Greenstar Enters., Inc. v DiSalvo

[*1] Greenstar Enters., Inc. v DiSalvo 2005 NY Slip Op 51512(U) [9 Misc 3d 1112(A)] Decided on September 21, 2005 Supreme Court, Kings County Rivera, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 21, 2005
Supreme Court, Kings County

GREENSTAR ENTERPRISES, INC., Plaintiff,

against

STEVEN DISALVO, Defendant,



24452/2003

Francois A. Rivera, J.

By motion filed on January 1, 2005, plaintiff seeks an order pursuant to CPLR §3216 striking defendant's answer to the complaint, entering judgment for the plaintiff by default and imposing sanctions against the defendant pursuant to 22 NYCRR 130-1.1. By cross motion filed on April 26, 2005, defendant moves pursuant to CPLR §§2215 and 3211(a)(7) for an order dismissing the complaint and imposing sanctions against the plaintiff. By motion filed on May 19, 2005, plaintiff also seeks to strike the note of issue filed by the defendant pursuant to 202.21 of the Uniform Rules of the Trial Courts. Defendant opposes plaintiff's motions.

On July 3, 2003, plaintiff commenced the action by filing a summons and verified complaint. On July 30, 2003, defendant served the answer to the complaint. On August 21, 2003, defendant served and filed an amended verified answer. Plaintiff's complaint contains five causes of action and alleges defendant's negligence, breach of fiduciary duty, breach of contract, conversion and replevin. Defendant's verified answer asserts eleven affirmative defenses.

Plaintiff, Greenstar Enterprises, Inc., (hereinafter Greenstar) is a domestic corporation engaged in the business of purchasing, developing and selling real estate. Defendant is a resident of New Jersey.

Prior to the instant motions, Greenstar moved by order to show cause for an order compelling the deposition of the defendant. The government of the United States of America moved for leave to intervene for the limited purpose of opposing the motion to compel defendant's deposition. The government sought a stay while it investigated potential tax crimes of Robert Toussie, the alleged owner of Greenstar. This court granted a ninety day stay which the parties extended by stipulation to May 22, 2004.

The court will address the motions in the order of their filing. Greenstar's motion of January 5, 2005, contains eight annexed exhibits and alleges the following facts. On June 22, 2004, after the stay had expired, plaintiff served defendant a notice of deposition with a scheduled date of July 13, 2004. On consent, the parties rescheduled it to July 22, 2004. Once again, the government sought to intervene. On November 18, 2004, this court held a status [*2]conference and thereafter issued an order directing that the defendant appear for his deposition on or before January 3, 2005. During the latter part of November 2004, plaintiff in response to a request by the defendant, moved up the defendant's deposition date to December 28, 2004.

On the afternoon of December 27, 2004, defendant sent plaintiff's counsel a letter by facsimile transmission requesting the date of his deposition in writing. Later that afternoon, plaintiff sent defendant a letter by facsimile transmission confirming the deposition scheduled for the next day. At about 7:00 pm that evening, defendant's counsel left a voice mail message to plaintiff's counsel stating the following: "My client has requested that I advise you that he will not appear at a deposition until he receives, from you, a letter requesting his appearance on a specific date, at a specific time and with a specific attorney questioning him on behalf of Greenstar for the purposes of the deposition in this action. I guess that's pretty clear. If you have any questions give me a call. I can also say that's since its 7:00 o'clock, that you will probably not be getting this until tomorrow, so let's —means I guess that the deposition has—Mr. DiSalvo will not be showing up tomorrow. My number is 212-490-3000 [sic]."

The defendant did not appear for his deposition. Defendant's opposition papers to plaintiff's motion for sanctions and for a default judgment consists of the affirmation of the defendant and of his counsel. Neither affirmation disputes plaintiff's allegations of fact. Rather, defendant contends that the manner which plaintiff chose to notify the defendant of his deposition date was inadequate and contrary to the requirements of CPLR §3107.

CPLR §3107 concerns notice of taking oral questions and provides in pertinent part as follows: A party desiring to take the deposition of any person upon oral examination shall give to each party twenty days` notice, unless the court orders otherwise. The notice shall be in writing, stating the time and place for taking the deposition, the name and address of each person to be examined, if known, and, if any name is not known, a general description sufficient to identify him or the particular class or group to which he belongs.

CPLR §3126(3) provides that as a penalty for refusal to comply with order or to disclose, the court may make an order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or any part thereof, or rendering a judgment by default against the disobedient party.

Pursuant to the Rules of the Chief Administrator of the Courts Part 130 as set forth in 22 NYCRR 130-1.1, the court may award to any party or attorney in a civil matter costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney fees, resulting from frivolous conduct.

For the purpose of this Part, conduct is frivolous if: (1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false. If a court awards costs or sanctions, it must be done in a written decision setting forth the [*3]offending conduct, why that conduct has been deemed frivolous and why the amount awarded is appropriate. The decision as to whether to award sanctions is within the sound discretion of the court (Wagner v. Goldberg, 293 AD2d 527 [2nd Dept. 2002]. In order to impose sanctions, the court must find that defendant's motion asserts material falsehoods or is without legal merit and undertaken primarily to delay or prolong the litigation, or to harass or maliciously injure another (Premier Capital v. Damon Realty Corp., 299 AD2d 158 [1st Dept. 2002]; see also Knoff v. Johnson 5 Misc 3d 1003(A) [NY Sup 2004]). If a court awards costs or sanctions, it must be done in a written decision setting forth the offending conduct, why that conduct has been deemed frivolous and why the amount awarded is appropriate (Breslaw v. Breslaw, 209 AD2d 662 [2nd Dept 1994], see also Phokus Group, Inc. v. Calcon, Inc., 7 Misc 3d 1013(A) [NY Sup 2005]).

This branch of the motion was heard on March 11, 2005. After oral argument of counsel, this court found that defendant's conduct merited sanctions and reserved judgment on the amount and on plaintiffs application to strike defendant's answer and to enter a default judgment. This decision was premised on the fact that the defendant knew the date, time and place of his deposition in that he participated in the selection of the date chosen. CPLR § 3107 requires a written notice of deposition unless the court orders otherwise. The deposition was ordered by this court and as such obviated the requirement of a written notice. Furthermore, plaintiff did provide defendant's counsel with a written notice of the deposition appointment although not required to do so. Therefore, this court finds from the totality of the circumstances that defendant's placement of a specific precondition to his attendance was a pretext to provide an excuse for not attending. The court finds this conduct was designed to delay discovery and was frivolous.

By decision issued March 11, 2005, this court gave plaintiff until March 25, 2005, to submit an affirmation setting forth its costs and attorneys fees in connection with the January 5, 2005 motion. Defendant was given until April 8, 2005 to submit any objection to the amount of sanctions requested by plaintiff. Defendant was ordered to appear for his deposition on or before April 29, 2005 and the parties were directed to return on May 6, 2005 for further proceedings on the issues reserved.

On April 7, 2005, defendant appeared pro se for his deposition and gave as a response to every questioned asked "I'm unable to answer that question." Plaintiff's counsel contacted the court by telephone conference and advised the court of defendant's behavior. The parties were advised by speaker-phone to continue the deposition. Defendant continued to give the same response.

Plaintiff sought as a sanction $11,375.00 in attorney's fees and $273.54 in costs. The vouchers offered in support of this figure contained redactions, crossed out numbers and computation errors. The accompanying affidavit also failed to sufficiently explain the figure requested. Defendant's sole stated basis for opposing the sanctions amount requested was that the invoices of plaintiff's counsel stated Robert Toussie's name instead of Greenstar. The sanction amount requested is denied without prejudice. Plaintiff has thirty days from the date of this decision to resubmit an affidavit in support of sanctions and costs.

The court takes note that defendant's prior counsel was discharged before the deposition was conducted. It is well settled that the drastic remedy of striking an answer is inappropriate absent a clear showing that the failure to comply with discovery demands is willful, [*4]contumacious, or in bad faith (Harris v. City of New York, 211 AD2d 663 [2nd Dept 1995]). The Appellate Division, Second Department has held that trial courts may strike pleadings for a party's willful, deliberate and contumacious failure to comply with disclosure orders and a party's failure to offer any reasonable excuse for delay. It is equally well settled that where a party disobeys a court order, and by his or her conduct, frustrates the disclosure scheme provided by the CPLR, dismissal of a pleading is within the broad discretion of the trial court (Zletz v. Wetanson, 67 NY2d 711[1986]. Furthermore, the absence of an excuse for the delay in responding to discovery demands, and the delaying party's failure to object to the demands, supports an inference that the failure to comply was willful (Brady v. County of Nassau, 234 AD2d 408 [2nd Dept 1996]). There is no dispute that the defendant failed to appear for his deposition scheduled for December 28, 2004. On March 11, 2005, the court advised the defendant that his failure to appear at his deposition to be scheduled on or before April 29, 2005, would result in the striking of his answer. There is no dispute that he appeared on April 7, 2005 and chose not to answer any questions. This conduct was done without seeking a protective order and without offering any objection to the questions asked. Defendant's failure to comply was willful.

By reserving decision on this portion of the motion, while at the same time directing defendant's deposition and making a finding that sanctions were warranted, it was the court's expectation that defendant would finally comply and permit the taking of his deposition. Instead, the defendant inexplicably refused to answer any question asked of him. This conduct demonstrated defendant's continued willful determination to disobey this court's order of discovery. Plaintiff's motion to strike defendant's answer for defendant's willful, deliberate and contumacious failure to comply with two court orders for discovery is granted. The striking of a defendant's answer, pursuant to CPLR §3126(3) is equivalent to defendant's defaulting in answering the summons and complaint (Fappiano v. City of New York, 5 AD3d 627 [2nd Dept. 2004]). If the defendant's answer is stricken an inquest must be conducted to determine damages (Hudson v. City of New York, 267 AD2d 351[2nd Dept 1999]).

By notice of cross motion filed with the Kings County Clerk's office on April 26, 2005, defendant moves pursuant to CPLR §321(a)(7) for an accelerated judgement dismissing plaintiff's complaint on the basis that its fails to state a cause of action. Defendant also seeks fees, costs and disbursements as well as an order imposing sanctions on the plaintiff and plaintiff's counsel. The motion papers contains defendant's affidavit and ten annexed exhibits.CPLR §3212(b) provides, in pertinent part, as follows: A motion for summary judgment shall be supported by affidavit, by a copy of the pleadings and by other available proof, such as depositions and written admissions. The affidavit shall be by a person having knowledge of the facts; it shall recite all the material facts; and it shall show that there is no defense to the cause of action or that the cause of action or defense has no merit.

Defendant's motion papers do not include a copy of the pleadings. Failure to submit copies of the pleadings to the court in support of a motion for summary judgment renders the moving papers defective requiring the court to deny the motion (Hamilton v. City of New York, 262 AD2d 283 [2nd Dept 1999]; see also Derily v. Fitzpatrick, 6 Misc 3d 1027(a)[NY Sup. 2005]). [*5]

CPLR § 2214 sets forth the requirements for motion papers: A notice of motion shall specify the time and place of the hearing on the motion, the supporting papers upon which the motion is based, the relief demanded and the grounds therefor. Relief in the alternative or of several different types may be demanded.

Furthermore, defendant's affidavit contains no allegations of fact pertaining to the motion for an accelerated judgement of dismissal or for the request for sanctions. The annexed exhibits consisted of correspondence, sworn statements of various attorneys submitted on other motions, and other unrelated documents. None of the annexed documents had any direct connection to the motion. The procedural deficiencies of the motion papers warrants denial of the entire application.

Plaintiff's motion of May 19, 2005, seeks to strike the note of issue served and filed on April 28 ,2005. The court rules and procedures pertaining to the note of issue and certificate of readiness are found in Uniform Rules for Trial Courts (hereinafter the Uniform Rules) (22 NYCRR) section 202.21. The procedure for vacating a note of issue is found in 22 NYCRR 202.21(e) and provides in pertinent part as follows: "Within 20 days after service of a note of issue and certificate of readiness, any party to the action or special proceeding may move to vacate the note of issue, upon affidavit showing in what respects the case is not ready for trial, and the court may vacate the note of issue if it appears that a material fact in the certificate of readiness is incorrect, or that the certificate of readiness fails to comply with the requirements of this section in some material respect."

Plaintiff's papers in support of this motion set forth the allegations pertaining to defendant's aforementioned failure to cooperate with the taking of his deposition. Defendant's opposition papers, although voluminous and replete with exhibits, do not directly address the contention that the defendant has not cooperated with the taking of his deposition. Plaintiff's motion is timely. As such, plaintiff's must merely demonstrate in what respect the case is not ready for trial (see generally, Audiovox Corp. v. Benyamini, 265 AD2d 135-138 [2nd Dept 2000], see also Bennett v. King of Technology NY, Inc. 8 Misc 3d 1005(a) [NY Sup 2005]). This court has determined that the defendant willfully failed to cooperate in the taking of his deposition testimony leaving the plaintiff's unready for trial. Having met there burden, plaintiff's application to strike the note of issue should be granted.

It is noted, however, that plaintiff's application to strike the note was not requested in the alternative to plaintiff's motion to strike defendant's answer. Inasmuch as the court is directing that the underlying complaint proceed to an inquest on the issue of plaintiff's damages, the striking of the note of issue is clearly counterproductive to proceeding on the inquest. The defendant opposes the application and it is logical to assume that the plaintiff would no longer wish this relief under these circumstances. The court therefore in an exercise of discretion denies the request to the strike the note of issue without prejudice.

In sum, plaintiff's application for an order striking defendant's answer to the complaint and for sanctions is granted. Plaintiff is directed to proceed to an inquest on the issue of damages and to resubmit to the clerk of this part, within thirty days of this order supporting papers on its [*6]request for sanctions. Defendant's cross-motion for an order dismissing the complaint and imposing sanctions against the plaintiff is denied. Plaintiff's request for an order striking the note of issue is denied.

The foregoing constitutes the decision and order of the court.

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J.S.C.