Ex-spouse has no standing to quash subpoena for financial records

A non-party ex-husband has neither the right to be notified of nor standing to quash subpoenas for financial records issued by his ex-wife in a legal malpractice suit against her divorce attorney, the Fairfax County Circuit Court has held.

After one of the companies notified him of the subpoenas, the ex-husband moved to quash and sought a protective order. The companies fully complied with the subpoenas.

Despite the potential for a “myriad of mischief” with Virginia’s subpoena rules, Judge Jonathan D. Frieden said only “the person to whom the subpoena is directed or a party to the litigation in which the subpoena is issued” had standing to quash or modify a subpoena.

“While he is no doubt affected by the Subpoenas, he has no standing to quash or modify them under the Rules of the Supreme Court of Virginia,” the judge wrote. “This holding does not violate [the ex-husband’s] Due Process rights, as he has no liberty or property interest at issue.”

Because the ex-wife’s counsel followed the rules, Frieden refused to quash the subpoenas or issue a protective order in Dinarany v. Dannenbaum (VLW 024-8-065).

Subpoenas

Following her divorce from John Stark, Firouzeh Dinarany sued her attorney, Daniel Dannenbaum and his firm for legal malpractice, alleging they failed to appropriately identify all separate and marital property and income for equitable distribution and support.

Dinarany’s counsel issued subpoenas to Citibank and TD Ameritrade, now Charles Schwab, seeking Stark’s monthly statements and year-end summaries for nine years. Copies of the subpoenas were served on Dannenbaum’s attorney, but not on Stark or his attorney.

Citibank fully complied with the subpoena, while Schwab notified Stark of the date it would comply absent a motion or order to quash or written withdrawal of the subpoena. Stark moved to quash before that date; Schwab nonetheless complied in full.

In addition to quashing the subpoenas, Stark requested a protective order that all responsive documents be destroyed, rather than disseminated.

‘Persons’ and ‘parties’

Frieden explained that Virginia’s rules pertaining to the issuance of and objection to subpoenas duces tecum refer to both “persons” and “parties.” Thus, the judge presumed that the meaning of “person” is distinct from the meaning of “party.”

“In the rules applicable to subpoenas duces tecum, ‘person’ means ‘a human being’ or ‘an entity (such as a corporation) that is recognized by law as having most of the rights and duties of a human being,’” the judge said, looking to Black’s Law Dictionary. “A ‘party’ is ‘[o]ne by or against whom a lawsuit is brought; anyone who both is directly interested in a lawsuit and has a right to control the proceedings, make a defense, or appeal from an adverse judgment.’”

Applying the plain meaning of the language used in the rules, Frieden concluded that issuance of the subpoenas obligated Dinarany’s counsel to mail or deliver them to the court clerk and serve them on defendants’ respective counsel.

“There was no obligation to notify Mr. Stark or his counsel, neither of whom are counsel of record in this case or a party to it,” the judge held. “Because Mr. Stark has no liberty or property interest in the documents responsive to the subpoenas, this holding does not violate his Due Process rights.”

Thus, Frieden held that Dinarany’s compliance with notice and service rules required him to deny Stark’s motion.

No interest at issue

Supreme Court of Virginia Rule 4:9A(c)(3) allows a court to quash or modify a subpoena duces tecum to a third-party “upon written motion promptly made by the person so required to produce, or by the party against whom such production is sought[.]”

Looking to Legaspi v. TME Enters., Inc., Frieden said the Supreme Court of Virginia “interpreted the phrase ‘party against whom the production is sought’ to refer to the opposing party in the case at bar” in Tonti v. Akbari.

“Thus, standing to quash or modify a subpoena duces tecum is granted only to the person to whom the subpoena is directed or a party to the litigation in which the subpoena is issued,” the judge said.

Although Stark’s bank information was subject to the subpoenas, he was neither the person to whom either subpoena was directed nor an opposing party to the case at bar. As such, he had no standing to quash or modify them.

Because he lacked a liberty or property interest at issue, Frieden said denial of the motion to quash didn’t violate Stark’s due process rights.

‘Myriad of mischief’

Frieden denied Stark’s request for a protective order based on his lack of standing, but acknowledged the harsh result compelled by the rules.

“It brings to mind a myriad of mischief that might result,” he said. “Take, for example, a case in which two unscrupulous individuals concoct a fictional narrative giving rise to a claim by one against the other in the financial records of a third individual, not a party to the lawsuit, would be relevant. One of the parties could retain a naïve attorney, unaware of this scheme, to subpoena the third person’s bank for that person’s financial records and provide the records to both scheming litigants without the third person even knowing that the records had been requested.”

And while a suit for breach of contract or fiduciary duty may remedy the harm resulting from the release of such records in some cases, the judge said it was unlikely that many financial institutions have voluntarily accepted the obligation to resist such subpoenas.

“Perhaps the law should be different, but that is not the province of this Court,” Frieden said. “The Court must interpret and follow the law as it is.”

Noting that Stark’s objections were moot — all documents responsive to the subpoenas had been produced — and that those documents were relevant to the instant matter, Frieden refused to quash the subpoenas.

‘Legally correct’

Scott Surovell, a Fairfax litigator and state senator, said his subpoena requested documents that Dannenbaum should have discovered in Dinarany’s divorce.

“Dannenbaum’s attorney didn’t even participate in Stark’s motion or argue at the hearing,” Surovell said. “While discussing the subpoena rule during the hearing, I said I don’t think it’s right as a policy matter, but I think it’s legally correct. We argued that the explicit notice process for medical record subpoenas underscored that we were legally correct.”

Although he has talked with the General Assembly’s Division of Legislative Services about giving broader rights to individuals whose records are subpoenaed, Surovell lamented that the issue is complicated.

“Given the volume and amount of information that corporations hold about people’s personal details, if we were to require notification and the right to quash to everybody, that gets complicated very fast,” he told Virginia Lawyers Weekly.

Stark’s attorney did not respond to a request for comment.