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Tricham Hous. Assoc., L.P. v Klein,

113 A.D.3d 432, 978 N.Y.S.2d 162 [1st Dept., 2014]

Where is the line in compensating a fact witness?

“In an attempt to settle the claims and counterclaims between them, plaintiff and defendant Emanuel Panitz entered into a Memorandum of Understanding (MOU) pursuant to which Panitz’s legal fees would be paid, provided that the claims of defendants Allan Klein, Lobby Design Group, and Steeltech SA (the LDG defendants, collectively) failed. In exchange for this, Panitz assigned plaintiff his remaining cross claims against the LDG defendants. This agreement is void and unenforceable as against public policy. Although his claims against plaintiff have been settled, Panitz is still a witness in this action. Permitting the MOU to stand as it is, with the payment of Panitz’s legal fees conditioned on the failure of his former co-defendants’ claims, creates an incentive for Panitz to falsify his testimony, an incentive that has long been disfavored.”

In 2013, we saw Caldwell v Cablevision Sys. Corp., where the Court of Appeals allowed a fact witness, who happened to be a physician, to demand and collect a fee of $10,000 for one hour of testimony. Read More