Commercial Division Blog

Posted: June 23, 2018 / Categories Commercial, Discovery/Disclosure, Sanctions

Answer Stricken as Sanction for Spoliation of Evidence

On June 8, 2018, Justice Masley of the New York County Commercial Division issued a decision in Kamco Supply Corp. v. Nastasi & Associates, Inc., 2018 NY Slip Op. 31200(U), striking an answer as a sanction for spoliation of evidence, explaining:

A party seeking spoliation sanctions must show that: (1) the party having control over the evidence possess an obligation to preserve it at the time of its destruction; (2) the evidence was destroyed with a culpable state of mind; and (3) the destroyed evidence was relevant to the party's claim or defense such that the trier of fact could find that the evidence Would support that claim or defense.

Here, the Nastasi Defendants had control over the evidence, and the culpable state of mind of the Nastasi Defendants can be inferred by the fact that they never responded or attempted to comply with this court's October 6, 2015 order prior to the destruction of N&A books and records in December 2015, despite having received the order with notice of entry and Kamco's related discovery demands in October and early-November 2015; indeed, Nastasi was a co-trustee of the Family Trust that rented office space to, and evicted, N&A, purportedly leading to the destruction of all business records of the Nastasi Defendants, which the Nastasi Defendants totally failed to preserve. Additionally, the destroyed evidence is plainly relevant in that it would establish the putative class and the extent of damages, if any; Kamco and other similarly situated beneficiaries sustained.

Accordingly, the answer of the Nastasi Defendants is stricken.

(Internal quotations and citations omitted) (emphasis added).

A big part of complex commercial litigation is giving, receiving and evaluating evidence (this is called "discovery"). This decision discusses the problem of litigants not performing their discovery obligations and what can happen to them if they do not. Contact Schlam Stone & Dolan partner John Lundin at if you or a client has a question regarding discovery obligations (and what to do if a litigant is not honoring those obligations).