Opinion
654459/2018
08-20-2020
SITE SAFETY, LLC, Major Building Consulting LLC, and City Safety Compliance Corp., Plaintiffs, v. Sandeep GUNNALA, Mansukh Savalia, Nelson Flores, Phillip Cooley, Keerthi Chintakindi, Gudavalli Yaswanth, Highrise Group NYC, Inc., KS Consulting Group LLC, John and Jane Does 1-10, and John and Jane Does Corporations 1-10, Defendants.
Wagner, Berkow & Brandt, LLP, New York, NY (Ian J. Brandt of counsel), for plaintiffs. Mario Biaggi Jr., Esq., New York, NY, for defendants.
Wagner, Berkow & Brandt, LLP, New York, NY (Ian J. Brandt of counsel), for plaintiffs.
Mario Biaggi Jr., Esq., New York, NY, for defendants.
Gerald Lebovits, J.
The following e-filed documents, listed by NYSCEF document number (Motion 002) 48, 49, 50, 51, 52, 53, 54, 55, 56, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72 were read on this motion for DISCOVERY.
Plaintiffs are affiliated companies that provide safety-related services to construction contractors. Plaintiffs have sued defendants for allegedly misappropriating plaintiffs' confidential information and soliciting business from clients of plaintiffs in violation of non-compete agreements. Defendant Sandeep Gunnala has counterclaimed for a share of plaintiffs' profits in 2016 through 2018, alleging that during his employment with plaintiffs he was contractually entitled to—but did not receive—that share of profits as a bonus.
Plaintiffs and defendants have each propounded extensive requests for written discovery; and each now argue that the other has failed to comply with their discovery obligations. Defendants move under CPLR 3124 to compel plaintiffs to provide further written discovery. Plaintiffs cross-move for the same relief. The motion and cross-motion are each granted in part and denied in part; the court's item-by-item determinations on the parties' respective discovery requests are set forth below.
Both defendants and plaintiffs seek, in the alternative, an order striking the other side's pleading under CPLR 3126. This court concludes that such drastic relief is not warranted here. The requests under CPLR 3126 are denied; the remainder of this decision deals only with the branches of the motion and cross-motion that seek to compel discovery under CPLR 3214.
DISCUSSION
Defendants' Discovery Requests of Plaintiffs
Document Requests
Request 29: Motion to compel denied. This request is overbroad and burdensome. Nor is it necessary to identify the clients for whom defendants allegedly performed work in violation of their non-compete agreements, as defendants suggest.
Request 31: Motion to compel denied. This request is not likely to lead to the discovery of admissible evidence. If defendants wish to identify witnesses who possess relevant information about the allegations in the complaint, the proper means to do so is an appropriately targeted set of interrogatories.
Requests 32, 34, 39, 40, and 45: Motion to compel denied. The court declines to direct the production of tax returns, bank-account information, bank statements, checks, and gross sales receipts absent a showing that no less-intrusive means—for example, production of corporate profit & loss statements—will suffice to obtain the relevant information about plaintiffs' profits. This court notes that defendants have not alleged that plaintiffs' determination of its profits, as an accounting matter, is materially inaccurate (either deliberately or inadvertently).
Request 35: Motion to compel denied. Plaintiffs' client list is highly sensitive information—particularly given the nature of the present action. Plaintiffs have already provided considerable detail (in the complaint, in the earlier settlement stipulation, and in their bill of particulars) about the identities of the clients whom defendants are alleged to have wrongfully solicited. Defendants have not shown that directing further, blanket production of plaintiffs' client list going back eight years is necessary to enable them meaningfully to defend this action.
Requests 38 and 43: Motion to compel denied. These requests are not likely to lead to the discovery of admissible evidence. This court is not persuaded by defendants' position that the payroll records and credit card statements at issue are relevant to defendant Gunnala's counterclaim. That counterclaim, as pleaded, does not allege that plaintiffs incorrectly calculated or wrongfully deflated Gunnala's promised share of plaintiffs' profits, but rather that plaintiffs refused to pay him his share altogether for 2016, 2017, and the first quarter of 2018.
Requests 41, 42, and 44: Motion to compel denied. These requests are overbroad, burdensome, and not likely to lead to the discovery of admissible evidence.
Request 46: Motion to compel denied for the same reasons as defendants' Requests 35 and 45, supra .
Demands for Bill of Particulars
Demand 6: Motion to compel denied. Defendants do not show that the information demanded is necessary to amplify the cited paragraph of the complaint. Nor have defendants shown that the information demanded is necessary to amplify defendant Gunnala's counterclaim, for the same reasons as defendants' Document Requests 38 and 43, supra .
Demand 17: Motion to compel granted. Plaintiffs must provide the information requested to the extent that it is within their possession. If plaintiffs lack any responsive information, they shall so indicate.
Demand 18: Motion to compel granted. Plaintiffs must supplement their response to fully respond to this demand. To the extent that plaintiffs lack any responsive information beyond what they have already provided, they shall so indicate.
Demand 20: Motion to compel granted. Plaintiffs' initial answer to this demand is non-responsive. Plaintiffs must supplement their response to fully respond to this demand. To the extent that plaintiffs lack any responsive information beyond what they have already provided, they shall so indicate.
Demand 21: Motion to compel granted. Plaintiffs (i) must clarify their answer to this demand to indicate whether they are saying that defendants diverted contracts with each of the entities identified in Bill of Particulars 15; and (ii) must also identify the particular contracts diverted.
Demand 26: Motion to compel granted. Plaintiffs must identify the jobs for which Solow has used HighRise from the beginning of 2018 to present, to the extent that this information is within their possession.
Demand 27: Motion to compel granted. Plaintiffs must provide the requested information, to the extent that it has not already been provided.
Demand 37: Motion to compel granted. Plaintiffs must identify the work diverted to the extent that this information is within their possession. Plaintiffs need not, however, specify the dollar amount of that work.
Demands 42 and 43: Motion to compel granted. Plaintiffs must provide the information requested to the extent that it is within their possession. If plaintiffs lack any responsive information, they shall so indicate.
Demand 46: Motion to compel denied. The cited paragraph of the complaint does not contain the allegation for which defendants seek amplification.
Demands 47, 48, 51, 53, 54, 55, 58, 59, 60, 63, 64, 66, 67, 69, 70, 72, 74, and 78: Motion to compel denied. Plaintiffs' bill of particulars need not particularize allegations as to the amount of lost business, damages, lost profits, or ill-gotten gains.
Demand 50: Motion to compel granted. Plaintiffs must supplement their initial answer to this demand to fully provide the information and amplification sought, to the extent that this information is within their possession. If plaintiffs lack any additional responsive information, they shall so indicate.
Demand 56: Motion to compel denied. The cited paragraph of the complaint on its face alleges that all the defendants had actual knowledge of plaintiffs' business relationships with their clients. And plaintiffs have specifically identified particular clients in the prior paragraphs of plaintiffs' Bill of Particulars that are cited in 56.
Demands 57 and 62: Motion to compel denied. Other allegations of plaintiffs' complaint specifically identify particular business opportunities that allegedly were diverted and business that was lost. Defendants have not shown that those allegations are insufficient or incomplete so as to require amplification.
Demand 71: Motion to compel granted. Plaintiffs must fully respond to this demand to the extent that the requested information is within their possession (and to the extent this information has not already been provided.) If plaintiffs lack any responsive information, they shall so indicate.
Demand 73: Motion to compel denied. This information has already been provided in other allegations of plaintiffs' complaint. Defendants have not shown that those allegations are insufficient or incomplete so as to require amplification.
Demand 75: Motion to compel granted. Plaintiffs must fully respond to this demand to the extent that the requested information is within their possession. If plaintiffs lack any responsive information, they shall so indicate.
Demand 76: Motion to compel denied. Defendants have not shown that this demand seeks information beyond that requested in Demand 17.
Demands 77 and 79: Motion to compel granted. Plaintiffs must fully respond to these demands to the extent that the requested information is within their possession. If plaintiffs lack any responsive information, they shall so indicate.
Plaintiffs' Discovery Requests of Defendants
As an initial matter, plaintiffs contend that this court should direct a forensic examination of the hard drives and cloud-storage files maintained by defendants. This court concludes that plaintiffs have not shown an entitlement to such far-reaching and intrusive relief (even if plaintiffs are willing to bear the cost of the examination).
This court is not persuaded by plaintiffs' assertion that defendant Gunnala falsely disclaimed ownership Highrise in interrogatory answers in this action while telling the New York City Department of Buildings that he owns Highrise. At most, Gunnala's response to whether he has any "legal, financial or equitable ownership interest" in Highrise was—aside from objecting to the question as improper—to state that he lacks an equitable ownership interest in Highrise. (See NYSCEF No. 63 at 2.) That is not the same as disclaiming ownership of Highrise altogether.
Document Requests
Request 1: Motion to compel granted. Gunnala shall produce all communications and documents in his possession that (i) were sent or received to clients of plaintiffs; (ii) were sent or received between September 1, 2016, and March 30, 2018, inclusive; and (iii) were not sent or received to carry out or further work that plaintiffs were performing on behalf of their clients. If Gunnala has no such communications or documents in his possession, he shall so indicate.
Request 2: Motion to compel granted. Savalia shall produce all communications and documents in his possession that (i) were sent or received to clients of plaintiffs; (ii) were sent or received during the period of Savalia's employment by plaintiffs (as alleged in the amended complaint); and (iii) were not sent or received to carry out or further work that plaintiffs were performing on behalf of their clients. If Savalia has no such communications or documents in his possession, he shall so indicate.
Request 3: Motion to compel granted. Flores shall produce all communications and documents in his possession that (i) were sent or received to clients of plaintiffs; (ii) were sent or received between September 1, 2016, and October 31, 2017, inclusive; and (iii) were not sent or received to carry out or further work that plaintiffs were performing on behalf of their clients. If Flores has no such communications or documents in his possession, he shall so indicate.
Request 7: Motion to compel granted. Defendants shall produce all such documents and communications in their possession that (i) were sent or received between March 30, 2018, and March 31, 2019, inclusive; and (ii) were germane to work (or services) performed by either plaintiffs or defendants.
Request 8: Motion to compel granted. Defendants shall produce all such documents and communications in their possession that (i) were sent or received between October 31, 2017, and March 31, 2019 inclusive; and (ii) were germane to work (or services) performed by either plaintiffs or defendants.
Request 9: Motion to compel denied. Plaintiffs assert that defendants' production in response to this request was incomplete "as non-party depositions reveal additional communications." (NYSCEF No. 59.) But they do not identify the depositions (or attach transcripts or relevant excerpts), specify what exactly was revealed by the depositions, or provide any details about the asserted additional communications.
Request 13: Motion to compel granted. Gunnala shall produce all documents and communications in his possession that (i) were sent or received between March 30, 2018, and March 31, 2019, inclusive; (ii) were sent to or received from entities whom Gunnala knew at the time to be (or to have been) clients of plaintiffs; and (iii) were germane to work (or services) performed by either plaintiffs or defendants.
Request 15: Motion to compel granted. Flores shall produce all documents and communications in his possession that (i) were sent or received between October 31, 2017, and March 31, 2019, inclusive; (ii) were sent to or received from entities whom Flores knew at the time to be (or to have been) clients of plaintiffs; and (iii) were germane to work (or services) performed by either plaintiffs or defendants.
Request 16: Motion to compel granted. Cooley shall produce all documents and communications in his possession that (i) were sent or received between March 30, 2018, and March 31, 2019, inclusive; and (ii) were sent to or received from entities whom Cooley knew at the time to be (or to have been) clients of plaintiffs.
Requests 17 and 18: Motion to compel denied. As drafted, these requests are extremely broad and burdensome, and seek considerable materials that do not appear relevant to plaintiffs' claims (along with documents that might be relevant or lead to the discovery of admissible evidence). The court declines to undertake the task for plaintiffs of pruning these requests down to a narrower and more manageable form.
Request 19: Motion to compel granted. Defendants shall produce (i) all text messages, emails, and other communications in their possession; that (ii) were sent or received by the individual defendants, any employee, agent, or representative of Highrise, and/or any employee agent, or representative, of KS Consulting; (iii) were sent to or received from the 16 individuals named in this request; (iv) were sent between September 1, 2017, and March 31, 2019, inclusive; and (v) did not carry out or further the work being performed by plaintiffs. Defendants need not otherwise respond to this request.
Request 20: Motion to compel granted. Defendants shall produce all such communications that (i) were sent or received between September 1, 2017, and March 31, 2019, inclusive; (ii) were sent to or received from individuals whom defendants knew at the time to be current or former employees of plaintiffs; and (iii) were germane to work (or services) performed by either plaintiffs or defendants.
Request 21: Motion to compel granted. Defendants shall produce information sufficient for plaintiffs reasonably to identify all such applications, permits, and filings. Defendants need not produce the documents themselves.
Request 22: Motion to compel denied on the ground that this request is overbroad and burdensome.
Request 23: Motion to compel granted as to documents and communications that (i) were sent or received between March 30, 2018, and March 31, 2019, inclusive; and (ii) were sent to or received from entities whom defendants knew at the time to be current or former clients of plaintiffs.
Requests 26 and 27: Motion to compel granted. Defendants shall provide the requested releases.
Request 28: Motion to compel granted. Defendants shall provide the requested financial statements for the fiscal year in which March 31, 2019, falls.
Request 29: Motion to compel denied. Defendants already have responded to this request, and plaintiffs do not identify a reason to believe the response is misleading or incomplete.
Requests 30 and 31: Motion to compel denied. Defendants have responded to these requests, and plaintiffs do not identify a reason to believe the responses are misleading or incomplete.
Requests 33, 34, and 35: Motion to compel denied on the ground that these requests are overbroad and burdensome. Plaintiffs also do not explain the connection between these requests and the cited deposition testimony of Ms. Toofani.
Request 40: Motion to compel denied. Plaintiffs do not explain why this burdensome request is likely to lead to the discovery of admissible evidence.
Request 42: Motion to compel denied. This request is substantially duplicative of plaintiffs' Request 21, supra , and plaintiffs do not explain why the additional information sought in this request is likely to lead to the discovery of further admissible evidence.
Request 49: Motion to compel denied. Plaintiffs do not explain why this burdensome request is likely to lead to the discovery of admissible evidence.
Requests 51, 52, and 53: Motion to compel granted. To the extent not produced in response to other requests, the defendants named in these requests shall produce all emails that were (i) sent or received on or before March 31, 2019; to (ii) entities who have been identified in this action as clients of plaintiffs or whom the named defendants knew at the time to be current or former clients of plaintiffs; and (iii) pertain to the provision of site safety services.
Request 54: Motion to compel granted. To the extent available and not already provided, Highrise shall produce copies of its gross sales receipts for the fiscal year in which March 31, 2019, falls, and also the two preceding fiscal years.
Request 55: Motion to compel denied. Defendants already have responded to this request, and plaintiffs do not identify a reason to believe the response is misleading or incomplete.
Request 56: Motion to compel granted. To the extent not already provided, defendants shall produce the requested information through March 31, 2019.
Request 57: Motion to compel denied. Defendants already have responded to this request, and plaintiffs do not identify a reason to believe the response is misleading or incomplete.
Interrogatories
Interrogatory 12: Motion to compel denied. Defendants' interrogatory answer is responsive, and plaintiffs do not specify additional information or detail that defendants should have provided.
Interrogatories 13 and 14: Motion to compel granted. Defendants must identify each individual or entity whom the individual defendants (or defendants Gunnala, Savalia, and Flores, respectively) knew to be a prospective or actual client of plaintiffs at the time the individual or entity was contacted by defendants.
Interrogatory 15: Motion to compel granted. As originally framed, this interrogatory is overly broad, vague, and burdensome. Defendants must, however, (i) identify all customer lists and financial information of plaintiffs that (ii) Highrise Group, KS Consulting, Aryan Engineering, or the individual defendants used (iii) through and including March 31, 2019, for (iv) purposes other than carrying out or furthering the work of plaintiffs themselves. Defendants need not otherwise supplement their response to this interrogatory.
Interrogatory 16: Motion to compel granted. Defendants' initial response appears to have been based solely on defendant Gunnala's personal recollection. To the extent that defendants have additional responsive information—based, for example, on notes, communications, memoranda, or other documents prepared or sent by Gunnala—they must supplement their response to provide this information.
Interrogatory 17: Motion to compel granted. Defendants' initial answer does not address the first half of this interrogatory. Defendants must supplement their answer to provide a response to that aspect of the interrogatory.
Interrogatory 18: Motion to compel granted. Defendants' initial answer is not responsive. They must supplement their answer to provide all responsive information in their possession.
Accordingly, for the foregoing reasons, it is hereby
ORDERED that the branch of defendants' motion and plaintiffs' cross-motion seeking to strike pleadings under CPLR 3126 is denied; and it is further
ORDERED that the branch of defendants' motion seeking to compel discovery responses under CPLR 3124 is granted in part and denied in part to the extent set forth above, and plaintiffs shall provide the required discovery within 45 days of service by either party of a copy of this order with notice of its entry; and it is further
ORDERED that the branch of plaintiffs' cross-motion seeking to compel discovery responses under CPLR 3124 is granted in part and denied in part to the extent set forth above, and defendants shall provide the required discovery within 45 days of service by either party of notice of entry.