Arbor Realty Funding, LLC v Herrick, Feinstein LLP

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Arbor Realty Funding, LLC v Herrick, Feinstein LLP 2016 NY Slip Op 08935 Decided on December 29, 2016 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law ยง 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on December 29, 2016
Acosta, J.P., Renwick, Andrias, Gische, JJ.
2543 651079/11 601122/12 651623/11

[*1]Arbor Realty Funding, LLC, Plaintiff,


Herrick, Feinstein LLP, Defendant-Respondent.

Arbor Realty Funding, LLC, Plaintiff, -against-Garret Gourlay, et al., Defendants.

East 51st Street Development, LLC, et al., Plaintiffs-Appellants, -against-


Blank Rome, LLP, et al., Defendants-Respondents.

McDonnell Daly, LLP, Lake Success (John S. McDonnell of counsel), for appellants.

Davis Polk & Wardwell LLP, New York (Nancy B. Ludmerer of counsel), for Herrick, Feinstein LLP, respondent.

Steptoe & Johnson LLP, New York (Michael Miller of counsel), for Blank Rome, LLP, respondent.

Paul, Weiss, Rifkind, Wharton and Garrison LLP, New York (Moses Silverman of counsel) for Cozen O'Connor PC, respondent.

Order, Supreme Court, New York County (Carol R. Edmead, J.), entered on or about October 14, 2014, amending order (same court and Justice), entered on or about October 6, 2014, which denied plaintiffs East 51st Street Development, LLC, 968 Kingsman, LLC, and 964 Associates, LLC's application to reinstate their complaint and dismissed the complaint with prejudice, unanimously reversed, on the law, the facts, and in the exercise of discretion, without [*2]costs, the complaint reinstated, and plaintiffs directed to, within 30 days, respond to defendants' discovery requests in the form requested and pay defendants a fine of $10,000 for their willful failure to comply with the trial court's discovery.

In this legal malpractice action, consolidated with two other actions, although plaintiffs produced responsive material, it was imbedded in large amounts of otherwise irrelevant documents. Over 30,000 documents were produced. The trial court then gave plaintiffs ample time and opportunity to further produce the documents in an electronically searchable format and to organize its responses in the form that defendant requested them. Plaintiffs failed to comply with the court's directions. Under these circumstances, the trial court properly concluded that plaintiffs' failure to comply with its orders was willful (Merrill Lynch, Pierce, Fenner & Smith v Global Strat Inc., 94 AD3d 491 [1st Dept 2012], mod 22 NY3d 877 [2013]). Given, however, plaintiffs' partial compliance and the strong public policy in favor of disposing of cases on the merits, we find that dismissal of the action is too severe a sanction at this time and that a less severe sanction, of a monetary fine in the amount of $10,000 plus costs is appropriate, along with a final 30-day opportunity for plaintiffs to provide the discovery in the format ordered by the trial court on February 19, 2014.





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