BMM Two, LLC v BMM Two, LLC

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BMM Two, LLC v BMM Two, LLC 2013 NY Slip Op 34004(U) July 3, 2013 Supreme Court, Westchester County Docket Number: 60249/11 Judge: Joan B. Lefkowitz 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. [* 1] INDEX NO. 60249/2011 NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 07/05/2013 To commence the statutory time period for appeals as of right [CPLR 55!3(a)], you are advised to serve a copy of this order, with notice of entry upon all parties. 'i SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER- C6MPLIANCE PART 11 ---------------------------------------------;-------------------------------x BMM FOUR, LLC, !I ~ j:Plaintiff, DECISION & ORDER 11 Ii -against- ~ BMM TWO, LLC and BMM THREE,, LLC, JP MORGAN CHASE BANK, N.A.,. as successor in interest to WASHINGTON MUTUAL BANK, F.A. and WORKERS' COMPENSA TION1 BOARD OF THE STATE OF NEW YORK, :1 Index No. 60249/11 Motion Date: 6/3113 Seq. No. 3 ·~ 1Defendants. 1 II ---------------------------------------------~-------------------------------x i LEFKOWITZ, J. ~ II The following papers were re~d on this motion by plaintiff for an order pursuant to CPLR 3126 precluding defendants BMM T»7o, LLC and BMM Three, LLC from introducing, using, or relying on certain documentary evidence in this action. 11 Ii Order to Show Cause - Affinrtation of Lawrence Gottlieb -·Affidavit of Michael Otis - Exhibits ~ Affirmation in Opposition - E!xhibits - Affidavit of Mark Fonte ~ !I Upon the foregoing papers and the proceedings held on June 3, 2013, this motion is determined as follows: · ~ Plaintiff commenced this part~tion action with respect to certain real property and improvements located at 204 Union i} venue, Mount Vernon. It is alleged plaintiff and the BMM defendants owned the property as tenants in common. It is alleged the BMM defendants have been in possession and control of the ;premises since the date of acquisition on April 5, 2004, keeping the funds generated by residential and commercial tenants. The Court issued a trial readiness stipulation and order dated f..pril 5, 2013. Plaintiff filed a note of issue and certificate of readiness on April 23, 2013. i I :i 1 Plaintiffs first request for pro duction of documents dated May 14, 2012 seeks a copy of !I [* 2] the closing statement related to the property and all documents maintained by the BMM defendants since acquisition of the premises so as to permit the plaintiff to determine the income and expenses associated with the operation of the premises (Plaintiffs Exhibits F, Plaintiffs First Request for Production of Documents, p. 5-6). Plaintiff argues defendants have had complete ownership and control of the premises for in excess of eight years, but they were unable to provide any bank statements or other evidence of income except for the twenty-one month period of June 2010 through February 2012 (Plaintiffs Exhibit H, bank statements). Plaintiff argues defendants did not provide documentation of expenditures, except seven pages of documents (Plaintiffs Exhibit I). A compliance conference order dated July 12, 2012 directs the BMM defendants to serve on or before August 3, 2012 responses to plaintiffs discovery and inspection demand dated May 14, 2012 (Plaintiffs Exhibit L). Plaintiff argues defendants produced additional documents at the March 5, 2013 deposition of Mark Fonte, a principal of defendant BMM Two and at the March 6, 2013 deposition of Robert Fonte, a principal of BMM Three (Plaintiffs Exhibits U, V). Plaintiff seeks to preclude the introduction of documents produced immediately prior to the March 2013 depositions, arguing they were produced late in violation of the July 12, 2012 compliance conference order. In opposition, defendants BMM Two and BMM Three argue they fully complied with the documentary discovery requests to the extent they could find documents responsive to the demands. Defendants argue documents, particularly documents prior to 2010, were difficult to locate. They reportedly continued searching for documents in a good faith effort to comply with defendants' disclosure obligations. Defendants argue a box of documents responsive to the document requests was located the day before the scheduled deposition of Mark Fonte and was provided to plaintiffs counsel the evening before the March 5, 2013 deposition (Plaintiffs Exhibit U). The documents were reportedly marked as exhibits at Mark Fonte's deposition and he was questioned about them. On the evening of March 5, 2013, defendants continued their search and located more documents. These documents were delivered to plaintiffs counsel on March 6, 2013 just prior to the deposition of Robert Fonte (Plaintiffs Exhibit V). Plaintiffs counsel reportedly did not object to the late production of documents at that time and did not request that either witness be produced for a further deposition related to the documents. Defendants submits the affidavit of Mark Fonte, who states when discovery was initiated he personally searched for documents related to the property in offices _and an off site storage facility. When the discovery responses were due the BMM defendants reportedly produced the documents they had and continued searching. Mr. Forte states prior to depositions he went back to the storage facility, conducted a search for additional documents, and located documents related to the property. Defendants argue the documents were produced late in good faith and plaintiff has not been prejudiced by the late production of documents. By order to show cause dated January 3, 2013, plaintiff made a prior motion seeking to strike the answer of the BMM defendants based in part on the alleged failure to disclose documents. In opposition to the motion, defense counsel submitted an affirmation dated January 18, 2013 stating relevant documentation was disclosed and "other documentation is either not in defendants' possession, custody or control or has been lost." The affirmation states "regarding documents requested but not produced, the defendants were fully forthcoming in their 2 [* 3] responses." After this motion was decided and immediately prior to defendants' depositions, defendants conducted a further search and located relevant documents, including documentation of expenditures, cancelled checks, home depot credit card statements, and a closing statement related to the property. "The nature and degree of the penalty to be imposed on a motion pursuant to CPLR 3126 is a matter generally left to the discretion of the Supreme Court" (Carbajal v Bobo Robo, Inc., 38 AD3d 820 [2dDept 2007]). To invoke the drastic remedy of preclusion a court must determine that the party's failure to disclose is willful and contumacious (Greene v Mullen, 70 AD3d 996 [2d Dept 2010]; Kingsley v Kantor, 265 AD2d 529 [2d Dept1999]). Willful and contumacious conduct can be inferred from repeated noncompliance with court orders or a failure to comply with court ordered discovery over an extended period of time, coupled with the lack of an adequate excuse for the failure (Mei Yan Zhang v Santana, 52 AD3d 484 [2d Dept 2008];Carbajal v Bobo Robo, Inc., 38 AD3d 820 [2d Dept 2007]; Prappas v Papadatos, 38AD3d 871 [2d Dept 2007]). At oral argument on June 3, 2013 counsel for the BMM defendants was questioned on the search for documents, the prior motion practice, and on the late production of documents that are clearly relevant to the allegations in this matter. Counsel failed to give a reasonable explanation as to why the documents were not located and produced in a timely manner. Counsel stated his clients are not good record keepers. It appears some of the documents at issue, such as cancelled checks and credit card statements, could have been obtained by the BMM defendants from other sources. Counsel failed to give a reasonable explanation as to why efforts were not made to obtain the documents from other sources. Pursuant to the July 12, 2012 compliance conference order, the BMM defendants were directed to serve discovery responses, including the documents at issue, on or before August 3, 2012 (Plaintiffs Exhibit L). Counsel submitted a January 18, 2013 affirmation stating relevant documentation was disclosed and "other documentation is either not in defendants' possession, custody or control or has been lost," then instructed his clients to keep looking for documents. The definitive representation made by counsel in the motion papers was disingenuous, as the clients were directed to keep looking for documents. Defense counsel then produced relevant documents immediately prior to defendants' March 5, 2013 and March 6, 2013 depositions. The BMM defendants have not stated a reasonable explanation for the late production of relevant documents. As the BMM defendants fail to demonstrate a good faith effort was made to comply with the July 12, 2012 compliance conference order and counsel does not set forth an adequate excuse for this failure, defendants' conduct is deemed willful and contumacious and an order of preclusion is warranted. In view of the foregoing, it is ORDERED that plaintiffs motion for an order precluding defendants BMM Two, LLC and BMM Three, LLC from introducing, using, or relying on certain documentary evidence marked as plaintiffs Exhibits U and Vis granted; and it is further 3 [* 4] ORDERED that plaintiff is directed to serve a copy of the order with notice of entry within ten days of entry. The foregoing constitutes the decision and order of this Court. Dated: White Plains, New York Jttftc ~' 2013 1J\'\ TO: Hass & Gottlieb (BY NYSCEF) 670 White Plains Road Suite 121 Scarsdale, New York 10583 ; 1 Stargiotti & Beatley, P.C. (BY NYSCEF) 48 Wheeler Avenue Pleasantville, New York 10570 The Law Office of Christopher Turcotte (BY NYSCEF) 575 Madison Avenue Suite 1006 New York, New York 10022 James McGinn, Esq. (BY NYSCEF) NYS Workers Compensation 'Board 20 Park Street Albany, New York 12207 cc: Compliance Part Clerk

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