CONTINUUM ENERGY TECHNOLOGIES LLC v. [And A Third-Party Action] (2025)

Order, Supreme Court, New York County (Joel M. Cohen, J.), entered on or about March 1, 2024, which, to the extent appealed from, granted plaintiffs' motion for discovery sanctions, unanimously affirmed, with costs.  Order, same court and Justice, entered on or about September 16, 2024, which awarded plaintiffs $75,000 in attorneys' fees and costs, unanimously affirmed, with costs.

The court did not abuse its discretion by sanctioning defendants Iron Oak, Inc. (USA), formerly Iron Oak LLC, CETech Holding Ltd., and Rajiv Gosain (the Iron Oak defendants) (see Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Global Strat Inc., 22 N.Y.3d 877, 880, 976 N.Y.S.2d 678, 999 N.E.2d 156 [2013]).  Plaintiffs served discovery requests in February 2022.  The Iron Oak defendants' responses were due the following month, but they did not respond until October 31, 2022, after regular business hours, with a “data dump.”  In addition, the Iron Oak defendants violated the July 2022 preliminary conference order, which required them to respond by October 14, 2022.

We do not consider the Iron Oak defendants' argument, made for the first time in their appellate reply brief, that the court should have denied plaintiffs' motion because they failed to submit an affirmation of good faith pursuant to 22 NYCRR 202.7.

The court did not improvidently exercise its discretion by awarding $75,000, as opposed to the $308,886.90 that plaintiffs requested or the $30,000 that the Iron Oak defendants contend is appropriate (see generally JK Two LLC v. Garber, 171 A.D.3d 496, 98 N.Y.S.3d 37 [1st Dept. 2019];  Zacharius v. Kensington Publ. Corp., 167 A.D.3d 452, 453, 90 N.Y.S.3d 25 [1st Dept. 2018]).

We decline plaintiffs' request to strike the Iron Oak defendants' pleadings.  Their appeal was not frivolous (see generally De Vito v. Yeh, 231 A.D.3d 406, 407, 217 N.Y.S.3d 547 [1st Dept. 2024];  Talos Capital Designated Activity Co. v. 257 Church Holdings LLC, 226 A.D.3d 414, 416, 208 N.Y.S.3d 581 [1st Dept. 2024]).