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Bricklayers and Allied Craftworkers Local 2, Albany v. Northeast King Construction

November 13, 2008

BRICKLAYERS AND ALLIED CRAFTWORKERS LOCAL 2, ALBANY, NEW YORK PENSION FUND, BY ITS ADMINISTRATOR STEPHEN J. O'SICK, ET AL., PLAINTIFFS
v.
NORTHEAST KING CONSTRUCTION, INC., F/K/A NORTHEAST CONSTRUCTION ENTERPRISES, INC.; RANDY KING, INDIVIDUALLY AND AS OFFICER OF NORTHEAST KING CONSTRUCTION, INC.; AND KIM M. KING, INDIVIDUALLY AND AS AN OFFICER OF NORTHEAST KING CONSTRUCTION, INC.,



The opinion of the court was delivered by: Randolph F. Treece United States Magistrate Judge

REPORT-RECOMMENDATION and ORDER

From its inception, this case has been plagued by many mishaps, predominately attributable to discovery misadventures and Defendants' dilatory responses to Plaintiffs' Discovery Demands. A recitation of the case history is warranted.

On November 1, 2006, we issued a Uniform Pretrial Scheduling Order (UPTSO) wherein we set, inter alia, the discovery deadline as June 1, 2007. Dkt. No. 13. Pursuant to a Stipulation, we amended the UPTSO resetting the discovery deadline to August 3, 2007. Dkt. No. 19, Order, dated May 16, 2007. More time to complete discovery was warranted primarily because of Defendants' failure to comply with Plaintiffs' Demands for Discovery. To urge Defendants' compliance, we directed that "[i]f Defendants do not permit the audit of their books and payroll within thirty (30) days of this Order, Plaintiff[s] may file either a motion to compel and/or sanctions without further Court authorization." Id. at p. 2. Shortly thereafter, on July 12, 2007, Plaintiffs filed a Motion to Compel Discovery and Sanctions. Dkt. No. 20. Plaintiffs' Motion revealed that they served Discovery Demands upon Defendants on November 20, 2006, but, even as late as July 11, 2007, Defendants had not produced the books and records for examination, notwithstanding Plaintiffs' numerous attempts to obtain those records. Id., Jennifer A. Clarke, Esq., Aff., dated July 12, 2007, at ¶¶ 9-10.

After the Motion was filed, Defendants provided boxes of records, albeit in a slovenly and ill-maintained mode. During a telephone conference on July 20, 2008, we agreed to defer our decision on the Motion to give the parties more time with the expectation that they would be able to resolve their discovery differences and the Motion to Compel would be withdrawn. Hence, the UPTSO was amended, once again, and the discovery deadline was extended to October 1, 2007. Within a month's time, Defendants' counsel filed a Motion to Withdraw. Dkt. No. 25, Mot. to Withdraw, dated Aug. 29, 2007. The crux of Counsel's Motion was that "Defendants have failed to fully cooperate with [his] office and have provided documentation in a manner which does not permit [him] to properly and timely comply with the Plaintiffs' discovery demands." Id., Vic J. Kopnitsky, Esq., Aff., dated Aug. 28, 2008, at ¶ 5. While the Motion to Compel and the Motion to Withdraw were pending, Plaintiffs filed a Letter-Motion, dated September 4, 2007, renewing their request for an order compelling compliance and striking Defendants' Answers, Dkt. No. 28, and Defendants filed a brief Affidavit in Opposition to the Motion to Compel, Dkt. No. 30.

On September 21, 2007, we issued a Memorandum-Decision and Order, granting Defendants' counsel's Motion to Withdraw and providing Defendants a reasonable duration to retain new counsel. Dkt. No. 31. In granting the Motion to Withdraw, we were compelled to discuss Defendants' feeble attempts to act in good faith regarding discovery. We noted that there had been numerous demands to produce and schedule audits of Defendants' books. Despite Defendants' counsel's persistent importunes, production had been far from complete and appearances at scheduled audits not kept. Defendants' then-counsel opined that there may have existed more documents which could be used to respond to Plaintiffs' Demands.

However, the time to secure new counsel had to be extended periodically and we were obliged to stay all proceedings. Approximately six months later, Defendants retained new counsel. With the assistance of new counsel, Defendants entered into a Stipulation that presumably resolved the pending Motion to Compel. Dkt. No. 39.

That Stipulation was converted into an Order on February 4, 2008, and is now the epicenter of another round of sanction motions. Dkt. No. 40.*fn1 It is important to summarize the more salient terms of the Stipulation and Order:

! If Defendants failed to comply with the provisions of this Order, the Answer and Amended Answer would be stricken, Plaintiffs would be authorized to proceed with the entry of a judgment by default, and Defendants would be precluded from submitting evidence in opposition to any motion for default;

! If Defendants failed to comply with the provisions of this Order, the Court shall enter judgment in Plaintiffs' favor in the sum of $1,847.86; and

! "If Defendants have not preserved the documents reviewed by Plaintiffs' counsel on July 25, 2007 and/or if Defendants have disturbed those documents, contrary to the agreement of Attorney Clark and Attorney Vic J. Kopnitsky, Jr., thereby requiring Plaintiffs' to re-examine such documents, upon Plaintiffs' application with Defendants' opportunity to be heard[,] Defendants shall pay $1,430.00 to Plaintiffs[.]"

Id. at pp. 3-4.

Six Months later, Plaintiffs filed a Motion for Sanctions, Dkt. No. 42, to which Defendants oppose, Dkt. No. 45. Plaintiffs' attorney's Affidavit reveals that six boxes of documents were delivered to her office. Not only were those documents an inadequate response to the Discovery Demand but the documents had been disturbed, i.e., post-in notes created by Plaintiffs during a prior review were removed, contrary to the February 4th Order, requiring her to duplicate her review efforts. Id. Jennifer A. Clarke, Esq., Aff., dated Aug. 2, 2008, at ¶¶ 8 & 9. Attorney Clark's list of discovery deficiencies extends two and one-half (2 1/2 ) pages. Id. at ¶¶ 10-13. Pursuant to FED. R. CIV. P. 37(b), Plaintiffs seek those costs enumerated in the February 4th Order, an additional $5,125.22 for cost and fees incurred in re-examining the documents and bringing this Motion, as well as an Order striking Defendants'

Answers to the Amended Complaints, precluding Defendants from submitting any evidence, and granting authorization to proceed with an entry of default. Id. at pp. 7-8.

Defendants blame their former counsel for not advising them that they were required to keep the documents in any prearranged fashion. Dkt. No. 45, Robert J. Gallamore, Esq., Affirm., dated Sept. 22, 2008, at ¶ 3. All of those files that had post-it notes on them were unwittingly removed by Defendant Randy King's mother-inlaw, who provides bookkeeping services to Defendants. Id. Defendants exclaim that they were acting in good faith when they provided the documents to Plaintiffs. Id. at ¶ 4. Defendants' counsel posits that had they been told not to disturb those post-it notes or disarrange the files as received from their erstwhile counsel they would have left those boxes in tact. Id. at ¶ 5. Defendants' counsel continues to aver at considerable length about all of the bad luck and misfortune that has befallen Defendant Randy King in the past year or so, and states that he "will make another ...


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