Corcoran Group CEO Pamela Liebman, who was not named in the suit

In what is being called a landmark ruling, a New York State Supreme Court judge determined that the Corcoran Group failed to produce e-mails in a case where the residential giant allegedly sold a flood-prone condominium unit to a couple in Brooklyn.

Judge Charles Ramos, in a 31-page opinion, ruled that the Manhattan-based brokerage was “grossly negligent” for failing to preserve and turn over electronic evidence revealing that Corcoran agents canceled appointments with prospective buyers on rainy days to hide a previously known problem with water leaks.

Corcoran was ordered to pay more than $35,000 in legal fees and court costs accumulated by the plaintiff, while the case continues on to a full trial. Lawyers for the plaintiffs said the ruling creates a new legal precedent for preserving electronic evidence in legal cases.

“This case adopts the basic federal standard of the obligation to preserve electronic evidence into the state court system,” said Jay Itkowitz, attorney for the plaintiffs. “Under federal case law, once you know you’re about to get sued, the obligation to preserve or protect electronic evidence comes into play.” [more]