Although discretionary, it is well-known among commercial practitioners that the Commercial Division justices generally like a Rule 19-a statement of material facts included with the submission of a summary judgment motion. When responding to a Rule 19-a statement, the responding party should be thinking a couple moves ahead. The ultimate goal should be to make things easier for the judge to accept clearly stated facts that cannot be contested before the commencement of a trial. The last thing that you want to happen is to be caught in a Steve Urkel “did i do that ” moment in failing to dispute a contested fact. A recent decision issued by Manhattan Commercial Division Justice Robert R. Reed sheds light on the consequences of that very scenario.
Background and Analysis:
Perella Weinberg Partners LLC et al. v Michael A. Kramer et al., involved a breach-of-contract dispute related to the defendants’ departure from the plaintiffs’ financial-advisory firm. During the course of the litigation, both parties moved for summary judgment on their respective claims and counterclaims. As part of their submissions, the parties submitted and responded to their respective Rule 19-a statements.
On April 2, 2024, following the court’s denial of summary judgment for both parties, and several meet-and-confer sessions to discuss the parties’ joint statement of stipulated facts and procedural history for their upcoming trial, the plaintiffs served a Notice to Admit under CPLR 3123 (“the Notice”) on the defendants. Defendants moved for a protective order under CPLR 3103 to strike the plaintiffs’ Notice, arguing that the court should strike the Notice on grounds that (i) the Notice was untimely by almost seven years based on the parties’ original scheduling order, which required notices to admit to be served by August 14, 2017; and that (ii) the requests to admit in the Notice were improper.
In opposition, Plaintiffs argued that their Notice was (i) timely based on the most recent pre-trial scheduling order, which required the parties to provide the court with all “notices to admit with responses” by April 22, 2024; and (ii) was proper because the requests were focused on facts that the defendants previously admitted as undisputed in their response to the plaintiffs’ Rule 19-a statement. On reply, the defendants argued that Rule 19-a expressly provides that responses to a Rule 19-a statement are admissions only “for the purposes of the motion” (as opposed to the trial). Justice Reed rejected the defendants’ arguments.
First, the court noted that a Notice to Admit may be served “at any time after service of the answer…and not later than twenty days before trial (CPLR 3123 [a]), acknowledging that the plaintiffs served their Notice more than 20 days prior to both the original trial date (April 29, 2024), as well as the adjourned trial date (January 24, 2025).
Second, the court rejected the defendants’ argument and/or interpretation of the Commercial Division Rules that admissions in a Rule 19-a statement are only for the purposes of a summary judgment motion. The Court found that the defendants “opened the door” by failing to admit certain facts for trial purposes that were previously identified as “uncontested” or “uncontroverted” in their response to plaintiffs’ Rule 19-a statement. Moreover, the Court held that plaintiffs’ service of the notice to admit was not used to obtain information in lieu of other devices or raise new issues that were left unresolved in discovery, but rather, to clarify previously admitted facts in defendants’ response to plaintiffs’ Rule 19-a statement. As a result, the Court denied the defendants’ motion for a protective order.
Upshot:
The Perella Weinberg Partners LLC decision emphasizes the strategic benefits of carefully drafting and responding to a Rule 19-a statement. Any facts left undisputed will survive the entirety of the case, including trial, and serve as a “cheat sheet” for judges when making future rulings. Failing to adhere to the rules or getting caught stretching the record regarding previously admitted facts, is the quickest path to losing the court’s trust and your motion.