Commercial Division Blog

Posted: July 5, 2023 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Categories Commercial, Discovery/Disclosure, Special Referee, Sanctions

Court Declines to Vacate Note of Issue Where Remaining Issues Could Be Decided on Post-Discovery Motions Or Were Not Preserved

On May 31, 2023, Justice Robert R. Reed of the New York County Commercial Division issued a decision in Oldcastle Precast v. Steiner Bldg. N.Y. City LLC, 2023 N.Y. Misc. LEXIS 2675, denying defendants’ motion to vacate the note of issue.  In the action, the parties had proceeded in discovery before a special referee, who had decided numerous discovery issues prior to the filing of the note of issue but left certain other issues relating to sanctions and the admissibility of certain expert reports for the Court to decide.  The Court rejected defendants’ arguments that the special referee’s failure to decide these issues warranted vacating the note of issue, because those issues could still be addresses on summary judgment or motions in limine or were not preserved.

On the question of spoliation, the Court explained:

The Referee specifically declined to decide defendants' request for spoliation sanctions and directed that the issue of spoliation be briefed and determined by this court as part of summary judgment motions or as a motion in limine (NYSCEF doc. no. 309). The issue is currently the subject of a pending motion made by defendants seeking spoliation sanctions against plaintiff (mot. seq. no. 005) and is also raised by defendants and briefed by the parties in connection with defendants' motion for summary judgment (mot. seq. no. 007). Therefore, the issue of whether to impose spoliation sanctions on plaintiff will be addressed by the court in the context of those motions. Vacating the note of issue is not warranted on this basis.

On the question of the admissibility of certain rebuttal expert reports, the Court explained:

The Referee's decision not to entertain defendants' motion regarding these reports does not warrant vacating the note of issue and further delaying resolution of this action. Defendants have not been precluded from raising this issue in connection with summary judgment motion practice and may move in limine to obtain an order on this issue.

Finally, on the admissibility of defendants’ sur-rebuttal expert reports, the Court found that defendants had failed to preserve the issue by failing to appeal the referee’s decision precluding those reports to the court within five days pursuant to CPLR 3104(d)

The court notes that the Referee permitted defendants to preserve their objections by allowing the parties to enter two-page letters addressing the issue. Defendants submitted such a letter to the Referee on March 28, 2022, wherein they raised the same arguments set forth herein and stated that they "respectfully except and reserve [their] rights to raise all issues related to your ruling with the court" (NYSCEF doc. no. 311). However, defendants never sought this court's review of the Referee's March 25, 2022 order and, at this juncture, any such motion would be untimely (see CIT Project Fin. v. Credit Suisse First Boston LLC, 7 Misc 3d 1002 [A], 2005 NY Slip Op 50406[U],** 3 ["Section 3104 (d) sets a five day requirement in order to foster the prompt resolution of disputed discovery issues in order to move the lawsuit" and accommodates "the on-going nature of discovery," by establishing "a scheme for the expedited review of the challenged discovery order"]). As such, defendants' objection to the Referee's ruling does not warrant vacatur of the note of issue so as to further delay this litigation.

Contact the Commercial Division Blog Committee at if you or a client have questions concerning discovery disputes, including discovery before a special referee, or the impact of filing a note of issue on your action.