US Pony Holdings, LLC v. Fashion Footwear LLC

2024 NY Slip Op 31089(U)

• Court: New York Supreme Court, New York County
• Decided: April 1, 2024
• Status: Unpublished

Opinion

US Pony Holdings, LLC v Fashion Footwear LLC 2024 NY Slip Op 31089(U) April 1, 2024 Supreme Court, New York County Docket Number: Index No. 655022/2022 Judge: Melissa A. Crane Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [FILED: NEW YORK COUNTY CLERK 04/01/2024 04:14 P~ INDEX NO. 655022/2022 NYSCEF DOC. NO. 254 RECEIVED NYSCEF: 04/01/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. MELISSA A. CRANE PART SOM Justice -------------------X INDEX NO. 655022/2022 US PONY HOLDINGS, LLC, MOTION DATE N/A, N/A Plaintiff, MOTION SEQ. NO. 005 006 - V -

FASHION FOOTWEAR LLC, DECISION + ORDER ON MOTION Defendant. ------------------------------------------------------------------------X

FASHION FOOTWEAR LLC Third-Party Index No. 595052/2023 Plaintiff,

-against-

ICON DE HOLDINGS LLC

Defendant. ------------------------------------------X

The following e-filed documents, listed by NYSCEF document number (Motion 005) 189, 190, 191, 192, 193,194,195,196,198,202,203,204,205,206,207,208,209,210,250 VACATE/STRIKE - NOTE OF ISSUE/JURY were read on this motion to/for DEMAND/FROM TRIAL CALENDAR

The following e-filed documents, listed by NYSCEF document number (Motion 006) 181, 182, 183, 184, 185,186,187,188,197,211,212,213,214,215,216,217,218,219,251 were read on this motion to/for DISCOVERY

Defendant/Counterclaim Plaintiff Fashion Footwear LLC ("Fashion") has moved for an

order compelling Plaintiff US Pony Holdings, LLC ("Pony") to produce documents in response to

Requests 4, 13, 14, 17, 18, 21, 22, and 29 of Fashion's First Set of Requests for the Production of

Documents (MS 06). Additionally, because Pony already filed the note of issue on January 18,

2024, certifying that the parties had completed all necessary discovery (Note of Issue, NYSCEF

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Doc. No. 170), Fashion has also moved to vacate that note of issue to allow for the additional

discovery that it seeks in the motion to compel (MS 05).

The court denies Fashion's motion to compel. A party is not entitled to discovery where i the party fails to show that the discovery is material and necessary to the prosecution or defense

of claims in the case (Pacelli v Peter L. Cedeno & Associates, P. C., 192 AD3d 560 [1st Dept 2021]

[holding that plaintiffs were not entitled to information "unrelated to any elements of their

claims"]; Foster v Snow, 221 AD3d 405,406 [1st Dept 2023] [holding that, the court "providently I exercised its discretion in denying defendants' motion to compel" where the defendants "failed to

show that this discovery was relevant and necessary to their defense of plaintiffs' claims"]).

Further, a court will not enforce a discovery demand based on "hypothetical speculation[]

calculated to justify a fishing expedition" (see AQ Asset Management LLC v Levine, 138 AD3d

635,636 [1st Dept 2016] [citation and internal quotation marks omitted]).

Fashion seeks discovery related to Genesco, the licensee that allegedly replaced Fashion

after Pony purportedly terminated its license agreement with Fashion. Fashion asserts that this

discovery is relevant to show that Pony acted in bad faith in purportedly terminating the license

agreement with Fashion. Fashion argues that Pony "intentionally breached the Pony License as a

pretext for ... replacing Fashion with Genesco" (Motion to Compel Opening Papers, NYSCEF

Doc. No. 188, p. 2). Fashion asserts that this showing of bad faith would allow it to avoid an I exculpatory clause in the license agreement that would otherwise bar Fashion's lost profits claim

(id.; see License Agreement, NYSCEF Doc. No. 183, § 18.7). Fashion also asserts that Pony's

alleged bad faith precludes Pony's equitable estoppel defense. The court rejects these theories.

An exculpatory clause such as section 18. 7 is unenforceable when enforcement would

immunize conduct that "smacks of intentional wrongdoing" (Electron Trading, LLC v Morgan

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Stanley & Co. LLC, 157 AD3d 579, 580-581 [1st Dept 2018] [citations and internal quotation

marks omitted]). However, this type of intentional wrongdoing is that which is "umelated to any

legitimate economic self-interest" (id., citing Devash v German Am. Capital Corp., 104 AD3d 71,

77 [1st Dept 2013]). Here, all the evidence suggests that Fashion understood Pony was terminating

the license agreement so that Pony could relaunch the brand (see Email from Morris Abraham of

Fashion to Marcel Apfel of Iconix, NYSCEF Doc. No. 218 [stating that he "underst[ ood] that the

new owners want to take the brand upstairs" and trying to caution Iconix afainst "relaunching the

brand"]). Regardless of whether Pony breached its license agreement with Fashion, Fashion has

failed to provide any support for the claim that such breach was in bad faith to get around the

exculpatory clause or Pony's equitable estoppel defense. Fashion's request for documents relating

to Genesco's performance under the Genesco license appears to rely on the wholly speculative

theory that "if Genesco failed to perform its obligations ... and Pony did not terminate that license

in response, it would tend to prove that Pony favored Genesco" (Motion to Compel Opening

Papers, p. 12 [emphasis added]). Fashion has provided no support for its suggestion that Genesco's

work was at all deficient, and this therefore amounts to an improper fishing expedition.

The court denies Fashion's motion to compel because there is no claim or defense to which

the Genesco discovery would be relevant. Further, because Fashion's only purported basis for

vacating the note of issue is to complete additional discovery related to Genesco, which the court ! has denied, the court also denies the motion to vacate the note of issue. I

The court has considered the parties' remaining contentions and found them unavailing.

Accordingly, it is

ORDERED that Defendant/Counterclaim Plaintiff Fashion Footwear LLC's motion to

vacate the note of issue (MS 05) is denied; and it is further

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ORDERED that Defendant/Counterclaim Plaintiff Fashion Footwear LLC's motion to

compel discovery (MS 06) is denied.

04/01/2024 DATE

n CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION GRANTED [;]DENIED GRANTED IN PART □OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □REFERENCE

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