Before the court is a motion pursuant to CPLR Article 31, including but not limited to CPLR 3122, 3124, and 3126, and pursuant to NYCRR Part 130, Subpart 130-1 Section 130-1.1 for an order:

(a) Pursuant to CPLR 3124 and/or 3126 and 3122, compelling respondent, Yakov Kurilenko, D.D.S., to comply with and answer petitioner's combined discovery notice and demands to respondent and compelling the respondent to produce at this court, on a date and time certain to be set by the court, all documents demanded by petitioner; and/or

(b) Pursuant to CPLR 3126 and other applicable law, dismissing in its entirety with prejudice respondent's response in this proceeding, striking and dismissing with prejudice and precluding the respondent from proffering any evidence or testimony in opposition to the petition and related relief at any trial or inquest thereon, on the basis of respondent's willful failure to [*2]disclose information and produce documents for inspection in response to petitioner's combined discovery notice and demands and in willful violation of the preliminary conference order;

(c) Pursuant to 22 NYCRR Part 130, Subpart 130-1 Section 130-1.1, ordering respondent to pay to petitioner the costs of making this motion, which is $2,500.00 to date; and

(d) Pursuant to 22 NYCRR Part 130, Subpart 130-1 Section 130-1.1, ordering respondent to pay to petitioner all additional costs in connection with this motion incurred after the date of filing.

Madelaine Bernfeld ("Bernfeld," or "the executor") is the surviving spouse of decedent, Michael Bernfeld (the "decedent"), who died on September 29, 2009. This court admitted decedent's will to probate on May 20, 2010, and issued letters testamentary to Bernfeld, the nominated executor and sole beneficiary under the will.

Decedent was a dentist in Queens County, who practiced withYakov Kurilenko ("Kurilenko") in a professional corporation titled "Michael Bernfeld, D.D.S. and Yakov Kurilenko, D.D.S., P.C.", and/or d/b/a "Howard Beach Dental Associates" (collectively, the "dental PC"). The parties dispute whether decedent's interest in the dental PC at the time of his death was 75% or 100%.^[FN1]

Following the death of decedent, Bernfeld demanded that Kurilenko produce the corporate share certificates reflecting Kurilenko's interest in the dental PC, if any, but the corporate certificates have not been produced. Counsel for Bernfeld, Stuart Serota, Esq., ("Serota"), asserts that Kurilenko cannot produce the certificates because he never received them, having never paid the $300,000.00 Kurilenko was required to pay to receive shares in the dental PC. Serota asserts that since decedent's death, Kurilenko took unauthorized custody and control of the dental PC books and records located in the dental PC office and has refused to provide the executor or her counsel with access or photocopies, despite Kurilenko's obligation to do so pursuant to the executor's demands for discovery and inspection and a preliminary conference order consented to by counsel for each party. Further, Serota alleges that Kurilenko took possession from the office of the dental PC's certified public accountant all of the dental PC's files, books and records that were located there.

On September 25, 2013, Bernfeld served on Kurilenko a Combined Discovery Notice and Demand and a Discovery and Inspection Demand (the "Demands"). Kurilenko did not object to the demands made within the twenty days allowed under CPLR 3122, and provided documents to Bernfeld on December 3, 2013. However, Serota advises the court that certain documents were not produced in response to the following Demands:

Demand 5: Provide original/paid checks or legible copies front and back of each check issued for the dental PC for the period of 2009 to the present.

Bernfeld asserts that Kurilenko failed to provide photocopies of canceled checks from Chase Bank account ending xxx1983, titled "Michael Bernfeld DDS Howard Beach Dental Associates" for the period beginning November 2009 to the present.

Demand 6: Provide all monthly bank statements, cancelled checks, deposits, receipts, wire transfers and financial statements created in connection with the dental PC and/or d/b/a [*3]HBDA for the period of September 1, 2009 to the present.

Bernfeld asserts that Kurilenko failed to provide bank statements and photocopies of canceled checks from Citibank account ending xxx6057 titled "Michael Bernfeld, DDS and Yakov Kurilenko, DDS, PC" for the period beginning September 2009 until January 2012.

Demand 7: Provide copies of all checks, wire transfers, or payments of salaries, distributions and other compensation including but not limited to the payment of personal debt(s) not incurred in the regular course of business for the dental PC for the period of September 1, 2009 to the present.

Bernfeld asserts that Kurilenko failed to produce bank statements and photocopies of canceled checks from HSBC account ending xxx2413 titled "Michael Bernfeld, DDS and Yakov Kurilenko, DDS d/b/a/ Howard Beach Dental Associates," for the period beginning January 2012 to the present.

Demand 8: Provide all general ledger and trial balances for each year from 2009 until the present for the dental PC and/or HBDA; and

Demand 9: Provide cash disbursement journals and cash receipt journals for the period September 1, 2009 until the present for the dental PC.

Bernfeld asserts that demands 8 and 9 were not complied with. No general ledgers, trial balances, cash disbursement journals or cash receipt journals for the dental PC were provided for the period beginning September 2009 until the present.

Demand 12: Provide a copy of the rental lease agreement for the operation of the dental PC located at 156-36 Cross Bay Boulevard, Howard Beach, from 2009 until the present, including any new lease, modification or extension executed from 2009 to the present.

Bernfeld asserts that Kurilenko failed to provide a copy of the rental agreement, modifications or extensions as demanded.

Demand 15: Provide copies of Federal forms W-2, 1099, K-1 or other tax documents issued by the dental PC to Kurilenko or any members of his family from September 1, 2009 to the present.

Bernfeld asserts that Kurilenko failed to provide photocopies of Federal W-2 forms issued to Kurilenko and any of his family members.

Demand 17: Insurance company documents indicating monies paid and received and/or capitation records for the years 2009 to date.

Bernfeld asserts that Kurilenko has failed to produce any insurance company documents of monies received and/or capitation records.

Counsel for Kurilenko, Dustin A. Levine ("Levine"), opposes the relief requested on three grounds:

(1) The court lacks discretion to grant the motion because Bernfeld failed to establish that Kurilenko engaged in conduct that is willful, contumacious, in bad faith or frivolous. In his memorandum of law, Levine argues that striking a party's pleading is only appropriate where the party's non-disclosure has been clearly shown to be willful, in bad faith or contumacious (citing McGilvery v New York Cith Tr. Auth., 213 AD2d 322,324 [1st Dept 1995]).

(2) At a settlement conference, Kurilenko made a substantial settlement offer that Levine claims Serota never shared with Bernfeld. Levine advises the court that when Serota demanded a [*4]second settlement conference, Kurilenko appeared, but Bernfeld did not. Levine demanded, but Serota refused, to provide Levine with written confirmation from Bernfeld that she was advised of Kurilenko's settlement offer.

(3) Kurilenko filed an affidavit dated January 2, 2014, in which he asserts that he "produced all documents responsive to Petitioner's Combined Discovery Notice and Demands within my possession, custody and control."

Levine concedes that Serota advised him in writing, on or about December 6, 2013, and again on December 9, 2013, that Kurilenko's responses to Demands 5-9, 12, 15 and 17 ^[FN2] were inadequate. However, Levine asserts that when he advised Serota by telephone that Kurilenko's response was comprehensive, Serota responded by saying that they would discuss an amicable settlement, yet never made arrangements for a settlement conference.

Serota reiterates that since decedent's death, Kurilenko took control over all of the assets and profits of the dental PC, and has refused to produce all of the documents and information needed to value this estate asset, in violation of CPLR Article 31 and the preliminary conference order signed by counsel to each party. Counsel asserts that Levine's demands (a) that Bernfeld personally appear for a settlement conference, and (b) that Serota provide Levine with Bernfeld's written confirmation that she was advised of Kurilenko's settlement offer, are attempts by Levine to interfere in Serota's relationship with his client and to cause Serota to violate attorney-client privilege. Serota argues that Levine has no right to demand that Bernfeld personally appear at a conference, absent a deposition notice, or that Bernfeld communicate with opposing counsel in writing concerning her receipt of a settlement offer. In any event, Serota asserts that it would be impossible for Bernfeld to consider or accept any settlement offer without having received and reviewed all of the information and documentation necessary to value the disputed estate asset. Moreover, any discussion of settlement negotiations is non-responsive to Bernfeld's Demands.Serota asks the court for the following relief, some of it for the first time in his reply affirmation: (1) order Kurilenko to turnover to Bernfeld, or to a receiver appointed by the court, all books, records, financial documents and corporate documents concerning the dental PC for the period beginning January 1, 2007 to the present date; (2) order Kurilenko to set forth to and from whom Kurilenko, or someone acting on his behalf, ever transferred possession, custody or control, directly or indirectly, of any books, records, financial documents and corporate documents of and concerning the dental PC for the period beginning January 1, 2007 to the present date; (3) order that Bernfeld's forensic accountants shall have full access to the books, records, documents, files, computer records, financial records, patient lists, patient accounts, bank statements and accounts needed to create an accounting and a valuation of the property and assets of the dental PC for the period beginning January 1, 2007 to the present date; (4) determine that Kurilenko is not a shareholder of the dental PC; (5) determine that Kurilenko does not have the status of a shareholder in the dental PC, because he never fully performed the condition necessary for obtaining ownership and shareholder status, even though the dental PC was titled "Michael Bernfeld, D.D.S. and Yakov Kurilenko, D.D.S., P.C.;" (6) order the appointment of a qualified receiver for the dental PC pendente lite until further order of the court; [*5](7) determine the amount owed by Kurilenko to decedent's estate and/or the dental PC, enter judgment for such amount and order Kurilenko to pay that amount by a date certain; and (8) determine the value of decedent's interest in the dental PC, direct how the asset should be marshaled and disbursed to Bernfeld, and upon such full disbursement, release the receiver, if appointed.

New York law requires full disclosure of all matter material and necessary in the prosecution or defense of an action (CPLR 3101 [a]). Case law has broadly construed the scope of material that is discoverable, ruling that "the words material and necessary are to be interpreted liberally to require disclosure of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay the test is one of usefulness and reason" (Allen v Crowell-Collier Publishing Co., 21 NY2d 403, 406-407 [1968] [internal citations omitted]). The Court of Appeals' interpretation of "material and necessary" has been understood "to mean nothing more or less than relevant'" (Connors, Practice Commentaries, McKinney's Cons.Laws of NY, Book 7B, CPLR C3101:5). Discovery of documents is permitted even if they are not admissible in evidence, provided that the production of such documents may lead to disclosure of admissible evidence (Fell v Presbyterian Hospital in New York at Columbia-Presbyterian Med. Ctr., 98 AD2d 624, 625 [1st Dept 1983]).

Courts have broad discretion in supervising discovery and the setting of reasonable terms and conditions therefor (Matter of U.S. Pioneer Execs. Corp., 47 NY2d 914, 916 [1979] Mattocks v White Motor Corp., 258 AD2d 628, 629 [2d Dept 1999]). Ordinarily if a party objects to a discovery demand, that party is to serve a response which states with reasonable particularity the reasons for each objection. If an objection is made to part of an item or category, the part is to be specified (Connors, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3122:1).

Bernfeld seeks relief pursuant to CPLR 3122, 3124 and 3126, and NYCRR 130-1.1. Under CPLR 3122, a party objecting to a notice for discovery and inspection pursuant to CPLR 3120 has 20 days from service of such notice to serve a response, which response must state with reasonable particularity the reasons for the party's objections. If the objecting party fails to serve a response in a timely manner, the only remaining bases for objections are that the demand (1) is palpably improper, or (2) seeks privileged material (Briand Parenteau, Inc. v Dean Witter Reynolds, Inc., 267 AD2d 576 [3d Dept 1999] Muller v Sorensen, 138 AD2d 683 [2d Dept 1988]). [*6]

The motion also seeks relief under CPLR 3124, which provides that a party seeking disclosure may bring a motion to compel a response or compliance with the request or demand.

Relief is also sought pursuant to CPLR 3126, which provides penalties for the refusal to comply with an order to disclose or wilfully fails to disclose information which the court finds ought to have been disclosed. Where the court finds that a party intentionally failed to disclose information which ought to have been disclosed, and there is a clear showing the failure to comply with the discovery demands was willful, contumacious or in bad faith, the court may strike the responsive party's pleading (Mendez v City of New York, 7 AD3d 766 [2d Dept 2004]).

The court acknowledges that a party cannot be compelled to produce information and documents which do not exist or which are not in the party's possession (Euro-Central Corp. v Dalsimer, Inc., 22 AD3d 793 [2d Dept 2005]).

"Compliance with disclosure requires both a timely response and one that evinces a good-faith effort to address the requests meaningfully. When the response to a discovery request is, in effect, that there are no responsive documents within the party's custody, possession, or control, that party must provide a detailed statement, under oath, by someone with direct knowledge of the facts setting forth the past and present status of the relevant documents; where they were kept; what efforts, if any, were made to preserve them; the circumstances surrounding their disappearance or destruction; and the means and methods used to conduct a search for them. In short, the affidavit submitted must provide the court with a basis to find that the search conducted was a thorough one or that it was conducted in a good faith effort to provide the necessary records to the plaintiff . . . . [B]ald and conclusory assertions by the [objecting respondents] that they have no documents in their possession responsive to the plaintiff's demands are clearly insufficient" (WMC Mortage Corp. v Vandermulen, 32 Misc 3d 1206 (A) [Sup Ct, Suffolk County 2011]).

Documents under a party's control may include documents as to which the party has "the legal right, authority, or ability to obtain upon demand documents in the possession of another . . . . Documents in a party's 'control' include those in the physical possession of its accountant" (Matter of Schaefer, 2013 NY Misc. LEXIS 1478 [Sur Ct, Nassau County 2013] [internal citations omitted]).

In connection with the requested federal W-2 forms, a party is deemed to have control of documents filed with a federal agency as to which the party has or can obtain copies (see, Matter of Woolworth Corp. Securities Class Action Litigation, 166 FRD 311 [SDNY 1996]).

The court further notes that the failure to provide demanded information will preclude the party from offering any proof regarding that information at trial (Corriel v Volkswagen of America, Inc., 127 AD2d 729 [2d Dept 1987]).

While Kurilenko does not deny his control over the dental PC since decedent's date of death in 2009, he denies that he has possession or control of the corporate accounting, tax, insurance and lease records and a substantial amount of bank records for the years 2009 through 2013. The documents sought include documents which were generated by, or in connection with, the dental PC as recently as three months ago. It defies credulity that these documents are not in Kurilenko's possession or control, as these terms are defined by the courts, and Kurilenko [*7]has not offered any support for his claim that he cannot produce them.

The motion is granted to the following extent:

1. Within 45 days following service of a copy of this order with notice of entry, Kurilenko is ordered to fully comply with the Demands and to produce every single document demanded by Bernfeld but not yet produced. In connection with any document not so produced, Kurilenko is directed to file an affidavit stating the efforts he made to search for the demanded documents.

Further, Kurilenko is ordered to set forth in his affidavit to and from whom he, or someone acting on his behalf, ever transferred possession, custody or control, directly or indirectly, of any books, records, financial documents and corporate documents of and concerning the dental PC during the time periods covered by the outstanding Demands.

2. In the event that Kurilenko fails to timely and fully comply with the above order, his response in this proceeding will be dismissed in its entirety with prejudice, and Kurilenko will be precluded from proffering any evidence or testimony in opposition to Bernfeld's petition and related relief at any trial or inquest thereon.

The balance of the relief requested ^[FN3] is denied without prejudice at this time.

A compliance and scheduling conference will be held on May 22, 2014 at 3:45 p.m.

This constitutes the decision and order of the court.

Dated: March 31, 2014

EDWARD W. McCARTY III

Judge of the

Surrogate's Court