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V3465 A& I SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK - - - - - - - - - - - - - - - - - -'- -x ROBERT BRIAN ASSOCIATES, INC. Index No. 6859/77 Plaintiff, -against- LOEWS THEATRES, INC., . Defendant. [ ---------------------------------------x Preliminary Statement t L i L This case has been tried, appealed, and remanded for retrial on the limited issue of the measurement of damages.,,Now, for the first time in the six year history of this matter, plaintiff Robert Brian Associates, Inc. ("Robert Brian") seeks to conduct discovery, and has served upon defendant Loews Theatres, Inc. ("Lorillard") a Notice for Discovery and Inspection pursuant to CPLR Rule 3120. Lorillard seeks a protective order barring this discovery on the ground that (1) no further discovery is permitted under the Civil Practice Law and Rules in the absence of a court order which Robert Brian has never sought, that (2) the noticet C11111 l is overbroad and wholly lacking in the specificity required ~ . ~ by CPLR 9 3120 and that (3) much of the material Robert Brian.,-~, N 0

2 [ t C L seeks to examine is irrelevant to the circumscribed issues which will be aired in the impending damage retrial. Prior Proceedings Herein - the First Trial The Lorillard division of Loews Theatres, Inc. manufactures and distributes various brands of cigarettes including Kent. Robert Brian is a sales promotion agency which was retained by Lorillard in June of 1970 to conceive novel and original sales promotion ideas for possible use by Kent cigarettes. That relationship was terminated in early 1972. In October 1974, Robert Brian commenced this action alleging that after it was fired, Lorillard used four sales promotion schemes suggested by Robert Brian without any further payment to Robert Brian.* ~ The Robert Brian/Lorillard retainer agreement was never reduced to writing but, according to Robert Brian's president, Robert Sandelman, the parties' oral understanding was that if Lorillard accepted any Robert Brian suggestion, the sales promotion company would have an absolute right to prepare the finished art work used in connection therewith and would have a right to bid for the actual production of ~ anv such promotion. In its complaint, Robert Brian alleged w O that the agreement provided that if it were the low bidder cz »N 1-+ N * A secind cause of action involvina a fee dispute on an unrelated promotion is not an issue on retrial and is not discussed herein. ~

3 .s '( i i L it would be.awarded the production. At trial, Sandelman, the Robert Brian president, conceded that Lorillard in fact always retained the right to award production to whomever it desired whether or not the low bidder. However, at trial, Sandelman also testified, for the first time, that the oral agreement contained an additional term to the effect that if production were awarded to anyone else, Lorillard would pay Robert Brian 15% of the moneys paid to that third party. Lorillard disputed most of the material allega- tions. It denied using any Robert Brian proposals and fur- ther contended that to the extent there were any similarities between what Robert Brian suggested and what Lorillard sub- sequently did, such similarities were in no sense novel and original~to Robert Brian and therefore not within the terms » of the contract. Lorillard also denied ever promising Robert Brian a right to bid, a right to receive production if the low bidder, or a promise to pay a 15% penalty if production were handled by a third party. Lorillard was unsuccessful in its efforts to persuade the jury. However, because the four separate claims concerning the four different promotions were all asserted in the context of a single cause of action and C G.; t f `1 ill d' reques or ar s because the trial court rejected Lor U jury interrogatories, it is impossible to determine just H N ~

4 'C. I 1 I t C «0 what facts or theories propounded by Robert Brian the jury did accept. The jury returned a general verdict of $90,000; it therefore only necessarily follows that the jury believed Lorillard to have used one or more of the four promotions in issue. Lorillard appealed the resulting judgment on a variety of grounds and won a partial success. While the Appellate Division sustained the jury's finding of liability, it found the proof of damages wholly wanting and remanded for a retrial on that single issue.* According to the Appellate Division, Robert Brian could have proved its damages in either of two distinct ways. As a result of Sandelman's testimonial claim that Lorillard had promised a 15% payment of the production fees on any Robert Brian-generated promotion produced by a third party, if the jury believed that testimony, Robert Brian could have proved what Lorillard actually paid for such production and claimed 15% of that amount. However, as the Appellate Divi- sion observed, at the first trial Robert Brian introduced absolutely no evidence whatsoever with respect to such third party payments. Alternatively, Robert Brian could have argued that O C * Because of this remand, the judgment was not final and W 13 Lori;lard could not seek leave from the Court of Appeals C to appeal. Therefore the underlying issues relating to ~~ liability have not yet received final appellate review. ~ W L

5 J; had it been»permitted to bid on production, it would have won the work and was therefore entitled to its lost net profits with respect to such work. However, it appears that Robert Brian was not a profitable business and, therefore, Robert Brian faced grave difficulties in proving any significant quantum of lost net profits. (It also appeared that Robert Brian was a very expensive company, and therefore not likely to be the low bidder in any competitive situation.) Instead, Robert Brian sought to finesse its evidentiary difficulties by introducing evidence as to its lost gross profits. Under settled New York law, lost gross profits may not be recovered in a contract action such as this. For these and other blatant defects as to proof of damages, a reversal on damages was required. The Appellate Division so ordered. The Instant Discovery Demand I L Now, instead of proceeding to trial as directed, Robert Brian, for the first time in the entire history of this litigation, seeks discovery. It has framed 12 document demands all in the most broad and sweeping language. The first three categories relate to the actual art work acquired by Lorillard in connection with the four Lorillard promotions C supposedly derived from Robert Brian's suggestions. Items 4 W O through 6 relate to the cost of the actual production of each c~ s »~ of these four promotions. ~ ~

6 a. 4. I 1 Items 7 through 9 cover other "services" performed by any third party in connection with the four actual promotions, but Robert Brian nowhere defines "services." Finally, items 10 through 12 concern the acquisition of premiums distributed in connection with these actual promotions; one of the promo- tions was a steak knife give-away and a second involved the distribution of a thermal coffee mug emblazoned with a Kent logo. I ROBERT BRIAN'S BELATED REQUEST FOR DISCOVERY IS UNTIMELY I t i It is settled law in this Department, and indeed in all the courts of this state, that once a Note of Issue and Statement of Readiness has been filed, and no timely objectioh has been made, further discovery without court s. order pursuant to a motion on notice is not allowed. Rule Section 660.4(d)(7) of the General Rules covering civil actions and proceedings of this Court provides that pursuant to the general rule regarding statements of readiness, ". .. no pretrial examination or other preliminary proceedings may be had unless permitted pursuant to Paragraph (6) of this subdivision, or under the follow- ing circumstances: 03'7094 15 (i) if unusual and unanticipated conditions subsequently develop which make it necessary that further pre-trial examination or further preliminary proceedings be had and if without them the moving pa,rty would be unduly prejudiced, the court may make an order granting permission to conduct such examination or to take such proceedings, and prescribing the time

7 0 e therefor. Such an order may be made only upon motion showing in detail by affidavit the facts claimed to entitle the moving party to relief under this para- graph." Directive Section 2.2(4) of the Rules of the Chief Adminis- trative Judge, Office of Court Administration, applicable to all the courts of the state, provides that: ". .. Where unusual or unanticipated circumstances develop subsequent to the filing of a note of issue and certificate of readiness which require additional pre- trial proceedings to prevent substantial prejudice, the court, upon motion supported by affidavit, may grant permission to conduct such necessary proceedings." No such motion has been made here. No affidavit r .i ( t L : has been submitted by Robert Brian suggesting the existence of any unusual or unanticipated circumstances. None exist. This matter came to trial only after Robert Brian warranted that it was ready to be tried. Perhaps, in truth, Robert Brian was not ready; after all, it had conducted no discovery whatsoever. Nevertheless, whatever the facts, Robert Brian cannot now simply ignore its own warranty of readiness. Even if Robert Brian were to move for permission to conduct the discovery it now demands, it would be error to grant such permission. The appellate courts of this state have consistently reversed lower courts which too freely granted leave to conduct discovery after the calendaring of 03'70-91116 a case where the failure to do so in a timely fashion was attributable simply to the inaction of the litigant. Price v. Brody, 7 A.D.2d 204, 181 N.Y.S.2d 661 (1st Dep't 1959); Jacobs V~

8 ,r r t 0-1 v. Peress, 23 A.D.2d 483, 255 N.Y.S.2d 492 (1st Dep't 1965); ;C a 't I t C L Morrison v. Sam Snead Schools of Golf of New York, Inc., 13 A.D.2d 986, 216 N.Y.S.2d 397 (2d Dep't 1961); Giddens v. Moultrie, 66 A.D.2d 993, 411 N.Y.S.2d 774 (4th Dep't 1978). In the Jacobs case, supra, the trial court had ordered a post-calendaring physical examination of the plain- tiff on the ground that it would be desirable to have the issue of the plaintiff's physical condition completely pre- sented to the trier of facts. In reversing the trial court's order, the Appellate Division characterized this rationale as an "untenable basis" for abandoning the rule against such post-statement discovery. 23 A.D.2d at 484. It is obvious why Robert Brian now wishes to ac- quire information on the sums expended by Lorillard in , connectign with the four actual promotions in issue, but it is self-evident'that such information was equally obviously useful three years ago when plaintiff filed its statement of readiness.* Robert Brian can claim no surprise on this * It is Lorillard's position that because Robert Brian failed to offer any evidence whatsoever concerning the actual costs of the actual productions at the original trial, that Robert Brian has abandoned this damage theory and cannot resurrect that theory upon the damage retrial. Robert Brian will undoubtedly dispute this contention. This issue is best left to the trial court itself for eventual resolution and we do not seek the decision of this ~ourt at this time on this issue. 03709417 L

9 r r t score. Until the trial itself, Lorillard had no inkling that Sandelman would claim a contractual right to a 15% penalty of Lorillard's actual payments to third party producers, but Robert Brian could not have been surprised by its president's testimony. In Ca ri Beachwear, Inc. v. AAA Stretch, Inc., 49 A.D.2d 831, 374 N.Y.S.2d 2 (1st Dep't 1975), plaintiff filed a note of issue and statement of readiness which defendant unsuccessfully moved to strike. The proceeding resulted in an eventual mistrial after which plaintiff obtained an order from the Supreme Court for leave to examine defendant before retrial. The Appellate Division reversed this order. It was clear that the matter was not ready for trial at the time the statement of readiness was filed from the very fact that a mistrial resulted, nevertheless, "The plaintiff . . . having filed its statement of readiness and note of issue, in the absence of unusual circumstances is barred from further pretrial proceed- ings." • It was an abuse of discretion by that trial court to authorize C further discovery by plaintiff. to do so here: It would be no less an abuse ~ ~ II W ~ O ~ ROBERT BRIAN'S NOTICE IS ~ OVERBROAD AND UI4DERSPECIFIC ~ C.P.L.R. Rule 3120 requires one party to produce "specifi?cally designated" documents at the request of another ~

10 I I [ t 1 t C C t, This requirement of specificity is essential for the effect- ive operation of the rule. It is necessary to prevent an "unreasonable rumaging through books and records" of the opposing party, State v. DeGroot, 35 A.D.2d 240, 315 N.Y.S.2d 310 (3d Dep't 1970). Document demands which fall short of the minimal specificity are routinely struck, Rios v. Donovan, 22 A.D.2d 409, 250 N.Y.S.2d 818 (1st Dep't 1964). Robert Brian, having conducted no pretrial examination and having conducted no helpful cross-examination of the Lorillard wit- nesses at trial, is obviously ill-prepared to produce a Rule 3120 notice specifying with any particularity the documents it desires. But that situation is not Lorillard's fault and Lorillard should not be required to assume the extra burdens associated with such broad gauged discovery because Robert Brian failed to prepare itself. The burden is on the dis- coverer. coverer. City of New York v. M. Paul Friedberg & Associates 62 A.D.2d 407, 404 Supp.2d 868 (1st Dep't 1978). " Each of the twelve individual items in the notice calls for "all" or "all other" documents touching upon some loose subject matter. The.very language of such a demand is ample ground for striking it. As the Appellate Division related in City of New York v. M. Paul Friedbera & Associates, supra: (;r,370`1419 "We have in the past held that attempts to designate documents by use of the alternate L