IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

OXFORD ASSOCIATES : CIVIL ACTION

REAL ESTATE, L.P. :

:

v. :

:

TSI SOCIETY HILL, INC. : 05-4445

ORDER AND OPINION

JACOB P. HART DATE: October 19, 2006

UNITED STATES MAGISTRATE JUDGE

In this action to confess judgment under a lease agreement, Plaintiff Oxford Associates

Real Estate, L.P. (“Oxford”), has filed a motion to compel discovery from its tenant, TSI Society

Hill, Inc. (“TSI”). As explained below, Oxford’s motion will be granted.

I. Factual Background

The larger history of the case is cogently set forth in the Memorandum and Order written

by the Honorable Bruce W. Kauffman on March 6, 2006, resolving TSI’s Motion to Open

Confessed Judgment. Relevant for our purposes is the fact that Oxford has alleged that TSI

defaulted under its lease by failing to pay its agreed-upon share of the real estate tax on the leased

property.

In his March 6, 2006, decision, Judge Kauffman opened the confessed judgment. He

ruled that letters written by Oxford to TSI on May 12, 2005, and June 6, 2006, did not constitute

proper notices of default under the lease, but that an issue of fact existed as to whether a third

letter, written on June 10, 2005, could be considered such notice.

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Judge Kauffman concluded:

The June 10, 2005 letter was .. the first writing that could be construed to comply

with the notice requirements of the Lease. However, assuming that the June 10

letter was proper written notice of default, Tenant cured the default when it mailed

the check to Landlord on June 24, 2005, within the fifteen-day cure period

provided by the Lease. While Landlord claims that Tenant did not mail the check

until June 30, 2005, the Court must view the evidence in a light most favorable to

Tenant. The Court thus finds that Tenant has presented sufficient evidence to

present to a jury that it cured its relatively minor default within the cure period. 

To rule otherwise would be manifestly unjust.

March 6, 2006, Memorandum and Order at 5. (Citations omitted).

TSI filed a motion to dismiss following this decision, which was converted by Judge

Kauffman to a motion for summary judgment in a June 19, 2006, Order. From Judge

Kauffman’s March 6, 2006, decision, it is evident that the relevant issues in the motion for

summary judgment are (a) whether the June 10, 2005, letter was proper written notice of default;

and (b) even if it was, whether TSI cured that default, i.e., whether the check TSI wrote to

Oxford was sent on June 24 or on June 30, outside of the fifteen-day cure period.

Judge Kauffman permitted the parties to submit further filings “pertinent to” the motion

for summary judgment. The parties agreed between themselves that, pursuant to this order, they

would engage in limited discovery comprising “two depositions and written discovery that

plaintiff will serve on defendant.” Feeney Letter of July 6, 2006, attached as Exhibit C to TSI’s

Response, and E-Mail Correspondence between counsel for the parties, attached as Exhibit D to

TSI’s Response.

Oxford deposed Robert S. Herbst, Esq., Tenant’s General Counsel, and John Smallwood,

a non-party witness previously employed by TSI’s parent company. TSI has also responded to

Oxford’s written discovery. 

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In its motion to compel discovery, however, Oxford has identified two issues with respect

to the Herbst deposition. First, Oxford asks that Herbst be directed to comply with the schedule

entitled “Documents and Things To Be Produced” which was attached to the original, March 27,

2006, notice of deposition served upon him by Oxford. Oxford also maintains that TSI has

waived the attorney-client privilege Herbst asserted in the following interchanges:

Q. The club manager [TSI ran a health club on the leased property], do you recall

the sum and substance of your e-mails with the club manager?

A. Essentially he forwarded the notice to quit, and he wondered what it was

about. I told him and also asked him various questions.

Q. What questions did you ask him?

A. Those would be attorney-client privilege.

COUNSEL FOR OXFORD: I’m going to disagree that his conversations in this

context are privileged. Without any prompting from the plaintiff, the defendant

chose to offer testimony in the form of a declaration as to what this individual

knew or did not know. And it’s my position that by doing that, you opened him

up to questioning about everything he knew about the case to find out whether or

not he knew there was a default. I’m entitled to inquire as to every single

conversation he had with every single employee to find out whether he knew there

was an underlying lease default.

COUNSEL FOR TSI: I disagree with that. We waived the attorney-client

privilege only as to what is included in this affidavit and the statements – the basis

for the statements that are made in the affidavit I think you’re entitled to inquire

about those, but beyond that, I believe the attorney-client privilege does prohibit

you from inquiring to anything further than what’s spelled out here.

...

Q. (To Herbst) Did anyone else at TSI ever state to you either orally,

electronically or in any other format that they understood payment of the taxes to

be late in the colloquial fashion?

COUNSEL FOR TSI: Objection, and I instruct the witness not to answer on

attorney-client privilege grounds. To the extent these statements occurred such

that they were not part of what you reviewed in putting this declaration together.

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Deposition of Robert Herbst at 40-41, and 46, as quoted in Landlord’s Memorandum in Support

of Motion to Compel.

II. Legal Standards

The Federal Rules of Civil Procedure are liberal with respect to discovery, permitting the

requesting party to obtain even inadmissible material, as long as it is relevant to the claim or

defense of any party, unprivileged, and reasonably calculated to lead to the discovery of

admissible evidence. Fed. R. Civ. P. 26(b)(1).

Further, Rule 37(a)(2)(B) provides that “if a party, in response to a request for inspection

submitted under Rule 34 [pertaining to production of documents], ... fails to permit inspection as

requested, the discovering party may move for an order compelling ... inspection in accordance

with the request.”

The discovery at issue in this motion is circumscribed by the scope of the motion for

summary judgment now pending before Judge Kauffman, and by the limits agreed to by the

parties themselves. Nevertheless, within the scope of these limitations, these federal rules apply.

III. Discussion

A. The Requested Documents

TSI argues that Oxford is not entitled to the documents it has requested, because, in their

discovery agreement following Judge Kauffman’s June 19, 2006, order, the parties did not

specify that documents would be produced at the depositions. I cannot accept this argument. It

is apparent that the Herbst’s deposition was held pursuant to the original notice, to which a

schedule of appended documents was attached. There is no evidence to the contrary.

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More to the point is TSI’s argument that the documents requested are not relevant to the

limited subject matter of the motion for summary judgment. TSI argues that “the document

requests appeal to be directed to issues other than notice of the default, such as TSI’s payment of

the real estate tax”, citing Request Nos. 3, 5, 7, 14 and 15. However, the cited requests could

also elicit information pertinent to the timing of TSI’s payment of the real estate tax. Request

No. 15 specifically asks for such material. As discussed above, this has become a central issue. 

The other requests, concerning such subjects as material regarding TSI’s obligation to pay

taxes, could elicit information pertinent to the issue of whether the June 10, 2005, letter was

understood by the parties as a notice of default. This is relevant to an inquiry as to whether that

letter was sufficiently clear to constitute notice.

Given the broad scope of discovery permitted by Federal Rule 26, the document requests

are appropriately connected to the subject matter of the currently-pending motion for summary

judgment. For that reason, I will direct TSI to produce the requested documents.

B. The Deposition Questions

I will also direct Mr. Herbst to answer the questions which he previously refused to

answer on the basis of attorney-client privilege. TSI put Mr. Herbst’s knowledge at issue by

attaching to its motion to open the confessed judgment a statement by him, in which he asserted 

that Oxford’s June 6, 2005, letter “appeared ... to be a routine request for payment of an invoice”

rather than a notice of default. Affidavit, attached as Exhibit E to TSI’s response at ¶ 4.

TSI now maintains that, because Herbst’s affidavit did not mention the June 10, 2005,

letter, it did not waive the attorney-client privilege regarding that letter. However, because TSI

has relied upon Herbst’s assertions as to his interaction with his client regarding Oxford’s letter,

it has waived its privilege with regard to the June 10 letter as well. Both letters deal with the

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same subject – TSI’s obligation to pay real estate taxes. Moreover, since TSI is apparently

claiming that the June 10th letter is not a valid notice of default, it cannot hide behind the

attorney-client privilege so as to deny Oxford the right to learn what Herbst may have said about

that letter.

In accordance with this Opinion, I now enter the following:

O R D E R

AND NOW, upon consideration of Plaintiff’s Motion to Compel, docketed in this case as

Document 29, and Defendant’s response thereto, it is hereby ORDERED that Plaintiff’s Motion

is GRANTED.

1. On or before ten days from the date of this Order, Defendant shall provide to Plaintiff

the documents listed in Schedule A, attached to the original notice for the deposition of Robert S. 

Herbst, Esq.; 

2. On or before ten days from the date of this Order, Robert S. Herbst, Esq., shall submit

himself to further deposition to answer the questions which he refused to answer in his first

deposition in reliance upon the attorney-client privilege, and for brief and limited follow-up

questioning. This further deposition may take place telephonically, for the convenience of Mr.

Herbst, at his option.

BY THE COURT:

/s/Jacob P. Hart

___________________________________

JACOB P. HART

UNITED STATES MAGISTRATE JUDGE

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