6340 NB LLC v. Capital One, N.A.

UNITED STATES DISTRICT COURT November 18, 2022

EASTERN DISTRICT OF NEW YORK U.S. DISTRICT COURT

-------------------------------------------------------------X EASTERN DISTRICT OF NEW YORK

LONG ISLAND OFFICE

6340 NB LLC,

Plaintiff,

MEMORANDUM ORDER

-against- 20-CV-02500 (JMA)(JMW)

CAPITAL ONE, N.A.,

Defendant.

-------------------------------------------------------------X

A P P E A R A N C E S:

Ronald J. Rosenberg

John S. Ciulla

Joshua Marc Liebman

Kenneth E. Aneser

Peter Williams

William J. Birney

Rosenberg Calica & Birney LLP

100 Garden City Plaza, Suite 408

Garden City, NY 11530

For Plaintiff 6340 NB LLC

Adam Kirschbaum

James Wilson Perkins

Michelle D Gambino

Michael Hass

Michael Patrick Manning

Shirin Afsous

Greenberg Traurig, P.A

One Vanderbilt Avenue

New York, NY 10017

For Defendant Capital One, N.A.

WICKS, Magistrate Judge:

Before the Court is Defendant Capital One, N.A.’s (“Capital One”) motion to compel

Plaintiff 6340 NB LLC (“6340 NB”) to produce allegedly critical zoning documents and

communications by and between attorneys Kevin Walsh (“Walsh”) and Laura Schaefer

(“Schafer”) of the firm Walsh Markus McDougal & DeBellis LLP (“WMMD”) in response to

Document Request Nos. 9, 30-36, 39-42, 45-46, 73 and 75, over 6340 NB’s objections on

various privilege grounds. (DE 94.) Oral argument was held on the motion on November 14,

2022. (DE 118.) For the reasons that follow, Capital One’s motion to compel documents is

hereby DENIED.

RELEVANT BACKGROUND

The Court and the parties are well versed in the underlying facts and allegations of this

case from prior orders which do not bear repeating here.

Relevant here is that pursuant to a 2017 Ground Lease and its subsequent amendments,

6340 NB was to acquire and rezone two residential parcels in order to construct a Capital One

bank branch (the “Property”). (DE 42 at ¶¶ 14-22.) In order to obtain zoning approval, 6340 NB

required Capital One’s cooperation to provide certain plans and specifications for the anticipated

branch. (Id. at ¶ 18.) After several extensions of deadlines, which 6340 NB alleges is at the

hands of Capital One, on July 24, 2019, 6340 NB finally filed the requisite zoning application.

(Id. at ¶¶ 26-28.) A public hearing was held before the Town Board of the Town of North

Hempstead on December 17, 2019. (Id.) Capital One contends that the Town would not agree to

the rezoning (see DE 94), but 6340 NB alleges progress was made during the hearing and the

Town was generally supportive. (See DE 42 at ¶ 28.) Nonetheless, just over a month later, on

January 31, 2020, Capital One served a Notice of Termination of the Ground Lease for 6340

NB’s failure to timely perform its obligations under the Ground lease (“Termination Notice).

(Id. at ¶ 31.) 6340 NB contends that this Termination Notice was wrongful and an act of

anticipatory repudiation because 6340 NB was well within the deadlines set in an amendment to

the Ground Lease. (Id. at ¶ 33.) In an effort to keep the deal alive, 6340 NB asked Capital One

to withdraw the Termination Notice, and in an email to Capital One’s counsel, stated: “We are

ready willing and able to proceed but to do so require that Capital One withdraw the

termination.” (Id. at ¶ 38.) Capital One did not withdraw the Termination notice and thus 6340

NB commenced this action to recover damages based on Capital One’s alleged breach of

contract and anticipatory repudiation of a Ground Lease and its subsequent amendments. (See

DE 42.) Capital One has counterclaimed against 6340 NB alleging fraud and breach of contract

in connection with 6340 NB’s alleged failure to perform under the Ground Lease. (See DE 89.)

DISCUSSION

In 2018, attorneys Walsh and Schaefer of WMMD were engaged to facilitate the zoning

approval necessary under the Ground Lease. The threshold question is, however: engaged by

whom? The question of whether Capital One is entitled to the documents it seeks necessarily

turns on whether Walsh and Schaefer were attorneys for 6340 NB, Capital One, or both.

Capital One seeks to compel 6340 NB to produce documents in response to sixteen

document requests concerning 6340 NB’s efforts to rezone the Property. (See DE 94-1.) In

response to those discovery requests, 6340 NB has withheld various emails from dates ranging

from November 29, 2017, through March 31, 2022, based on the attorney-client and work

product privileges, and has produce a corresponding privilege log (“Walsh/Schaefer Emails”).

(DE 94-2.)1 Capital One argues it is entitled to the Walsh/Schaefer Emails because (1) no

privilege exists as to communications involving Walsh and Schaefer because Walsh and

Schaefer were acting as attorneys for both 6340 NB and Capital One with respect to the zoning

approval; (2) 6340 NB has put the issues surrounding rezoning at issue by claiming that it was

1 During oral argument, counsel for 6340 NB estimated that it was withholding less than 100 emails.

Further, to the extent the privilege log also references emails of Katrine A. Beck of Fullerton Beck LLP

counsel for Capital One confirmed that it is not seeking to compel those withheld emails, but rather only

the WMMD emails.

“ready willing and able” to perform under the Ground Lease; (3) the documents are not protected

under the work product doctrine because they were not prepared in anticipation of litigation and

Capital One has otherwise demonstrated a substantial need for those documents; and (4) Walsh

and Schaefer were hired for a business purpose and the sought after materials are factual in

nature, not legal. (DE 94.) Capital One further requests that to the extent the Court a privilege to

the exclusion of Capital One exists, that the Court conduct an in-camera review to ensure all

non-privileged material is produced. (Id.)

In opposition, 6340 NB argues that the Walsh/Schaefer Emails are protected by the

attorney-client privilege because WMMD did not jointly represent 6340 NB and Capital One and

because 6340 NB has not put these communications at issue. (DE 99.) 6340 NB further contests

the need for an in-camera review. (Id.)

A. Did Walsh and Shaefer Represent Both 6340 NB and Capital One?

Capital One argues that no privilege exists as to the Walsh and Schafer emails because

WMMD acted as Capital One’s attorney in all aspects of the legal work done on the rezoning.

(DE 94; DE 108.) Capital One relies on two related but distinct doctrines and at times seems to

conflate the two: (1) the common-interest doctrine; and (2) the joint-client exception. (See id.)

In response, 6340 NB argues that the Walsh/Schaefer Emails are subject to the attorney-client

privilege because WMMD did not jointly represent 6340 NB and Capital One. (DE 100-2; DE

107; DE 113.)

i. Common-Interest Doctrine2

Typically, when a communication between a client and an attorney is shared in the

presence of a third party, the attorney-client privilege is waived. Schultz v. Milhorat, No. CV 10-

103 (AKT), 2011 WL 13305347, at *2 (E.D.N.Y. Apr. 11, 2011). The common-interest doctrine

functions to extend the attorney-client privilege and prevent waiver when an otherwise privileged

communication is disclosed to a third party. Id. (common-interest privilege “acts as an

exception to these general waiver rules in order to facilitate cooperative efforts among parties

who share common interests”); SR Int'l Bus. Ins. Co. v. World Trade Ctr. Properties LLC, No. 01

CIV. 9291 (JSM), 2002 WL 1334821, at *3 (S.D.N.Y. June 19, 2002) (“The common interest

privilege is a limited exception to the general rule that the attorney-client privilege is waived

when a protected communication is disclosed to a third party”). The purpose of the common-

interest doctrine is to “protect the confidentiality of communications passing from one party to

the attorney for another party where a joint defense effort or strategy has been decided upon and

undertaken by the parties and their respective counsel.” Schaeffler v. United States, 806 F.3d 34,

40 (2d Cir. 2015). The doctrine “applies where parties are represented by separate counsel but

engaged in a common legal enterprise.” Fresh Del Monte Produce, Inc. v. Del Monte Foods,

2 “Common-interest doctrine” is also frequently referred to as “common-interest privilege.” However, the

mere fact that although sometimes the doctrine is called the “common-interest privilege,” it is in fact not

an independent source of privilege, bur rather “it applies only to communications that otherwise would be

protected by the attorney-client or work product doctrine.” In re Lifetrade Litig., No.

17CV2987JPOKHP, 2022 WL 3644357, at *4 (S.D.N.Y. Aug. 24, 2022); Carnegie Inst. of Washington v.

Fenix Diamonds, LLC, No. 20-CV-200 (JSR), 2020 WL 7074726, at *1 (S.D.N.Y. June 30, 2020) (“The

common-interest doctrine is not a source of privilege in its own right; rather, it is an exception to the rule

that attorney-client privilege is generally waived by voluntary disclosure of the [privileged]

communication to another party”) (internal quotes omitted).

Inc., No. 13 CIV. 8997 JPO GWG, 2015 WL 3450045, at *3 (S.D.N.Y. May 28, 2015) (quotes

omitted).

The common-interest doctrine is a shield, however, and not used as a sword. Here,

Capital One seeks to use the common-interest doctrine to essentially invade the attorney-client

privilege that exists between WMMD and 6340 NB and entitle Capital One to otherwise

privileged material. This is not the function of the doctrine. See e.g., E. End Eruv Ass'n, Inc. v.

Town of Southampton, No. CV 13-4810 (AKT), 2014 WL 12847276, at *8 (E.D.N.Y. Mar. 13,

2014) (finding documents and communications between plaintiff and non-parties to be shielded

from disclosure by defendant because of a common legal interest); United States v. Zhu, 77 F.

Supp. 3d 327, 331 (S.D.N.Y. 2014) (finding documents between two companies sharing a legal

interest were immune from discovery by plaintiff); In re Velo Holdings Inc., 473 B.R. 509, 518

(Bankr. S.D.N.Y. 2012) (common-interest doctrine applied to shared documents and

communications between plaintiff and its agent as to prevent disclosure to defendant).

Accordingly, the common-interest doctrine is inapplicable here. 3

3 In a supplemental submission filed post-oral argument by Capital One, Capital One contends that

Feighan (180 A.D.3d at 874) and In re McCormick (287 A.D.2d 457, 457 (2d Dep’t 2001)) are examples

of instances where the common-interest doctrine is used a “sword” to pierce a privilege, rather than as a

“shield” to protect it. The Court disagrees. Both Feighan and McCormick involve circumstances where

parties were represented by the same attorney and subsequently engaged in litigation. See Feighan, 180

A.D.3d at 874) (“Here, Vecchio's joint representation of the parties in 2013 with respect to the preparation

of estate planning documents . . . constituted representation with respect to the same matter, and we agree

with the Supreme Court's determination that the attorney-client privilege could not be invoked to protect

confidential communications concerning Vecchio's representation of the parties with regard to the

defendant's 2013 revocable trust”); McCormick, 287 A.D.2d at 457 (“The appellant and the objectant

Suzanne McCormick were both executors of the estate of Edmund J. McCormick. The law firm of White

and Case represented the estate and the executors”). This implicates the joint-client exception, not the

common-interest doctrine, which requires that the parties actually be represented at one time by the same

attorneys.

ii. Joint-Client Exception

The joint-client exception provides that “[a]n attorney who represents two parties with

respect to a single matter may not assert the privilege in a later dispute between the clients.”

Quintel Corp., N.V. v. Citibank, N.A., 567 F. Supp. 1357, 1364 (S.D.N.Y. 1983); Feighan v.

Feighan, 180 A.D.3d 873, 874, 118 N.Y.S.3d 674, 676 (2020) (“Generally, when an attorney

represents two or more parties with respect to the same matter, the attorney-client privilege may

not be invoked to protect confidential communications concerning the joint matter in subsequent

adverse proceedings between the clients”). Importantly, and unlike the common-interest

doctrine, the “exception only applies, however, where the attorney actually represented both

parties.” (Quintel Corp., N.V., 567 F. Supp. at 1364). And so, to determine the applicability of

this exception, the Court must first determine whether WMMD actually represented Capital One.

Courts in this jurisdiction are guided by six factors in determining whether an attorney-

client relationship exists:

1) whether a fee arrangement was entered into or a fee paid; 2) whether a written

contract or retainer agreement exists indicating that the attorney accepted

representation; 3) whether there was an informal relationship whereby the attorney

performed legal services gratuitously; 4) whether the attorney actually represented

the individual in one aspect of the matter (e.g., at a deposition); 5) whether the

attorney excluded the individual from some aspect of the litigation in order to

protect another (or a) client's interest; 6) whether the purported client believes that

the attorney was representing him and whether this belief is reasonable.

Protostorm, LLC v. Antonelli, Terry, Stout & Kraus, LLP, 834 F. Supp. 2d 141, 154–55

(E.D.N.Y. 2011).

Here, it is undisputed that no retainer agreement exists between Capital One and

WMMD. (DE 100-3, Declaration of Kevin M. Walsh [“Walsh Decl.”] at ¶ 3) (“At the outset, I

want to make clear that WMMD did not at any time have an agreement, written, oral or

otherwise, to represent Capital One in connection with the zoning process, or with respect to any

other matter”); DE 111-1, Declaration of Frank DelGiudice Supplementing Motion to Compel

[“DelGiudice Dec.”] at ¶ 11) (“Additionally, even though there was no written engagement

agreement between Capital One and Walsh and Schafer on this project. . .”). But one was

entered between 6340 NB and WMMD. (Walsh Decl. at ¶ 4; DE 107-1.) 6340 NB contends that

WMMD started providing legal services to 6340 NB concerning the Ground Lease and zoning

issue in late November 2017, but the relationship was formally reduced to a writing through an

engagement letter dated September 25, 2018 (“Engagement Letter”). (DE 107 at 1 n. 1; DE 107-

1.) The Engagement Letter designates 6340 NB as the “Client” and provides that WMMD will

represent 6340 NB in connection with the Property and “a number of zoning approvals.” (DE

107-1.) The Engagement Letter further goes on to state that the firm had already met with the

Planning Department of North Hempstead to discuss a zoning application and that the firm’s

services would encompass all administrative hearings. (Id.) The Engagement Letter makes no

mention whatsoever of Capital One.4 (Id.)

Whether a fee arrangement was entered into by Capital One or fees were paid is a

thornier issue. Walsh, a partner at WMMD, attests that Capital One did not pay any of

WMMD’s legal fees and instead, all fees were billed to, and paid by, 6340 NB. (Walsh Decl. at

¶ 4.) However, emails between Capital One and 6340 NB demonstrate a potential fee

arrangement was entered into. (See DE 116-2.)5 Specifically, as it related to getting zoning

approvals for the branch’s drive-thru, Capital One offered to reimburse 6340 NB for Walsh’s

work, or in the alternative, offered to pay Walsh directly. (Id.) 6340 NB did not object or raise

any concerns, but rather stated, “[w]hatever way is easier on your end. Either way works for us.”

4 The Court notes that 22 NYCRR § 1215.1 requires attorneys to give every client an engagement letter.

5 For clarity, Richard Becker (“Becker”) and David Ross (“Ross”), involved in the cited email chain are

the sole members of 6340 NB. (See DE 53.)

(Id.) Indeed, the idea may have come from 6340 NB itself. A month prior, when initially

confronted with how the parties should proceed applying for the drive-thru zoning, Becker

drafted an email for Ross to send to Capital One wherein he suggests 6340 NB, as the landlord,

handle the drive-thru zoning so there would be one cohesive application,” and offered to Capital

One: “We can have the attorney break out billing for each task and CapOne can pay its portion.”

(Id.) It is unclear from the record if this email was ever sent and it was confirmed during

argument that WMMD did not ultimately break out any billing. Nonetheless, the fact still stands

that this pay arrangement never materialized and Capital One did not actually pay any of

WMMD’s legal fees. Further, inasmuch as there was a discussion between Capital One and

6340 NB about a potential fee split, it does not appear that WMMD was ever a party to these

discussions. It cannot be said that an informal relationship existed between WMMD and Capital

One whereby WMMD performed legal services gratuitously.6

Next, the record suggests that WMMD did in fact exclude Capital One from some aspect

of its representation to protect 6340 NB’s interest. Capital One argues that Capital One, Walsh,

and Schaefer routinely worked together and over the course of the transaction there are hundreds

of communications between them. (DE 108.) However, the very fact that there are numerous

emails over the course of three years between 6340 NB, Walsh, and Schaefer in which Capital

One was excluded, demonstrates that there was a relationship between WMMD and 6340 NB

that Capital One did not share. (See DE 94-2.)

The analysis of the remaining factors, namely whether the attorney actually represented

the individual in one aspect of the matter, whether the purported client believes that the attorney

6 Indeed, the engagement letter rule itself requires that “an attorney who undertakes to represent a client

and enters into an arrangement for, charges or collects any fee from a client shall provide” the

engagement letter to the client. 22 N.Y.C.R.R. Part 1215. That was not done here.

was representing him, and whether this belief is reasonable, go hand in hand in this

circumstance. Capital One asserts that because Walsh and Schaefer worked directly with Capital

One’s agents, architects, and engineers with respect to the rezoning and communicated with both

6340 NB and Capital One about the proposed site plan and the strategy by which to approach the

County and the Town, Walsh and Shaefer were representing both entities. (DE 94; see 94-3.)

Capital One also points to the zoning application submitted by WMMD to the Town of North

Hempstead on July 24, 2019, which lists Capital One as the “Applicant,” and the transcript of a

public hearing before the Town (“Town Hearing”) wherein Walsh introduces himself as

speaking on behalf speaking on behalf of both 6340 NB and Capital One. (Id.; see 94-4; 94-5.)

The Court does not find that either fact tips the scale in favor of finding that WMMD

represented Capital One. While the zoning application lists Capital One as the applicant, the

application cover letter, printed on WMMD letterhead and signed by Shaefer, unequivocally

states: “I represent, 6340 NB LLC, the owners of the above property.” (DE 94-5). A few months

later, on October 8, 2019, Schaefer again wrote the Town clearly stating, “I represent 6340 NB

LLC, the owners of the Premises.” (DE 100-6.) Indeed, under the Ground Lease, zoning for the

project was 6340 NB’s obligation. (DE 94.)

There was no such unequivocal language used at the Town Hearing. Review of the Town

Hearing transcript reveals that the Town Board members repeatedly and incorrectly identify

6340 NB as the applicant.7 (Id.) So, when Walsh first states that he is “speaking for the

applicant” it suggests that he is speaking on behalf of 6340 NB, not Capital One. However,

Walsh then goes on to further introduce himself as belonging to the firm WMMD and speaking

for the owner of the property (6340 NB) and the proposed tenant (Capital One) and is further

7 Recall, the actual zoning application lists Capital One as the applicant. (See 94-5.)

joined by a team of civil engineers, architects, traffic consultants, and a representative from

Capital One. However, Walsh’s role simply as the presenter at the Town Hearing doing

introductions is insufficient under these facts to create an attorney-client relationship between

Capital One and WMMD.8

What is more, other documents submitted by Capital One illustrate that it was clear to

Capital One that Walsh and Shaefer were 6340 NB’s attorneys and not its own. For instance, in

the email sent by Capital One to 6340 NB inquiring about how to proceed with the drive-thru

approval, Capital One states, “[w]e also need to discuss how to move forward with your attorney

running point on getting our drive-thru approved with the ZBA.” See DE 116-2 (emphasis

added). 6340 NB responded to that inquiry identifying Walsh of WMMD as 6340 NB’s zoning

attorney. See id. (“Our zoning attorney Kevin Walsh (Walsh Markus McDougal & DeBellis,

LLP) will be able to handle your applications for the drive-thru”). Even when discussing the

potential fee arrangement as discussed above, Capital One refers to Walsh to 6340 NB as “your

zoning attorney.” (Id.) Further, in an April 3, 2019, email, well into the progression of the

zoning approval project, Capital One’s project manager sent an internal email referring to

WMMD as “the landlord’s attorney.” (See DE 100-4.) These facts lend themselves to a finding

that Capital One did not believe that Walsh and Shaefer were representing it and even if so, such

a belief was not reasonable under the circumstances.

Upon consideration of these factors—that there was no retainer agreement between

WMMD and Capital One, that Capital One did not pay any of WMMD’s legal fees (despite

offering to do so), that WMMD excluded Capital One from certain aspects of the project, that on

multiple occasions WMMD unequivocally stated it represented 6340 NB, only, and Capital

8 Walsh’s participation in administrative hearings is a delegated obligation under the Engagement Letter

with 6340 NB.

One’s own recognition that WMMD was 6340 NB’s attorneys—the Court finds that there was no

attorney-client relationship between Capital One and WMMD. Therefore, the joint-client

exception does not apply here. See Quintel Corp., N.V. v. Citibank, N.A., 567 F. Supp. 1357,

1364 (S.D.N.Y. 1983) (declining to apply the joint client exception, finding the “fact that

Citibank attorneys engaged in negotiations and performed legal services in connection with the

acquisition does not make Gajria the client of these attorneys”).

B. Did 6340 NB put the Withheld Emails “At Issue,”

thus Entitling Capital One to Their Disclosure?

Capital One argues that 6340 NB must turn over the Walsh/Schafer Emails which relate

to whether 6340 NB could have successfully rezoned the Property because it waived any

purported attorney-client privilege when 6340 NB put the documents squarely at issue by

alleging that it was “ready, willing, and able to perform” its obligations under the Ground Lease.

(DE 94; DE 108.)

In opposition, 6340 NB argues that an “at issue” waiver is inapplicable here because

6340 NB does not assert any claim or defense that it intends to prove by the use of any privileged

communications with Walsh and Schaefer. (DE 100-2; DE 113.)

An “at-issue” waiver (sometimes referred to as “implied waiver”) is typically found

when:

(1) [the] assertion of the privilege was the result of some affirmative act, such as

filing suit, by the asserting party; (2) through this affirmative act, the asserting party

put the protected information at issue by making it relevant to the case; and (3)

application of the privilege would have denied the opposing party access to

information vital to his [claim or] defense.

Pall Corp. v. Cuno Inc., 268 F.R.D. 167, 168 (E.D.N.Y. 2010). “As per Second Circuit

jurisprudence, the key to a judicial finding of an implied waiver ‘is some showing by the party

arguing for a waiver that the opposing party relies on the privileged communication as a claim or

defense or as an element of a claim or defense.’” Nycomed U.S. Inc. v. Glenmark Generics Ltd.,

No. 08-CV-5023 CBA RLM, 2009 WL 3334365, at *1 (E.D.N.Y. Oct. 14, 2009) (citing In re the

County of Erie, 546 F.3d 222, 228 (2d Cir.2008) (emphasis in original)). However, “‘[e]ven if

the privilege holder does not attempt to make use of the privileged information[,]... the privilege

[may be waived] if [the privilege holder] makes factual assertions the truth of which can only be

assessed by examination of the privileged communication.’” Pall Corp., 268 F.R.D. 168–69.

“On the other hand, the fact that a privileged communication may simply be relevant to a claim

or defense is insufficient to effect forfeiture of the privilege.” Chen-Oster v. Goldman, Sachs &

Co., 293 F.R.D. 547, 556 (S.D.N.Y. 2013).

Therefore, in order to determine whether 6340 NB has impliedly waived privilege, it is

necessary for the Court to review 6340 NB’s claims for anticipatory repudiation and breach of

contract and whether 6340 NB relies on the Walsh/Schaefer documents as an element of those

claims.

6340 NB alleges that on January 31, 2020, approximately 7 months before its zoning

deadline under the Ground Lease, Capital One wrongfully terminated and anticipatorily

repudiated the Ground Lease, in writing, based allegedly on 6340 NB's purported failure to

timely satisfy its "acquisition and rezoning obligations." (DE 42 at ¶¶ 31-33.) Following its

receipt of the Termination Notice, 6340 NB attempted on two occasions to convince Capital One

to withdraw the Termination Notice. (Id. at ¶¶ 35-39.) Specifically, on February 17, 2020, 6340

NB wrote to Capital One's counsel, stating:

" ... With the termination, your client Capital One has unequivocally shown it

intends to breach the lease Second Amendment. We are ready willing and able

to proceed but to do so require that Capital One withdraw the termination. If

Capital One does not withdraw the termination on or before February 21, 2020,

we will have no choice but to deem Capital One in breach and seek all remedies

available .... "

(Id. at ¶ 38) (emphasis added). According to 6340 NB, despite these requests, Capital One

refused to withdraw the Termination Notice, rescind its wrongful repudiation, and perform its

contractual obligations including by cooperating with 6340 NB to obtain the zoning approval as

required by the Ground Lease. (See id.) Capital One has asserted counterclaims alleging that it

was well within its rights to terminate the Ground Lease because it was 6340 NB who did not

comply with its obligations under the Ground Lease. (See DE 89.)

“Anticipatory repudiation occurs when, before the time for performance has arisen, a

party to a contract declares his intention not to fulfill a contractual duty.” Lucente v. Int'l Bus.

Machines Corp., 310 F.3d 243, 258 (2d Cir. 2002). When confronted with an anticipatory

repudiation, the non-repudiating party has two options: (1) treat the repudiation as an

anticipatory breach and seek damages for breach of contract, thereby terminating the contractual

relation between the parties; or (2) treat the contract as valid and await the designated time for

performance before bringing suit. Id. However, to succeed on a claim for anticipatory

repudiation, a plaintiff must also show that he was ready, willing and able to perform his own

obligations but for the repudiation. Towers Charter & Marine Corp. v. Cadillac Ins. Co., 894

F.2d 516, 523 (2d Cir. 1990); Vision Ent. Worldwide, LLC v. Mary Jane Prods., Inc., No. 13

CIV. 4215 AT, 2014 WL 5369776, at *5 (S.D.N.Y. Oct. 17, 2014) (“If [the non-repudiating

party] elects to terminate the contract and sue for breach, he is excused from tendering his own

performance; he need only show that [he] was ready, willing and able to perform”).

6340 NB contends that the attorney-client privilege here has not been waived “because

allegations that 6340 NB was ready, willing, and able to obtain zoning approval do not constitute

a waiver of the privilege.” (DE 100-2.) In order to succeed on its affirmative claims, 6340 NB

will have to demonstrate that it was, in fact, ready willing and able to perform its obligations

under the Ground Lease, but for Capital One’s alleged repudiation. 6340 NB asserts that it does

not rely on, or intend to use, privilege communications with Walsh or Schaefer to prove its

allegations and further introduced the idea during oral argument that perhaps an exception to this

rule applies and 6340 NB may not have to establish it was ready, willing, and able at all. When

questioned on how 6340 NB intends to show it was ready, willing, and able to obtain zoning

approval, 6340 NB stated it was likely it would use Walsh as a witness to testify to these facts.

Capital One argues it is entitled to know the contents of the Walsh/Schaefer emails in order to

determine if 6340 NB was, in fact, ready willing and able to perform.

Here, Capital One has not sufficiently established that 6340 NB has put the advice of

Walsh at issue such that it waives the attorney-client privilege. Insofar as Capital One contends

that what was said in the Walsh/Schaefer emails may be relevant to 6340 NB’s claims and

Capital One’s defenses, relevance is insufficient to effect forfeiture of the privilege. See Chen-

Oster, 293 F.R.D. at 556. To meet its burden, Capital One needed to establish that 6340 NB put

Walsh and Schaefer’s advice at issue, and it simply has not done so here. See In re Grand Jury

Proc., 219 F.3d 175, 182–83 (2d Cir. 2000) (“The quintessential example is the defendant who

asserts an advice-of-counsel defense and is thereby deemed to have waived his privilege with

respect to the advice that he received”).

C. Do the Walsh/Schaefer Emails Serve a Legal or Business Purpose?

Capital One further argues that “most of the materials and communications at issue” are

not privileged in any event because Walsh and Schaefer were hired for a business purpose and

thus their communications are factual and not legal in nature. (DE 94.) To this end, Capital One

requests that in the event the Court determines the Walsh/Schaefer Emails are privileged, it

should conduct an in camera review of the emails “to determine which documents (or portions of

documents) contain legal advice and which contain only factual material and must be produced.”

(Id.)

In opposition, 6340 NB submits that this argument is at odds with Capital One’s primary

position that WMMD “represented Capital One in all aspects of the legal work being done on the

rezoning” and provided “legal advice to Capital One in ‘hundreds of communications ’” (DE

113.) 6340 NB argues the Court should summarily reject this argument as meritless. (Id.)

“It is well-established that the attorney-client privilege applies only where legal advice,

not business advice, is sought and given.” Urb. Box Off. Network, Inc. v. Interfase Managers,

L.P., No. 01 CIV. 8854 LTS/THK, 2006 WL 1004472, at *4 (S.D.N.Y. Apr. 18, 2006). In order

for a communication to be privileged, its predominant purpose must be to obtain or provide legal

advice. Koumoulis v. Indep. Fin. Mktg. Grp., Inc., 295 F.R.D. 28, 37 (E.D.N.Y. 2013), aff'd, 29

F. Supp. 3d 142 (E.D.N.Y. 2014).9 In other words, it must involve the “interpretation and

application of legal principles to guide future conduct or to assess past conduct.” In re Cnty. of

Erie, 473 F.3d 413, 419 (2d Cir. 2007). “Attorneys frequently give to their clients business or

other advice which, at least insofar as it can be separated from their essentially professional legal

9 The Court notes that the Supreme Court recently granted certiorari in In re Grand Jury, No. 21-1397, __

U.S. __ (Oct. 3, 2022) which will consider the appropriate standard to apply in assessing privilege

assertions when the communications are “dual-purpose” involving both legal and business advice.

services, gives rise to no privilege whatever.” Koumoulis, 295 F.R.D. at 37 (quoting Colton v.

United States, 306 F.2d 633, 638 (2d Cir.1962)). “Thus, when an attorney is used as a business

consultant, the resulting attorney-client communications will not be privileged.” Id. The

communication need not specifically ask for legal advice, but the information must be sent to

counsel in order for counsel to provide legal advice. Urb. Box Off. Network, Inc., 2006 WL

1004472, at *4. The burden is on the party asserting the privilege and any ambiguities are

construed against that party. Koumoulis, 295 F.R.D. at 38.

6340 NB’s privilege log identifies that the withheld emails are “[c]onfidential

communications from counsel to representatives of 6340 providing legal advice and requesting

information in connection with representation involving development and zoning issues

pertaining to proposed for Capital One Bank branch.” (DE 94-2.) Indeed, Capital One argues

that WMMD provided it with legal advice, thus purportedly giving Capital One reason to believe

WMMD represented it, on the very same issues. It was undisputed during argument that a

zoning or land use attorney’s work and advice during a transaction such as this has a

predominantly legal purpose. Conclusory allegations, without more, that the Walsh/Schafer

emails contain communications for a business purpose, rather than legal advice is insufficient.

CONCLUSION

For the foregoing reasons, Capital One’s motion to compel documents (DE 94) is hereby

DENIED.

Dated: Central Islip, New York

November 18, 2022

S O O R D E R E D:

James M. Wicks

/S/

JAMES M. WICKS

United States Magistrate Judge