PF SECURITIES EVALUATIONS INC v. FILLEBEEN (2026)

Order, Supreme Court, New York County (Arlene P. Bluth, J.), entered March 12, 2026, which denied the motion of plaintiff PF2 Securities Evaluations, Inc. and counterclaim- defendants Gene Phillips and Robin Phillips (collectively, appellants) for discovery sanctions, unanimously affirmed, with costs.

Supreme Court providently exercised its discretion in denying appellants' motion for discovery sanctions (see Those Certain Underwriters at Lloyds, London v Occidental Gems, Inc., 11 NY3d 843, 846 [2008] ).  The present motion sought discovery sanctions for conduct that was the subject of an earlier motion and cross-motion to compel discovery and for sanctions, both of which were referred to a Special Referee.  In a detailed report and recommendation the Special Referee resolved all the discovery issues raised on the present motion, including the issue of defendant-counterclaimant Guillaume Fillebeen's allegedly inaccurate certification in 2017 that all relevant documents had been produced.  The Special Referee found that neither side's conduct rose to a level warranting sanctions, and the March 2025 Supreme Court order confirming the report was never appealed from.  As a result, appellants are precluded from relitigating the issues raised in the present motion, which are the same as those raised in the prior motion (see City of New York v. VJHC Dev. Corp., 125 AD3d 425, 426 [1st Dept 2015] ).

Were we to review the merits, we would find that sanctions are not warranted.  Even according to appellants' own account, defendants' counsel at various times stated that defendants would produce tax returns and other “missing” documents, thus undercutting appellants' assertion that defendants were intentionally lying about the existence of additional documents.  In addition, although appellants contend that the 2017 certification resulted in the cessation of document production for seven years, defendants in fact produced approximately 150,000 pages of documents before the 2017 certification, and their final production was about 8,000 pages, representing only around 5% of the total documents produced.

We reject appellants' contention that Supreme Court should have dismissed the counterclaims as a sanction for spoliation of evidence supporting those counterclaims — specifically, valuations of defendant PF2 Securities Evaluations, Inc. Appellants did not submit evidence sufficient to demonstrate that Fillebeen actually destroyed any company valuations.  In any event, the existence of company valuations was also at issue before the Special Referee, who required Fillebeen to submit a Jackson affidavit.  Appellants cannot seek to relitigate the matter simply by seeking a different sanction for the same alleged misconduct.