Pete' s All Service Corp. v Colonial Sur. Co.
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Pete' s All Service Corp. v Colonial Sur. Co. 2012 NY Slip Op 30568(U) February 23, 2012 Sup Ct, Nassau County Docket Number: 5891/09 Judge: Denise L. Sher Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SCAN SHORT FORM ORDER SUPREME COURT OF THE STATE OF NEW YORK PRESENT: HON. DENISE L. SHER Acting Supreme Cour Justice . TRlL/IAS PART 31 NASSAU COUNTY PETE' S ALL SERVICE CORP. Index No. : 5891/09 Motion Seq. No. : 04 Motion Date: 02/17/12 Plaintiff, - against - COLONIAL SURETY COMPANY Defendant. COLONIL SURETY COMPANY Third- Par Plaintiff - against - EASTLAND CONSTRUCTION, INC. NANCY SCHULMAN and ALLAN SCHULMAN, Third- Par D fendants. The followin papers have been read on this motion: Papers Numbered Order to Show Cause Affrmations and Exhibits Affrmation in Opposition and Exhibits Upon the foregoing papers , it is ordered that the motion is decided as follows: Third- par defendants move , pursuant to CPLR 1007 , for an order limiting third- plaintiff s claims to the claims relating to the plaintiff s main cause of action; and move par , pursuant [* 2] to CPLR ~3126 , for an order precluding thrd-par plaintiff from calling a witness at trial when it failed to produce a witness with knowledge at a deposition and precluding third-par plaintiff from producing any documents at trial that are responsive to a previously served Discovery Notice; and move for an order staying the trial of ths matter until such time as the Cour d~termines the issues raised in the instant motion. Defendant/third-par plaintiff opposes the motion. Ths is an action for breach of contract and payment on a bond brought by plaintiff, a subcontractor to third-par defendant , against defendant/third-par plaintiff, who was thrd-par defendants ' payment and performance bond sur~ty on the construction project on which plaintiff was the steel installation subcontractor. Plaintiff brought an action against defendant/thrd-par plaintiff who then impled third- par defendants. Third- par defendants submit that there is an issue between themselves and defendant/third- par plaintiff as to the substance of the third par claim , as well as with the procedural postue of the case. Counsel for defendant/third- par plaintiff has " stated that this claim was not just for the approximately $50, 000 that Pete s All Service had sued Colonial for but for all the claims arising out of the Offce of General Services (OGS) contract that Pete s was subcontracting for; he stated that this amount was just under $1 000 000. 00. " Counsel for defendant/third-par plaintiff contends that the pleadings provided notice of the extent of the claim and that the discovery engaged in had also done so. Counsel for third-par defendants argues that there was nothing in the fie that he received from his clients that would indicate that the claim was for that value Gust under $1, 000 000. 00). He fuer argues that counsel for defendant/third-par plaintiff has never produced a witness with knowledge for an Examination Before Trial ("EBT" In response to counsel for third- par defendants ' contention that counsel for defendant/third-par plaintiff had never produced a witness with knowledge for an EBT, counsel for defendant/third-par plaintiff claims that defendant/third-par plaintiff had produced a [* 3] witness from Beacon Consulting Group, Inc. (" Beacon ), who had analyzed the claim and completed the work on the OGS project. However , counsel for third-par defendants submits that the deposition of the Beacon witness was terminated and held open because he had no personal knowledge of the facts surounding plaintiffs claim. See Third- Par Defendants ' Affirmation in Support Exhibit B. Counsel for third-par defendants fuer submits that, upon learing that defendant/third-par plaintiff was going to rely on Beacon as its witness in ths matter, third- par defendant served a demand for documents upon defendant/third-par plaintiff which required production of all the Beacon records and analysis. See Third- Par Defendants ' Affirmation in Support Exhibit C. Counsel for third-par defendants argues that the deposition of third-par defendant Allan Schulman " also exposes that this claim was never about anyting other than Pete s All Service. If this claim were really about all ofthe issues suroundin the OGS project, Mr. Schulman would not have been questioned exclusively about Pete s All Service. When it was Colonial' s tun to depose Mr. Schulman in this action , the attorney for Colonial asked him precisely five (5) questions in total. All of them related to the value of the Pete s All Service claim.... It canot be believed that in its litigation of a $1 000 000. 00 claim , that counsel for Colonial would ask five questions only about a $50 000. 00 portion of that claim. See Third~ Par Defendants ' Affirmation in Support Exhibit D. Third- party defendants contend that there is nothing in the pleadings , discovery or depositions that would put anyone on notice that this claim was about anyting other than the Pete s All Service claim. Third-par defendants add that " (t)he liabilty to be imposed upon a third-par defendant in an thrd-par action commenced pursuant to CPLR 1007 should' arse from or be conditioned upon the liabilty asserted against the third- par plaintiff in the main action. ", Third-par defendants also submit that the lack of appropriate discovery in this case is the basis for the other component of their motion , specifically to preclude defendant/third- par [* 4] plaintiff from offering testimony of a witness with knowledge in ths case due to its failure to produce a witness with knowledge at the EBT. Third- par defendants contend that , despite the existence of a Preliminar Conference Order , two separate Cour Orders requiring production of a witness with knowledge and a side stipulation , defendant/third-par plaintiff never produced a witness with knowledge. Third-par defendants argue that " (a)llowing ths matter to move forward to trial and at that trial to allow Colonial to produce a witness with knowledge and documents that are responsive to previously served discovery notices would be counter to the CPLR and the case law of this State... .It would be fudamentally unair to reward Colonial for violating repeated cour orders and stipulations by letting it proceed to trial without having provided any of the discovery demanded and ordered. In opposition to the motion, counsel for defendant/third-par plaintiff submits that " (o)n Februar 8 , 2012 , counsel for Colonial and the Third- Par Defendants appeared before the Honorable Denise L. Sher , J. C., for the presentation of the instant Order to Show Cause at which time this Cour refused to stay the trial and stated that the tral will go forward on March 2 2012 , as scheduled , limited to the scope of the trial to indemnty of the Pet~ s payment bond claim and related expenses (as expressly permitted by the indemnity agreement). Accordingly, the only issues for this Cour to address are whether Colonial should be permitt~d to introduce documentar and testimonial evidence regarding Colonial' s third-par contractual and common law indemnification claims related to Colonial' s settlement with the Plaintiff on May 4 2011, afer the dates for discovery were over , after the Note of Issue was filed , after the matter had appeared at trial calls and counsel marked the case ' ready, ' and after counsel for the Third- Par Defendants had moved to withdraw. Counsel for defendant/third-par plaintiff argues that the Cour should deny the instant motion because " (a) the Third- Par Defendants contractually consented to permit Colonial to establish its prima facie case through the submission of a sworn , itemized statement , or other evidence , of disbursements by Colonial , which documents the Third- Par requested in discovery and many of which did not exist until after Defendants never settlement with Pete s; (b) the [* 5] Third-Par Defendants waived any rights to discovery - both expressly at the deposition of Allan Schulman , and implicitly by idly ' sitting on their hands ' thoughout the pendency of the action failng to object to the filing of the Note ofIssue , and waiting almost eighteen (18) months to raise the issue with the Court on the eve of trial; and , (c) the Third- Par Defendants ' eleventh- hour motion seeking preclusion oftestimony and documents is procedurally deficient in light of the fact that the Third-Par Defendants never made a good- faith demand upon Colonial to resolve any discovery issues as required by the Uniform Cour wil beat Rules , never requested the documents that issue in the third-par action and never fied a motion to compel discovery under CPLR ~ 3124. Counsel for defendant/third-par plaintiff adds that this matter was originally managed by the Honorable Daniel Marin , A.J. C. when the paries appeared for status conferences during the fall and winter of2009. In Januar 2010 , the matter was transferred to this Cour and , on Januar 2010 , this Cour so-ordered a stipulation between the paries which directed the paries to exchange all discovery demands by Februar 9, 2010 and to provide responses to any outstanding demands by Februar 19 , 2010. See Defendant/Thrd- Par Plaintiffs Affirmation in Opposition Exhibit B. Counsel for defendant/third- par plaintiff contends that third-par defendants did not serve any discovery demands or deposition notices in accordance with the Cour' s deadlines as set fort in the Januar 29 2010 Order. Nor did the third-par defendants timely respond to defendant/third-par plaintiff s discovery demands. Counsel for defendant/third-par plaintiff states that "the Third- Par Defendants have never - not even to ths day- provided written responses to Colonial's interrogatories and documents demands which were timely served in compliance with the Januar Order , this may explain why the Third- Par Defendants did not move to compel , since they lacked, and stil lack , the ' clean hands ' and statement of compliance with their own discovery obligations required by the rule. Counsel for defendant/third-par plaintiff fuer submits that, on March 30 2010 , at the end of third-par defendant Allan Schulman s deposition, the third- par defendants , through their then counsel, expressly and unambiguously waived their appearance at the deposition of '" [* 6] defendant/third-par plaintiffs representative. " Specifically, Thrd- Par Defendants ' counsel Joseph Harbeson , with Mr. Schulman seated next to him , stated on the record: ' I understand the We don representative of Colonial is here. I'm going to waive my attendance at that deposition. really need to attend it and for good practical reasons. we re not going to Defendants ' Affirmation in Support Exhibit D. Defendant/thrd- par was deposed by plaintiffs counsel and plaintiffs counsel See Third- Par plaintiffs representative was the only one who adjoured the deposition and reserved the right to re-notice defendant/third-par plaintiffs deposition. Counsel for defendant/thrd-par plaintiff contends that ths issue is moot since plaintiff and defendant/third-par plaintiff have settled their dispute in this matter , Furhermore , counsel for defendant/third-par plaintiff argues that they did not produce a witness without knowledge in order to thwar discovery or violate the Cour' s orders. Counsel for defendant/third- par plaintiff states that , on May 18 , 2010 , l~ssthan two weeks prior to the trial certification deadline , third-par defendants for the first time ard afer the expiration of the deadlines set fort defendant/third-par in the Cour' s Januar and March Orders , served plaintiff with a request for documents. See Third- Par Defendants Affirmation in Support Exhibit C. Counsel for defendant/third- par plaintiff claims that said discovery request was " overly broad and non-specific " and " only sought documents pertaining to Beacon s work as a consultant on the Project. " The Thrd- Par Defendants did not request copies of bils or costs incured by Colonial to date in litigating Pete s claims , which would obviously be relevant to the third-par indemnification action. See id. Third-par defendants objected to service of defendant/third-par plaintiffs May 18 , 2010 DiscoveryDemand. See Defendant/Third- Par Plaintiff s Affirmation in Opposition Exhibit E. As previously stated in defendant/thrd-par plaintiffs Affirmation in Opposition , on Februar 8 , 2012 , par defendants ' this Cour refused to stay the trial of the instant matter , as requested in third- instant Order to Show Cause , and held that said trial will go forward on March , 2012 , as scheduled , and the scope of said trial wil be limited to indemnty of plaintiff s payment bond claim and related expenses (as expressly permitted by the indemnity agreement). [* 7] Accordingly, that portion ofthird- par order limiting third-par defendants ' motion , pursuant to CPLR 1007 , for an plaintiffs claims to the claims relating to the plaintiffs main cause of GRATED. action is hereby With respect to third-par defendants ' motion , pursuant to CPLR 9 3126 , for an order par plaintiff from callng a witness at trial when it failed to produce a witness with knowledge at a deposition and precluding third-par plaintiff from producing any precluding thrd- documents at trial that are responsive to a previously served Discovery Notice , the Cour finds that counsel for defendant/third-par plaintiff has demonstrated that the discovery demands made by thrd-par defendants that are at issue were made well after the expiration of the discovery deadlines set fort in the Cour' s Januar and March Orders. See Defendant/Third- Par Plaintiffs Affirmation in Opposition Exhibits Band C. Furermore , counsel for defendant/third-par plaintiff has shown that counsel for third-par defendants expressly and unambiguously waived third-par defendants ' appearance at the deposition of defendant/third~ par plaintiffs representative , thereby makng the arguent that counsel for defendant/thrdpar plaintiff had never produced a witness with knowledge for an EBT one that lacks a good faith basis. See Third- Par Defendants ' Affirmation in Support Exhibit D. Counsel for defendant/thrd-par plaintiff has additionally shown that thrd~par defendants failed to object to the fiing of the Note ofIssue and waited almost eighteen (18) months to raise the issue in its instant Order to Show Cause. Additionally, counsel for defendant/thrd-par plaintiff has shown that the third-par defendants never made a good- faith demand upon defendant/thrd~ plaintiff to resolve any discovery issues as required by the Uniform Cour Rules , par never requested the documents that will be at issue in the third-par action and never filed a motion to compel discovery under CPLR 3124. Finally, counsel for defendant/third-par plaintiff has submitted documenta evidence that the Indemnity Agreement between the paries provides defendant/third-par plaintiff the right " (i)n any claim or suit hereunder , (to present) an itemized statement of (Colonial' s) loss and expense , sworn to by an officer of (Colonial), or the vouchers or other evidence of disbursement by (colonial), shall be prima facie evidence of the fact and [* 8] extent of the liability hereunder of Indemnitor(s). See Defendant/Third- Par Plaintiffs 4( d). Affirmation in Opposition Exhibit A at It is also noted that , at the Januar 11 , 2012 status conference held before this Cour , the Cour issued a ruling denying counsel for defendant/third par plaintiff s requ~st that the re-open discovery and that challenged the sufficiency of defendant/thrd par Cour plaintiff s discovery responses. Said requests were rejected as the Cour ruled that such challenge by third- par defendants should have been made in July of 20 1 0 , after the dates in th~ June Stipulation had expired , and/or within twenty days of the filing ofthe Note ofIssue. Accordingly, third-par defendants ' motion , pursuant to CPLR ~ 3126 , for an order par plaintiff from callng a witness at trial when it failed to produce a witness with knowl~dge at a deposition and precluding third-par plaintiff from producing any precluding thrd- documents at trial that are responsive to a previously served Discovery Notice is hereby DENIED. Defendant/third-par plaintiff and third- par defendants shall appear for Trial in IAS Par 31 of the Nassau County Supreme Cour, 100 Supreme Cour Drive , Min~ola, N~w York, on March 9, 2012 , at 9:30 a. This constitutes the Decision and Ord~r of this Cour. ENT DENISE L. SHER, A. Dated: Mineola, New York Februar 23, 2012 ENTFRED FEB 28 2012 NASSAU COUNTY COUNTY CLERK' S OF'IC
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