Discovery Violations = Sanctions and Attorneys’ Fees
February 8, 2011
135 E 57th Street LLC v. Katzoff
(Supreme Court of the State of New York, New York County 5/26/2012)
We represented a plaintiff whose motion for sanctions based on the defendants’ failure to comply with discovery requests was granted. Court further ordered defendants to redo their discovery responses, and warned that further sanctions in the amount of $10,000.00 per culpable party, per account or computer containing the document, would be forthcoming if relevant documents were produced during an e-discovery search.
Following this order, the defendants redid their discovery productions, producing for the first time in this action emails and attachments along with metadata, totaling hundreds of thousands of pages of documents. Upon review of the new discovery productions, it became clear that some of the defendants still had not fully complied, and failed to produce voluminous numbers of emails and attachments, particularly those that were harmful to the defendants’ case. Using cutting edge e-discovery software, Itkowitz was able to quickly and efficiently determine which documents were produced by some of the defendants and not by others, but which should have been in all defendants’ productions. After this discovery analysis, Itkowitz made a second motion for sanctions, to strike the answer of the non-compliant defendants, and for adverse inferences based on the “smoking gun” documents which were not produced.
The Court found the defendants’ explanation for their deficient production unconvincing, and granted plaintiff’s motion for sanctions by awarding plaintiff attorneys’ fees incurred as a result of the defendants’ discovery defaults. Link to Full Text of Decision
135 East 57th Street, LLC v. Gerald Katzoff, etal.
(Index No. 602167-09, NYS Supreme Court, June 6, 2011)
We represented the landlord of a commercial building on the Upper East Side in ongoing litigation in the Commercial Division of New York Supreme Court, New York County, with a day spa (a former tenant) and the spa’s principals. Previously, Itkowitz obtained a money judgment against the tenant limited liability company in Civil Court for over One Million Dollars after three written decisions and an aborted bankruptcy. Itkowitz has meanwhile pursued the direct and indirect owners and principals of the day spa LLC on several legal theories, alleging that they wrongfully and secretly transferred the day spa business to a new company, then expressly promised the landlord in a lease amendment dated six months later that the identity of ownership had not changed.
In this discovery motion following the landlord’s successful survival of defendants’ pre-discovery summary judgment motion, we sought sanctions for the defendants’ failure to comply with discovery requests. Some defendants had produced nothing at all, even after repeated demands in writing; others had made a partial production, but failed, among other things, to produce emails during the six-month period between the change in ownership and the execution of the lease amendment with the landlord. Defendants’ excuses for noncompliance were unconvincing; at oral argument, Justice Ramos granted Itkowitz’s motion for sanctions, directed defendants to redo their discovery responses, and warned defendants that if any relevant documents of importance in this case are discovered in the email accounts and on the desktops of the computers they failed to disclose, Itkowitz’s client will be granted sanctions of $10,000.00, per culpable party, per account or computer containing the document. Link to Full Text of Decision
In re 57th Street Day Spa, LLC, Case No. 10-13048 (REG)
(Bankr. S.D.N.Y. Oct. 27, 2010)
We represented 135 East 57th Street LLC in litigation with its prior tenant, 57th Street Day Spa, LLC (“Day Spa”), and individuals and entities that own and/or manage Day Spa. On June 7, 2010 — just one day before we were scheduled to proceed to trial for money damages resulting from Day Spa’s nonpayment of rent — Day Spa filed a Chapter 7 bankruptcy petition, bringing all state-court litigation to a halt. We then moved to dismiss the bankruptcy case pursuant to Bankruptcy Code § 707(a) “for cause” as a bad-faith filing, even though motions to dismiss corporate Chapter 7 bankruptcy cases are rarely granted. Nevertheless, on October 27, 2010, the United States Bankruptcy Court for the Southern District of New York (Hon. Robert E. Gerber, U.S.B.J.) granted the motion. Noting that the no-asset, single-creditor bankruptcy case would not serve any valid bankruptcy purpose and is “not a GM” (Judge Gerber is also presiding over the General Motors bankruptcy cases), the court held that the case had been filed with the purpose of frustrating the landlord and that the filing had achieved that effect. The state-court litigation remained pending. Link to Full Text of Decision
