Zimmerman v 410-57 Corp.

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Zimmerman v 410-57 Corp. 2021 NY Slip Op 31663(U) May 12, 2021 Supreme Court, New York County Docket Number: Index No. 653569/2020 Judge: Kathy J. King 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. [* 1] INDEX NO. 653569/2020 NYSCEF DOC. NO. 136 RECEIVED NYSCEF: 05/17/2021 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. KATHY J. KING PART IAS MOTION 34 Justice ----------------------------------------------------------------------X BETSY ZIMMERMAN, EDWARD ZIMMERMAN, P!aintiff{s), INDEX NO. MOTION DATE 653569/2020 02/01/2021 MOTION SEQ. NO. 003 -v410-57 CORPORATION, THE BOARD OF DIRECTORS OF THE 410-57 CORPORATION, JOSHUA FORMAN DECISION + ORDER ON MOTION Defendant(s). -------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 003) 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135 were read on this motion to/for CONTEMPT Upon the foregoing papers, plaintitis Betsy Zi1n1ncr1nm1 and Ed\vard Zi1nmen11an (collectively '·Zi1n1nertnans'') move by Order to Show Cause for the following relief: (a) Pursuant to J11diciary Law§ 753, findi11g defendants 410-57 Corporation (the "Corporation"), the Board of Directors of the 410-57 Corporation (the "Board") and Joshua Formm1 ("Forman"), (collectively "Defendants'') in civil contempt of J11sticc Marin's October 29, 2020 order (the "Production Order"), which required, i11ter alia, that Defendants produce, on or before December 4, 2020, certain categories of documents wit11held by Defendants; (b) Pursuant to Judicia1y Law§ 773, awarding t11e Zitnmerm8.J.1S attor11eys' fees and costs as a result o_fDefendants' contempt11ous behavior; (c) Pursuant to 'CPLR § 6301 et seq., te1nporarily and preliminarily enjoining and restraini11g Defendants fron1 destroyi11g, spoliating or otherwise discarding the Corporation's books and records in violation of the Zimmermans' right to inspect those documents pursuant to com1non law, BCL §624 and t11e Production Order; and, Upon the signing of the Order to Show Cause~ the Court granted plaintiffs' ap1Jlicario11 for a ten1poraf)' rcstrait1ing order tJending the hearing date, which enjoined Defendants fro1n 653569/2020 ZIMMERMAN, BETSY vs. 410-57 CORPORATION Motion No. 003 1 of 4 Page1 of4 [* 2] INDEX NO. 653569/2020 NYSCEF DOC. NO. 136 RECEIVED NYSCEF: 05/17/2021 destroying, spoliating, or otl1ervvise discarding the Corporation's books ai1d records in its possession, custody, or control in violation of BCf~ §624 and the Production Order. De1Cndants oppose the requested relieJ: a11d on the return date herein the Court heard oral argun1ent. 1'11e Zimmermans are sl1areholders in the Corporation which O\vns tl1e apartment building located at 410 East 57 111 Street, New York, NY. Defendant corporation is managed by t11c Board and defendant, For1nan, was previously the President of the Board. The Zimmennans purchased shares in two apartments wit11in the building on or abo1it January 25, 2017 pursuant to a propriety lease with the Corporation. The ltnderlying dispute in the matter arose from the Board's-denial of the Zimmermans' application to perform alterations on their apartments, together with the Zi1nmer1nans' claims that the apartments 11ave leaks, inold, old windows, a11d weak water pressure, among other things, In relation to these issues, tl1e Zi1nmem1ans served demru1ds dated Septe1nber 2019, March 2020 and, August 2020~ p11rsuant to tl1eir statutory and common lawright as shareholders to inspect corporate books and records. On August 31 2020, the Zimmennans comme11ced the underlying action wl1ich included causes of action arising fron1 denial oftl1e alteration application and issues arisi11g from the condition of the two apartments. Count 12 of the complaint also i11cludes a demru1d for the corporate books a11d records as set forth in the Zimmerman's pre-action de1nands. Thereafter, the Zimmermans' moved by Order to Show Cause (the First Order to Show Cause) for ru1 order directing Defendants to permit inspection of tl1e corporate books and records, mirroring Count 12 oftl1e complai11t. Following a heari11g on the return date of the First Order to Show Cause, Justice Alan C. Marin isstted the Prodt1ction Order, dated October 29, 2020, directing, inter alitr, that "i) Defendants are to provide ite1ns a), h), i),j), and a copy of the insurance policy, on or before Dece1nbcr 4, 2020; and ii) Defendant[s] sl1all file an answer by November 4, 2020. 653569/2020 ZIMMERMAN, BETSY Motion No. 003 vs. 410-57 CORPORATION 2 of 4 Page 2 of 4 [* 3] INDEX NO. 653569/2020 NYSCEF DOC. NO. 136 RECEIVED NYSCEF: 05/17/2021 Plaintiffs now n1ove for co11ten1pt based on Defendants' failure to prodt1ce the corporate books and records as set forth in this Court's on-the-record decision from October 29, 2020 1 and restated in the Production Order. Jn opposition, De1Cndants, argue that, the plaintiffs fail to show that the reqttisite docume11ts were not produced pursuant to the Production Order. It is well settled that the clements neccssaiy to support a finding of civil conte1npt are: (1) a lawful order of tl1e cou1t was in effect, clearly expressing an unequivocal n1andate; (2) the appearance, with reasonable certainty, that tbe order was disobeyed; (3) the party to be held in contempt 11ad l(nowledge of the court's order; and (4) prejudice to the right of a party to tl1e litigation (see El-Dehdan v El-Dehdan, 26 NY3d 19, 29 [2015]; see also Judiciary Law§ 753). In an application for co11tempt, the 1novant bears the burden of establishing contempt with clear and convit1cing evidence (Tener v. ()·emer, 89 A.D,3d 75, 78 [1st Dept 20 I I J). In the case at bar, wl1ile the plaintiffs established that Defendants had lmowledge of the Production Order, a review of the record establishes that Defendants provided 430 pages of documents on or before December 4, 2020, pursuant to the Prod11ction Order. Further, in response to plaintiffs' claims that some of the docu1nents provided were illegible, tl1e record indicates that Defendants supplemented the production of those documents, wl1icl1 are attached to the moving papers as Exhibit H. Accordingly, the Court finds that Defendants did not disobey the Production order, a11d a fi11ding of conte1npt is not warranted under Judiciary Law§ 753. Further, tl1e Court notes that \Vl1ilc the Productio11 Order required the Defe11dants to file their answer on or before November 4, 2020, tl1e Production Order did not include a preliininary co11ferencc schcdttle \;\1ith a ti11letable for con11J!etion of disclosure pursuant to the Unifortn Court 1 The Court notes that conversion of'the plaintiffs' reqttested relief in the First Order to Sho\v Cause to relief sounding in discovery (October 29. 2020 Transcript) \Vas pren1ature. since defendants had not yet filed an atlS\Ver. 653569/2020 ZIMMERMAN, BETSY vs. 410-57 CORPORATION Motion No. 003 3 of 4 Page 3 of4 [* 4] INDEX NO. 653569/2020 NYSCEF DOC. NO. 136 RECEIVED NYSCEF: 05/17/2021 Rules 202.12, De£C11dants properly assert that plaintiffs' den1ands co11tain requests for docu1nents outside the scope of the Production Order. The Court finds that while said docun1ents 1nay be ulti1nately discoverable, they would be properl)' addressed within the subject of a Preliininary c:onference Order. Based on the foregoing, t11e Order to Show Cause is denied in its entirety, and all stays granted herein are vacated. The parties are hereby directed to appear for a virtual prelimi11ary conference on June 3, 2021 at 3 p.m. 5/12/2021 DATE CHECK ONE: APPLICATION: CHECK !F APPROPRIATE: ~ CASE DISPOSED GRANTED 0 DENIED SETTLE ORDER INCLUDES TRANSFER/REASSIGN 653569/2020 ZIMMERMAN, BETSY vs. 410-57 CORPORATION Motion No. 003 4 of 4 Page 4 of4

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