Sentry Insurance a Mutual Company v. Brand Management Inc.

Filing 195

ORDER ADOPTING REPORT AND RECOMMENDATIONS. Ordered by Judge Eric N. Vitaliano on 10/12/2013. (Siegfried, Evan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

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SENTRY INSURANCE A MUTUAL
COMPANY,

Plaintiff,

MEMORANDUM & ORDER

-against-

10-cv-347 (ENV) (RLM)

BRAND MANAGEMENT, INC., BUDGET
SERVICES, INC., and HERSHEL WEBER,

11-cv-3966 (ENV) (RLM)

Defendants.

--------------------------------------------------------------x
VITALIANO, D.J.,
For more than a year, plaintiff Sentry Insurance A Mutual Company
("Sentry") has sought discovery of defendants Brand Management, Inc. ("Brand"),
also known as Budget Services, Inc. ("Budget"), and of its principal, Hershel Weber.
Contention, frustration, obfuscation, and failure of accommodation have been the
hallmarks of defendants' response.
The overall litigation history is equally tortured, if not more so. In two nowconsolidated actions, Sentry asserts, inter alia, a breach of contract claim against
defendants, regarding a pair of workers' compensation policies issued by Sentry in
2008. (Com pl. at, 5, Dkt. No. 1). 1 In the first-filed action, against Brand, the parties
not only completed discovery, but went to trial, which began on July 20, 2011. (Dkt.

1

Unless otherwise specified, citations to docket entries refer to the primary docket
number in this case, 10-cv-347. A second case, with a second complaint, bearing
docket number 11-cv-3966, was filed and consolidated into this one; a related
bankruptcy proceeding, also in this district, bore docket number 11-bk-46230.

1

No. 49). On the first day of trial, however, interrupting the testimony of Sentry's
second witness, Brand announced that it had that day sought bankruptcy
protection, resulting in an automatic stay of the case and a mistrial. (Dkt. No. 51).
An omen of things to come, the Bankruptcy Court subsequently dismissed Brand's
bankruptcy case as a filing "bordering on bad faith." (11-bk-46230, Dkt. No. 49). At
or around the same time, Sentry commenced the second action against Budget and
Weber, as the alter egos of Budget, Brand, and other entities. (Compl.

at~~

44-55,

11-cv-3966, Dkt. No. 1). This Court consolidated the cases, and discovery
recommenced. The pretrial management disputes have come at a staccato pace.
They have led to no fewer than four motions for sanctions and a plethora of
memoranda and orders by Magistrate Judge Roanne L. Mann, either threatening or
imposing sanctions. At the fulcrum of them all lies Sentry's alter ego claim against
Weber.
On February 7, 2013, Judge Mann issued a Report and Recommendation
("R&R") that the Court preclude defendants from opposing Sentry's alter ego
claim, either at summary judgment or trial, or in the alternative that the Court
strike their answers and enter default judgment against them. On March 11, 2013,
defendants filed timely objections to the R&R. No other objections have been filed.
Standard of Review
In reviewing an R&R of a magistrate judge, a district judge "may accept,
reject, or modify, in whole or in part, the findings or recommendations made by the
magistrate judge." 28 U.S. C. § 636(b)(l). Where no objection has been taken, the
district court need only satisfy itself that the R&R on its face and on the record is

2

free from any clear error. Urena v. New York, 160 F. Supp. 2d 606, 609-10 (S.D.N.Y.
2001) (quoting Nelson v. Smith, 618 F. Supp. 1186, 1189 (S.D.N.Y. 1985)). A district
court is required, however, as in the instant matter, to "make a de novo
determination upon the record, or after additional evidence, of any portion of the
magistrate judge's disposition to which specific written objection has been made" by
any party. Fed. R. Civ. P. 72(b).
Procedural Historv
On February 1, 2012, defendants were ordered to supply a host of documents
relevant to Sentry's alter ego claim against Weber ("First Order"). (Mem. & Order,
Mann, M.J., 11-cv-3966, Dkt. No. 37). Among the documents defendants were
ordered to seek and produce were those related to non-party entities that were
covered by workers' compensation insurance through their association with Weber
(the "Insured Weber Entities"), documents related to any contracts between Brand
and Budget, and an affidavit from Weber essentially attesting to defendants'
compliance with the document demand (/d.). Sentry moved for sanctions and an
order compelling Weber's compliance on March 30, 2012, after defendants had
failed to comply with Judge Mann's First Order. (Pl. Mot., Dkt. No. 71). Sentry
proffered that it had provided defendants with sufficient opportunity to cure
deficient production, and that their counsel had "advised that there were no
additional documents to produce"; counsel further assured Sentry that Weber
would affirm in a forthcoming affidavit that no additional documents existed. (/d. at
2).

Nearly five months later, Judge Mann, in a Memorandum and Order dated

3

August 10, 2012 ("Second Order"), found that defendants had provided only
"minimal production," which was "woefully inadequate", and that Weber had still
provided no affidavit concerning his compliance with the First Order. (Mem. &
Order, Mann, M.J. 9-10, Dkt. No. 137; R&R 3, Dkt. No. 179). Finding that
defendants had "willfully violated" the First Order, Judge Mann ordered that
defendants fully comply with the First Order and submit the still-outstanding
affidavit from Weber, "[o]n pain of sanctions". (Mem. & Order, Mann, M.J. 10,
Dkt. No. 137). 2 Defendants were directed to comply with the Second Order by
August 22, 2012, a date which would come and go without production compliance
but not without controversy. According to a stream of letters filed by counsel,
defendants made available "a partial production" on the August compliance date
but refused to permit their copying or retrieval by Sentry's agents because Sentry
arrived later than expected, and because of an apparent misunderstanding about
confidentiality stipulations. See, e.g., (R&R 4, Dkt. No. 179; Letters, Dkt. Nos. 14244). Actually, on this dust-up, defendants provide two versions of reality. In the
first, they say that their restricted production of August 22, 2012 was both full and
ready for processing at the time set. In the second, their counsel, two weeks later,
requested an extension of time to complete the production-already months
2

In the Second Order, Judge Mann also awarded attorney's fees and costs to plaintiff in
connection with its pursuit of a remedy for defendants' noncompliance with the First
Order. (Mem. & Order, Mann, M.J. 11, Dkt. No. 137). The parties were requested to
confer regarding a reasonable award of fees, but to no avail; Judge Mann subsequently
granted Sentry's motion for fees in the amount of $6570. (Mem. & Order, Mann, M.J., Dkt.
No. 179). Judge Mann's sanctions order for that episode is the subject of a separate
objection by defendants, which is overruled in a separate Memorandum & Order of the
Court dated today.

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overdue. (Letter, Dkt. No. 151). Apparently, the second version of reality was more
accurate, since on September 5, 2012, defendants finally produced an affidavit by
Weber addressing discovery compliance. Compellingly, it was backdated to August
22, 2012, and contained a series of errors, contradictions, and artfully-worded
obfuscations. In any event, it failed to comply with Judge Mann's Second Order. See
(Pl. Mot, Dkt. No. 153; Def. Resp. 10, Dkt. No. 158 (admitting "clear error" on the
face of the affidavit)). Judge Mann, in a display of remarkable patience and
restraint, especially in light of the outright initial misrepresentation by defense
counsel that defendants' had complied with the Second Order, then issued another
order denying the defense motion for an extension of time, chastising defendants for
a failure to act in good faith, and insisting that production be completed
immediately-with all directives, again, "on pain of sanctions" ("Third Order").
(Mem. & Order, Mann, M.J. 3-4, Dkt. No. 152).
By October 18, 2012, the situation had not improved, and Sentry filed a new
motion to compel discovery and for sanctions. (Pl. Mot., Dkt. No. 153). Sentry
continued to seek documents requested in connection with its alter ego theory, and
charged that Weber, by his unmodified September 5, 2012 affidavit, had
"persist[ed) in his failure to make the required attestation[s]" and had "attempt[ed)
to improperly limit the universe of documents that the Court [had] ordered the
Budget Defendants to produce." (/d. at 3). In response to Sentry's motion,
defendants continued to stand by the claimed adequacy of the Weber affidavit,
noting it was "a very detailed affidavit of fourteen (14) pages." (Def. Resp. 4, Dkt.
No. 158). Flat out, defendants represented that "[c)learly, Weber and Budget have

5

provided to Sentry all of the documents in their possession, custody and control
responsive to the document demands and the prior Orders of this Court." (/d. at
10).
In what had become commonplace, further consideration made manifest the
persistent disconnect between defendants' representations and reality. As a result,
on December 19, 2012, Judge Mann issued still another Order ("Fourth Order"),
noting the existence ofyet-unproduced documents, detailing once more the ways in
which the Weber affidavit had failed to comply with her previous orders, and
ordering that a supplemental Weber affidavit be filed no later than December 27,
2012 to cure the noted deficiencies. (Mem. & Order, Mann, M.J. 10, Dkt. No. 160).
Succinctly, Judge Mann wanted Weber's averments to inform her deferred
determination of whether-and to what extent-further sanctions would be
merited. As Judge Mann observed,
Since most of the delayed and/or outstanding discovery relates to the
Insured Weber Entities, and, thus, Sentry's alter ego claim, this Court
would be justified in entering an order precluding defendants from
offering evidence opposing Sentry's alter ego claim. The Court will
defer imposing such a preclusion sanction until the submission of
Weber's supplemental affidavit. If the supplemental affidavit is
unsatisfactory or untimely, the Court will revisit the issue of a
preclusion order sanction. Discovery ended more than six months ago;
the Court will tolerate no further delays.
(/d. at 14-15 (internal citations omitted)).

Months after representing to all who would listen that production was
complete, on December 26, 2012, defendants provided Sentry with a partial
production of as-yet-undisclosed documents relating to one of many Insured Weber
Entities. See (Pl. Mot. 2, Dkt. No. 166). More productions were to come, continuing
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through at least January 8, 2013, at which point more than 100,000 additional pages
had been provided to Sentry. More incredibly, despite the vastness of the miracle
production, certain payroll documents called for by the Fourth Order remained
unproduced. (/d. at 2). Whatever the value of the produced documents, the late
summer discovery representations in affidavits and statements of defendants and
their counsel had proved worthless.
On January 2, 2013, defendants produced a supplemental Weber affidavit,
backdated to December 27, 2012, which defendants did not file with the Court. (/d.).
The supplemental Weber affidavit, depressingly, was replete with inconsistencies,
repeated misrepresentations, and dissembling. For instance, it did not attest to
whether any current or past contract exists or existed between Budget and Brand,
altogether ignoring the requirements and reminders of the Second, Third, and
Fourth Orders. See (Mem. & Order, Mann, M.J., Dkt. No. 137; Mem. & Order,
Mann, M.J., Dkt. No. 152; PI. Mot., Dkt. No. 166-1). The original and supplemental
Weber affidavits were also apparently contradicted by a subsequent document
production. That production established that at least one Insured Weber Entity
maintained bank accounts, in spite of Weber's affirmations that bank accounts were
never maintained by Insured Weber Entities. See (Pl. Mot. 3, Dkt. No. 166). Seizing
on these and other acts or omissions frustrating discovery and defying compliance
orders, Sentry pressed anew for sanctions. (/d. at 3-7). Defendants failed to timely
oppose Sentry's motion but did-following Sentry's accusations-produce more
than 200 boxes of additional documents apparently relating to bank statements
which Weber had sworn did not exist. See (R&R 12-13, Dkt No. 179).

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The last fleck of straw had landed on the camel's back. On February 7, 2013,
Judge Mann filed the subject R&R, concluding that an order of preclusion be
entered against defendants as a sanction for their willful and bad faith
noncompliance with discovery demands and pretrial management orders.
Discussion
Judge Mann's R&R addresses two separate issues: first, the appropriate
sanction to be imposed for defendants' failure to comply with the Second Order,
which had been deferred by the Fourth Order; and, second, whether, separately,
additional sanctions were merited for defendants' failure to comply with the Third
and/or Fourth Orders. The first is discussed here. 3
A. The Breadth of Available Sanctions
Under Rule 37(b)(2) of the Federal Rules of Civil Procedure, courts enjoy
broad discretion to sanction parties that fail to obey discovery orders; this discretion
includes, but is not limited to, the power to issue an order "prohibiting the
disobedient party from supporting or opposing designated claims or defenses." Fed.

3

As to the second question, a different standard applies and, on these facts, short-form
adjudication is all that is required. The issue arises out of Judge Mann's directive that
defendants pay sanctions of attorney's fees and costs to Sentry for violating the Third and
Fourth Orders. That determination being entirely within Judge Mann's discretion to make,
and finding no abuse of discretion or clear error, this Court adopts Judge Mann's R&R as
the opinion of the Court insofar as it levies sanctions for violations of the Third and Fourth
Orders. See 28 U.S.C. § 636(b)(l); Commodity Futures Trading Comm'n v. Standard Forex,
Inc., 882 F. Supp. 40, 42 (E.D.N.Y. 1995) ("magistrates are afforded broad discretion in
resolving discovery disputes, and reversal is appropriate only if that discretion is abused.").
The parties have since reached an agreement-astonishingly-with respect to the fee
award. In line with these findings, of course, defendants' objection to this recommendation
is overruled.

8

R. Civ. P. 37(b)(2)(A)(ii); Daval Steel Products v. M/V Fakredine, 951 F.2d 1357, 1366

(2d Cir. 1991). A court's discretion should be guided by the principle that "the
severity of the sanction must be commensurate with the non-compliance,"

Shcherbakovskiy v. Da Capo AI Fine, Ltd., 490 F.3d 130, 140 (2d Cir. 2007), such that
sanctions are both "just ... and relate to the particular claim to which the discovery
order was addressed." Daval Steel, 951 F.2d at 1366 (citing Insurance Corp. of

Ireland v. Compagnie des Bauxites, 456 U.S. 694, 707 (1982)). An order of preclusion
"is strong medicine, [but] such orders are necessary on appropriate occasion to
enforce compliance with the discovery rules and maintain a credible deterrent to
potential violators." I d. at 1367 (citing Nat'/ Hockey League v. Metro. Hockey Club,

Inc., 427 U.S. 639, 643 (1976)). Finally, when selecting an appropriate sanction from
among the many options provided by Rule 37, courts have considered: (1) the
willfulness of acts underlying noncompliance; (2) the efficacy of lesser sanctions; (3)
the duration of noncompliance; and (4) whether the noncompliant party was on
notice that it faced possible sanctions. See Agiwal v. Mid Island Mortg. Corp., 555
F.3d 298, 302-03 (2d Cir. 2009). In textbook fashion, Judge Mann has considered all
of these factors in reaching her conclusion.

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B. Defendants' Objections Overruled
Defendants dispute their noncompliance. 4 Mysteriously, for example, as part
of their hopeless defense to the sanction recommended by Judge Mann, they lament
that they were "destined to be faulted" with respect to the Weber affidavits. (Def.
Mem. 20, Dkt. No. 184). Particularly, defendants argue that "Weber was directed to
use very specific language in the Supplemental Affidavit", but was still "faulted for
not having provided the information in a different manner. Weber did exactly as he
was instructed to do and should not be sanctioned for having followed the directive
ofthe Magistrate." (/d. at 21). Defendants, however, mischaracterize both Judge
Mann's requirements for the supplemental Weber affidavit and what was actually
stated in that affidavit under oath.
Indeed, it was this sort of dissembling that led to the order directing Weber to
file a supplemental affidavit in the first place. Specifically, the Second Order
directed that:
Weber must provide an affidavit or affirmation attesting to the fact
that he has produced all responsive documents in his possession,
control or custody. If no contract ever existed between Brand and
Budget, Weber's sworn statement must also include confirmation of
that fact. Failure to comply with this order may result in a finding of
4

This may be explained by their fundamental misconception, benevolently, of what federal
discovery rules required them to do in the first place. In their objection, defendants assert
that their most recent document productions were made only "out of an abundance of
caution and not because they were at all relevant or probative of any of the claims in this
action." (Def. Mem. 22, Dkt. No. 193). The statement belies, at best, defendants'
fundamental misunderstanding of Judge Mann's orders and their responsibilities. More to
the point, if they had a good faith objection to production, which the Court finds they did
not, it was up to them to object and for Judge Mann to rule, and not for defendants to
unilaterally resolve.

10

contempt.
(Mem. & Order, Mann, M.J. 10, Dkt. No. 137). These were instructions for the

original Weber affidavit, which, Judge Mann found, were not followed; it was the
Fourth Order that laid out instructions for the supplemental affidavit. That Order
provided that:
This supplemental affidavit must specifically confirm whether,
following a diligent search, he has produced all responsive documents
in his possession, control or custody. In order to avoid further
obfuscation, the supplemental sworn statement must utilize the exact
phrase "produced all responsive documents in my possession, control
or custody" and must address whether any responsive documents have
been destroyed or misplaced. Moreover, the supplemental affidavit
must identify and correct any and all errors contained in the Weber
Affidavit.
(Mem. & Order, Mann, M.J. 10, Dkt. No. 166). Destiny or not, Weber did not
comply.
Analysis begins with the evasive representations by defendants that, while
some inconsistencies may exist in the affidavits, nonetheless, those inconsistencies
should have been resolved by Sentry through depositions of Weber. (Def. Mem. 19,
Dkt. No. 184). This proposition wholly ignores the fact that, when ordered to make a
sworn response by a federal judge, the responsibility for true and complete
averments falls upon the party doing the swearing. Indeed, this proposition
advances a startling absolution for untruthful assertions in an affidavit: the
availability of other discovery devices to impeach the affiant excuses the affiant for
dissembling. Relatedly, contrary to their own objection, the self-recognized
"weaknesses" in the Weber affidavits establish that the words of Judge Mann's
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orders did not pre-destine Weber's noncompliance. Second, in contravention of the
Second Order, neither the original nor supplemental Weber affidavit affirmed that
no contract ever existed between Brand and Budget. Nor had a copy of any contract
ever been produced, see (PI. Mot., Dkt. No. 166-1), leaving open the question the
affidavit was supposed to close. Lastly, as defendants note, the supplemental Weber
affidavit did (repeatedly) employ the phrase "produced all responsive documents in
my possession, control or custody." The sin, of course, is that these affirmations
proved untrue, when Judge Mann found that later-produced documents were
responsive notwithstanding Weber's averments otherwise. This hollow incantation
of the words of compliance sought by Judge Mann's orders, rather than douse it,
only added fuel for the fire.
Moving to a blunderbuss, defendants argue, generally, that the sanctions
recommended are not supported by the record or legal precedent. They cite a series
of cases where default judgments or preclusion orders were entered as sanctions,
and attempt to distinguish them. As an example, defendants seize on Judge Mann's
quotation of Nieves v. City of New York, 208 F.R.D. 531,536 (S.D.N.Y. 2002),
protesting that Nieves presented a much more vexing discovery dispute than the
instant case. See (Def. Mem. 15-16, Dkt. No. 184). In Nieves, defendants note, that,
unlike themselves, the sanctioned parties made little effort to participate in the case.
Theirs, they say, was not the failure to litigate, but the failure to do so on the
schedule ordered by the magistrate judge. (Id. at 16). It is more misdirection. Judge
Mann simply quoted Nieves for the general principle that "[a)s long as [defendants)
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fail[) to comply with discovery orders, the merits of th[e] case elude determination."
(R&R 14, Dkt. No. 179). Judge Mann's orders and sanctions have never been just
about time and schedules. Time has been a prism illuminating the full color of
defendants' evasion and obstruction of discovery.
Next, defendants urge that, because Judge Mann "failed to consider whether
a lesser sanction was appropriate," the sanctions of preclusion or dismissal cannot
be imposed. See (Def. Mem. 12, Dkt. No. 184). This is wrong both as a matter of law
and of fact. Quite to the contrary, "district courts are not required to exhaust
possible lesser sanctions before imposing dismissal or default if such a sanction is
appropriate on the overall record .... " S. New England Tel. Co. v. Global NAPs,

Inc., 624 F.3d 123, 148 (2d Cir. 2010). But, more to the point, as the record here
makes painful, Judge Mann, in fact, deferred consideration of sanctioning
defendants for their violation of the Second Order for the express purpose of
determining-based on the content of the supplemental Weber affidavit-which
(and whether) sanctions might be appropriate. She went the extra mile, giving
warnings and opportunities to cure. Plus, the proper warning shots were fired
across the bow. Judge Mann noted in her Second Order that defendants risked
sanctions "including, but not limited to monetary sanctions and/or entry of default
judgments against them .... " (Mem. & Order, Mann, M.J. 10, Dkt. No. 137).
Defendants were on early notice of how serious the consequences might be if
plaintiff's discovery complaints were found well-supported. Furthermore, Judge
Mann's R&R also plainly considers whether lesser sanctions would be effective in
13

this instance, and concludes that, because "monetary sanctions were not sufficient to
deter defendants' persistent disregard of this Court's orders," such lesser sanctions
would be of no fair use at this juncture, either. (/d. at 17). It is obvious from the
record, therefore, that Judge Mann considered the full panoply of possible
sanctions-from the least to most severe-and even entertained the idea of not
sanctioning defendants further at all. See (R&R 9, Dkt. No. 179 ("First, the Court
will revisit the issue that was deferred ... to wit, what additional sanction, if any,
should be imposed .... ") (emphasis added)). 5
Defendants also argue that either default or preclusive sanctions require a
showing that Sentry was prejudiced by defendants' conduct, citing UBS Int'l Inc. v.

/tete Brasil Instalacoes Telefonicas Ltd., 09-civ-4286, 2011 WL 1453797 (S.D.N.Y.
2011),. (Def. Mem. 17, Dkt. No. 184). A showing of prejudice is always powerful, but,
as UBS demonstrates, is hardly essential. UBS itself imposed a sanction of
preclusion against noncompliant defendants on a claim related to their failure to
produce documents, even without a showing of prejudice. 6 In that respect, UBS is on

5

Defendants note that Sentry seeks a judgment in excess of $9 million against them and
suggest, therefore, that sanctions bearing on the outcome of this case would be
incommensurate to any offense committed. See (Def. Mem. 14-15, Dkt. No. 193). But, the
question of commensurability is concerned with meeting defendant conduct with an
appropriate penalty, not with the amount in controversy. Parties do not become less
culpable for their behavior because more money is at stake. Even an entry of default
against defendants, were it deemed appropriate in response to defendants' misconduct,
would not summarily deprive defendants of $9 million, as defendants suggest; an inquest
on damages would follow. But, with the less severe sanction the Court adopts, there is an
additional buffer to the award of damages. Damages could only be awarded after it had
been determined that one or more of the defendants had breached a contract with Sentry.
6
It bears noting that defendants, still playing the same dissembling tune on their banjo,

14

all-fours with the determination recommended by Judge Mann. Indeed, UBS does
not foreclose the adoption of the alternative default judgment recommendation; the
Second Circuit has conclusively held that prejudice need not be shown in order to
sustain even that ultimate sanction when supported by the record. SeeS. New

England Tel. Co., 624 F.3d at 148-49 (citing Nat'/ Hockey League, 427 U.S. at 639).
Moreover, even if a showing of prejudice were required to support these sanctions,
this Court is most satisfied, upon de novo review of the record, that Sentry has been
prejudiced, substantively and practically, by defendants' willful conduct,
obstruction, obfuscation, and dissembling.
Finally, defendants accuse Judge Mann of bias and misrepresentation of fact.

E.g. (Def. Mem. 9, Dkt. No. 184 ("the Magistrate issued a Memorandum and Order,
the language of which reflected less than an objective and impartial analysis.")
(internal citations omitted)). By and large, defendants' recitations amount to
quibbling of no real consequence. For example, they assert that "the Magistrate had
no basis whatsoever to assume that I had left at 2:37P.M. when I in fact remained
unti12:50 P.M." (/d.) (also taking issue with Judge Mann's use of the word
"reportedly" when noting that defense counsel was "reportedly . . . about to leave
on vacation")). The Court, in conducting its de novo review of the record, finds no

directly quote large sections of UBS but truncate their excerpt to omit the following,
conclusive sentence: "The appropriate remedy, then, is to preclude the MUSP Defendants
from asserting that the funds in the subject UBS accounts are in any way related to any
advances that the MUSP Defendants may have made on behalf of Itete Brasil." UBS, 2011
WL 1453797 at *4.

15

instance of bias, nor any error in her conclusions. That a party is unhappy with a
judge's findings, after her consideration of the record, and points to the analysis
underlying her findings as evidence of bias, has zero probative value in showing bias
or impropriety.
In sum, the objections interposed by defendants are meritless. The Court
finds ample reason, on de novo review, to accept Judge Mann's findings. In
considering her alternative recommended sanctions-of issue preclusion as opposed
to entry of default judgment-the Court concurs with Judge Mann that, "[s]ince
most of the delayed and/or outstanding discovery relates to the Insured Weber
Entities, and, thus, Sentry's alter ego claim, this Court would be justified in entering
an order precluding defendants from offering evidence opposing Sentry's alter ego
claim." (Mem. & Order, Mann, M.J. 14-15, Dkt. No. 160). The recommended relief
is just, well-tailored to the misconduct of defendants, and supported by the record.
The sanction comes after more than fair warning. It is the relief the Court orders.
Conclusion
Upon de novo review, the Court finds no clear error in Judge Mann's Report
and Recommendation. Very much to the contrary, the Court finds itself in full
agreement with Judge Mann's analysis, reasoning, and with her conclusion that
defendants and their counsel have more-than-earned the recommended sanctions.
Consequently, the Court orders that defendants shall be precluded from offering
evidence opposing Sentry's alter ego claim, for the purposes of both summary
judgment and trial. To the end that Judge Mann's R&R reaches this result, it is

16

•

adopted as the opinion of the Court. Likewise, the monetary sanction, in the amount
agreed upon by the parties, is also affirmed.
SO ORDERED.
Dated:

Brooklyn, New York
October 12, 2013

s/ ENV
United States District Judge

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