons for the delays as "revisionist after-thought thinking and argument" and challenging their veracity. The letter concluded:

Please note: Unless we receive the computer files in digital format, in the exact form as what Eisner described as receiving from Marcum and Fred Deutsah or other sources as set forth in Exhibit G to the 8-4-11Contempt Motion, we will NOT withdraw the motion before we see you in Court on 8-11-11.

Be guided accordingly.

The supplemental discovery was delivered to plaintiff's counsel on August 8, as promised, together with a cover letter again requesting withdrawal of the contempt motion and threatening to request sanctions upon failure to do so. After affording counsel an opportunity to examine the additional production, on August 9, at 12:58 P.M., by e-mail, Ms Stallone again asked whether the motion would be withdrawn. As confirmed at oral argument, Eisner's counsel was delaying the preparation of a response to the motion against their non-party client in the hope of avoiding additional legal fees. By e-mail, at 1:36 P.M. on August 9, Mr. Graff responded: "We gave the disk to our accountants to see if what was on the disk was usable by them and there were difficulties loading the Quickbooks files on to their computer. They gave the disk to their IT group and we are waiting to hear back from the IT group. We will update you as soon as we here [sic] from them."^[FN9] At 1:52 P.M. on August 9, Mr. Syracuse sent an e-mail to Mr. Graff deriding the making of the unnecessary contempt motion and urging its withdrawal. At that time, plaintiff's counsel had had the documents for nearly 24 hours, but had not sought to confer with opposing counsel or their IT staff to resolve what was a technical problem. Mr. Graff's final response to Mr. Syracuse at 2:10 P.M. on August 9 was:

You and I disagree. Why we would we [sic] withdraw the Motion if you did not comply by producing the material? I can only tell you whether you produced the material if our accountants can access the material. This issue is exactly what's before the Court because if you produce the files but they are not usable, what's the value in the production from our perspective?

In fact, I just received a call from our accountants that the IT people are still working on opening the Quickbooks files. As soon as I hear anything I will let you know.

On August 10, Mr. Syracuse prepared his Affirmation in Opposition, which was delivered to my chambers late in the day. [*9]

At oral argument, despite the clearly vituperative exchanges between Mr. Scher and Mr. Syracuse that had preceded the making of the motion, and Mr. Scher's suggestion that Mr. Syracuse had improperly assumed the representation of Eisner, Mr. Scher insisted his motion was not seeking to hold Mr. Syracuse in contempt but that the motion was directed against Eisner. He was not, however, able to identify anyone at Eisner who had willfully failed to comply with this Court's direction of June 8 to produce the original data that had been provided to Eisner, which were Parklex's own records, acknowledging that all communication had been with Eisner's counsel. Mr. Scher took the position that Eisner's failure to directly produce the electronic files in exactly the form supplied to them, without prior review by counsel, constituted contempt.

There is no question that plaintiff's counsel was in possession of all the requested material, including the missing electronically stored data, at least two days prior to the return date of their motion. Had plaintiff's attorneys or accountants made inquiry of Eisner, its counsel or IT people, it might have learned the reasons for its inability to access the information. Instead, plaintiff's counsel pursued its motion for contempt, notwithstanding that the original basis for the alleged contempt had been fully cured and plaintiff's counsel had been provided with hard copies of the Quickbooks data contained in the electronic files that could not be opened. It is noted that the sole reason given for the "emergency" in obtaining the Quickbooks data was the need to file tax returns. There was no actual prejudice alleged or demonstrated that would support a finding of contempt in the circumstances. See Matter of McCormick v Axelrod, 59 NY2d 574, 583 [1983] (prejudice to the right of a party is an essential element of contempt under Judiciary Law §753).Plaintiff did not establish that Eisner had failed to comply with the Court's order of June 8.

At the conclusion of oral argument on August 11, this Court denied the Motion for Contempt against Eisner, finding such motion to have been frivolously pursued, and awarded sanctions pursuant to Part 130-1 of the Rules of the Chief Administrator. Eisner's counsel was directed to submit an affirmation in support of their request for attorney's fees, on notice to plaintiff, which has now been received. Mr. Scher has opposed the proposed order, seeking to reargue the Court's decision from the bench which granted sanctions.^[FN10] Mr. Scher argues that the Court may not grant sanctions without a hearing and written findings. This Court did hold a hearing on August 11 and has considered the documentary evidence submitted by both parties. No issue of disputed fact requires the taking of additional evidence. The relevant facts are undisputed, except for Mr. Scher's insistence that Mr. Syracuse is not truthful in his explanation, but this Court credited the reliability of his representations in its decision on August 11. This decision will supply the written explanation Mr. Scher demands.

Part 130-1(c) of the Rules of the Chief Administrator provides for the award of sanctions for frivolous conduct that is "without merit in law " or "undertaken primarily . . . to harass or maliciously injure another." Factors to be considered in determining whether particular conduct is frivolous are, "among other issues, (1) the circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct; and (2) [*10]whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel or the party." Contrary to plaintiff's argument, sanctions may be awarded "upon the court's own initiative, after a reasonable opportunity to be heard. The form of the hearing shall depend upon the nature of the conduct and the circumstances of the case." (Part 130-1(d); see Miller v Cruise Fantasies, Ltd., 74 AD3d 919 [2d Dept 2010]). In responding to plaintiff's motion, counsel for Eisner requested an award of sanctions to cover the attorneys' fees and costs incurred by his non-party client. Plaintiff was thus on notice that his failure to withdraw the motion, so as to avoid such costs, might result in such award. Plaintiff's counsel was provided a full opportunity at oral argument to address such request.

Plaintiff's motion to punish Eisner for contempt was inappropriate from the outset. The proper application relating to the failure to produce discovery would be a motion pursuant to CPLR 3124 to compel such disclosure. In this case, of course, an oral order had already been made in response to Eisner's motion to strike the Subpoena, requiring production by July 11. In fact, Eisner did comply with this order and made the documents available to plaintiff on that date. It was not until July 18 that counsel for Eisner became aware of the missing material, whereupon counsel took immediate action to supplement its initial production. Plaintiff's counsel was advised of the efforts made by Eisner's counsel, but was unwilling to permit them the time needed to remedy the problem, in disregard of the Standards of Civility requiring counsel to avoid unnecessary motion practice through negotiation, impose reasonable deadlines in the circumstances and agree to extensions of time when needed (Rules of the Appellate Divisions, 22 NYCRR Part 1200, Appendix A), and Rule 14 of the Commercial Division requiring consultation and a request for a conference with the court regarding discovery disputes.^[FN11] The need for supplemental disclosure is common in the practice of law and a mere oversight or technical problem associated with retrieving information stored electronically, as in this case, does not constitute contempt.

However, it is not the contempt application itself that serves as the basis for this Court's award of sanctions, but, rather, the failure to withdraw the motion once any possible contempt had been cured. Unfortunately, it was this Court's, in retrospect, improvident, signing of the Order to Show Cause that set the wheels in motion. As noted, upon the papers submitted in support of plaintiff's application, I perceived a dispute that required expeditious resolution before my extended absence beginning a week later. The hostile relationship between counsel,^[FN12] as [*11]reflected in the above-quoted exchanges, indicated that a live, in-court discussion would be needed. It was my hope and expectation that the failure to provide the materials, as alleged, would be cured in advance of the return date and the motion would be withdrawn. My expectation was realized to the extent that the materials were produced. It is plaintiff's failure to withdraw the contempt motion that this Court finds to be frivolous under Rule 130-1(c).

It cannot be disputed that plaintiff's counsel was repeatedly advised that, in light of Eisner's production of all of the information requested, their refusal to withdraw the motion was frivolous and subject to sanction. The Scher Law Firm's insistence that Mr. Syracuse's need to review the newly-discovered additional material prior to delivery to plaintiff was "unjustified" and that "[t]he digital files should have been copied and produced as and when it was received by Mr. Syracuse" without review by counsel (Emergency Affirmation of Jonathan L. Scher Esq. at ¶ 8), is without merit. An attorney's failure to review material prior to disclosure in the context of litigation would constitute a serious breach of professional responsibility. It is noted that, pursuant to the Eisner Engagement Letter from the Flemming Firm, under the Kovel rule, Eisner's work product might be privileged as attorney-client communication or protected as attorney work product (see Spectrum Systems Int'l Corp. v Chemical Bank,78 NY2d 371 [1991]). This Court's order of June 8 expressly excluded any communications or material for which protection from disclosure was claimed.

The Court is now in receipt of a proposed order for settlement, attached to which is the affirmation of Vincent Syracuse attesting that Eisner incurred a total of $21,954.89 in attorneys' fees and costs as a result of plaintiff's motion to hold it in contempt. A time log for each of the people who worked on the matter, together with their qualifications and regular billing rate, is annexed. Mr. Syracuse indicates that the sum billed to the client represents a 20% discount from the regular rates billed for these attorneys. Mr. Scher does not dispute the reasonableness of the fees recited although he does demand to see the retainer agreement between Eisner and counsel. That does not appear to be necessary here. See Matter of Estate of Rose BB, 35 AD3d 1044, 1045 [3d Dept 2006](Court to determine reasonable legal compensation and is not bound by retainer agreement).

In opposition to the proposed order, both Mr. Scher and Mr. Graff insist they were "blindsided" with respect to the award of sanctions, claiming that Eisner's counsel knew that the electronic files supplied in the supplemental disclosure could not be opened and failed to advise them of this fact. In court on August 11, Mr. Syracuse represented that the files had been down-loaded onto his computer, which he had in court, and could be opened. After the August 11 appearance, in a letter dated August 15 addressed to Mr. Graff, enclosing a Memory Stick containing the files that had not been openable by plaintiff's accountants, Ms. Stallone stated: "These files were copied directly from our laptop, which with the exception of a few files that Eisner was also unable to open, we have been able to review".^[FN13] Plaintiff's counsel interpret this statement as an acknowledgment that Eisner's counsel knew all along that these files were not openable. However, the statement of Ms. Stallone, taken in the context of all the prior exchanges and the representations at oral argument, suggests to this Court that only some of the files could [*12]not be opened and that those files were also not accessible to Eisner and therefore were not used in developing the Book. In fact, Eisner did provide the files to plaintiff, including, apparently, the unopenable files, in the form delivered to the Tannenbaum Firm, before the return date of the motion, in compliance with the Court's June 8 Order. The fact that they could not be opened by plaintiff's accountant does not form the basis for a finding of contempt. The chain of e-mails between the Scher Law Firm and their IT people and plaintiff's accountants, submitted in opposition to the proposed order, do nothing to mitigate plaintiff's counsel's duty to communicate with opposing counsel and the Court prior to the hearing of the contempt motion.

Surely, compliance with Rule 14 would have been a far more efficient strategy to obtain the desired information than insisting upon the litigation of a meritless motion for contempt which has cost a non-party to the litigation in excess of $21,000 and this Court, countless hours in addressing the matter. The Court declines to modify its prior determination awarding attorneys' fees to Eisner as a sanction for plaintiff's frivolous conduct. Since plaintiff does not dispute the reasonableness of the rates charged, there is no need for a further hearing. However, a review of the time logs submitted indicates that not all of the time logged between August 5 and August 31 related exclusively to the motion for contempt, but included "various Eisner discovery issues" as well. Accordingly, the sum claimed for attorneys' fees will be discounted an additional twenty percent in assessing the sanction pursuant to Part 130-1.

Plaintiff's motion for contempt is denied and defendant's application for sanctions is granted. Parklex and the Scher Law Firm are directed to pay to the Tannenbaum Firm, on Eisner's behalf, $17,651.54, inclusive of attorneys' fees and disbursements, as the costs incurred by Eisner in defending itself against plaintiff's frivolous motion, by November 30, 2011. The proposed order has been signed as modified in conformity with this Decision.

This constitutes the decision and order of the court.

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JUSTICE OF THE SUPREME COURT