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Briand Parenteau, Inc. v. Dean Witter Reynolds, Inc.
Citations: 267 A.D.2d 576; 699 N.Y.S.2d 230; 1999 N.Y. App. Div. LEXIS 12477
Court: Appellate Division of the Supreme Court of the State of New York; December 1, 1999; New York; State Appellate Court
An appeal was made from a Supreme Court order that denied defendants' motion to compel the plaintiff to comply with discovery demands. The plaintiff alleged fraud and negligence against the defendants, claiming they were induced to invest $105,000 in an unsuitable mutual fund based on misrepresentations. After answering the complaint, the defendants requested various discovery materials, including personal and corporate income tax returns and investment-related documents. The plaintiff initially sought an extension to respond and expressed general objections regarding the relevance of personal tax records but did not formally contest the other demands. Ultimately, the plaintiff complied with most requests but withheld five, prompting the defendants to seek a court order for compliance. On appeal, the defendants contended that the Supreme Court incorrectly addressed the merits of the discovery objections due to the plaintiff's failure to timely respond as mandated by CPLR 3122(a). This statute requires a party to object to discovery demands within 20 days, and failure to do so limits objections to claims of privilege or impropriety. The Supreme Court's denial of the request for income tax records was interpreted as a finding that such demands were not relevant to the case, as disclosure of tax returns is generally discouraged without a compelling reason that the information cannot be obtained from other sources. The defendants argued that the tax returns were relevant to assessing the financial circumstances and investment experience of the plaintiff's president, which were crucial for determining justifiable reliance on the defendants' representations. However, the court found that the defendants did not adequately demonstrate that this information could not be obtained through other means, such as depositions. Regarding the other disputed materials, the Supreme Court's decision was deemed to fall within the trial court's discretion in managing discovery. The order was affirmed, with costs awarded to the prevailing party.