Opinion
07-CV-804 (JBW).
July 29, 2008
KENNETH DE VOS, Plaintiff, By: Lloyd De Vos (LD8129), DE VOS CO. PLLC, New York, New York.
MEMORANDUM AND ORDER
Currently pending before this Court is, inter alia, plaintiff's motion for summary judgment against pro se defendants Stephen M. Lee ("Lee") and Adriana Santi ("Santi") (collectively, " pro se defendants"), which seeks to establish that pro se defendants are the alter ego of Sun Graphics Corp., and thus personally liable for a judgment plaintiff recovered against Sun Graphics in 2006.See generally 6/21/08 Memorandum in Support of Plaintiff's Motion for Summary Judgment. Pro se defendants have cross-moved for summary judgment against plaintiff on the same claim. See 6/20/08 Memorandum of Law in Support of Pro Se Defendants' Stephen M. Lee and Adriana Santi Motion for an Award of Summary Judgment Pursuant to Rule 56 of the Federal Rules of Civil Procedure Against Plaintiff.
After an initial review of the submitted factual exhibits, it appears that there are corporate records and financial documents relating to the alter ego claim that pro se defendants have yet to produce, even though at least some of the documents allegedly might create material issues of fact on the alter ego issue. See 1/17/08 Deposition of Adriana Santi at 20-56 (attached as Ex. 9 to Affidavit of Lloyd DeVos in Support of Motion for Summary Judgment). Pro se defendants have repeatedly informed plaintiff that these documents are in the possession of their accountant, Neal Dorf.See id. Contrary to pro se defendants' assumption, documents in the possession of a party's accountant are deemed within that party's control for purposes of Rule 34 discovery. See Fed.R.Civ.P. 34 (allowing inspection of documents in "the responding party's possession, custody, or control"); Bank of New York v. Meridien BIAO Bank Tanzania Ltd., 171 F.R.D. 135, 154 (S.D.N.Y. 1997); Arkwright Mutual Ins. Co. v. Nat'l Union Fire Ins. Co. of Pittsburgh, No. 90 Civ. 7811, 1994 WL 510043, at *3 (S.D.N.Y. Sept. 16, 1994) ("[D]ocuments a client has given to his accountant are within his control because he has the right to demand their return."); Florentia Contracting Corp. v. The Resolution Trust Corp., 1993 WL 127187, at *3 (S.D.N.Y. Apr. 22, 1993) ("Control is defined as the legal right, authority, or ability to obtain upon demand documents in the possession of another."); see also Calzaturficio S.C.A.R.P.A. S.P.A v. Fabiano Shoe Co., 201 F.R.D. 33, 39 (D. Mass. 2001) (corporate defendant's tax-related documents in possession of its accountant found to be within defendant's control because it had "the legal right and practical ability to obtain the documents from the accountant"); MGP Ingredients, Inc. v. Mars, Inc., 2007 WL 3353401, at *3 (D. Kan. Nov. 10, 2007) ("A party is also deemed to have control over financial records of the party that are in the possession of the party's accountant.").
Accordingly, as to any responsive corporate and/or financial documents in the custody of the accountant not yet produced to the parties, pro se defendants are on notice that they are currently in violation of their Rule 34 discovery obligations. These documents first were requested by plaintiff in May 2007, see Plaintiff's First Request for Production of Documents [from Pro Se Defendants] (attached as Ex. 1 to docket entry #48), and include but are not limited to the following: underlying financial documentation provided to the accountant for purposes of creating the general ledger including receipts, invoices, copies of promissory notes, and notes payable; cash disbursement journals from 2002 through 2005; documents reflecting Sun Graphics' payments made for the benefit of Lee and Santi; and documents detailing the officer compensation of Lee and Santi.
This would include any documentation reflecting child support payments withheld from Lee's compensation. See 1/17/08 Deposition of Adriana Santi at 36 (attached as Ex. 9 to Affidavit of Lloyd DeVos in Support of Motion for Summary Judgment).
Pro se defendants have had more than ample opportunity to retrieve responsive documents from Mr. Dorf, and the Court will tolerate no further delays in this regard. Therefore, pro se defendants are ordered to produce to the parties and to the Court all responsive records currently in the possession of their accountant not previously provided for by Wednesday, August 6, 2008. To the extent any of the responsive documents are now in Lee and Santi's possession and no longer remain in the accountant's possession, Lee and Santi should produce them.
The Court understands that Santi is currently out of town. This, however, should not affect pro se defendants' ability to request their accountant to provide the documents. To assist them, the Court has attached a copy of Plaintiff's First Request for Production of Documents by Defendant Adriana Santi and assume that a similar request was served on Lee.
Pro se defendants are hereby warned that failure to do so could result in severe sanctions, such as drawing an adverse inference toward those particular facts and/or precluding pro se defendants from relying on the evidence in the event the claim proceeds to trial. See, e.g., Star-Kist Foods, Inc. v. Goldstein, 87 Civ. 2377 (KC), 1988 WL 132844 (S.D.N.Y. Dec. 9, 1988) (deeming alter ego of defendants to be admitted and precluded from contesting personal liability at trial due to failure to produce corporate documents, which in turn hindered plaintiff's ability to litigate the issue on summary judgment.).
SO ORDERED.
PLAINTIFF'S FIRST REQUEST FOR PRODUCTION OF DOCUMENTS BY DEFENDANT ADRIANA SANTI
Pursuant to Rule 34 of the Federal Rules of Civil Procedure, plaintiff, Kenneth De Vos ("De Vos"), requests that defendant, Adriana Santi, also known as Adriana Santi Lee ("Santi"), produce the documents designated below that are in its possession, custody or control, for inspection and copying by plaintiff or his counsel, on June 25, 2007 at 10:00 a.m., at the offices of the undersigned at 1230 Avenue of the Americas, 7th Floor, New York, NY.The following instructions, in addition to the definitions and rules of construction set forth in Local Civil Rule 26, apply to this request.
Instructions
A. Time period . Unless otherwise indicated, these document requests cover the period from January 2001 through the present.
B. Continuing obligation . The obligation to respond to these requests is of a continuing nature and you are under a duty seasonably to amend or supplement such responses if you learn that any response is in some material respect incomplete or incorrect and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.
C. Entire document . Where only a portion of a document relates or refers to the subject indicated, the entire document is to be produced, along with all attachments, appendices, and exhibits.
D. Documents withheld . If any document or portion thereof is withheld under a claim that it is privileged or subject to protection as trial preparation material, you shall provide the information required by Fed.R.Civ.P. 26(b)(5).
E. No responsive documents . If, with respect to any request or subpart thereof, you do not have any responsive documents in your possession, custody, or control, you shall so state in your response.
F. Lost or destroyed documents . If any otherwise responsive document has been, but no longer, is, in your possession, custody or control, or has ceased to exist, state (i) the date, type, and number of pages of the document, (ii) the information contained therein or subject matter of the document; (iii) the author, (iv) each addressee or recipient; (v) the identity of any attachments or appendices to the document; (vi) all persons having knowledge of the document's contents; (vii) the present location and custodian of the document, if it still exists, (viii) the date and manner of any destruction or discard of the document, or the circumstances under which the document ceased to exist; and (ix) the person authorizing or carrying out such destruction or discard.
Documents Requested
1. All documents that relate to the incorporation of Sun Graphics Corp.2. All documents that relate to the acquisition of the purchase of assets of Freedman Die Cutters by Sun Graphics Corp.
3. All documents that show the source of money used by Sun Graphics Corp. to purchase assets of Freedman Die Cutters.
4. All documents that relate to the sale of fixed assets by Sun Graphics Corp., by auction or otherwise.
5. All documents that relate to or name Access Die Display, LLC, On Demand Printing or Christopher Gravagna.
6. All documents that relate to or name Mr. David Halpern, a former employee of Freedman Die Cutters and Sun Graphics.
7. All corporate books and records of Sun Graphics Corp.
8. All books of account and financial records of Sun Graphics Corp.
9. All financial statements of Sun Graphics Corp.
10. All bank statements, cancelled checks and debit notices for all bank accounts maintained by Sun Graphics Corp.
11. All bank statements, cancelled checks and debit notices for all bank accounts into which funds belonging to Sun Graphics Corp. or any affiliated company were deposited.
12. All documents sent to any bank with which Sun Graphics Corp. or any affiliated company had a banking relationship.
13. All credit card statements for credit cards issued to, for the benefit of or the statements for which were paid by Sun Graphics Corp.
14. All payroll records for Sun Graphics Corp.
15. All documents that reflect any investments made by or for the benefit of Sun Graphics Corp.
16. All documents that show any payments made to or for the benefit of Santi from Sun Graphics Corp.
17. All bank account statements where Santi is an account holder either singly or jointly with any other person.
18. All securities account statements where Santi is an account holder either singly or jointly with any other person.
19. All federal and state tax returns filed by Santi either jointly or individually.
20. All Form W-2's received by Santi.
21. All Forms 1099 received by Santi.
22. All expense reports submitted by Santi to Sun Graphics Corp.
23. All documents relating to cars owned or leased by or for the benefit of Santi.
24. All documents relating to loans made by, to or for the benefit of Sun Graphics Corp.
25. All documents relating to loans made by you, to you or for your benefit.
26. All documents you intend to rely upon at the trial of this matter.