By: Jared A. Hand Published: July 2013

Failing to Comply with the Timing Requirements Surrounding Discovery Demands may have Harsh Consequences...

In the course of a lawsuit each party is given an opportunity to inspect the other side's documents and question key witnesses. This exchange of information is broadly referred to as discovery. New York's rules of procedure and the judges charged with enforcing those rules provide guidance as to how and when this exchange is to occur. This is to ensure that our judicial process moves quickly and efficiently without sacrificing judicial integrity. On July 11, 2013, the Appellate Division, Third Department, issued a decision demonstrating the importance of strictly complying with the timing requirements surrounding discovery demands.

In Hameroff and Sons, LLC v. Plank, LLC, 2013 N.Y. Slip. Op. 05271 (2013), the parties negotiated a stipulation of settlement requiring Plaintiff to pay Defendant $105,000 in satisfaction of its obligations under a construction contract and requiring Defendant to, among other things, complete the building. Neither party complied with the stipulation of settlement thus leading to litigation and eventually a discovery schedule being put into place by the court.

After Defendant, although having failed to comply with Plaintiff's December 2010 discovery demands, moved for Summary Judgment, Plaintiff cross-moved to compel discovery. The Court denied Defendant's motion for Summary Judgment, finding that the settlement agreement entered into was ambiguous, and granted Plaintiff's cross-motion, directing Defendant to serve discovery responses within 20 days. Defendant again failed to comply and the Supreme Court set another deadline for discovery responses to be served.

While the Defendant again failed to timely respond to Plaintiff's discovery demands, it did allow Plaintiff to review documents. Defendant, however, did not provide written responses to the demands and Plaintiff complained of irregularities and missing documents without any response from Defendant. Finally, 15 months after initial service of the discovery demands, Plaintiff moved, pursuant to CPLR § 3126, for preclusion and issue resolution. After giving the parties extensive opportunities to submit additional papers, the Supreme Court partially granted Plaintiff's motion and found that Defendant willfully failed to comply with discovery demands and was therefore precluded from offering evidence concerning the stipulation of settlement.

On Appeal, it was determined that the Supreme Court did not abuse its discretion by precluding Defendant from offering certain evidence. Trial courts have "broad discretionary power in controlling discovery and disclosure, and only a clear abuse of discretion will prompt appellate action." The Appellate Division placed emphasis on the fact that between December 2010 and March 2102, Plaintiff repeatedly requested that Defendant respond to its discovery demands. Despite such requests, established deadlines and three court orders, Defendant, without objecting to the demands, still failed to respond.

The Court further reasoned that an inference of willful non-compliance arose given that Defendant repeatedly failed to respond, and because of documentary evidence establishing that Defendant deleted certain electronic communications after being aware of the potential for litigation, and possibly after litigation had already begun. Although Defendant argued that the emails it deleted were irrelevant, the Court found that relevance of destroyed documents is presumed if the destruction was intentional or willful.

For these reasons, it was held that the Supreme Court did not abuse its discretion by precluding Defendant from offering evidence on a particular issue.

Recommendation:

Whether plaintiff or defendant, a party to a lawsuit must always strive to strictly comply with the time requirements surrounding discovery demands. In the event that compliance is not possible, communication should always be maintained with your attorney and adversary to prevent situations such as the one presented above. Further, if litigation appears possible in the future, no matter how slight the chances and how irrelevant certain documents may seem, electronic records and correspondence should never be deleted. Such deletions may lead to an inference of relevance, willful non-compliance, and can result in sanctions disallowing the presentation of evidence on essential issues. For all of these reasons it is important to manage your time wisely and always produce documents to your attorney when requested. As in the case above, the failure to timely do so may have harsh consequnces.

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