CPLR 3101(d) Expert Preclusion Requires Willfulness and Prejudice; Erroneous Preclusion Warrants a Damages-Only Retrial

1. Introduction

Kela Tennis, Inc. v City of Mount Vernon (Appellate Division, Second Department, Jan. 14, 2026) arises from a long-term municipal license arrangement for the operation of an indoor/outdoor tennis facility at Memorial Field in Mount Vernon. Under a 2015 license agreement, the City granted Kela Tennis, Inc. an exclusive right to operate the facility through 2029, while the City undertook major construction obligations—most notably, building a clubhouse with specified amenities.

The relationship deteriorated after the City allegedly failed to complete the facility as promised, the parties executed an addendum reducing fees, and the City later asserted Kela was in breach for nonpayment. In 2018, the City revoked the license and entered the site, rapidly deflating the “bubble” structure, allegedly damaging property. Kela sued, including for breach of contract.

The litigation presented multiple high-stakes issues: whether Kela’s nonpayment was excused by the City’s alleged material breach; whether the license was invalid as ultra vires due to an intermunicipal agreement (IMA) with Westchester County; whether the public trust doctrine required State legislative approval; and—critically on appeal—whether the trial court properly precluded the City’s damages expert for allegedly deficient expert disclosure under CPLR 3101(d).

2. Summary of the Opinion

The Second Department reversed the amended judgment and remitted for a new trial limited to damages, while upholding the jury’s liability verdict for Kela.

The court held:

The trial court correctly denied the City’s CPLR 4401 directed-verdict motion because a rational jury could find Kela’s performance was excused by the City’s material breach.
The City’s ultra vires defense lacked merit; the license agreement was executed in accordance with the Mount Vernon City Charter, and the IMA did not strip the City of authority.
State legislative approval was not required; operating a tennis facility in a public park was a “park purpose” even though the license permitted charging certain fees.
The trial court properly precluded the City’s late-disclosed environmental remediation documents.
The trial court erred by precluding the City’s damages expert under CPLR 3101(d) because there was no willfulness and the disclosure was not so inadequate as to cause surprise or prejudice; that error required a damages-only retrial.

3. Analysis

A. Precedents Cited

(i) Directed verdict / judgment as a matter of law (CPLR 4401)

The court applied a familiar, plaintiff-favorable standard when reviewing denial of a directed verdict: whether there is “no rational process” by which the jury could find for the nonmovant, and whether inferences must be drawn in the nonmovant’s favor without weighing credibility.

Delaney v Delaney and Velez v Goldenberg: supplied the “no rational process” formulation and the allocation of burden to the movant.
Gonsalves v 35 W. 54 Realty Corp. and Wehr v Long Is. R.R. Co.: reinforced the deference to the jury’s potential fact-finding where competing inferences exist.
Centennial Contrs. Enters. v East N.Y. Renovation Corp. and Szczerbiak v Pilat: emphasized that courts must view evidence in the light most favorable to the nonmovant.
Bzezi v Eldib and Dolitsky v Bay Isle Oil Co., plus Brownrigg v New York City Hous. Auth.: underscored that directed verdicts are improper where facts are disputed, credibility is implicated, or different inferences may be drawn.

These cases collectively framed why the City could not obtain judgment as a matter of law based solely on Kela’s nonpayment: the jury could rationally find that the City’s breach was “material” and therefore excused Kela’s performance.

(ii) Material breach and excuse of performance

Grace v Nappa: supplied the core contract principle that a material breach can excuse the other party’s performance.
Integrity Real Estate Consultants v Re/Max of N.Y., Inc., PAS Tech. Servs., Inc. v Middle Vil. Healthcare Mgt., LLC, Cobenas v Ginsburg Dev. Cos., LLC, and Poulakis v Town of Orangetown: supported applying the material-breach/excuse doctrine on disputed facts—making the issue properly one for the factfinder.

The Second Department’s use of these authorities confirms that even undisputed nonpayment may not be dispositive if a jury could reasonably find that the nonpayment followed (and was justified by) the counterparty’s prior material failure to perform.

(iii) Municipal authority and ultra vires contracting

The City argued it lacked authority due to the IMA, rendering the license agreement ultra vires and unenforceable. The court rejected this, emphasizing that the agreement was approved through the City’s charter processes and that the IMA did not negate that authority.

Atalaya Asset Income Fund II, LP v HVS Tappan Beach, Inc., Michael R. Gianatasio, PE, P.C. v City of New York, and Clark v County of Nassau: were cited by comparison (cf.) to situate the charter-compliance analysis and illustrate that proper municipal approvals are central to enforceability challenges.
Matter of Municipal Consultants & Publs. v Town of Ramapo and Matter of Diederich v St. Lawrence: were cited generally to reinforce the framework courts apply when assessing municipal power and compliance with governing law.

The practical takeaway from the court’s reliance on these cases is that an ultra vires defense cannot succeed merely by pointing to an intergovernmental agreement’s general limitations; the proponent must show an actual lack of authority in light of the municipality’s enabling laws and the approvals that were, in fact, obtained.

(iv) Public trust doctrine / “park purpose”

The City contended State legislative approval was required because the arrangement involved a for-profit enterprise on public parkland. The court held that the tennis facility remained a “park purpose” notwithstanding fee-based services, and thus legislative approval was not required.

Matter of Avella v City of New York and Union Sq. Park Community Coalition, Inc. v New York City Dept. of Parks & Recreation: informed the “park purpose” analysis under the public trust doctrine, particularly the concept that revenue generation does not automatically transform a use into an alienation inconsistent with park purposes.
Matter of City Club of N.Y., Inc. v Hudson Riv. Park Trust, Inc. and Matter of Committee to Preserve Brighton Beach & Manhattan Beach v Planning Commn. of City of N.Y.: supported the proposition that certain commercial or concession-like elements can coexist with park purposes.

The court thus reaffirmed a functional approach: if the primary use remains recreational/park-oriented, charging fees for services does not, by itself, trigger a legislative-approval requirement.

(v) Trial preclusion for nondisclosure (non-expert materials)

The court affirmed preclusion of the City’s environmental remediation documents because they were not disclosed prior to trial.

Chihuahua v Birchwood Estates, LLC
Mahgoub v 880 Realty, LLC
Mikhailov v Katan

These cases reflect the court’s willingness to enforce disclosure obligations where late production threatens orderly trial preparation—an important counterpoint to the court’s more restrained approach to expert preclusion under CPLR 3101(d), discussed next.

(vi) Expert disclosure and the limits of preclusion (CPLR 3101(d))

The central appellate holding concerned the improper preclusion of the City’s damages expert. The court highlighted: (1) the statutory requirements of CPLR 3101(d)(1)(i), (2) the discretionary nature of sanctions, and (3) the general rule that preclusion is unwarranted absent willfulness and prejudice.

Rivera v Montefiore Med. Ctr. and McGlauflin v Wadhwa: framed expert-preclusion decisions as discretionary, but reviewable for abuse where the sanction is disproportionate to the disclosure lapse.
Katz v Petre Glass & Mirror Corp., Mazzurco v Gordon, and Deandino v New York City Tr. Auth.: reinforced both the discretionary standard and the preference for decisions on the merits where possible.
Cruz v Gustitos and Mazzurco v Gordon: supplied the opinion’s key limiting principle—preclusion is generally improper without a willful/intentional failure and a showing of prejudice.
Casimir v Bar-Zvi and Gagliardotto v Huntington Hosp.: supported the conclusion that a disclosure that is imperfect is not necessarily “so inadequate” as to create surprise.
Burbige v Siben & Ferber and Shopsin v Siben & Siben: illustrated circumstances where expert preclusion was deemed too harsh given the disclosure context.

By tying these cases to the trial court’s express finding of “no willfulness” and the appellate finding of “no surprise or prejudice,” the Second Department positioned the error as a classic disproportionality problem: the sanction (complete exclusion of a damages expert) did not fit the nature of the disclosure defect, particularly in a case where damages were heavily contested and expert testimony would predictably matter.

(vii) Remedy: damages-only retrial

Having found liability properly determined, the court ordered a new trial limited to damages—citing cases recognizing partial retrial as an appropriate corrective where the error affected only one phase of a bifurcated verdict.

Gubitosi v Hyppolite
Nunez v Bardwil
Fafard v Ajamian

B. Legal Reasoning

(i) Liability was supported under a “material breach excuses performance” theory

The City sought a directed verdict based on Kela’s admitted nonpayment after December 2015. The Second Department refused to treat nonpayment as automatically dispositive. The court reasoned that, viewing the evidence favorably to Kela, a jury could rationally conclude that the City committed a material breach (e.g., failing to complete required facilities such as the clubhouse), and that such breach excused Kela’s obligation to continue paying license fees.

(ii) The license agreement was not invalid as ultra vires, and the public trust doctrine did not require legislative approval

The court’s municipal-law analysis proceeded in two steps:

Authority/approvals: The record showed the agreement was executed consistent with the Mount Vernon City Charter, including approval by the City Council and the Board of Estimate and Contract. That institutional compliance undermined the claim that the City lacked capacity to contract.
Park purpose: Even if the IMA dedicated the field to public use, the tennis facility was deemed a park purpose. Charging fees for certain services did not, in the court’s view, transform the project into a non-park alienation requiring State legislative approval.

(iii) Discovery enforcement was calibrated: harsh for late documents, restrained for expert testimony

A notable feature of the decision is its differentiated treatment of disclosure failures:

Environmental consent order documents: the City failed to disclose them prior to trial; the court upheld their preclusion. This signals that late “fact” disclosures that disrupt trial preparation are likely to be sanctioned.
Damages expert: despite an allegedly deficient CPLR 3101(d) disclosure, the trial court found no willfulness; the appellate court found no real surprise/prejudice. Under those conditions, total expert preclusion was deemed an abuse of discretion.

The opinion thus reinforces proportionality in disclosure sanctions: preclusion—especially of expert proof central to damages—requires a concrete justification grounded in willfulness and actual prejudice.

C. Impact

The decision’s most practical precedential value lies in its CPLR 3101(d) holding and its remedial structure:

Expert preclusion is disfavored absent willfulness and prejudice: Trial courts retain discretion, but this case demonstrates the Second Department’s willingness to reverse where preclusion is imposed even after a finding of no willfulness and where the opposing party cannot credibly claim surprise.
Damages-only retrials are a targeted remedy: In bifurcated trials, appellate courts may preserve liability findings while ordering a new damages trial when the error is confined to damages proof—reducing the systemic costs of full retrials.
Public trust doctrine clarity for recreational concessions: The opinion reinforces that recreational park uses can remain “park purposes” even with fee-based operations, limiting arguments that legislative approval is automatically required when a private operator earns revenue from park-adjacent services.
Municipal contracting defenses face a record-based test: Assertions that an agreement is ultra vires will be scrutinized against actual charter compliance and the operative language/effect of intergovernmental agreements.

4. Complex Concepts Simplified

CPLR 4401 (Directed verdict / judgment as a matter of law): A request to take the case from the jury because, even crediting the opponent’s evidence, no reasonable jury could rule for them.
Material breach: A serious contract violation that goes to the heart of the deal; it can excuse the other side from continuing to perform (for example, excusing payment).
Ultra vires: Literally “beyond the powers.” In municipal contracting, it refers to an agreement a municipality had no legal authority to make, potentially rendering it unenforceable.
Public trust doctrine (parkland): The principle that public parkland is held “in trust” for the public and generally cannot be diverted from park purposes without legislative approval. This case treats a tennis facility as a park purpose even if operated by a private entity charging certain fees.
CPLR 3101(d)(1)(i) (Expert disclosure): Requires advance disclosure of the expert’s identity and a reasonable description of what the expert will say and why. The remedy for noncompliance can include preclusion, but this case emphasizes preclusion usually requires willfulness and prejudice.
Bifurcated trial: A trial split into phases—here, liability first, then damages. This structure enabled the appellate court to order a damages-only retrial.

5. Conclusion

Kela Tennis, Inc. v City of Mount Vernon is most significant for its disciplined approach to expert preclusion under CPLR 3101(d): where the trial court finds no willfulness and the disclosure is not so deficient as to cause genuine surprise or prejudice, excluding a damages expert is an abuse of discretion. The Second Department coupled that holding with a pragmatic remedy—preserving the liability verdict while ordering a new trial on damages only—thereby reinforcing both proportional discovery sanctions and efficient appellate correction.