D2D HOLDINGS LLC v. BRIDGEMARKET ASSOCIATES (2023)

Order, Supreme Court, New York County (Lucy Billings, J.), entered on or about May 9, 2022, which, to the extent appealed from as limited by the briefs, granted defendants’ motion for discovery sanctions in accordance with CPLR 3126 to the extent of awarding defendants attorneys’ fees and costs incurred through plaintiffs’ noncompliance with disclosure requirements and denied the motion to the extent that it sought a further penalty for noncompliance, unanimously affirmed, with costs.

Supreme Court providently exercised its discretion in imposing monetary sanctions on plaintiffs, as defendants sufficiently established the willful nature of plaintiffs’ failure to comply with disclosure requirements.  Although plaintiffs claimed that their difficulty subleasing their commercial space was caused by defendants’ conduct, they withheld evidence material to their allegations — a Limited Restrictive Use Agreement (LRUA) with a nonparty grocery chain (Food Emporium).  In the LRUA, plaintiff agreed not to sublease the commercial space to any grocery competitor of Food Emporium even though the space had previously been occupied by a supermarket.  Under the circumstances, where the LRUA was manifestly relevant to plaintiffs’ alleged damages, plaintiffs’ failure to produce the LRUA was sufficient to support the award of a sanction.  Plaintiffs offer no persuasive reason to disturb Supreme Court's determination as to the appropriate monetary sanctions to be levied (see e.g. Jackson v. OpenCommunications Omnimedia, LLC, 147 A.D.3d 709, 709, 49 N.Y.S.3d 389 [1st Dept. 2017]).

As to defendants’ cross-appeal, defendants failed to show that they were prejudiced by the delay in disclosure of the LRUA and related documents, and they have not rebutted plaintiffs’ argument that their final productions of more than 30,000 pages, complete with metadata, were responsive to defendants’ disclosure demands.

We have considered the parties’ remaining contentions and find them unavailing.