On October 21, 2024, Justice Reed of the New York County Commercial Division issued a decision in Bagatelle Little W. 12th LLC v. JEC II, LLC, 2024 NY Slip Op. 51437(U), holding that a party seeking discovery is not required to prove that the evidence it seeks exists, explaining:
CPLR 3101 (a) provides that there shall be full disclosure of all matter material and necessary in the prosecution or defense of an action. The words, material and necessary, are to be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity. The test is one of usefulness and reason. If there is any possibility that the information is sought in good faith for possible use as evidence-in-chief or in rebuttal or for cross-examination, it should be considered evidence material in the prosecution or defense.
Here, BLW12 asserts that the documents requested are relevant to its seventh cause of action for breach of contract. That cause of action alleges, among other things, that counterclaimants failed to provide services for which they were compensated, failed to cause financial statements to be properly prepared and audited, failed to account for or explain numerous transfers and expenses incurred by counterclaimants, and failed to provide required internal auditing and financial oversight. In its verified reply to counterclaims, BLW12 asserts affirmative defenses such as unclean hands and set-off. To the extent that such claims and affirmative defenses assert a failure of counterclaimants to properly provide accounting services, the documents requested by BLW12 are reasonably calculated and sought in good faith.
With respect to the potential for a fishing expedition, the Court of Appeals in Forman v. Henkin articulated in dicta that New York discovery rules do not condition a party’s receipt of disclosure on a showing that the items the party seeks actually exist; rather, the request need only be appropriately tailored and reasonably calculated to yield relevant information. The purpose of discovery is to determine if material relevant to a claim or defendant exists and, in many cases, as is the case here, a party seeking disclosure will not be able to demonstrate that items it has not yet obtained contain material evidence. Moreover, it is a well-established rule that there is no need for a specialized or heightened factual predicate to avoid improper fishing expeditions.
Counterclaimants have purportedly produced responsive documents for the period requested by BLW12, but failed to produce other requested documents from the same period without a reasonable basis for their objection. When resolving a discovery dispute, competing interests must always be balanced, and the need for discovery must be weighed against any special burden to be borne by the opposing party. Although counterclaimants submit that BLW12’s requests are not justified as they are not relevant to its claims, counterclaimants do not contend that such requests are unduly burdensome, prejudicial to counterclaimants, or are voluminous and over broad. Nor do counterclaimants make a showing under CPLR 3103(a) that the method of discovery sought is being used for the purpose of incurring unreasonable expense or delay.
(Internal quotations and citations omitted).