Motion-Secondary: Atlantic Casualty Insurance Company v. Eastern Fruit & Vegetables Inc.

On May 24, 2018 a Motion-Secondary was filed involving a dispute between Atlantic Casualty Insurance Company, and Eastern Fruit & Vegetables Inc., for Commercial - Contract in the District Court of Kings County.

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FILED: KINGS COUNTY CLERK 11/02/2020 03:29 PM INDEX NO. 510798/2018
NYSCEF DOC. NO. 151 RECEIVED NYSCEF: 11/02/2020

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
ATLANTIC CASAULTY INSURANCE
COMPANY,
Index No.: 510798/2018
Plaintiff,
Assigned to: Hon. Carl. J. Landicino
v.
REPLY AFFIRMATION IN
EASTERN FRUIT & VEGETABLES INC. FURTHER SUPPORT OF
MOTION AND IN OPPOSITION
Defendant. TO CROSS-MOTION

DEBRA M. KREBS, ESQ., an attorney duly admitted to practice law in the courts of the

State of New York, and a partner in the law firm Keidel, Weldon & Cunningham, LLP, counsel

for Plaintiff, Atlantic Casualty Insurance Company (“Atlantic Casualty”), hereby affirms the

following under penalties of perjury:

1. As counsel for Atlantic Casualty, I am familiar with the facts and circumstances set

forth in this Affirmation.

2. This Affirmation is respectfully submitted in further support of Atlantic Casualty’s

motion seeking an order: (a) pursuant to CPLR 3126 striking Defendant’s Answer based upon

Defendant’s failure to properly and/or timely respond to Plaintiff’s discovery demands, as required

by this Court’s Preliminary Conference Order; and/or (b) pursuant to CPLR 3126 precluding

Defendant from denying and/or producing evidence and/or testimony contesting liability for the

premiums sought herein and the amount of premiums and/or other damages sought in this lawsuit

in light of Defendant’s failure to respond to Atlantic Casualty’s discovery demands; and/or

Atlantic Casualty’s discovery demands and interrogatories; and (d) pursuant to CPLR 3123 either

deeming Defendant to have admitted the allegations contained in Atlantic Casualty’s Notice to

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Admit, in light of Defendant’s failure to respond or compelling Defendant to respond to the same,

and granting such other and further relief as this Court deems just, equitable and proper. More

specifically, this affirmation is submitted in response to Defendant’s opposition to that motion.

This affirmation is also submitted in opposition to Defendant’s cross-motion.

THE PANDEMIC IS NOT AN EXCUSE FOR
DEFENDANT’S FAILURE TO RESPOND TO DISCOVERY
SERVED IN OCTOBER 2019

3. Defendant’s primary excuse for failing to respond to discovery is that Defendant is

“suffering, substantially under stress, and have extremely limited resources to maintain its level of

business closely to the level it was at the pre-pandemic conditions.” Morris Affirmation at ¶5.

4. However, as noted in support of the within motion, the discovery demands and

interrogatories at issue were served on October 19, 2019 – well before the pandemic. See,

[NYSCEF Doc. Nos. 62-67]; Exhibits C through E attached to Atlantic’s motion.

5. On December 5, 2019 the undersigned filed a Request for Preliminary Conference.

See, [NYSCEF Doc. No. 71]; Exhibit N attached to Atlantic’s motion. Shortly thereafter, the

parties were notified that a Preliminary Conference was scheduled for January 13, 2020.

6. Four days prior to the scheduled conference date, on January 9, 2020, Defendant

filed a second motion to dismiss pursuant to CPLR 3211(a) in direct contravention of the one-

motion rule set forth in CPLR 3211(e). See, [NYSCEF Doc. No. 73]; Exhibit N attached to

Atlantic’s motion.

7. When the parties appeared for the Preliminary Conference, counsel for Defendant

attempted to avoid responding to the discovery by arguing that its motion stayed discovery. The

Court disagreed and ordered that Defendant respond. See, [NYSCEF Doc. No. 79]; Exhibit F

annexed to Atlantic’s motion.

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8. Rather than respond to the actual demands and interrogatories, Defendant lumped

multiple paragraphs into a single response and randomly referenced items filed on the docket. See,

[NYSCEF Doc. Nos. 81-82]; Exhibits G and H attached to Atlantic’s motion. As discussed in

support of Atlantic’s motion, this was clearly not even a good faith effort to respond to the

demands. Notably, Defendant does not refute this.

9. On March 10, 2020, the undersigned wrote to counsel for Defendant regarding the

insufficiencies of the responses.

10. All of this occurred before the Governor issued the “New York on PAUSE” order

(i.e. Executive Order 202.8) effective March 22, 2020 cited in Defendant’s opposition. See, Morris

Affirmation at ¶7.

11. In addition to the fact that responses were due well before the start of the pandemic,

counsel should have obtained documents from their client long before that time. Moreover,

although the Defendant may be an “essential business,” it is highly doubtful that in the more than

seven (7) months since the start of the pandemic Defendant has not been able to devote a small

amount of time to providing the information and documents requested in Atlantic’s demands.

12. As a result, it is respectfully submitted that Defendant’s COVID-19 argument is

nothing short of disingenuous and fails to provide any basis for the Defendant to avoid providing

discovery responses.

13. Accordingly, Atlantic’s motion should be granted and Defendant’s cross-motion

should be denied.

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THE INFORMATION AND DOCUMENTS SOUGHT
ARE MATERIAL AND NECESSARY TO THIS MATTER

14. CPLR 3122(a)(1) states that:

Within twenty days of service of a notice … under rule 3120 or section 3121, the
party or person to whom the notice … is directed, if that party or person objects to
the disclosure, inspection or examination, shall serve a response which shall state
with reasonable particularity the reasons for each objection.

15. Defendant did not respond, much less object, within twenty days of service of the

demands. Nonetheless, even if we were to ignore the deadline, Defendant served a purported

response without objecting to most of the demands. To the extent Defendant has not objected to

the materiality or necessity of the documents sought, any such objection is waived. (See, Faraone

v Carrollwood Assoc., 123 AD2d 344, 346 [2d Dept 1986]; Anonymous v High Sch. for Envtl.

Studies, 32 AD3d 353, 359 [1st Dept 2006]).

16. Defendant argues that Atlantic has failed to prove that each of the items sought in

Atlantic’s demands and interrogatories are material and necessary to this action. See, Morris

Affirmation at ¶8. However, the case law establishes that this burden is satisfied “by

demonstrating Defendants' failure to comply with the outstanding discovery demand and court

order directing the production of documents in a timely fashion. Thus, the burden shifts to

Defendants to establish a reasonable excuse for their defaults (citation omitted).” (Rodriguez v

Clarke Worley Goodman, M.D., 2015 NY Slip Op 31412[U], *7 [Sup Ct, NY County 2015]). In

the moving papers, Atlantic demonstrated Defendant’s failure to comply with the outstanding

demands and court order directing the production of documents in a timely fashion. As a result,

the burden shifted to Defendant to establish a reasonable excuse for its failure to provide proper

responses.

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17. Nonetheless, it should be noted that the moving papers do, in fact, establish that the

information sought is material and necessary. As discussed in support of the within motion, this

seeks to recover insurance premiums which Defendant has failed and/or refused to pay to Atlantic

under insurance policies issued in 2016 and 2017. See, [NYSCEF Doc. No. 123] at ¶ 4. As

demonstrated in Exhibit O annexed to the moving papers [NYSCEF Doc. No. 138], the premiums

at issue were calculated based upon Defendant’s gross earnings. See, Exhibit O [NYSCEF Doc.

No. 138] at ¶¶29-39. As demonstrated in the discovery demands themselves and in the content of

the Affirmation in Support of Motion [NYSCEF Doc. No. 123], the discovery demands all seek

documents which relate to the: the insurance policy at issue (i.e. the policy itself), the purchase of

the policies (during which the premiums at issue were calculated), the audit and Plaintiff’s

financial documents which would demonstrate the accuracy of the amount of premiums at issue in

this lawsuit. These documents are needed not only because they assist Atlantic in establishing its

claim, but they are requested to assist us in addressing any defenses which Defendant might be

asserting in this matter.

18. Defendant only objected to one paragraph (i.e. paragraph 15) of Atlantic’s

discovery demands, claiming that the materials sought were not relevant or material.1

19. Paragraph 15 requested “[c]opies of all tax returns filed by or on behalf of Eastern

Fruit & Vegetables, Inc. for tax years 2014, 2015, 2016 and 2017. Paragraph 27 of the Affirmation

in Support of this Motion addresses this issue and demonstrates that these documents are material

and necessary. See, NYSCEF Doc. No. 123] at ¶27. Defendant does not refute that argument.

1
Defendant also objected with respect to paragraphs 20 and 21 of Atlantic’s document demand. However, that demand
seeks information regarding Defendant’s counterclaims which have been dismissed. As a result, that demand has been
rendered academic.

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20. As a result, it is clear that all of the items sought are material and necessary to this

matter. Since Defendant has failed to respond to those demands and has failed to comply with a

court order directing Defendant to provide such responses, it is respectfully submitted that Atlantic

is entitled to relief pursuant to CPLR 3126 or, at the very least, pursuant to CPLR 3124.

ATLANTIC WAS NOT REQUIRED TO ATTACH
A COPY OF ITS INSURANCE POLICY
TO A DISCOVERY MOTION

21. Defendant argues that “Plaintiff’s motion … is aggressively asserting its alleged

claims pursuant to an insurance policy not included in the motion’s papers. Plaintiff is asserting

its rights under an agreement that they have not disclosed.” Morris Affirmation at ¶6.

22. It should first be noted that in the present motion Atlantic is not “asserting its

alleged claims….” Rather, Atlantic is seeking to obtain discovery to which it is entitled, so that

Atlantic may address those claims in a substantive motion at a later date and/or at trial.

23. Since Defendant concedes that the issue in this lawsuit is Defendant’s failure to pay

insurance policy premiums, Atlantic need not attach copies of those policies in order to obtain

discovery regarding those allegations.

24. Nonetheless, in an effort of caution, copies of the policies (previously filed in this

matter) are attached here as Exhibits A and B.2 See also, [NYSCEF Doc. Nos. 91 and 92].

THE INFORMATION SOUGHT IN ATLANTIC’S
SECOND NOTICE FOR DISCOVERY AND INSPECTION
IS DIRECTLY RELATED TO AN ARGUMENT ASSERTED BY DEFENDANT

25. As addressed in support of the within motion, the documents Atlantic seeks in its

second document demand are directly related to an argument raised by Defendant’s principal.

2
These are authenticated in the affidavit of Suzanne Parrish attached as Exhibit O to Atlantic’s moving papers.

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26. We believe the argument raised by Defendant lacks any merit. However, since

Defendant raised the argument, we are entitled to conduct discovery regarding that argument.

27. In opposition to the within motion, Defendant argues that, because Atlantic denies

that the argument has any merit, Atlantic should not be permitted to conduct discovery on the

issue. The fact that we do not believe their argument is a valid one does not change the fact that

they are raising it and that we are entitled to discovery on the issue.

28. However, if by Defendant’s opposition they mean to advise the Court that

Defendant abandons the argument they previously raised, the resolution is a simple one – the Court

should preclude Defendant from asserting that argument and from raising any arguments or

producing any evidence based upon Defendant’s subsequent insurance policy (i.e. the discovery

which Defendant now claims is not relevant3). However, if the Court does not issue such an order,

and Defendant is still being permitted to raise the argument, Atlantic is entitled to discovery

regarding such argument. Since Defendant has failed and/or refused to provide such discovery,

Atlantic is entitled to relief pursuant to CPLR 3126. Alternatively, it is respectfully submitted that

the Court should compel Defendant to produce the requested disclosure.

DEFENDANT’S PRIVILEGE ARGUMENT FAILS
AS DEFENDANT HAS FAILED TO IDENTIFY
ANY ALLEGED PRIVILEGE OR
ANY BASIS FOR APPLYING A PRIVILEGE

29. Defendant argues that “[p]rivileged matter is not obtainable as per CPLR

3101(b)…” and advises that they are seeking a protective order under CPLR 3103. Since the only

demand to which Defendant asserted a privilege objection is paragraph 15 of Atlantic’s first

document demand, we presume that is the only paragraph at issue as any such objection as to the

3
Since prior objection was not asserted, such objection is waived.

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other demands has been waived. (See, CPLR 3122(a); see also, Faraone, 123 AD2d at 346; High

Sch. for Envtl. Studies, 32 AD3d at 359).

30. However, Defendant has failed to demonstrate any basis for a protective order on

the basis of privilege (for paragraph 15 or any other of the demands).

31. The party asserting a claim of privilege bears the burden of establishing the

existence of a privilege which precludes production. (Priest v Hennessy, 51 NY2d 62, 69 [1980]).

32. In the present situation, it is first noteworthy that Defendant does not even identify

the privilege they claim to be asserting. As a result, we are unable to identify the elements they

would need to demonstrate in order to establish the existence of a privilege. Certainly, since they

do not provide any proof or any arguments which would support the existence of any privilege,

they have failed to satisfy their burden.

33. Moreover, CPLR 3122 requires that a party withholding documents on the basis of

privilege must identify the following information with respect to each document withheld: “(1) the

type of document; (2) the general subject matter of the document; (3) the date of the document;

and (4) such other information as is sufficient to identify the document for a subpoena duces

tecum.” This is typically provided by way of a privilege log. Plaintiff has failed to provide any

such log in the present situation.

34. As Defendant has failed to provide any information regarding the specific privilege

being asserted or any of the documents being withheld, it is respectfully submitted that Defendant

has failed to satisfy its burden of establishing that any of the documents requested are privileged.

Accordingly, Defendant’s request for a protective order should be denied and this Court should

compel Defendant to produce the requested documents.

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CONCLUSION

35. Defendant’s opposition confirms that Defendant’s purported responses were not

sufficient and were not provided in good faith. As a result, Defendant failed to comply with this

Court’s order and, as discussed in support of the within motion, this Court should strike

Defendant’s answer pursuant to CPLR 3126 or provide other appropriate relief pursuant to that

statute. Alternatively, it is requested that the Court compel Defendant to provide sufficient

responses within a period of time specified by the Court.

36. Defendant does not oppose that portion of Atlantic’s motion which seeks to deem

admitted all of the paragraphs of Atlantic’s Notice to Admit. As a result, that portion of Atlantic’s

motion should be granted as well.

WHEREFORE, it is respectfully requested that this Court grant Atlantic’s motion and deny

Defendant’s cross-motion and grant to Atlantic such other and further relief as this Court deems

just, equitable and proper.

Dated: White Plains, New York
November 2, 2020
Keidel, Weldon & Cunningham, LLP

By: ________________________________
Debra M. Krebs, Esq.
Attorneys for Plaintiff
Atlantic Casualty Insurance Co.
925 Westchester Avenue, Suite 400
White Plains, New York 10604
Tel: (914) 948-7000
Fax: (914) 948-7010

TO: L. Blake Morris, Esq.
L. Blake Morris & Associates
Attorneys for Defendant
Eastern Fruit & Vegetables, Inc.
1214 Cortelyou Road
Brooklyn, New York 11218
Tel: (718) 826-8401

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Case Info

Judge

Landicino Track Judge’s New Case

Case No.

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Document Filed Date

November 02, 2020

Case Filing Date

May 24, 2018

County

Parties

Atlantic Casualty Insurance Company Plaintiff
CAHILL, THOMAS J. Attorney
Eastern Fruit & Vegetables Inc. Defendant
Hull & Company of New York Inc. Non Party
KREBS, DEBRA M Attorney for the Plaintiff
LEWIS, ROBERT W Attorney for the Plaintiff
MORRIS, LAWRENCE B Attorney for the Defendant
SHUR, JOSEPH M Attorney for the Plaintiff
MUDITHA HALLIYADDE Attorneys for Plaintiffs
ROBERT LEWIS Attorneys for Plaintiffs
JOHN CAHILL Attorney
RALPH GOLDSTEIN Attorneys for Plaintiffs
NATHANIEL COSTA Attorneys for Defendants
NATHAN COOK Attorneys for Defendants
KELECHI ACHOLONU Attorney
LYSTRA BLAKE Attorney
MICHAEL SHUR Attorney
ROBERT BOWLING Attorney
DEBRA MARCH Attorneys for Plaintiffs
KENNETH BAND Attorney
ROBERT WALKER Attorney
CARL LANDICINO Attorney

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Motion-Secondary: Atlantic Casualty Insurance Company v. Eastern Fruit & Vegetables Inc.

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