Opinion
500033/07.
April 29, 2009.
Scott Michael Moore, Esq., Attorney for Plaintiff.
Monte Malek Chandler, Esq., Attorney for Defendant.
Plaintiff moves for summary judgment under CPLR 3212(b) based upon defendants' failure to comply with this court's order dated February 4, 2009 requiring defendants to separately respond to all interrogatories served by plaintiff and to provide all items sought pursuant to subpoenas duces tecum. Defendants move for a protective order vacating plaintiff's document demand notice dated June 28, 2008 with respect to items 2, 3, 9, 10, 13 and 17.
BACKGROUND
Plaintiff served each defendant with an individual Notice of Discovery and Inspection/Subpoena Duces Tecum dated April 25, 2008. In response, plaintiff received a letter signed by defendant Justin Kennedy, on "Imagery Media, LLC" letterhead, dated May 28, 2008, attaching a number of documents. Justin Kennedy's response stated, "please find Defendants Federal and State Income Tax Returns from 2002-2005. Defendants' Accountant, Herman Taitt, is preparing Defendants' 2006 and 2007 taxes." On June 5, 2008, plaintiff's attorney sent the defendants' attorney a letter noting deficiencies with defendants' response indicating that all parties did not certify under oath as to the truthfulness of their responses. The June 5, 2008 letter specifically noted that the following documents ("June 5 Demand Documents") were not included in the response:
It is noted that Kennedy did not attach state income tax returns in the response.
Item 2. Federal income tax returns for all parties are missing for the
years 2001, 2006, and 2007.
Item 3. All state income tax returns for all parties are missing for allyears, 2001-present.
Item 9. All monthly and annual profit loss statements for all parties are
missing for all years, 2001-present.
Item 10. All monthly and annual balance sheet statements for all partiesare missing for all years, 2001-present.
Item 13. All items for all parties, notably bank statements, are missingfor the following periods:
January to September, 2004
January 2006 to the present
Plaintiff served the individual defendants with interrogatories dated June 26, 2008. On August 22, 2008, plaintiff moved pursuant to CPLR 3124 to compel defendants to comply with plaintiff's interrogatories and subpoenas duces tecum including production of the June 5 Demand Documents and for all of the defendants to answer interrogatories as defendants' sole response was an unsworn statement signed only by Justin Kennedy. On October 15, 2008, defendants' counsel did not appear at oral arguments for the motion, plaintiff's motion was granted, and this court issued an order requiring defendants to respond to plaintiff's subpoenas duces tecum and interrogatories. The order further indicated, "[f]ailure to comply within thirty (30) days of the date of this order shall result in the striking of the defendants' answer." On November 19, 2008, defendants served a response to plaintiff's interrogatories which did not include answers to interrogatory 1 for the individual defendants or interrogatory 4(xii) for all defendants. Furthermore, with respect to interrogatory 5, which requested the names of other businesses formed and whether any documents relating to those businesses were destroyed, defendants merely referred plaintiff to "documents attached to Defendants letter dated the 28th of May, 2008 in response to Plaintiffs Notice of Discovery and Inspection/Subpoena Duces Tecum dated the 25th of April, 2008."
The defendants' attorney also failed to appear for a compliance conference with this court on August 20, 2008 and Imagery Media's deposition noticed for September 10, 2008 at his own office.
It is noted that while individual interrogatories were served on each defendant, defendants responded with only one response signed by the individual defendants and Justin Kennedy on behalf of Imagery Media, LLC. Although the majority of the interrogatories are nearly identical for all three defendants, the response appears to answer Imagery Media's interrogatories and does not address the modified interrogatories for the individual defendants including interrogatory 1 (request for individual defendants' employment history), interrogatory 5 (request for the name of each business the individual defendants caused to be formed) and interrogatory 7 for Justin Kennedy (request for information on Justin Kennedy's prior practice of law).
On November 25, 2008, plaintiff moved pursuant to CPLR 3126(3) to strike the answer of the defendants for failure to comply with this court's October 15, 2008 order instructing defendants to respond to the subpoenas duces tecum and answer the interrogatories within 30 days. At oral argument on February 4, 2009, this court ordered that "[d]efendants' answer is stricken unless each defendant separately and individually under oath responds to all Interrogatories served by plaintiff . . . on or before February 20, 2009."
On February 21, 2009, plaintiff moved for summary judgment pursuant to CPLR 3212(b), arguing that defendants' answer should be stricken as they did not comply with this court's February 4, 2009 order requiring the defendants to respond to the interrogatories and subpoena duces tecum on or before February 20, 2009. At oral argument on March 11, 2009, which was delayed nearly two hours due to the late appearance by the defendants' attorney, plaintiff's attorney specifically listed the defendants' outstanding document discovery from the subpoenas duces tecum and responses to interrogatories. These items included:-
Federal income tax returns for the years 2001, 2006, and 2007 (Transcript at 11, L. 13-14).-
All state income tax returns for the years 2001 to present (Transcript at 11, L. 23-24).-
All monthly and annual profit loss statements for the years 2001 to present (Transcript at 25, L. 1-2).-
All monthly and annual balance sheet statements for the years 2001to present (Transcript at 25, L. 3-4).-
All bank statements for the periods January to September 2004 and January 2006 to the time the demand was made (Transcript at 25, L. 4-6).-
Responses to interrogatories 1 (Transcript at 25, L. 11-13, 23-24), 4(12) (Transcript at 25, L. 24-25), 5 (Transcript at 26, L. 1), and 7 (Transcript at 23, L. 13-14).
This court then issued a written order on March 11, 2009 holding:
[Defendants have] failed to respond to Interrogatory No 7 and [have] failed to supply various documents demanded as recited on the record this date. As it is not desirable to determine the merits of this complicated matter summarily solely upon the failure to supply complete information upon initial requests, the defendants will be accorded a final opportunity to supply all information and documentation as recited on the record on or before March 23, 2009. The case is adjourned to April 15, 2009. If defendants fail to comply, their Answer will be stricken. No protective relief has ever been sought by defendants.
Due to scrivener's error, the order incorrectly references the failure of the "plaintiff" to respond to discovery demands. However, it is clear from the order that this should read "defendants".
On March 23, 2009, the date by which the defendants' were ordered to respond, defendants made a motion for a protective order pursuant to CPLR 3103(a) to vacate the document demand referencing "Item 2, Item 3, Item 9, Item 10, Item 13 and Item 17" in the plaintiff's letter dated June 28, 2008. Defendants' "affirmation in opposition," states that the demand "is overly burdensome and unreasonable in that defendants have produced a bevy of documents responsive to plaintiff's demands covering the period up to January 2006" and turning over tax returns for a nine year period "would be a hardship to the defendants as well as overly burdensome, unreasonably annoying and abusive." The motion does not address the interrogatories that defendants were ordered to answer by March 23, 2009.
Defendants did not attach a demand letter dated June 28, 2008 in support of their motion. The only portion of a discovery demand letter attached to the motion is the second page of the plaintiff's June 5, 2008 demand letter that references Items 2, 3, 9, 10, 13, and 17.
The affirmation is improperly titled as this is the affirmation in support of the defendants' motion.
At oral argument on April 22, 2009, this court denied defendants' motion for a protective order as being untimely having been served ten months beyond the 20 days provided by statute for a response (CPLR 3122) and after three orders of this court directing a response. Plaintiff noted that Justin Kennedy provided a response to interrogatory number 7, but the defendants otherwise failed to provide the documentation as recited on the record in open court on March 11, 2009. The attorneys were instructed to review this court's previous orders with my law clerk and the defendants' attorney indicated that he had not received a copy of the March 11, 2009 transcript until April 15, 2009 and thus was not able to respond to the plaintiff by March 23, 2009. The court ordered the defendants' attorney to return at 3:30 P.M. with all of the discovery turned over to the plaintiff in this action. After conferring with my law clerk, defendants' attorney indicated that the only additional discovery turned over to the plaintiff pursuant to the court's March 11, 2009 order was Justin Kennedy's response to interrogatory number 7.
DISCUSSION
"The nature and degree of the penalty to be imposed pursuant to CPLR 3126 lies within the sound discretion of the trial court. The striking of a pleading may be appropriate where there is a clear showing that the failure to comply with discovery demands is willful and contumacious. The willful and contumacious character of a party's conduct can be inferred from the party's repeated failure to respond to demands and/or to comply with discovery orders" (internal citations omitted) ( McArthur v New York City Hous. Auth. , 48 AD3d 431 [2d Dept 2008]; see Ziskin Law Firm, LLP v Bi-County Elec. Corp. , 43 AD3d 1158 , 1159 [2d Dept 2007]; see Wolfson v Nassau County Medical Center, 141 AD2d 815 [2d Dept 1988]).
The plaintiff alleges in the complaint that the individual defendants formed a partnership with the plaintiff in 2003 with the intent to form an LLC and after the partnership ended in 2006, plaintiff learned that the individual defendants had in fact fraudulently formed Imagery Media, LLC prior to entering the alleged partnership with the plaintiff. Plaintiff further asserted that the individual defendants breached their fiduciary duty to plaintiff, were unjustly enriched through plaintiff's contributions to the alleged partnership, and improperly converted plaintiff's $600,000 investment in the partnership. As plaintiff raised allegations in the complaint that the defendants, in their individual capacity, fraudulently formed the LLC prior to the formation of the alleged partnership with the plaintiff in 2003, the financial documents between 2001 and April of 2008, including tax returns and basic financial statements, are routine business documents and the demand was therefore not overly burdensome on the defendants.
Plaintiff's demand letter of June 5, 2008 specifically listed the June 5 Demand Documents as missing from the defendants' response to the subpoenas duces tecum and defendants did not provide any response to the demand. Defendants did not respond to plaintiff's June 26, 2008 interrogatories pursuant to the CPLR. Subsequent to this court's October 15, 2008 order that defendants respond to subpoenas duces tecum and interrogatories, defendants served responses to interrogatories that were clearly incomplete. After defendants failed to comply with the October 15, 2008 order, this court gave defendants another opportunity to comply with plaintiff's discovery demands and on February 4, 2009, ordered that defendants respond to subpoenas duces tecum and interrogatories under oath. On March 11, 2009, after the defendants refused to comply with the two previous orders, this court offered yet a third opportunity for defendants to respond to the subpoenas duces tecum and interrogatories by adjourning the summary judgment motion and having plaintiff's counsel list, on the record, the specific June 5 Demand Documents still being sought by plaintiff and the responses to the interrogatories that were inadequate. The March 11, 2009 order clearly indicated that this was the defendants' final opportunity to supply the information and documentation indicated on the record by March 23, 2009, and failure to comply with the order would result in the answer being stricken. Defendants' motion for a protective order, submitted to the Kings County Clerk at 3:53 P.M. on March 23, 2009, did not contain any legal authority or a complete copy of the discovery demand for which the protective order was sought, incorrectly identified the discovery demand, and simply contained declarative statements that turning over the documents demanded would be a hardship to the defendants without any reasonable explanation as to why turning over the documents would be burdensome. Furthermore, the motion for a protective order did not even address the interrogatories to which the defendants were ordered to respond by March 23, 2009. This inadequate motion for a protective order, made more than nine months after the discovery at issue was demanded, is yet another attempt by the defendants to avoid responding to routine discovery demands.
Defendants have willfully failed to respond to plaintiff's routine discovery demands, contumaciously disregarded three separate discovery orders by this court, and filed an untimely and inadequate motion for a protective order in an eleventh hour attempt to thwart this court's previous discovery orders. Pursuant to CPLR 3126 (3) and this court's order of February 4, 2009, defendants' answer is hereby stricken and plaintiff's motion for summary judgment pursuant to CPLR 3212 (b) is granted ( see McArthur v New York City Hous. Auth. , 48 AD3d 431 [2d Dept 2008]; see Ziskin Law Firm, LLP v Bi-County Elec. Corp., 43 AD3d 1158, 1159 [2d Dept 2007]; see Wolfson v Nassau County Medical Center, 141 AD2d 815 [2d Dept 1988]).
CONCLUSION
Accordingly, pursuant to CPLR 3216 (3), the defendants' answer is stricken. Plaintiff's motion for summary judgment pursuant to CPLR 3212 (b) is granted. The parties are to appear for an inquest to determine damages before a Judicial Hearing Officer on June 22, 2009.
This constitutes the decision and order of the court.