Sutton v Houllou

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Sutton v Houllou 2020 NY Slip Op 33566(U) October 26, 2020 Supreme Court, Kings County Docket Number: 513118/15 Judge: Lawrence S. Knipel 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: 1] KINGS COUNTY CLERK 10/27/2020 04:20 PM NYSCEF DOC. NO. 158 INDEX NO. 513118/2015 RECEIVED NYSCEF: 10/27/2020 I I I: At an IAS Tenn, Con1n1ercial Part4 o~the Sut>reme 1: Cotn1 of the State of New York, l1eld 111 and for tl1e 1: Cotrnty of l(h1gs, at the Courtl1ouse, at Civic Center, ; Broolclyn, New York, on tl1e 261h day of October, '2020. PRESENT: HON. LAWRENCE KNIPEL, 1: D-A~;~ s~~~~~ ~~d M~; s~~~~i.=~ -------jx !, Plaintiffs, DECISION AND ORDER 1: - against - IndexNo.513118/15 ALBERT HOULLOU, AMH RETAIL, LLC, AMD VENTURES, LLC, and F&E TRADING LLC, Mot. Seq. No. 6 Defendants. ·' ----------------------------------pc 1:' 1: 'fl1e following e-filed papers read hereiI1: NYSCEFNo.: Notice of Motion, Affinnation, Memorandmn o~:Law, and Exhibits Annexed-----~-=-'------ Affirmation in Opposition, Meinorandum of La-tji and Exhibits Annexed I' Reply Affirmation, Memorandum of Law,'. and Exl1ibits A1111exed : 121-133 138-146 148-153 1 I'Ii In this action for breach of contract an1, other relief, plaintiffs David Sutton and Max Sutton (collectively, plaintiffs) move in Seq. iro. 6 for an order(!) extending the discovery Ii' deadlines in this action by at least sixty d+:s; and (2) directing that defendants Albert Houllou (Houllou). AMH Retail LLC, A . Ventures, LLC, and F&E Trading LLC ; (collectively, defendants) pay the costs ' ofl)he 1-Ioullou's deposition. Defendants oppose th1 motion. videographer whom plaintiff hired for 1: Ii' 1 1: "Defendants' Reply in Further Support of1fheir Cross-Motion to Preclude Expert ·resti!nony," dated Aug. 24, 2020 (NYSCEF#l 54), which, as releva~therein, objected to plaintiffs' motion, is disregarded because it was filed, without plaintiffs' consent and ~thout leave of the Court, after the instant motion bad been fully submitted on Ai1g. 14, 2020 (see CPLR 221,4 [b], [c]). 1: I; I'' 1 ofI 6 [*FILED: 2] KINGS COUNTY CLERK 10/27/2020 04:20 PM NYSCEF DOC. NO. 158 INDEX NO. 513118/2015 RECEIVED NYSCEF: 10/27/2020 1:' Backj,ro11nd According to plaintiffs' complaint, ~bfendant AMD Ventures, LLC (AMD) sells electronics through various internet inarket p~~ces, including amazon.co111. AMD is owned 30% by plaintiffs (through their wholly ow~bd LLC) and 70% by defendant AMR Retail LLC (AMH), which is the retail division of de,,endantF&E Trading LLC (F&E) (Complaint [NYSCEF #!], 1!1! 35-36; 26). The majority wnership ofF&E is held by Houllou and his • family (id., 1f 27). 2 The dispute is essential!~; over the amount of distributions F&E owes Ii' plaintiffs from their business venture with Htullou. Commenced on Oct. 27, 2015, this acf10n has been pending for nearly five years to I• date. On Aug. 30, 2018, plaintiffs filed a nf';te of issue and certificate of readiness, with a proviso that certain discovery was then out !anding (NYSCEF #88). 3 On Feb. 18, 2020, ,i the Court issued what it underscored to be "th· final discove Feb. 18, 2020 order). order" (NYSCEF # 107) (the Therein, the Cou 'addressed the then-outstanding document production and depositions, as well as the urg pcy to establish a fir1n trial date. With respect Ii' to docu1nent production, the Court unequivoct:ly indicated that"[ a]Il documentary discovery [was] deemed completed (any not provided as · er prior orders [was] deemed waived." With ; respect to. the depositions, the Court establishf' d the following time line: (!)Depositions of each plaintiff to be eld during the week of Feb. 25, 2020; (2) Depositions of Houllou and the en ities not controlled by him to be started and completed during the week of Mar. 2, ¥020; and (3) Third-party depositions to be held ruring the week of Mar. 16, 2020. The trial date was set for Apr. l, 2020. ; 1 Ii' 1 I 1 According to fioullou, AMH is one of"o1 companies under our umbrella," but he could not elaborate on its ex~ct ?wnership ;;tructure (see Hou }ou EBT tr at page 22, line 17 to page 24, line 2 ; [NYSCEF #151 J [h1ghl1ghted sections]). )- · The case-n1anagement order, dated June ~2, 20 I 8, directed the filing of a note of issue and certificate of readiness by no later than Aug. 31, 20 I 81:(NYSCEF #78). 3 2' 2 of 6 [*FILED: 3] KINGS COUNTY CLERK 10/27/2020 04:20 PM NYSCEF DOC. NO. 158 INDEX NO. 513118/2015 RECEIVED NYSCEF: 10/27/2020 'I'. The Feb. 18, 2020 order is final and binding on each side.' 1, Before the COVID-19 pandemic i~te1<med, the dep.ositions of each plaintiffhad been completed: Also completed, pre"pandem1c, ias the depos1twn of defendant Houllou, albeit its scope was unilaterally narrowed by defen~nts' counsel to his individual capacity only.5 Plaintiffs' attempttovideota~eHoullou's depJsition was precluded, at defendants' objection, lo by Justice Jimenez-Salta on account of pl4intiffs' failure to comply with 22 NYCRR 202.15 (c). 6 To date, depositions of the LLC def~/>dants' designees and those of third parties remain outstanding. As to the LLC defendant~, their current chieffinancial officer, Gedaliah Waxler, who is familiar with their ownershi~istructure and operations, designee. As to third parties, plaintiffs hav~ not deposed: defendants' former chief financial officer 2020 but was canceled because of the may serve as their (I) Moshe Posner, the LLC (~hose deposition wa.s scheduled for Mar. 16, pandem~c); and (2) Roy Raphaeli, a former employee of AMD whose reconciliation of its bool<s 4 · 7 atjp. records against those of i1onparty Amazon I I'' convinci''. Subsequently, defendants failed to the Second Judicial Department to stay this action their appeal fro1;i the Fe~. 1.8, 2020 order, a~ we J as their pending appeal from a pri~r order denying their pre-answer motion to d1s1n1ss, were determined :(see Sutton v Houllou, 2020 NY Shp Op 64903[U] I' [2d Dept, Mar. 18, 2020]). unt~l ' ·s_ See I-loullou EBT tr at page 21, line 3 (stat~ent of defendants' counsel that Houllou was not produced as "a corporate designee") (NYSCEF #150 r--~~unarked sections]). 6 · Whereas 22 NYCRR 202.15 (c) requires, int:Telev.ant parl, that "[e]very notice ... for the taking of a videotaped deposition shall state ... the name ~nd address of the videotape operator,~' plaintiffs' deposition notice failed to state the name and addres - of the videotape operator. Contrary to plaintiffs' contention, defendants' failure to object to the vide taping within three days after receiving plaintiffs' deposition notice did not preclude Justice Jin1enez-Sa ta from exercising her broad discretionary power to issue a protective order against videotaping (see Miller,· v /iaha, 151 AD3d 1316, 1318 [3d Dept 2017]). I' .')ee Houllou EB1' tr at page 22, line 17 to p~ge 25, line 23; page 44, lines 11-13 (NYSCEF #151 [highlighted sections]). 7 - 3 of 6 [*FILED: 4] KINGS COUNTY CLERK 10/27/2020 04:20 PM NYSCEF DOC. NO. 158 INDEX NO. 513118/2015 RECEIVED NYSCEF: 10/27/2020 I I I indicated a possible $6 million loss in the '!Fulfillment by Amazon" inventory." On the Ii' a defense side, defendants have not completed deposition (commenced on Aug. 3, 2020) of nonparty Alex Blaker who currently empltj¥s plaintiffs through his two wholly owned I: entities, nonparties UniMaven, Inc. and Tectology Supplier, lnc. 9 Disc,ssio11 ~e The record reflects that both sid.es havtj.diligently proceeded with discovery in a good Ii' faith attempt to meet deadlines despite the urj~voidable delays presented by the COVID-19 health crisis which began in earnest in the ~nited States in March 2020 and which has Ii' created significant disruptions throughout thelcountry. Under the circumstances, a sixty-day extension to conduct (and, where appxopri~te, complete) the outstanding depositions is t Ii' warranted; namely: (1) Gedaliah Waxler behalf of the LLC defendants; (2) Moshe Posner; (3) Roy Raphaeli; and (4) Alex Blfker. The COVID-19 health crisis presents Ii "unusual or unanticipated circumstances" watanting the post-note discovery directed herein (see 22 NYCRR 202.21 [d]). No further docuipent discovery is permitted in accordance with Ii the Feb. 18, 2020 order. In light of the currently available technplogy and the serious health risks posed by the Ii COVID-19 virus, depositions should be condtcted remotely unless all parties agree to face1, 8 1 See I-Ioullou EBT tr at page 95, line 4 to pag '98, line 24 (describing Roy Raphaeli's reconciliation of the FBA inventory) (NYSCEF #150 [un1narked s , tions]). - See Plaintiffs' Reply Affinnation (NYSC F #!48), ~ 20. See also lvfatter of Sutton v }/oullou, Docket No. BER-L-111-20 (NJ Sup Ct, Bergen Cou ty, Mar. 27, 2020) (denying Alex Blaker's 1notion to quash nonparty subpoenas served by defendants on hi , and his hvo wholly owned entities) (NYSCEF # 152). 9 4 of 6 [*FILED: 5] KINGS COUNTY CLERK 10/27/2020 04:20 PM NYSCEF DOC. NO. 158 INDEX NO. 513118/2015 RECEIVED NYSCEF: 10/27/2020 I to-face depositions with the appropriate sociajidistancing (see e.g. Fields v MTA Bus Co.,_ I' ' Misc 3d _ , 2020 NY Slip Op 20203, *4 [1,'1P Ct, Wes.tchester County 2020]; Disbrow v Metropolitan Tr. Auth, 2020 WL 5521070, h[Sup Ct, NY County 2020]). i' I; As a general matter, "[t]he cost ofvil~otaping ... shall be borne by the party who served the notice for the videotaped . . . 1. recording of the deposition" (22 NYCRR 202.15 [k]). As noted, videotaping here comply with 22 NYC RR 202.15 [c]). Defendants have offered no wa~:precluded on account of plaintiffs' failure to I'' ' explan~tion as to why they failed to timely seek I' a protective order against a videotaped depo,~tion until it was about to start, As a result of defendants' delay, plaintiffs incurred an exp4nse in retaining a videographer and in having I a fully-equipped video operator attend the deposition. Defendants' delay warrants an award of the actual costs incurred by plairi\iffs' counsel for the videographer for 1, Houllou's deposition (see Millerv Saha, 50 M!sc 3d l2 l 8[A] [Sup Ct, Clinton County 2016], affd151AD3d1316 [3dDept2017]). I 1, concrusion Accordingly, it is 1, ORDERED that plaintiffs' motion in ~eq. No. 6 is granted to the extent that: (!)the depositions of Gedaliah Waxler (on behalf ~fthe LLC defendants), Moshe Posner, Roy I' Raphaeli, and Alex Blaker shall aJI be complfed by no later than Thursday, Dec. 17, 2020; and (2) defendants shall reimburse plaintiffst counsel for the cost of the videographer for 1: I; ' t 5 of 6 [*FILED: 6] KINGS COUNTY CLERK 10/27/2020 04:20 PM NYSCEF DOC. NO. 158 I I INDEX NO. 513118/2015 RECEIVED NYSCEF: 10/27/2020 Houllou 's deposition within 20 days after ele~tronic service of a copy ofthe videographer's invoice therefor on defendants' counsel; and lit is further ORDERED that in light of the con~nuing health risk posed by the COVID-19 pandemic, each deposition set forth herein ~/lall be held by video conference, unless all parties involved in that particular deposition ~gree that such deposition may be held ±ace to face with the appropriate social distancing; ~d it is further ORDERED that defendants' counsel sJall electronically serve a copy of this decision I and order with notice of entry on plaintiffs' of service thereof with the Kings County co~nsel, and shall electronically file an affidavit Cle~k. This constitutes the decision and orderliofthe Cou11. I 1, Justice Lawrence Knipe! I 6 Ii' 6 of 6 .

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