Case Name: Rafael D. Gutierrez, Respondent, v. L. Raul Bernard et al., Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1999-12-09
Citations: 267 A.D.2d 65
Docket Number: 
Parties: Rafael D. Gutierrez, Respondent, v L. Raul Bernard et al., Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 267
Pages: 65–66

Head Matter:
Rafael D. Gutierrez, Respondent, v L. Raul Bernard et al., Appellants.
[699 NYS2d 396]

Opinion:
—Order, Supreme Court, New York County (Ira Gammerman, J.), entered July 10, 1998, which, in an action for breach of contract, money had and received, rescission, fraud and fraudulent conveyance, granted plaintiff's motion to confirm the Special Referee's report recommending that defendants' answer be stricken, and directed entry of judgment in favor of plaintiff in the amount demanded in the complaint, unanimously modified, on the law, to vacate the directive for entry of judgment in the amount demanded in the complaint with respect to plaintiffs causes of action for fraud and fraudulent conveyance (the third, fourth and seventh causes of action), and to remand the matter for an inquest with respect to plaintiffs demand for punitive damages in those causes of action, and otherwise affirmed, without costs.
Defendants' answer was properly stricken in view of their willful failure to comply with a prior order directing production of the corporate defendant's checks. Such willfulness was evinced by other conduct aptly characterized by the motion court as "playing games", including defendants' failure to produce documents in support of their contention that a $1 million loan to defendant Bernard was used to pay the corporation's debts and expenses, Bernard's inability to recall whether he ever received that money, why other family members also received loans from the corporation, and the name of the accountant who prepared the ledger sheet reciting these transactions. However, with respect to the fraud and fraudulent conveyance causes of action, an inquest is required to determine whether plaintiff is entitled to punitive damages, and we modify accordingly. Concur — Sullivan, J. P., Rosenberger, Lerner, Rubin and Andrias, JJ.