“C’mon Ref!” – Right and Wrong Ways to Challenge the Call in a Supervised Disclosure Proceeding
June 08, 2023
Section 3104 of the CPLR authorizes courts to appoint a judge or referee to supervise disclosure proceedings. The appointed referee enjoys “all the powers of the court” to resolve discovery disputes. A party seeking review of a referee’s order must, within five days after the order is made, file a motion in the court in which the action is pending. Lawyers involved in supervised disclosure proceedings should be familiar with the requirements for review contained in CPLR 3104(d). In a recent decision from New York County’s Commercial Division, Justice Robert R. Reed reminds us that only strict adherence to those requirements will suffice to obtain review.
In Oldcastle Precast, Inc., v. Steiner Building NYC, LLC et al., plaintiff entered a contract with defendants to manufacture, furnish, and install pre-cast concrete structures for construction of a film and television soundstage complex in the Brooklyn Navy Yard. Plaintiff brought suit against defendants for breach of contract, alleging that defendants failed to pay the balance due after plaintiff completed performance.
The parties engaged in extensive discovery disputes, so the court appointed a special referee under CPLR 3104(a) to facilitate a resolution. After multiple conferences and letter-orders, the referee decreed that discovery was complete and directed the parties to advise the court of her determination.
Several weeks later, plaintiff advised the court that discovery had concluded and filed a note of issue and certificate of readiness. Defendants moved to vacate the note of issue under 22 NYCRR 202.21(e) on the grounds that discovery was not complete. They claimed the referee left open “two significant discovery issues” that precluded the filing of a valid note of issue: (1) whether plaintiff should be sanctioned for spoliation of evidence; and (2) the propriety of plaintiff’s rebuttal expert reports and defendants’ sur-rebuttal expert reports.
The court denied defendants’ motion to vacate the note of issue. It determined that the spoliation issue was already pending in connection with defendants’ motion for summary judgment, therefore it would be decided on that motion and did not warrant vacatur of the note of issue. Further, the propriety of plaintiff’s rebuttal expert reports—which the referee expressly declined to rule upon and deferred to the court—could be addressed instead by a motion in limine and did not warrant vacatur of the note of issue.
The decision’s apex addressed the propriety of defendants’ “supplemental” sur-rebuttal expert reports, which the referee had precluded. By letter-order, she determined that the supplemental reports were late and lengthy; the date for expert depositions was imminent by then, and there already had been protracted discovery delays. To allow defendants’ voluminous submissions would require postponement of the expert depositions and cause more delays.
Defendants took exception to this ruling. They argued that the referee’s preclusion of their supplemental expert reports was inconsistent with her decision to defer the propriety of plaintiff’s rebuttal expert reports to the court. The referee allowed the parties to file letter-submissions on the issue to preserve their arguments for appeal, and the parties submitted their letters three days after the ruling.
The court declined to review the referee’s ruling on defendants’ motion to vacate the note of issue. It asserted that defendants should have sought the remedy prescribed by CPLR 3104(d), which would have required them to file a motion for review with the court within five days of the date of the referee’s order. But they failed to do so, and their letter-submission to the referee did not reserve their right to challenge the decision in court. In short, only strict adherence to CPLR 3104(d) would suffice to contest the referee’s decision, and any attempt to do so beyond the statute’s five-day timeline was untimely.
As the Oldcastle decision shows, CPLR 3104(d) is the exclusive mechanism for prompt judicial review of a special referee’s order. Practitioners should be mindful to heed the statute’s five-day timeline in any supervised discovery proceeding, and to lodge their objections by filing a motion before the assigned judge rather than by submitting a letter to the referee. Otherwise, review will have to await an appeal from the final judgment.