Giano v. Ioannou

• Decision Date: 09 November 2010
• Citation: 911 N.Y.S.2d 398,78 A.D.3d 768
• Parties: Steve GIANO, etc., respondent, v. John IOANNOU, etc., appellant.
• Court: New York Supreme Court — Appellate Division

911 N.Y.S.2d 398

78 A.D.3d 768

Steve GIANO, etc., respondent,

v.John IOANNOU, etc., appellant.

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

Nov. 9, 2010.

Mischel & Horn, P.C., New York, N.Y. (Scott T. Horn and Naomi M. Taub of counsel), for appellant.

Joseph P. Ferri, Garden City, N.Y. (Louis A. Badolato of counsel), for respondent.

STEVEN W. FISHER, J.P., MARK C. DILLON, ANITA R. FLORIO, and PLUMMER E. LOTT, JJ.

In an action, inter alia, to recover legal fees and to recover treble damages for violation of Judiciary Law § 487, the defendant appeals (1), as limited by his brief, from so much of an order of the Supreme Court, Nassau County (O'Connell, J.), entered December 7, 2007, as granted that branch of the plaintiff's motion which was pursuant to CPLR 3124 to compel disclosure to the extent of, in effect, conditionally striking his answer unless he provided specified disclosure by a date certain, (2) from an order of the same court (Murphy, J.), entered October 16, 2008, which granted the plaintiff's motion, in effect, to strikethe answer and to set the matter down for an inquest based upon his failure to comply with the order entered December 7, 2007, (3) from a judgment of the same court (Cozzens, Jr., J.), entered March 24, 2009, which, upon a decision of the same court (Cozzens, Jr., J.), dated December 4, 2008, made after an inquest, finding that the plaintiff sustained damages in the principal sum of $197,054.22 (representing $158,708.22 in legal fees and $38,346 in treble damages for fraudulent disbursements), is in favor of the plaintiff and against him in the principal sum of $197,054.22, and (4) from an order of the same court (Cozzens, Jr., J.), dated May 4, 2009, which, in effect, denied his motion, in effect, pursuant to CPLR 2221(a) to modify the order dated December 4, 2008, on the ground that the plaintiff was only entitled to 50% of the $158,708.22 in legal fees.

ORDERED that the appeals from the orders entered December 7, 2007, and October 16, 2008, are dismissed; and it is further,

ORDERED that the judgment is reversed, on the law, the cause of action pursuant to Judiciary Law § 487 is dismissed, and the matter is remitted to the Supreme Court, Nassau County, for entry of an amended judgment in accordance herewith; and it is further,

ORDERED that the order dated May 4, 2009, is affirmed; and it is further,

ORDERED that one bill of costs is awarded to the plaintiff.

The appeals from the orders entered December 7, 2007, and October 16, 2008, respectively, must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action ( see Matter of Aho, 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647). The issues raised on the appeals from those orders are brought up for review and have been considered on the appeal from the judgment ( see CPLR 5501[a][1] ).

The plaintiff and defendant, both of whom are attorneys, entered into an agreement whereby the plaintiff agreed to refer cases to the defendant who would "process [them] to completion" in exchange for 50% of the fee. The plaintiff became dissatisfied with the defendant's handling of the cases referred to him and brought an action against him alleging, inter alia, breach of contract. The plaintiff sought 100%, rather than 50%, of the fees, and treble damages for violation of Judiciary Law § 487.

As a consequence of the defendant's repeated failure to comply with discovery orders, the Supreme Court granted the plaintiff's motion, in effect, to strike the defendant's answer and set the matter down for an inquest on damages. The Supreme Court awarded the plaintiff 100% of the fees generated by the cases referred to the defendant and treble damages under Judiciary Law § 487 based upon evidence that the defendant had charged the clients for undocumented costs in the cases referred to him.

Due to the defendant's failure to timely challenge the plaintiff's disclosure demands, this Court is limited to considering whether the requested material was privileged or whether the request was palpably improper ( see During v. City of New Rochelle, N.Y., 55 A.D.3d 533, 534, 865 N.Y.S.2d 279). Nonetheless, we conclude that the material requested by the plaintiff was not privileged and the request was not palpably improper. Moreover, even if the defendant had timely challenged the disclosure demands, the court providently exercised its discretion in ordering the defendant to produce the requested disclosure. " '[A] trial court is given broad discretion to oversee the discovery process' "( Maiorino v. City of New York, 39 A.D.3d 601, 834 N.Y.S.2d 272, quoting Castillo v. Henry Schein, Inc., 259 A.D.2d 651, 652, 686 N.Y.S.2d 818; see Olexa v. Jacobs, 36 A.D.3d 776, 777, 829 N.Y.S.2d 564; Byam v. City of New York, 68 A.D.3d 798, 800, 890 N.Y.S.2d 612). Since the disputed files were "crucial to the [prosecution] of this action," limiting inspection and copying to the brief period in which the files had already been made available to the plaintiff would have been "overly [ ] restrictive" ( Olexa v. Jacobs, 36 A.D.3d at 777, 829 N.Y.S.2d 564).

"The determination whether to strike a pleading for failure to comply with court-ordered disclosure lies within the sound discretion of the trial court" ( Fishbane v. Chelsea Hall, LLC, 65 A.D.3d 1079, 1081, 885 N.Y.S.2d 718). However, the "sanction of striking a pleading should be imposed only where the failure to comply with court-ordered discovery is shown to be willful and contumacious" ( Byam v. City of New York, 68 A.D.3d at 801, 890 N.Y.S.2d 612; see Jenkins v. Proto Prop. Servs., LLC, 54 A.D.3d 726, 726-727, 864 N.Y.S.2d 79;Carabello v. Luna, 49 A.D.3d 679, 853 N.Y.S.2d 663; Maiorino v. City of New York, 39 A.D.3d at 602, 834 N.Y.S.2d 272; Nunez v. City of New York, 37 A.D.3d 434, 831 N.Y.S.2d 420).

A finding that a party's conduct is willful and contumacious is warranted where that party has "repeated[ly] fail[ed] to comply with court-ordered discovery" and has offered "inadequate explanations for the failures to comply" ( Savin v. Brooklyn Mar. Park Dev. Corp., 61 A.D.3d at 955, 878 N.Y.S.2d 178 [internal quotation marks omitted]; see Byam v. City of New York, 68 A.D.3d at 801, 890 N.Y.S.2d 612; Nunez v. City of New York, 37 A.D.3d at 434-435, 831 N.Y.S.2d 420). Here, willful and contumacious conduct was properly inferred from the defendant's persistent...