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Amazing Wall Covering, Inc. v. Merchants Ins. Group

November 15, 1999

AMAZING WALL COVERING, INC.,
PLAINTIFF,
V.
MERCHANTS INS. GROUP,
DEF./THIRD PARTY PLAINTIFF
V.
NISSIM SEDAKA
THIRD PARTY DEFENDANT



OPINION

Before the Court is a motion by plaintiff, Amazing Wall Covering, Inc., and third party defendant, Nissim Sedaka, to quash a subpoena served upon movant's counsel, Thomas Chaseman, Esq., and for sanctions to recover counsel fees and expenses. Defendant/third party plaintiff, Merchants Insurance Group, filed opposition to the motion. The Court heard oral argument on October 25, 1999. For the reasons set forth below, the motion is denied.

Background

This matter stems from a coverage dispute involving a fire insurance policy issued by Merchants Insurance Group ("Merchants") to Amazing Wall Covering, Inc. ("Amazing Wall"). On August 21, 1996, a fire occurred at the business premises of Amazing Wall, a paint and wallpaper store in Saddle Brook, New Jersey. (Chaseman Aff. at ¶3) Merchants denied coverage for Amazing Wall's fire losses, accusing its principal, third party defendant Nissam Sedaka, of committing "dishonest and/or criminal acts such as to cause the . . . loss." (Id. at ¶7) Additionally, Merchants maintained that Amazing Wall's fire insurance policy was void as a result of "fraud and intentional concealment and misrepresentations of material facts in connection with the acquisition of the insurance." (Id. at ¶8) More specifically, defendant alleges that Mr. Sedaka, in order to secure insurance coverage on behalf of Amazing Wall, provided false information *fn1 to Merchants' agent, Vincent Perna, during the application process. (Kallman Aff. at ¶3)

In a deposition on July 1, 1999, counsel for Mr. Sedaka and Amazing Wall, Thomas Chaseman, questioned Mr. Perna about Mr. Sedaka's application process. (Id. at ¶4) More than once during the course of questioning this witness, Mr. Chaseman revealed on the record certain communications he had with his client regarding his client's conversations with Mr. Perna during the application process:

"Q. Mr. Sedaka has indicated to me that the first time you came to his office you didn't ask him any questions on the application, but at that time the only thing you asked him for was the information regarding the insurance policy, which he gave you at that time. Do you agree with that or is that not the case as far as you recall?

Mr. Kallman: Object to the form of question.

A. No. I don't agree with that. I think he's mistaken. (Chaseman Aff. at ¶12, Exh. F)

"Q. Lets look at the estimated annual sales receipts line. Mr. Sedaka told me that he told you that his past sales and receipts was in the neighborhood of 40 to 50,000 dollars. Do you disagree with that?

Mr. Kallman: Objection to the form of the question, what he told you. Who cares? Just ask him the question.

Mr. Chaseman: That's a perfectly fine question." (Kallman Aff. at ¶4, Exh. A)

On July 21, 1999, counsel for Merchant's served a subpoena on Mr. Chaseman to appear for a deposition and to produce records

pertaining to the conversations with Nissim Sedaka relevant to the conversations between Nissim Sedaka and Vincent Perna of United Assurance, Inc. in connection with the acquisition of insurance by Amazing Wall Coverings from Merchants Mutual Insurance Company, including but not limited to all notes of conversations between you and Mr. Sedaka. (Chaseman Aff. at ¶14)

As a result, Mr. Chaseman filed the instant motion to ...


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