BEAR STEARNS CO INC v. ENVIROPOWER LLC (2005)

Judgment, Supreme Court, New York County (Ira Gammerman, J.H.O.), entered May 26, 2004, in an action for breach of contract, awarding plaintiff, after inquest, the principal sum of $1,046,870, plus interest, costs and disbursements, and bringing up for review an order, same court and J.H.O., dated May 4, 2004 and entered May 25, 2004, which, inter alia, struck defendant's answer and directed entry of judgment on liability in plaintiff's favor, and an order, same court and J.H.O., dated May 11, 2004 and entered May 13, 2004, which denied defendant's motion to vacate the prior order, unanimously affirmed, with costs.

Defendant's answer was properly stricken because of its negligent spoliation of documents (see Gray v. Jaeger, 17 A.D.3d 286, 794 N.Y.S.2d 324 [2005];  Standard Fire Ins. Co. v. Federal Pac. Elec. Co., 14 A.D.3d 213, 218, 786 N.Y.S.2d 41 [2004] ) after it was on notice of plaintiff's claim, albeit before the action was commenced (see 430 Park Ave. Co. v. Bank of Montreal, 9 A.D.3d 320, 781 N.Y.S.2d 67 [2004] ).   While we have stated that “ ordinarily” a pleading should not be stricken for failure to provide disclosure absent a motion on notice (Postel v. New York Univ. Hosp., 262 A.D.2d 40, 42, 691 N.Y.S.2d 468 [1999] ), the concerns articulated in Postel have been dispelled under the instant circumstances, where the court repeatedly warned defendant that its answer might be stricken if it did not produce the demanded documents (cf. Salamone v. Wyckoff Hgts. Med. Ctr., 273 A.D.2d 117, 709 N.Y.S.2d 181 [2000] ), and the appeal brings up for review the denial of a motion that defendant made to vacate the conference order (cf. Ayala v. Delgado, 303 A.D.2d 286, 755 N.Y.S.2d 617 [2003], lv. denied 100 N.Y.2d 514, 769 N.Y.S.2d 201, 801 N.E.2d 422 [2003] ).

We have considered defendant's other contentions and find them unavailing.