Motion-Secondary: William Donner v. One Network Enterprises Inc, Fenway Partners Inc

On January 10, 2006 a Motion-Secondary was filed involving a dispute between William Donner, and Fenway Partners Inc, One Network Enterprises Inc, for Commercial in the District Court of New York County.

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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
WILLIAM DONNER,

Plaintiff,
Index No. 04/601015
- against -
Assigned Justice:
ONE NETWORK ENTERPRISES, INC. and Hon. Karla Moskowitz
FENWAY PARTNERS, INC.,

Defendants.

Plaintiff’s Memorandum of Law in Opposition to Defendant One
One Network’s Motion for Reargument

Preliminary Statement

One cannot read Defendant One Network’s motion for reargument of this

Court’s February 9, 2006 Order (the “Spoliation Order”) without being struck by

One Network’s adamant refusal to take any responsibility for having failed to

prevent the destruction of relevant documents, or to accept the consequences of that

failure. One Network blames everyone else for the predicament it now finds itself

in -- this Court, Plaintiff, even the discovery process itself -- when in truth, it only

has itself to blame. It is Plaintiff (an individual) who is a victim of Defendant’s

discovery abuses – not vice versa.

One Network blames this Court for imposing excessive sanctions, even

though this Court issued only a preclusion order, when plaintiff had sought two far

more drastic remedies: either (a) striking One Network’s answer and entering a

default judgment in plaintiff’s favor, or (b) striking the defenses contained in One
Network’s answer. The Court also denied plaintiff’s request for attorneys’ fees.

See Plaintiff’s Notice of Motion for Sanctions (annexed as part of One Network’s

Ex. B).

Rather than being excessive, the preclusion order was narrowly tailored to

address the specific misconduct at issue and the obvious prejudice that the admitted

destruction of evidence had caused: Plaintiff’s hampered ability to cross-examine

and impeach self-serving testimony by Defendant’s witnesses, including their

insistence, in the wake of documents to the contrary produced by Defendant that,

the detailed Term Sheet is “too indefinite” to be enforced, the deal struck with

Plaintiff changed, and that Donner had been fired “for cause.” Given the

destruction of evidence, including the obvious “stripping” of Donner’s personnel

file (which was produced nearly five months after Defendant’s outside counsel

admittedly received it and long after the deadline for production had passed), the

Spoliation Order, which precludes Defendant from offering testimony that

contradicts the documentary evidence that was produced, clearly addresses the

prejudice to Plaintiff with laser-like precision.

One Network blames Plaintiff for “rushing to the Courthouse” for sanctions

without being able to identify precisely what documents were destroyed (Def. Br. at

6).1 Clearly, however, this would be impossible, as Plaintiff has never seen and

thus has no way of knowing precisely what documents those were. (Plaintiff does

1
How could plaintiff have “rushed,” when the destruction was disclosed after the discovery cut-off date?
Plaintiff’s counsel disclosed the destruction to the Court at the December 2005 certification conference and at
that time the Court granted plaintiff’s request to make a motion for sanctions.

2
know that no copy of the Term Sheet [with the exception of the copy provided to

One Network by Plaintiff’s counsel] was ever produced by One Network, although

indisputably at least one copy of the Term Sheet once was in One Network’s files;

all copies of the Term Sheet evidently were destroyed or improperly withheld.) 2

Ironically, One Network then blames the discovery process itself, for

allowing “persons like Plaintiff” to attempt to “plumb the vast depths of [One

Network’s] electronic databases, such as hard drives and servers” for relevant

documents (Def. Br. at 7), when One Network is, in fact, a technology company,

specializing in computer-driven solutions. Of course, it is One Network which has

the obligation to search for responsive materials and, as found by this Court, and

confirmed by One Network’s own papers, it never met such obligations.

One Network fiercely refuses to take a hard look at its own conduct,

choosing instead to blame the victim. Having admittedly destroyed some

documents (including all documents on Mr. Setless’ hard drive) and failed to look

for others (some for months, and others, not at all), while leading Plaintiff to believe

that all relevant documents actually had been searched for, collected and produced,

One Network has the audacity to suggest that “no sanctions were warranted in this

case.” Affirmation of William G. Ballaine, dated March 17, 2006 (“Ballaine Aff.”)

at 4, n. 5. Although One Network’s counsel chastises Plaintiff for supposedly

wanting to “have it both ways,” (id. at ¶11), if anything is clear from One

2
Former defendant Fenway alone produced the Term Sheet. Fenway’s own e-mail to One Network noted
that Fenway kept Donner’s Term Sheet in a folder marked “Employment Agreements” and that the Term
Sheet had been sent to One Network on several occasions. Ex. 1 to Garay Aff.

3
Network’s motion papers, it is that it is One Network who does. Notwithstanding

its admitted spoliation and the resulting impact on Plaintiff’s case, One Network

nevertheless wants to preserve the ability to argue that Plaintiff lacks the requisite

proof to sustain his claim for severance benefits or to refute One Network’s

contention that Plaintiff was fired “for cause.” This Court, quite properly, held that

this was something One Network should not be permitted to do. Importantly, the

sanction imposed was well-considered and less than the relief Plaintiff had sought.

As demonstrated below, One Network’s motion, whether it is treated as a

motion “to reargue,” or a motion “to renew,” should be denied on both procedural

and substantive grounds. As a procedural matter, One Network’s motion (which it

calls a reargument motion) improperly seeks to expand the record, and should, on

that basis be denied. If, as a result of One Network’s “additional submissions” it is

deemed a motion “to renew,” One Network’s motion should be denied because One

Network has not (and cannot) make the required factual showing that the facts that

it now offers could not have been previously offered by One Network in opposition

to Plaintiff’s application for sanctions. The Court’s ruling of February 9, 2006

should remain in place.

One Network’s motion also is substantively without merit. One Network

outrageously contends that this Court erred by imposing too harsh a sanction. Yet

here, it is undeniable that Defendant (a) has disposed of relevant evidence, (b)

delayed providing documents until they had been destroyed or lost, and (c) defied

numerous court orders mandating discovery and setting deadlines (a fact which One

4
Network conspicuously fails to address in its motion papers). The courts in the

First Department have not hesitated to impose preclusion orders as a sanction for

such misconduct. No lesser sanction than preclusion is warranted here, particularly

since, even now, One Network only provides further evidence of its “stonewalling.”

Further, One Network’s “supplemental submissions” only serve to confirm

this Court’s finding that what One Network did do, was too little, too late. Plaintiff

has been prejudiced severely by this misconduct, both in the delays, additional legal

fees and, importantly, in the loss of crucial evidence that would assist Plaintiff in

refuting Defendant’s defenses.

Point I

Although Styled as a Motion to “Reargue,” One
Network’s Motion, Which Relies on Additional
Evidence, Is Actually a Motion “To Renew.” Because
One Network Has Not Offered Any Excuse for Not
Offering This Evidence Previously, Its Motion Should Be Denied.

A motion for reargument is addressed to the discretion of the court, and is

designed to afford a party with an opportunity to establish that the court overlooked

or misapprehended relevant facts or misapplied any controlling principle of law; its

purpose is not to serve as a vehicle to permit the unsuccessful party to argue, once

again the questions previously decided. William P. Pahl Equip. Corp. v. Kassis,

182 A.D.2d 22, 588 N.Y.S.2d 8 (1st Dep’t), lv to appeal dismissed in part, denied in

part, 80 N.Y.2d 1005 (1992); Foley v. Roche, 68 A.D.2d 558 (1st Dep’t 1979).

CPLR 2221(d)(2) expressly provides that a motion to reargue “shall not include any

matters of fact not offered on the prior motion.”

5
An application for leave to renew, on the other hand, must be based on

additional material facts that existed at the time the prior motion was made, but

were not then known to the party seeking leave to renew, and therefore not made

known to the court; renewal should be denied where the movant fails to offer a

valid excuse for not submitting additional facts upon the original application. Foley

v. Roche, supra; CPLR 2221; see also Poag v. Atkins, 9 Misc. 3d 1107 (A), 806

N.Y.S.2d 448 (Sup. Ct. N.Y. Co. 2004).

Here, One Network offers three additional “supplemental submissions” from

each of the persons who submitted affirmations/affidavits in opposition to Donner’s

original application for sanctions --- Thomas Shepherd, Douglas Linebarger and

Jacqueline Paulus -- yet it contends that its motion is one to “reargue.” Obviously,

it offers those papers, and the affirmation of a supposedly “untainted” lawyer,

William Ballaine, for no other purpose than improperly “to argue, once again the

questions previously decided” against it. William P. Pahl Equip. Corp. v. Kassis,

182 A.D.2d 22, 588 N.Y.S.2d 8 (1st Dep’t), lv to appeal dismissed in part, denied in

part, 80 N.Y.2d 1005 (1992); Foley v. Roche, 68 A.D.2d 558 (1st Dep’t 1979).3 In

any event, such supplementation of the record is improper. CPLR 2221(d)(2).

Such materials simply cannot be considered on a motion to reargue.

It is equally obvious as to why One Network has not noticed its motion as

one for “renewal.” There is no excuse -- and One Network offers none -- for why its

3
One Network also may be attempting, not so subtly, to expand the record, in the hope that, on appeal, the
Appellate Division, First Department will be more sympathetic to its plight.

6
new submissions could not have been offered by One Network in opposition to

Plaintiff’s original motion. It is respectfully submitted that, on this basis alone, this

Court should deny One Network any relief. See Herrera v. Matlin, 4 A.D.3d 139,

771 N.Y.S.2d 347 (1st Dep’t 2004)(unanimously affirming court order that denied

Defendant’s motion to renew prior order granting Plaintiff’s motion to strike

Defendants’ answer on ground of spoliation of evidence; Defendants failed to

explain why they did not submit newly submitted materials on prior motion).

Defendant cannot have another bite at this same apple. As there is nothing in these

“supplemental submissions” that could not have been brought to the Court’s

attention previously in connection with the hearing on Plaintiff’s motion for

sanctions; this is not a situation where the Court should relax the “newly discovered

evidence” requirement “in the interest of justice.” Postel v. New York University

Hosp., 262 A.D. 2d 40, 691 N.Y.S.468 (1st Dep’t 1999).4

Because it is, at a minimum, procedurally defective, One Network’s motion

should be denied.

4
At the oral argument of the original motion, this Court criticized Defendant for submitting affidavits replete
with hearsay and from persons without personal knowledge. As shown, infra, if considered, these affidavits
still contain hearsay and should not result in a different ruling.

7
Point II

The Court’s Preclusion Order Is Not Unduly Harsh and Is Not
an Abuse of Discretion, As Demonstrated by
Numerous Cases from this Judicial Department Imposing
Similar and Even More Severe Sanctions for
Spoliation of Evidence.

The entire premise of One Network’s motion is that this Court

misapprehended or overlooked controlling First Department case law and material

facts in the record, and thereby abused its discretion by issuing an order that

supposedly “determine[ed] key liability issues against One Network.” Def. Br. at 2.

In fact, however, and although Plaintiff asked for more severe sanctions -- including

the striking of the Answer or all of One Network’s affirmative defenses -- this Court

imposed only a preclusion order. That Spoliation Order does not, as One Network

contends, “determine an issue of liability as a sanction” (id. at 3), but merely

precludes One Network from (a) denying the existence of a valid and enforceable

agreement between Plaintiff Donner and One Network based on the Term Sheet, (b)

denying the definiteness of the terms set forth in the Term Sheet, and (c) offering

any evidence or testimony that the Plaintiff was fired “for cause.”5 The preclusion

order is appropriate given Defendant’s admitted failure to preserve, produce and

even search for relevant materials and its admitted destruction of computer records.

5
Plaintiff admittedly argued in his cross-motion for summary judgment that this Court’s preclusion order
had the effect of preventing the Court from granting defendant’s motion for summary judgment and
supported the granting of Plaintiff’s cross-motion for summary judgment (which Defendant will likely
dispute). This Court, of course, will have to determine the effect of its ruling on those motions.
In any event,
this Court did not find that Defendant’s summary judgment motion was rendered moot by its Spoliation
Order; itordered the briefing on the motion to proceed. February 9, 2006 Transcript of Oral Argument
annexed as Ex. A to the Ballaine Aff. (“Tr.”) at 26-27.

8
This Court narrowly tailored the Spoliation Order to target the prejudice to Plaintiff,

i.e., his hampered ability to impeach or cross-examine Defendant’s witnesses’ self

serving statements with respect to the terms of Donner’s employment and the

circumstances of his termination (which statements contradict the documents that it

produced).

For example, in its summary judgment motion, Defendant urges this Court to

find that the Term Sheet is too indefinite to be enforced. Yet Defendant failed to

produce the Term Sheet or materials that discuss it. No affidavit was presented by

anyone knowledgeable regarding its drafting. A preclusion order is proper to

prevent Defendant from using the absence of documents as an opportunity to allege

that the Term Sheet is too indefinite to be enforced, or to prevent Plaintiff from

effectively cross-examining Defendant’s witnesses who would testify in such a self-

serving manner.

Defendant is also contending that Donner was fired “for cause,” yet no

document was produced to support this. Defendant’s former Vice President of

Finance and Corporate Operations testified that Defendant’s file appeared to be

missing materials. No performance evaluations were produced, and the unsigned

“exit memo” from Donner’s termination refers only to a reduction in force as the

cause for his termination. Thus, an order precluding Defendant from introducing

evidence or testimony contrary to the documents actually produced so that it might

establish that Plaintiff was fired “for cause,” is both appropriate and narrowly

tailored to the discovery abuse.

9
In issuing the Spoliation Order, the Court did not overlook either case law or

material facts in the record. Rather, this Court quite properly found that, because

Plaintiff was prejudiced by One Network’s admitted spoliation of evidence and

failure to produce (even if he were not deprived entirely of the ability to meet

Defendant’s affirmative defenses), One Network should be precluded from offering

evidence on certain discrete matters. Such a preclusion order comports with the

case law emanating from this Department regarding spoliation.

In determining the severity of the spoliation sanction, the Court must

ascertain what prejudice, if any, the party seeking the sanction has incurred by

reason of the spoiled evidence. Kirkland v. New York City Hous. Auth.,236 A.D.2d

170, 666 N.Y.S.2d 609 (1st Dep’t 1997); Shea v. Spellman, 4 Misc.3d 1008 (A), 791

N.Y.S.2d 873 (Sup. Ct. Bronx Co. July 8, 2004). If the Court concludes that, due to

the spoliation, “one party destroyed critical physical proof, such that its opponents

are ‘prejudicially bereft of appropriate means to [either present] or confront a claim

with decisive evidence,’ the spoliator’s pleading is properly stricken in order to

obviate a trial that is ‘based on rank swearing contests.” Shea v. Spellman, supra at

*2 (citations omitted).6

6
It is undisputed that, if the Court had, in fact, found that such evidence was “key,” it would have been
within its discretion to strike One Network’s pleading, dismiss its answer, or “determine an issue of liability.”
Def. Br. at 3. See, e.g., Standard Fire Ins. Co. v. Federal Pacific Electric Co., 14 A.D.3d 213, 786 N.Y.S.2d
41 (1st Dep’t 2004)(reversing lower court order denying defendant’s motion to dismiss complaint; dismissal
of pleading was not unduly harsh where evidence had not been preserved when party was on notice of need
for evidence); Amaris v. Sharp Electronics Corp., 304 A.D.2d 457, 758 N.Y.S.2d 637 (1st Dep’t
2003)(summary judgment dismissing the complaint was warranted as sanction for spoliation where plaintiff
negligently failed to take sufficient steps to assure its preservation); Cabasso v. Goldberg, 288 A.D.2d 116,
733 N.Y.S.2d 47 (1stDep’t 2001)(answer was properly stricken despite defendant’s claim that spoliated
evidence was not critical); Weiss v. Connecticut Mut. Ins. Co., 287 A.D.2d 400, 731 N.Y.S.2d 713 (1st Dep’t

10
Even negligent spoliation warrants sanctions, where, as here, “the [spoliator]

was on notice that the evidence might be needed for future litigation.” Ianucci v.

Rose, 8 A.D.3d 437, 438, 778 N.Y.S.2d 525 (2d Dep’t 2004). See Hartford Fire

Ins. Co., v. Regenerative Bldg. Construc., Inc., 271 A.D.2d 862, 706 N.Y.S.2d 236

(3d Dep’t 2000) (sanctions appropriate even where negligent destruction of

evidence where “opposing party had no opportunity to view them”); Mudge, Rose,

Guthrie, Alexander & Ferdon v. Penguin Air, 221 A.D.2d 243, 633 N.Y.S.2d 493,

494 (1st Dept 1995) (dismissal of pleading warranted “because of plaintiff’s

negligent loss of a key piece of evidence which Defendants never had an

opportunity to examine”).

Where the evidence destroyed or lost is deemed not “crucial” or “key” to the

innocent party’s case, i.e., where its absence does not prevent the outright

prosecution or defense of a case, the lesser sanction of a preclusion order,

precluding the offending party from offering evidence with respect to evidence

previously destroyed, is warranted. Adrian v. Good Neighbor Apartment Assocs.,

277 A.D.2d 146, 717 N.Y.S.2d 99 (1st Dep’t 2000)(preclusion order preventing

defendants from offering exonerating evidence proper given defendant’s failure to

preserve evidence important to plaintiff’s case); Cohen Bros. Realty v. J. J.

2001)(portion of plaintiff’s disability claim properly dismissed in view of plaintiff’s disposal of evidence
after it had been requested by defendant); Squitieri v. City of New York, 248 A.D.2d 201, 669 N.Y.S.2d 589
(1st Dep’t 1998) (in light of extreme prejudice to third-party defendant’s case resulting from destruction of
evidence, dismissal of the third-party complaint was appropriate); Kirkland v. New York City Hous. Author.,
supra, 236 A.D.2d at 170, 666 N.Y.S.2d at 609 (dismissal was not too harsh a sanction for negligent
destruction of key evidence). Given this authority, defendant should not be heard to argue that preclusion
was improper when it admittedly destroyed discoverable materials, failed to disclose such in a timely
manner, and failed to preserve and search for discoverable materials.

11
Rosenberg Electrical Contractors, Inc., 265 A.D.2d 242, 697 N.Y.S.2d 20 (1st

Dep’t 1999)(preclusion order warranted where spoliation substantially hindered

defendant’s presentation of defense); Strelov v. Hertz Corp., 171 A.D.2d 420, 566

N.Y.S.2d 646 (1st Dep’t 1991)(preclusion order limited to possible defects in

automobile component parts that were no longer available for inspection due to

spoliation was proper). It was this lesser sanction of preclusion that the Court

imposed here, which sanction, it is respectfully submitted, was tailored so as to

achieve a fair result. See Siegman v. Rosen, 270 A.D.2d 14, 15, 704 N.Y.S.2d 40,

41 (1st Dep’t 2000)(“in view of the importance of the documents as they pertain to

plaintiff’s claims, the efforts expended by defendants to prevent their disclosure

through judicial means and, when all legal maneuvering failed, their sudden,

unexplained disappearance, the IAS Court should have concluded that the

defendants’ actions were indeed willful and warranted the sanction of preclusion”).

One Network argues that the sanction of a preclusion order is too severe, in

that its actions have not totally crippled Plaintiff by destroying “key” or “crucial”

evidence. Def. Br. at 3, 5. This is an incorrect standard. A preclusion order is the

appropriate lesser sanction imposed by the courts in this Judicial Department when

evidence is important, but arguably not “key.”7 As noted above, prejudice was

established here.

7
Plaintiff continues to believe that the spoliated evidence was, in fact, “key,” in that had Donner’s personnel
file been intact, it would have contained a term sheet, plus information refuting One Network’s contention
that Donner was fired “for cause.”

12
In determining whether sanctions were appropriate and what those sanctions

should be, this Court clearly considered: (a) what One Network did or did not do in

connection with discovery, including what its counsel had done or not done in

searching and preserving materials and informing Plaintiff regarding such; (b) when

during the litigation One Network revealed what had or had not been done; and (c)

whether the evidence allegedly destroyed or lost, was “crucial,” i.e., whether its

absence prevented Donner from prosecuting his case or responding to One

Network’s defenses. The following exchange at oral argument demonstrates such:

THE COURT: . . . I mean, what is it that is hindering your ability to
try this case on behalf of your client that you say may be missing?

MS. GARAY: Well -

THE COURT: That can’t be cured? I mean, you’re not prohibited
from trying your case; right?

MS GARAY: Your Honor, we are certainly prejudiced.

THE COURT: In what way? . . .

Ms. GARAY: We don’t know what else there is . . .

Tr. at 4.

MS. GARAY: . . . They admitted to destroying documents. The
people who were involved in his termination --

THE COURT: You’re asking that any evidence on this -- well,
striking defenses and precluding certain preconclusions because you
haven’t gotten e-mails that you say would be contrary to what they
want to testify about?

MS. GARAY: Exactly, your Honor. Again, what troubles me is that
it was only after discovery was over, after --

THE COURT: That you found this out.

13
MS. GARAY: Yes.

Tr. at 7.

THE COURT: What about the defendant? What about retaining --

MR. SHEPHERD [Defendant’s counsel]: Retaining documents?

THE COURT: Yes, destroying everything. There’s nothing in his
personnel file, come on.

Tr. at 10.

MS. GARAY: Yes. I got it [the Term Sheet] before we brought the
litigation, your Honor [from co-defendant]. But the point is, were
there e-mails that circulated it, were there documents? The term sheet
was placed in a document room at the time of the merger. The merger
agreement makes reference to it. But there -- and the exhibit B that
you made reference to is an analysis that reflected terms in the term
sheet. The point is: Are there other documents that were
contemporaneous, that confirm it?

THE COURT: You have a term sheet?

MS. GARAY: I do.

THE COURT: And the term sheet is what controls. Correct?

MS. GARAY: I believe so, your Honor.

THE COURT: Right. So what else would there be if there’s
something that existed that was destroyed? That would be helpful.
That’s what I’m trying to get at.

MS. GARAY: I guess I’m looking at it two different ways. The fact
that he never produced that makes you wonder what else they didn’t
produce.

THE COURT: The fact is the term sheet controls. Correct?

MS. GARAY: Yes, I think so. They take the position it still doesn’t
control. Mr. Brady changed Mr. Donner’s salary at some point and
they’ve produced a couple of e-mails that talk ---

THE COURT: Isn’t this on the summary judgment motion?

14
MS. GARAY: Yes. But I don’t know what other documents would
exist that they’ve deleted or haven’t produced or haven’t looked for
that would be further support that they recognized that the term sheet
was a binding, et cetera --

THE COURT: You’re asking me, then, to strike anything -- because
it’s only partially disclosed that goes to any testimony or any
document -- any, quote, e-mails, that go to vary the terms of the term
sheet? Is that what you’re asking?

MS. GARAY: Yes, your Honor. And also that they be precluded
from taking the position that he was fired for cause. When they gave
him the termination or the separation letter, they don’t say he was
fired for cause. The fact that his personnel file is empty, Miss Paulis
testified that it was a reduction in force but we don’t have all the e-
mails that --- from the players.

Mr. Martin, for example, never got the May notice. Mr. Martin was
the former vice-president of corporate finance. And he was involved
in the termination of Mr. Donner.

So the fact that we don’t have documents regarding this -- and it’s
very clear, your Honor, that they’ve never told the Court what they
did to look for materials. In response to the discovery in this case --

THE COURT: All we have is this affidavit from the lawyer?

MS. GARAY: Yes.

THE COURT: . . . I have no idea at this point on the eve of trial and
in the -- I think in the middle of the summary judgment motion
whether or not the defendant has actually produced everything
relating to this case and whether or not it’s destroyed. I can’t tell.
And counsel is correct, counsel for the plaintiff is correct, there’s been
stonewalling by the defendant throughout the case and probably from
before the action was started. There’s been a total disregard of what
the company should do to retain documents. It’s beyond belief that a
personnel file for a former employee is completely empty.

MR. SHEPHERD: That’s not what has been testified to, that it was
totally empty.

THE COURT: Well, what was it? What was in it? anything relevant
to this?

15
MR. SHEPHERD: We produced the personnel file.

MS. GARAY: His term sheet wasn’t in it. What was in it was the
memo they produced of his exit interview when they fired him and
8
some COBRA-type documents.

THE COURT: Nothing about the, quote, fired for cause?

MS. GARAY: No, your Honor.

Tr. 15-17; 23-24.

Finding that One Network’s conduct amounted to a violation of “all

standards” of document retention and for compliance with discovery requests, the

Court issued a preclusion order. Contrary to One Network’s contention, this Court

did not impose the most severe sanction available, but rather the least severe of the

three different sanctions sought by Plaintiff for defendant’s misconduct:

THE COURT: I’m going to grant this motion to the extent that I’m
going to preclude the defendant from denying the existence of a valid
and enforceable employment agreement between plaintiff and One
Network and that’s based on the term sheet.

. . . I’m going to grant the application that the defendant is
precluded from denying the definiteness of the term[s] set forth in the
term sheet and I’m going to preclude evidence that the defendant
contends any evidence that the plaintiff was fired for cause and from
offering any evidence or testimony that the plaintiff was fired for
cause.

You can have the costs of the motion. I’m not going to grant
attorney fees. I think that’s a sufficient sanction based on the
stonewalling and the failure to maintain documents as a company
should do in this day and age.

Total violation of all standards for, one, document retention
and, two, discovery, compliance with discovery requests. That’s the
decision and order of the court.

8
In fact, however, as evidenced by the documents annexed as Ex. A to Mr. Shepherd’s affirmation submitted
on this motion, the memorandum of Plaintiff’s exit interview was not in his personnel file.

16
Tr. at 25-26.

This Court found that One Network admittedly failed to preserve and

concededly destroyed evidence, defied court orders for discovery, and further,

“stonewall[ed]. . . throughout the case and probably from before the action was

started.” Tr. at 24. Thus, this Court should reject One Network’s contention that a

lesser sanction (or no sanction) should have been imposed. The supposedly

“properly tailored” sanctions proposed by One Network, i.e., a missing document

charge or an adverse inference instruction, would be patently insufficient to redress

the harm caused here by One Network’s intentional spoliation and stonewalling

(which, of course, is the goal of any sanction) and would amount to nothing more

than “a slap on the wrist.” See People v. Deery, 165 Misc.2d 319, 630 N.Y.S.2d

193 (Cr. Ct. Bronx Co. 1995)(finding that preclusion of evidence rather than

adverse inference charge proper where court found that not even perfunctory effort

had been made to collect materials which were important and which would be

destroyed, and destruction compromised the ability of opposing counsel to cross-

examine witness).

One Network’s reliance on Balaskonis v. HRH Const. Corp., 1 A.D.3d 120,

767 N.Y.S.2d 9 (1st Dep’t 2003), and Tommy Hilfilger USA, Inc. [“Hilfilger”] v.

Commonwealth Trucking, Inc., 300 A.D.2d 58, 751 N.Y.S.2d 446 (1st Dep’t 2002),

for the proposition that the lesser sanction of a missing document or adverse

inference charge would suffice here, is completely misplaced. In Balaskonis, the

court found that the documents in question had been innocently destroyed in the

17
ordinary course of business, and without “notice of the evidence’s potential

evidentiary value.” Id. (Still, the court ordered sanctions.) Here, on the other hand,

the Court concluded that the destruction of documents was in no way innocent, but

rather part of One Network’s on-going pattern of stonewalling. Tr. at 24. I

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Motion-Secondary: William Donner v. One Network Enterprises Inc, Fenway Partners Inc

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