Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Ford Motor Credit Co. v. Meehan

July 11, 2008

FORD MOTOR CREDIT COMPANY AND FORD CREDIT TITLING TRUST, PLAINTIFFS,
v.
JOHN J. MEEHAN AND MATTHEW J. MEEHAN, DEFENDANTS.



The opinion of the court was delivered by: A. Kathleen Tomlinson, Magistrate Judge

ORDER

I. PRELIMINARY STATEMENT

Senior District Judge Hurley recently issued a Memorandum & Order [DE 37] granting partial summary judgment in this indemnification case which emanates from a motor vehicle accident where a car carrying six young male passengers flipped onto its side and hit a tree. As a result, one young man was killed, one ultimately underwent an above-the-knee amputation of his leg, and three others sustained varying levels of injuries. Having granted partial summary judgment to the Plaintiffs Ford Motor Credit Company and Ford Credit Titling Trust ("Plaintiffs" or "Ford"), Judge Hurley referred the matter to me to conduct a hearing on the reasonableness of the settlement entered into between Ford and the five passengers who brought suit in state court against Ford and Defendants John and Matthew Meehan. Judge Hurley further directed that the hearing include a determination of the reasonableness of the attorneys' fees and associated costs sought by Plaintiffs.

On April 3, 2008, I issued an Order directing the parties (1) to submit briefing, limited to ten (10) pages, setting forth their respective positions on the reasonableness of the settlement and fees and (2) to advise the Court whether they intended to introduce witnesses at the hearing. Plaintiffs responded by letter [DE 39] that they intended to produce witnesses and were commencing service of trial subpoenas to that end. Among others, Plaintiffs subpoenaed Defendants' counsel, Brian Brown, Esq., who represented Defendants in the state court actions and who is also co-counsel in the instant action. Mr. Brown sent a letter to the Court dated May 6, 2008 [DE 42] objecting to the subpoena which had not yet been served, and advising that Court intervention would likely be necessary. A similar subpoena was to be served on Defendants' personal counsel, John Bailly, Esq., who also objected to any intended subpoena. I scheduled a telephone conference with the parties for May 9, 2008 to discuss this issue.

During the May 9 telephone conference, I advised the parties that Rule 45 calls for formal motion practice if the person subpoenaed seeks to quash or modify the subpoena and that the one-page letters written to the Court were not sufficient. In light of the impending hearing scheduled for May 16, 2008, I informed the parties that if they chose to engage in formal motion practice, the hearing date would have to be adjourned. I directed the parties to confer with each other in the hope of reaching an agreement concerning the scope of the testimony to be provided at the hearing and the specific production of documents so that formal motion practice might not be necessary and the hearing could proceed on May 16. See DE 46. I further directed the parties to contact my Chambers by the close of business on May 12 to inform me whether they had reached an agreement or whether they intended to engage in formal motion practice, in which case they would work out a briefing schedule and the hearing would be adjourned to a date in July.

On May 12, Plaintiffs' counsel filed a letter on ECF [DE 47], on behalf of all parties, stating that (1) they had been unable to reach an agreement, (2) they had entered into a formal briefing schedule on the motion to quash or modify, and (3) the hearing would have to be adjourned to the July 17 date which I had previously discussed with the parties. These motions are now before the Court. The law firm of Lewis Johs Avallone Aviles, LLP ("Lewis Johs"), counsel for Defendants John J. Meehan and Matthew J. Meehan ("Meehan"), moves to quash a trial subpoena served upon it by Plaintiffs [DE 52]. In addition, the law firm of Bailly and McMillan, LLP ("Bailly and McMillan) (collectively with Lewis Johs, "the Law Firms"), Meehan's personal counsel, move to quash a nearly identical trial subpoena served upon it by Ford [DE 55]. The Court has reviewed Lewis Johs' moving papers, Bailly and McMillan's moving papers, Ford's opposition to both motions, and Lewis Johs' reply papers. For the reasons set forth more fully below, the Law Firms' motions to quash the trial subpoenas served upon them by Ford are hereby GRANTED in part and DENIED in part.

II. BACKGROUND

A. Procedural Status

The facts involved in this case are set forth at some length in Judge Hurley's Memorandum & Order [DE 37] (the "Order") and will not be repeated here except as they apply to the instant motions. On or about December 23, 1999, Meehan entered into an agreement to lease a vehicle for 36 months. That lease was assigned by the original lessor to Ford. Pursuant to the terms of the lease agreement, Meehan maintained liability insurance with Allstate in the sum of $1,300,000 to cover the vehicle. The lease agreement included an indemnity clause that provided that Meehan "will indemnify and hold harmless [Ford] and their assigns from any loss or damage to the Vehicle and its contents and from all claims, losses, injuries, expenses and costs related to the use, maintenance, or condition of the Vehicle."

As a result of the November 23, 2000 accident, five of the passengers (the "Passenger Plaintiffs") brought four separate actions which were ultimately consolidated against Ford and Meehan in state court. On the eve of trial, a settlement agreement was reached which called for payments to be made to the Passenger Plaintiffs in an amount totaling $5,825,000. Meehan's insurer, Allstate, tendered the full limits of Meehan's policy ($1,300,000) in partial satisfaction of the settlement amount, while Ford paid the remaining amount.

Ford filed this action in federal court seeking contractual and implied indemnification from Meehan pursuant to the indemnity provision of the lease agreement. Subsequently, Ford sought summary judgment on its contractual indemnity claim against Defendant John J. Meehan. In opposition, Meehan claimed that he never agreed to the settlement and Ford had settled the action unilaterally.

In the Order granting partial summary judgment, Judge Hurley found that the contractual indemnity clause in the lease agreement was valid and enforceable, and rejected Meehan's claims that the indemnity clause was unconscionable. However, Judge Hurley also determined that an issue of fact exists whether Meehan had notice of the settlement and "whether Meehan was deprived of an opportunity to defend himself in the passenger actions [in state court] and participate in the settlement . . . ." Order at 15. As a result, Judge Hurley stated that:

[U]nder New York law, if Meehan had notice of the settlement, he is bound by any reasonable good faith settlement. If he did not have notice, he is only bound if the settlement was reasonable and Ford would have been actually liable. Under the present record, given that Ford's good faith and statutory liability are not in dispute, the result is the same either way. Which is to say that under either analysis, the only remaining question is the reasonableness of the settlement.

Id. (internal citation and footnote omitted). Finding that a hearing was necessary to determine the reasonableness of the settlement amount as well as the attorney's fees and associated expenses sought by Ford, Judge Hurley referred the matter to me for that purpose.

B. The Trial Subpoenas

In preparation for the upcoming hearing, Ford served nearly identical trial subpoenas upon Lewis Johns, Meehan's counsel in the instant action, and Bailey and McMillan, Meehan's personal counsel and counsel in the underlying state court actions. The subpoenas seek production of five categories*fn1 of documents as well as testimony from the attorneys. As they appear in the attachments to the subpoenas, the categories call for the following documents:

(3) All correspondence between you and any attorney representing Ford concerning all attempts to settle the [underlying state court] Passenger Actions, including negotiations and mediation.*fn2

(4) All correspondence between you and any attorney representing any or all of the Passenger Plaintiffs concerning all attempts to settle the Passenger ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.