### 1461-1469 Third Ave. Owner LLC v Lux Group Holdings Ltd. 2024 NY Slip Op 32586(U) July 25, 2024 Supreme Court, New York County Docket Number: Index No. 652652/2022 Judge: Nancy M. Bannon Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York State and local governmentsources, including the New

York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.NYSCEF DOC. NO. 125 INDEX NO. 652652/2022 RECEIVED NYSCEF: 07/26/2024

PRESENT: 

## SUPREME COURT OF THE STATE OF NEWYORK NEWYORK COUNTY HON. NANCY M. BANNON PART Justice 61M

----------------------------------------------------------------- ----------------X INDEX NO. 652652/2022

1461-1469THIRD AVE. OWNER LLC, Plaintiff,-vLUX GROUP HOLDINGS LTD. and RON SHEMESH Defendants.

------------------------------------------------------------------- --------------X MOTION DATE 05/29/2024 MOTION SEQ. NO. 002
DECISION 

### + ORDER ON MOTION

The following e-filed documents, listed by NYSCEF document number (Motion 002) 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110,111,112,113, were read on this motion to/for DISCOVERY
I. BACKGROUND In this breach ofcontract action arising from the construction ofa 35-story residential condominium building in Manhattan, the plaintiff property owneralleges thatthe defendant contractor, a homefurnishing manufacturing companywhich specializes in kitchen cabinets and bathroom vanities, and its principal, Ron Shemesh, were terminated from the projectfor performing in an unworkmanlike and untimely manner, causing $5 million in damages. The defendants answered and asserted seven counterclaims seeking damages in excess of$2 million. 1 By an order dated September 19, 2023, the court (Ostrager, J. [Ret.]) granted, in part, a motion bythe plaintiffto dismiss six ofthe defendants' counterclaims (MOT SEQ 001). This left, for purposes ofdiscovery, the plaintiff's claims for breach ofcontract and fraud, and the

1On September5, 2023, the plaintiffcommenced aseparate breach ofcontract action againstthe construction managerforthe project, Leeding Builders Group LLC, which remains pending in this court under Index No. 654322/2023, awaiting assignmentto ajudge. It appearsthat no discovery has been conducted in thatcase.

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defendants' counterclaims for breach of contract, unjust enrichment, wrongful termination ofthe contract, violation ofthe NewYork Prompt PaymentAct and violation ofthe NewYorkTrust Fund Act. Discovery has been ongoing fortwo years. On May20, 2024, the defendants moved for an order (1) compelling plaintiffto provide them with a copy ofall documents concerning the project maintained by Procure Technologies, Inc. (Procure), a database and central repository of construction documents; (2) compelling the plaintiffto producefor depositions, non-parties Miki Naftali, Chair and CEO of Naftali Group, an affiliate of plaintiff and project developerwhich employees 45 people, and Danielle Naftali, Naftali Group's executive Vice-President of Marketing and Design, and (3) extending the Note of Issue filing deadline to afford the defendants' experttime to review the Procure documents. The plaintiff opposes the motion. In the meantime, by a status conference order dated July 11, 2024, the court, interalia, directed (1) the depositions oftwo non-party entities, ltalkraft LLC and Tiger Cabinets, Inc., contractors hired by the plaintiffto finish the defendants' work, within 30 days; (2) that defendants were to serve their expert report on or before September20, 2024; (3) that the final Note of Issuefiling deadlinewas extended to October 9, 2024, and (4) that the plaintiffwas to produce the monthly reports testified to by Jason Zuech, a Naftali Group employee, at his deposition, within ten days ofthat order. The court notes thatthe defendants' motion is defective in that counsel made legal arguments in an affirmation ratherthan in a memorandum of law. However, the court, in its discretion, will not denythe entire motion on this ground alone, as urged by the plaintiff. See CPLR 2001. Nordoes the court accept sur-replies on motionswithout leave ofcourt, not granted here. The court accepts the sur-replyfiled by the defendants onlyto the extentthat it includes a withdrawal ofthat part ofthe motion that seeks to depose Danielle Naftali in this action. Counsel shall be guided accordingly going forward. II. DISCUSSION Disclosure in NewYork civil actions is guided by the principle of"full disclosure of all matter material and necessary in the prosecution ordefense of an action." CPLR 3101(a). The phrase "material and necessary" is "to be interpreted liberally to require disclosure, upon request, of anyfacts bearing on the controversywhich will assist preparation fortrial by

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### [* 2]NYSCEF DOC. NO. 125 INDEX NO. 652652/2022 RECEIVED NYSCEF: 07/26/2024 sharpening the issues and reducing delayand prolixity. See Kapon v Koch, 23 NY3d 32 (2014). In lightthe remaining claims to be litigated, and this being a major NewYork construction project, discovery is not unexpectedly broad. However, it is notwithout limits. The branch ofthe defendants' motion that seeks an order compelling the defendantto provide all Procure documents is denied, without prejudice, as the request is overly broad. Indeed, the defendants seekto obtain Procure log-in credentials to allow access to all files on Procure related to the subject project. While some documentswould likely be material and necessary, the defendants are not entitled to afishing expedition. Moreover, prior conference orders state that all documentdiscoverywas conducted and completed, orwaived, and the defendantsfail to adequately explain the untimeliness ofthis document demand. However, it follows Procure's objections to a subpoena. On or aboutApril 19, 2024, the defendants served a subpoena on Procure apparently seeking the same documents. Procure's counsel responded with general and specific objections on May20, 2024. The first general objection is thatthe "materials sought by the subpoena are available from othersources that are more convenient, less burdensome, or less expensive, including Owner." Procure also objected on ground ofthe subpoena being overly broad, ambiguous and improperly seeking confidential information as per its confidentiality agreement with clients. Procure explained that its clientele create all documents stored on its cloud-based platform and the clients control access to those records. The instant motion was filed the same day Procure responded with those objections. Although Procure has not moved to quash the subpoena, its objections, echoed bythe plaintiff, have merit. The defendants served manysubpoenas in this case, including one on non-party Miki Naftali, and he did not comply. The branch ofthe motion that seeks an order compelling the plaintiffto produce non-party Miki Naftali for a deposition is denied as the defendants have not show entitlementto that relief. It is well settled that a subpoena may not be used as a tool of harassment orfor a proverbial "fishing expedition to ascertain the existence of evidence." Reuters Ltd. v DowJones Telerate, Inc., 231 AD2d 337, 342 (1 st Dept. 1997); see Law Firm of Ravi Batra, P.C. v Rabinowich, 77 AD3d 532 (1 st Dept. 2010). Moreover, "[w]here disclosure is sought against a nonparty, more stringent requirements are imposed on the party seeking disclosure." Velez v Hunts Point Multi-Serv. Ctr., Inc,. 29 AD3d 104, 108 (1 st Dept. 2006). The defendants supporttheirapplication onlywith several emails on which Nafatali was either a

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sender, recipient orjustcopied. Naftali then submitted an affirmation in opposition in which he describes his position in Naftali Group and his connection to the subject project and alleges, interalia, that he was not involved in day-to-day marketing, design or construction aspects of the projectsuch that his testimonywould be of no value. Indeed, as noted in the July 11, 2024, status conference order, eleven depositions had already been completed, including two of Naftali Group employees, and the two depositions of ltalkraft and Tiger Cabinets, the companies the plaintiff hired to replace the defendantwere to continue. However, given his position as CEO of Naftali Group and his knowledge, albeit limited, ofthe plaintiff's decision to terminate the defendantfrom the project and any damages incurred as a result, as indicated in his affidavit, the defendants have shown "good cause" to serve limited interrogatories, in accordancewith Rule 11-a ofthe Commercial Division rules and CPLR article 31, to be limited to those issues only and limited to ten separate interrogatories, including subparts. The branch ofthe motion seeking to extentthe Note of Issuefiling deadline is granted to the extentthatthe deadline is extended to October 9, 2024, perthe court's status conference order dated July 11, 2024. As the branch ofthe motion seeking to compel production ofthe Procure documents is denied, the defendant's expertwill not need time to review them. Nonetheless, the deadline extension granted in the July 11, 2024, order remains in effect. Any further issue may be raised the next conference, scheduled for October3, 2024. The defendants' remaining contentions have been considered and rejected. Any relief not expressly granted herein is denied. The parties are encouraged to explore settlement. Ill. CONCLUSION Accordingly, upon the foregoing papers, it is ORDERED thatthe defendants' motion is granted to the extentthat (1) the Note of Issue filing deadline is extended to October 9, 2024, as perthe court's status conference order dated July 11, 2024, and (2) the defendants mayserve interrogatories on Miki Naftali, in accordance with Rule 11-a ofthe Commercial Division rules and CPLR article 31, to be limited to the issue of his knowledge ofthe plaintiff's decision to terminate the defendantfrom the project and any damages incurred as a result, and limited to ten separate interrogatories, including subparts, on or before August 15, 2024, and Miki Naftali shall respond on or before September 16, 2024, and the motion is otherwise denied, and it is further

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ORDERED thatthe parties shall appearfor a status conference on October3, 2024, at 11 :00 a.m., as previously scheduled. This constitutes the Decision and Orderofthe court.

7/25/2024 

# ~cJNONS4CC

DATE CHECKONE: NANCY M. BANNON, J.S.C.

### □ CASE DISPOSED

### □ GRANTED 

# 0 NON-FINAL DISPOSITION

### □ DENIED 

# 0 GRANTED IN PART

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### □ OTHER

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