Etage Real Estate LLC v. Stern

Summary

The Appellate Division, First Department, modified two Supreme Court orders by denying leave to amend the pleadings and limiting the time period covered by subpoenas to 2012 through 2019. The court held that the proposed veil-piercing, fraudulent-conveyance, and Penal Law causes of action would not survive a motion to dismiss, while upholding enforcement of subpoenas to DJJMS LLC's bank and accountant and permitting the request for tax returns.

Holdings

1. The Supreme Court improperly granted the motion for leave to amend the pleadings because none of the proposed causes of action would survive a motion to dismiss.
2. The Supreme Court properly compelled compliance with the subpoenas because the requested assets and transfers are relevant to the veil piercing and fraudulent conveyance causes of action.
3. The time period covered by the subpoenas should be limited to 2012 through 2019.
4. The Supreme Court properly refused to strike the request for tax returns because plaintiffs met the heavy burden required.
5. The Supreme Court properly denied defendants' request to review third-party productions for confidential information.

Questions Presented

1. Whether the Supreme Court properly granted plaintiffs' motion for leave to amend the pleadings.
2. Whether the Supreme Court properly compelled compliance with subpoenas issued to nonparties.
3. Whether the time period covered by the subpoenas should be limited.
4. Whether the Supreme Court properly refused to strike the request for tax returns.
5. Whether defendants' request to review third-party productions for confidential information was properly denied.

Disposition

modified and affirmed