Opinion
Index 155013/2019
01-19-2022
BILL REICHENBACH, JULIE BASEM, AMY KERNER, and ERIKA ABRAMS, Plaintiff(s), v. JACIN INVESTORS CORP., N.V., JACIN INVESTORS LLC, and NYC HOLDINGS LLC, Defendant(s) NYSCEF Doc. No. 221 Motion Seq. No. 8
LEWIS J. LUBELL, JUDGE
Unpublished Opinion
MOTION DATE: 10/19/21
PRESENT: HON. LEWIS J. LUBELL, J.S.C.
DECISION & ORDER ON MOTION
LEWIS J. LUBELL, JUDGE
Plaintiffs move (Motion #8) for leave to renew Motion #5. Defendants cross-move for summary judgment as to plaintiffs' fourth cause of action and any other claim for money damages.
The following papers filed on NYSCEF were read on the motion: Doc. Nos.
Notice of Motion, Affirmation, and Exhibits (18) 172-191
Affirmation in Opposition and Affidavit 212-213
Notice of Cross-Motion, Affirmation, Affidavit, Statement, Exhibits (14) 192-209
Affirmation in Opposition and Reply and Statement 210-211
Transcript 220
By way of background, plaintiffs are tenants in a building known as 1410 York Avenue, New York, New York (Premises), which is owned and managed by defendants. Plaintiffs occupy units 3D, 2J, 4C, and 5J, respectively. Plaintiff commenced this action on May 17, 2019 with the filing of a summons and complaint, which was later amended. The complaint sets forth four causes of action. The first seeks a declaration that plaintiffs Amy Kerner and Erika Adams are entitled to rent stabilized leases at units 4C and 5J. The second seeks a declaration as to the lawful rents for the subject units under the Rent Stabilization Law (RSL). The third seeks a declaration that a certain stipulation relating to the rent regulatory status of unit 5J. The fourth seeks money damages for alleged overcharges of the lawful stabilized rent set forth under the RSL. Subsequently, plaintiffs moved to compel discovery or strike defendants' pleadings (that is, Motion # 3), which was resolved by a so-ordered stipulation that extended defendants' time to produce the outstanding discovery. Before the deadline for compliance expired, defendants moved for a protective order (that is, Motion #4) and plaintiffs again moved to compel discovery or strike defendants' pleadings (that is, Motion #5). Plaintiff indicated that the outstanding discovery (Outstanding Discovery) includes, but is not limited to (a) particularization of defendants' affirmative defenses and counterclaims; (b) certain filings relevant to the question whether the rents were lawfully increased at defendants' rent-regulated units; (c) certain filings relevant to the question whether defendants' rent-regulated units were properly deregulated; and (d) copies of itemized proofs of individual apartment increases and/or Premises-wide major capital improvements rendered at the Premises, including checks, paid invoices, work estimates, and other such materials relevant to the question of lawful rent increases. On April 10, 2020, the Court (per Hon. Robert D. Kalish, J.S.C.) issued a decision and order, which resolved the motions by providing for the depositions of two individuals (that is, Elliot Sohayegh and Mario Kucher) said to possess knowledge and information relevant to the Outstanding Discovery. In reaching its decision, the Court noted that "there is no dispute that the subject documents are material and necessary for the prosecution and defense of this action, pursuant to CPLR - 3101 (a)." Now, plaintiffs move for leave to renew Motion #5 and defendants cross-move to dismiss plaintiffs' fourth cause of action. The Court addresses the motions in order.
Mr. Sohayegh is the property manager of defendants and Mr. Kucher was formerly employed as a property manager by defendants.
Plaintiffs' Motion
In support of the motion, plaintiffs proffer, among other things, the deposition transcript of Mr. Sohayegh. Plaintiffs assert that Mr. Sohayegh offered no testimony that would explain defendants' inability to produce the Outstanding Discovery. Plaintiffs also assert that defendants' failure to provide the Outstanding Discovery is willful and contumacious. Further, plaintiffs note that, notwithstanding the fact that they provided defendants with Mr. Kucher's last known address, defendants have made no effort to secure Mr. Kucher's deposition or obtain any documents from him. Based hereon and defendants' repeated failure to produce the Outstanding Discovery, plaintiffs contend that they are entitled to a preclusion order or that defendants' pleadings should be stricken.
In response, defendants assert that they have no documents other than what has already been provided. Defendants note that there was a change of ownership in 2014 and that Mr. Kucher was the property manager of the Premises at that time. Defendants note that Mr. Kucher commenced an action in connection with that transaction, claiming that he is entitled to a broker fee. Defendants speculate that Mr. Kucher may have taken the documents that plaintiffs seek. Based hereon, defendants contend the only relief to which plaintiffs would be entitled is an order of preclusion that would enjoin defendants from producing the subject documents at trial.
Discussion
When faced with a party's failure to comply with a discovery order, CPLR 3126 empowers the Court to fashion an appropriate penalty, including issuing a preclusion order or striking a party's pleadings. However, it is well settled that the Court should not strike a party's pleading absent "a clear showing that the failure to comply is willful, contumacious or in bad faith" (Lee v 13th St. Entertainment LLC, 161 A.D.3d 631, 632 [1st Dept 2018] [internal quotation marks omitted]). Here, defendants have repeatedly indicated that they do not possess the discovery sought and plaintiffs have not proffered evidence that clearly shows that this is not the case. Accordingly, striking defendants' pleadings is not appropriate. Next, the Court considers plaintiffs' application for an order of preclusion.
As noted above, there is insufficient evidence to establish that defendants' failure to produce the outstanding discovery is the result of a refusal to comply with a court order or a willful failure to produce the same. As such, it is the common-law doctrine of spoliation, rather than CPLR 3126, which governs the application (see Strong v City of New York, 112 A.D.3d 15, 24 [1st Dept 2013]). "Preclusion, also a relatively severe sanction, is appropriate where the defendants destroyed essential physical evidence leaving the plaintiff without appropriate means to confront a claim with incisive evidence" (id. [internal quotation marks omitted]). As there is no dispute that the outstanding discovery is material and necessary for the prosecution and defense of this action, the Court finds the less severe sanction of preclusion to be appropriate. Next, the Court consider defendants' motion for summary judgment as to plaintiffs' fourth cause of action.
Defendants' Cross-Motion
In support of the motion, defendants assert that the alleged overcharges occurred beyond the four-year statute of limitations of CPLR 213-a. Defendants assert that this four-year statute of limitations bars review of the rental history as well, unless there is a showing of fraud. Defendants assert that a finding of fraud is only available when there is a scheme; a simple overcharge will not satisfy this requirement Defendants assert that plaintiffs can only point to a jump in the rental history more than four years ago which defendants contend, is insufficient.
Effective February 1, 2021, "[u]pon any motion for summary judgment... there shall be annexed to the notice of motion a separate, short and concise statement, in numbered paragraph,, of the material facts as to which the moving party contends there is no genuine issue to be tried" (Uniform Rules for Trial Cts [22 NYCRR] § 202.8-g [a] [emphasis added]). Although Defendants submitted a purported statement of undisputed material facts, the statement does not present a single fact as to which defendants contend there is no dispute. Rather, each statement is either a restatement of an allegation of the complaint, a paraphrasing of what Defendants assume to be plaintiffs' argument, or simply an argument by defendants. Effectively, Defendants submitted no statement of undisputed material facts. There is some authority for the proposition that the failure to submit a statement of undisputed material facts requires the denial of a motion for summary judgment (see Alexander v B. N.C. M. Inc., 73 Misc.3d 1225 (A) [Sup Ct, NY County 2021]; Amos Fin. LLe v Crapanzano, 73 Misc.3d 448 [Sup Ct, Rockland County 2021]). However, in this instance, the Court will simply ignore the submitted statement and give it no consideration in rendering its decision on the cross-motion.
Discussion
"It is well settled that a movant for summary judgment bears the initial burden of presenting affirmative evidence of its entitlement to summary judgment" (Hairston v Liberty Behavioral Mgt. Corp., 157 A.D.3d 404, 405 [1st Dept 2018]). "Merely pointing to gaps in an opponent's evidence is insufficient to satisfy the movant's burden" (id) Here, defendants have merely argued that plaintiffs lack sufficient proof to support their four cause of action, which is insufficient to make out a prima facie showing.
Conclusion
To the extent not specifically addressed herein, the Court finds the remaining arguments to be without merit. Based on the foregoing, it is hereby
ORDERED that plaintiffs' motion (Motion #8) is GRANTED TO THE EXTENT that defendants are precluded from producing the Outstanding Discovery at trial, in subsequent motion practice, and/or the remainder of this action's pendency; and it is further
ORDERED that defendants' cross-motion is DENIED.