Gore v. Narconon: Order denying sanctions

8/19/2019 Gore v. Narconon: Order denying sanctions

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EXHI IT

ILED: NEW YORK COUNTY CLERK 03/09/2016 04:56 PM INDEX NO. 159042/

YSCEF DOC. NO. 306 RECEIVED NYSCEF: 03/09/


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FILED: NEW YORK COUNTY CLERK 0 3 0 9 j 2 0 l 6 1 1 : 0 9 AM] INDEX NO. 159042/201

NYSCEF DOC. NO. 303 RECEIVED NYSCEF: 03/09/201

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SUPREME COURT

OF THE STATE OF NEW

YORK

NEWYORK COUNTY

PRESENT:

Just ce

•V•

~

PART

INDEX NO / r2 ~ - ¥ -

MOTION

D TE

MOTION

SEQ NO

QO

The following papers, numbered 1 to were read on this motion tolfor

Notice

of

Motion Order to Show Cause Affidavits Exhibits

Answering Affidavits Exhibits -

Replying Af f i dav i t s - -

Upon the foregoing papers,

it

is ordered that this motion Is

Motion sequence 004 and 005 are consolidated and resolved as follows:

I

No(s) _ _

I

No(s).

1No(s).

In this action to recover monies paid for drug rehabilitation services for a family member,

plaintiffs, Heidi Gore and Nathaniel S. Gore ( plaintiffs ) move to

(1)

strike the answer,

affirmative defenses, and counterclaims of defendants Narconon GulfCoast, Inc. ( Narconon )

and Debbie Ross ( Mrs. Ross ) (collectively, defendants ), or in the alternative, (2) deem as

resolved issues

of

whether: (a) materials provided to patients were based upon the teachings ofL.

Ron Hubbard and the Church

of

Scientology; (b) defendants have ties to the Church

of

Scientology; and (c) defendants' website disclosed the fact that Narconon's treatments were

based on these teachings; or (3) preclude defendants from offering proof favorable to them on

such issues; or (4) for an adverse inference at trial that the lost evidence was relevant and would

have contradicted defendant's position; and (4) costs, expenses, and attorneys' fees (Seq. 004).

By separate motion (seq. 005), plaintiffs also move for plaintiffs' expenses incurred and

attorneys' fees and for sanctions against defendants for their frivolous conduct.

In

support

of

sanctions, plaintiffs argue that after two court orders to produce documents,

the Court, by order dated March 17 2016, directed defendants to produce and recreate all

relevant documents responsive to plaintiffs' request within 30 days and ordered that the failure

to fully comply with this order shall result in the striking of defendants' answer, affirmative

Dated: _ _

----------

.S.C

3 CHECK IF APPROPRIATE:

................... ..............

0

SUBMIT ORDER

[J REFERENCE

1 of 7


3/15

defense, and counterclaims (the March 2016 order ).

Plaintiffs contend that defendants produced documents and workbooks, which reference

other workbooks and hardbound books that also exist, but were not produced. Thus, defendants'

claim that there was nothing more to produce was disingenuous. Plaintiffs also point out that

:virs

Ross testified at her deposition that she burned everything and anything that said

Narconon on it, and as to another book that she testified existed, no such book has been

produced. Further, although Chris Ross (Mrs. Ross' son) testified at his deposition that that three

of their website pages referenced defendants' use

ofthe

teachings

ofL

Ron Hubbard, none

of

the produced copies of the website show any reference to L Ron Hubbard or Scientology.

Defendants were on notice of plaintiffs' complaint as early as 2012. Thus, defendants' failure

to

maintain copies

of

their website leaves plaintiffs unable

to

challenge defendants' claim that the

website disclosed the teachings ofL Ron Hubbard. Defendants' destruction

ofthe

materials

possibly evidenced more direct ties to the Church

of

Scientology itself. The deadline

to

produce

documents has expired, and thus, sanctions are warranted for defendants' violation

of

several

court orders.

Defendants oppose the motions, arguing that more than 5000 pages

of

documents were

produced to plaintiff in addition

to

documents from email searches using search terms required of

plaintiffs, course materials, tax returns, and documents responsive to plaintiffs' post deposition

demands. The Court directed defendants to recreate documents after defendants advised

plaintiffs that defendants destroyed the books related to Narconon International course work

when they terminated their license agreement with Narconon in October 2013. Thus, it is

of

no

moment that defendants burned these documents, which is nevertheless in doubt based on Mr.

Ross' testimony. And, there is no evidence that the destroyed documents were not recreated and

produced to plaintiffs. Further, it would be unprecedented to strike a pleading based on a failure

to

produce a book which is available for sale on Amazon, and which defendants' counsel

ordered. Plaintiffs misconstrue the deposition testimony

of

defendants, and evidence exchanged

during the jurisdictional phase

of

this case demonstrate that defendants did not control its outside

website vendor. Public policy favors deciding cases on the merits. Further, plaintiffs' motion is

lacking a separate affirmation of good-faith effort

to

resolve the issues, as required under the

Uniform Rules.

In reply, plaintiffs add that defendants' eventual compliance with some of their discovery

obligations is insufficient. It cannot be disputed that Mrs. Ross burned the documents at issue,

and that defendants failed to recreate all documents reflecting the teachings

of

L Ron Hubbard

within the time frame as directed. Defendants used the entire library

ofL

Ron Hubbard's drug

rehabilitation books that needed to br recreated. The fact that a book is available online is

of

no

moment. Plaintiffs' counsel's affirmation explains the many efforts undertaken to obtain the

discovery the subject of this motion.

Plaintiff also requests attorneys fees and costs based on defendants' alleged frivolous

conduct concerning discovery production.

Discussion

Courts have broad discretion to fashion a remedy for spoliation in the interest of justice

Ortega v City o New York,

9 NY3d 69 [2007]), generally finding that sanctions are warranted

when prejudice is severe

see e.g., Kirkland,

236 AD2d at 175;

Squitieri v City o New York,

248

2

2 o f 7


4/15

AD2d 201, 204 pst Dept 1998]). Under New York law, spoliation sanctions are appropriate

where a litigant, intentionally or negligently, disposes

of

crucial items

of

evidence involved in an

accident before the adversary has an opportunity to inspect them (Kirkland v New York City

Hous.

Auth.,

236 AD2d 170, 173 [1st Dept 1997]). Courts have defined spoliation as the

intentional or negligent destruction

of

key or crucial evidence, and have held that sanctions

are warranted when crucial items

of

evidence are destroyed

(Kirkland v New York City Hous.

Auth ;

236 AD2d 170, 173 [1st Dept 1997]; see also Atlantic

Mutua Insurance

Co v Sea

Tramfer Trucking Corp., 264 AD2d 659, 660 [1999]; see DeKenipp v Rockefeller Center, Inc.,

856 NYS2d 23,

23

[S Ct

NY

Cty 2007] [holding that [s]poliation is the loss, destruction, or

alteration

of

key evidence to a lawsuit ];

see also Squitieri, supra]; Mudge, Rose, Guthrie,

Alexander Ferdon v Penguin Air Condition Corp., 221 AD2d 243 [1st Dept 1995]). In

deciding whether to impose sanctions, courts look to the extent that the spoliation

of

evidence

may prejudice a party, and whether a particular sanction is necessary as a matter

of

elementary

fairness. The burden is on the party requesting sanctions to make the requisite showing (Duluc

v

AC

L

Food

Corp., 119 AD3d

450 451-52

[1st Dept 2014] [internal quotation marks and

citations omitted],

lv denied

24

NY

3d 908 [20 14 ]).

In this action, plaintiffs allege that in September 2012, and based on their internet

research and telephone conversations they had with defendants' representatives, they paid

$40,000 to defendants to provide drug rehabilitation services to a family member (the Patient ).

Soon after Mrs. Gore enrolled the Patient, plaintiffs independently discovered that

Narconon was based upon the teachings

ofL.

Ron Hubbard, the founder

ofthe

Church

of

Scientology. Mr. Gore called Narconon opposing the Patient's stay at Narconon, and spoke with

Mrs. Ross, who agreed to pro-rate the fee

if

the Patient left the program. Thus, plaintiffs

arranged for the Patient to leave the program the following Sunday, September 11, 2012 and

attempted to arrange for the refund. However, in a letter response sent to plaintiffs, defendants

stated that the deposit and fees were non-refundable, explained that the program is monetarily

heavily weighted in the beginning, and stated that monies were spent

on

the Patient during his

stay at the facility totaling $205.26. As a result

of

defendants' refusal to refund plaintiffs, this

action alleging unjust enrichment, promissory estoppel, fraudulent misrepresentation, fraudulent

concealment, and rescission ensued.

To pursue these claims, and as relevant herein, beginning in October 2014, plaintiff

sought documents to establish defendants ' ties to

L


of

Scientology, the types of drug rehabilitation treatments, services, Scientology-related

educational/teaching materials defendants utilized, and defendants' Website pages, marketing

materials, and development of defendants' website.

By order dated October 28, 2014, the Court directed defendants to produce certain

discovery by December 19, 2014.

When defendants failed to comply, the deadline was extended by So-Ordered Stipulation,

dated January 30, 2015, which directed that,

inter alia,

Defendants' complete document

production will be hand delivered to counsel for Plaintiffs on or before February 4, 2015.

By

order dated February

24 2015

(when defendants again failed to produce any

documents), the Court directed defendants to complete document production by February 25,

2015.

3

3 o 7


5/15

On February 25, 2015 (the deadline), defendants served discovery responses. This was

followed by a letter dated March 16, 2015, wherein defendants' counsel stated, that an

exhaustive search was conducted and that documents responsive to the demands were either

previously produced, located at off-site storage, or that all Narconon materials have been

destroyed or returned

p r

the termination agreement with Narconon International,

which

required such destruction and/or return. (Emphasis added). According to defendants, they also

served by email 4 pages of post-termination correspondance.

As a result, by order dated March

17,

2015, this Court ordered defendants to produce

and

recreate all relevant documents responsive

to

plaintiffs' request within 30 days (i.e., April

16,

20 15). The Court also ordered that the failure to comply would result in the striking

of

defendants' answer, affirmative defense, and counterclaims. According to defendants, on April

15, 2015 (the day before the deadline), they sent plaintiffs 1,135 pages

of

documents

as

a

representation of patients' charts detailing the type

of

services provided on a 90-day stay basis.

Defendants maintain that these documents indicate the five-day initial withdrawal regimen,

initial drug test and lab work, sauna therapy, psychosocial assessment, and student education and

individual, group, and family therapy. And, on April16, 2015 (the deadline), defendants

produced two workbooks: (1) Narconon, Changing Conditions in Life Course 7 Based on the

works of

L

Ron Hubbard; and (2) Narconon, The Way to Happiness Course 8 Based on the

works of L Ron Hubbard.

1

Thereafter, on or about May 4, 2015 (approximately three weeks after the Apri116, 2015

deadline), defendants produced additional books specifically demanded by plaintiffs. According

to defendants, this document production consisted

of

4,532 pages course materials such as Book

1 Therapeutic Training Routine Course, Book 2 New Life Detoxification Program, Book 3

Learning Improvement Course, Book 4A and 4B Comunication and Perception Course,

Book 5 Ups and Downs in Life Course, Book 6 Personal Value and Integrity Course,

Narconon Changing Conditions in Life Course 7, and Narconon The Way to Happiness

Course 8.

2

·

Defendants contend that on May

4,

2015, they also sent additional documents,

including email pages based on search terms required by plaintiffs, pleadings from other cases,

and a discovery affidavit.

t

is undisputed that the following deposition of Mrs. Ross (on September 25, 2015)

confirmed that documents were destroyed, and that they were destroyed by fire.

At the deposition of Mr. Ross (also on September 25, 2015) Mr. Ross stated that the

home page, the resources page and the contact us page I believe are the three places that the

teachings

ofL Ron Hubbard were on (EBT, pp. 114-115). And, on October 15,2015, a

paralegal for counsel for defendants attested that she performed a search of the defendants'

website as it existed on July 12, 2012, printed screen shots of each page, and saw no mentions

of Scientology or L Ron Hubbard.

Thus, based on demands made at Mrs. Ross' deposition for, inter alia, Clear Body, Clear

Mind, the effective purification program by

L.

Ron Hubbard (Ross, EBT p. 184

,

by order dated

1

Defendants add that they also sent tax returns, and 26 pages

of

requested Narconon Bad Publicity.

2

Ross testified at her deposition to the use of such materials in the program.

4

4 o f 7


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September 28,2015, the Court directed plaintiffs to produce documents requested at

Defendants' EBT by October 23, 2015.

The Court notes that contrary to plaintiffs' contention, the fact that documents were

destroyed by fire does not, in and

of

itself, warrant a sanction, as defendants previously advised

on March 16 2015 that documents were destroyed as required under its termination agreement

with Narconon International. And, Mrs. Ross testified at her deposition that she had a very

small book that was called Clear Body, Clear Mind, which she

no

longer had but was available

on Amazon.

Plaintiffs' claim that defendants' failure

to

preserve their website leaves plaintiffs unable

to confront defendants' claim that the site disclosed the teachings

ofL

Ron Hubbard is

insufficient to warrant sanctions under the circumstances herein. It is noted that Ross' deposition

testimony that that the teachings of

L.

Ron Hubbard were on the website, is not necessarily

inconsistent with the attestation that the website did not mention Scientology or L. Ron

Hubbard. First, although recreation of the website was untimely, production of same does allow

plaintiffs a basis, if any, to challenge the claim that defendants' website did not reveal

defendants' reliance on Scientology and

L

Ron Hubbard's teachings. The website includes

pages describing how defendants' program Does Things Differently, the New Life

Purification Program, and descriptions of various courses, such as The Ups and Downs to Life

Course, and The Way to Happiness Course. Defendants produced Narconon Changing

Conditions in Life Course 7 and Narconon The Way to Happiness Course 8 both of which

expressly state that they are Based on the works ofL Ron Hubbard. Thus contrary to

plaintiffs' claim, they may examine and compare the website pages and the books and other

materials provided to establish their claim that defendants utilized the teachings of Scientology

and/or L. Ron Hubbard, but did not disclose same on their website.

As to plaintiffs' ability to establish additional ties between defendants and L. Ron

Hubbard and the Church

of

Scientology, the types of drug rehabilitation treatments, services, and

Scientology-related educational/teaching materials defendants utilized, the above production by

defendants was made, albeit after the Court-ordered deadline.

Second, Mr. Ross explained at his deposition that defendants' website was created by

another company. According to the attestation

of

defendants' counsel's paralegal, she was able

to recover these pages by accessing the website Wayback Machine, which archives on a

periodic basis, websites prior to their change or deletion.

While no explanation is given as to defendants' delay in producing Book 1 Book 2 Book

3 Book 4A and 4B, Book

5

and Book 6 they were produced nonetheless.

Although a substantial amount of pages of defendants' production were untimely and

produced after several court interventions and appearances, plaintiff failed to establish that any

additional information not produced at this juncture constitutes key evidence without which

[they] will be 'substantially prejudiced' New York City Hous. Auth. v Pro Quest Sec., Inc., 108

AD3d 471,473 [1st Dept 2013] [citations omitted]). Moreover, plaintiffs are not without means

to

prove their claims or disprove defendants' claims, since plaintiffs can testifY at trial about the

circumstances under which she enrolled and withdrew the Patient from defendants' program,

how plaintiffs' independently discovered that defendants were allegedly tied to Scientology,

and the losses they allegedly incurred. Thus, the severe sanction of striking defendants' answer,

5

5 o 7


7/15

-- - - -- -

affirmative defenses, and counterclaims

of

defendants is unwarranted.

However, the record indicates that defendants have failed to produce any version of

Clear Body, Clear Mind, or recreate the Red and Green volumes that defendants offered for

sale to Narconon International. As to the latter, inasmuch as the record indicates, arguably, that

Ross attempted to sell to Narconon International its Red and Green volumes and Narconon

International is allegedly related to Scientology, such volumes are precluded by use by

defendants at trial. Ross's January 14, 2014letter to Narconon International indicates that the

Red and Green volumes (which are in excellent condition' are for sale. Please forward your

offer of a reasonable fair market value for each set for consideration. Thank you for your

assistance in this regard. While defendants infer from the deposition testimonies and

submissions that such volumes were most likely hard cover materials, and thus, not used by

patients, even accepting such contentions

as

true, defendants failed to establish that such volumes

bore no relationship to Narconon International's teachings, the teachings

of

Scientology, or that

the information therein was not made available to patients or used as part of the defendants'

treatment program. Indeed, the offer for sale to Narconon supports plaintiffs' contentions to the

contrary. As such, the failure

of

defendants to recreate Clear Body, Clear Mind and the Red

and Green volumes, warrants an adverse inference at trial as to these specific materials.

3

Further, in light of the numerous attempts plaintiffs made to obtain discovery from

defendants, defendants shall be precluded at trial from offering any proof favorable to them

which was not previously exchanged as of the date of this decision on the following issues: (a)

materials provided to patients were based upon the teachings of L. Ron Hubbard and the Church

of Scientology; (b) defendants have ties to the Church of Scientology; and (c) defendants'

website disclosed the fact that Narconon's treatments were based on these teachings.

And, in light

of

the significant document production and sanctions issued herein,

plaintiffs' additional request for expenses, attorneys' fees, and sanctions is unwarranted.

onclusion

Based on the foregoing,

it

is hereby

ORDERED that plaintiffs' motion (sequence 004) is granted solely to extent that an

adverse inference shall be issued at trial as to defendants' failure to produce and/or recreate the

books, Clear Body, Clear Mind and the Red and Green volumes and defendants shall be

precluded at trial from offering any proof favorable to them which was not previously exchanged

3

However, as to the purported letter to which Mrs. Ross allegedly testified to (pages 275-276 as cited by

plaintiffs), such deposition testimony fails to establish that the letter exists . Further,

as

to any letter from

an

inspector at Narconon International to which Ross testified (pages 267-269), defendants are precluded at trial from

utilizing any such letter. According to Ross' s deposition, an inspector at Narconon wrote a letter criticizing

defendants, in sum and substance, that defendants were not part of the Scientology group.

And, inasmuch as the final exam, consisted

of

questions taken and reproduced from each

of

the books,

and that such books were provided, sanctions are unwarranted as to defendants' failure to recreate such final exam.

The deposition testimony of Chris Ross establishes that question from each

book

were typed up and constituted the

final exam.

Finally, plaintiffs' request for sanctions based on defendants' alleged failure to recreate marked-up

versions of documents

of

which plaintiffs received newly purchased copies, appears unwarranted, under the

circumstances, as the Cou did not require any recreation of markings made by defendants .

6

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8/15

s

o

he d te o his decision on the following issues: (a) materials provided to patients were

based upon the teachings

ofL


of

Scientology; (b) defendants have

ties to the Church

of

Scientology; and (c),defendants website disclosed the fact that Narconon s

treatments were based on these teachings; and it is further

ORDERED that plaintiffs motion (sequence 005) for expenses incurred and attorneys .

fees and for sanctions against defendants for their frivolous conduct is denied; and it is further

ORDERED that plaintiffs shall serve a copy of this order with notice of entry upon all

parties within 20 days

of

entry.

This constitutes the decision and order

of

the Court.

DATED:

HON CAROL

R

EDMEAD

J S C

D

CASE DISPOSED NON FINAL DISPOSITION

J.S.C.

1 CHECK ONE

2

CHECK

AS

APPROPRIATE:

MOTION IS:

0

GRANTED

D

DENIED D.a GRANTED IN PART

D

OTHER

3 CHECK IF APPROPRIATE

D DONOTPOST

D

SETTLE ORDER

D

SUBMIT ORDER

D

FIDUCIARY APPOINTMENT

7

o

7

D REFERENCE


9/15

[FILED: NEW

YORK

COUNTY CLERK 03/09/2016 02:34 Pij

INDEX NO. 159042/201

RECEIVED NYSCEF:

03/09/201

YSCEF DOC. NO. 304

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SUPREME COURT OF THE STATE OF

NEW

YORK

NEWYORK COUNTY

PRESENT:

HON.CAROLR.EDMEAD

J.s.q.

u

ce

•V•

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3 ~

PART

INDEX NO

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;_

MOTION DATE

-

MOTION

SEQ

NO

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The following papers, numbered 1 to were read on this motion to/fo r

Notice of Motion/Order to Show

Cause

Affidavits Exhibits

Answering Affidavits Exh i b i t s

Replying Aff idavi ts

Upon the foregoing papers, It Is ordered that this motion is

Motion sequence 004 and 005 are consolidated and resolved as follows:

I

No s).

I

No s).

I

No s).

In

this action to recover monies paid for drug rehabilitation services for a family member,

plaintiffs, Heidi Gore and Nathaniel

S.

Gore ( plaintiffs ) move

to

(1 strike the answer,

affirmative defenses, and counterclaims of defendants Narconon GulfCoast, Inc. ( Narconon )

and Debbie Ross ( Mrs. Ross ) (collectively, defendants ), or in the alternative, (2) deem as

resolved issues

of

whether: (a) materials provided to patients were based upon the teachings

ofL.

Ron Hubbard and the Church of Scientology; (b) defendants have ties to the Church of

Scientology; and (c) defendants' website disclosed the fact that Narconon's treatments were

based on these teachings; or (3) preclude defendants from offering proof favorable to them on

such issues; or (

4

for an adverse inference at trial that the lost evidence was relevant and would

have contradicted defendant's position; and (4) costs, expenses, and attorneys' fees (Seq. 004).

By separate motion (seq. 005), plaintiffs also move for plaintiffs' expenses incurred and

attorneys' fees and for sanctions against defendants for their frivolous conduct.

In

support

of

sanctions, plaintiffs argue that after two court orders to produce documents,

the Court,

by

order dated March

17,

2016, directed defendants to produce and recreate all

relevant documents responsive to plaintiffs' request within 30 days and ordered that the failure

to

fully comply with this order shall result

in

the striking of defendants' answer, affirmative

Dated:

• J.S.C.

3

CHECK

IF APPROPRIATE:

....................................

SETTLE ORDER

0DO NOT POST

[]OTHER

U

SUBMIT ORDER

LJREFERENCE

1

of

7


10/15

-

defense, and counterclaims (the March 2016 order ).

Plaintiffs contend that defendants produced documents and workbooks, which reference

other workbooks and hardbound books that also exist, but were not produced. Thus, defendants'

claim that there was nothing more to produce was disingenuous. Plaintiffs also point out that

Mrs. Ross testified at her deposition that she burned everything and anything that said

Narconon on it, and as to another book that she testified existed, no such book has been

produced. Further, although Cln·is Ross (Mrs. Ross' son) testified at his deposition that that three

of their website pages referenced defendants' use

ofthe

teachings ofL

Ron

Hubbard, none

of

the produced copies of the website show any reference to L. Ron Hubbard or Scientology.

Defendants were on notice of plaintiffs' complaint as early as 2012. Thus, defendants' failure to

maintain copies of their website leaves plaintiffs unable to challenge defendants' claim that the

website disclosed the teachings ofL Ron Hubbard. Defendants' destruction

of

the materials

possibly evidenced more direct ties to the Church of Scientology itself. The deadline to produce

documents has expired, and thus, sanctions are warranted for defendants' violation

of

several

court orders.

Defendants oppose the motions, arguing that more than 5000 pages

of

documents were

produced to plaintiff in addition to documents from email searches using search terms required

of

plaintiffs, course materials, tax returns, and documents responsive to plaintiffs' post deposition

demands. The Court directed defendants to recreate documents after defendants advised

plaintiffs that defendants destroyed the books related to Narconon International course work

when they terminated their license agreement with Narconon in October 2013. Thus, it

is of

no

moment that defendants burned these documents, which is nevertheless in doubt based on Mr.

Ross' testimony. And, there is no evidence that the destroyed documents were not recreated and

produced to plaintiffs. Further, it would be unprecedented to strike a pleading based on a failure

to produce a book which is available for sale on Amazon, and which defendants' counsel

ordered. Plaintiffs misconstrue the deposition testimony of defendants, and evidence exchanged

during the jurisdictional phase

of

this case demonstrate that defendants did not control its outside

website vendor. Public policy favors deciding cases on the merits. Further, plaintiffs ' motion

is

Jacking a separate affirmation of good-faith effort to resolve the issues, as required under the

Uniform Rules.

In reply, plaintiffs add that defendants' eventual compliance with some of their discovery

obligations

is

insufficient. t cannot be disputed that Mrs. Ross burned the documents at issue,

and that defendants failed to recreate all documents reflecting the teachings of L. Ron Hubbard

within the time frame as directed. Defendants used the entire library ofL . Ron Hubbard's drug

rehabilitation books that needed to br recreated. The fact that a book

is

available online is

of no

moment. Plaintiffs' counsel' s affirmation explains the many efforts undertaken to obtain the

discovery the subject of this motion.

Plaintiff also requests attorneys fees and costs based on defendants' alleged frivolous

conduct concerning discovery production.

Discussion

Courts have broad discretion to fashion a remedy for spoliation in the interest

of

ustice

Ortega

v City o New York, 9 NY3d 69 [2007]), generally finding that sanctions are warranted

when prejudice

is

severe

see e.

g.

Kirkland,

236 AD2d at 175;

Squitieri v City

o

New York,

248

2

2

of

7


11/15

AD2d 201, 204 [1st Dept 1998]). Under New York law, spoliation sanctions are appropriate

where a litigant, intentionally or negligently, disposes of crucial items of evidence involved in an

accident before the adversary has an opportunity

to

inspect them

Kirkland v New York City

Hous Auth.,

236 AD2d 170,

173

[1st Dept 1997]). Courts have defined spoliation as the

intentional or negligent destruction

of

key or crucial evidence, and have held that sanctions

are warranted when crucial items

of

evidence are destroyed Kirkland v New York City Hous

Aut

h ;

236 AD2d 170, 173 [1st Dept 1997]; see also Atlantic Mutual Insurance Co v Sea

Transfer Trucking Corp., 264 AD2d 659, 660 [1999]; see DeKenipp v Rockefeller Center, Inc.,

856 NYS2d 23, 23 [S Ct Y Cty 2007] [holding that [s]poliation is the loss, destruction, or

alteration of key evidence to a lawsuit ]; see also Squitieri, supra]; Mudge, Rose, Guthrie,

Alexander Ferdon v Penguin

ir

Condition Corp., 221 AD2d 243 [ 1 Dept 1995]). In

deciding whether

to

impose sanctions, courts look to the extent that the spoliation of evidence

may prejudice a party, and whether a particular sanction is necessary as a matter of elementary

fairness. The burden is on the party requesting sanctions to make the requisite showing Duluc

v

C

L Food Corp., 119 AD3d 450,451-52 [1st Dept 2014] [internal quotation marks and

citations omitted],

lv denied

24 NY 3d 908 [20 14]).

In this action, plaintiffs allege that in September 20

12

and based on their internet

research and telephone conversations they had with defendants' representatives, they paid

$40,000 to defendants to provide drug rehabilitation services to a family member (the Patient ).

Soon after Mrs. Gore enrolled the Patient, plaintiffs independently discovered that

Narconon was based upon the teachings of

L.

Ron Hubbard, the founder of the Church of

Scientology. Mr. Gore called Narconon opposing the Patient's stay at Narconon, and spoke with

Mrs. Ross, who agreed to pro-rate the fee if the Patient left the program. Thus, plaintiffs

arranged for the Patient to leave the program the following Sunday, September 11,2012 and

attempted to arrange for the refund. However, in a letter response sent to plaintiffs, defendants

stated that the deposit and fees were non-refundable, explained that the program is monetarily

heavily weighted in the beginning, and stated that monies were spent on the Patient during his

stay

at

the facility totaling $205.26. As a result

of

defendants' refusal to refund plaintiffs, this

action alleging unjust enrichment, promissory estoppel, fraudulent misrepresentation, fraudulent

concealment, and rescission ensued.

To pursue these claims, and as relevant herein, beginning in October 2014, plaintiff

sought documents

to

establish defendants' ties to

L.


of

Scientology, the types of drug rehabilitation treatments, services, Scientology-related

educational/teaching materials defendants utilized, and defendants' Website pages, marketing

materials, and development of defendants' website.

By

order dated October 28, 2014, the Court directed defendants to produce certain

discovery

by

December 19,2014.

When defendants failed to comply, the deadline was extended by So-Ordered Stipulation,

dated January 30, 2015, which directed that,

inter alia,

Defendants' complete document

production will be hand delivered to counsel for Plaintiffs on or before February 4 2015.

By order dated February 24, 2015 (when defendants again failed to produce any

documents), the Court directed defendants to complete document production by February 25,

2015.

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. On February 25, 2015 (the deadline), defendants served discovery responses. This was

followed

by

a letter dated March

16,

2015, wherein defendants' counsel stated, that an

exhaustive search was conducted and that documents responsive to the demands were either

previously produced, located at off-site storage, or that all Narconon materials have been

destroyed or returnedp r the termination agreement with Narconon International, which

required such destruction and/or return. (Emphasis added). According to defendants, they also

served

by

email 4 pages

of

post-termination correspondance.

As a result, by order dated March 17, 20

15,

this Court ordered defendants to produce

and recreate all relevant documents responsive

to

plaintiffs' request within 30 days (i.e., April

16, 2015 . The Court also ordered that the failure to comply would result in the striking of

defendants' answer, affirmative defense, and counterclaims. According to defendants, on April

15,

2015 (the day before the deadline), they sent plaintiffs I, 135 pages

of

documents as a

representation of patients' charts detailing the type

of

services provided on a 90-day stay basis.

Defendants maintain that these documents indicate the five-day initial withdrawal regimen,

initial drug test and lab work, sauna therapy, psychosocial assessment, and student education and

individual, group, and family therapy. And, on April

16,

2015 (the deadline), defendants

produced two workbooks: (1) Narconon, Changing Conditions in Life Course 7 Based on the

works of L. Ron Hubbard; and (2) Narconon, The Way to Happiness Course 8 Based on the

works of

L.

Ron Hubbard.'

Thereafter, on or about May 4, 2015 (approximately three weeks after the April16, 2015

deadline), defendants produced additional books specifically demanded by plaintiffs. According

to defendants, this document production consisted

of

4,532 pages course materials such

as

Book

1 Therapeutic Training Routine Course, Book 2 New Life Detoxification Program, Book 3

Learning Improvement Course, Book 4A and 4B Comunication and Perception Course,

Book 5 Ups and Downs in Life Course, Book 6 Personal Value and Integrity Course,

Narconon Changing Conditions in Life Course 7, and Narconon The Way to Happiness

Course

8.

2

Defendants contend that on May

4,

2015, they also sent additional documents,

including email pages based on search terms required by plaintiffs, pleadings from other cases,

and a discovery affidavit.

It is undisputed that the following deposition of Mrs. Ross (on September 25, 2015)

confirmed that documents were destroyed, and that they were destroyed by fire.

At the deposition

of

Mr. Ross (also on September 25, 2015) Mr. Ross stated that the

home page, the resources page and the contact us page I believe are the three places that the

teachings ofL Ron Hubbard were on (EBT, pp. 114-115). And, on October 15,2015, a

paralegal for counsel for defendants attested that she performed a search of the defendants'

website

as

it existed on July 12,2012, printed screen shots of each page, and saw no mentions

of

Scientology or L. Ron Hubbard.

Thus, based on demands made at Mrs. Ross' deposition for, inter alia, Clear Body, Clear

Mind, the effective purification program by

L

Ron Hubbard (Ross, EBT

p.

184

, by

order dated

1

Defendants add that they also sent tax returns, and 26 pages of requested Narconon Bad Publicity.

2

Ross testified at her deposition to the use of such materials in the program.

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I

September 28, 2015, the Court directed plaintiffs

to

produce documents requested at

Defendants' EBT by October 23, 2015.

The Court notes that contrary to plaintiffs' contention, the fact that documents were

destroyed

by

fire does not, in and

of

itself, warrant a sanction, as defendants previously advised

on March 16 2015 that documents were destroyed as required under its termination agreement

with Narconon International. And, Mrs. Ross testified at her deposition that she had a very

small book that was called Clear Body, Clear Mind, which she no longer had but was available

on Amazon.

Plaintiffs' claim that defendants' failure to preserve their website leaves plaintiffs unable

to confront defendants' claim that the site disclosed the teachings of L Ron Hubbard is

insufficient to warrant sanctions under the circumstances herein. It is noted that Ross' deposition

testimony that that the teachings

of

L. Ron Hubbard were on the website, is not necessarily

inconsistent with the attestation that the website did not mention Scientology or L. Ron

Hubbard. First, although recreation

ofth

website was untimely, production

of

same does allow

plaintiffs a basis, if any, to challenge the claim that defendants' website did not reveal

defendants' reliance on Scientology and

L

Ron Hubbard's teachings. The website includes

pages describing how defendants' program Does Things Differently, the New Life

Purification Program, and descriptions

of

various courses, such as The Ups and Downs to Life

Course, and The Way

to

Happiness Course. Defendants produced Narconon Changing

Conditions in Life Course 7 and Narconon The Way

to

Happiness Course 8 both of which

expressly state that they are Based on the works of L. Ron Hubbard. Thus contrary to

plaintiffs' claim, they may examine and compare the website pages and the books and other

materials provided to establish their claim that defendants utilized the teachings

of

Scientology

and/or L Ron Hubbard, but did not disclose same on their website.

As to plaintiffs' ability to establish additional ties between defendants and L Ron

Hubbard and the Church of Scientology, the types of drug rehabilitation treatments, services, and

Scientology-related educational/teaching materials defendants utilized, the above production

by

defendants was made, albeit after the Court-ordered deadline.

Second, Mr. Ross explained at his deposition that defendants' website was created by

another company. According

to

the attestation

of

defendants' counsel's paralegal, she was able

to recover these pages by accessing the website Wayback Machine, which archives on a

periodic basis, websites prior to their change or deletion.

While no explanation is given as to defendants' delay in producing Book 1 Book 2 Book

3 Book 4A and 4B, Book 5, and Book 6 they were produced nonetheless.

Although a substantial amount

of

pages

of

defendants' production were untimely and

produced after several court interventions and appearances, plaintiff failed to establish that any

additional information not produced at this juncture constitutes key evidence without which

[they] will be 'substantially prejudiced ' New York City Hous. Auth. v Pro Quest Sec., Inc., 108

AD3d 471,473 [1st Dept 2013] [citations omjtted]). Moreover, plaintiffs are not without means

to prove their claims or disprove defendants' claims, since plaintiffs can testify at trial about the

circumstances under which she enrolled and withdrew the Patient from defendants' program,

how plaintiffs' independently discovered that defendants were allegedly tied to Scientology,

and the losses they allegedly incurred. Thus, the severe sanction of striking defendants' answer,

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affirmative defenses, and counterclaims

of

defendants is unwarranted.

However, the record indicates that defendants have failed to

produce any version

of

Clear Body, Clear Mind, or recreate the Red and Green volumes that defendants offered for

sale

to

Narconon International. As to the latter, inasmuch

as

the record indicates, arguably, that

Ross attempted

to

sell to Narconon International its Red and Green volumes and Narconon

International is allegedly related to Scientology, such volumes are precluded by use

by

defendants at trial. Ross's January 14, 2014letter

to

Narconon International indicates that the

Red and Green volumes (which are in excellent condition' are for sale. Please forward your

offer of a reasonable fair market value for each set for consideration. Thank you for your

assistance in this regard. While defendants infer from the deposition testimonies and

submissions that such volumes were most likely hard cover materials, and thus, not used by

patients, even accepting such contentions as true, defendants failed to establish that such volumes

bore no relationship to Narconon International's teachings, the teachings of Scientology, or that

the information therein was not made available to patients or used

as

part

of

the defendants'

treatment program. Indeed, the offer for sale to Narconon supports plaintiffs' contentions

to

the

contrary. As such, the failure of defendants

to

recreate Clear Body, Clear Mind and the Red

and Green volumes, warrants an adverse inference at trial as to these specific materials.

3

Further, in light

of

the numerous attempts plaintiffs made

to

obtain discovery from

defendants, defendants shall be precluded at trial from offering any proof favorable to them

which was not previously exchanged as of the date of this decision on the following issues: (a)

materials provided to patients were based upon the teachings of

L


of

Scientology; (b) defendants have ties to the Church

of

Scientology; and (c) defendants'

website disclosed the fact that Narconon's treatments were based on teachings.

And, in light of the significant document production and sanctions issued herein,

plaintiffs' additional request for expenses, attorneys' fees, and sanctions is unwarranted.

onclusion

Based on the foregoing, it is hereby

ORDERED that plaintiffs' motion (sequence 004) is granted solely

to

extent that an

adverse inference shall be issued at trial as to defendants' failure to produce and/or recreate the

books, Clear Body, Clear Mind and the Red and Green volumes and defendants shall be

precluded at trial from offering any proof favorable to them which was not previously exchanged

3

However, as to the purported letter to which Mrs. Ross allegedly testified to (pages 275-276 as cited by

plaintiffs), such deposition testimony fails to establish that the letter exists. Further, as to any letter from an

inspector at Narconon International to which Ross testified (pages 267-269), defendants are precluded at trial from

utilizing any such letter. According to Ross's deposition, an inspector at Narconon wrote a letter criticizing

defendants,

in

sum and substance, that defendants were not part

of

the Scientology group.

And, inasmuch as the final exam, consisted of questions taken and reproduced from each ofth books,

and that such books were provided, sanctions are unwarranted as to defendants' failure to recreate such final exam.

The deposition testimony of Chris Ross es tablishes that question from each book were typed up and constituted the

final exam.

Finally, plaintiffs' request for sanctions based on defendants' alleged failure to recreate marked-up

versions of documents of which plaintiffs received newly purchased copies, appears unwarranted, under the

circumstances, as the Court did not require any recreation of m arkings made by defendants.

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so he d te o his decision on the following issues: (a) materials provided to patients were

based upon the teachings o L. Ron Hubbard and the Church o Scientology; (b) defendants have

ties to the Church o Scientology; and (c) defendants website disclosed the fact that Narconon s

treatments were based on these teachings; and it is further

ORDERED that plaintiffs motion (sequence 005) for expenses incurred and attorneys .

fees and for sanctions against defendants for their frivolous conduct is denied; and it is further

ORDERED that plaintiffs shall serve a copy o this order with notice o entry upon all

parties within 20 days o entry.

This constitutes the decision and order

o

the Court.

DATED:

1 CHECK ONE

2 CHECK AS APPROPRIATE :

3 CHECK IF APPROPRIATE

] O NOT POST

HON.

C ROl

R ED MEAD

J.S.C..

J.S.C.

D CASE DISPOSED 1 1 NON FINAL DISPOSITION

MOTION IS: GRANTED D DENIED ~ G R N T E D

IN

PART D OTHER

D SETTLE ORDER

D

SUBMIT ORDER

D FIDUCIARY APPOINTMENT

D

REFERENCE

Gore v. Narconon: Order denying sanctions

Documents

Transcript of Gore v. Narconon: Order denying sanctions