Discovery

Valuecare Pharmacy Inc v MVAIC, 2021 NY Slip Op 50429(U)(App. Term 1st Dept. 2021)

There is irony when Supreme Court Justices opine that the failure to object solely leaves privilege and palpable impropriety as the sole grounds to object to discovery. It is not until the CC order that anyone takes discovery seriously, well after the 20-day period. But it is easier to legislate than it is to regulate.

“Where a party fails to timely object to discovery demands within the 20-day period prescribed by CPLR article 31 (see CPLR 3122[a]; 3133[a]), appellate review is limited to determining whether the requested material is privileged under CPLR 3101 or the demand is palpably improper (see Khatskevich v Victor, 184 AD3d 504 [2020]; Jefferson v State of New York, 60 AD3d 1215 [2009]). Here, defendant did not timely object to plaintiff’s discovery demands, including the interrogatories and notice for discovery and inspection, and, in fact, ignored them until plaintiff moved to compel compliance several months later. Since defendant did not argue below that the discovery requested was privileged or that the requests were palpably improper, we have no cause to disturb Civil Court’s grant of plaintiff’s motion to compel (see Precision Chiropractic, PC v MVAIC, 67 Misc 3d 126[A], 2020 NY Slip Op 50359[U] [App Term, 1st Dept 2020]).”

I think as a defendant, this Court has over the last 5 years been the tougher of the two intermediate lower-level appellate courts in which to prevail.

The theme is once discovery starts, the Court will not substitute its discretion for that of the trial court when a discovery order is a bit wayward

Deposition rulings

Gargano v Langman, 2020 NY Slip Op 04923 (2d Dept. 2020)

“An order denying a motion to compel a witness to answer questions propounded at an examination before trial is akin to a ruling made in the course of the examination itself and is not appealable as of right, even where it was made upon a full record and on the plaintiff’s motion to compel responses”

EBT rulings – even if made in the context of a subsequent motion – may only be appealed as of right.

Conditional Order of preclusion substitutes for willfulness

Center Sheet Metal v Cannon Design, Inc., 2020 NY Slip Op 04010 (1st Dept. 2020)

“Plaintiffs violated the court’s third conditional order of preclusion by failing to produce a witness for Aspen’s scheduled deposition, and failed to demonstrate either a reasonable excuse for their failure to comply or a meritorious claim.”

Contrary to plaintiffs’ argument, the court was not required to find that their failure to comply was willful (Keller v Merchant Capital Portfolios, LLC, 103 AD3d 532, 533 [1st Dept 2013]).

Waiting can cost you

Aikanat v Spruce Assoc., L.P., 2020 NY Slip Op 02188 (1st Dept. 2020)

“The court providently exercised its discretion in declining to vacate the note of issue or permit post-note of issue discovery in light of defendants’ failure to seek the discovery at an earlier time (see generally Andon v 302-304 Mott St. Assoc., 94 NY2d 740, 745 [2000]). Although defendants requested authorization to obtain plaintiff’s tax returns in 2015, they took no action to enforce their request until after the note of issue was filed. Similarly, they did not seek the Facebook Data until soon before the note of issue was filed, despite the asserted need for the information based on plaintiff’s testimony in his depositions, the last of which was taken in July 2018.

Defendants contend that the note of issue should be vacated because plaintiff misrepresented in the certificate of readiness that discovery was complete. However, the certificate of readiness correctly stated that plaintiff responded to all outstanding discovery requests, in that objections are an appropriate response. Furthermore, defendants failed to indicate why they are entitled to the discovery they belatedly sought; why the information in the tax returns was not available from another less private source, such as plaintiff’s employer’s payroll records (see Gama Aviation Inc. v Sandton Capital Partners, LP, 113 AD3d 456, 457 [1st Dept 2014]); and why they waited so long to request the social media information.

Defendants also assert that they were also improperly denied the opportunity to depose a corporate witness from third-party defendant BGC Partners, Inc. (BGC), who had knowledge of their claims for contractual indemnification and failure to procure insurance, and that the first witness produced by BGC did not have the requisite knowledge. However, they fail to indicate why they waited until after the note of issue was filed to seek this discovery inasmuch as the sale of assets to BGC occurred in April 2012, and defendants deposed the corporate witness in August 2018. The court further noted that defendants moved for summary judgment on their [*2]indemnification claims against BGC, demonstrating that the additional discovery was superfluous.”

I find this interesting as it is consistent with the view that the party who sleeps on his rights waives them. I believe that moving for summary judgment and asking for tax returns caused the court not insert its discretion in the place of the Supreme Court.

The conditional order of dismissal

Mehler v Jones, 2020 NY Slip Op 02103 (1st Dept. 2020)

“The motion court providently exercised its discretion in issuing a conditional order of dismissal, in light of plaintiff’s history of noncompliance with court orders requiring her to appear for a further deposition (see CPLR 3126[3]; Fish & Richardson, P.C. v Schindler, 75 AD3d 219, 220 [1st Dept 2010]).

Plaintiff contends that her behavior was neither willful nor contumacious. However, by issuing a conditional order, the court “relieve[d] [itself] of the unrewarding inquiry into whether [plaintiff’s] resistance was willful” (Board of Mgrs. of the 129 Lafayette St. Condominium v 129 Lafayette St., LLC, 103 AD3d 511, 511 [1st Dept 2013] [internal quotation marks omitted]).”

I find it hard to believe that the decision to impost a conditional order is a two step process. This Court lately has been all over the place doctrinally. There was a CPLR 2309 case that was off the charts stupid that I did not post because I did not want to encourage anyone to make those arguments. I am losing faith in this Court quickly.

Discovery of the first-party file

Dabo v One Hudson Yards Owner, LLC, 2019 NY Slip Op 07751 (1st Dept. 2019)

“Documents in an insurer’s claim file, including an accident investigation report, that were prepared for litigation against its insured are immune from disclosure (see CPLR 3101[d][2]; Recant v Harwood, 222 AD2d 372, 373-374 [1st Dept 1995]). Although documents in a first-party insurance action prepared in an insurer’s ordinary course of business in investigating whether to accept or reject coverage are discoverable (see CPLR 3101[g]; Brooklyn Union Gas Co. v American Home Assur. Co., 23 AD3d 190, 191 [2005]), there is no indication that such documents are being protected here.”

Move quickly or do not move at all

Cashbamba v 1056 Bedford LLC, 2019 NY Slip Op 03456 (1st Dept. 2019)

(1)”Defendants failed to comply with the requirement of 22 NYCRR 202.7 to submit an affirmation of good faith in support of their disclosure-related motion. Contrary to their contention, their counsel’s affirmations are insufficient, because they do not include the time, place, and nature of the consultations that counsel had with plaintiff’s counsel to try to resolve the issues raised by the motion (22 NYCRR 202.7[c]; see 241 Fifth Ave. Hotel, LLC v GSY Corp., 110 AD3d 470, 471-472 [1st Dept 2013]; see also Loeb v Assara N.Y. I, L.P., 118 AD3d 457, 457-458 [1st Dept 2014]). To the extent defendants rely on letters exchanged between their counsel and plaintiff’s counsel, the letters are insufficient, because they relate to only one of the items sought by defendants and do not reference any discussions between counsel. Moreover, the record does not support defendants’ contention that the parties have historically been unable to resolve discovery disputes without court intervention.”

(2) “Furthermore, defendants failed to provide an adequate explanation for their delay in seeking to compel the examination after plaintiff failed to appear. They also failed to explain why they did not move to reargue and/or appeal the court’s decision of June 15, 2017, wherein it denied defendants’ motion to vacate the note of issue. In its decision, the court stated that the motion was denied as moot as “[a]ll discovery sought in the motion has now been provided.” Instead, defendants waited until August 27, 2018, to move to strike the complaint or to preclude plaintiff from providing evidence of his neurological injuries or for an order compelling plaintiff to appear for an independent neurological examination and to provide authorizations.”

The lesson here is once that Note of Issue is thrown down, you need to act expeditiously, whether to reargue or to appeal. Defendant fell asleep here and got severely punished.

Discovery penalty: dismissal

Queens-Roosevelt Med. Rehabilitation, P.C. v Response Ins. Co., 2019 NY Slip Op 50608(U)(App. Term 2d Dept. 2019)

“Contrary to the finding of the Civil Court, the questions at issue were “designed to elicit information which was material and necessary to the appellant’s defense of this action” (Parker v Ollivierre, 60 AD3d 1023, 1024 [2009]), as Dr. McGee’s involvement in other medical service corporations, including how much time he spent at those entities, could necessarily affect his involvement in the daily activities and management of plaintiff, and were relevant to whether Dr. McGee was plaintiff’s “bona fide owner [and] operator.” Moreover, counsel’s “directions not to answer [the questions at issue] were not otherwise authorized by [Uniform Rules for the Conduct of Depositions] 22 NYCRR [§] 221.2” (id. at 1024). In light of plaintiff’s failure to fully comply with discovery over many years, plaintiff’s refusal to answer the questions at issue may be presumed to be willful and contumacious (see e.g. Honghui Kuang v MetLife, 159 AD3d 878 [2018]); therefore, a sanction is warranted. Given that certain of plaintiff’s claims have already been struck based upon its noncompliance with discovery and that Dr. McGee has already been deposed twice, we find that striking plaintiff’s complaint is the appropriate sanction (see id.).”

This case is interesting for a bunch of reasons. First, Dr. McGee should have had shells on his payroll to administer the tests and treatments at his facility, so he could account for his large practice. Second, the direction not to answer a question is just dangerous unless the question is palpably improper. Example: “What’s her motivation for saying that you lied”. Clearly palpably improper. Better question: “Are you aware of why she said you lied?” But, I suppose McGee asked for this outcome.

Yet, don’t you think in light of Dr. McGee appearing twice – a remedy short of dismissal with prejudice (SOL makes it with prejudice) – perhaps a third deposition or preclusion might be a proper remedy?

Discovery

Fu-Qi Acupuncture, P.C. v Travelers Ins. Co., 2019 NY Slip Op 50273(U)(App. Term 2d Dept. 2019)

“Defendant’s timely motion to vacate the notice of trial (see Uniform Rules for NY City Civ Ct [22 NYCRR] § 208.17 [c]) should have been granted since it was based upon a certificate of readiness which contained the erroneous statement that discovery was complete or that it had been waived (see Savino v Lewittes, 160 AD2d 176 [1990]; Queens Chiropractic Mgt., P.C. v Country Wide Ins. Co., 23 Misc 3d 142[A], 2009 NY Slip Op 51073[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]). As it is undisputed that plaintiff never appeared for a deposition in this action despite being served with a notice to take deposition upon oral examination, the notice of trial and certificate of readiness should be vacated (see Queens Chiropractic Mgt., P.C., 23 Misc 3d 142[A], 2009 NY Slip Op 51073[U]).”

Discovery, especially depositions, is potent because it can really increase the transactional costs of litigating all types of matters. The current fee structure of handling litigation on all sides makes discovery the exception and not the rule. An in house firm gets a flat rate to handle a file. If more cases go the deposition route, then more labor will be spent on motion practice and conducting depositions. An hourly firm would obviously salivate at this type of strategy but no insurance carrier really wants to pay $7,000-$10,000 in litigation expenses on a PIP case. So, from the defense side, this strategy just cannot work.

The Plaintiffs only lose money since they receive a stat attorney and usually some amount of principle and interest regardless of the amount of work put into a file. Assuming full discovery, their margins are hammered. Point is full court discovery cannot make sense in the current environment.

Court hints at its view towards renewal when discovery is outstanding

Corvino v Schineller, 2019 NY Slip Op 00259 (2d Dept. 2019)

“The defendant’s contention that the plaintiff’s motion should have been denied without leave to renew is not properly before this Court. However, we note our concern that, where a motion for summary judgment has been made prematurely, granting leave to renew upon completion of discovery may only encourage the making of premature motions, resulting in successive motion practice and, in turn, successive appeals, thus increasing the burdens on this Court. Motion courts should therefore exercise their discretion with care in deciding whether to give advance permission to a movant to make a successive motion for summary judgment. “

The Scheinkman Court has been sending out signals that he wants the Second Department to run similar to how Westchester Supreme Court ran when Justice Schneinkman was the administrative judge at that court. We saw an admonition to the trial judges in a criminal case involving involuntariness of pleas. Also, the Court warned us that extensions of time to perfect briefs would not be ripe for the asking.

Personally, they should break up the Second Department into a new Fifth Department for Long Island and Mid-Hudson Valley matters. The Court just hears too many cases, and it is not fair to the Judges or the attorneys to wait 2 years for argument/submission or 3 months following same for an opinion.