This dispute arises from an allegedly defectively constructed luxury condominium building. Plaintiff brings this motion against defendants 5 Beekman Property Owner LLC and Alan Gross (defendants). Plaintiff is the board of managers of the residential section of a condominium building located at 5 Beekman Street in Manhattan. 5 Beekman is the condominium's sponsor (Sponsor). Gross is Sponsor's principal. Gross is also the chief executive officer of GFI Capital, Sponsor's parent company. (NYSCEF No. 8 at ¶¶ 6, 21.)

In this action, plaintiff asserts claims for breach of contract, fraud, fraudulent transfer, and deceptive trade practices under General Business Law §§ 349 and 350. According to plaintiff, defendants breached the condominium offering plan by failing to deliver a condominium building without defects. (NYSCEF No. 8 at 8 [verified complaint].) Plaintiff also alleges that defendants "retained a substantial amount of such sale proceeds by conveying valuable Units to Sponsor associates, employees, business associates, and other affiliates" (id. at ¶ 137) or improperly transferred the profits to investors (see NYSCEF No. 73 at 10).

Plaintiff moves to compel defendants to produce responses to interrogatories and document demands to which they have objected. Plaintiff's motion is granted in part and denied in part.

To prevail on this motion, plaintiff must show that the discovery requests it seeks are necessary and material to prosecuting their claims. (See CPLR 3101.) Necessity and materiality are "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." (Matter of Kapon v Koch, 23 NY3d 32, 38 [2014] [internal quotation marks omitted].)

As an initial matter, defendants argue that plaintiff has not shown that it has meritorious underlying claims that would substantiate discovery of the sort requested by plaintiff. But as plaintiff points out, defendants have not (yet) moved to dismiss. This court therefore evaluates the necessity and materiality of plaintiff's discovery requests based on plaintiff's causes of action as alleged, without giving weight to the potential merits of those claims as defendants urge. (See Day v Serenity Pharm., LLC, 213 AD3d 488, 489 [1st Dept 2023] [holding that arguments that "were largely attempts to relitigate the merits of plaintiff's claims . . . were not properly raised on a discovery motion"].)

Plaintiff seeks to compel responses to interrogatory nos. 4 and 5. Interrogatory no. 4 asks defendants to identify "each person or entity that has ever been [S]ponsor's lender or creditor." Interrogatory no. 5 asks defendants to identify "each person or entity that has ever had an ownership interest in the sponsor." Plaintiff argues that these interrogatories pertain to plaintiff's claim "that Sponsor is a mere instrumentality and alter ego for Sponsor's parent company, Gross, and their other companies and exists merely to advance their pecuniary interests while [*2]defrauding innocent purchasers."^[FN1] (NYSCEF No. 73 at 9.)

The court concludes that plaintiff has not shown that these interrogatory requests are necessary or material to plaintiff's claims in this action.^[FN2] In particular, plaintiff has not explained how the identities of lenders, creditors, or individuals with ownership interests in Sponsor are related to plaintiff's claim that Sponsor is an alter ego for Gross and the GFI companies. (See NYSCEF No. 8 at 14.) Defendants need not respond to these interrogatories.

Plaintiff argues that defendants must provide additional responses/documents with respect to document demand nos. 2, 3, 4, 5, 7 ,8, 9, 10, 11, 12, and 22 because those demands assertedly seek materials relevant to plaintiff's "actual and constructive fraudulent conveyance claims." (NYSCEF No. 73 at 10.) That is, according to plaintiff, these responses to these demands will "address the financial arrangement between the Sponsor, GFI and the multiple Does named in the Complaint"; identify individuals who are "GFI's partners and investors in the Condominium"; and "will substantiate the Board's allegations that funds received by the Sponsor from unit purchasers were to be held by Sponsor but instead were improperly transferred to investors." (Id.)

Demand no. 2 seeks "[d]ocuments or communications sufficient to identify the Sponsor's general partners, limited partners, members, managing members, officers, directors, managers and employees of the Sponsor." (NYSCEF No. 65 at 9 [pdf pagination].) This demand is relevant to plaintiff's fraudulent-conveyance claim against Sponsor—particularly to the question of who could, or did, authorize alleged transfers from Sponsor. And it is not overly broad or burdensome for defendants to respond. Defendants must supplement their response to this demand.

Demand no. 3 requests "[e]ach document and communication concerning the corporate structure of the Sponsor." (Id.) Plaintiff seeks documents "including but not limited to organizing documents, articles of incorporation, corporate bylaws, partnership agreements, and operating agreements from Sponsor's inception through the present." (Id.) Plaintiff has not shown that its alter-ego and fraudulent-conveyance claims warrant documentary discovery of this breadth. Defendants need not respond to this request as it stands.

Demand no. 4 asks for "each subscription agreement signed in connection with a Sponsor [*3]ownership interest." (Id.) According to plaintiff, the subscription agreements "will outline the terms in which Sponsor's investors were paid to the detriment of the condominium." (NYSCEF No. 73 at 10.) The court understands plaintiff to mean that the subscription agreements—which delineate who bought condominium units and at what price—will shed light on the amount of funds Sponsor received. This request is neither overbroad nor irrelevant to plaintiff's fraudulent-conveyance claim. Defendants must supplement their response to this demand.

Demand no. 5 seeks "[e]ach document reflecting any profit earned by the Sponsor in connection with sale of Condominium units." (NYSCEF No. 65 at 9 [pdf pagination].) Similarly, on demand nos. 7 and 8, plaintiff seeks "[e]ach document and communication concerning" the transfer of assets owned by the Sponsor, Gross, or parent entities to or from the Sponsor, Gross, or parent entity. (Id.) And demand no. 9 asks defendants to produce "[e]ach document and communication concerning the capitalization and/or financing of the Sponsor, including, without limitation, documents and communications concerning capital contributions, distributions, loans, and loan applications." (Id. at 10 [pdf pagination].)

The court agrees that documents concerning profits made on the sale of condominium units and the transfer of assets to or from Sponsor are potentially relevant to plaintiff's fraudulent-conveyance claim. But that does not, without more, establish that the broad, burdensome, and invasive discovery sought through these particular demands is necessary or material to that claim. Nor has plaintiff provided a sufficient basis to require documents reflecting the transfer of assets to and from Gross individually. Accordingly, defendants need not respond to these requests as they stand. Plaintiff may serve narrowed versions of these requests on defendants.

Demand no. 10 asks for "[e]ach document and communication concerning the Sponsor's finances, debts, liabilities, and/or other monetary obligations." (NYSCEF No. 65 at 10 [pdf pagination].) Plaintiff requests, at minimum, "documents and communications concerning any audit, bank or brokerage statements, federal and state tax return forms, account ledgers, mortgage statements, credit card statements, pledges, real estate transaction documents, accounting records, or other financial records or statements." (Id.) But plaintiff has not shown why it needs such a broad and invasive document production—let alone one with no temporal limit on its scope. Defendants need not respond to this request as it stands.

Demand No. 11 seeks "[e]ach document and communication concerning Gross's finances, debts, liabilities, and/or other monetary obligations, including but not limited to documents and communications concerning any audit, bank or brokerage statements, ledgers, mortgage statements, credit card statements, pledges, real estate transaction documents, accounting records, or other financial records or statements relating to the Condominium." Plaintiff does not explain, however, why Gross's individual financial records are relevant to plaintiff's fraudulent-conveyance claim. (Cf. Day, 213 AD3d at 489 [requiring "strong showing of necessity" for disclosure of individual tax returns] [internal quotation marks omitted].) This omission is especially notable in light of plaintiff's allegations that Gross took part in the fraudulent transfer together with Sponsor, rather than by making transfers from his personal accounts. (See NYSCEF No. 8 at 23-24.) Defendants need not respond to this request.

Demand no. 12 requests production of "[e]ach document and communication concerning any payment, distribution, transfer, disbursement or other conveyance of assets, holdings, profits, property, funds, or anything of value between or among any of the Sponsor and Gross." (NYSCEF No. 65 at 10 [pdf pagination].) The requested documents are potentially relevant—though only during the approximate period in which Sponsor was selling condominium units. Also, plaintiff does not make fraudulent-conveyance allegations against Gross individually. The court concludes that defendants must respond to this demand only to the extent they have documents or communications about distributions, transfers, and the like from Sponsor to Gross from August 1, 2016, through December 31, 2021.

Demand no. 22 seeks "[e]ach document between any Defendant and any person or entity that was an investor or creditor of the Sponsor concerning the Construction or the Defects." This request—although conceivably relevant to all plaintiff's claims in this action—is overly broad and burdensome. Defendants need not respond to the request as it stands.

Accordingly, it is

ORDERED that plaintiff's motion to compel is granted in part and denied in part as set forth above; and it is further

ORDERED that defendants shall, within 30 days of entry of this order, serve supplemental document responses on plaintiff to the extent directed above; and it is further

ORDERED that with respect to document demand nos. 3, 5, 7, 8, 10, and 22, plaintiff may, within 30 days of entry of this order, serve revised, more-tailored versions of these demands on defendants.