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Posted: February 20, 2014

First Department Reverses Grant of Renewal For Lack of Diligence in Seeking Evidence

On February 18, 2014, the First Department issued a decision in Orchard Hotel, LLC v. D.A.B. Group, LLC, 2014 NY Slip Op. 01107, reversing a trial court’s grant of a motion for renewal.

In Orchard Hotel, the trial court granted the defendant’s motion for renewal, reinstating its counterclaims. The First Department reversed, both because it found the defendant’s new evidence to be without merit and because the defendant should have offered it in the original motion, explaining:

CPLR 2221(e)(2) provides in pertinent part that a motion to renew “shall be based upon new facts not offered on the prior motion that would change the prior determination.” . . .

[U]nder CPLR 2221(e)(3), a motion to renew “shall contain reasonable justification for the failure to present such facts on the prior motion.” Here, [the defendant] made the discovery request that yielded the Action Plan only upon the motion court’s suggestion, and only after this Court affirmed the order dismissing [the defendant’s] counterclaims. The Action Plan was available at the time of the original motion—-indeed, numerous witnesses alluded to it during their depositions. Even so, [the defendant] did not provide a reasonable justification for its failure to serve a more exacting discovery demand that specifically requested Brooklyn Federal’s internal documents related to the loan extension issue. Thus, we find that [the defendant] failed to show that it exercised due diligence in obtaining the documentary evidence, and the motion court erred in granting leave to renew.

(internal quotations and citations omitted).

The First Department had a different view than the trial court on the substantive importance of the Action Plan. However, in its apparent effort to drive a stake through the heart of the defendant’s counterclaims, it could be viewed as setting a high bar for parties seeking renewal.

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