Opinion
Index No. 521318/19 Motion Seq. No. 4
02-15-2023
SHMUEL AIZIKOVIGH & OHR CHODOSH ELECTRICAL CONTRACTING. INC., Plaintiffs v. JOZEF TOROK, TFK ELECTRIC CORP., HUN MAINTENANCE INC., & KAMILA RHOLVA TOROK, Defendants,
Unpublished Opinion
PRESENT: HON. LEON RUCHELSMAN J.
DECISION AND ORDER
HON. LEON RUCHELSMAN J.S.C.
The defendants have moved seeking to compel the disclosure of the- plaintiff's corporate and personal tax returns. The plaintiff has opposed the motion- Papers were submitted, by the. parties and arguments held. After reviewing all the arguments, this court how makes the following determination..
As. recorded in a prior order the Amended Complaint essentially alleges the defendant Torok misappropriated money from the plaintiff, falsified records and caused the plaintiff to be responsible for goods purchased by Torok. The defendant counterclaimed and asserted the plaintiff was paid by the defendants for work the defendants never performed, essentially siphoning funds from the defendants. The defendants asserted counterclaims for breach of contract, fraud, conversion and unjust enrichment. The defendants now seek the corporate and personal tax returns of the plaintiff. The. plaintiff has refused to disclose those tax returns necessitating this motion.
Conclusions of Law
It is well settled that "tax returns, generally are not discoverable in the absence of a strong showing that the information is indispensable to a claim or defense and cannot be obtained from other sources" (see, bill v. Gaco Western LLC., 203 A.D.3d 1173, 758 N.Y.S.2d 135 [2d Dept., 2003]). Thus, "the party seeking to compel production of a tax return must identify the particular information the return will contain and. its relevance, explain why other possible sources of the information sought are inaccessible or likely to be unproductive and limit examination of the- return to relevant material through redaction of extraneous information" (see, Nanoor Realty COpr., v. Pater Realty Company, 242 A.D.2d 208, 661 N.Y.S.2d 216 [1st Dept.1997]).
In this case the defendant's basis seeking the tax returns is to verify the plaintiff's contention that an oral partnership, existed- between the parties. In Shabbasson v. Max E. Greenberg, Trager, Toplitz and Herbst, 284 A.D.2d 230, 726 N.Y.S.2d 552 [1st Dept. 20;01] the Court permitted. the disclosure of Schedule K-l 1 s of the partnership tax returns- to establish claims a partner did not receive his fair share of partnership profits. Likewise, the Schedule-' K-.l's, to the extent they exist in this -case will establish the existence of a partnership. Thus, the portion of the request seeking-the Schedule K-l'.s only for purposing of establishing the existence of a partnership is granted.
The defendants, also seek the tax returns on the- grounds they allege the plaintiff committed fraud against the. defendant Torok. Specifically, the defendant asserts that "the tax returns are the only source-' that can verify and support Defendant's counterclaim-, as they will be able to verify whether Torok ever received the 50% of net profits, he was. entitled to" (see, Affirmation in Support, ¶37 [NYSCEF Doc. No. 102]). However, as noted, the production of Schedule K-1's, if any, surely provide the necessary information in this regard that cannot be obtained from other sources .
Lastly, the defendants, argue, they require the- production of full and complete tax returns so they can verify whether the. information provided, in other financial documents submitted: is accurate. The defendants assert that "plaintiffs' tax-returns will show the- amount .of monies Plaintiff's diverted from Defendants'. Defendants will be able- to see from the., tax returns the amount of monies Plaintiffs actually took from the partnership and from Defendant's" see, Affirmation. in. Support, ¶41 [NYSCEF Doc. No. 102]') .However, there is no basis upon which to assert that the tax returns will contain a list of jobs for which the. plaintiff worked, and the defendants can then sift, through the- list and ascertain whether, any funds .owed them has-been withheld. -The tax. returns will not contain such specific and readily comparable- information. Thus., the tax returns will, not "show the amount of monies plaintiffs diverted from defendants" (id) . Therefore, there is no basis to disclose such information,.
Consequently; based on the foregoing, the motion seeking the tax returns of the plaintiff is granted only to the extent that partnership Schedule K-1 's shall be furnished. No other information of any tax return is discoverable.
So ordered.