Commercial Division Blog

Posted: May 25, 2022 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Christopher R. Dyess, Joshua Wurtzel, Hillary S. Zilz / Categories Default Judgment, Sanctions, Discovery/Disclosure

Discovery Violations Result in Striking of Answer and Default Judgment

In a Decision and Order dated April 11, 2022, in Lynx Capital Partners of NJ, LLC v. Bayes Capital LLC, 2022 NY Slip. Op. 31214(U), Justice Andrew Borrok granted the plaintiff’s renewed motion for sanctions, struck the defendant’s answer, entered default judgment in plaintiff’s favor, and awarded attorneys’ fees, explaining: 

Pursuant to CPLR 3126(3), when a party willfully refuses to comply with a court order to provide disclosure that the court finds relevant, the court may strike out pleadings, dismiss the action, or render a judgment by default against the disobedient party. Repeated failure to produce in the face of express orders constitutes prejudice sufficient to justify sanctions such as striking the defendants' answer (Oasis Sportswear, Inc. v Rego, 95 AD3d 592, 592, 944 N.Y.S.2d 101 [1st Dept 2012]). While striking the pleadings is a drastic remedy, it may be appropriate after an attorney repeatedly ignored warnings at compliance conferences (Goldstein v CIBC World Mkts. Corp., 30 AD3d 217, 217, 817 N.Y.S.2d 19 [1st Dept 2006]). Striking the pleadings is warranted when the court finds willful and contumacious noncompliance (Gliklad v Cherney, 113 AD3d 505, 506, 979 N.Y.S.2d 297 [1st Dept 2014]).

The defendants' pattern of willful and contumacious conduct by failing to provide documents, defying court orders, and producing incomplete and noncompliant document productions despite numerous "last chances" following the granting of motions to compel warrants striking their answer. The defendants simply have and continue to flout the orders of this court and to deny Lynx the ability to seek discovery relevant to its theory of the case. 

The attorneys at Schlam Stone & Dolan frequently litigate discovery disputes.  Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such disputes.