Arts4all, Ltd. v. Hancock

Order, Supreme Court, New York County (Rolando T. Acosta, J.), entered July 25, 2006, which dismissed plaintiffs’ remaining cause of action and defendant’s counterclaims for failure to comply with discovery and effectively denied defendant’s request for signed transcripts, affirmed, without costs. Appeal from the October 31, 2005 ruling imposing sanctions against defendant dismissed, without costs. Supreme Court providently exercised its discretion to strike the pleadings (CPLR 3126 [3]). The parties have offered no excuse for their repeated noncompliance with the court’s disclosure orders, and their conduct throughout the course of this litigation has been “dilatory, evasive, obstructive and ultimately contumacious” (Henry Rosenfeld, Inc. v Bower & Gardner, 161 AD2d 374, 374 [1990]). It is a “court’s prerogative to control its calendar and expeditiously dispose of the volume of cases before it” (People v Alston, 191 AD2d 176, 177 [1993]; see also Kriger v Holland Furnace Co., 12 AD2d 44, 46 [I960]). Appellate courts have recognized that, under the individual assignment system, substantial deference should be accorded to the trial court’s considerable discretion to compel compliance with discovery orders, and, absent clear abuse, a penalty imposed in accordance with CPLR 3126 should not readily be disturbed (see Sawh v Bridges, 120 AD2d 74, 79 [1986], appeal dismissed 69 NY2d 852 [1987]). The public policy favoring reso [287] lution of cases on their merits is not promoted by permitting a party to a single such matter to impose an undue burden on judicial resources to the detriment of all other litigants. Nor is the efficient disposition of the business before the courts advanced by undermining the authority of the trial court to supervise the parties who appear before it (cfi id. at 80). The record, which reflects a personal animus between defendant and plaintiff Humphrey, amply demonstrates the parties’ willful, contumacious defiance of court orders via excessive, frivolous and retaliatory motion practice involving disclosure and other issues. In this simple action for breach of the no-disparagement clause of a general release, the parties, in a relatively short period of time, interposed approximately 18 motions, several of which involved voluminous disclosure demands and charges of misconduct, improper disclosure requests and noncompliance with such demands. The court’s September 29, 2005 order vacating all disclosure stays, admonishing both sides for their dilatory tactics and directing the parties to complete disclosure within 30 days, effectively afforded them the opportunity to begin anew. The parties’ conduct, nevertheless, quickly segued into abuse despite the court’s proactive efforts to provide a firm discovery schedule, a restriction on motion practice, rapid access to court assistance in resolving disputes, and progressive warnings and sanctions. For example, over one year after it had been issued, plaintiffs still had not complied with the court’s June 8, 2005 order enforcing defendant’s shareholder inspection rights to certain videotapes, financial statements and other corporate documents (including items sought in defendant’s Schedule J), notwithstanding the court’s repeated reiteration of this directive. Thus, plaintiffs also engaged in willful misrepresentation and dilatory conduct when they filed a note of issue on January 13, 2006 stating that all disclosure had been completed. Several months later, on April 6, 2006, the court ordered the parties to its jury room and several hours were spent working out an agreement as to the Schedule J items, with some degree of success. But upon their return to court that same day, plaintiffs sought to renege on the agreement, informing the court that they would be filing a CPLR 3126 motion to strike defendant’s amended counterclaims. Defendant’s response to the September 29, 2005 discovery order was to wait until nearly the mandated initial disclosure completion date, November 18, 2005, before serving her discovery responses together with voluminous discovery requests, thus rendering compliance with the court’s order [288] virtually impossible. Defendant filed a 45-page initial discovery response on October 19, 2005, a notice to admit facts on October 14, 2005, a notice to admit genuineness of documents (with 28 documents attached) on October 17, 2005, another notice to admit genuineness of documents (with 12 documents attached) on October 18, 2005, and her own notice of deposition on October 24, 2005. Defendant failed to appear at the deposition scheduled for October 24, 2005. The record shows that when counsel was served with notice of the deposition, he requested that it be rescheduled due to, among other things, his observance of a religious holiday. Despite the court’s denial of an adjournment, defendant defaulted in appearance. At the October 31, 2005 hearing in connection with the default, defendant’s counsel informed the court that he had made an error, believing that October 24 was a Jewish holiday and only later learning that the holiday fell on October 25 and 26. Counsel apologized for creating the impression that “we have also played fast and loose with the Court.” The court fined defendant $500 for her failure to appear at the deposition, and issued a briefly extended but more rigid disclosure schedule and a warning to both parties that further failure to adhere to the disclosure schedule would result in dismissal of the offending party’s pleadings. It is significant that both sides made motions pursuant to CPLR 3126 to strike each other’s pleadings despite their own willful and contumacious disregard for the court’s discovery orders—plaintiff did so on three separate occasions. Furthermore, the record indicates that the conduct at issue cannot be blamed solely on the parties’ attorneys. As the court noted in the decision on appeal: “It is only upon listening to and observing the parties during oral argument and their utter lack of respect for each other that this Court came to its conclusion that the parties have no interest in resolving this dispute nor [to] allow the Court or a jury to do so, but instead are intent on using the court as a weapon to harass each other.” The motion court’s finding that the parties’ conduct was willful and contumacious is supported by the record, and “[i]t would not be appropriate, at bar, for this Court to substitute its discretion for that of the Justice sitting in the IAS Court” (Spira v Antoine, 191 AD2d 219, 219-220 [1993], citing Sawh v Bridges, 120 AD2d at 77). In view of the obstreperous, dilatory and evasive conduct engaged in by the parties, the motion court did not abuse its discretion in dismissing the complaint and the counterclaims. As stated by the Court of Appeals: “If the credibility of court orders and the integrity of our judicial system [289] are to be maintained, a litigant cannot ignore court orders with impunity. Indeed, the Legislature, recognizing the need for courts to be able to command compliance with their disclosure directives, has specifically provided that a ‘court may make such orders ... as are just,’ including dismissal of an action (CPLR 3126) . . . [Compliance with a disclosure order requires both a timely response and one that evinces a good-faith effort to address the requests meaningfully” (Kihl v Pfeffer, 94 NY2d 118, 123 [1999]). Finally, the contention that the dismissals caught the parties unawares is without merit. Indeed, the record shows that from September 29, 2005 forward the court repeatedly warned the parties of the risk of having their pleadings dismissed for disclosure abuse. While it is true that, during the proceedings on April 6 and May 11, 2006, the court stated that it was not likely to dismiss pleadings, on the former date it granted plaintiffs permission to submit a CPLR 3126 motion and adjourned defendant’s CPLR 3126 motion so as to make both returnable on May 11, 2006 for argument. At that time, the parties’ final court appearance before the decision on appeal was entered, they vigorously argued for dismissal of each other’s pleadings. The court noted with disgust that defendant’s submission on its motion, contrary to the court’s instructions, had been unnecessarily voluminous. The court also admonished plaintiff: “you know, you are not giving me any choices. I am going to have to dismiss your cause of action as a sanction for failure to abide by several court orders that this Court has issued. I mean, what else, what other choice do I have other than continuing with this game that you folks are playing?” This heated proceeding ended with the court tersely withdrawing its order, issued earlier in the proceeding, directing that certain long-delayed disclosure be provided to defendants and stating that it would issue its decision within 60 days. Taken in context, these events clearly apprised the parties that the court, despite its expressed unwillingness to dismiss the pleadings, was considering such action based upon their conduct during disclosure. Thus, the parties were on notice that CPLR 3126 dismissal was a real option, the court’s comments to the contrary notwithstanding. Given the court’s dismissal of the remainder of the parties’ claims, it was not error to simultaneously decline to rule upon, and thus implicitly deny, defendant’s request for signed transcripts of three oral, disclosure-related rulings rendered academic by the dismissals. One such ruling was the court’s sua sponte imposition during oral argument on October 31, 2005 of [290] a $500 sanction against defendant. Apart from being unappealable here because the transcript was not “so ordered” by the court (see Matter of Grisi v Shainswit, 119 AD2d 418, 420 [1986]), defendant’s challenges lack merit. She erroneously asserts that the sanction, for noncompliance with a CPLR 3107 deposition notice, was improperly imposed since the notice was void on its face. CPLR 3107 provides, inter alia, that 20 days’ notice shall be given for a deposition upon oral examination, “unless the court orders otherwise.” Here, although only 13 days’ notice was given, the record shows that the court considered and rejected defendant’s request to revise the disclosure schedule prior to the deposition. Defendant also wrongly asserts that the court erred in imposing the sanction orally, in violation of 22 NYCRR 130-1.2. The record shows that the sanction was imposed pursuant to CPLR 3126, which is distinct from, and not subject to the constraints of, a sanction imposed under the Court’s rules (Connors, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3126:11; see also Hilley v Sanabria, 12 AD3d 1188, 1189 [2004]). We have considered and rejected the parties’ remaining arguments for affirmative relief. Concur—Tom, J.P., Williams and Moskowitz, JJ.