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Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: December 12, 2019

Discovery on Defendant’s Motive for Breaching Contract Denied

On December 3, 2019, the First Department issued a decision in Bersin Props., LLC v. Nomura Credit & Capital, Inc., 2019 NY Slip Op. 08641, denying discovery on a defendant’s motive for breaching a contract, explaining:

Supreme Court providently exercised its discretion in denying plaintiff’s discovery requests. Here, plaintiff sought discovery regarding defendant’s motives and intent on its breach of contract claim. However, as the court correctly recognized, in a breach of contract claim, the issue is whether the defendant failed to perform its obligations pursuant to the terms of the contract.

Furthermore, while plaintiff accurately points out that in limited circumstances, a defendant’s intent may be relevant in a breach of contract claim in determining whether the defendant’s bad faith or alleged misconduct prevented or hindered compliance with a contractual condition precedent, the motion court did not abuse its discretion by declining to apply the exception.

(Internal quotations and citations omitted).

A big part of complex commercial litigation is giving, receiving and evaluating evidence (this is called “discovery”). The scope of discovery is broad, but as this decision shows, it is not unlimited. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client has a question regarding discovery obligations (and what to do if a litigant is not honoring those obligations).

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