Python Financial Solutions, Inc., Plaintiff, v. SDCK LLC (2026)

The following e-filed documents, listed by NYSCEF document number (Motion 002) 46, 47, 48 were read on this motion to/for VACATE/STRIKE - NOTE OF ISSUE/JURY DEMAND/FROM TRIAL CALENDAR.

This action arises from an alleged breach of a purchase and sale agreement between plaintiff Python Financial Solutions, Inc. ("Python") and defendant SDCK I LLC, ("SDCK"). In motion sequence 002, defendant SDCK moves, pursuant to 22 NYCRR § 202.21(e), to vacate the note of issue and certificate of readiness filed in this action on June 23, 2026 by plaintiff Python. Alternatively, defendant requests leave from the court, under 22 NYCRR § 202.21(d), for the note of issue to be deemed filed upon the condition that currently pending pretrial proceedings concerning an in-camera review that had not been completed, at the time of the motion's filing, may be resolved and any discovery ordered in connection therewith may be used in this action. Python does not oppose the motion.

On February 26, 2026, a Rule 14 status conference was held, at the close of which the court requested additional case law in support of the parties' respective positions concerning whether certain documents being withheld by plaintiff were privileged. After hearing from the parties in conference, reviewing Rule 14 submissions and examining the supplemental case law provided by the parties, the court directed plaintiff to submit documents PYT003056 and PYT003004, along with the privilege log addressing those documents for in-camera review by the court (NYSCEF doc. no. 38). By case management order, the note of issue deadline was extended to June 5, 2026 (NYSCEF doc. no. 40). Pursuant to the preliminary conference order in this action, any dispositive motions were to be made by notice of motion returnable in the submissions part within sixty (60) days of the filing of the note of issue, or as otherwise directed by the court (NYSCEF doc. no. 23). The note of issue was filed on June 23, 2026, with a footnote that read:

On January 27, 2026, Defendant SDCK filed a Rule 14 letter concerning an in-camera review of certain privileged documents. Plaintiff responded on February 2, 2026. It is the parties' understanding that the Court conducted its review and the parties are awaiting its Order.

(NYSCEF doc. no. 44).

On July 21, 2026, defendant filed its motion to vacate the note of issue, eight (8) days after the filing deadline (NYSCEF doc. no. 46). On August 4, 2026, this court ordered plaintiff to produce documents PYT003056 and PYT003004, which were the subject of the January 27, 2026, Rule 14 letter and subsequent in-camera review (NYSCEF doc. no. 49).

The Uniform Rules set forth two separate and distinct methods for obtaining discovery after a note of issue is filed. If a party moves within twenty (20) days of the filing of the note of issue to vacate the note of issue, that party must demonstrate only the less stringent standard — that is, "upon affidavit showing in what respects the case is not ready for trial, and the court may vacate the note of issue if it appears that a material fact in the certificate of readiness is incorrect, or that the certificate of readiness fails to comply with the requirements of this section in some material respect" (22 NYCRR 202.21[e]). However, if the party seeking discovery moves to compel such discovery after the 20-day period provided by 22 NYCRR 202.21(e) has expired, the more stringent standard under 22 NYCRR 202.21(d) — requiring "good cause" — must be met (Audiovox Corp. v Benyamini, 265 AD2d 135, 140 [2nd Dept 2000]). "Good cause" is established when the party seeking post-note discovery demonstrates unusual or unanticipated circumstances and substantial prejudice (Taylor v Enter. FM Tr., 214 AD3d 493, 494 [1st Dept 2023]; 22 NYCRR 202.21[d]).

Here, defendant is subject to the more arduous standard simply because it filed its motion to vacate the note of issue eight (8) days after the deadline for such submission (NYSCEF doc. no. 46). Section § 202.21(d) of the Uniform Rules of the Supreme Court specifies that the certificate of readiness indicate that "all discovery proceedings have been completed." Obviously, that was not the case in this instance: the court itself was in the process of completing an in-camera review of the disputed documents; and plaintiff indeed acknowledged in a footnote, when filing its note of issue, that discovery was in fact not complete. Defendant, nevertheless, has failed to show any "unusual or unanticipated circumstances" that would justify vacating the note of issue after failing to file its motion to vacate in a timely manner.

That failure notwithstanding, trial courts are authorized, as a matter of discretion, to permit post-note of issue discovery without vacating the note of issue, so long as neither party will be prejudiced (see Pickering v Union 15 Rest. Corp., 107 AD3d 450 [1st Dept 2013]). Although defendant here fails to demonstrate actual "unusual or unanticipated circumstances" that merit vacating the note of issue, defendant has identified how it would be prejudiced if it were foreclosed from using non-privileged evidence at trial, or in connection with dispositive motion submissions or at oral argument on such motion(s). Further, though not so-ordered by the court, the docket reflects that the parties did stipulate to a request to extend the deadline to file dispositive motions in light of the court's on-going in-camera review (NYSCEF doc. no. 45). Given the circumstances present here, the court grants leave for limited post-note of issue discovery related solely to inquiries involving, or arising logically from, the production of documents PYT0003056 and PYT003004, which were ordered to be produced by plaintiff to defendant following in-camera review by the court (AAEB5 Fund 17, LLC v Duval & Stachenfeld, LLP, 247 AD3d 631, 633 [1st Dept 2026]). The court perceives no prejudice that could result from such continued discovery (see, e.g., Dominguez v Manhattan & Bronx Surface Tr. Operating Auth., 168 AD2d 376, 376-377 [1st Dept 1990]).

Accordingly, it is hereby,

ORDERED that defendant's motion is granted to the extent that discovery may proceed post-note of issue related solely to inquiries involving, or arising logically from, the production of documents PYT003056 and PYT003004, with all discovery to be completed by October 1, 2026; and it is further

ORDERED that the motion is denied in all other respects.

Robert R. Reed, J.