## Facts

- A judgment creditor held an unsatisfied money judgment (entered in 1990) against the judgment debtor.
- The creditor alleged the debtor and his wife engaged in fraudulent conveyances to place assets beyond creditors’ reach, including creation of a corporation owned by the wife, purchase and improvement of a house titled solely in the wife’s name, and dissolution of a related company.
- The alleged scheme involved transactions reaching back to the mid-1980s, making pre-1986 financial records relevant to the fraudulent-conveyance claims.
- A trial court order in 1997 broadly barred discovery into all pre–March 2, 1986 transactions, but that restriction was later lifted on appeal as to the fraudulent-conveyance claims.
- After the appellate ruling, the trial court ordered production of specified pre-1986 discovery (October 29, 1998).
- Defendants repeatedly failed to comply, gave assurances of future production, and later claimed they could not locate the documents without explaining any search efforts.
- The creditor moved for sanctions, seeking preclusion of evidence or testimony tied to the withheld discovery; the trial court refused to impose preclusion.
- The creditor appealed the denial of meaningful sanctions.

## Issues

1. Whether defendants’ persistent failure to comply with a discovery order, coupled with conclusory explanations for nonproduction, permitted an inference of willful and contumacious conduct under CPLR 3126.
2. Whether the trial court abused its discretion by declining to impose a preclusion sanction where the withheld discovery was central to the fraudulent-conveyance claims.

## Decision

- The Appellate Division reversed the order in substantial part.
- The court held that defendants’ persistent noncompliance and inadequate explanation supported an inference of willful and contumacious conduct.
- The court directed imposition of a preclusion sanction (or comparably strong CPLR 3126 relief) barring defendants from offering evidence or testimony concerning matters for which they failed to provide ordered discovery.
- The matter continued with the ordered preclusion applicable in further proceedings.

## Legal Principles

- Under CPLR 3126, a court may impose sanctions, including preclusion, where a party willfully fails to disclose information that should have been disclosed.
- Willful and contumacious conduct may be inferred from repeated failure to comply with court-ordered discovery, especially when paired with inadequate, conclusory excuses.
- A claimed inability to locate documents does not defeat sanctions absent a showing of diligent search and a credible explanation for nonproduction.
- Preclusion is an appropriate remedy when noncompliance frustrates proof on central issues and lesser measures do not cure resulting prejudice.

## Conclusion

The Appellate Division required strong CPLR 3126 sanctions because defendants repeatedly ignored an order compelling production of pre-1986 records central to the fraudulent-conveyance claims and offered only unsupported assertions that the documents could not be found, making preclusion necessary to address prejudice and enforce compliance with discovery orders.


Siegman v. Rosen, 270 A.D.2d 14, 704 N.Y.S.2d 40 (App. Div. 1st Dep’t 2000)