FILED: NEW YORK COUNTY CLERK 06/05/ :08 PM INDEX NO /2017 NYSCEF DOC. NO. 57 RECEIVED NYSCEF: 06/05/2017
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1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK X FREE PEOPLE OF PA LLC, Plaintiff, ~ Index No /17 -against- Mot. Seq. No. 4 DELSHAH 60 NINTH, LLC, Defendant. DELSHAH 60 NINTH, LLC Third Party Plaintiff -against- 56 NINTH AVENUE LLC Third Party Defendant X MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT'S ORDER TO SHOW CAUSE SEEKING ADDITIONAL TIME TO COMPLETE DISCOVERY AND RESCHEDULE THE TRIAL BRADLEY S. SILVERBUSH Of Counsel ROSENBERG & ESTIS, P.C. Attorneys for Delshah 60 Ninth, LLC 733 Third Avenue New York, NY (212) of 14
2 Table of Authorities Cases Paae s Brustowskv v. Herbst, 4 A.D.3d 220, 772 N.Y.S. 311 (A.D. 1st Dept. 2004)... 6 Goldheart International Ltd v. Vulcan Construction Corp., 24 A.D.2d 507, 508 N.Y.S.2d 182 (1st Dept. 1986)... 7 Kamhi v. Dependable Delivery Service Inc., 234 A.D.2d 34, 650 N.Y.S.2d 676 (A.D. lst Dept. 1996)... 4, 5 Libson v. Dime Savings Bank of New York, FSB, 203 A.D.2d 161, 610 N.Y.S.2d 261 (A.D., 1994)... 5, 6 Rules 22 NYCRR (e)... 6 CPLR CPLR 3212(a)... 3 Treatises Ferstendig, David L., on Brill v. City of New York, LexisNexis Expert Commentary, (Lexis 2008), 2008 Emerging Issues Weinstein, Korn and Miller, New York Civil Practice (David L. Ferstendig, 2d ed., 2016) i- 2 of 14
3 TABLE OF CONTENTS RELEVANT FACTUAL BACKGROUND...2 ARGUMENT...4 POINT I NO MATTER HOW PRESSING THE NEED FOR EXPEDITION OF CASES, A COURT MAY NOT DEPRIVE PARTIES OF FUNDAMENTAL RIGHTS TO WHICH THEY ARE ENTITLED...4 POINT II THERE IS NO PREJUDICE TO THE PLAINTIFF...8 POINT III PLAINTIFF WILL OPPOSE THE APPLICATION BECAUSE IT PREFERS AND IS ADVANTAGED BY TRIAL BY AMBUSH...9 CONCLUSION ii- 3 of 14
4 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK X FREE PEOPLE OF PA LLC, DELSHAH 60 NINTH, LLC, Plaintiff, ~ Index No /17 Defendant. -against- DELSHAH 60 NINTH, LLC Third Party Plaintiff -against- 56 NINTH AVENUE LLC Third Party Defendant X MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT'S ORDER TO SHOW CAUSE SEEKING ADDITIONAL TIME TO COMPLETE DISCOVERY AND RESCHEDULE THE TRIAL This memorandum of law ("MOL") is submitted in support of the Defendant's order show cause seeking, inter alia, additional time to complete discovery, as well as a rescheduling of the upcoming trial in order to permit a reasonable opportunity for completion of discovery so that the Defendant is not deprived of the fundamental rights to which it is entitled. It is respectfully submitted for the reasons set forth herein as well as for the reasons set forth in the accompanying affirmation of Defendant's counsel, that said motion be granted in its entirety. 4 of 14
5 RELEVANT FACTUAL BACKGROUND The relevant factual background is set forth in the accompanying affirmation of Defendant's counsel. In summary, this case, brought by a commercial tenant seeking declaratory relief, and damages in the millions of dollars, was commenced after Plaintiff (as tenant), received a notice from the Defendant (as landlord), regarding a default under the provision of the lease regarding payment of rent. While the tenant could have simply proceeded to trial in what would likely have been a summary proceeding, Plaintiff instead sought and obtained a Yellowstone injunction in connection with this action. On the initial appearance date, March 1, 2017, the Hon. Barry Ostrager, for reasons which are not readily apparent, "fast tracked" the case, directing that all discovery be completed within approximately 4 months' time, (NYSCEF Doc. No. 15), and further, directed that a note of issue be filed by Monday, July 3, 2017; the Court scheduled the trial on Wednesday, July 5, See, Stipulation, NYSCEF Doc. No. 15. It is undisputed that this case presents no basis for a preference. As set forth in the accompanying affirmation ofdefendant's co-counsel, Defendant diligently undertook its obligations to complete discovery in an expeditious manner. However, as may be gleaned from the affirmation in support of William Savino (co-counsel for Defendant), several depositions were necessary of witnesses who are out of state, including Missouri, Ohio, and Pennsylvania. Because of the foregoing, the Defendant was required to seek commissions and retain out-of-state counsel (again, all of which is referenced in the Savino affirmation). In the interim, document production was undertaken to comply with notices of discovery and inspection. As set forth in the Savino affirmation, Plaintiff failed to provide all of the requested documentation. In at least one respect, Plaintiff's explanation for its failure was a -2-5 of 14
6 purported "loss of all s from 2014." This explanation seems difficult (if not impossible) to believe, because that there appear to be numerous other s that predate the 2014 timeframe. Further compounding the problem is the fact that the s are not only relative and probative of the issues presented, but are critical to the Defendant's right to present a full defense in response to the complaint's allegations. On June 1, 2017, this matter appeared before the Court in connection with Plaintiff's motion seeking, inter alia, pro hac vice relief to permit one of the Philadelphia law firm partners to appear and litigate this matter before this Court. At said time, a discussion was held before the Court, alerting the Court of some of the foregoing facts, as well as the compelling need to extend the Defendant's tune to complete discovery. Similarly, Defendant's counsel informed the Court of the need to reschedule the trial date. Chief among the reasons advanced were the following: The depositions were commencing the week of June 5, beginning with the deposition by the Plaintiff of the Defendant's star witness. However, because of the commissions and related need to serve subpoenas, no firm dates and have yet been scheduled for the deposition by the Defendant or of the out-of-state witnesses (despite Defendant's establishment of priority); CPLR 3116 provides a witness with 60 days you review and subscribe a deposition transcript, and no provision for accelerated subscription have been provided in this case. In light of the foregoing, Defendant will be placed in the position of having to go to trial without having subscribed deposition transcripts to utilize at trial. In effect, this would deprive the Defendant of the right to use pretrial discovery at trial. Not raised at that time, but clearly relevant, is the fact that CPLR 3212(a) provides that a party has a right to move for summary judgment. As discussed below, the practice commentaries to this section of the CPLR suggest that (1) a note of issue should not be filed until discovery is completed, and (2) it is illogical to schedule a trial so close to the filing of the note of issue so as to deprive a litigant of its right to move for summary judgment of 14
7 If, as directed by the Court, a note of issue is filed on July 3rd, and the Court insists that the trial proceed on July 5, the Court has effectively denied both parties the right to seek CPLR 3212 relief, as a matter of law. Requiring that the case proceed to trial prior to the expiration of the time of llefendant's right to move for summary judgment effectively deprives Defendant of the rights provided for by law. Based upon all the foregoing, it appears that denial of this request would effectively be a violation of the Defendant's procedural and substantive due process rights, and would likely constitute an abuse of discretion were the Court to refuse to extend the discovery schedule and reschedule the trial. ARGUMENT POINT I NO MATTER HOW PRESSING THE NEED FOR EXPEDITION OF CASES, A COURT MAY NOT DEPRIVE PARTIES OF FUNDAMENTAL RIGHTS TO WHICH THEY ARE ENTITLED Is undisputed that a court has broad discretion to supervise disclosure. However, it is equally well-settled that such discretion must be exercised to facilitate the resolution of the action. See, Kamhi v. Dependable Delivery Service Inc., 234 A.D.2d 34, 650 N.Y.S.2d 676 (A.D. 1st Dept. 1996). In Dependable Delivery Service, supra, the Appellate Division held that the Supreme Court abused its discretion in deeming waived all discovery not completed by the parties "by date approximately 4-1/2 months after issue was joined," which is nearly identical to the situation presented in this case. Moreover, the Appellate Division in Dependable Delivery Service, supra, held that in depriving a party any further discovery after a mere four-and-a-half months, was to effectively -4-7 of 14
8 deprive plaintiffs of fundamental rights to which they are entitled. Dependable Delivery Service, supra, at 34. The Dependable Delivery Service court commented that the parties and record were unclear as to the court's intent in its pre-calendar order setting such date. Similarly, in this case, it is unclear as to why this Court felt the need to schedule a trial in such an incredibly short time, and is unwilling to provide additional time to permit discovery. Finally, in Dependable Delivery, as in here, the failure to comply with the initial order to complete discovery in four months "was not willful, contumacious or deliberate, and in part, stems from circumstances beyond [the attorney's] control. Dependable Delivery Service Inc., supra, at 35. In like fashion, the oft-cited case of Lipson v. Diane Savings Bank of New York, FSB, 203 A.D.2d 161, 610 N.Y.S.2d 261 (A.D., 1994) succinctly stated the rule of law to apply as follows: "No matter how pressing the need for expedition of cases, the court may not deprive parties of fundamental rights to which they are entitled;... It was an abuse of discretion for the trial court to force the parties to trial without first providing them with a reasonable opportunity for completion of discovery." Dime Savings Bank of New York, FSB, at 161. Indeed, in Dime Savings Bank of New York, FSB, supra, the Appellate Division held that the error committed by Justice Gammerman in denying a reasonable opportunity for completion of discovery was so egregious, that not only did they unanimously reverse the order and permit the additional time requested, but they directed that "the matter is remanded for completion of discovery and trial before a different justice, with costs." Dime Savings Bank, supra, at of 14
9 Here, as in Dime Savings Bank, supra, Defendant actively pursued discovery throughout the period permitted by the court, and made allowances for scheduling conflicts, as well as seeking court assistance in obtaining discovery Note that discovery in this case required open commissions, service of subpoenas, and obtaining local counsel in three different states outside of this Court's jurisdiction. Moreover, Courts have recognized that it is error to direct a case to proceed to trial without regard for a witness' time to review and subscribe a deposition transcript i.e., the sixty day period reference under CPLR 3116). For example, in Brustowsky v. Herbst, 4 A.D.3d 220, 772 N.Y.S. 311 (A.D. 1st Dept. 2004), in reversing Justice Gammerman, the Appellate Division recognized that it is inappropriate to grant such relief where, as here, transcripts of the relevant depositions had not been furnished as of the week of trial (and in the instant case, it should be readily apparent that due to the fact that the depositions are taking place in June, that the 60-day period for the witnesses to review the deposition transcripts and subscribe same, will not expire until sometime well after the scheduled July 5th trial). It is basic hornbook law, and this Court may take judicial notice of the fact, that a note of issue should not be filed prior to the completion of discovery. Indeed, if it appears that a material fact in the certificate of readiness is incorrect (for example, discovery is not complete), a party can move to vacate the note of issue within twenty days of service. See, 22 NYCRR (e). Generally, a deadline to file a summary judgment motion runs from the filing of a note of issue. Because the deadline is tied to the filing of the note of issue, if a motion to vacate a note of issue is denied while permitting discovery to go forward, a party should still be given the opportunity to make the summary judgment motion after discovery is complete of 14
10 Consequently, such parties should request, and the Court should direct entry of an order setting the deadline for moving for summary judgment 30 to 120 days after discovery is completed. See, e.g:, Preserving Right to Move for Summary Jud~nent, David L. Ferstendig, Practice Insights to the Civil Practice Annual, 2007, LexisNexis CLS Desk Edition; see also, David L. Ferstendig, on Brill v. City of New York, LexisNexis Expert Commentary, (Lexis 2008), 2008 Emerging Issues 823; see also, Weinstein, Korn and Miller, New York Civil Practice (David L. Ferstendig, 2d ed., 2016). The problems created by a court's scheduling a trial less than thirty days after the requisite filing of the note of issue have been addressed. The appellate courts have actively discouraged trial judges from scheduling trials in such a fashion that effectively prohibits a party from moving for summary judgment. For example, in Goldheart International Ltd v. Vulcan Construction Corp., 124 A.D.2d 507, 508 N.Y.S.2d 182 (1st Dept. 1986), the Appellate Division observed that attempts by judges to refuse to entertain summary judgment motions should be rejected because forcing the parties to try a less than meritorious claim is a waste of resources, judicial or otherwise. Thus, it should be readily apparent that preventing a party from seeking summary judgment relief when done in a timely fashion, would be unconscionable. Waiting at least thirty days until after filing of the note of issue to make such a motion (1) provides the movant with the benefit of all discovery conducted, and (2) avoids an argument, presented in opposition, that the motion is premature i.e., before discovery is complete). Simply put, precluding a party from seeking summary judgment by scheduling the trial on less than thirty days' time (let alone the day after), is illogical and contrary to the intent of the CPLR of 14
11 Here, there is a dire need and good faith request to extend the initial discovery order directed by the court. The Court should reschedule the trial date so as to permit no less than thirty days between the filing of the note of issue and the scheduling of the trial date to permit either party, if so advised, to move for summary judgment. All of the foregoing points to two inescapable conclusions; viz., (1) that the abbreviated four-month period of time ordered by the Court in which to complete the complex discovery required under the facts of this case is simply insufficient, and (2) not extending the period of time in a reasonable manner (to facilitate the completion of discovery) is, in and of itself, a deprivation of the Defendant's rights to procedural and substantive due process, and is likely to be viewed as an abuse of discretion. Defendant seeks no more than that which is provided for by law, and that is a reasonable opportunity to complete the discovery required to be afforded the rights and remedies provided for under the CPLR, and the scheduling of a reasonable trial date. In accordance with the provisions in the CPLR relating to discovery, the subscription of depositions, filing note of issue, and permitting a party sufficient time to move for summary judgment, the Court should extend the discovery schedule, and reschedule the trial date accordingly. POINT II THERE IS NO PREJUDICE TO THE PLAINTIFF Defendant asks the court to observe that the parties stipulated to a Yellowstone injunction on the condition that use and occupancy at the rate otherwise payable as rent, would be continued, pendent lite. Inasmuch as payment of use and occupancy at the rate otherwise payable as rent is the sole condition upon which this court granted the Yellowstone relief, there can be no prejudice to the Plaintiff by extending the tune to complete discovery and adjourning the trial of 14
12 Not only is there no prejudice to the Plaintiff, but on the contraxy, the Plaintiff will benefit from the Court's extension of discovery schedule and reschedule of the trial for reasons which should be readily apparent. Granting the relief requested herein will permit all parties additional time to complete much-needed discovery, as well as anticipated required discovery that will have regarding third-party defendant. Secondly, granting the relief requested herein will ensure that all parties will have the requisite 60 day period provided by law, related to a witness' subscription of the deposition transcript, so that it will be able to utilize the deposition testimony at trial. Third, granting the relief requested herein will permit all parties the requisite time under the CPLR and case law in which to move for summary judgment (should they elect to do so). And finally, granting of the instant motion will benefit the parties in that it will avoid what would otherwise likely be a prejudicial and erroneous determination by the Court, which would likely lead to a reversal of any ensuing judgment. As this Court commented to the attorneys for the parties in discussing the Yellowstone application, this is a very lengthy lease with many years yet to run. In the event of any finding of rent credits that the Plaintiff maybe entitled to, those credits could be, and would be, taken as an offset to future rents. In so stating, this Court has recognized the fact that the Plaintiff is fully protected, and there can be no prejudice under the facts presented. POINT III PLAINTIFF WILL OPPOSE THE APPLICATION BECAUSE IT PREFERS AND IS ADVANTAGED BY TRIAL BY AMBUSH Obviously, to the extent that the Plaintiff is able to frustrate the Defendant's entitlement to discovery, it inures to its benefit. Many of the defenses raised by the Defendant of 14
13 relate to actions by the Plaintiff and third parties, which are the subj ect of the outstanding discovery requests. Accordingly, it is expected that the Plaintiff will vociferously object to any extension, feigning purported "prejudice" by the granting of such relief. In reality, denying the Defendant's request to complete the discovery and directing the matter proceed to trial without permitting Defendant to complete the discovery is effectively to grant the Plaintiff a substantial advantage which effectively will result in a trial by ambush. The cases cited, and the undisputed facts, clearly show that is in the interest of justice and fair play that Defendant the permitted a reasonable opportunity to complete discovery so that a full and fair trial on the merits can be had of 14
14 CONCLUSION It is respectfully submitted that both the facts, the law, as well as the equities, demand that Defendant be granted additional time in which to complete the discovery requests. Similarly, the granting of the reasonable time requested mandates that the trial date be rescheduled for the convenience of the parties and the Court. There has been no prior application for the relief requested herein. WHEREFORE, it is respectfully requested that the instant motion be granted in its entirety, and this order to show cause be granted in its entirety, together with such other and further relief as this Court may deem just and proper. Respectfully submitted, Dated: I~Tew York, New York June 5, 2017 ROSENBERG & ESTIS, P.C. Attorneys for Delshah 60 Ninth, LLC 733 Th New York, New York (212) of 14
FILED: KINGS COUNTY CLERK 02/23/ :39 PM INDEX NO /2016 NYSCEF DOC. NO. 64 RECEIVED NYSCEF: 02/23/2018
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