Suffolk P.E.T. Mgmt., LLC v. Anand
Suffolk P.E.T. Mgmt., LLC v. Anand
105 A.D.3d 462 (N.Y. App. Div. 2013)
April 4, 2013
Failure to Preserve
Bad Faith
Spoliation
Sanctions
Default Judgment
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Summary

Decision affirming the order of a special referee on a motion for sanctions.  The referee recommended defendant’s answer to plaintiff’s claims be stricken for engaging in “willful and contumacious” conduct by failing to comply with the court’s discovery orders and that a default judgment be entered for plaintiff.

Over a two-year period, defendants failed to timely search for requested documents and failed to preserve material documents.  Although the case does not say how the parties got to this point, a forensic study of defendant’s computer revealed that what little production defendant had made was in bad faith because defendants did not produce all relevant ESI and “[m]any of the records that plaintiffs sought and were not provided with were material to plaintiffs' case, and were required to be maintained by defendants.”  Because defendant failed to comply with clearly explained discovery orders, the court affirmed the special referee’s order to strike defendant’s response to plaintiff’s claim and entered a default judgment against defendant on the issue of liability. 

SUFFOLK P.E.T. MANAGEMENT, LLC, et al., Respondents,
v.
AZAD K. ANAND, M.D., et al., Appellants
9729N, 113141/08
Supreme Court, Appellate Division, First Department, New York
April 04, 2013

Counsel

Weber Law Group LLP, Melville (Garrett L. Gray of counsel), for Appellants.
Storch Amini & Munves PC, New York (Steven G. Storch of counsel), for Respondents.

Opinion

Order, Supreme Court, New York County (Bernard J. Fried, J.), entered July 16, 2012, which granted plaintiff's motion to confirm the report of the Special Referee recommending that defendants' answer be stricken for noncompliance with discovery orders and directives and that a default judgment be entered against defendants on liability, and referred the matter to a special referee to hear and report on the issue of damages, unanimously affirmed, without costs.
The motion was properly granted inasmuch as the record supports the findings that defendants engaged in willful and contumacious conduct by their failure to comply with the court's discovery orders and directives (see CPLR 3126[3]; Jones v. Green, 34 A.D.3d 260, 825 N.Y.S.2d 446 [1st Dept. 2006]; Hot & Tasty Corp. v. IOB Realty, 270 A.D.2d 67, 704 N.Y.S.2d 816 [1st Dept. 2000] ). There exists no basis to disturb the credibility determinations made by the Special Referee (see Matter of Continental Cas. Co. v. Lecei, 65 A.D.3d 931, 885 N.Y.S.2d 285 [1st Dept. 2009] ).
Here, while defendants produced much documentation during discovery, a forensic study of defendants' computer hard drives revealed evidence that conflicted with defendants' assertions that all relevant documents, including electronic information, had been produced. Many of the records that plaintiffs sought and were not provided with were material to plaintiffs' case, and were required to be maintained by defendants, as per the parties' contract. The evidence further shows that defendants, over a two-year period, failed to conduct timely searches for requested documents, failed to preserve material documents despite an awareness of the action and otherwise affirmatively interfered with plaintiffs' efforts to collect discoverable material. Moreover, defendants were alerted to the potential consequences of incomplete disclosure during the several hearings conducted by the court on the discovery issues.