Opinion
14/11073
01-27-2016
Madhu Sanon, Plaintiff, v. Manish Sanon, Defendant.
Gregory J. Mott, Esq. Davidson Fink LLP Attorney for Plaintiff Rochester, New York Peter J. Glennon, Esq. The Glennon Law Firm, P.C. Attorney for Defendant Rochester, New York
Gregory J. Mott, Esq. Davidson Fink LLP Attorney for Plaintiff Rochester, New York Peter J. Glennon, Esq. The Glennon Law Firm, P.C. Attorney for Defendant Rochester, New York Richard A. Dollinger, J.
In this matter, a husband and wife duel over the extent of permissible disclosure under Article 31 of the Civil Practice Law and Rules and how far New York's broad disclosure rules reach into a still-married couple's separate lives.
CPLR Article 31 contains a broad formula for disclosure. Forman v Henkin, 2015 NY Slip Op 09350 (1st Dept. 2015) (the "material and necessary" standard only requires a reasoned basis for asserting that the requested category of items "bear[s] on the controversy" (see id.), or a showing that it is likely to produce relevant evidence); Chester v. Zima, 41 Misc 2d 676 (Sup. Ct. Erie Cty.1964) (Article 31 of the Civil Practice Law and Rules indicates, I believe, a clear intention to open the door of pretrial inquiry to the point where as much of the information material to the issues and normally in the sole possession or under the control of one party may be obtained by the other in the interests of truth). Under this broad command, the court examines the disclosure disputes in this hotly-contested matrimonial action.
1.Disclosure of Documents which the husband says are not in his possession
Two axioms dictate the resolution of this dispute. The first flows in the direction of an amplified obligation to disclose: CPLR 3120 compels production of documents not only in the possession of a party but under their "control." Fugazy v. Time, Inc., 24 AD2d 443 (1st Dept. 1965). Conversely, the second stream flows into an eddy of cases directing that a party may not be compelled to produce information that does not exist or which he does not possess. Rosado v. Mercedes-Benz of North America, Inc., 103 AD2d 395 (2nd Dept. 1984). Corriel v. Volkswagen of America, Inc., 127 AD2d 729 (2nd Dept. 1987): Romeo v. City of New York, 261 AD2d 379 (2nd Dept. 1999) (a party may not be compelled to produce information that does not exist or which he [or she] does not possess). As one of the court's colleagues noted, disclosure is required if:
plaintiff currently retains possession and control, items must be preexisting and tangible to be subject to discovery and production, and a party cannot be compelled to create new documents or items in response to a disclosure demand Heins v. Public Stor., 36 Misc 3d 1217(A) (Sup. Ct. Suffolk Cty. 2012); see also CPLR 3120 [1]; Gatz v Layburn, 9 AD3d 348 (2nd Dept. 2004); Castillo v Henry Schein, Inc., 259 AD2d 651 (2nd Dept. 1999) (a party cannot be sanctioned for failing to produce documents or other tangible items that do not exist or are not in its possession). Simply put in this case, the husband claims he has nothing further to disclose because he swears he does not have many of the requested documents in his possession.
In many of his responses in his affidavit before the court, the husband states that certain accounts have not been used for years or are dormant. This response does not comport with the CPLR, as it suggests that the documents, if in the husband's possession, are, in the husband's mind, not relevant. The husband does not get to make that determination: it is reserved for the court. The documents concerning the couple's finances prior to the date of commencement are prima facie relevant in almost all cases and can be further relevant if they lead to information regarding the husband's post-commencement income. Under the rules discussed above, the husband's only permissible sworn answer to these inquires for access to documents under CPLR 3120 (1) (I) is simply either: I have the documents and will produce them or I do not have the requested documents in my possession or under my control.
Therefore, if the husband has any of the documents which he claims are not pertinent or "dormant" as stated in paragraph 4 of his December 8, 2015 affidavit, he must produce them and to that extent the wife's motion is granted.
In response to the husband's denial that he possesses many of the requested documents, the wife argues that the husband has "control" over the accounts and other information because, as the wife's attorney repeatedly argued, in sum and substance, "these are his accounts with his name on them." But, the requested bank accounts and credit card statements are not the husband's records over which he has "control." The account statements or business records from various banks and other vendors are the records of such institutions. The husband can conduct transactions on such accounts and he does have the power to request reports from such institutions. But, the term "control" as used in CPLR 3120 is most often applied to instances in which a party has direct control over records or personnel such as successor corporations or corporate subsidiaries of parties. Argo v. Queens Surface Corp., 58 AD3d 656, 658 (2nd Dept. 2009). It has also been applied to require discovery from employees of a party. Moriates v. Powertest Petroleum Co., 114 AD2d 888 (2nd Dept. 1985). The court can find no authority that mandates a party, who denies possessing requested documents, is required to obtain corporate records, possessed by a third party, for the benefit of the opposing party under CPLR 3101 or CPLR 3120. In this instance, for example, the corporate records of the husband's dental practice, while corporate records owned and controlled by the corporation, are still under the husband's control because they are the records of a corporate entity over he has control and hence, he is obligated to disclose those records.
In a demonstration of who has "control" of bank statements and credit card records, this Court notes that the account statements, sought here, would need to be certified as business records — by a representative of the business — in order to be admissible at a trial. CPLR 4518(a); People v. Reeves, 124 A.D3d 1068 (3d Dept 2015); Unifund CCR Partners v Youngman, 89 A.D3d 1377 (4th Dept 2011); Citibank (S.D.), N.A. v Zaharis, 2011 NY Slip Op 33285(U)(Sup. Ct. Queens Cty 2011).
When the wife's demand for disclosure is filtered through these statutory guidelines, the court can only conclude that many of the records the wife seeks are not in the husband's possession or under the husband's "control." In response to the demand for a series of documents, the husband swears, under oath, that he does not possess a series of requested documents. Because the husband does not posses or control these documents, he cannot be compelled to produce them. Bivona v. Trump Marina Casino Hotel Resort, 11 AD3d 574 (2nd Dept 2004) (no disclosure if the information requested in the demand did not exist or was not in their possession); Vaz v New York City Tr. Auth., 85 AD3d 902 (2nd Dept. 2011) (party may not be compelled to produce or sanctioned for failing to produce information which he does not possess).
These requested documents which the husband he does not have in his possession include casino spending statements, a VISA card, a Bank of America card (which the defendant states he does not use), an HSBC account (which he claims is dormant), a First Niagara Account (now dormant, he claims), a closed Fleet Bank account, and E-trade account, a series of other bank accounts, Expedia accounts, loyalty programs and longevity checks.
The court, while upholding the husband's objection that he does not possess or control the requested documents, rejects the argument, advanced by the husband, that he can evade his disclosure obligations by suggesting that his wife has control of certain requested documents or that documents are equally accessible to her. The rule is simple; if he has the documents, he must produce them, regardless of whether the wife has access to the documents or even if she has the same documents in her possession. Based on its research, this court can find no authority for the proposition that a party, from whom disclosure is demanded, may decline disclosure on a premise that the requesting party also has access to the requested documents. Recognizing such an exception to the CPLR's broad discovery rule would enshrine a somewhat condescending "you-can-go-get-it yourself" approach that would defeat the purpose of entire statutory scheme and this Court rejects it.
Finally, the wife repeatedly asks for documents which relate to the husband's financial activities after the date of commencement of the action. The wife, in support of disclosure of post-commencement activities, cites two cases: Dorsa v. Dorsa, 50 AD3d 842 (2nd Dept. 2008) and Lennon v. Lennon, 124 AD2d 788 (2nd Dept. 1986). Both cases hold that a party is entitled to post-commencement valuation of marital assets to establish the true value of the assets during the marriage and at the time of commencement. As the court in Lennon v. Lennon intoned: "Post-commencement information relevant to the valuation of marital assets is thus a proper inquiry." Id. at 789. However, neither case supports the proposition that a party in a divorce has an interest in post-commencement expenses paid by a party's separate income. The wife has no marital interest in documents detailing separate property expenses incurred after the commencement of the action. She does have a legitimate interest in documents which demonstrate the income of the husband after the commencement. In that respect, this court notes that the husband and wife have filed joint income tax returns during their married life. The wife has signed income tax returns detailing the husband's sources of income during the marriage. The wife concedes that while they were married she was involved in the husband's business and was familiar with his finances. While there is an allegation that the husband, during the marriage, hid income from the wife (and may be still hiding it), there is no evidence to support that allegation and no evidence that he - or his wife - failed to disclose this allegedly phantom income to the government taxing authorities when filing their marital tax returns. Given these factors, the post-commencement expenses of the husband are not relevant to any disputed issue currently before the Court. Gama Aviation Inc. v Sandton Capital Partners, LP, 113 AD3d 456 (1st Dept 2014); Abrams v Pecile, 83 AD3d 527 (1st Dept 2011).
The husband's attorney argues in his affidavit that the wife has "engaged in scorched earth tactics" by looking in uncommon places for financial data - including the husband's shoes left in the marital residence - and taking other actions (opening mail or emails) to find the husband's financial trail. This court declines to comment except to note that a divorce litigant may look near and far - even into the deep recesses of the soles of an opponent - to find relevant trial-worthy evidence.
The wife cites Pennino v. Lipsky, 49 AD3d 543 (2nd Dept. 2008) to suggest that post-commencement expenditures may be relevant to establish income for child support or maintenance. In reading this never-cited-since case, the wife admitted to annual expenses and thus, the court imputed an income to match those expenses. In this case, it is undisputed that the husband has a substantial post-commencement income and there is no factual basis for any allegations of "hidden income" by the wife
The wife does allege, through her attorney, that the husband's reported income does not reflect his true income, but apart from this suggestion, there is no evidence to support the allegation, especially when tax returns for the husband and wife and other corporate entities, containing sworn statements of pre-commencement income, have already been exchanged or should be.
Therefore, based on the current facts in this application, the court holds that the husband must produce all items below in his possession: (A)all the husband's pay stubs from any employer from 2014 to date; (B)credit card statements prior to the date of commencement, but not thereafter; (C)any receipts for purchases from January 1, 2013, until the date of commencement; (D)any receipts for trips taken by the husband during the last two years of the marriage; (E)any documents relating to the ESL first mortgage up to the date of the response; (F)any applications for business or personal loans from 2012 to the date of response; and (G)any other requested documents, relating to marital expenses or post-commencement income, which are currently in his possession.
The wife's application to compel is granted to that extent. It is denied as respecting all other documents except those cited in footnote 1 above.
2.Subpoena/Deposition of the Husband's Fiancé
The subpoena of the husband's fiancé for a deposition is governed by CPLR 3101(4) which requires that a subpoena of a non-party state the circumstances for which "such disclosure is sought." CPLR 3101(4). The subpoena issued to the fiancé in this case fails to state such circumstances and therefore is facially defective. Matter of Kapon v. Koch, 23 NY3d 32, (CPLR 3101 (a) (4)'s notice requirement nonetheless obligates the subpoenaing party to state, either on the face of the subpoena or in a notice accompanying it, "the circumstances or reasons such disclosure is sought or required" and the subpoenaing party must include that information in the notice in the first instance (see Sponsors Mem, Bill Jacket, L 1984, ch 294), lest it be subject to a challenge for facial insufficiency); see also De Stafano v MT Health Clubs, 220 AD2d 331 (1st Dept. 1995).
However, for purposes of judicial and litigant economy, the broader question - whether the fiancé has matter "material and necessary" to this litigation as required by CPLR 3101 (a) - should be resolved as well. The husband argues that his fiancé has no "material and relevant" information to detail in this litigation. In seeking to depose the finance, the wife argues that the husband has showered expensive gifts and other luxuries on his fiancé and adds that these expenses are certainly "relevant on the issue of the [husband's] ability to pay support and what he does with his earnings." However, it is undisputed that all of these expenses, which are the subject of the wife's inquiry, were incurred with the husband's separate post-commencement funds. In addition, the husband, who will be deposed, can answer any and all questions regarding his post-commencement income. There is no suggestion - or any "factual predicate" - set forth in the wife's papers that the fiancé knows anything about the husband's post-separation income. McCann v. Harleysville Ins. Co. of NY, 78 AD3d 1524 (4th Dept. 2010) (without such a factual predicate, the disclosure was characterized as a "fishing expedition"). What the husband declares as post-commencement income may be relevant to a number of issues but what he does with his separate funds (whether he spends them on his fiancé or not) is not relevant unless he alleges that his exorbitant expenses prevent him from paying statutory child support or reasonable maintenance. He has not made any such allegation in this litigation to date. For these reasons, the husband's motion to quash the subpoena for testimony of his fiancé is granted.
If the wife contended that the fiancé contributed to the husband's expenses, then she might be subject to a deposition to determine the amount of such contribution and whether her contribution permits the Court to impute income to the husband. Matter of Simmons v. Simmons, 48 AD3d 691 (2d Dept 2008); Krup v. Fehr, 24 Misc 3d 1219(A)(Sup. Ct. Kings Cty 2009). There is no such allegation in this matter.
If the gifts were purchased with pre-commencement - i.e., "marital" - funds, then the items (rings, cars, houses, other goods) are marital property and the wife has a marital interest in them and they must be disclosed and are subject to equitable distribution.
3.Inspection of Marital Property
During the marriage, the husband bought a second home. It is undisputedly marital property and the wife has an interest in it. Under CPLR 3120 (1) (b), a party may serve a notice to inspect any property in the possession or control of a party and may take photographs of "the property." The wife has asked to enter the property: the husband agreed and then when arrangements for the inspection were made, the wife's entry did not occur.
The court grants the wife the right to enter the husband's residence. All marital property in the residence must be available for inspection and photographing when the wife visits. The court will, if necessary and upon request, appoint a neutral to accompany the wife in the inspection to make sure that she has access to the entire property and to assure both parties that nothing is removed from the property during the inspection.
4.Sale or Repair of the Marital Residence
As this court has repeatedly noted, this court cannot order a sale of the marital residence pendente lite. Kahn v. Kahn, 43 NY2d 203 (1977); see Harlan v Harlan, 46 Misc 3d 1003 (Sup. Ct. Monroe Cty. 2014) (Dollinger, J.). Similarly, this court will not permit any actions that have the practical impact of compelling sale, such as the husband's application to shave his maintenance payments until the house is sold. The court declines to reduce the maintenance payments.
There is little substance to the husband's claim for reduction in temporary maintenance. There is no allegation of an extreme hardship to the husband or any evidence that the maintenance payments have impacted his lifestyle or business. Khan v. Ali, 132 AD3d 635 (2nd Dept. 2015); Sayers v. Sayers, 129 AD3d 1519 (4th Dept. 2015).
While the court cannot order the sale of the residence, the parties agree that the home should be prepared for sale. But, in what this court considers a distressing comment on the status of this litigation, the parties cannot even agree on the protocol of making the repairs necessary for sale or the broker who will sell it. During the oral argument of these motions, the couple could not agree on these issues. Because these issues are left to the court, the court will accept the wife's description of the needed repairs and the wife's designated workmen. The wife and husband are ordered to sign an agreement with those contractors for repairs at the house within 10 days of the entry of an order from this decision. The contractors will proceed forthwith to make the needed repairs. The husband will pay those costs and be reimbursed for these expenses off the top of the net proceeds. While I would tend to retain a realtor who has previously worked with the parties, I am cautious, given the friction between this couple, and I believe the parties need a new start. I therefore select the realtor who was the second choice of the husband and the parties will sign a standard listing agreement with that realtor when, in the realtor's discretion, the property is properly prepared for sale. The court will advise the parties of selected contractors/realtor through subsequent email.
The wife also sought payment of $1733.86, which was previously ordered by the court. The husband avers that this sum has been paid.
5.Attorneys Fees
The competing claims for attorneys fees are denied without prejudice at this time, subject to renewal later. As a result of these competing motions, there are claims by the husband that the wife's application to depose the fiancé and compel production of documents that were not in his possession were overly broad. Conversely, the wife, as the indisputably lesser moneyed spouse and for whom DRL Section 237 (a) presumes an entitlement to attorneys fees, can accurately note that the husband did withhold some requested documents, frustrated inspection of marital property, failed to timely pay the previously ordered sum and unsuccessfully tried to scale back his maintenance payments to compel sale of the marital residence. In the court's view, there is a plague of intemperance that has settled on both houses that has clouded their judgment to the extent of even requiring the court to intervene and decree who will repair their house and sell it. Given this seeming intransigence on both sides, this court will wait until completion of this action to award additional fees. At that point, this court will be better able to shift fees, if necessary, and the court will have a better vantage point to evaluate all the factors that warrant fee shifting including the presumptive entitlement to fees and the consequences of what may be a sizable equitable distribution to the wife. Clements v. Clements, 990 NYS2d 437 (Sup. Ct. Monroe County 2014) (Dollinger, J.); Morrissey v. Morrissey, 259 AD2d 472 (2nd Dept. 1999) (court must consider "relative merits" of the parties positions in assessing fees and may consider "stonewalling" conduct that results in unnecessary litigation); see also Prichep v. Prichep, 52 AD3d 61 (2nd Dept. 2008) (the court may also consider whether either party has engaged in conduct or taken positions resulting in a delay of the proceedings or unnecessary litigation).
See Sykes v. Sykes, 992 NYS2d 161 (Sup. Ct. New York Cty. 2014) (considering an award of interim fees, but insuring that both parties have "skin the game").
See Shakespeare, Romeo and Juliet, Act 3, scene 1, lines 90—92 (1597)
This decision resolves all issues before the court.
SUBMIT ORDER ON NOTICE. DATED:January 27, 2016______________________________
Richard A. Dollinger, A.S.C.J.