Khashayar Sehhat, Plaintiff, v. KHASHAYAR SEHHAT BABAK EMAMI (2026)

Defendant/Counterclaimant Tannaz Iranpour (Iranpour) moves for an order compelling Plaintiff/Counterclaim Defendant Khashayar Sehhat (Sehhat) and Additional Counterclaim Defendant Babak Emami (Emami) to produce Court Ordered discovery by a date certain and to set a date for the trial on the punitive damages award.

Papers Considered NYSCEF DOC NO. 270-275; 298-304

1. Notice of Motion/Affirmation of Stavros E. Sitinas, Esq./Exhibits 1-3/ Affirmation of Good Faith

2. Affirmation in Opposition of Aaron G. Baily, Esq./Memorandum of Law in Opposition/Exhibit 1

3. Affirmation in Opposition of Mark A. Crawford, Esq.

4. Affirmation in Reply of Stavros E. Sitinas, Esq./Exhibits 1-2

FACTUAL AND PROCEDURAL BACKGROUND

Sehhat commenced this action with the filing of a summons and complaint on May 23, 2019 to recover money allegedly loaned to Iranpour. On October 4, 2019, Iranpour filed an answer with counterclaims, alleging counterclaims for assault and battery, harassment, malicious prosecution, defamation, among others, and named Emami as an additional counterclaim defendant. Sehhat filed the note of issue in 2023 and a jury trial commenced on February 6, 2025. On March 14, 2025, the jury returned a verdict in favor of Iranpour against Sehhat in the amount of $12,000,000.00 and against Emami in the amount of $2,500,000.00. The jury also found that Iranpour was entitled to punitive damages against both Sehhat and Emami.

The transcript from the jury trial (NYSCEF Doc. No. 196) indicates that the Court asked the jury whether punitive damages should be imposed on both Sehhat and Emami and the jury unanimously answered yes. At that time, the Court thanked the jury for their service. He advised the parties that the jury could not return the following week for a trial on punitive damages and that a punitive damages trial would have to be held in front of a different jury. The Court reminded the parties that the jury was scheduled until the end of February and that it was already March 14, 2025. He also reminded the parties that he did not allow any discovery on the net worth of Sehhat or Emami "because a punitive trial is a separate and distinct trial," and that now Iranpour is entitled to discovery on finances. The Court suggested the parties may be able to stipulate to the facts of Sehhat and Emami's conduct, since the jury already determined that the conduct rose to that level. The Counterclaimant Defendants advised the Court that they would be making motions to set aside the verdict as excessive, among other requested relief.

Iranpour's counsel stated to the Court that "this jury," has to be the one to come back and hear the punitive damages trial. Then the Court spoke to the jury, who asked if the punitive damages portion could be heard today. The jury informed the Court that it could not come back. At that point, Emami and Sehhat's trial counsel stated that they were not prepared to do punitives and that it was her understanding that they would set a briefing schedule if there was an unfavorable verdict. She also stated that it was "putting the cart before the horse to even address punitives while we still have outstanding motions at this point." The Court again reiterated that the jury could not stay any longer given that they were held two weeks later than expected and that the parties had wanted to bring motions to set aside the verdict, which would take time.

In motion sequence 013, Sehhat and Emami moved, among other things, to set aside the verdict, to direct that a judgment be entered in their favor as a matter of law and to dismiss Iranpour's complaint. In the alternative, they moved for an order setting aside the jury's verdict and ordering a new trial on all issues because the verdict was against the weight of the evidence. Pursuant to a decision and order dated January 7, 2026, the Honorable Lewis J. Lubell, J.S.C. denied the motion in its entirety.

In motion sequence 014, Sehhat moved to vacate the verdict due to Iranpour's alleged fraud. This motion was denied on the record after oral argument held on October 17, 2025.

On July 29, 2025, Sehhat served a notice to produce documents for claims for punitive damages (NYSCEF Doc. No. 220). The demand sought a statement of net worth, complete copies of income tax returns, all bank account statements, statements related to ownership in any property, among other financial documentation.

Sehhat and Emami objected on the basis that the demands were palpably improper and stated that Iranpour is not entitled to the information at this point in the litigation.

Instant Motion

Iranpour now moves to compel compliance with the notice to produce and requests the Court set a date for the punitive damages trial to commence. According to Iranpour, where, like here, liability for punitive damages has been determined, a plaintiff is entitled to disclosure of a defendant's financial condition and net worth so that the factfinder can assess the amount of punitive damages. As a result, Iranpour argues that her notice to produce seeks proper, post-verdict financial discovery that is material and necessary to the punitive damages trial. Iranpour is requesting the Court direct Sehhat and Emami to produce the discovery by a certain date.

In opposition, Sehhat argues that Iranpour should not be entitled to a trial on punitive damages since the new jury did not hear the liability evidence and would allegedly not be able to fairly determine the amount. According to Sehhat, the standalone punitive damages trial before a new jury is not permitted under New York law. Further, as Iranpour is allegedly not entitled to a punitive damages trial, she is not entitled to compel discovery. In the alternative, Sehhat argues that the discovery request is overbroad and that a jury does not require this documentation to be informed about Sehhat's net worth.

Emami also opposes the motion and argues that the discovery sought is overbroad. Among other things, Emami also alleges that Iranpour should be precluded from having a punitive damages trial due to the delay in requesting for the trial to be placed on the calendar.

DISCUSSION

Punitive Damages Trial

Here, it is undisputed that the jury found that punitive damages were warranted due to the conduct of both Sehhat and Emami. However, the Court had specifically precluded financial discovery related to net worth prior to coming to a verdict because punitive damages is a separate and distinct trial. The trial transcript indicates that the amount of damages could not be determined right after the jury rendered the verdict due to the unavailability of the jury. The Court, not Iranpour, then chose not to reconvene the original jury, and suggested a post-verdict framework for setting up a future punitive damages trial. This post verdict framework included financial discovery. Sehhat and Emami did not object to the Court's decision to proceed in that manner. They stated that they were not prepared to go forward on punitives and that it was premature to have the punitives trial since they would be making motions to vacate/set aside the verdict.

Now, in opposition to Iranpour's motion to compel, Sehhat and Emami claim that Iranpour is not entitled to a punitive damages trial. Neither Sehhat nor Emami cite any New York authority holding that a plaintiff's entitlement to punitive damages is extinguished solely because the original jury cannot be reconvened. On the other hand, courts routinely bifurcate the issue of liability for punitive damages and the quantification of those damages. See e.g. Rupert v Sellers, 48 AD2d 265, 272 (4th Dept 1975) ("the split trial procedure should be used, and that the court should take a special verdict as to whether defendant was guilty of such conduct that plaintiff is entitled to punitive damages. Not until plaintiff obtains such a special verdict that he is entitled to punitive damages is it necessary or important for him to know defendant's wealth").

Further, Courts have recognized that it may not be feasible for the same jury that rendered a liability determination on punitive damages to render the amount of punitive damages. See e.g. James D. Vollertsen Associates, Inc. v John T. Nothnagle, Inc., 48 AD2d 1007, 1007 (4th Dept 1975) ("If plaintiffs obtain a special verdict entitling them to punitive damages against defendants, they may make immediate application for defendants to answer such interrogatory; and the trial may then be resumed before the same jury, where feasible, with the parties presenting such additional evidence as they see fit on the question of the amount of damages to which plaintiffs are entitled, and the jury shall then determine that question").

Moreover, "trial courts are accorded wide discretion in making evidentiary rulings . . . , absent an abuse of discretion, those rulings should not be disturbed on appeal." Rojas v New York City Tr. Auth., 176 AD3d 990, 991 (2d Dept 2019) (internal quotation marks omitted). Thus, here, the trial court had broad discretion over the conduct of trial, including structuring a split trial for punitive damages proceedings. In addition, Sehhat and Emami did not object to this procedural framework during the trial. Although they brought motions to vacate the jury verdict, they did not challenge the trial court's announced procedure for completing the punitive damages award before a different jury or otherwise claim that it was unauthorized. As a result, Sehhat and Emami failed to preserve their procedural objections. See e.g. Sabine v State of New York, 43 NY3d 1015, 1017 (2024) (internal quotation marks omitted) ("To demonstrate that a question of law is preserved for this Court's review, a party must show that it raised the specific argument in [the trial court] and asked the court to conduct that analysis in the first instance").

Accordingly, this matter will now be referred to the Trial Assignment Part for a punitive damages trial to be placed on the calendar.

Motion to Compel

"Disclosure in civil actions is generally governed by CPLR 3101 (a), which directs: [t]here shall be full disclosure of all matter material and necessary to the prosecution or defense of an action, regardless of the burden of proof. . . . The test is one of usefulness and reason." Forman v Henkin, 30 NY3d 656, 661 (2018) (internal quotation marks and citations omitted). CPLR 3101 (a) "embodies the policy determination that liberal discovery encourages fair and effective resolution of disputes on the merits, minimizing the possibility for ambush and unfair surprise." Id. at 661 (internal quotation marks and citation omitted). "The supervision of disclosure and the setting of reasonable terms and conditions therefor rests within the sound discretion of the trial court . . . ." Montalvo v CVS Pharm, Inc., 102 AD3d 842, 843 (2d Dept 2013) (internal quotation marks and citations omitted).

Pursuant to CPLR 3124, "[i]f a person fails to respond to or comply with any request, notice, interrogatory, demand, question or order under this article . . . the party seeking disclosure may move to compel compliance or a response." On a motion brought pursuant to CPLR 3124, the burden is on the party seeking the disclosure to establish a basis for the production sought. See Foster v Herbert Slepoy Corp., 74 AD3d 1139, 1140 (2d Dept 2010) (internal quotations omitted) ("It is incumbent on the party seeking disclosure to demonstrate that the method of discovery sought will result in the disclosure of relevant evidence or is reasonably calculated to lead to the discovery of information bearing on the claims"). "[T]he party challenging disclosure bears the burden of establishing that the information sought is immune from disclosure." Ambac Assurance Corp. v DLJ Mortg. Capital, Inc., 92 AD2d 451, 452 (1st Dept 2012). Courts have found that a party is not required to respond to a discovery demand that is "palpably improper . . . [in that it is seeking] irrelevant information, or [is] overbroad and burdensome." Montalvo v CVS Pharm, Inc., 102 AD3d at 843.

It is well settled that the "wealth of a defendant is material to the assessment of punitive damages." McIntyre v Manhattan Ford, Lincoln-Mercury, Inc., 256 AD2d 269, 271 (1st Dept 1998); see also Whitney v Citibank, N.A., 782 F2d 1106, 1119 (2d Cir 1986) (internal quotation marks and citations omitted) ("In determining the amount and effectiveness of exemplary damages to be awarded against a defendant, the court may take into consideration the defendant's wealth or net worth. This consideration is relevant as enabling the fact finder to arrive at an award of sufficient substance to make the offender smart, since a lesser award would probably not achieve the desired deterrent effect"). This contrasts with compensatory damages, where "the financial resources of either party are irrelevant." Dufresne v Duemler, 108 AD2d 1102, 1102 (3d Dept 1985).

As noted, evidence of a defendant's wealth may not be introduced at trial "unless and until the jury has brought in a special verdict that plaintiff is entitled to punitive damages against defendant." Rupert v Sellers, 48 AD2d at 272. However,"[s]ince the purpose of presenting to the jury the amount of defendant's wealth is only to furnish to them a guide for suitable punishment, there is no need for a plaintiff to explore the details of a defendant's assets and liabilities. Id. This financial disclosure may typically consist of a sworn statement of net worth, together with "copies of each defendant's income tax returns for not to exceed five years immediately preceding." Id.

Iranpour served Sehhat and Emami with a notice to produce 21 different document demands. They did not produce any of the documents in response. The first item demands that Sehhat and Emami produce a current and historical statement (from October 4, 2019 to the present day) of net worth setting forth all assets and liabilities. The second item seeks production of complete copies of all federal and state income tax returns, including all schedules, W-2s, 1099s, K-1s, and any other related documents.

As set forth above, once a jury has determined that punitive damages are warranted, some financial disclosure is necessary for the jury to determine the amount of damages. As Iranpour has established an entitlement to punitive damages, she is entitled to, at a minimum, a comprehensive sworn statement of net worth and the tax returns for the preceding five years. Accordingly, document demands numbered 1 and 2 are material and necessary for the jury to consider the wealth of Sehhat and Emami when determining the appropriate punishment for their conduct. The Court declines to compel production of the remaining financial records, without prejudice to renew the application if such discovery later proves to be relevant to assess punitive damages. At this time, the Court declines to address whether broader disclosure may be relevant for post judgment enforcement proceedings.

All other arguments raised on this motion and evidence submitted by the parties in connection thereto have been considered by this court notwithstanding the specific absence of reference thereto.

CONCLUSION

Accordingly, it is hereby

ORDERED that Tannaz Iranpour's motion to compel is granted in part, to the extent that Khashayar Sehhat and Babak Emami are directed to produce the information and documents requested in the Document Demands 1-2 (NYSCEF Doc. No. 220); and it is further

ORDERED that Khashayar Sehhat and Babak Emami shall produce the discovery demands to Tannaz Iranpour on or before August 21, 2026.

This matter will now be referred to the Trial Assignment Part to set a date for the jury trial on the punitive damages award.

Dated: August 4, 2026

White Plains, New York

HON. WILLIAM J. GIACOMO, J.S.C.

William J. Giacomo, J.