Shumakh v Shumakh

[*1] Shumakh v Shumakh 2008 NY Slip Op 52482(U) [21 Misc 3d 1142(A)] Decided on November 13, 2008 Supreme Court, Kings County Thomas, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on November 13, 2008
Supreme Court, Kings County

Gennadiy Shumakh, Plaintiff,

against

Natalya Shumakh, Defendant.



38653/06



Attorney for the plaintiff, Gennadiy Shumakh:

Steven C. Bernstein, Esq.

Bernstein & Jaffe

189 Montague Street

Brooklyn, NY 11201

Attorney for the defendant, Natalya Shumakh:

Jonathan E. Edwards, Esq.

336 South Ocean Avenue

Freeport, NY 11520

(516) 379-1323

Delores J. Thomas, J.

Upon the foregoing papers, defendant Natalya Shumakh moves for an order, pursuant to NY Ct. Rules § 202.21(d) and (e), striking the note of issue or, alternatively, allowing her to conduct additional post-note of issue discovery in the above-captioned matrimonial action. Plaintiff Gennadiy Shumakh opposes the instant motion on the ground that defendant has failed to demonstrate that the subject note of issue is defective or that additional discovery is warranted in this action.In support of her motion to strike the note of issue and for further discovery, defendant submits the affirmation of her attorney which states, in relevant part, the following with respect to the alleged necessity of additional pre-trial/post-note of issue discovery in this matter: 3. By way of procedural history; [*2]

A.I was retained by the defendant . . . to represent her in this matrimonial action on June 5, 2008. (Citation to exhibit omitted).

B.The Defendant had previously been represented by [different counsel]. A consent to change attorney form was duly executed by the Defendant and both the outgoing and incoming attorneys. (Citation to exhibit omitted).

C.On June 5, 2008, I served a Notice of Appearance upon counsel for the plaintiff along with a copy of the duly executed consent to change attorney form. (Citation to exhibit omitted).

D.The Note of Issue and Certificate of Readiness for Trial in this matter was filed on or about January 14, 2008. This was some six months before I came into this case. (Citation to exhibit omitted).

E.A pretrial conference in this matter was conducted before the Court on July 3, 2008. At the conference, among other things, counsel discussed the need for additional depositions and more comprehensive exchange of financial disclosure.

F.At this time counsel for the Plaintiff has not agreed to provide for additional financial discovery nor for the continued deposition of the plaintiff. As a result, Defendant has been left with no alternative but to seek the relief herein requested.

4.Upon being retained in this matter I immediately took action to obtain and review the entire file of my client's prior counsel. It became clear very quickly that there had been only minimal discovery on this matter and that substantial additional discovery would need to be conducted in order to properly prepare this matter for trial. One of the most important items of discovery that must be addressed is the deposition of the plaintiff. The plaintiff was deposed on August 10, 2007 by the Defendant's prior counsel. Unfortunately the deposition was woefully inadequate. (Citation to exhibit omitted). The deposition of the plaintiff lasted only 55 minutes from start to finish. Crucial financial issues were not touched on at all, and the issues that were touched on were gone into in so little depth as to render the deposition useless. The discovery we would be seeking would be such as set forth in our Notice of Discovery and Inspection . . . and a further deposition of the Plaintiff with regard to the financial issues herein.

5.I would respectfully submit to the Court that proper discovery should be permitted either via vacating the Note of Issue pursuant to 22 NYCRR 202.21(e) or granting post Note of Issue discovery pursuant to 22 NYCRR 202.21(d). Without proper and thorough pretrial discovery being completed, a tremendous amount of judicial time at trial will be wasted. We would, in effect be left with no alternative but to do the discovery during the trial itself. This would be wasteful of the Court's time and certainly would be a tremendous financial burden to both parties herein. Some of the issued that must be explored are:

A.Marital Residence: There are many questions with respect to the appraisal of the [*3]property that was done on September 15, 2007. These issues, as well as the amounts of the mortgage and home equity line, and what was done with the moneys from the home equity line, need to be properly explored.

B.The value of the cooperative apartment in Brooklyn needs to be properly explored.

C.A cooperative apartment held in the name of the plaintiff's mother must be explored, including substantial contributions that were made to the loan expenses and various improvements. Issues of a possible constructive trust must be explored with respect to this potential marital asset.

D.A cooperative apartment of the plaintiff which was owned by him prior to the marriage must be explored with respect to the co-mingling of the proceeds of the sale of the unit into a joint account of the parties.

E.At least eight bank accounts must be explored and the deposits and withdrawals explained.

F.Three separate retirement benefits of the Plaintiff with Sherman Sterling must be explored.

G.A bonus received by the Plaintiff in March 2007 from McCarter & English must be explored.

H.A number of bank account liquidations by the Plaintiff must be explained such as: the liquidation of $75,000 from a Chase account on March 20, 2006 and checks ranging form $80,000 to [$]180,000 drawn on the parties['] joint bank accounts at Citibank and made payable to the Plaintiff's sister;

I.Wire transfers into a Citibank account from the Ukraine in the approximate amount of $90,000, possibly from an offshore business of the Plaintiff, and the subsequent removal of those funds by the Plaintiff;

J.The disposition of the proceeds from the sale of the Plaintiff's 2006 Lexus automobile; and

K.The disposition of the proceeds of the sale by Plaintiff of 375 shares of stock of JP Morgan in 2006-07.

In opposition to the instant motion, plaintiff submits the affirmation of his counsel which states, in relevant part, the following with respect to the discovery already engaged in by the parties and the alleged failure of defendant to articulate an adequate basis for her request for further and additional discovery:

6.This is not a very complicated case. Both Plaintiff and Defendant are and have always been [*4]W2 wage earners. Neither party has ever owned or operated a business. There are no children of the parties' marriage and both parties are self supporting. There are very limited issues in this action and, accordingly, counsel for both parties limited their examinations before trial, in a conscious effort to reduce their client[s'] legal costs.

7.With respect to the issues and alleged concerns raised by Defendant's new counsel, these issues were previously raised by Defendant and addressed by Defendant's prior counsel. Defendant's current counsel's suggestion that Defendant was not properly represented is preposterous. The issues raised in Defendant's counsel's Affirmation were all addressed by Defendant's prior counsel in conferences with both parties present in court, in a conference in Defendant's attorneys' office, where Plaintiff addressed Defendant's concerns and substantiated his explanations with documents provided by Plaintiff to Defendant's prior counsel. In addition, the within issues were also raised at Defendant's counsel's examination before trial of Plaintiff, of which the Defendant annexes some pages. Prior to the examination before trial of Defendant on August 10, 2007, the parties and counsel met at Defendant's counsel's office on July 23, 2007 in an effort to resolve this matter where all of these issues were once again discussed.

* * *

10.Briefly, I will address Defendant's counsel's contentions in paragraph 5 of his Affirmation:

A.Prior to the marriage, the Plaintiff was an owner of a cooperative apartment at 2277 Homecrest Avenue, Apt. 2V, Brooklyn, New York. The aforesaid apartment was sold during the marriage, and the proceeds were used to purchase the coop apartment at 1717 Avenue N, Apt. 2A, Brooklyn, NY, which is titled in Defendant's name and the marital premises at 20 Regazzi Lane, Staten Island, New York, which is titled in Plaintiff's name. At trial, this Court, when determining equitable distribution, will have to make a determination, as to whether and to what extent, the Plaintiff should be credited with the monies realized from the sale of the premarital cooperative apartment at . . . 2277 Homecrest Avenue, Apt. 2V, Brooklyn, NY, which was a premarital asset, whose proceeds were utilized to purchase the cooperative apartment at 1717 Avenue N, Apt. 2A, Brooklyn, NY, which was purchased during the marriage and the marital premises at 20 Regazzi Lane, Staten Island, New York. In connection with this issue, Plaintiff provided Defendant's counsel with documentation and closing statements with reference to the purchases and sale of his premarital coop, the Avenue N cooperative apartment purchased during the parties' marriage and the Staten Island marital premises purchased during the parties' marriage.

B.Defendant's unhappiness with the court ordered appraisal of the cooperative apartment in Brooklyn and suggestion that its value needs to be properly explored is not a basis for relief [f]rom this court.

C.Plaintiff's mother owns a coop apartment and owned a coop apartment prior to the marriage[.] Plaintiff explained that while he possessed a joint account with his mother, which was established prior to the parties['] marriage, he did not pay his mother's expenses incidental to the ownership as the aforesaid joint account was funded solely by his mother. [*5]

D.See A. above.

E.The parties had various joint bank accounts at Citibank prior to Defendant packing up and removing marital furnishings while Plaintiff was at work. Defendant supplied statements in his possession. Defendant is free to obtain any other Citibank statements.

F.Defendant was questioned under oath regarding his retirement benefits and Defendant's prior counsel has served a subpoena on Sherman and Sterling for plaintiff's records. Defendant's prior counsel also caused judicial subpoenas duces tecum to be served on plaintiff's other employers and providers of retirement benefits during the parties['] marriage.

G.Plaintiff advises that he did not receive a bonus in March, 2007. In any event, any bonus received by plaintiff would be reflected in his employment records which were subpoenaed by [Defendant's] prior counsel.

H.Plaintiff explained to Defendant and Defendant's prior counsel on at least three (3) occasions when I was present and provided documentation that Plaintiff's father deposited $75,000.00 into an account in the sole name of plaintiff, which plaintiff held for his father until Plaintiff's father directed that Plaintiff transfer this money to plaintiff's sister. The plaintiff was questioned concerning this money . . . [at] his deposition. Plaintiff is unaware of checks from $80,000.00 to $180,000.00 drawn on the parties' joint bank accounts at Citibank and made payable to Plaintiff's sister. If any such checks exist, Defendant, as a co-owner of bank accounts would have access to same and be able to produce same. No such checks have been produced and disclosed by Defendant.

I.Plaintiff and Defendant were both aware that plaintiff's cousin's husband wired monies to Plaintiff for his wife several years prior to the parties['], which monies were immediately paid to Plaintiff's cousin. Plaintiff was questioned concerning wire transfers at his deposition.

J.Plaintiff listed his 2006 Lexus on this Statement of Net Worth and was questioned about his Lexus . . . [at] his deposition.

K.Plaintiff explained to Defendant and her counsel several times and at his examination before trial . . . that he did not own 375 shares of stock but received 375 Chase stock options.

11.As stated herein, plaintiff and his counsel have addressed the concerns raised by Defendant's current counsel with Defendant and her prior counsel on several occasions in an effort to resolve this matter without a trial. Nonetheless, Defendant, as is her right, refuses to accept the Plaintiff's explanation(s) regarding the issues raised. Defendant apparently believes that plaintiff has some "secret" money, although Defendant is well aware that plaintiff has always been a W-2 wage earner whose wages were always deposited into his joint bank accounts with Defendant when he was living with the Defendant. This is why a prompt trial is warranted, as nothing that Plaintiff will or can say will serve to resolve the aforesaid issues. [*6]

12.It would be incongruous and an injustice, for this court to allow this Defendant, whose behavior demonstrates a strong animus to the plaintiff and a malicious desire to harass and harm the Plaintiff, to extend and continue her efforts to harass and injure the plaintiff, when there is no basis for discovery to be reopened, and further discovery will only serve to unnecessarily further delay the disposition of this matter, cause the Plaintiff to incur additional legal fees and place Plaintiff's life on unnecessary hold.

In reply, defendant submits an affidavit which states the following with respect to the alleged necessity of additional discovery in this action:

6.There are many financial issues that were ignored altogether or to which [an] insufficient response has been provided by the Plaintiff and his attorneys.

7.The following are some issues that require further exploration:

A.The income of the Plaintiff from non W2 sources has never been adequately addressed. The Plaintiff has been involved with multiple businesses overseas and the proceeds from these ventures have been sent to him via wire transfers over the years. All of this income and/or various wire transfers into the United States from overseas should be explored.

B.The co-op held in the name of the Plaintiff's mother was actually a rental investment of the Plaintiff and Defendant herein and the rent from the apartment was collected monthly by the Plaintiff in cash. The loan payments and monthly maintenance on this co-op were paid every month from our joint account. In fact, we usually doubled up the monthly payments so we could pay off the loan faster. We also paid approximately $20,000 for improvements to this co-op unit from our joint funds. The facts surrounding ownership of this co-op should be explored.

C.No copies of pertinent closing documents nor closing statements from the purchases and sales have been provided to my attorneys.

D.No discovery was provided with respect to the various retirement accounts of the plaintiff nor of his annual bonuses.

E.No discovery has been provided with respect to the liquidation by Plaintiff of 375 shares of stock. The Plaintiff was given stock options by his employer. He subsequently executed those options and sold the stock for approximately $14,000. This should be explored.

F.The Plaintiff took money out of a Home Equity Line of Credit and has not explained where that money went. This should be explored.

G.The Plaintiff has kept large sums of money in the names of various of his family members over the years and these funds have not been explained nor accounted for. This should be explored. [*7]

H.Between $80,000 and $180,000 was wired into and out of the joint accounts of the parties between 2000 and 2006. Although statements for these accounts are being obtained, the statements simply show the transaction, they do not explain where the money came from, what it was for, and where it went. This should be explored.

8.All of the above issues should be delved into in detail at a further deposition of the Plaintiff. The financial documentation with respect to all of these issues, so far as same exist, should be exchanged by the attorneys for the parties prior to such deposition. Leaving all of these issues unresolved will make it difficult if not impossible to conduct an orderly trial in this matter.

9.I am certainly not seeking to delay a trial in this action. I want this matter resolved just as badly as the Plaintiff. I do not, however, want to go into the trial of this action without full and proper disclosure having been made by both sides. This is just another case to the attorneys and even to the Court, but this is my life. The assets that I have built up with my husband during our marriage are all that I have. It is crucial to me that the court upon a trial of this matter have a true and complete picture of the finances of my husband and I so that a fair decision can be rendered.

10.Without full and proper disclosure, I will go through the rest of my life wondering if my husband got away with hiding assets and income from the Court. I will always have a doubt in my mind if justice was actually done between us.

11.What I am seeking really is fairness. I am requesting that the Court allow my attorney an opportunity to conduct meaningful and complete discovery in this action. If there is a concern that the trial would be delayed if the Note of Issue is vacated, then the court could grant the alternative relief of allowing appropriate post note of issue discovery. I would certainly be happy to comply with any time frame or time limit the Court might set to complete the necessary additional discovery and deposition of the Plaintiff. I would certainly be more than happy to appear for a further deposition of myself if the attorneys for the Plaintiff so desired.[FN1]

The court finds that defendant is not entitled to an order either striking the subject note of issue or allowing for additional discovery. It is well established that "under equitable distribution and Domestic Relations Law § 236 (B) (4), broad financial discovery is necessary and required" (Gellman v Gellman, 160 AD2d 265, 267 [1990]). Stated somewhat differently, "[b]road pretrial disclosure enabling both spouses to obtain necessary information regarding the value and nature of the marital assets is deemed critical if the trial court is to properly distribute the martial assets" (Goldsmith v Goldsmith, 184 AD2d 619, 620 [1992]). Indeed, such discovery is useful not only with respect to the proper identification and valuation of known marital property, but also serves "to [*8]uncover potential hidden assets" (Antreasyan v Antreasyan, 245 AD2d 405, 405 [1997]). Indeed, the entire financial history of the marriage is open to for examination by either party during discovery in a matrimonial action (see Lobatto v Lobatto, 109 AD2d 697, 699 [1985]). The broad disclosure standard in matrimonial actions concerning equitable distribution, therefore, comports with the general policy of liberal disclosure embodied by CPLR 3101. However, the trial court also remains "vested with broad discretion to supervise disclosure to prevent unreasonable annoyance, expense, embarrassment, disadvantage or other prejudice" (Obermueller v Obermueller, 24 AD3d 641, 642 [2005][internal quotation marks and citation omitted]).

In addition, once the note of issue has been filed and discovery presumably completed, the applicable standard for allowing additional discovery is governed by the decidedly less liberal requirements of NY Ct. Rules § 202.21 (d), which provides, in relevant part, as follows:

Where unusual or unanticipated circumstances develop subsequent to the filing of a note of issue and certificate of readiness which require additional pretrial proceedings to prevent substantial prejudice, the court, upon motion supported by affidavit, may grant permission to conduct such necessary proceedings.

The note of issue itself may be vacated pursuant to NY Ct. Rules § 202.21 (e) if the following circumstances are present:

Within 20 days after service of a note of issue and certificate of readiness, any party to the action or special proceeding may move to vacate the note of issue, upon affidavit showing in what respects the case is not ready for trial, and the court may vacate the note of issue if it appears that a material fact in the certificate of readiness is incorrect, or that the certificate of readiness fails to comply with the requirements of this section in any material respect. However, the 20-day time limitation to make such motion shall not apply to tax assessment review proceedings. After such period, except in tax assessment review proceedings, no such motion shall be allowed except for good cause shown. At any time, the court on its own motion may vacate a note of issue if it appears that a material fact in the certificate of readiness is incorrect, or that the certificate of readiness fails to comply with the requirements of this section in some material respect. If the motion to vacate a note of issue is granted, a copy of the order vacating the note of issue shall be served upon the clerk of the trial court.

Here, the defendant does not contend that plaintiff failed to provide any court-ordered discovery or to complete depositions. Indeed, defendant herself has access to certain salient banking records pertaining to the parties' joint accounts and apparently subpoenaed other material records including employment records of the plaintiff during pre-trial discovery. However, rather than specify any incorrect material facts in the certificate of readiness and note of issue or claim that plaintiff has failed to comply with the relevant requirements concerning same, defendant primarily contends that the pretrial discovery conducted by her former attorney was "inadequate." It is well settled, however, that absent a demonstration by the defendant that unusual or unanticipated circumstances arose subsequent to the filing of the note of issue sufficient to compel additional post-note of issue discovery, it is inappropriate for the court to allow for same (NY Ct. Rules § 202.21[d]). In the instant case, the financial issues which allegedly now require further "exploration" admittedly occurred either over the course of the entire marriage or in 2006 and 2007, prior to the filing of the note of issue and, indeed, some issues identified were the subject of questions posed to [*9]the plaintiff at his deposition. There is no allegation that any new or startling financial issues came to light post-note of issue. Accordingly, defendant's argument is properly construed as one based upon the untenable ground of mere alleged "incomplete discovery" (see Welch v County of Clinton, 203 AD2d 749, 749 [1994][reversing grant of additional discovery where "[a]t best, defendant has alleged that discovery is incomplete, which is insufficient to warrant further discovery after the filing of the note of issue and statement of readiness"]; DiMaria v Coordinated Ranches, Inc., 114 AD2d 397, 398 [1985][finding that alleged incompleteness of discovery was not an unusual or unanticipated circumstance warranting additional discovery where defendant knew the identities of the individuals sought to be deposed and the significance of their testimony prior to the placement of the action on the trial calendar]; see also Simpson v K-Mart Corp., 245 AD2d 991, 992 [1997], lv denied 91 NY2d 813 [1998]; S.A.B. Enter., Inc. v Village of Athens, 178 AD2d 820, 821 [1991]).

In addition, courts have consistently determined that "[t]he substitution of new counsel or the delinquencies of predecessor counsel alone is insufficient to show the presence of unusual or unanticipated circumstances subsequent to the filing of the note of issue" (Utica Mut. Ins. Co. v P.M.A. Corp., 34 AD3d 793, 794 [2006]); accord Schroeder v IESI NY Corp., 24 AD3d 180, 181 [2005]; Nisselson v Hercules Constr. Corp., 269 AD2d 507, 508 [2000]; Lyons v Saperstein, 202 AD2d 401,402 [1994]; Ehrhart v County of Nassau, 106 AD2d 488, 488 [1984]). Here, defendant's counsel states, in his supporting affirmation that upon his review of defendant's prior counsel's file, "[i]t became clear very quickly that there had been only minimal discovery on this matter and that substantial additional discovery would need to be conducted in order to properly prepare this matter for trial." Defendant's counsel critiques the deposition of plaintiff that was conducted by prior counsel, noting that same "lasted only 55 minutes from start to finish," and lists a number of issues which he deems worthy of further "exploration." However, "[t]he fact that defendant ha[s] new counsel, who wish[es] to prepare the case in a different manner than prior counsel," and has determined that the prior counsel's conduct of discovery was inadequate or somehow delinquent, "does not present unusual or unanticipated circumstances" (Ward v County of Rensselaer, 106 AD2d 719, 721 [1984]).

The court is mindful of the necessity of broad disclosure in matrimonial cases. It also recognizes that such liberal discovery both affords the court the ability to distribute the entirety of the parties' marital assets in an equitable manner and allows the parties to achieve a degree of certainty with respect to the nature and scope of such assets, including those which would not be readily apparent through a more cursory evaluation of the parties' property. However, the court is bound as well to oversee the discovery process and to insure that undue prejudice and delay do not occur as the result of additional and/or potentially open-ended discovery, including unwarranted fishing expeditions. This is especially true with respect to post-note of issue discovery, given the stringency of the "unusual and unanticipated" standard.

In the instant action, the note of issue was filed on or about January 14, 2008. Defendant did not move to vacate same or for further discovery until on or about September 18, 2008, rendering such motion untimely as to the vacatur portion. Moreover, defendant does not claim that the note of issue and certificate of readiness contain any incorrect material facts or otherwise fail to comply with the applicable requirements for same. Rather, the gravamen of defendant's claim is that various issues pertaining to the parties' assets were not adequately explored during the discovery phase of this action, and [*10]her current attorney has deemed prior counsel's prosecution of the case "inadequate." However, as previously discussed, none of the issues identified by defendant arose subsequent to the filing of the note of issue or were unusual or unanticipated in nature. Rather, said issues were present and ongoing throughout the marriage, some occurred in 2006 and 2007 just prior to the filing of the note of issue, and defendant has access to many of the salient records concerning the joint accounts of the parties - the focal point for a number of the issues raised by defendant -as well as to other relevant records which are subject to subpoena. Many of the issues raised, by both defendant and her counsel, are also unduly speculative and conclusory, with little evidence proffered in support of same. In any event, defendant's expressed concerns about so-called "secret assets" or improper dispositions of various marital funds did not arise, nor are they based on facts which unexpectedly came to light, subsequent to the filing of the note of issue.

Moreover, the alleged inadequacy of defendant's prior counsel similarly is insufficient to constitute the requisite unusual or unanticipated circumstances central to any determination that additional post-note of issue discovery is warranted. Although defendant's counsel may be frustrated with prior counsel's preparation of the case and would have conducted pre-trial discovery in a different manner, it is well settled that the appearance of new counsel, even where prior counsel could be considered to have been delinquent in his prosecution of the action, does not suffice as an unusual or unanticipated circumstance sufficient to support any further post-note of issue discovery.

As a result, defendant's motion to vacate the note of issue and for additional discovery is denied in its entirety. The case shall remain on the trial calendar.

The foregoing constitutes the decision and order of the court.

E N T E R:

_____________________________

Hon. Delores J. Thomas

J . S. C. Footnotes

Footnote 1: The court notes that the parties also devote portions of their papers to debating the circumstances surrounding the withdrawal and substitution of defendant's prior counsel. As said issue is not relevant to a determination concerning defendant's application for post-note of issue discovery or to strike the note of issue, the court declines to address the parties' contentions in this regard.