STATE OF NEW YORK

SUPREME COURT : COUNTY OF CHAUTAUQUA

 

DANIEL C. WEINSTEIN,

Plaintiff,

-vs- Index #H-07181


KEYWELL CORPORATION, A MICHIGAN

CORPORATION; JOEL D. TAUBER;

MORTON B. PLANT; ARNOLD I. PLANT;

RICHARD D. ODLE; JOHN MARK LOZIER;

KENNETH A. DISHELL; AND JEFFREY

O'HARA,

Defendants.

----------------------------------------

KEYWELL CORPORATION,

Plaintiff,

-vs- Index #H-07185


DANIEL C. WEINSTEIN;

ANTHONY BOSCARINO; AND

VAC AIR ALLOYS CORP.,

Defendants.

----------------------------------------

ANTHONY BOSCARINO,

Plaintiff,

-vs- Index #H-07194


KEYWELL CORPORATION, A MICHIGAN

CORPORATION; JOEL D. TAUBER;

MORTON B. PLANT; ARNOLD I. PLANT;

RICHARD D. ODLE; JOHN MARK LOZIER;

KENNETH A. DISHELL; AND JEFFREY

O'HARA,

Defendants.

----------------------------------------

DANIEL C. WEINSTEIN,

Plaintiff,

-vs- Index #H-08467


KEYWELL CORPORATION; JOEL D. TAUBER;

MORTON D. PLANT; RICHARD D. ODLE;

AND JOHN MARK LOZIER,

Defendants & Third Party Plaintiffs,

-vs-

VAC AIR ALLOYS CORP.; AND

ANTHONY BOSCARINO,

Third Party Defendants.

 

 


THORP, REED & ARMSTRONG

(Thomas E. Lippard, Esq.

of Counsel) for Weinstein


PIPER & MARBURY

(Joseph G. Finnerty, Jr.,

Esq. of Counsel) Co-Counsel

for Keywell Corp.


CHARLES EDWARD FAGAN, ESQ.

Counsel for Keywell


PHILLIPS, LYTLE, HITCHCOCK,

BLAINE & HUBER

(Jeremiah J. McCarthy, Esq.

of Counsel) for Boscarino

and Co-Counsel for Weinstein



DECISION AND ORDER



GERACE, J.



PRODUCTION OF KEYWELL'S TAX RETURNS



The motion to compel the production of Keywell


Corporation's tax returns for the years 1988 to 1994 and


interim financial statements for 1995, is granted, subject to


the right of Keywell to move "in limine" at trial to limit


the use.


The Court in NIAGARA FALLS URBAN RENEWAL AGENCY V.


FRIEDMAN, 55 A.D.2d 830, 390 N.Y.S.2d 310 (A.D. 4 Dept 1976)


stated, "[a] party will not be required to produce income tax


returns in a particular action unless the record presents a


strong necessity for such disclosure in order for the party

to prove its cause of action or defense." (citation to cases


and treatise omitted).


In Keywell's complaint, paragraph 29, it states:


"Keywell has been damaged by fraud in the inducement and

the deceit of Vac Air, Weinstein and Boscarino in the

purchasing of the real property for more than full value

when it had a contamination problem, which has very

costly remedies. . . . In addition to the fraud and

deceit of Vac Air, Weinstein and Boscarino, Keywell's

business has faced serious disruption in its operation

because of the actions of the Defendants and this has

affected Keywell's relations with its employees,

customers, suppliers and the public."



Paragraph 30 of the complaint recites:


"Keywell respectfully prays the court award actual

damages and punitive damages herein, plus the costs of

this suit, for the Defendants' wanton, malicious and

reckless disregard of Keywell's rights."



The complaint and the record make the requisite showing


that those tax returns were indispensable to this aspect of


the plaintiff's claims. How else can defendant's determine


whether Keywell's business was so affected? If relevant


information possibly contained in the tax returns is


unavailable from other sources, defendant has the right to


review those returns. (see LAUER'S FURNITURE V. PITTSFORD


PLACE ASSOCIATES, 190 A.D.2d 1054, 593 N.Y.S.2d 674 (A.D.4


Dept. 1993), and cases cited therein). Where else can


defendants obtain the information?


The tax returns are also relevant to the


Boscarino/Weinstein claims of fraudulent manipulation of the

stock valuation.


Keywell suspects that the motive behind the discovery


demand is "to show the jury how much money Keywell made in


the seven years after their fraud" and "to convince the jury


that since Keywell made money, they should excuse defendants


for their fraud." The fact that the Court permits discovery


is no guarantee the returns will be shown to the jury.


The motion for Keywell's production of tax returns is


granted. So Ordered.


This is the Decision and Order of the Court. No further


order shall be necessary.



Dated: July 21, 1995

Mayville, New York


 

JOSEPH GERACE

Justice of Supreme Court