Interventure 77 Hudson LLC v Halengren

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Interventure 77 Hudson LLC v Halengren 2018 NY Slip Op 31217(U) June 15, 2018 Supreme Court, New York County Docket Number: 653913/2013 Judge: O. Peter Sherwood Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 06/15/2018 02:44 PM 1] INDEX NO. 653913/2013 NYSCEF DOC. NO. 1611 RECEIVED NYSCEF: 06/15/2018 SlJPREME COlTRT OF THE ST ATE OF NE\V YORI( COlJN'rY 01~,, NE\\l YORK: CO!VlMEJ{(:JAI" l>IVISION J>ARrl~ 49 ------------------------------··-*·--X INTEJlVEN1~lJlll~ 77 HlJDSC>N LLC, ett1l., DECISION ANI> ORl>Ell Index No.: 653913/2013 l\tlot. Seq. Nos.: 020, 024, 025, & 027 Plaintiffs, -against- Defendants. - ~ --- ~ - ~ - ~ -- ~ ~ - ~ - ~ ---- ~ ~ --- ~ ~ ----·- ~ --x 0 . PETER SllEl~W()()I), J. : Motio11 sequence nu1nbers 020 . 024~ 025 and 027 are consolidated for disposition. l\lotion Seq.uence Nu1nber 20 Frustrated DeJendanls~ ~'due to plaintifls't continued noncompliance with [court t>rdered] Falcon disclosure requests, ~ .. and in the interest of obtaining doct1mcnts that are n1aterial and necessary to this litigation~ the Falcon l)cfcndants served a subp(lena on [non-party Price Waterh<Juse C~oopers] . ' (Falcon Men1<>randun1 ofl... a\~l in ()pposition t<> fv1otion to Quash, NYSCEF Doc. N()~ 120fJ . at 3 ). Generally~ the court discourages use of subp<.)enas to obtain documents from non-parties \Vhere the intclr1nation needed f(lr the litigation can be obtained 1rom a party. This is especially so when the court has already detern1ined that a party has the relevant information and directed that it be produced. Such is t.he case here. The 1notion to qu~sh is granted vvithout prejudice to the Falcon [Jefendants applying to the court for non-party discovery and appropriate sanctions upon failure of plaintiffs to produce the l(~(i investigat.ion repo11 by the date directed at the June 11, 20 J 8, hearing. Because plaintiffs tailed to produce the Il~G report that is the principal su~jecl of ~1otion Sequence Nun1ber 020~ despite the orders of Justice Singh directing production of the report in his April 22': 2016 . and Decen1ber 15'1 20 I 6., orders, the court hereby grants the Falcon Defendants~ 1 2 of 6 [*FILED: NEW YORK COUNTY CLERK 06/15/2018 02:44 PM 2] INDEX NO. 653913/2013 NYSCEF DOC. NO. 1611 RECEIVED NYSCEF: 06/15/2018 request for sanctit)ns. PlaintitTs shall reimburse defendants for t.he cost .of enforcing the April 22~ 20 I 6, order relating to the lC~U report (i.e. fees and expenses relating to this Motion Sequence Nun1ber 020). To this end . \Vithin fourteen ( 14) days of the date of this Decision and. ()rdercounsel for the Falcon Defendants n1ay prepare and delivery (>f fees t() counsel fen· plaintifls a detailed statement and expenses incurred. Pay111cnt shall be lnadc 'vithin ten (] 0) days of receipt, except') if counsel for plaintiffs dispute the reasonableness of the amounts billed, plaintitls' counsel shall con1n1unicatc \Vi th defendants" counsel \Vithin five (5) business days of said receipt., giving the specific iten1s disputed. \Vithin tivc (5) business days of receipt of said con1municati(ln, counsel f(>r the parties shall 1neet and conter in a good faith eJ1ort to reach. a co1npron1isc. If. after good faith efforts, the parties are unable to reach agreement, the unrcsol\rcd issues 1nay be brought to the attention of the court by letter'! which sha.11 be no n1orc that four (4) pages in length~ single spaced. The p~rtics are reminded that this exercise, which is intcnd-cd to enforce compliance with a specific discovery order'\ should not be turned into a n1ini-litigation onto itself. l\totion Sequence Number 024 In 1notion sequenct: nun1ber 024 . plaintiffs seek to ~ . penalize"' defendants for less than full con1pJiance \vith various requests for production of financial records of defendants, among other matters (see NYS(~f~F l)oc. Nos. 911, 913 & 1058). I laving rcvie\ved the briefs subn1itted by the parties, it appears defendants have complied \Vith court orders directing discl<)sure~ although not con1pletcly, and often late. Further, as a re.suit of f~1ilure to take steps to preserve relevant inforn1ation and refusals to adequately respond to plaintiffs, discovery requests'\ cc.11ain bank records are no longer available (see, e.g. NYSCEF Doc. No. 1316'! ii 14 ). 1\1nong the iten1s n<>t provided arc: 2 3 of 6 [*FILED: NEW YORK COUNTY CLERK 06/15/2018 02:44 PM 3] INDEX NO. 653913/2013 NYSCEF DOC. NO. 1611 RECEIVED NYSCEF: 06/15/2018 1. HiJrs affidavit of con1plctcncss" per the order of [)cccmber 15, 2016 (see Plaintiffs Reply . NYSC'F:F l)oc. No. 1409, at 3 ); 2. IRES bank records reflecting receipt of $1, 159 . 027.60 fron1 Strean1 Realty in July 2008 and $450 . 539.34 relating to the Aker lease in August 2008 (see ill.)~ 3. Bank records of .Institutional Real f~state Services~ Whitney Investment Advisors and DA Associates. ,J\ll are alleged to be entities controlled by Hill (see ill at 5); 4 . ..1\n affidavit attested to by II ill that con1pJics \Vith the Order of l)cccrnber 15 . 2016 (see ill... at 4): 5. Hallengrcn (,base Bank account statements for 2006 and 2007 (apparently not jJreserved) (see ill., at 6)~ and 6. rv1il1er BM<) I larris flank account staten1enls f(Jr 2006 through 2009 (also not preserved) (see it.I., at 7). ·For the violations al Jcged . plainti ffi; request the court impose penalties and deem Hi It Hallengren and r.r1iller "~jointly and severally liable f-(1r the illicit kickback payments and unauthorized lees . . ."" (N'I''SC:f:F [)oc. No. 1259., at. 16). The requested sanctions are disproportionate to the scope of the violations indicated and "viii not be irnposed. Defendants shall provide proper responses regarding iten1s 1 through 4, above, \vi thin f()LU1ecn ( 14) days of the date of this Decision and (Jrder. 'rhc request for sancti{>ns f(lr spoliation of the ·records identified in itc1ns 5 and 6 is denied \Vithout prejudice to rc11cvlal al the tin1e of trial. Motion Sequence Numher 025 In inotion sequence nun1ber 025, the Falcon l)cfcndants seek sanc.tions f(Jr plaintiffs' fi1ilurcs to provide disclosure ordered hy Justice Singh in his 1\pril 22, 2016, decision. The HiIJ defendants have joined in support (see N YSCEF Doc. No. 1500). 4 of 6 [*FILED: NEW YORK COUNTY CLERK 06/15/2018 02:44 PM 4] INDEX NO. 653913/2013 NYSCEF DOC. NO. 1611 RECEIVED NYSCEF: 06/15/2018 /\It.hough the n1otions seek disclosure of docu1nents (see N"l:'SCEF Doc. No. 1362)., it As to the forrne.r t\vo categories ~~owi1ership. ~'corporate," .''' appear~ or documents, and ''privileged~~ that only the last is of concern at this point. plaintiffs appear to have cured the violation'\ including presenting an afiidavit attesting t.he requested documents were produced_, a diligent search had been conducted . and no additi.011al relevant docun1ents were .f{>und (sec .• . ~ NYSC~EF, l){>C. No. 1359~ ,J 4). In a reply letter'! the Hill l)cfcndants took no issue \Vitl1 plaintiffs' representations, . . . but chalJcnged plaintiffs' refusal to provide the ~'privileged"' docun1ents (see N'YS(~F~F Doc. No. J588). ·rhc court has already resolved this issue .. having directed pro1npl disclosure of the ICG internal investigati<>n report (see M<>tion Sequence ·Nun1bcr 020 . su1Jrt1). l)cfcndants" request for sanctions~ specifically to· dismiss the c.ornplaint, is denied. Motion Sequence ·Nu miler 027 In Motion Sequence Number 27~.- dated 1\ugust 22, 2017, the Falcon Defe11dants seek sanctions regarding.the repeated failure of plaintifls to schedule Andreas Limburg for depositio~ (NYSC:EF l)oc. No. I 133). Not to be outdone~ plaintiffs cross-n1ovc for sanctions based on dc:fendants ~''"frivolous Ct)nduct'" (N YSC~EF [)oc. ·No. 1521 ). In a decision dated January 27. . 2018, this court granted plaintiffs' n1otion to vacate an order dated May 30" 2017, directing t.he deposition of ·Mr. Lin1burg (see NYSC:l~l; Doc. No. 1597). thereby rendering this rnotion and the cross-motion n1oot. By letter dated February 5~ 2018 . counsel f{>r the Falcon. Defendants advised the cou11 of their continued desire to depose Mr. Lin1burg. P1aintiffs responded by seeking delerraJ until a11er the court decided the then pending (and no\v decided) n1otions for su111n1ary judgment. At this point . it is appropriate to set a st.:hcdule for con1pletion of discovery, including the deposition of Mr. Lin1burg. l'he parties are di rccted to n1cct and confer on or before July 6, 2018, regarding a 4 5 of 6 [*FILED: NEW YORK COUNTY CLERK 06/15/2018 02:44 PM 5] INDEX NO. 653913/2013 NYSCEF DOC. NO. 1611 RECEIVED NYSCEF: 06/15/2018 schedule and to appear at a coin pl iance c<>n ference on July 11., \ 252 . 60 Centre Street . Ne\v \,.ork" New York 10007. This constitutes the decision and order of the court. Dated: June 15, 2018 ENTER: 5 6 of 6 2018~ at noon at Part 49., Rot)m

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