Emporium Mgt. Corp. v Reyes
Annotate this CaseDecided on June 30, 2015
Civil Court of the City of New York, Kings County
Emporium Management Corp., Petitioner-Landlord,
against
Luis (Lewis) D. Reyes, 1291 Green Avenue Apartment 1L Brooklyn, New York 11237, Respondent-Tenant.
L & T 75838/12
Attorneys are: Make the Road, NY (by Ezra Kurtz, Esq.) for respondent, and Barry Schwartz, Esq. for petitioner. Scott Gross, Esq. was the attorney at the time the discovery issues arose, and his office submitted the opposition papers to each of respondent's motions.
Leslie A. Stroth, J.
Recitation, as required by CPLR 2219(a), of the papers considered in the review of respondent's Motion to Preclude as well as respondent's motion for summary judgment:
PapersNumbered
Respondent's Notices of Motion, Affidavits and Exhibits annexed1,2
Petitioner's Affirmations in Opposition, Affidavits and Exhibits annexed3,4
Respondent's Reply Affirmations5,6
Upon the foregoing cited papers, the Decision/Order in these motion is as follows:
This is a summary nonpayment proceeding commenced by petitioner in June, [*2]2012. Petitioner seeks to recover arrears dating back to February, 2012, at a monthly rent of $1300 per month. Respondent is represented by counsel. In his Answer he raises several affirmative defenses and counterclaims including that petitioner has failed to properly register the premises with the Department of Housing Preservation and Development (HPD) pursuant to the Multiple Dwelling Law, that respondent has already partially paid the rent alleged to be owed, that there has been a reduction in services entitling him to an abatement, that there has been an unlawful rent overcharge on the part of petitioner for four years, entitling respondent to treble damages, and that petitioner has violated the warranty of habitability, entitling respondent to an abatement.
The following history of the proceeding is undisputed by the parties.
Respondent moved for discovery in this matter in July, 2012, which motion was opposed by petitioner in November, 2012 after several extensions by the court for petitioner to submit opposition papers. By decision and Order dated January 17, 2013, Honorable Marcia Sikowitz granted respondent's motion for limited discovery pertaining to petitioner's claimed individual apartment improvements (IAI's). These alleged IAI's resulted in a 300% increase from the 2004 DHCR registered rent of $665.12, to the 2009 DHCR registered rent of $2300.
Petitioner was to comply with respondent's limited document discovery request within thirty days of service of a copy of the order with notice of entry, or February 22, 2013. On February 21, 2013, respondent filed a motion to renew a part of that decision with respect to use and occupancy, and that motion was not decided until June 14, 2013. Discovery was not provided by petitioner while the motion was pending. In the June 14, 2013 decision, Judge Sikowitz restored the matter to the calendar for trial to July 24, 2013, noting that contrary to petitioner's argument, petitioner's obligation to provide discovery previously had been triggered. The court noted that although discovery had not been provided, respondent failed to act on his available remedies for petitioner's failure to comply with discovery requests.
On July 2, 2013, the parties agreed to adjourn the matter to August 22, 2013, by a stipulation in which petitioner agreed to deliver discovery documents by July 20, 2013. On August 21, 2013, respondent filed and served a motion to, inter alia, strike petitioner's pleadings or deem the issue of IAIs resolved in respondent's favor, as the discovery documents had not been provided. That motion was withdrawn by respondent due to the short-service on August 22, 2013, and the parties entered into a court-ordered stipulation whereby petitioner would provide respondent with outstanding discovery and respondent would file and serve any motions by the adjourn date of October 2, 2013. On August 23, 2013, respondent re-served its motion.
On the return date of the motion, October 2, 2013, petitioner served its discovery responses upon respondent, and the matter was adjourned to November 19, 2013, for petitioner to file and serve its opposition papers to respondent's motion to strike. Petitioner filed and served its opposition papers, and in the last paragraph (Paragraph 24) [*3]of petitioner's Affirmation in Opposition dated October 15, 2013, petitioner's counsel states that, "In the end, Respondent is in receipt of all documents demands which are currently in the Petitioner's control. He has not been prejudiced and the case should be allowed to proceed to trial on the merits." On December 20, 2013, the court orally denied respondent's motion, adjourning the matter to February 26, 2014 for trial or for the summary judgment motion respondent s attorney said would be made. In denying the motion to strike petitioner's pleadings, the court noted that respondent was in possession of the discovery documents that would allow him to prepare for trial.
On February 26, 2014, a motion schedule for petitioner's summary judgment motion was made by a court-ordered, two-attorney stipulation, with a return date of April 30, 2014. Respondent filed and served its summary judgment motion on March 19, 2014. Petitioner did not submit opposition to the motion by the agreed upon date of April 11, 2014, nor by the return date of April 30, 2014. On that date, the time to do so was again extended and the motion was adjourned to June 24, 2014. Petitioner was to serve its opposition papers on or before May 21, 2014. Petitioner still had not opposed the motion by the return date, and was given a final extension to file and serve its opposition to respondent's motion by July 31, 2014. The matter was adjourned again to August 27, 2014. On August 1, 2014, petitioner served its opposition papers along with "new documentary evidence" that had not been previously turned over to respondent relating to the alleged individual apartment improvements.
On September 29, 2014, respondent submitted the within motion pursuant to CPLR 3126 for petitioner's failure to comply with court-ordered discovery. Respondent requests an Order: precluding petitioner from offering any evidence at trial as to the issues of the rental history and individual apartment improvements in the subject premises, and/or deeming the issues of the rental history and individual apartment improvements resolved in respondent's favor, or precluding petitioner from offering any documentary evidence as to the issues of the rental history and IAI's that was not provided to respondent on or before October 2, 2013, or granting respondent leave to conduct further discovery.
Respondent asserts that the "willful and contumacious disregard for the Court's orders and the discovery process as a whole," provides a basis for preclusion, pointing to the fifteen months (now 24 months) of litigation, petitioner's repeated failure to comply with so-ordered motion schedule stipulations, as well as with court orders regarding discovery. Respondent further argues that the only time petitioner provided the court ordered discovery was after respondent was forced to file a Motion to Strike petitioner's pleadings. Respondent points out that the motion was ultimately denied by the court because petitioner finally provided the documents with a statement that all documents in petitioner's control had been provided and that the matter was ready to proceed to trial. Respondent asserts that it was in reliance upon petitioner's statements that discovery was complete and that the matter was ready for trial that he moved for summary judgment, [*4]and that petitioner did not provide the alleged "newly discovered" documents until the day after the court's final extension for petitioner to serve opposition papers. Petitioner further asserts that the documents provided are fraudulent.
In opposition to respondent's motion, petitioner's attorney points to CPLR 3101 (h) which provides that,
(h) Amendment or supplementation of responses. A party shall amend or supplement a response previously given to a request for disclosure promptly upon the party's thereafter obtaining information that the response was incorrect or incomplete when made, or that the response, though correct and complete when made, no longer is correct and complete and the circumstances are such that a failure to amend or supplement the response would be materially misleading. Where a party obtains such information an insufficient period of time before the commencement of trial appropriately to amend or supplement the response, the party shall not thereupon be precluded from introducing evidence at the trial solely on the grounds of noncompliance with this subdivision. In that instance, upon motion of any party, made before or at trial, or on its own initiative, the court may make whatever order may be just. Further amendment or supplementation may be obtained by court order.
Petitioner specifically refers to the provision that, "...the party shall not be precluded from introducing evidence at the trial solely on grounds of non-compliance with this subdivision." Petitioner's attorney states that the documents relating to the individual apartment improvements were provided promptly upon petitioner's discovery of them, which was made after another search was done following respondent's submission of the summary judgment motion.
Petitioner's attorney's affirmation states that an employee by the name of Cindy Mohammed was responsible for obtaining the requested documents, and that she was "nothing more than a secretary" (Affirmation, paragraph 22). Petitioner's attorney states that Ms. Mohammed did not turn over all of the documents, that she was fired, and that the property manager, Steven Makhany, discovered the documents after conducting a search following respondent's service of the Motion for Summary Judgment.
In respondent's attorney's Affirmation in Reply to petitioner's opposition to respondent's motion for summary judgment, respondent's attorney argues that Cindy Mohammed is not just a secretary, but is listed as the "head officer" of Emporium Management Corp and as managing agent of the subject premises. Respondent's attorney further states in the affirmation that Ms. Mohammed has been involved in managing the building for a long time, and appeared in court on petitioner's behalf. Respondent attaches an HPD printout listing Ms. Mohammed as "Head Officer" and "Managing Agent" for Emporium Management Corp.
Petitioner's attorney has failed to attach to her Affirmation in Opposition to respondent's Motion to Preclude any affidavits from someone with personal knowledge as to how the discovery documents came to be withheld, ultimately obtained, and disclosed, nor has she attached any other proof of same. There is an Affidavit from Steven [*5]Makhany attached to petitioner's Affirmation in Opposition to respondent's summary judgment motion (not to the Motion to Preclude) stating that the secretary, Cindy Mohammad, failed to turn over all of the documents, but petitioner fails to provide a sufficient explanation as to how this "secretary" came to withhold documents without a supervisor being aware, when her alleged failure was discovered, when she was fired and for what reason, where the documents were, and why it took so long to locate the additional documents once the omission was discovered.
Moreover, at no time as petitioner requested extensions to file and serve opposition papers to respondent's motion, did petitioner notify respondent's attorney or the court that an alleged problem with disclosure of documents occurred, or that a diligent search was being conducted to correct the problem. Petitioner never attempted to amend its prior discovery responses, and still has not done so. The "new documentary evidence" in support of additional individual apartment improvements is simply attached as an exhibit to the Affirmation in Opposition to respondent's summary judgment motion, seventeen months after the court first ordered petitioner to turn over the specified discovery documents, ten months after petitioner stated that all documents had been produced, and four months after respondent filed and served its Motion for Summary Judgment.
CPLR 3126 provides that,
If any party, or a person who at the time a deposition is taken or an examination or inspection is made is an officer, director, member, employee or agent of a party or otherwise under a party's control, refuses to obey an order for disclosure or wilfully fails to disclose information which the court finds ought to have been disclosed, pursuant to this article, the court may make such orders with regard to the failure or refusal as are just, among them:
1. An order that issues to which the information is relevant shall be deemed resolved for purposes of the action in accordance with the claims of the party obtaining the order;
2. An order prohibiting the disobedient party from supporting or opposing designated claims or defenses, from producing in evidence designated things or items of testimony, or from introducing any evidence of the physical, mental or blood condition sought to be determined, or from using certain witnesses; or
3. An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or any part thereof, or rendering a judgment by default against the disobedient party party may move for an Order granting relief for failure to comply with court-ordered discovery.
As has been demonstrated by the detailed history of this proceeding as it relates to discovery, petitioner repeatedly failed to timely comply with court orders and so-ordered stipulations setting forth discovery schedules. Petitioner has failed to submit an affidavit from anyone with personal knowledge as to the efforts it made to timely comply with discovery, and the reasons for the repeated non-compliance with court orders and disclosure schedules. Petitioner attempts to blame the late disclosure prior to October 2, 2013, as well as the disclosure of newly discovered documents submitted with the [*6]Opposition to Respondent's Motion for Summary Judgment on a secretary in petitioner's office, but that alleged secretary, Cindy Mohammad, was the registered "Head Officer" and "Managing Agent" with the Housing Preservation Department (HPD). Even if she was "nothing more than" a secretary, as petitioner's attorney states, she was still an employee of petitioner, and petitioner is responsible for the actions of its employees. CPLR 3126 outlines available actions the court may take, "If any party, or a person who at the time a deposition is taken or an examination or inspection is made is an officer, director, member, employee or agent of a party or otherwise under a party's control, refuses to obey an order for disclosure or wilfully fails to disclose information which the court finds ought to have been disclosed..."
With respect to petitioner's argument that CPLR 3101 does not permit preclusion when disclosure is untimely made, this argument is misplaced. First, CPLR 3101 requires that, " A party shall amend or supplement a response previously given to a request for disclosure promptly upon the party's thereafter obtaining information that the response was incorrect or incomplete when made...," and petitioner here made no attempt to amend or supplement its previous response. It simply attached the "new documentary evidence" documents to the Affirmation in Opposition to respondent's summary judgment motion, in an attempt to defeat that motion, without making any effort to amend its discovery responses. Additionally, there is no affidavit from a person with personal knowledge that the "new documentary evidence" was provided promptly upon petitioner obtaining it. Secondly, CPLR 3101 provides that, "... the party shall not thereupon be precluded from introducing evidence at the trial solely on the grounds of noncompliance with this subdivision...," which would not be the circumstance here, as there is a long history of petitioner's non-compliance with court orders and court-ordered stipulations, and delay after delay by the petitioner. Preclusion herein is not requested, "solely on the grounds of noncompliance" with CPLR 3101, but based on many months of petitioner's complete disregard of court stipulations and orders and the fact that petitioner never made any attempt to amend its discovery responses, despite the many months it had to do so.Petitioner repeatedly states in its Affirmation in Opposition that respondent is not prejudiced by its late disclosure of documents. Respondent has shown otherwise. Respondent relied on petitioner's attorney's statement that all discovery was complete in making a decision to file his motion for summary judgment, and respondent has now had no choice but to file and serve yet another motion seeking an appropriate remedy for petitioner's late disclosure and repeated delays in this proceeding. Respondent has a right to have his rent overcharge claim resolved, and petitioner has prevented that by the unreasonable delay in responding to discovery as well as to respondent's motions. Petitioner was given extension after extension to comply with discovery and motion schedules, and has been non-complaint at every turn.
Additionally, respondent argues that prior to his motion for summary judgment, in which he calculated that petitioner would need to show $47,179.00 in improvements in [*7]order for the subject premises to be deregulated, petitioner's documentation showed improvements totaling far less than that amount, but that after its summary judgment motion was filed, petitioner produced receipts, bills and invoices totaling $48,880.00. Petitioner claims that many of the submitted documents are fraudulent and contradict the earlier documents provided by petitioner.
Given the undisputed history of this proceeding as it relates to petitioner's disregard of court stipulations and orders, and the resulting delay, as well as petitioner's failure to produce sufficient proof to show that its failure to comply with the court's discovery orders and the various stipulations in this matter is not due to its willful and contumacious disregard of those orders and stipulations, the court finds that petitioner's conduct has been willful and contumacious, and it now must issue an Order that it determines to be just under the circumstances. See, Kihl v. Pfeffer, 94 NY2d 118 (1999); Kingsley v. Kantor, 265 AD2d 529 (2d Dept 1999); Kutner v. Feiden Dweck & Sladkus, 223 AD2d 488 (1st Dept 1996); Red Apple Supermarkets Inc. v. Malone & Hyde, Inc., 251 AD2d 78 (1st Dept 1998); Santini v. Alexander Grant & Co., 245 AD2d 30 (1st Dept. 1997).
Therefore, for all of the foregoing reasons, respondent's Motion to Preclude is granted to the extent that petitioner is precluded from offering into evidence any documents relating to the alleged individual apartment increases that were produced after October 2, 2013, the date petitioner asserted that all discovery was complete. There has been no attempt to supplement or amend the discovery responses by petitioner, and the "new documentary evidence" attached to its Affirmation in Opposition to respondent's summary judgment motion may not be produced at a trial in this matter as part of petitioner's proof. The court declines to grant the other relief sought in respondent's motion.
Turning now to respondent's Motion for Summary Judgment pursuant to CPLR 3212, or alternatively for an order requiring petitioner to produce an affidavit to certify its discovery responses, as well as for an order granting respondent leave to amend his Answer, this motion is denied in part and granted in part.
With respect to that part of the motion seeking summary judgment, as has been demonstrated in the moving papers on the part of both parties, there are material issues of fact in dispute, which must be resolved by a trier of fact. Pursuant to CPLR 3212, a grant of summary judgment is permissible in cases where there is clearly no material and triable issue of fact presented. Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395 (1957); Di Menna & Sons, Inc. v City of New York, 301 NY 118 (1950). Summary judgment is a drastic remedy and should not be granted where there is any doubt as to the existence of a triable issue, Rotuba Extruders, Inc. v Ceppos, 46 NY2d 223 (1978).
To obtain summary judgment, the moving party must make a prima facie showing to the court that as a matter of law it is entitled to judgment in its favor. Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065 (1979); CPLR 3212 (b). To defeat a [*8]motion for summary judgment, the opposing party must then show sufficient facts to require a trial on any issue. DiSabato v Soffes, 9 AD2d 297 (1st Dept 1959). Both parties must lay bare their evidentiary proof in admissible form. Friends of Animals v Associated Fur Mfrs., supra; Zuckerman v City of New York, 49 NY2d 557 (1980).
The role of the motion court is merely one of issue finding, not issue determination. Rose v Da ECIB USA, 259 AD2d 258 (1st Dept 1999); Pirrelli v Long Island RR, 226 AD2d 166 (1st Dept 1996). The court must view the evidence in the light most favorable to the opposing party and draw all reasonable inferences in the opposing party's favor. Assaf v Ropog Cab Corp., 153 AD2d 520 (1st Dept 1989).As stated above, the parties have established that there are triable issues of fact which have not been resolved through respondent's motion papers, affirmations, affidavit and attachments. Although the documents submitted in opposition to respondent's summary judgment motion are precluded, petitioner produced documents in support of its alleged IAI increases in the October 2, 2013 disclosure, which petitioner may produce at trial along with testimony of its witnesses in an effort to support the rent increases alleged to be justified by the individual apartment improvements. Respondent disputes the validity of the documents produced. These issues of fact must be resolved by a trial. Therefore, that part of petitioner's motion requesting summary judgment is denied.
As for that part of the motion seeking amendment of its Answer, respondent moves to amend the Answer to add a Sixth Affirmative Defense, that at the time the Petition was commenced, Petitioner lacked capacity to commence the proceeding because Petitioner had been dissolved. Respondent states that this information was not discovered until long after the initial Answer was filed. Respondent requests that he be permitted to amend his Answer in the event this court denies summary judgment, which it has. Respondent further moves to amend the Answer to add a Fourth Counterclaim, for attorneys' fees, which respondent states was omitted from the original Answer by oversight, and which he asserts should be added in the interest of judicial economy under the current index number.
CPLR 3025(b) permits a party to amend his or her pleading with leave of court, providing that "Leave shall be freely given upon such terms as may be just." Petitioner argues that such amendment may only be made absent a showing of prejudice to the other side. Petitioner fails, however, to show any prejudice in the event respondent is permitted to amend his Answer, other than to argue that such amendment would further delay the case from proceeding to trial or other resolution. As petitioner has failed in its opposition papers to show any prejudice should the court grant respondent's motion to amend his Answer, the motion is granted pursuant to CPLR 3025(b). Respondent must file and serve the Amended Answer forthwith.
For all of the foregoing reasons, respondent's motion to preclude any discovery documents produced by petitioner after October 2, 2013, including the "new documentary evidence" attached to petitioner's Affirmation in Opposition to respondent's Motion for [*9]Summary Judgment is granted. Respondent's motion for further sanctions is denied. Respondent's Motion for Summary Judgment is denied, but the motion to amend respondent's answer is granted. The court denies that part of petitioner's motion seeking an order requiring petitioner to produce an affidavit to certify its discovery response.
This matter is adjourned to August 31, 2015, at 9:30 a.m, in Part H, Room 507, for trial.
The foregoing constitutes the Decision and Order of the Court.
Dated: New York, New York___________________________
June 30, 2015LESLIE A. STROTH, J.H.C.
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