X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Plaintiffs are former board members of the 3681 Broadway Housing Development Fund Corporation (3681 Broadway HDFC or the HDFC) and current residents of 3681 Broadway in Manhattan. In 2016, they brought this action for breach of fiduciary duty and breach of contract, alleging, among other things, that the current board was financially mismanaging 3681 Broadway HDFC. Defendants — 3681 Broadway HDFC itself, its board, and its current board members — counterclaimed, alleging that plaintiffs had financially mismanaged the HDFC during their time on the board and had failed to turn over documents belonging to the HDFC when they left the board. This motion arises from the latest of several discovery disputes in this action. Defendants move to strike plaintiffs’ complaint under CPLR 3126, to preclude plaintiffs from introducing any evidence with respect to any defenses which relate to this motion at trial under CPLR 3126, and to compel plaintiffs to respond to defendants’ discovery demands under CPLR 3124. The court grants the branch of defendants’ motion seeking to compel plaintiffs to respond to defendants’ interrogatories. The court orders an evidentiary hearing on the branch of defendants’ motion seeking to compel plaintiffs to produce documents in response to defendants’ requests for production, except as to request no. 8. The court denies defendants’ motion to compel production with respect to request no. 8 and denies the other branches of defendants’ motion. BACKGROUND In September 2019, defendants served plaintiffs with a set of interrogatories and a notice for discovery and inspection of documents. (See NYSCEF Nos. 203, 205.) Plaintiffs rejected both. (See NYSCEF Nos. 204, 206.) In December 2019, defendants moved to compel plaintiffs to respond to the discovery demands. (See NYSCEF No. 207.) Although the court initially denied the motion, the court later granted defendants’ motion to reargue. (See NYSCEF Nos. 208, 209.) Defendants interposed a second motion to compel; the court granted the motion in April 2020. (See NYSCEF Nos. 210, 211.) The court set a deadline of June 16, 2020, for plaintiffs to respond to defendants’ discovery demands. (See NYSCEF No. 211 at 3.) Plaintiffs did not respond by the deadline. Defendants then served a good-faith letter on plaintiffs, requesting their compliance with the court’s order. (See NYSCEF No. 212.) In a September 2020 status conference order, the court ordered plaintiffs to respond to defendants’ discovery demands by October 19, 2020. (See NYSCEF No. 213 at 1.) On October 16, 2020, plaintiffs responded to defendants’ discovery demands. (See NYSCEF Nos. 214, 215.) Plaintiffs objected to most of defendants’ interrogatories and requests for production. (See id.) Unsatisfied with plaintiffs’ responses, defendants filed this motion. DISCUSSION Trial courts have broad discretion in supervising discovery. (Stambovsky v. Reiner, 145 AD2d 309, 310 [1st Dept 1988].) New York courts favor “liberal discovery.” (Forman v. Henkin, 30 NY3d 656, 663 [2018].) Parties must comply with a court’s discovery orders. Compliance requires a timely, good-faith response to discovery demands. (Kihl v. Pfeffer, 94 NY2d 118, 123 [1999].) If a party fails to obey an order for disclosure, the court has broad discretion to issue such orders against the disobedient party “as are just.” (CPLR 3126; see also Arts4All, Ltd. v. Hancock, 54 AD3d 286, 286 [1st Dept 2008].) The movant in a motion to strike must make a clear showing that the nonmovant’s noncompliance with discovery requests was willful, contumacious, or in bad faith. (Mateo v. City of New York, 274 AD2d 337, 337 [1st Dept 2000].) It is insufficient for the movant to merely allege that the nonmovant has concealed discoverable documents; the movant must provide evidence of concealment. (Melcher v. Apollo Med. Fund Mgt. LLC, 52 AD3d 244, 245 [1st Dept 2008].) If the movant does so, the burden shifts to the nonmovant to provide a “reasonable excuse” for noncompliance. (Fish & Richardson, P.C. v. Schindler, 75 AD3d 219, 220 [1st Dept 2010].) If the movant does not provide evidence to the contrary, a court may accept the nonmovant’s claim that due diligence was performed to turn over all responsive documents. (See e.g. Heinze v. Mnuchin, 2009 NY Slip Op 50711[U], *5 [Civ Ct, NY County Apr. 16, 2009] ["As defendants allege that they have provided plaintiff with all of the documents in their possession, plaintiff's frustration with defendants' inability to locate certain documents forms no basis for compelling their production."].) Alternatively, a court may make credibility determinations in an evidentiary hearing on a discovery motion. (See CEMD El. Corp. v. Metrotech LLC I, 141 AD3d 451, 453 [1st Dept 2016] ["[A] hearing is required to determine, among other things, whether defendant’s failure to attend the disposition was willful and contumacious.”].) I. The Branch of Defendants’ Motion Seeking to Compel Plaintiffs to Respond to Defendants’ Interrogatories Defendants served plaintiffs with 22 interrogatories. Plaintiffs responded to Nos. 1 and 22 but objected to the remaining 20. Plaintiffs object to defendants’ interrogatories on the basis that they seek information to support counterclaims that are barred by the statute of limitations, the business judgment rule, or both. These affirmative defenses are inappropriate objections to discovery demands; they address the merits of defendants’ underlying counterclaims, not defendants’ discovery demands. Plaintiffs may raise these defenses on a motion to dismiss or a motion for summary judgment. (See Rite Aid Corp. v. Grass, 48 AD3d 363, 364 [1st Dept 2008] [affirming trial court's granting summary judgment before discovery was completed].) But while the counterclaims remain live — and this court is not addressing their merits in this decision — plaintiffs must provide requested discovery relating to the counterclaims. Plaintiffs also object to these interrogatories as seeking information beyond the scope of this litigation. Plaintiffs raise this objection in response to interrogatories asking each plaintiff to declare how much they currently owe 3681 Broadway HDFC in arrears. Plaintiffs claim that their arrears as residents are irrelevant to defendants’ counterclaims, which target plaintiffs’ alleged mismanagement as board members. However, private information is discoverable if it is relevant to a party’s claims. (Forman, 30 NY3d at 664.) The trial court has wide discretion in determining whether interrogatories are relevant and appropriate. (Fellner v. Texas Mexican Ry. Co., 76 AD2d 820, 820 [1st Dept 1980].) Plaintiffs’ personal financial situations are relevant to their alleged financial mismanagement of 3681 Broadway HDFC. Plaintiffs had financial dealings with the same corporation, 3681 Broadway HDFC, as residents and as board members. To the extent that plaintiffs’ arrears as residents impacted their business decisions as board members, plaintiffs’ arrears are relevant to this litigation. For the same reason, plaintiffs must respond to interrogatories asking whether they have been leasing rooms in their apartments. Again, this case concerns plaintiffs’ financial management of 3681 Broadway HDFC. Plaintiffs’ alleged renting of rooms is a financial transaction that occurred at 3681 Broadway. It is possible that plaintiffs’ financial activities as residents impacted their activities as board members. Consequently, whether plaintiffs lease or sublease rooms in their apartments is relevant to defendants’ counterclaims. Plaintiffs object to other interrogatories on the basis that they are argumentative and improperly require the adoption of assumptions. Plaintiffs claim that interrogatories concerning board activities imply that plaintiffs alone were responsible for those board activities. This implicit assumption would be prejudicial because plaintiffs served on the board with individuals who are not parties to the litigation, such that the board’s actions are not attributable solely to plaintiffs. Plaintiffs’ argument is unpersuasive. Defendants’ phrasing of interrogatories about board decisions does not prejudice plaintiffs. The interrogatories do not state, either explicitly or implicitly, that plaintiffs are solely responsible for board decisions. Further, plaintiffs may explain in their responses their role, or lack thereof, in arriving at board decisions. Defendants’ interrogatories are not argumentative and do not impermissibly require the adoption of assumptions. To the extent that plaintiffs interpret the interrogatories otherwise, they may in their responses dispel any incorrect assumptions that they perceive. Plaintiffs object to interrogatories on the basis that the information sought was already subject to previous litigation between the parties. In 2011, 3681 Broadway HDFC brought an action in Supreme Court, New York County, against three then-board members, including Franklin Lama, a plaintiff here. (See NYSCEF No. 219 at 12.) The corporation alleged that defendants there had been withholding documents belonging to it. The parties settled the case on October 27, 2011. (See NYSCEF No. 221.) They agreed to schedule a special meeting of shareholders to elect a new board. They also agreed that if defendants were not re-elected, defendants would turn over all documents and records belonging to 3681 Broadway HDFC and provide an accounting to the new board. As Lama was re-elected to the board, the return-of-documents and accounting provisions of the settlement did not apply. The 2011 settlement, therefore, does not dispose of the issue of which documents plaintiffs here turned over when they left the board. Plaintiffs object to interrogatories on the basis that the information requested is available in 3681 Broadway HDFC’s internal records and is within the personal knowledge of defendant Beatriz Santana and defendants’ bookkeeper, Maria Reyes. Parties must refrain from placing unnecessarily onerous discovery demands on one another. (Kavanagh v. Ogden Allied Maintenance Corp., 92 NY2d 952, 954 [1998].) Plaintiffs claim that the information that defendants seek is readily available in records that they already possess. In this action, however, defendants are counterclaiming for the return of documents that they allege that plaintiffs improperly kept from their time on the board. Whether the relevant documents are in plaintiffs’ or defendants’ possession is disputed. Regardless, plaintiffs’ objection fails. Plaintiffs claim that defendants would be able on their own find the information sought, not that plaintiffs lack that information. The fact that information is equally accessible to the requesting party is not a proper objection to discovery. (See Sanon v. Sanon, 51 Misc 3d 1214[A], 2016 NY Slip Op 50657[U], *3 [Sup Ct, Monroe County 2016] ["[T]his court can find no authority for the proposition that a party, from whom disclosure is demanded, may decline disclosure on a premise that the requesting party also has access to the requested documents.”].) For the same reason, the court finds unpersuasive plaintiffs’ objection that defendants seek publicly available information. Interrogatory no. 9 asks whether plaintiff Juan Taveras got a New York City Department of Buildings (DOB) permit before installing a fountain at 3681 Broadway. Plaintiffs argue that defendants can search public records to determine whether the DOB issued a permit. Defendants argue that records cannot affirmatively state that the DOB did not issue a permit. At most, defendants can infer that the DOB did not issue a permit if public records do not list a permit for the fountain. The fact that information is publicly available does not necessarily prevent a party from seeking that information during discovery from an adversary. (See Long v. State of New York, 33 AD2d 621, 621 [3d Dept 1969]; see also Alfaro v. Schwartz, 233 AD2d 281, 282 [2d Dept 1996].) The court finds that defendants’ interrogatory is not designed to harass and is not unduly burdensome. (See Kavanagh, 92 NY2d at 955.) Whether Tavares received a DOB permit is within his personal knowledge, so the interrogatory places no undue burden on plaintiffs. It is more efficient for plaintiffs to confirm whether Taveras obtained a permit than for defendants to search public records for the absence of a permit. (Cf. MBIA Ins. Corp. v. Countrywide Home Loans, Inc., 27 Misc 3d 1061, 1073 [Sup Ct, NY County 2010].) The court has considered plaintiffs’ remaining objections and finds them unavailing. As plaintiffs’ objections are meritless, the court grants defendants’ motion under CPLR 3124 to compel plaintiffs to respond to defendants’ interrogatories. The court denies, however, defendants’ motions to strike plaintiffs’ complaint under CPLR 3126 and to preclude plaintiffs from introducing any evidence with respect to any defenses which relate to this motion at trial under CPLR 3126. The court does not find that plaintiffs’ failure to respond adequately to defendants’ interrogatories was willful, contumacious, or in bad faith. Plaintiffs did not ignore defendants’ interrogatories or provide wholly inappropriate responses. (Cf. Kihl, 94 NY2d at 122 [striking complaint because plaintiff's responses to interrogatories were delayed, "lack[ed] any reasonable detail and improperly reserve[d] the right to provide answers at a later time”].) Plaintiffs provided substantive, albeit meritless, objections to defendants’ interrogatories. Further, plaintiffs responded to the interrogatories before the deadline that the court set in its status-conference order. II. Plaintiffs Object to Defendants’ Requests for Production Although plaintiffs state specific objections to 30 of defendants’ 33 requests for production, they have produced documents in response to some of defendants’ requests notwithstanding their objections. Plaintiffs have produced only 45 pages of documents in total. Plaintiffs object to request for production no. 8. Request no. 8 demands that plaintiffs provide an accounting for the time that any plaintiff served on the board. Defendants’ third counterclaim in this action is for an order requiring plaintiffs to provide an accounting. An accounting is an equitable remedy. (See Roslyn Union Free Sch. Dist. v. Barkan, 16 NY3d 643, 650 [2011].) Defendants now request that plaintiffs provide a full accounting during discovery. This would effectively grant defendants judgment on their accounting counterclaim before they have established their entitlement to that relief. Defendants’ motion to compel production with respect to request no. 8 is denied. Plaintiffs object to defendants’ requests for production as insufficiently bounded in time. This objection is unpersuasive. A request for production must be limited to an “identifiable” time period. (See Kantor v. Kaye, 114 AD2d 782, 782-783 [1st Dept 1985].) Defendants request documents for the time when any plaintiffs served on the board of 3681 Broadway HDFC. (See NYSCEF No. 119 at

1-10.) Plaintiffs know when they served on the board. Plaintiffs can, without undue effort, identify the precise time limitations on defendants’ discovery demands. Plaintiffs also contend that defendants already possess the documents that are responsive to their own requests. Plaintiffs interpose this as continuing objection to every one of defendants’ requests. (See NYSCEF No. 215 at 2.) Plaintiffs also state this as a specific objection to requests nos. 1-7, 9, 10, 13-20, 22, and 23. (See id. at.

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now
Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now
Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now
September 05, 2024
New York, NY

The New York Law Journal honors attorneys and judges who have made a remarkable difference in the legal profession in New York.


Learn More
April 29, 2024 - May 01, 2024
Aurora, CO

The premier educational and networking event for employee benefits brokers and agents.


Learn More
May 15, 2024
Philadelphia, PA

The Legal Intelligencer honors lawyers leaving a mark on the legal community in Pennsylvania and Delaware.


Learn More

Atlanta s John Marshall Law School is seeking to hire one or more full-time, visiting Legal WritingInstructors to teach Legal Research, Anal...


Apply Now ›

Shipman is seeking an associate to join our Labor & Employment practice in our Hartford, New Haven, or Stamford office. Candidates shou...


Apply Now ›

Evergreen Trading is a media investment firm headquartered in NYC. We help brands achieve their goals by leveraging their unwanted assets to...


Apply Now ›
04/15/2024
Connecticut Law Tribune

MELICK & PORTER, LLP PROMOTES CONNECTICUT PARTNERS HOLLY ROGERS, STEVEN BANKS, and ALEXANDER AHRENS


View Announcement ›
04/11/2024
New Jersey Law Journal

Professional Announcement


View Announcement ›
04/08/2024
Daily Report

Daily Report 1/2 Page Professional Announcement 60 Days


View Announcement ›