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Martinez v. New York City Health & Hospitals Corp.

United States District Court, S.D. New York

December 28, 2017

SARA MARTINEZ, Plaintiff,
v.
NEW YORK CITY HEALTH AND HOSPITALS CORPORATION et al., Defendants.

          MEMORANDUM ORDER

          GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE

         In an Order to Show Cause issued on August 8, 2017 (Docket # 165) (“Order to Show Cause”), this Court ordered defendants Dyntek Services, Inc., and Dyntek, Inc. (collectively, “Dyntek”), and their former counsel, Lea Spiess, Esq., to show cause why each should not be sanctioned for their failure to respond to plaintiff Sara Martinez's discovery requests and to obey numerous Court orders. Dyntek and plaintiff submitted a number of papers in response.[1] Spiess did not respond to the Order to Show Cause. For the reasons stated below, we conclude that Spiess's conduct warrants sanctions and that Dyntek's conduct does not.

         I. BACKGROUND

         We will not review in detail the conduct that led to the issuance of the Order to Show Cause as it was set forth in the original Order to Show Cause as well as a previous order of the Court. See Order, filed July 25, 2017 (Docket # 160). In brief, Dyntek failed to respond to Martinez's interrogatories and document requests for at least six months preceding a June 5, 2017 status conference. At the conference, Spiess admitted that she had not responded to Martinez's discovery requests. See Transcript, filed July 13, 2017 (Docket # 155), 28. The Court set a new deadline to respond of June 9, 2017. Id. 30; see also Amended Scheduling Order, filed June 6, 2017 (Docket # 149).

         On July 5, 2017, Martinez filed a letter stating that Dyntek “still [has] not responded to Plaintiff's First Set of Interrogatories and Document Requests, in direct violation of Your Honor's Order, dated June 5, 2017.” See Letter from Laurie E. Morrison, dated July 5, 2017 (Docket # 150). Spiess responded on July 10, 2017, claiming that she had mailed the outstanding discovery to Martinez's counsel on June 20, 2017, by disc, because the files were too large to email. See Letter from Lea Spiess, dated July 10, 2017 (Docket # 152). Martinez's counsel responded that she had not received any discovery responses from Dyntek by email or in any other form. See Letter from Laurie E. Morrison, dated July 13, 2017 (Docket # 153).

         The Court issued an Order directing Spiess to either email her responses to Morrison, breaking the documents down into separate emails if necessary, or to hand-deliver a disc containing the responses, by noon on July 14, 2017, and to call Morrison on that day to confirm receipt. Order, filed July 13, 2017 (Docket # 154). Morrison then filed two letters stating that Spiess had not complied with the Court's order other than to send Morrison a single email with seven pages attached. See Letter from Laurie E. Morrison, dated July 14, 2017 (Docket # 158); Letter from Laurie E. Morrison, dated July 17, 2017 (Docket # 159) (“Morrison July 17 Letter”). While Morrison did not state what was on these seven pages, it appeared from the letters that they were not the responses and objections to the discovery requests. See Order, filed July 25, 2017 (Docket # 160), at 2. The transmission of only seven pages was also inconsistent with Spiess's previous claim that the responsive materials were “too large to send via e-mail.” Id. Spiess never responded to Morrison's letters. Id.

         On July 25, 2017, the Court ordered Spiess and “an officer of Dyntek with the most knowledge of this topic” to file sworn statements describing in detail what Dyntek and counsel had done to comply with the Court's Orders of June 5 and July 13, 2017. See id. The Court also required that either Dyntek or Spiess attach “all discovery responses that Dyntek claims to have previously transmitted to plaintiff, ” and required that all filings be made by August 1, 2017. Id. at 2-3.

         No filings were made on that date. Accordingly, on August 2, 2017, a law clerk called Spiess to inquire about this failure. Later that day, Spiess filed a letter requesting an extension to August 4, 2017, which the Court granted. See Order, filed Aug. 2, 2017 (Docket # 163). Dyntek and Spiess failed to comply with that deadline either. Accordingly, the Court ordered them both to show cause, in writing, by August 15, 2017, for why each should not be sanctioned for their failure to respond to Martinez's discovery requests and to obey the Court's orders. See Order to Show Cause. Spiess and Dyntek made no filing by that date.

         On August 21, 2017, the Court scheduled a hearing on the Order to Show Cause for August 28, 2017, and ordered the President or Chief Executive Officer of Dyntek to attend. Order, filed Aug. 21, 2017 (Docket # 169). Spiess was also directed to file an affidavit by August 22, 2017, “indicating that she has personally confirmed with the President or CEO of [Dyntek], that he or she must attend this hearing.” Spiess filed an affirmation on August 23, 2017 (Docket # 172), stating that she had “personally informed the President and Chief Executive Officer of [Dyntek] that his presence is required at the hearing.”

         Spiess appeared alone and 15 minutes late to the August 28 hearing. Order, filed Aug. 28, 2017 (Docket # 174). When asked why her client, whom she identified as Ron Ben-Yishay, was absent, Spiess did not provide an adequate explanation. Id. Consequently, the Court adjourned the proceeding until August 31. Id. In a written Order confirming oral orders given at the hearing, the Court ordered Spiess and “a representative from the New York offices of Dyntek with the most information concerning this litigation” to attend the next hearing in person. Id. Ben-Yishay was allowed to attend via telephone. Id. In addition, the Court ordered Ben-Yishay to file an affidavit by August 29, 2017, explaining why he failed to comply with the Court's August 21 Order. Id.

         No filings were made by that date. Accordingly, on August 30, 2017, a law clerk called Spiess to confirm that no affidavit had been submitted. See Order, dated Aug. 30, 2017 (Docket # 177). After failing to reach her and finding her voicemail inbox full, the law clerk telephoned Ben-Yishay to ask whether he had received a copy of the August 28 Order. Id. Ben-Yishay said he had not seen the Order, and provided an email address to which the law clerk could email the Order. Id.; see also Declaration of Ron Ben-Yishay, dated Sept. 19, 2017 (annexed as Ex. 1 to Def. Mem.) (“Ben-Yishay Decl.”), ¶ 7. The law clerk subsequently emailed the Order to Ben-Yishay, along with prior Orders. Ben-Yishay Decl. ¶ 7.

         Spiess did not appear at the August 31, 2017 hearing. See Declaration of Adam LaChant, dated Sept. 19, 2017 (annexed as Ex. 3 to Def. Mem.) (“LaChant Decl.”), ¶ 6. Ben-Yishay, however, appeared by telephone, and Dyntek Senior Account Executive Adam LaChant appeared in person. Ben-Yishay Decl. ¶ 9; LaChant Decl. ¶ 6. After the Court explained to Ben-Yishay the full scope of Dyntek's counsel's actions in this case, Ben-Yishay stated that he had been unaware of Spiess's conduct. See Transcript, filed Sept. 7, 2017 (Docket # 182) (“Tr.”), 3-10. Ben-Yishay requested and the Court granted a week for Dyntek to obtain new counsel. Id. at 13.

         Dyntek timely obtained new counsel, see Notices of Appearance, dated Sept. 7, 2017 (Docket ## 184, 185), following which the parties responded to the Order to Show Cause. In their response the Dyntek Chief Executive Officer, Ron Ben-Yishay, indicated that he hired Spiess because she had been counsel on a previous litigation that was successfully resolved. Ben-Yishay Decl. ¶ 3. His Chief Operating Officer, Karen Rosenberger, and a Senior Account Executive, Adam LaChant, were to be in charge of interactions with Spiess. Id. ¶ 4. Ben-Yishay did not have knowledge of Spiess's discovery failures and failures to obey court orders in June and July 2017 (let alone earlier) and was not properly informed of the Court's order regarding his appearance in court on August 23, 2017, or the requirement that he submit an affidavit. Id. ¶¶ 5, 8, 10. Ben-Yishay terminated Spiess the same day he learned of the Court's orders, which was August 31, 2017. Id. ¶ 9. Rosenberger and LaChant were similarly unaware of the Court's orders, the plaintiff's motions to compel, or Spiess's failure to comply with discovery obligations. See Declaration of Karen Rosenberger, dated Sept. 19, 2017 (annexed as Ex. 2 to Def. Mem.); LaChant Decl.

         II. GOVERNING LEGAL STANDARDS

          The Order to Show Cause directed the parties to explain why each should not be sanctioned pursuant to “Fed. R. Civ. P. 16(f), Fed.R.Civ.P. 37(b), Fed.R.Civ.P. 37(d), 28 U.S.C. § 1927 (as to Spiess only), the Court's contempt powers, and/or the inherent powers of the Court.” Order to Show Cause. Having reviewed the responses, ...


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