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M&T Mortgage Corp. v. White


May 18, 2007


The opinion of the court was delivered by: VIKTOR V. Pohorelsky United States Magistrate Judge


The defendant Better Homes Depot ("BHD") has moved for a protective order to quash requests for admissions served in these actions, which have been consolidated for purposes of discovery.*fn1 BHD argues that the requests are burdensome, that the information they seek is available in public records, and that it does not have documents of its own to which it can refer to provide responses. For the reasons below, the court rejects each of BHD's bases for seeking a protective order, and thus orders BHD to respond to them in accordance with the directions below.

The claims against BHD in this action allege a pattern and practice of fraudulent conduct in connection with the purchase, renovation, and resale of residential real estate. Among other things, the plaintiffs allege that BHD made a practice of purchasing real estate and reselling it to unsophisticated buyers at inflated prices by making false promises to the buyers about renovations that would be made, certificates of occupancy that had been issued, and the rental income that could be obtained from the properties. Each of the plaintiffs contend that they purchased properties based on these false representations and found that renovations were not made and that expected rental income could not be earned because the necessary certificates of occupancy had not been issued.

The seventeen requests for admissions served on BHD seek admissions about some 247 properties purchased and sold by BHD during the period in which the plaintiffs contend BHD carried on its pattern and practice of fraudulent conduct. The admissions seek confirmation of various items of information concerning the properties, including the dates of BHD's purchase and resale of each of the properties, as well as the absence in the public records of the City of New York of any building permits, applications for building permits, certificates of occupancy, applications for certificates of occupancy, deeds, and other such documents concerning the properties during the time when BHD was in possession of them. These items of information are all central to the proof of the plaintiffs' allegations concerning the pattern and practice of fraudulent conduct in which BHD engaged.

BHD's burdensomeness argument rests primarily on the number of admissions encompassed by the requests. Because each of the seventeen admissions apply to multiple properties, the plaintiffs are actually seeking confirmation of 2,127 facts.*fn2 On its face, then, the sheer volume of data as to which admissions are sought appears to support BHD's burdensomeness argument. If BHD were required to sift through thousands of pages of documents in order to answer the admissions, the task would indeed be time-consuming. But no such sifting will occur because, as BHD readily admits, it has destroyed all the documents in its possession that might contain the confirming information. Rather, most of the data may be confirmed simply by consulting two public records databases maintained by the City of New York which are readily available to BHD over the internet.*fn3 There is no question that a party is required to consult readily obtainable information in order to respond to a request for admissions. See Fed. R. Civ. P. 36(a) ("[a]n answering party may not give lack of information or knowledge as a reason for failure to admit or deny unless the party states that the party has made reasonable inquiry and that the information known or readily obtainable by the party is insufficient to enable the party to admit or deny"); accord, e.g., In re Gulf Oil/Cities Service Tender Offer Litigation, Nos. 82 Civ. 5253 (MBM), 87 Civ. 8982 (MBM), 1990 WL 657537, at *2 (S.D.N.Y. May 2, 1990); T. Rowe Price Small-Cap Fund, Inc. v. Oppenheimer & Co., Inc., 174 F.R.D. 38, 43 (S.D.N.Y. 1997); Al-Jundi v. Rockefeller, 91 F.R.D. 590, 593-94 (W.D.N.Y.1981).

Deciding the burdensomeness question concerning BHD's review of the databases rests in great measure on an assessment of the gains to be obtained from that effort. "[R]equests for admission can save litigants valuable time and substantial money, which would otherwise have to be spent unnecessarily either to prove certain facts at trial, or to establish certain facts through complex costly discovery procedures, such as interrogatories, depositions, and requests for the production of documents, when such facts are not contested." T. Rowe Price Small-Cap Fund, Inc., 174 F.R.D. at 43. Thus, "because rule 36 admission requests serve the highly desirable purpose of eliminating the need for proof of issues upon trial, there is a strong disincentive to finding an undue burden [in responding] where the responding party can make the necessary inquiries without extraordinary expense or effort." Id. (quoting Al-Jundi, 91 F.R.D. at 594). The court has itself accessed the databases and found that after a brief period needed to become acquainted with their features, navigating them and obtaining necessary information is quick and easy. Moreover, the review does not require an attorney, but rather can be accomplished by a paralegal or even one untrained in the law who is told what to look for. The review required thus appears likely to take only several days, not hundreds of hours as BHD contends. To prove each of the various facts sought to be established by the admissions at trial, on the other hand, would require an exhaustive accumulation of documents from the public records of the city, not to mention the trial time required to present them to the jury in a meaningful fashion. As the facts sought by the admissions are not likely to be disputed, there is no question that the gains in efficiency achieved by requiring BHD to respond to the admissions outweigh the burden imposed.

The foregoing reasoning also applies to BHD's argument that the information sought by the admissions is largely available in the public records. "Rule 36 is not a discovery device. The purpose of the rule is to reduce the costs of litigation by eliminating the necessity of proving facts that are not in substantial dispute, to narrow the scope of disputed issues, and to facilitate the presentation of cases to the trier of fact." T. Rowe Price Small-Cap Fund, Inc., 174 F.R.D. at 43. It is precisely because the information is readily available in the public records, and therefore not likely to be disputed, that the requests for admissions here will serve a useful purpose in this action.

The argument that BHD does not possess records necessary to respond to some of the requests is also irrelevant, particularly in light of BHD's admission that it has destroyed all of its records regarding the matters on which admissions are sought. A party is required to consult available documents, regardless of who produces them. See Fed. R. Civ. P. 36(a) (answering party may not rely on lack of knowledge as basis for failing to respond without making "reasonable inquiry" and consulting "information known or readily obtainable"); Cf. Gulf Oil/Cities Service, 1990 WL 657537, at *4 (litigant compelled to inquire of a non-party in order to respond to requested admission). Thus, to the extent that records are available because they have been produced by other parties, BHD is required to consult them to respond to whatever requests those records may apply. BHD's destruction of records of course has reduced the volume of records, and thus the burden, of such a review. If no records are available either in the databases or the documents produced by other parties, and are not readily obtainable elsewhere, BHD may respond by identifying with specificity the properties as to which a given request cannot be admitted or denied because of the absence of records from which the information permitting a response could be obtained. See Fed. R. Civ. P. 36(a) ("[W]hen good faith requires that a party qualify an answer or deny only a part of the matter of which an admission is requested, the party shall specify so much of it as is true and qualify or deny the remainder.").

Finally, BHD objects to certain of the requests for admissions because they apply to properties not included within a discovery order previously entered by the court. That order limited the time frame of the purchase and resale transactions as to which the defendants were required to retrieve and produce documents in this case.*fn4 It was not intended to limit the time frame for transactions as to which admissions might be sought, or to otherwise limit the plaintiffs' proof concerning the existence of the alleged pattern and practice of fraudulent conduct.*fn5 Since the requests are not unduly burdensome overall, the fact that they encompass transactions outside the limitations of the discovery order above is of no consequence to the court's analysis.

The motion for a protective order is denied. BHD is required to serve responses to the requests for admissions no later than June 30, 2007.


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