Court Orders Co-owned Businesses Dissolved Because of Dispute of Over Paying for Imaging of Servers

Last month, Judge Andrea Masley issued a decision, Besen v. Doshi, Index No. 652691/2018, 2019 N.Y. Misc. LEXIS 6835 (N.Y. Sup. Ct. Dec. 27, 2019) ruling on the Plaintiff's motion to quash the Defendant's demand for the production of hard copy documents. The Plaintiff also sought to condition the production on Doshi covering 50% of the costs of production. The parties were co-owners of multiple business. Besen's complaint brought claims for conversion and breach of fiduciary duty and also sought the judicial dissolution of some of the businesses. Doshi also filed a petition seeking the dissolution of a different business the parties co-owned.

The Court granted Besen's motion to extent that he was not required to produce documents in hard copy. "The days of producing paper copies are over." Id. at *11. Collecting, processing, and storing the 5 TB of data on the business's servers is estimated to cost as much as $100,000 and take 12 months. Besen estimates that imaging the servers would cost $1500 and setting up a portal would cost $6000. Judge Masley rejected the portal option and ordered that the servers be imaged and produced to Doshi within 10 days, with Besen's business covering the cost. Besen cannot restrict Doshi's access to only ESI that Besen found to be discoverable.

The Court admonished the parties for their inability to cooperate on discovery and decided it proved they were harming their businesses. "Despite this court's clear order on the record, the parties did nothing to move this matter along since October 11, 2019 until the night before a conference on December 18, 2019. The bickering over who shall pay the $1,500 cost to image the server evidences the dissention, deadlock and division. Their inability to cooperate to the detriment of their co-owned companies yields one conclusion: dissolve all of the joint businesses, now." Id. at *12.