CPLR § 3123(a)

CPLR § 3123 Admissions as to matters of fact, papers, documents and photographs

CPLR § 3123(a)Notice to admit; admission unless denied or denial excused

Wagner v 119 Metro, LLC, 2009 NY Slip Op 01109 (App. Div., 2nd 2009)

After a dispute arose over the plaintiffs' entitlement to the escrow
funds, the plaintiffs commenced this action and, after joinder of
issue, served discovery demands in January 2004 to which the defendants
never responded. Nor did the defendants appear for scheduled
depositions. Pursuant to a compliance conference order, the [*2]plaintiffs
filed a note of issue and certificate of readiness on January 25, 2007.
Six weeks later, on March 6, 2007, the plaintiffs served the defendants
a notice to admit to which were appended 39 documents. The defendants
neither responded nor sought a protective order.
On October 15, 2007,
which was shortly before the trial, the defendants retained new
counsel. One week later, on the first day of the trial, the plaintiffs
moved in limine to preclude the defendants from testifying at trial and
presenting any evidence at trial based on their failure to provide any
discovery during the litigation. The defendants opposed, asserting that
their failure to provide discovery had not been willful, but resulted
from their prior counsel's failure to communicate with them, which led
them to mistakenly believe that the plaintiffs had abandoned the
matter. The trial court granted the motion to the extent of precluding
the defendants from testifying at trial. At the nonjury trial, the only
evidence consisted of the pleadings and the 39 documents appended to
the notice to admit.
Neither party presented any witnesses. At the
conclusion of the trial, the court found that the plaintiffs either
substantially performed their obligations under the escrow agreement by
correcting the violations or were prevented from doing so by the
defendants' actions and/or inactions, and accordingly, the defendants
had breached the escrow agreement by failing to remit to the plaintiffs
the sum of $24,000 held in the escrow account. A judgment thereafter
was entered against the defendants in the principal sum of $24,000,
from which the defendants appeal. We reverse.

The Supreme Court improvidently exercised its discretion in
granting the plaintiffs' motion in limine to the extent of precluding
the defendants from testifying at trial, as there was no showing that
the defendants' failure to provide discovery was willful and
contumacious (see CPLR 3126; cf. Klutchko v Baron, 1 AD3d 400, 404; Goens v Vogelstein, 146 AD2d 606; Tine v Courtview Owners Corp., 40
AD3d 966). Instead, the defendants' submission in opposition to the
motion demonstrated the reasonableness of their excuse that the law
office failure of their prior counsel explained their failure to
provide discovery (see Hageman v Home Depot U.S.A., Inc., 25 AD3d 760; Halikiopoulos v New York Hosp. Med. Ctr. of Queens, 284 AD2d 373).

Based on the defendants' concession that they never responded to
the plaintiffs' notice to admit, the trial court did not err in deeming
the defendants to have admitted the genuineness of 39 documents
appended to the plaintiffs' notice to admit (see CPLR 3123[a]).

Moreover, "[w]here, as here, a nonjury trial is involved, this Court's
power to review the evidence is as broad as that of the trial court" (Totonelly v Enos, 49 AD3d 710, 711; see Northern Westchester Professional Park Assoc. v Town of Bedford, 60
NY2d 492, 499). Since the trial court heard no testimony, under the
circumstances, there is no issue with respect to witness credibility (cf. Totonelly v Enos, 49
AD3d at 711). The plaintiffs did not establish the defendants' breach
of the escrow agreement or the plaintiffs' performance of their
obligations thereunder.

In light of the trial court's error in granting the plaintiffs'
in limine motion to preclude the defendants from testifying, and given
that the trial evidence did not support the trial court's finding that
the plaintiffs substantially performed their obligations under the
escrow agreement or were prevented from doing so by the defendants, or
that the defendants breached the escrow agreement, we reverse the
judgment. Although the evidence submitted by the plaintiffs at trial
failed to establish a prima facie case on their breach of contract
causes of action, because discovery was never completed we must remit
the matter to the Supreme Court, Queens County, for completion of
discovery and, thereafter for a new trial.

The bold is mine.

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