Borough Constr. Grp. v. Red Hook 160 LLC

Decision Date05 April 2022
Docket NumberIndex 500308/19
Citation2022 NY Slip Op 31147 (U)
CourtNew York Supreme Court
PartiesBOROUGH CONSTRUCTION GROUP, LLC, Plaintiff, ; v. RED HOOK 160 LLC, PHILADELPHIA INDEMNITY INSURANCE COMPANY, SCREFI MORTGAGE LENDING, LLC, TRI STATE LUMBER, AF SUPPLY CORP, UNITED RENTALS (NORTH AMERICA), INC, WORLDWIDE PLUMBING SUPPLY, INC., CASTLE MASONRY, INC., WOODBURY CONSTRUCTION, INC., GQ GREENER PLUMBING, INC., PREMIUM BUILDING MATERIALS, INC., UNIVERSAL MARBLE AND GRANITE OF QUEENS AND TPG CONTRACTING, CORP., Defendants, RED HOOK 160 LLC, Third Party Plaintiff, v. BOROUGH EQUITIES LLC:, MICHAEL BAUER & EMANUEL KANARIS, Third- Party Defendants, UNITED RENTALS (NORTH AMERICA) INC., Third Party Plaintiff, v. ATLANTIC SPECIALTY INSURANCE COMPANY, a/k/a ATLANTIC SPECIALTY INSURANCE INC., D/b/a ASIC INSURANCE, Third-Party Defendants

2022 NY Slip Op 31147(U)

BOROUGH CONSTRUCTION GROUP, LLC, Plaintiff, ;
v.

RED HOOK 160 LLC, PHILADELPHIA INDEMNITY INSURANCE COMPANY, SCREFI MORTGAGE LENDING, LLC, TRI STATE LUMBER, AF SUPPLY CORP, UNITED RENTALS (NORTH AMERICA), INC, WORLDWIDE PLUMBING SUPPLY, INC., CASTLE MASONRY, INC., WOODBURY CONSTRUCTION, INC., GQ GREENER PLUMBING, INC., PREMIUM BUILDING MATERIALS, INC., UNIVERSAL MARBLE AND GRANITE OF QUEENS AND TPG CONTRACTING, CORP., Defendants,

RED HOOK 160 LLC, Third Party Plaintiff,
v.

BOROUGH EQUITIES LLC:, MICHAEL BAUER & EMANUEL KANARIS, Third- Party Defendants,

UNITED RENTALS (NORTH AMERICA) INC., Third Party Plaintiff,
v.

ATLANTIC SPECIALTY INSURANCE COMPANY, a/k/a ATLANTIC SPECIALTY INSURANCE INC., D/b/a ASIC INSURANCE, Third-Party Defendants

Index No. 500308/19

Supreme Court, Kings County

April 5, 2022


Unpublished Opinion

1

DECISION AND ORDER

HON. LEON RUCHELSMAN JSC

Red Hook 160 has moved seeking sanctions against the defendants on the grounds they have spoliated evidence. The defendants have cross-moved seeking to compel Red Hook 160 to

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provide sought after discovery. Papers were submitted by the parties and arguments held. After reviewing all the arguments this court now makes the following determination.

It is well settled that a party is under a duty to preserve evidence, even before litigation commences, once it reasonably anticipates litigation (Jacquety v. Baptista, 538 F.Supp3d 325 [S.N.D.Y. 2021]). That is an objective standard and requires whether a reasonable party would have expected litigation (Mastr Adjustable Rate Mortgages Trust 200 6-OA2 v. UBS Real Estate Securities Inc., 295 F.R.-D. 77 [S.D.N.Y, 2013]). Thus, correspondence threatening legal action surely is reasonable notice of the anticipation of litigation (Karsch v. Blink Health Ltd., 2019 WL 2708125 [S.D.N.Y. 2019]).

A review of the time line- concerning the anticipation of litigation and the progression of the litigation is necessary, On September 15, 2016 Borough Construction Group LLC entered into a contract with Red Hook 160 LLC concerning the construction and renovation of a project located at 160 Imlay Street in Kings County. Further, on October 25, 2016 the parties entered into another side agreement which further formed conditions and obligations of the parties. Shortly thereafter the relationship deteriorated. Thus, on November 30, 2017 in response to complaints filed by Red Hook, Michael Bauer, a representative of Borough sent an email and noted that "I understand your email as

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trying to lay foundation for a potential lawsuit down the road. Let, me stop you right here. We can choose to keep moving together as a TEAM or we can start to play the blame game and point fingers. Since we came onto the job, we have been forced to work with unrealistic budgets and- schedules despite our advice to the contrary while being asked to push the job as much as possible. If you want to attempt to place blame solely on us, there is PLENTY" of blame: and incompetence to go around from other people who are on this email...No one is perfect and in no way are we Claiming to be, but we have continually worked with the team to save the job and make up for other's: mistakes. Also, we are still finding and correcting work from the prior contractor/subcontractors" (see, Email from Michael Bauer, 1:03 PM, November 30, 2017). On August 10, 2018 Red Hook sent Borough a default notice which indicated that "over the course of the Project, you have been negligent by failing to supervise and manage the Project, or to provide the construction management services required by the Contract. There can be no dispute: that the Project schedules and budgets that you have provided have consistently been underestimated, incorrect and/or disregarded and you have effectively held the. Project hostage by purposely slowing down the work in violation of the Contract based upon your inflated position of monies due in the amount of $l.f2.MM. As you know, the Contract specifically provides that the

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Construction Manager will prosecute the Work, time being of the essence, and will not slow down the Work pending any dispute, with the Owner. However, you- have not. properly planned or executed the Work and have not performed with any sense of concern or urgency with regard to timely performance. Instead, you have used your inflated claim for monies as a basis for purposely stalling the Project" (see, Letter sent from Red Hook dated August 10, 2.018. The letter further highlighted that significant plumbing work had not...

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