ATM SERV. NY, INC. v. ZONE ONE N.Y., INC.

Full title: ATM SERVICES NY v. ZONE ONE NEW YORK

Court: Supreme Court of the State of New York, New York County

Date published: Jul 5, 2007

2007 N.Y. Slip Op. 31985 (N.Y. Sup. Ct. 2007)

Opinion

0100674/2006.

July 5, 2007.

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] SHIRLEY W. KORNREICH, Judge.

Pursuant to CPLR 3124, Defendants Zone One New York, Inc., Lee Chen and Michael Chen ("defendants") move to compel plaintiff, ATM Services NY, Inc. ("plaintiff), to provide further responses to their Second Notice to Produce and Permit Discovery and Inspection, dated March 29, 2007 ("Notice"), along with costs, disbursements and attorneys' fees. Plaintiff avers that defendants' demands were over-broad and irrelevant to any of plaintiff's claims and counterclaims. Plaintiff also contends that it previously provided defendants with all relevant and responsive documents as required by CPLR 3122 and, thus, opposes defendants' motion.

I. Factual Background

Plaintiff commenced this action seeking monetary damages for breach of contract and interference with contractual relationships. It contends that it entered into ATM Site Location Agreements with retail stores known as M A Grocery, Pak Punjab Deli Grocery, Village Bazaar and AAK Convenience ("Stores"), which granted plaintiff exclusive rights to place and process ATM transactions on the Stores' premises. Sometime thereafter, plaintiff sub-contracted with defendants to perform work on the ATM machines in exchange for a fee. However, plaintiff claims that defendants re-programmed and switched the codes in the ATM machines, without plaintiff's consent, in order to receive a higher fee or "kick-backs" from a different company. Plaintiff contends that it lost profits and incurred reputational harm when defendants wrongfully induced the Stores to breach their agreements and evicted plaintiff from the Stores.

In their counterclaims, defendants aver that plaintiff breached its contract with them and tortiously interfered with their business relationships with M A Grocery and Pak Punjab Deli Grocery by using threats and extortion and inducing the stores to breach their relationship with defendants. They, however, do not mention Village Bazaar or AAK Convenience in their counterclaims.

II. Conclusions of Law

CPLR 3101 (a) states: "[t]here shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof." The words "material and necessary" are to be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity. Allen v. Crowell-Collier Publishing Co., 21 N.Y.2d 403, 406 (1968). Litigants, however, do not have carte blanche to demand production of whatever documents they speculate might contain something helpful. Vyas v. Campbell, 4 A.D.3d 417, 417 (2^nd Dept. 2004). Therefore, demands that are unduly burdensome, lack specificity, seek privileged matter or irrelevant information, or are otherwise improper must be denied. Scalone v. Phelps Memorial Hosp. Center, 184 A.D.2d 65, 70 (2^nd Dept. 1992). Moreover, trial courts have broad discretion in supervising pre-trial discovery, as CPLR 3103 (a) states:

The court may at any time on its own initiative, or on motion of any party or of any person from whom discovery is sought, make a protective order denying, limiting, conditioning or regulating the use of any disclosure device. Such order shall be designed to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts.

Here, the majority of defendants' demands are overly broad and irrelevant to the issues in this case. See 40 Rector Holdings, LLC v. Travelers Indemnity Co., 2007 NY Slip Op 4422 (1^st Dept. 2007). For example, items ten through twenty-seven of the Notice require plaintiff to provide copies of pleadings related to other actions in which plaintiff is involved and to produce contracts, agreements, correspondence, etc. relating to different stores not mentioned in the pleadings in this action. There are no claims in this action relating to these other stores, and defendants have not shown that the issues in the actions relating to the other stores are related to the issues here. Also, defendants request copies of documents showing phone numbers and correspondence under the control of plaintiff's president, Mr. Kim, a list of all of the ATM machines operated by plaintiff, copies of plaintiff's sales agents' tax forms, and a print-out of plaintiff's highest and average bank balance for 2006. Defendants fail to explain how these documents are relevant to this case or might lead to the discovery of material facts. See Scofield v. Trustees of Union College, 267 A.D.2d 651, 652 (3^rd Dept. 1999). Additionally, defendants did not provide the Court with a copy of Mr. Kim's deposition, which they repeatedly refer to in order to explain why their requests are needed to prepare for trial.

Discovery should not be ordered where, as here, there has been a failure to demonstrate that it is anything more than a "fishing expedition." Greenberg v. McLaughlin, 242 A.D.2d 603, 604 (2^nd Dept. 1997). Virtually all of defendants' interrogatories are improper, overly broad or seek conditionally privileged information, such as tax information and bank accounts. See EIFS, Inc. v. Morie Co., Inc., 298 A.D.2d 548, 549 (2^nd Dept. 2002). Document requests two through twenty-seven and interrogatories (demonstrated as "information questions") one through three should be stricken rather than pruned, as they are patently burdensome, unduly vague and oppressive. Barouh Eaton Allen Corp. v. IBM Corp., 76 A.D.2d 873, 874 (2^nd Dept. 1980); see also EIFS, Inc. v. Morie Co., Inc., 298 A.D.2d 548, 549 (2^nd Dept. 2002).

On the other hand, defendants' first request for documents makes a legitimate request for police records regarding an investigation of plaintiff and Mr. Kim, who is a police officer, as well as plaintiff's president. Defendants requested disclosure of Mr. Kim's police department records and agreements concerning his operation of plaintiff's business while serving as a police officer. This information relates to defendants' counter-claims, as Mr. Kim allegedly told defendants that he was removing himself from plaintiff's business by order of the police department, and that he was turning over plaintiff's locations to defendants. Thus, plaintiff and Mr. Kim shall produce any documents relating to the police investigation and agreement that are in their possession, custody or control, and which they are permitted by law to disclose. However, plaintiff and Mr. Kim may not be compelled to produce information that does not exist, that they are legally bound to keep confidential, or over which they do not exercise possession, custody or control. Lauro v. Top of the Class Caterers, Inc., 169 A.D.2d 708, 708 (2^nd Dept. 1991). In the event that plaintiff and Mr. Kim do not have possession, custody or control of documents responsive to this request, they shall provide defendants with an affidavit so stating. Accordingly, it is

ORDERED that plaintiff is directed to produce the documents demanded by defendants in item number one of the Notice within seven (7) days of service upon plaintiff of a copy of this order with notice of entry; and it is further

ORDERED that defendants' document requests two through twenty-seven and information questions one through three are hereby stricken; and it is further

ORDERED that defendants' request for costs, disbursements and attorneys' fees is denied.