Fletcher v Dakota

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Fletcher v Dakota 2012 NY Slip Op 32504(U) September 28, 2012 Sup Ct, New York County Docket Number: 101289/11 Judge: Eileen A. Rakower 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] SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY Justice Index Number 101289/2011 FLETCHER, ALPHONSE vs. DAKOTA SEQUENCE NUMBER : 011 ' INDEXNO. k MOTION DATE MOTION SEP. NO. COMPEL The following papers, numbered I to Notice of MotionlOrder to Show Cause Answering Affidavits ,were read on this motion to/for -Affidavits - Exhibits - Exhibits Replylng Affidavits INo(s). I INo(s). 2 IN O W b Upon the foregoing papers, It is ordered that this motion is w 2 L FILED Dated: 2. 3. r' ..................................................................... CASE DISPOSED 'NON-FINAL DISPOSITION CHECK AS APPROPRIATE: ........................... MOTION I : 0GRANTED S DENIED 0GRA TED IN PART 0OTHER CHECK IF APPROPRIATE: ................................................ 0SETTLE ORDER SUBMIT ORDER 0DO NOT POST u FIDUCIARY APPOINTMENT 0REFERENCE I . CHECK ONE: [* 2] Plaintiffs Alphonese Fletcher, Jr. ( Fletcher ) and Fletcher Asset Management, Inc. ( FAM ) (collectively, Plaintiffs ) commencedthis action on February 1,20 11. Plaintiffs action concerns the Board of The Dakota s denial of Fletcher s application to purchase an apartment adjacent to the one (Apartment 50) he owns for purposes of combining the two. Fletcher has been a resident of The Dakota and a shareholder of the corporation since 1992 and has previously served on the Board of The Dakota, including two terms as Board President. Fletcher alleges that The Dakota discriminated against him, inter alia, based on his race, in their refusal to approve his application to purchase the adjacent apartment. Fletcher also alleges retaliation against him for his protecting the rights of others, including minority and Jewish shareholders and applicants of The Dakota. Fletcher alleges that in early 2007 he objected to the discriminatory treatment of a Jewish couple applying to purchase an apartment and in another instance protested the Board s unjustified denials of an Afi-ican-Americanshareholder s requests to fix her bathroom. Fletcher also alleges that during the period in which his application was pending, Defendants defamed Fletcher by making numerous false statements to others regarding his financial condition in order to taint consideration of his application, including that he had not fulfilled binding charitable commitments; that Fletcher was playing the race card and using his status as an African-American to persuade the Board to approve his application; that Fletcher s assets were illiquid and difficult to value; and that FAM s business loans left it overextended and at risk of collapse. 1 [* 3] Certain claims and defendants were dismissed by this Court in an order dated July 2 1, 20 11 and additional claims were dismissed, on appeal of that order, by the Appellate Division, First Department, by decision dated July 3, 2012. The claims currently remaining in the action are as follows: As to The Dakota, claims of discrimination, retaliation, tortious interference with contract, and defamation based upon statements made before the filing of the Complaint that Fletcher had not fulfilled binding charitable pledges but instead owed money to charity, that Fletcher was living on borrowed money, and that [blased on the financial information submitted by Fletcher, approving Fletcher s application was not in the best interest of The Dakota; As to defendant Barnes, discrimination; and As to defendant Nitze, defamation based only upon the statement allegedly made to Craig Hatkoff that Fletcher had not given the money he promised to give to charity and that he owes it. A. Defendants Motion to Compel Defendants The Dakota, Inc., Barnes, and Nitze move for an Order compelling plaintiffs to produce certain documents and information responsive to their document requests and interrogatories served on August 3, 20 11. Defendants state that in their April 2,2012 written responses and objections to their requests and interrogatories, plaintiffs objected to producing the following categories of relevant documents: 1. The operational structures, investments and valuation procedures of the Fletcher Entities [defined as FAM; the Pre-1995 Entity (as further defined) Richcourt Holdings Inc., the Fletcher Funds; the Fletcher Foundation; and their officers, directors, employees, corporate parent, subsidiaries, affiliates or predecessors ]; 2. Plaintiffs tax returns, financial statements, valuations of real estate holdings, and investments, loan obligations, and payments and obligations to each other, dating fiom 20 10, see Responses to Requests 2 [* 4] 6, 17-18,21,39,43-44 & 46; 3. The business relationship between FAM- related entities and Quantal, Duhallow, and FTI, see Responses to Requests 3 4-3 5 & 3 8; Responses to Interrogatories 17-19; 4. Plaintiffs charitable donations,their binding and non-binding charitable pledges and commitments, and any failure to satisfy those pledges and commitments, see Responses to Interrogatories 3 0-32; [available on tax returns] 5. Fletcher s prior claims of discrimination, see Responses to Request 4849, Responses to Interrogatory 22; 6. The Pension Funds investment in the Fletcher Funds and the SEC investigation into Fletcher and FAM, see Responses to Requests 40-41 ; and 7. The identity of Fletcher s current place of residence, see Responses to Interrogatories 27-28. As to Categories 1.2. and 3 Defendants claim that the requested financial information regarding FAM and its related entities is relevant in order to defend against plaintiffs defamation claims and to prove the absolute defense of truth - that Fletcher and FAM were in poor financial condition, Defendants also contend that plaintiffs themselve~ have tied the Defendantsallege that plaintiffs only produced 576 mundane documents that appear to be drawn solely from Fletcher s own files . , . Notably missing from the Plaintiffs productions are (i) any financial information regarding Fletcher or FAM or FAM s affiliates (other than that referenced in the filings relating to Plaintiffs prior motions for a temporary restraining order and preliminary injunction;) and (ii) any previously undisclosed documents relating to Duhallow, Quantal, or FTI (entities that prepared reports regarding Plaintiffs financial condition that were submitted to the Board or attached to the complaint). 3 [* 5] financial condition of Fletcher to FAM, and FAM in turn to the financial condition and holdings of the FAM-managed funds and other FAM-related entities, and thus they cannot refuse to produce the requested information. Defendants state that in his application to purchase the subject apartment, Fletcher himself relied on the assets and income of FAM and the FAM-related entities to seek to establish that he was financially qualified. Plaintiffs contend that it is undisputed that they have agreed to produce numerous categories of financial information for the three year period purportedly considered by the Dakota Board when it deliberated on Fletcher s application to purchase Apartment 50 and contend that those documents are more than sufficient to allow defendants to develop their defenses. CPLR 53 101(a) generally provides that [tlhere shall be full disclosure of all matter material and necessary in the prosecution or defense of an action. The Court of Appeals has held that the term material and necessary is to be given a liberal interpretation in favor of the disclosure of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity, and that [tlhe test is one of usefulness and reason (Allen v. CromwellCollier Publishing Co., 2 1 N.Y.2d 403,406 [ 19681). However, a party is not required to respond to discovery demands which are palpably improper. A demand is palpably improper if it seeks information which is irrelevant or confidential, or is overbroad and unduly burdensome (Gilman & Ciocia, Inc. v. Walsh, 2007 N Slip Y Op 8410, 1 [2nd Dept. 20073). Defendants are entitled to full disclosure of all matter material and necessary . . . in the defense of an action. CPLR 3 101(a). Plaintiffs are obligated to satisfy their discovery obligations and are directed to produce all documents responsive to Defendants discovery demands that relate to plaintiffs financial condition as of March 3 1, 20 10 as they are material and necessary to Defendants defense. Plaintiffs state, While Fletcher s April 23,20 10 application materials made representations concerning his financial condition as of March 3 1,20 10, defendants have not shown how documents fiom the year end that were not available and do not break down information by quarter, such as annual tax returns, would enable defendants to assess Fletcher s qualificationto purchase Apartment 50 in early 20 10. However, to the extent that plaintiffs cannot produce a substitute to show the 4 [* 6] - . .. . quarterly breakdown as of March 31, 2010 for the documents requested by Defendants, plaintiffs are required to produce the 2010 year end tax return or other financial records that are requested. As for other documents post March 3 1,2010, Defendants are entitled to only those that specifically relate to the alleged defamatory statements after March 3 1, 20 10 asserted in plaintiffs Complaint, as upheld by the Appellate Division. Those statements include: [At an April 14, 2010 board meeting,] one or more of the Individual Defendants told the other members of the Board that Fletcher had not fulfilled binding charitable commitments and pledges, that Fletcher s assets were all illiquid and difficult to value, and that FAM s business loans left it over-extended and at risk of collapse . . . [On or before May 7, 2010, Nitze told Dakota shareholder Craig Hatkoff that Fletcher] had not actually given the money he had promised to give [to charity] and he owes it . . . [At some point between June 24,2010 and September 20 101one or more of the Individual Defendants falsely and maliciously stated to Hatkoff that Fletcher had checked out of his business and was living on borrowed money . . . On September 14, 2010, . . . the Board sent a letter to certain Dakota shareholders . . . [It stated, inter alia,] [blased on the financial information submitted by Fletcher, the Board concluded that approving such a purchase would not be in the best interest of The Dakota . . . [The letter] also contained the false and misleading statement that Fletcher had declined the Board s request to provide additional financial information. Defendants requests for financial information that fall within the above categories 1 , 2 , 3 are overly broad with respect to these alleged defamatory statements. Thus, except as previously stated, to the extent that Defendants seek financial and other information relating to plaintiffs financial condition post March 3 1, 20 10, Defendants must narrow their demands. 5 [* 7] 1 As to Categories 4 and 5 - Charitable Pledges and Prior Instances of Discrimination Defendants requests relating to charitable pledges is limited to plaintiffs binding charitable pledges, Defendants request to compel additional discovery concerning prior instances of discrimination is denied. As to Categorv 6 and 7 - The Pension Funds investment in the Fletcher Funds and the SEC investigation into Fletcher and FAM and Fletcher s Residence Defendants discovery demands that fall within categories 6 and 7 are denied because they are palpably improper, overly broad and unduly burdensome. C. Plaintiffs Motion To Compel Plaintiffs move for an order compelling Defendants to produce documents and information pursuant to CPLR 3 124, as well as costs and expenses, including attorneys fees, incurred in connection with this motion. Plaintiffs contend that defendants have refused to produce, among other things, documents concerning (i) defendants historical discriminatory conduct; (ii) defendants post filing retaliatory conduct; (iii) plaintiffs themselves; and (iv) the joint listing and sale of Apartments 50 and 5 1. Defendants oppose. In discrimination cases, plaintiffs are to be afforded liberal and thorough discovery : [Tlhe Legislature and the Court of Appeals have clearly established that New York favors broad and effective enforcement of the discrimination laws, The subtle and elusive methods often characterize discriminatory practice (citations omitted), and the strong State policy in favor of the eradication of discrimination, combined with the burden of proof placed on plaintiff in these actions, requires courts to insure that plaintiffs are afforded broad and thorough discovery. O Grady v. City o New York, 164 Misc. 2d 171, 174 (N.Y. Misc. 1995). f 6 [* 8] (i) Documents Concerning Defendants Alleged Historical Discriminatory Misconduct Given Plaintiffs claims concerning Defendants historical and continuing discriminatory misconduct and in light of the liberal discovery standards applied in discrimination cases, Defendants are required to produce documents concerning Defendants alleged historical discriminatory conduct responsive to Plaintiffs Document Requests 9, 13, 14, 15, 19,20,31,34,53, and 55 for the ten year period preceding the Board s denial of Plaintiffs application. (ii) Documents Concerning Defendants Post Filing Retaliatory Conduct Plaintiffs request to compel Defendants to produce documents concerning Defendants alleged post filing retaliatory conduct is denied. (iii) Defendants Documents Concerning Plaintiffs In light of the liberal discovery standards applied in discrimination cases, Defendants are required to produce documents concerning or referencing plaintiffs for the requested ten year period. (iv) Documents Concerning the Joint Listing of Apartments 50 and 5 1 Plaintiffs request to compel Defendants to produce documents relating to the plannedjoint listing of Apartments 50 and 5 1 in October 20 10 which did not take place is denied based on lack of relevancy. Wherefore it is hereby ORDERED that defendants The Dakota, Bruce Barnes, and Peter Nitze s motion is granted to the extent that plaintiffs Alphonese Fletcher, Jr. and Fletcher Asset Management, Inc. are directed to produce any and all responsive documents in accordance with this decision within thirty (30) days of receipt of a copy of this Order with notice of entry thereof; and it is further ORDERED that plaintiffs Alphonese Fletcher, Jr. and Fletcher Asset 7 [* 9] Management, Inc,'s motion is granted to the extent that defendants The Dakota, Bruce Barnes, and Peter Nitze are directed to produce any and all responsive documents in accordance with this decision within thirty (30) days of receipt of a copy of this Order with notice of entry thereof. This constitutes the decision and order of the court. All other relief requested is denied. EILEEN A. RAKOWER, J.S.C. 02 2012 NEW YORK COUN7Y CLERK'S OFFICE 8

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