Opinion
00371-05.
Decided June 29, 2011.
ESSEKS, HEFTER ANGEL, LLP, Attorneys for Plaintiff.
PATRICIA WEISS, ESQ., Attorney for Defendants Donald MacPherson and Carrie MacPherson.
DAVID A. KAMINSKY ASSOCIATES, P.C., Attorneys for Defendant John Eugene Sheehan.
Upon the following papers numbered 1-27 read on this motion to compel/sanction ; Notice of Motion and supporting papers 1-19 ; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers 20-25; 26-27 ; Replying Affidavits and supporting papers; it is, ORDERED that this motion by the plaintiff to compel the defendants Hendrika Vandermeulen; 234 South Magee Co., Inc.; Donald Macpherson; Carrie MacPherson; and John Eugene Sheehan to comply with their disclosure obligations or to sanction them pursuant to CPLR 3126 is granted; and it is further
ORDERED that, within 20 days after service of a copy of this order with notice of entry, the defendants Hendrika Vandermeulen; 234 South Magee Co., Inc.; Donald Macpherson; Carrie MacPherson; and John Eugene Sheehan shall provide the plaintiff with any and all documents in their possession, custody, or control that are responsive to the plaintiff's first notices for discovery and inspection, or their answers will be stricken; and it is further
ORDERED that, for each and every document responsive to the plaintiff's demands that the defendants cannot produce because such document is not in their possession, custody, or control, the defendants Hendrika Vandermeulen; 234 South Magee Co., Inc.; Donald Macpherson; Carrie MacPherson; and John Eugene Sheehan shall, within 20 days after service of a copy of this order with notice of entry, provide the plaintiff with an affidavit from someone with personal knowledge of the search conducted for the document setting forth the past and present status of the document; where it was kept; what efforts, if any, were made to preserve it; the circumstances surrounding its disappearance or destruction; and the means and methods used to conduct a search for it, or their answers will be stricken; and it is further
ORDERED that, for each and every document responsive to the plaintiff's demands that the defendants claim is privileged, the defendants Hendrika Vandermeulen; 234 South Magee Co., Inc.; Donald Macpherson; Carrie MacPherson; and John Eugene Sheehan shall, within 20 days after service of a copy of this order with notice of entry, provide the plaintiff with a privilege log setting forth the type of document, the general subject matter of the document, the date of the document, and such other information as is sufficient to identify the document for a subpoena duces tecum, as well as an explanation as to why production of the document is both testimonial and incriminating, or their answers will be stricken.
This is an action to foreclose a mortgage on a parcel of real property located at 234 South Magee Street in Southampton, New York; to impress an equitable lien on such property; and to recover damages for fraud. The plaintiff holds an unrecorded, first-priority mortgage lien on the property as security for a loan to the defendant Hendrika Vandermeulen. The plaintiff alleges that Vandermeulen and her corporation, the defendant 234 South Magee Co., Inc., in conjunction with Donald MacPherson, Carrie MacPherson, and John Eugene Sheehan (collectively "the defendants"), among others, engaged in a scheme to commit mortgage fraud. The details of the defendants' purportedly fraudulent conduct are found in this court's decision and order dated March 29, 2007.
The plaintiff served the MacPhersons, Vandermeulen, and 234 South Magee Co. with separate notices for discovery and inspection on or about August 23, 2007. The plaintiff sought, inter alia, bank statements, corporate documents, documents related to the Vandermeulen's purchase of the property from the MacPhersons, documents related to subsequent conveyances and a subsequent mortgage of the property, and any correspondence sent or received about the property. 234 South Magee Co. failed to respond to the plaintiff's demands. Vandermeulen and the MacPhersons objected to such demands on the grounds that they were improper, overly broad, unduly burdensome, and not reasonably calculated to lead to admissible evidence. Vandermeulen and the MacPhersons also claimed that they did not have any documents responsive to the plaintiff's demands in their possession. The plaintiff subsequently moved, inter alia, for an order compelling Vandermeulen, the MacPhersons, and 234 South Magee Co. to produce the requested documents. By an order dated March 26, 2009, the motion was granted to extent of directing them to produce any and all documents responsive to the plaintiff's notices within 45 days after service of the order with notice of entry. The court found that the plaintiff had met its burden of establishing that the documents sought were material and necessary in the prosecution or defense of the action. The court went on to note that, while a party cannot be compelled to produce documents that it does not possess or control or that do not exist, the defendants had failed to submit satisfactory proof that the requested disclosure was impossible.
On or about May 9, 2009, the MacPhersons served supplemental responses to the plaintiff's notices. They averred that they had been arrested and that production of the requested documents would violate their privilege against self-incrimination. They also averred that the Suffolk County District Attorney had executed search warrants and seized documents kept at their residence and at the office of the attorney who represented Vandermeulen and acted as her attorney-in-fact in connection with her purchase of the property. Thus, some of the requested documents might be in the possession of the District Attorney.
On or about July 14, 2009, Vandermeulen also served a supplemental response to the plaintiff's notice in which, like the MacPhersons, she asserted the privilege against self-incrimination and claimed that some of the documents requested might be in the District Attorney's possession. However, unlike the MacPhersons, she had not been arrested. 234 South Magee Co. again defaulted in responding to the plaintiff's notice.
On or about May 5, 2010, the plaintiff served the defendant John Eugene Sheehan with a first notice for discovery and inspection. The discovery demands served on Sheehan were similar in scope to the demands served on Vandermeulen and the MacPhersons. They sought, inter alia, documents related to Sheehan's interest in the property, documents related to the subsequent conveyances and subsequent mortgage of the property, and any correspondence sent or received about the property. The plaintiff also served Sheehan with a notice to appear at a deposition on June 17, 2010. By a letter dated May 11, 2010, Sheehan's attorney advised the plaintiff's attorney that Sheehan would not appear for the scheduled deposition because he was subject to an ongoing criminal investigation in Suffolk County and he was invoking his right against self-incrimination. By a letter to the court dated February 2, 2011, which was copied to the plaintiff's attorney, among others, Sheehan's attorney advised that his client would not respond to the plaintiff's notice for discovery and inspection on the ground that it would violate his privilege against self-incrimination.
The court addressed the plaintiff's first notices for discovery and inspection on the
record on June 10, 2010. Attorneys for the plaintiff, Vandermeulen and 234 South Magee Co., and the MacPhersons, among others, appeared on that date. Sheehan's attorney did not appear. The court found that the MacPhersons' and Vandermeulen's responses to the plaintiff's notices were insufficient in that they failed to specify, on a document-by-document basis, which documents would be produced, which documents would not be produced, why they would not be produced, and what efforts the MacPhersons and Vandermeulen had made to search for them. The court also found that the MacPhersons and Vandermeulen had failed to properly assert their claim that production of the requested documents would violate their privilege against self-incrimination. The court directed Vandermeulen and the MacPhersons to specify, on an item-by-item basis, the efforts they had made to search for and obtain documents responsive to the plaintiff's notices and to create a privilege log for the documents that they claimed were privileged. The court also directed them to contact the District Attorney's Office to determine if it had any documents responsive to the plaintiff's notices. On or about June 11, 2010, the attorney for the MacPhersons sent a letter to the Suffolk County District Attorney asking him provide her with any documents in his possession, custody, or control that might be responsive to the plaintiff's document demands. On or about June 14, 2010, the attorney for Vandermuelen and 234 South Magee Co. sent a similar letter to the District Attorney.
While Vandermeulen's attorney also represented 234 South Magee Co., only Vandermeulen responded to the plaintiff's first notices for discovery and inspection.
Sheehan's attorney advised the court in a letter dated June 9, 2010, that he was unable to appear on June 10, 2010, because he was engaged in a conference at the Appellate Division.
At a subsequent conference on August 5, 2010, the MacPherson's attorney agreed to give the plaintiff's attorney the name and telephone number of the Assistant District Attorney ("ADA") handling the criminal case against the MacPhersons so that the plaintiff's attorney could contact the ADA. The MacPherson's attorney provided the plaintiff's attorney with the ADA's name and telephone number, as well as a fax number, and the plaintiff's attorney spoke with the ADA on August 6, 2010. The ADA advised the plaintiff's attorney that, if she had documents in her possession that were responsive to the plaintiff's discovery demands, she would make them available upon receipt of a written consent from Donald MacPherson for their release. On or about August 16, 2010, the MacPherson's attorney provided the District Attorney's Office with a written consent signed by Donald and Carrie MacPherson. Additional discovery conferences were held on October 21, 2010, and February 17, 2011, at which attorneys for the plaintiff, Vandermeulen and 234 South Magee Co., and the MacPhersons appeared, among others. By a letter dated March 21, 2011, the Suffolk County District Attorney's Office advised the plaintiff's attorney that it did not have any documents related to 234 South Magee Street. This motion ensued.
Although court records do not reflect whether Sheehan's attorney appeared at those conferences, the court's recollection is that he did not appear.
The plaintiff seeks to compel Vandermeulen, 234 South Magee Co., the MacPhersons, and Sheehan to produce documents responsive to the plaintiff's first notices for discovery and inspection or to sanction them for their failure to do so. The MacPhersons oppose the plaintiff's motion on the grounds that they have no responsive documents in their possession and that the production of any such documents would violate their privilege against self-incrimination. Sheehan opposes the plaintiff's motion on the same grounds. Vandermeulen and 234 South Magee Co. have not responded thereto.
A trial court is given broad discretion to oversee the discovery process ( Giano v Ioannou, 78 AD3d 768, 770). Compliance with disclosure 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). When the response to a discovery request is, in effect, that there are no responsive documents within the party's custody, possession, or control, that party must provide a detailed statement, under oath, by someone with direct knowledge of the facts setting forth the past and present status of the relevant documents; where they were kept; what efforts, if any, were made to preserve them; the circumstances surrounding their disappearance or destruction; and the means and methods used to conduct a search for them ( Jackson v City of New York, 185 AD2d 768, 770; Dziegielewsky v Advanced Integrative Wellness, LLC, Sup Ct, Nassau County, March 9, 2010, Murphy, J., at 2 [ 2010 WL 1515585]; Tower Ins. Co. of New York v Headley, Sup Ct, New York County, August 11, 2009, Stallman, J., at 4 [ 2009 WL 2578547]; Lazzaro v MJM Industries, Inc., Sup Ct, New York, April 7, 2003, Jones, J., at 3 [ 2003 WL 25573908]). In short, the affidavit submitted must provide the court with a basis to find that the search conducted was a thorough one or that it was conducted in a good faith effort to provide the necessary records to the plaintiff ( Jackson v City of New York, supra at 770). The bald and conclusory assertions by the MacPhersons and Sheehan that they have no documents in their possession responsive to the plaintiff's demands are clearly insufficient.
Although a demand in a civil case may seek documents that could be incriminating in connection with a criminal indictment against the defendant, the fact that the witness may invoke the privilege against self-incrimination is not necessarily a basis for precluding civil discovery ( Matter of Astor, 62 AD3d 867, 869; Citifinancial Auto, Ltd. v Universal Auto Sales, LLC, Supreme Court, Nassau County, February 17, 2010, Driscol, J., at 3-4 [ 2010 WL 767063]). A blanket refusal to answer questions based on the Fifth Amendment privilege against self-incrimination cannot be sustained absent unique circumstances, and the privilege may only be asserted when there is reasonable cause to apprehend danger from a direct answer ( Matter of Astor, supra at 869). While the witness is generally the best judge of whether an answer may tend to be incriminating, when the danger of incrimination is not readily apparent, the witness may be required to establish a factual predicate ( Id.). Thus, in order to effectively invoke the protections of the Fifth Amendment, a party must make a particularized objection to each discovery request ( Id.).
The Fifth Amendment privilege only protects a person from being incriminated by his own compelled testimonial communications ( Id. at 870). The privilege does not extend to the compelled production of incriminating documents unless the individual asserting the privilege was compelled to create the documents ( Matter of Astor, 21 Misc 3d 400, 405, affd 62 AD3d 867). However, while the contents of documents are generally not protected by the privilege, the act of producing the documents may be protected when it is found to be both testimonial and incriminating ( Id. at 405-406). Analysis of whether the act-of-production doctrine applies is made without reference to the content of the documents ( Id. at 406).
Evidence is testimonial when it reveals the defendant's subjective knowledge or thought process or when it expresses the contents of the defendant's mind ( Id. at 406). The turnover of evidence may be testimonial if it communicates, explicitly or implicitly, statements of fact such as the existence of documents in the individual's possession or control that were not known to the authorities or could not have been discovered through independent means as well as their authenticity ( Id.). Thus, the act of producing documents may be testimonial if it establishes the existence, authenticity, and custody of the items produced ( Matter of Astor, 62 AD3d at 870).
The act of production is incriminating if the subjective information the government will obtain through the act of production poses a realistic threat of incrimination ( Matter of Astor, 21 Misc 3d at 407). Again, that the documents contain incriminating information does not implicate the privilege ( Id.). Depending on the facts of the case, the act of production may be found incriminating because the documents exist, are in the possession of the individual, or are those described in a subpoena ( Id.).
The defendants do not contend, nor does it appear from the court's review of the plaintiff's first notices for discovery and inspection, that the plaintiff is seeking documents that the defendants were compelled to create. Thus, the defendants' claim of privilege is pursuant to the act-of-production doctrine. When, here, it is not readily apparent whether production of documents would be testimonial or have an incriminating effect, the proper procedure is for the party seeking to protect documents from disclosure to compile a privilege log in order to aid the court in its assessment of the privilege claim and to enable it to undertake an in camera review ( Matter of Astor, 62 AD3d at 870). The log must contain enough information to enable the court to determine the application of the privilege and must include a written explanation as to why the production of each document is both testimonial and incriminating ( Matter of Astor, 21 Misc 3d at 407). The defendants' bald and conclusory assertions that the production of documents in response to the plaintiff's notices would violate their Fifth Amendment privilege against self-incrimination is clearly insufficient to establish a factual predicate therefor.
In view of the foregoing, the court finds that the defendants have failed to meet their burden of establishing that they have no documents in their possession responsive to the plaintiff's demands or that their production of such documents would be self-incriminating.
CPLR 3126 provides that a court may, in its discretion, impose a wide range of penalties on a party who refuses to obey an order for disclosure or wilfully fails to disclose information that the court finds ought to have been disclosed ( Morano v Westchester Paving Sealing Corp., 7 AD3d 495, 496). The penalties for such failure or refusal include: (1) deciding the disputed issue in favor of the prejudiced party, (2) precluding the disobedient party from producing evidence at trial on the disputed issue, or (3) striking the pleadings of the disobedient party ( Id.) The determination of whether to strike a pleading lies within the sound discretion of the trial court ( Giano v Ioannou, 78 AD3d at 770). However, the sanction of striking a pleading should be imposed only when the failure to comply with court-ordered discovery is shown to be willful and contumacious ( Id.). A finding that a party's conduct is willful and contumacious is warranted when that party has repeatedly failed to comply with court-ordered discovery and has offered inadequate explanations for the failure to comply ( Id. at 771). Willful and contumacious conduct may be inferred from a defendant's persistent failure to comply with proper disclosure demands including a failure to attend court conferences, a failure to provide adequate responses to written disclosure demands, untimely and nonspecific objections to disclosure demands, and a failure to appear for court-ordered depositions ( Id.).
The plaintiff's first notices for discovery and inspection were served on the MacPhersons, Vandermeulen, and 234 South Magee Co. on or about August 23, 2007. They failed to produce any documents in response thereto. By an order dated March 26, 2009, the court directed Vandermeulen, the MacPhersons, and 234 South Magee Co. to produce any and all responsive documents within 45 days after service of the order with notice of entry. They again failed to produce any documents in response to the plaintiff's notices. On or about May 5, 2010, the plaintiff's first notice for discovery and inspection was served on Sheehan. Sheehan failed to produce any documents in response thereto and failed to appear for a deposition noticed for June 17, 2010. Additionally, Sheehan failed to appear at court conferences. On June 10, 2010, the court directed Vandermeulen and the MacPhersons on the record to compile a privilege log for the documents that they claimed were privileged and to specify, on an item-by-item basis, the efforts they had made to search for and obtain documents responsive to the plaintiff's notices. They failed to do so. Moreover, neither the MacPhersons nor Sheehan have produced a privilege log in response to the plaintiff's motion or an affidavit setting forth the good faith efforts, if any, they undertook to search for and obtain the requested documents ( see, Jackson v New York, 185 AD2d at 770). Vandermeulen and 234 South Magee Co. have not even responded to the motion. To date, almost four years after service of the plaintiff's initial notices for discovery ad inspection, the plaintiff has not received a single document in response to its demands. The court finds that, under these circumstances, the defendants' conduct was willful and contumacious.
Their attorney was relieved by an order of this court dated May 17, 2011.
The only document that Vandermeulen agreed to produce, the corporate book for 234 South Magee Co., has not been produced to date.
Accordingly, the motion is granted. Within 20 days after service of a copy of this order with notice of entry, Vandermeulen, 234 South Magee Co., the MacPhersons, and Sheehan are directed to provide the plaintiff with any and all documents in their possession, custody, or control that are responsive to the plaintiff's first notices for discovery and inspection. For each and every document responsive to the plaintiff's demands that the defendants cannot produce because such document is not in their possession, custody, or control, the defendants shall produce an affidavit from someone with personal knowledge of the search conducted for such document setting forth the past and present status of the document; where it was kept; what efforts, if any, were made to preserve it; the circumstances surrounding its disappearance or destruction; and the means and methods used to conduct a search for it. For each and every document responsive to the plaintiff's demands that the defendants claim is privileged, the defendants shall produce a privilege log setting forth the type of document, the general subject matter of the document, the date of the document, and such other information as is sufficient to identify the document for a subpoena duces tecum ( see, CPLR 3122), as well as an explanation as to why production of the document is both testimonial and incriminating. The defendants' answers shall be stricken if, within 20 days after service of a copy of this order with notice of entry, the defendants fail to provide the plaintiff with each and every document responsive to the plaintiff's demands; an affidavit completely complying with the requirements of Jackson v New York ( 185 AD2d 768) for each and every document that the defendants cannot produce because such document is not in their possession, custody, or control; and a privilege log for each and every document responsive to the plaintiff's demands that the defendants claim is privileged.