Briand Parenteau Inc. v. Dean Witter Reynolds Inc.

• Decision Date: 02 December 1999
• Citation: 699 N.Y.S.2d 230
• Parties: BRIAND PARENTEAU INC., Respondent, v. DEAN WITTER REYNOLDS INC. et al., Appellants.
• Court: New York Supreme Court — Appellate Division

Page 230

699 N.Y.S.2d 230

BRIAND PARENTEAU INC., Respondent, v. DEAN WITTER REYNOLDS INC. et al., Appellants.

Supreme Court, Appellate Division, Third Department, New York.

Dec. 2, 1999.

Theodore A. Krebsbach, New York City, for appellants.

Thuillez, Ford, Gold & Conolly (Debra J. Schmidt of counsel), Albany, for respondent.

Before: MIKOLL, J.P., CREW III, YESAWICH JR., SPAIN and MUGGLIN, JJ.

MIKOLL, J.P.

Appeal from an order of the Supreme Court (Hughes, J.), entered August 28, 1998 in Albany County, which, inter alia, denied defendants' motion to compel plaintiff to comply with defendants' discovery demands.

Plaintiff commenced this action alleging that it was induced by defendants' fraudulent and negligent misrepresentations to invest $105,000 in a mutual fund ill-suited to the investment objectives which Briand Parenteau, plaintiff's president, had previously communicated to defendants. After answering, defendants served discovery demands seeking, inter alia, personal and corporate income tax returns, as well as materials relating to other investment accounts or activities on the part of plaintiff or Parenteau individually. Plaintiff initially requested an extension of time to answer the discovery demands and registered a generalized protest to the relevance of Parenteau's personal income tax records, but did not otherwise formally object to the nature or scope of the demands. Eventually, plaintiff complied with all but five of defendants' requests. Defendants sought an order compelling production of the material in dispute and now appeal from Supreme Court's denial of their motion.

Defendants' threshold claim on appeal is that Supreme Court erred in addressing the merits of plaintiff's challenge to the discovery demands in view of its failure to timely object as required by CPLR 3122(a). That section provides that a party objecting to disclosure sought pursuant to CPLR 3120 must serve a response particularizing the reasons for the objection within 20 days of service of the demand, failing which the objecting party may later resist the demand only upon grounds that it seeks privileged material or is palpably improper (see, Greico v. Albany Ambulette Serv., 232 A.D.2d 938, 939, 648 N.Y.S.2d 834). While not expressly characterizing defendants' demand for income tax records as palpably improper, such a determination is implicit in Supreme Court's denial of the request for these documents based on their confidential nature and the court's finding that they were not relevant to the instant dispute (see, Otto v. Triangle Aviation Servs., 258 A.D.2d 448, 684 N.Y.S.2d 612). Moreover, disclosure of income tax returns is disfavored without a strong showing that they contain...