Cruz v Freedom Mtge. Corp.

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Cruz v Freedom Mtge. Corp. 2012 NY Slip Op 33341(U) June 28, 2012 Sup Ct, NY County Docket Number: 402396/10 Judge: Manuel J. Mendez Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. SCANNED ON 7/6/2012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK HON. MANUEL J. MENDEZ PRESENT: NEW YORK COUNTY PART ---=-1=-3__ Justice IGNACIO CRUZ 402396/10 5-16-2012 MOTION SEQ. 0 . _'""'00.._1,____ _ INDEX NO. Plalntlff(a), MOTION DATE -v- MOTION CAL. NO. _ _ _ __ FREEDOM MORTGAGE CORP., DARREN J. KAPLAN, RUSHMORE CAPITAL PARTNERS, LLC, GREEN MOUNTAIN FINANCE FUND, LLC, RAM, LLC, JONATHAN J. SOMERSTEIN, KENNETH R. KALSTEIN, KIMBERLY CRUZ, WELLS FARGO FOOTHILL, LLC, a/k/a WELLS FARGO CAPITAL FINANCE, LLC, EMIGRANT MORTGAGE COMPANY, INC., FILC:J JUL 05 2012 Defendant( ¢). NL:WYORK en z 0 w~ i= a::: (.) UJ en :::> C> ~~ 0 c ...J w ...J ~~ WW u.. ::c w la::: a::: >o :I u.. :::> u.. .... (.) a::: ~ 3 were read on this motion an~Ir116tl&B~/dfFICE PAPERS NUMBERED Notice of Motion/ Order to Show Cause - Affidavits - Exhibits ... Answering Affidavits - Exhibits _ _ _cross motion 2 Replylng Affidavits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ z I- w a. en w The followlng papers, numbered 1 to Compel Discovery: Cross-Motion: Yes X No Upon a reading of the foregoing cited papers, It Is Ordered that Plaintiff's request to compel discovery is granted, to the extent that Defendant, Rushmore Capital Partners, LLC ("Rushmore"), shall provide some of the documents and responses requested In Plaintiff's March 1, 2012 letter (the "Deficiency Letter"). Plaintiff's request for the Imposition of conditional sanctions is denied. Plalntlff brought this action clalmlng Defendants are liable for fraud whereby they divested Plaintiff of the title to his home and deprived Plaintiff of more than $383,000 In home equity. Plalntlff seeks responses to, and the production of documents in compliance with, "Plaintiffs First Set of Interrogatories & Document Requests Directed to Defendant Rushmore Capital Partners", dated July 7, 2011 (Plaintiff's Interrogatories"). w en c( z (.) 0 j:: 0 ::IE Rushmore opposes the motion claiming that its February 3, 2012 responses (the "Rushmore Response") to Plaintlff's Interrogatories, render the motion moot. Rushmore claims that the Rushmore Response properly responded to Plaintiff a Interrogatories, that the Rushmore Response was adequate for scheduling depositions where inadequacies In the Rushmore Response can be explored. Pursuant to CPLR §3124, the Court may compel compliance upon failure of a party to provide discovery. It is within the Court's discretion to determine whether the [* 2] materlals sought are "material and necessary" as legitimate subject of Inquiry or are being used for purposes of harassment to ascertain the existence of evidence. See Roman Catholic Church of the Good Shepard v. Tempco Systems, 202 A.O. 2d 267, 608 N.Y.S. 2d 647 (N.Y.A.D. 1 ¢t Dept. 1994); 148 Magno/ls, LLC v. Merrimack Mutual Fire Insurance Company, 62 A.O. 3d 486, 878 N.Y.S. 2d 727 (N.Y.A.D. 1 ¢t Dept., 2009). "The words 'material and necessary' are ... to be Interpreted liberally to require dlsclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the Issues and reducing delay and prollxlty." Allen v. Crowe/I-Collier Pub/. Co., 21 N.Y. 2d 403, 288 N.Y.S. 2d 449, 235 N.E. 2d 430 (1968). The test concerning discovery Is one of "usefulness and reason" and as such should lead to dlsclosure of admissible proof. Parties to an action are entitled to reasonable discovery of any relevant facts to the action. See Spectrum Systems International Corporation v. Chemical Bank, 78 N.Y. 2d 371, 581 N.E. 2d 1055, 575 N.Y.S. 2d 809 (1991); Anonymous v. High School for Environmental Studies, 32 A.O. 3d 353, 820 . N.Y.S. 2d 573 (N.Y.A.D. 1 ¢t Dept., 2006). Upon review of all the papers submitted with the motion, this Court finds that some of Plaintiff's requests in the Deficiency Letter are materlal and necessary for Plalntlff's discovery prior to depositions. Given the long and complicated deallngs between the Plalntiff and the various Defendants, as well as the interconnected relatlonshlps among the various Defendants, trying to determine the completeness of the Rushmore Response by way of depositions of the agents of the various Defendants one by one seems to this Court to be a herculean task. For this reason, this Court finds the usefulness of some of Plalntlff's requests In the Deficiency Letter outweigh the burden Imposed upon Rushmore by such a broad document production request and Interrogatories . Due to the voluminous nature of the Rushmore Response, neither party submitted a copy of the Rushmore Response along with their papers, which thankfully spares the Court the task of viewing the Rushmore Response in Its entirety. In Schedule A of the Deficiency Letter, Plalntiff states specific interrogatories and documents it believes to be deficiencies in the Rushmore Response. Although this gives the Court an Incomplete view of the Rushmore Response, the Court feels Schedule A Is mostly sufficient to determine what interrogatories and document requests are most necessary to Plaintiff to sharpen the Issues sufflclently to proceed to depositions. In the paragraphs associated with ...Response 1b" on Schedule A, Plaintiff requests emalls, faxes, or other documents exchanged between Defendant, Darren Kaplan ("Kaplan") and Robert Gordon e'Gordon")/ Robert MacAlllster ("MacAlllster") during the loan application process. Plaintiff notes that emails between Gordon, MacAllister, Ira Tannenbaum ("Tannenbaum") and Kaplan for certain time periods were produced but that it is unclear If additional emalls, faxes, or other responsive documents exist. Plalntlff·also requests that Rushmore Identify Tannenbaum and his role in Rushmore's activities. From the papers submitted, it Is not clear to the Court that all of the above named individuals are agents of Rushmore. To the extent that any of the above named lndlvlduals are or during the relevant time period were agents of Rushmore, Rushmore shall produce the requested documents and/or answer the Interrogatories. [* 3] In the paragraphs associated with "Response 3a" on Schedule A, Plaintiff asserts that Rushmore referenced written underwriting guidelines, a letter of explanation as to the borrower's needs, appraisal reports, BPOs, and onllne valuation tools, but falled to produce copies of such. To the extent the above named items exist and were referred to In the Rushmore Response, Rushmore shall furnish copies, or In the case of the onllne tools, provide Plaintiff with the means to access said tools. In the paragraph associated with 11 Response 3b" on Schedule A, Plaintiff asserts that Rushmore referred to numerous communications between Kaplan and Rushmore, but did not produce copies. To the extent the above named communications exist and were referred to In the Rushmore Response, Rushmore shall produce copies of the referred to communications with clear indication that such are the referred to communications. In the paragraphs associated with 11 Response 7a" on Schedule A, Plaintlff asserts that Rushmore did not state In reasonable detail its reason for overbreath/vagueness objections. Without more detall the Court can not make a determination as to the materiality and necessity of this request. Plaintiff also requests clarity as to the identity of all indlvlduals who prepared closing documents. Rushmore shall answer the Interrogatory as to whether Defendant Kenneth Kalsteln prepared all closing documents on behalf of Rushmore and Identify any other preparers. Plaintiff also requests copies of all versions and alterations of the quitclaim deed signed by Plalntlff. This request Is over-broad and based on the papers submitted and arguments made by Plaintiff Is neither material or necessary. In the paragraph associated with 11 Response 11 b" on Schedule A, Plaintiff asserts that the Rushmore Response made reference to a participation agreement between Rushmore and Defendant Green Mountain Finance Fund, LLC C'Green Mountain") but did not produce such. To the extent the above participation agreement exists and was referred to In the Rushmore Response, Rushmore shall produce a copy. In the paragraph associated with 11 Response 11 c" on Schedule A, Plaintiff asserts that Rushmore did not answer the question as to the services provided by Green Mountain and mad.' reference to a due dlllgence package and appraisal, but did not produce a copy of such. Rushmore shall answer as to the services Green Mountain provided and If the referred to due diligence package and appraisal In any way relates to Rushmore's interaction with Plaintiff, then Rushmore shall produce said due diligence package and appraisal. In the paragraph associated with "Response 12" on Schedule A, Plaintiff asserts that Rushmore did not address questions regarding the corporate structure and registration of Defendant, Ram, LLC. These questions are beyond the scope of discovery appropriate to Rushmore and better addressed directly to Ram, LLC. In the paragraph associated with 11 Response 16" on Schedule A, Plalntlff asserts that Rushmore did not produce any emalls, faxes, notes of communication, or other documents between Rushmore and Defendant Jonathan J. Somersteln (11 Somerstein"). Rushmore shall produce, to the extent they exist, copies of all such documents related to Rushmore's Interaction with Plaintiff. If such documents do not exist, Rushmore will give a statement explaining such. [* 4] Pursuant to CPLR §3126, sanctions are appropriate where there has been a showing of a willful vlolatlon of a prior Order for discovery and that the failure to provide discovery was willful, contumacious, or due to bad faith. This would Include predicate fallure to provide the discovery sought. See Weissman v. 20 East 9th Street Corporation, 48 A.O. 3d 242, 852 N.Y.S. 2d 67 (N.Y.A.D. 1 ¢t Dept., 2008); S/egman v. Rosen, 270 A.O. 2d 14, 704 N.Y.S. 2d 40 (N.Y.A.D. 1 ¢t Dept. 2000). The Court is not aware of any prior discovery Orders in this case, and Rushmore has been responsive to what appears to be a large portion of Plalntltrs Interrogatories. Deficiencies In the Rushmore Response appear to be the result of a good faith belief on Rushmore's part that the Rushmore Response was adequate and that any deficiencies would be best resolved during deposltlons or In post-deposition discovery requests, therefore this Court Is of the opinion that Plalntltrs request for sanctions pursuant to CPLR §3126 is premature. Accordingly, It Is ORDERED that Plaintiffs motion pursuant to CPLR §3124 to compel responses to Plaintiffs First Set of Interrogatories & Document Requests Directed to Defendant Rushmore Capital Partners, dated July 7, 2011 la granted to the extent that Defendant, Rushmore Capltal Partners, LLC, shall provide supplemental responses to the responses dated February 3, 2012; and It Is further, ORDERED, that Rushmore Is to speclflcally respond to Response 1b, Response 3a, Response 3b, the portion of Response 7a seeking the Identity of all lndlvlduals responsible for preparing closing documents, Response 7b, Response 11 b, Response 11 c, and Response 16 from Schedule A of the March 1, 2012 letter from Plalntlff to Rushmore. Rushmore shall provide written responses to Interrogatories and copies of the documents requested, or to the extent any documents do not exist or can not be located, Rushmore shall provide an affidavit from an lndlvldual with knowledge stating the same and the substance of any documents that can not be located, within sixty days from service of a copy of this Order with Notice of Entry; and It Is further, ORDERED, that the remainder of Plalntltrs motion is denied, and It is further, ORDERED that the Parties to this action are ordered to appear for a preliminary conference on September 5, 2012, In Room 307, 80 Centre Street, New York, New York at 9:30 a.m. This constitutes the decision and order of this Cou"F Il ED Dated: June 28, 2012 ENTER: JUL 05 2012 NEW YORK ~ COlJNTY Cl FRK'S OFFICE MA"'UEL J. MENDEZ J.S.C. MANUELJ. MENDEZ J.S.C. Check one: D FINAL DISPOSITION X Check if appropriate: 0 DO NOT POST NON-FINAL DISPOSITION D REFERENCE

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