Opinion
00 Civ. 5390 (DLC)(FM)
December 12, 2001
MEMORANDUM DECISION AND ORDER
I. Introduction
In this action, plaintiff Cheiko Uehigashi ("Uehigashi") contends that defendants Takashi Kanamori, a/k/a "Voikunthanath Kanamori" and/or "Takashi Voitur" ("Kanamori"), and Yoko and Yuka Kanamori ("Yoko" and "Yuka"), his wife and daughter, defrauded Uehigashi and her family out of more than seven million dollars in connection with an investment in a failed recording studio. A default judgment was entered against Kanamori on January 19, 2001, but subsequently was set aside on March 30, 2001. (Docket Nos. 45, 64).
Kanamori has now moved pro se for sanctions against Uehigashi, pursuant to Fed.R.Civ.P. 37, arising out of her failure to respond to his "Request for Interrogatories and Production of Documents." Yoko and Yuka, who are represented by counsel, also have moved, pursuant to Fed.R.Civ.P. 6(b)(2), for an enlargement of their time to file an answer to the Second Amended Complaint. For the reasons set forth below, Kanamori's sanctions motion is denied and the motion of Yoko and Yuka to extend their time is granted.
II. Background
Uehigashi commenced this action on July 20, 2000, by the filing of a Complaint. Over the course of the next ten months, Uehigashi also filed three amended complaints. (Docket Nos. 47, 63, 79). The Second Amended Complaint, dated March 8, 2001, is the first pleading in which Yoko and Yuka are named as defendants.
In her affidavit in support of her motion Yoko indicates that she first learned of the Second Amended Complaint in early March when it was delivered by Federal Express without a summons. (See Affidavit of Yoko Kanamori in Support of Motion for Enlargement of Time to File Answer, sworn to on August 20, 2001 ("Yoko Aff."), ¶ 2). The Marshals Service return plainly establishes, however, that Yoko and Yuka subsequently were properly served with copies of the Second Amended Complaint by personal delivery to Yoko on April 4, 2001. (Docket No. 69). Despite this service, Yoko and Yuka did not submit their answer until June 26, 2001, at which time Uehigashi "rejected" it because it was untimely and served by Rudra Tamm, Esq., an attorney who was alleged to have a conflict of interest by reason of his participation in certain events underlying the suit. (See Docket Nos. 91, 92).
Although Uehigashi complained about Mr. Tamm's delay in answering the Second Amended Complaint on behalf of Yoko and Yuka, a Third Amended Complaint was filed on May 24, 2001. The Third Amended Complaint was accepted for filing even though it is unaccompanied by an affidavit of service. See Int'l Controls Corp. v. Vesco, 556 F.2d 665, 669 (2d Cir. 1977) (amended complaint is a nullity until served in conformity with Fed.R.Civ.P. 5(a)).
On July 17, 2001, Mr. Tamm made a motion to enlarge Yoko's and Yuka's time to answer and requested oral argument. (Docket No. 94). After conceding that he had a potential conflict because he had been a participant in some of the activities that Uehigashi alleged were wrongful, Mr. Tamm subsequently agreed to withdraw as counsel for Yoko and Yuka and to have no further involvement in the case. (See letter from Erwin J. Shustak, Esq., to the Court, dated July 18, 2001 ("July 18th Letter"), at 2; Docket No. 97). For that reason, I directed Yoko and Yuka to have their successor counsel serve a renewed motion to serve answer out of time and denied as moot the motion previously filed by Mr. Tamm. (Docket No. 97).
On August 20, 2001, through their new counsel, Charles T. Busek, Esq., Yoko and Yuka filed a renewed motion for enlargement of time to answer. (Docket No. 102). Uehigashi opposed that motion, claiming that the defendants had failed to show that their late filing was the result of "excusable neglect." (See Affirmation of Susan C. Stanley, Esq., in Opp'n to Mot. for Enlargement of Time to File Answer, dated September 6, 2001 ("Stanley Affirm."), at 2, 4).
In her papers, Uehigashi also asserted that Mr. Busek could not serve as counsel because he was not admitted to practice before this Court. While the Court's official website reflects no entry for Mr. Busek, (see http://winnt4.nysd.circ2.dcn/cgi-bin/foxweb.exe/ntmaster?Atty) (last visited Dec, 11, 2001), I am advised that he was, in fact, admitted to practice in this District on May 20, 1980.
Subsequently, Kanamori, proceeding pro se, filed a motion seeking sanctions against Uehigashi pursuant to Rule 37 of the Federal Rules of Civil Procedure. (Docket No. 115). Kanamori claimed that Uehigashi has failed to provide answers to interrogatories or respond to document requests which were served on her counsel and defendant Avatar Entertainment Corp. on or about July 1, 2002. (Id.). Uehigashi's counsel opposed that motion on several grounds, but indicated that he would respond within one week. (See letter from Erwin J. Shustak, Esq. to the Court, dated Nov. 19, 2001 ("November 19th Letter"), at 2).
II. Discussion
A. Motion for Enlargement of Time to File Answer
Pursuant to Rule 6(b)(2) of the Federal Rules of Civil Procedure, a court may extend a party's time to answer after it has expired, provided that "the failure to act was the result of excusable neglect." The "excusable neglect" standard is "somewhat of an elastic concept and is not limited strictly to omissions caused by circumstances beyond the control of the movant." Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 392, 113 S.Ct. 1489, 1496, 123 L.Ed.2d 74 (1993) (footnotes and internal quotations omitted). In deciding whether neglect is excusable, a court must make an equitable determination in light of all of the relevant circumstances, including any "danger of prejudice to the [nonmoving party], the length of the delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith." Id. at 395, 113 S.Ct. at 1498; see also In re PaineWebber Ltd. P'ships Litig., 147 F.3d 132, 135 (2d Cir. 1998) ("To establish excusable neglect . . . a movant must show good faith and a reasonable basis for noncompliance."); LoSacco v. City of Middletown, 71 F.3d 88, 92 (2d Cir. 1995) (quoting Pioneer, 507 U.S. at 395, 113 S.Ct. at 1498).
In support of Yoko's and Yuka's motion, Yoko has submitted an affidavit indicating that she contacted Mr. Tamm in late March 2001, on behalf of herself and her daughter, and asked that he represent their interests. (Yoko Aff. ¶ 4). Regrettably, however, it appears that Mr. Tamm failed to advise her that he was not then a member of this Court's bar, (see id. ¶ 5), and had a potential conflict of interest.
Mr. Tamm applied for admission to the bar of this Court on April 23, 2001, and his application was granted on May 15, 2001. Thus, by the time he was admitted, the twenty-day period in which Yoko and Yuka wer required to answer the Second Amended Complaint had already expired. See Fed.R.Civ.P. 12(a)(1)(A).
Uehigashi has not seriously argued, nor can she show, that allowing Yoko and Yuka to file an answer will prejudice her in any way. Indeed, because the default against Kanamori has been vacated, discovery in this action has yet to begin in earnest. Accordingly, it is highly unlikely that Uehigashi will have to repeat the questioning of any deposition witnesses or engage in any other repetitive discovery because of the late filing by Yoko and Yuka.
Moreover, Yoko and Yuka apparently took steps to respond to the Second Amended Complaint but were poorly served by their chosen counsel, Mr. Tamm. It therefore appears that they have proceeded in good faith.
For these reasons, it is appropriate to grant the motion for leave to file an answer out of time, but on the condition that Yoko and Yuka serve and file that answer within ten days from the date hereof.
B. Motion for Sanctions
The potential consequences of a failure to comply with discovery requests are summarized in Rule 37(d) of the Federal Rules of Civil Procedure, which provides, insofar as relevant, that:
If a party . . . fails . . . to serve answers or objections to interrogatories submitted under Rule 33, after proper service of the interrogatories, or . . . to serve a written response to a request for inspection submitted under Rule 34, after proper service of the request, the court . . . may make such orders in regard to the failure as are just, and among others, it may take any action authorized under [Rule 37(b)(2)(A), (B), or (C)].
Fed.R.Civ.Proc. 37(d). The subparagraphs of Rule 37(b)(2) referenced in Rule 37(d) authorize a court to sanction a recalcitrant party by entering an order (1) deeming the matter which is the subject of the discovery request established for the purposes of the action; (2) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters into evidence; or (3) striking out pleadings, or parts thereof, dismissing the action in whole or in part, or rendering a default judgment against the disobedient party. See Fed.R.Civ.Proc. 37(b)(2)(A), (B), and (C).
The Federal Rules provide no guidance as to when any particular sanction or order is appropriate, other than a generalized direction that such orders be "just." The Second Circuit has, however, outlined three purposes that such sanctions serve:
First, [sanctions] ensure that a party will not benefit from its own failure to comply. Second, they are specific deterrents and seek to obtain compliance with the particular order issued. Third, they are intended to serve a general deterrent effect on the case at hand and on other litigation . . . .
Update Art, Inc. v. Modiin Publ'g. Ltd., 843 F.2d 67, 71 (2d Cir. 1988).
In this case, Uehigashi's counsel apparently declined to respond to Kanamori's discovery requests for several reasons, including a belief that they had been improperly served directly on co-defendant Avatar Entertainment by Mr. Tamm. (See July 18th Letter at 2). Although Kanamori purported to be proceeding pro se, there is, in fact, substantial reason to believe that his discovery requests (and his motion for sanctions) were drafted, at least in part, by Mr. Tamm given their content and similarity in appearance to other papers that Mr. Tamm has submitted to the Court in his own name. (Compare Docket No. 115 (Mtn. for Sanctions) with Docket No. 91 (Proposed Answer of Yoko and Yuka Kanamori)). Although this may not have excused Uehigashi's noncompliance, even a cursory review of Kanamori's interrogatories shows that they go well beyond the inquiries that Local Civil Rule 33.3(a) would allow at this stage of a suit. Moreover, insofar as documents are concerned, Uehigashi's counsel undertook some time ago to provide responses to Kanamori within one week. (See November 19th Letter at 2).
On January 31, 2001, Uehigashi, who is represented by counsel, was named as Avatar's receiver. (See Docket No. 53).
In these circumstances, with discovery at a very preliminary stage, the Court declines to exercise its discretion to impose sanctions on Uehigashi for her prior refusal to comply with Kanamori's discovery requests. See, e.g., Tuff-N-Rumble Mgmt., Inc. v. Sugarhill Music Publ'g Inc., 75 F. Supp.2d 242, 249 (S.D.N.Y. 1999) (holding sanctions unwarranted when discovery deadline is extended). Nevertheless, there is a need to ensure that discovery proceedings in this seventeen-month old action proceed without further delay. Accordingly, the Court will hold a pretrial conference on December 20, 2001, at 2 p.m. in Courtroom 11C, which all counsel and Mr. Kanamori are required to attend. In the interim, to the extent that she has not already done so, Uehigashi shall respond to any outstanding discovery requests from Kanamori.
III. Conclusion
The motion of defendants Yoko and Yuka Kanamori for enlargement of their time to file an answer to the Second Amended Complaint is granted, and they are directed to serve and file that answer within ten days. Defendant Kanamori's motion for sanctions is denied. All counsel and Mr. Kanamori are directed to appear in Courtroom 11C on December 20, 2001 at 2 p.m. for a pretrial conference. Prior to that conference, Uehigashi shall respond to any outstanding discovery requests from Mr. Kanamori.
SO ORDERED