General Motors Acceptance Corp. v New York Cent. Mut. Fire Ins. Co.
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General Motors Acceptance Corp. v New York Cent. Mut. Fire Ins. Co. 2012 NY Slip Op 31304(U) January 31, 2012 Sup Ct, NY County Docket Number: 109668/2006 Judge: Joan M. Kenney 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] SCANNED ON 511712012 SUPREME COURT OF THE STATE O F NEW YORK NEW YORK CQUNTY --- PRESENT: Dated: I, ' -_I. ._ , J.S.C. u -' ',k:'' I , . <,: '4, CHECK ONE: ..................................................................... . <Q'# .1 11 11,18 PART I 2. CHECK AS APPROPRIATE: ......................... ..MOTION I : S 0 CASE DISWSED 0GRqNTED r]DENIED [* 2] SUPREME couKpr OF TIE STATE OF NEW YORK COUNTY OF NEW YORK:IAS Part 8 X _____________________II_________________---------------------------~~~~ General Motors Acccptaice Corporation and American Automobile Insumicc Company, P laiiiti ffs, -against- DECISION AND ORDER Index Number.: 109668/2006 Motion Seq. No.: 003 New York Central Mutual Fire Insurance Company, Recitation, as required by CPLR 221 9(a>,of the papers considered in review of this motion to Papers Notice of Motion, Affidavits and Exhibits Affirmation in Opposition & Exhibits Reply Affirmation Plaintiff seeks an Order of Preclusion; an O MAY 172012 r $ NEW YORK ~ ~ ~ 1-8 9-16 17 - 20 ~ ~ & against c charge n defendmt at trinl; and an Order, pursuant to CPLR 3212, for summary judgment in plaintiffs favor on the issue of liability. UAL BACKGROUND Briefly, p1aintiKs Gciieral Motors Acceptance Corporation (GMAC) arid American Automobile Insurance Coinpany (AAIC), seek to recover monies they paid towards a settlement of an undcrlying personal injury matter (the Sette Action) on grounds that defendant, New York Central ' Mutual Fire Insurance Company WYCM), as the primary insurer of GMAC, failed to settle the Setle Action prior to trial, resulting in a jury verdict of $1.5 million dollars, exposing GMAC and its excess insurance carrier, RAIC to the $1.2 million dollars paid in excess ofNYCM's $300,000.00 policy lirnils (the bud faith action). On June 30,201 1, this Court issued a conditional order and directed defendant to produce: e [* 3] ( I ) [t]ranscriptions of coininittee meeting audio recordings regarding the Sette Action maintained by NYCM employce, David Vibburd; (2) lotus Notes maintained by claims personnel concerning the Seltc Action as testified to by NYCM witness, Beth Mcnuez,; and (3) all correspondence between defendant, NYCM and Raxter & Smith (now known as Bnxtcr, Smith & Shapiro) regarding the Sette Action up to the time of the commencement of this bad faith action (the June 30, 201 1 order). This Court Culther Ordered that a Failure to cornply with this Court s directive could result in both an Order of Prcclusion, as wcll as an adverse inference charge against defendant at trial. On or about Aug~ist19, 201 I defendant s produced an Affirmation of Compliauce (the complinnce ai-liimation) together with attached documents and an August 12,201 1 affidavit from defendant s assistant vice president, Diane Wildey. In this affidavit, Diane Wildey asserted, plainly, that she located the following documents annexed to the compliance affirmation: 1. 2. 3. A copy ofn transcription for the only committee meeting Diane Wildey recalls on the Selte Action, which took place on May 19, 2000 (annexed ELS Exhibit A to the compliance affirmation); A copy of the File Review Analysis for the Setle Action which contains the lotus notes about which Beth Meiiuez testified to during her deposition on April 7,2009 (annexed as Exhibit B to the compliance affirmation); and Copies of correspondences between Baxter & Suiith and defendant, NYCM, regarding the Sette Action. ARGUMENTS IJlninliffnow seeks an Order precluding defcndmt from offering any evidence in opposition to plaintiffs claim of liability and an adverse inference charge at trial because: (1) defendant failcd to cornply with this Court s Julie 30,20 1 1 order. In particular, plaintiff avers that no transcription(s) of the committee meeting(s) were in fact produced and only letters froin Baxter & Smith were produced, rather than all written correspondences between Baxter & Smith and defendant NYCM, 2 [* 4] as directed to do so by the Court. Plaintiff also seeks an Order directing judgment in heir favor 011 thc issue of liability, pursuant to CPLR 32 12. Defendant contends that plaintiff's motion must be denied because: (1 ) thc summary judgment motion is untirndy; (2) plaintiffs d i e l ' seeking to preclude dtfmdant Iron1 offering any evidence in opposition to plaintifl"~ claim of liability is equivalent to an Order striking defendant's answer for alleged spoilation of evidence nnd this Court has already held by its Julie 30,201 1 Order that plaintiff failcd la deliionstrate entitlctnent to said relief; and (3) defeiidant fully coinplicd with this Court's directive and produced the requested documents, rendering plaintifl's motion, moot in its entirety To the extent that plainliffs seek any dispositive relief, pursuant to CPLR 3212, said application is denied, as untimely. There can be no dispute that this Court directed that any dispositive motions be interposed no later than July 4,201 0.' llpon review of the documents submitted with the compliance affirmation, this Court concludes that defendant has willfully and contumaciously failed to comply with discovery demands and Court orders. Exhibit to the compliance affirmation is not a copy of a transcription meeting held on May 19, 2000. Rather it appears to be EL summary of facts in the Sette Action. Exhibit "A" 'It is notcd that defendant timely interposed a dispositive motion (Motion Seq.OO1) pursuant to CPLR 32 1 2, which is currently subjudice. This Court has held in abeyance, .mu .sponte, defendant's dispositive motion until the motion to strike defcndant's answer for failing to comply with discovery (Motion Seq. 002), submitted at the same time as defendant's dispositive motion, was resolved and discovery fully completed. Notably, discovery issues continue to be a contentious matter between the parties. Rather lhan deny defendant's dispositive inotion as prenialurc for failure to complete discovery (see also CPLR 3212), this Court held in abeyance determination of dcfcndant's summary judgment motion and granted defendant an opportunity to curc its failure to produce dctnanded and ordered discovery. 3 [* 5] to the compliance affirniation is a document dated April 24, 1994, years before the purported May 19,2000 cmimittee mectiiig 111 question. Dnve Vibbard, a NYCM employce who was s a d lo have niaintaincd the transcriptions of the audio recordings of these committee meetings produced an affidavit dated August 12. 201 1, as part ofthe compliance nffirrnatioii (Exhibit 3 ) stating that he was not in possession of any docuiiients or files concerning the Sette Action. There can be no doubt that these documents wcrc, in fact, maintained by him at some point, however, absent ally explanation as to where these documents are, or what happened to them alter it was in his possession, this Court can only surmise and coiiclude that the documents went missing and/or were destroyed during the coursc of this litigation. No one with pcrsonal knowledge of the facts presented an affidavit setting forth what search Dave Vibbrad conducted to produce the transcriptions of the committee meeting audio recordings. In fact, there has been a blatant disregard for the submission of any reasonable explanation as to thc location of these, nnd other, documents. In sum, Dave Vibbard s affidavit is devoid ofany facts that would clarify what happened to the documents sought to be produced and claimcd to hnvc cxisted by defendant itself. Diaric Wildey s stateinelit in her latest affidavit dated, Janusuy 10, 2012, asserts that Dave Vibbard didn t h a w to asscd that he searched for documents in order to comply with this Cowl s order bccause she personally conducted a search ofany documents responsivc to the Court s ordcr. This argument is spacious and more to the point, it s the first time derendant asset-ts that one of its many employees who huidlcd the Sette Action, searched for the inissing documents which are the subject of this motion. The afiidavit Diane Wildey prescnted in support of the coinpliance affirmtion nicrely statcd that she locatcd thc following documents. Clearly Exhibit A to the complimcu affirmation did not comply with this Court s directive and something has happened to 4 [* 6] these documentshudio recordings/transcriptions of conunittee meetings etc. that have not been produce despite tcstiniony fiom defendant itselfthat it did, at some point in time during the course of the instate litigation, exist. Ik xhibit B to the compliance affirniation, is labeled File Review Analysis for Liability for Claims with an open dalc of Jaiiuary 9,200 1 and a liability close date of October 17,2007. Plaintifr does not yeem to object to the fact that these contain the missing lotus notes as previously demanded, FAiihit C of thc compliance affirmation are the purported correspondences from Bnxter & Smith to defendant, NYCM. It is obvious, from I h c content ofthese corrcspondences, that Baxler & Smith was responding to correspondences from NYCM, yet copies of defendant s correspondence(s) were omitttcd from production, Diane Wildey, by affidavit dated January 10,2012, now claiins that all of her communications with Bwter & Smith were by way of n telephone conversation(s) and any references in Baxter & Smith s letters claiming that they were replying to NYCM s written communications, is, in Dianc Wildey s belief, referenced in error. This Court finds, howevcr, that Diane Wildey s statements are self-serving nsscrtions because defendant has not produced any stateinents from Baxter & Smith claiming that their letters rererencing corrcspondences from defendant NYCM was written in error and was a mistake on Baxter & Smith s part. It is noted that Diane Wildcy herself identified in thc compliance affirmation that she was able l o locate thc correspondences hetween Rnxter & Smith and defendant NYCM (emphasis added). yet failed to produce all these documents. Lastly, Baxter & Smith s letters are addressed to employees olher than Diane Wildey and 110 affidavits have been presented by these employees that thcy didn t communicate and/or provide written responses to Baxter & Smith. [* 7] At this juncturc, this Court can only conclude that defendant has willfully failed to producc discovery as demanded and Court ordered. It is apparent that documents once in defendant s possession have been destroyed during the course of this litigation, since it was during the coursc of this litigation that defendant adniitted to possessing the now missing documents. Diane Wildey s affidavit datcd October 8,20 10, contends that even if transcriptions of committee meetings did exist, they wcre destroyed. No esplanntion is provided to this Court as to how and when they could have been destroycd. Diane Wildey asserts in her affidavit in support of the coniplimce affirmation that she located the transcription and purportedly attached same as Exhibit A therein. Diane Wildey dues not explain when it was she suddenly located them or how and when they were purporledly destroyed if they did exist. Nevertheless, it is apparent she had not located any ofthe transcriptioti(s) of meetings L ~ S none was produced and she erroneously identifies Exhibit A to the cornplimce affirmation as the transcript, when it is clearly not a transcription of meetings, but rathcr a summary of some kind regarding the Sette Action. Plaintiff has proven that NYCM has prejudiced their ability to effectively prosecute this bad hith action The continued evasive responses, the lack of production of documents, the fact that defendant was in possession ofdocuments that are now missing and went missing during the course of this bad faith action wilhout any viablc and reasonable explanation by ddendant, the repeated mis-chnracterizatioid mis-representation of the identity of documents that have been produced, etc. lends itself, at this juncku-e, to not only an adverse inference charge at trial against defendant, but also an Order ofprtclusion against defendant. Contrary to defendant s contention, issuancc of both such orders is not contradictory, nor prohibitive, under the circumstances ofthis case and is not the equivalent of striking defendant s answer. At this point, plaintiff has prescnted a prima facie 6 [* 8] eiititlemenl to thc claim of spoilalion of evidence by defendant. Accordingly, it is ORDERET3 thnt plaintirf's motion for sunmiary judgriietit on thc issuc of liability, pursuant to CLR 3212, is denicd, as untimely; and it is further ORDERED that plaintiff's motion seeking an Order ofPreclusion and an Order directing an adverse inference charge against defendant, at trial, is granled; and it is firther ORDERED that plaintiffs, having established that defendant has willfully failed and refused to providc discoveiy as dircclcd by Orders dated, June 30, 301 1, July 3 1, 2008, April 30,2008 and November 15, 2007, and without reasonable justification, defendant having failed and refused lo produce documents respecting transcription of corntilittee meetings and all correspondences by atid between Baxter & Smith and defendant, NYCM , in addition to the admission by defendant that document(s) have been destroyed, this Court directs and Orders that at the time of trial of this matter, plaititiff shall be entitled to a charge on spoilation of evidence/adverse inference charge agninsl defendant and defendant is precluded from offering any evidentiary proof with respect to documents regarding transcription of committee meetings and/or all correspondences by and between Baxter & Smith and defcndarit, in defense and/or in opposition to plaintiffs prosecution ofthe within bad faith claim; and it is further ORDEKED that the parties proceed to mediation, forthwith, ENTER: DATED: January 3 1 201 2 ~ 7 FILED
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