| Wagner v 119 Metro, LLC |
| 2009 NY Slip Op 01109 [59 AD3d 531] |
| February 10, 2009 |
| Appellate Division, Second Department |
| Theodore Wagner et al., Respondents, v 119 Metro, LLC,et al., Appellants. |
—[*1] Farley & Kessler, P.C., Jericho, N.Y. (Cary David Kessler and Susan R. Nudelman ofcounsel), for respondents.
In an action, inter alia, to recover damages for breach of contract, the defendants appeal froma judgment of the Supreme Court, Queens County (Schulman, J.), entered February 29, 2008,which, after a nonjury trial, is in favor of the plaintiff and against them in the principal sum of$24,000.
Ordered that the judgment is reversed, on the facts and in the exercise of discretion, and thematter is remitted to the Supreme Court, Queens County, for further proceedings consistentherewith, with costs to abide the event.
This action, inter alia, to recover damages for breach of contract arises from the purchase bythe defendant 119 Metro, LLC (hereinafter Metro), of three adjacent parcels of real property inKew Gardens, Queens, from the plaintiffs Theodore Wagner and Kew Gardens Holdings. Thedispute principally concerns the plaintiffs' contention that Metro and its member, the defendantIlan Cohen, violated the parties' escrow agreement dated November 5, 2002 which provided thatthe defendants were to hold $24,000 of the purchase price in escrow to ensure that within 60days the plaintiffs would perform certain work relating to Environmental Control Board(hereinafter ECB) violations, sidewalk violations, and certificates of occupancy regarding thesubject parcels. In a subsequent forbearance agreement, the parties, among other things,extended the plaintiffs' time to complete their obligations under the escrow agreement untilOctober 10, 2003. After a dispute arose over the plaintiffs' entitlement to the escrow funds, theplaintiffs commenced this action and, after joinder of issue, served discovery demands in January2004 to which the defendants never responded. Nor did the defendants appear for scheduleddepositions. Pursuant to a compliance conference order, the [*2]plaintiffs filed a note of issue and certificate of readiness onJanuary 25, 2007. Six weeks later, on March 6, 2007, the plaintiffs served the defendants anotice to admit to which were appended 39 documents. The defendants neither responded norsought a protective order. On October 15, 2007, which was shortly before the trial, thedefendants retained new counsel. One week later, on the first day of the trial, the plaintiffsmoved in limine to preclude the defendants from testifying at trial and presenting any evidenceat trial based on their failure to provide any discovery during the litigation. The defendantsopposed, asserting that their failure to provide discovery had not been willful, but resulted fromtheir prior counsel's failure to communicate with them, which led them to mistakenly believe thatthe plaintiffs had abandoned the matter. The trial court granted the motion to the extent ofprecluding the defendants from testifying at trial. At the nonjury trial, the only evidenceconsisted of the pleadings and the 39 documents appended to the notice to admit. Neither partypresented any witnesses. At the conclusion of the trial, the court found that the plaintiffs eithersubstantially performed their obligations under the escrow agreement by correcting theviolations or were prevented from doing so by the defendants' actions and/or inactions, andaccordingly, the defendants had breached the escrow agreement by failing to remit to theplaintiffs the sum of $24,000 held in the escrow account. A judgment thereafter was enteredagainst the defendants in the principal sum of $24,000, from which the defendants appeal. Wereverse.
The Supreme Court improvidently exercised its discretion in granting the plaintiffs' motionin limine to the extent of precluding the defendants from testifying at trial, as there was noshowing that the defendants' failure to provide discovery was willful and contumacious (seeCPLR 3126; cf. Klutchko v Baron,1 AD3d 400, 404 [2003]; Goens v Vogelstein, 146 AD2d 606 [1989]; Tine v Courtview Owners Corp., 40AD3d 966 [2007]). Instead, the defendants' submission in opposition to the motiondemonstrated the reasonableness of their excuse that the law office failure of their prior counselexplained their failure to provide discovery (see Hageman v Home Depot U.S.A., Inc., 25 AD3d 760 [2006];Halikiopoulos v New York Hosp. Med. Ctr. of Queens, 284 AD2d 373 [2001]).
Based on the defendants' concession that they never responded to the plaintiffs' notice toadmit, the trial court did not err in deeming the defendants to have admitted the genuineness of39 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 asbroad as that of the trial court" (Totonelly v Enos, 49 AD3d 710, 711 [2008]; see NorthernWestchester Professional Park Assoc. v Town of Bedford, 60 NY2d 492, 499 [1983]). Sincethe trial court heard no testimony, under the circumstances, there is no issue with respect towitness credibility (cf. Totonelly v Enos, 49 AD3d at 711). The plaintiffs did notestablish the defendants' breach of the escrow agreement or the plaintiffs' performance of theirobligations thereunder.
In light of the trial court's error in granting the plaintiffs' in limine motion to preclude thedefendants from testifying, and given that the trial evidence did not support the trial court'sfinding that the plaintiffs substantially performed their obligations under the escrow agreementor were prevented from doing so by the defendants, or that the defendants breached the escrowagreement, we reverse the judgment. Although the evidence submitted by the plaintiffs at trialfailed to establish a prima facie case on their breach of contract causes of action, becausediscovery was never completed we must remit the matter to the Supreme Court, Queens County,for completion of discovery and, thereafter for a new trial.
In light of our determination, we need not address the defendants' remaining contention.Rivera, J.P., Angiolillo, Carni and McCarthy, JJ., concur.