IN RE: HINDUJA GLOBAL SOLUTIONS (2024)

Order, Supreme Court, New York County (Margaret A. Chan, J.), entered on or about June 14, 2024, which, insofar appealed from as limited by the briefs, denied the motion of respondent HBI Group, Inc. to reject in part the ruling of the Special Master, dated March 5, 2024, unanimously affirmed, with costs.

In this special proceeding, petitioner Hinduja Global Solutions, Inc. (HGSI) seeks to compel HBI to comply with a subpoena duces tecum.  The subpoena's scope was narrowed in part on a previous appeal to this court (Matter of Hinduja Global Solutions, Inc. v. HBI Group, Inc., 214 A.D.3d 471, 472, 184 N.Y.S.3d 755 [1st Dept. 2023]).  HBI subsequently produced some documents pursuant to the subpoena, but HGSI averred that this production was incomplete.  Upon HGSI's motion to compel, the parties agreed to have their discovery disputes heard by Special Master Hon. James C. Francis IV (retired).  The parties stipulated to “reserve their rights to have any order made in connection with [retention of the Special Master] ․ subject to CPL 4403 and Uniform Civil Rule 202.44.”  The Special Master ruled in favor of petitioner, directing that respondent produce additional documents subject to certain limitations.

HBI made a motion in Supreme Court to reject the Special Referee's Ruling.  Supreme Court denied the motion as untimely.

We hold that HBI's motion was timely.  Contrary to Supreme Court's finding, the stipulation appointing the Special Master was signed by all parties and did not have to be so-ordered.  While the stipulation appointed the Special Master under CPLR 3104, which gives parties only five days to request review of the Special Master's ruling, as noted above it also expressly “reserve[d] the[ ] rights to have any order made in connection with [retention of the Special Master] ․ subject to CPLR 4403 and Uniform Civil Rule 202.44,” both of which allow a party a longer period — 15 or 30 days, depending on who is making the motion — to move to confirm or reject a referee report.  Thus, the terms of the stipulation, under which the parties properly charted their own procedural course, provide that CPLR 4403 and Uniform Civil Rule 202.44 apply to the Special Master's report (see Childs v. Levitt, 151 A.D.2d 318, 319–320, 543 N.Y.S.2d 51 [1st Dept. 1989]).

Nonetheless, on the merits the Special Master's ruling was not clearly erroneous or contrary to law (see CIT Project Fin. v. Credit Suisse First Boston LLC, 7 Misc.3d 1002[A], 2005 N.Y. Slip Op. 50406[U], *2, 2005 WL 729528 [Sup. Ct., N.Y. County 2005]).  As HBI notes, in the prior appeal this Court limited certain document requests in the subpoena to payments traceable to a broker agreement between petitioner Hinduja Global Solutions, Inc. and nonparty Synergy Global Outsourcing, LLC (214 A.D.3d 471, 184 N.Y.S.3d 755 [1st Dept. 2023]).  However, although the funds HBI received from Synergy in connection with the broker agreement were commingled with other funds, any commingling of funds does not necessarily render the broker agreement-related funds untraceable to the broker agreement, and does not abrogate HBI's obligation to produce documents showing payments and distributions from the account that received broker agreement-related funds (see Family Health Mgt., LLC v. Rohan Devs., LLC, 207 A.D.3d 136, 145–147, 171 N.Y.S.3d 44 [1st Dept. 2022]).

With respect to HBI's concerns about removing certain redactions, we note, as we did on the prior appeal, that a protective order is in place in the Texas action between Synergy and Hinduja Global Solutions (see Matter of Hinduja Global Solutions, Inc., 214 A.D.3d at 472, 184 N.Y.S.3d 755).  We also reject HBI's argument that the Special Master's direction to produce documents is excessively onerous, especially in light of our decision in the prior appeal narrowing the scope of the subpoena.

We have considered HBI's remaining arguments and find them unavailing.