This is a special proceeding brought to obtain the dissolution of Collision Depot, Inc. Petitioner Alan Lipp ("Lipp") and Respondent Robert Zigman a/k/a Robert Aronson a/k/a Robert Arenson ("Zigman") are equal shareholders in Collision Depot. Collision Depot operated an auto repair and body shop in Oceanside.

Lipp alleges that Zigman systematically diverted assets from the business. In addition to seeking the judicial dissolution of the Collision Depot, Lipp seeks to recover the money Zigman is alleged to have diverted or misappropriated from the business.

Zigman, who was primarily responsible for the day-to-day operation of Collision Depot, asserts the business was not making any money. He claims that, over the years, he has had to put money into the business. He also claims he has not been paid a salary or received any other money from Collision Depot in the past four to five years.

Zigman has been unable to produce the bank statements for Collision Depot. He asserts the bank statements were given to Collision Depot's accountant in connection with an audit. When the audit was complete, Zigman sent a Collision Depot employee to pick up the statements. The statements allegedly disappeared from the truck the employee used to pick up the statements from the accountant.

Zigman testified that he uses the surnames Zigman and Aronson interchangeably. People who knew him early in his life know him as Robert Aronson. People who met him later know him as Robert Zigman.

At deposition, Zigman was asked if he had more than one social security number. Counsel directed him not to answer the question claiming the question was irrelevant.

Zigman also testified that, in the early 1990's, he had an ownership interest in Finish Line Collision. He left this business because of disputes with one of his partners. He was questioned at deposition about the nature of the disagreement. Counsel again directed him not to answer asserting the question was irrelevant.

Lipp has also sought to obtain discovery of Zigman's documents which he submitted to a lending institution in connection with the refinance of residences in East Rockaway and Pennsylvania.

One of Lipp's claims in this action is that Zigman diverted or misappropriated funds from Collision Depot. Zigman testified that Collision Depot did not make money. He testified that the source of income of $600 per week which he receives is from a buyout of another business. Despite this, Zigman has homes in East Rockaway and Pennsylvania. His wife, who is not employed, drives a new luxury vehicle.

At some point, Collision Depot was subject to a tax audit which resulted in a tax assessment of approximately $195,000. Zigman testified that he secured money to pay the assessment from his in-laws and by refinancing the East Rockaway home. The home in East Rockaway is owned by his wife.

Zigman is presently involved in South Shore Auto Group. He testified that he obtained the money for his capital investment in this venture by refinancing the mortgage on his Pennsylvania home.

Zigman further testified that he had not received any money from Collision Depot in the past four to five years. [*2]

Lipp sought to obtain documents submitted to the lending institution regarding the refinance of the mortgage on both premises. Zigman has refused to provide the material asserting it was irrelevant.

The deposition of Zigman was conducted prior to the effective date of the Uniform Rules for the Conduct of Depositions (22 NYCRR Part 221). Therefore, those rules are not applicable to this application. However, the basic rules of liberal discovery and civility pre-date Part 221.

The proper procedure for a deposition is to permit the witness to answer all questions subject to objections pursuant to CPLR 3115(b),(c) and (d), unless the question clearly violates the witness's constitutional rights, legally recognized privilege or is palpably irrelevant. Dibble v. Consolidated Rail Corp., 181 AD2d 1040 (4th Dept. 1992); White v. Martins, 100 AD2d 805 (1st Dept. 1984); Ferraro v. New York Telephone Co., 94 AD2d 784 (2nd Dept. 1983); Watson v. State of New York, 53 AD2d 798 (3rd Dept. 1976); and Mora v. St. Vincent's Catholic Med. Ctr. of New York, 8 Misc 3d 868 (Sup.Ct. N.Y.Co. 2005).

A.Social Security Numbers

Zigman was asked at his deposition whether he has more than one social security number. His attorney refused to let him answer on the grounds the question was irrelevant.

Lipp asserts the information is subject to discovery because it might lead to information regarding whether Zigman was siphoning money out of Collision Depot.

Possession and/or use of multiple social security numbers is, under certain circumstances, a federal crime. See, United States v. Gros, 824 F.2d 1487 (6th Cir. 1987); United States v. Quinteros, 769 F.2d 968 (4th Cir. 1985); and 18 U.S.C. §1028; United States v. Ellis, 50 F.3d 419 (7th Cir. 1995); and 42 U.S.C.§408(a)(7).

While counsel is incorrect as to his assertion that the information sought is irrelevant, compelling Zigman to answer this question could be a violation of his Fifth Amendment right against self-incrimination. Should the Court direct a further deposition of Zigman and he asserts his Fifth Amendment right as a basis for not answering that question, the Court would have to sustain the objection. Therefore, Zigman cannot be compelled to answer the question relating to whether he has or uses multiple social security numbers.

B.Zigman's Prior Business Relationship

The second line of questioning relates to the reasons why Zigman left Finish Line Collision. He answered, without objection, that he left because of disagreements between one of his partners and him. He was then asked about the nature of the disagreements. His attorney objected to this question and directed him not to answer on the grounds that it is not relevant.

Lipp asserts this question is relevant because it might establish that Zigman engaged in similar activities, diverting funds from the business, while a partner in Finish Line Collision. [*3]

"[E]vidence of the same or a similar act on another unrelated occasion is inadmissible to prove that the person did an action on a particular occasion." Prince, Richardson on Evidence §4-517 (11th Ed., Farrell). See, Matter of Brandon, 55 NY2d 206 (1982); and Kourtalis v. City of New York, 191 AD2d 480 (2nd Dept. 1993).

The rule does not exclude evidence of prior similar acts if the prior act has some relevance other than mere similarity. Prince, Richardson on Evidence § 4-517, supra. Thus, evidence of prior "...similar acts will be admitted if they tend to establish: (1) motive; (2) intent; (3) the absence of mistake or accident; (4) a common scheme or plan; or (5) identify (People v. Molineux, 168 NY 264, 293; accord New York Proposed Code of Evidence, §404, subd[b])". Matter of Brandon, supra at 211.

Where one of the claims is to recover for fraud, prior similar acts can be introduced to establish scienter. Id; and Prince, Richardson on Evidence § 4-517, supra. Lipp claims Zigman diverted moneys from Collision Depot. The eighth cause of action alleged in the petition asserts a cause of action for fraud.

In determining whether the material sought through discovery is "material and necessary", the court must determine if the demanded material has any bearing on the issues raised in the case and whether the demanded documents will "...sharpen the

issues and reduce delay and prolixity." The test is one of usefulness and reason. Allen v. Crowell-Collier Publishing Co., 21 N.Y2d 403, 406 (1968).

Discovery is permitted of material that may not be admissible in evidence provided that the production of such information may lead to the disclosure of admissible evidence. See, Southampton Taxpayers Against Reassessment v. Assessor of the Village of Southampton, 176 AD2d 795 (2nd Dept. 1991); and Fell v. Presbyterian Hospital in the City of New York, 98 AD2d 624 (1st Dept. 1983).A deposition is undeniably a disclosure device. Siegel, New York Practice 4th §354; and CPLR 3107.

Zigman should be compelled to answer these questions. If he engaged in similar actions as are alleged in this action while a partner in Finish Line Collision, such testimony might be admissible to prove scienter in connection with the fraud claim. See, Matter of Brandon, supra. While the answer to these questions may prove to be irrelevant to this litigation, such a determination cannot be made until the questions are posed and answered. All issues regarding admissibility in evidence of questions asked and answered at a deposition, except those relating to form, are reserved for the trial court. See, Shapiro v. Levine, 104 AD2d 800 (2nd Dept. 1984); and McKinney v. State of New York, 111 Misc 2d 382 (Ct. Cl. 1981); and Siegel, New York Practice 4th §356.

C.Mortgage Applications

The third issue involves whether the documents submitted to lending institution in connection with the refinancing of the mortgages on the East Rockaway and Pennsylvania properties is discoverable.

The key issue relating to the East Rockaway property is ownership. Zigman testified that the East Rockaway property is owned by his wife. He also testified that [*4]she owned the property at the time of their marriage. Lipp has not established that Zigman ever had an interest in the East Rockaway property. Zigman was not asked whether he guaranteed payment on the refinanced mortgage or whether his income or assets were considered by the lending institution in determining whether to give the mortgage. Thus, Lipp is seeking discovery of material from a non-party, Zigman's wife or the mortgagee.

The proper method for obtaining the information regarding the refinance of the East Rockaway property is to obtain it from either the lending institution or Zigman's wife by subpoena pursuant to CPLR 3120 and CPLR 3122(b).

Zigman has an interest in the Pennsylvania property. His income and assets were almost certainly considered by the lending institution in making the decision.

One of the issues involved in this action is the value of Collision Depot and the income Zigman derived from that business. Lipp claims that Zigman misappropriated money from Collision Depot. Zigman asserts that he was not deriving any income from Collision Depot. Certainly, one of the items that is asked on a mortgage application is the applicant's income. Thus, the mortgage application would almost certainly reflect Zigman's income and the source(s) of that income.

Another question that is generally contained on a mortgage application involves businesses in which the applicant has an interest, their value and any obligations the applicant has personally incurred in connection with those businesses. One of the issues in this case involves the value of Collision Depot.

Discovery of documents that are not admissible in evidence is permitted provided that the production of such documents may lead to the disclosure of admissible evidence. Southampton Taxpayers Against Reassessment v. Assessor of the Village of Southampton, supra; and Fell v. Presbyterian Hospital in the City of New York, supra. The production of the documentation Zigman submitted to a lending institution may very well contain admissible evidence or may lead to the discovery of admissible evidence.

Zigman does not assert that the documentation he submitted to the bank is subject to any legally cognizable privilege. The demand for these documents may have a bearing on the issues involved in this litigation and are subject to discovery. See, Samide v. Roman Catholic Diocese of Brooklyn, 16 AD3d 482 (2nd Dept. 2005); and Titleserv, Inc. v. Zenobio, 210 AD2d 314 (2nd Dept. 1994). Therefore, the documents filed with the lending institution in connection with the refinance of the Pennsylvania property are subject to discovery and must be produced.

Accordingly, it is,

ORDERED, that Petitioner's application for a further deposition is granted to the extent of directing Respondent, Robert Zigman a/k/a Robert Aronson to appear for a further deposition regarding the nature of the disagreements that resulted in him leaving Finish Line Collision and the documents to be produced in accordance herewith and is

otherwise denied. Such deposition shall be held on or before February 28, 2007. Counsel and the parties are reminded of the applicability of 22 NYCRR Part 221; and it is further,

ORDERED, that Robert Zigman a/k/a Robert Aronson shall produce within twenty (20) days of the date of this order copies of all documents submitted to any [*5]application(s) and financial disclosure he submitted to any lending institution in connection with the refinancing of the mortgage on his Pennsylvania property; and it is further,

ORDERED, that Petitioner's application to obtain from Robert Zigman a/k/a Robert Aronson documents submitted to the lending institution in connection with the application to refinance the mortgage on the East Rockaway property is denied without prejudice to securing such information in accordance herewith.

This constitutes the decision and Order of the Court.

Dated:Mineola, NY_____________________________

January 10, 2007Hon. LEONARD B. AUSTIN, J.S.C.