I & M Kosher Catering LLC v BHNG Inc.

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I & M Kosher Catering LLC v BHNG Inc. 2022 NY Slip Op 30831(U) February 24, 2022 Supreme Court, Kings County Docket Number: Index No. 523834/19 Judge: Leon Ruchelsman 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 03/10/2022 03:53 PM INDEX NO. 523834/2019 NYSCEF DOC. NO. 54 RECEIVED NYSCEF: 03/10/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS : CIVIL TERM:. CQMMERCIAL PART 8 - .· --. --..___ ·. :-----.- . --. --.- -.- --- ·. -. _._. ----x I & M KO'SHER CATERING LLC, Decisiqn and order P laint:.iff., •.,- against - Index No. 5238 34/19 BHNG INC. and KARIEN GANAH a/k/a KARTEN NADI\.V, Defendants, - .---·- .. --- .---. ----- .------·-- .-.-------. --x February 24, 2022 PRESENT: HON. LEON RUCHELSMAN The plaintiff has moved pursuant to CPLF. §3126 seeking to strike the defendants answer or to preclude any testimony for the failure to comply with discovery demands. Alternatively, the plaintiff moves t:,1).rs:u ant to CPLR §3124 seeking to production of discovery squght. The defendants oppose the motion. submitted by the parties and arguments held. Papers were After reviewing all the arguments this court now makes the following determination. As reco1;ded in a prior qrder; the plaintiff sued the defendants alleging essentially the defendants withheld vital financial information concerning the purchase of a bagel store in Kings county which induced the plaintiffs to pay mo'r e than it was act:ually worth. Pi;i.rs11ant to the. <::omplaint: the defer.tdants repres.e nted. the bagel store generated .. pro:f i ts of $250,000 a year anq. pursuant to the Asset Purchase Agreement the parties agreed upon a sale pri~e of $800,000. The plaintiff paid $500,000 by the time of closing a,nd tne remaining "thr~e nunc;ired thous.and and 00/100 dollars ($300,000 ~ 00). balanc.e of the Purchase Price. was made in the form of a promissory note from Plaintiff to 1 of 5 .. . . · · · · · · · · · - · · · · · - - - - - - - - - - - - - - - - - - - - - [*FILED: 2] KINGS COUNTY CLERK 03/10/2022 03:53 PM NYSCEF DOC. NO. 54 INDEX NO. 523834/2019 RECEIVED NYSCEF: 03/10/2022 Defendants'' (see, Verified Complaint, CJr24). The complaint further allege's that indeed the business. did not generate any income at all. The complaint alleges causes of action for fraud and breach of contract. This attion was joined for purposes of another action instituted by the seller alleging with discovery . . the purchaser has failed to make payments p1_+rsuant to the: agreement,. This motion has been filed wherein the plaintiff alleges the defendants have failed to provide necessary discovery sought. The defendants oppose the motion on the grounds they did not act in bad faith. Further, defendant Karien Ganah submitted an aff.1.davit arid conceded that she left the United Stated in July 2.020 am:i thctt "the prior business .records for the business were no longer in our pqs·s ession following the 2018 sale" (see, Affirmation of KarienGanah; <Jl16). affirmation is essentially an The plaintiff counters that admission the dqcurnents have been spoliated necessitating a strict sanctio11. Concltisions of Law It is well settled that a motion to compel should riot be .granted where the information sought is irrelevant, overly broad or burd~nsome (Accent COllections Inc., v .. Cappelli Enterprises _ Inc., 84 AD3d 1283, 924 NYS2d 545 [2d Dept., 2011]). Thus, the party seeking discovery must demonstrate the disclosur~ sought 2 .......... , . , _ ,_, ____________________________________ 2 of 5 [*FILED: 3] KINGS COUNTY CLERK 03/10/2022 03:53 PM NYSCEF DOC. NO. 54 INDEX NO. 523834/2019 RECEIVED NYSCEF: 03/10/2022 contains relevant evidence or information that is reasonably calculated to 1ea,d. to information relevant to the claims in the case at h..a nd (Pesce v. Fernandez, 144 A03d. 653, 40 NYS3d 466 [2d Dept., 2016] ) . There is no question the information s ·ought in this case is highly relevant. It is well settled that corporate tax returns and all corporate finanqial statements are properly the subject of discovery where the information cannot be obtained for any other source (see~ Latture NYS2q. 135 [.2d Dept., 2003.]). v. Smith, 304 AD2d 534, 758 Further, personal tax returns ar~ likewise discoverable where the information cannot be maintained fron other sources. Th~ defertdants h~ve failed tb present ahy reason why the ta~ returns should not be disc.9veral)le in this case (. Pugliese v. Mondello,. 20081). 57 AD3d 637, 871 NYS2d 174 [2d Dept., Therefore, the plaintiff's motion seeking to compel production of a,:11 personal and corporate tax and financial information in unredacted form is granted. The defendant must provide all the tax returns sought within thirty days of when this order is uploaded. Turning to the remainder of the discovery sought the defendants really'. do not provide a sufficient reason wh:f they have delayed in providing the discovery and have insl..lfficiehtly argued they have provided all the discovery sought . Indeed, the overwhelming majority of discovery remains outstanding. Cons.equently, th~ pl<:lintiff ha& been. almos.t completely frustrat~d 3 3 of 5 [*FILED: 4] KINGS COUNTY CLERK 03/10/2022 03:53 PM INDEX NO. 523834/2019 NYSCEF DOC. NO. 54 RECEIVED NYSCEF: 03/10/2022 in being afforded the opportunity to pursue its claims. Thus, such frustration is pre.cisely the conduct that war:rant·s a sanction.. The defendant's ..chief reas.o n in. opposition is that the. document.s are no longer in the defendant's posseSsion. This has prompted a request for further sanctions based upon spoliation of evidence. Regarding the spbliation issue, sanctions may be imposed whei:\e a party has negligently disposed of evidence before . . the opposing party has had ar't opportunity to inspect such evidence (Hartford Fire Insurance Co.; v. Regenercrtive Building Construction Inc., 271 AD2d 862, 706 NYS2d 236 [3 rd Dept.; ZOOO]). Moreove:r, it must be demonstrated that the. party without access to the evidence is "prejudicially bereft of appropriate means to confront a claim with incisive evic:ience" (Foncette v. LA Express, 295 AD2d 471, 744 NYS2d 429 [2d Dept., 2002]). The court has broad discretion regarding whether, and to what extent, spoliation of physical evictepce should give rise to sanctiops ( Iannucci v. Rose, 8 AD3d 437, 778 NYS2d 525 [ 2ci Dept., 2004]) , and Allstate Ins. Co. v. Kearns, 309 AD2d 776, Dept., 2003] ) . 765 NYS2d 806 [2d Factors properly .c onsidered l:;)y the court in.e lude the extent of the prejudice imposed on the party due. to the missing evidence and the degree of willfulness of the spqliator (Iannucci, supra, at 438). As noted, the defendant Ganah asserts that the records sought are no longer in he:r possession. While that admission certainly app.e ars to. sup:port the assertion that 4 4 of 5 [*FILED: 5] KINGS COUNTY CLERK 03/10/2022 03:53 PM INDEX NO. 523834/2019 NYSCEF DOC. NO. 54 RECEIVED NYSCEF: 03/10/2022 spoliation has taken place the court is reluctant to impose a severe sari.ct ion without a clearer understanding w.hy sh.e no longer claims to posses.s those. documents. Therefore, the court is ordering an updated affirmation from Ms. Ganah, to be provided within two weeks from the date this order is uploaded, explaining precisely what happened to all those documents. The spoliation request as well as any :sanction is helcl. in abeyance pending that submission. So ordered. ENTER.: DATED: February 24, 2022 Brooklyn N.Y. Hon. Leon Ruchelsman JSC 5 5 of 5

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