ATSCO FOOTWEAR HOLDINGS LLC LLC v. KBG LLC (2022)

The following e-filed documents, listed by NYSCEF document number (Motion 004) 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 111, 113, 126 were read on this motion to/for MISCELLANEOUS.

Upon the foregoing documents, it is ordered that this motion (Motion Seq. 004) is granted in part and denied in part.

Defendant/third-party plaintiff KBG, LLC (“KBG”) moves pursuant to CPLR 3124 for an order to compel the following:

(1) plaintiff Atsco Footwear Holdings, LLC, f/k/a Atsco Footwear, LLC (“Atsco”) to produce the documents sought in requests Nos. 24-39 to it; and

(2) third-party defendants Alan Colman and Mark Itzkowitz to produce the documents sought in requests Nos. 1-3, 28-30, and 35-43 of KBG's requests for production to each of them.1

CPLR 3101 requires full disclosure of all matter material and necessary in the prosecution or defense of an action. The phrase “material and necessary” is “to be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity (Kapon v Koch, 23 NY3d 32, 38 [2014]).

Notwithstanding the liberal interpretation of the statute, New York courts recognize a privacy interest in tax returns (Pyron v Banque Francaise Du Com. Exterieur, 256 AD2d 204, 205 [1st Dept 1998]). Consequently, courts require the party seeking production of tax returns to make a strong showing of necessity and demonstrate that the information contained in the returns is unavailable from other sources (Gordon v Grossman, 183 AD2d 669, 670 [1st Dept 1992]). Here, KBG has not adequately shown that the information contained in the tax returns would be otherwise unobtainable. The court will not compel the disclosure of tax returns from Atsco (Request No. 24-25) or from Colman, or Itzkowitz (Requests for production No 28-29).

Additionally, the court will not compel disclosure where movant has not sufficiently shown a need for responses to its more burdensome or broad requests. The Court of Appeals has made clear that “competing interests must always be balanced; the need for discovery must be weighed against any special burden to be borne by the opposing party” (O'Neill v Oakgrove Const., Inc., 71 NY2d 521, 529 [1988]). Some of KBG's requests for production are unreasonably broad and others are particularly burdensome when balanced with their minimal-to-nonexistent relevancy.

Finally, KBG's requests to Colman and Itzkowitz for information about the sufficiency of their assets are premature, and therefore irrelevant.

The court deems KBG's requests to be relevant and material, except for the tax records, certain burdensome or overbroad requests, and information related to corporate veil-piercing. For these reasons, the motion to compel will be granted in part.

ORDERED that the portion of the motion relating to KBG, LLC's requests for production No. 28-39 to Atsco Footwear Holdings, LLC, f/k/a Atsco Footwear, LLC is granted, and therefore Atsco Footwear Holdings, LLC, f/k/a Atsco Footwear, LLC is directed to provide such full and complete responses within 20 days of the date of this order, and it is further

ORDERED that the portion of the motion relating to KBG, LLC's requests for production No. 35-43 to both Alan Colman and Mark Itzkowitz is granted, and therefore Alan Colman and Mark Itzkowitz are directed to provide such full and complete responses within 20 days of the date of this order, and it is further

ORDERED that the motion to compel (Motion Seq. 004) is otherwise denied; and it is further

ORDERED that counsel are directed to appear for a status conference on Microsoft TEAMS on _ at _ a.m.

This constitutes the Decision and Order of the court.

FOOTNOTES

1.   KBG's requests for production to Colman and Itzkowitz are separate but identical documents.

Robert R. Reed, J.