Opinion
Index No. 653355/2021
07-17-2024
Flatiron 30 LLC, Plaintiff, v. The Continuum Company LLC, Defendant.
Eric Streich, P.C., White Plains, NY (Eric Streich of counsel), for plaintiff. Kucker Marino Winiarsky & Bittens, LLP, New York, NY (Andrew D. Cassady, Eric R. McAvey, and Craig P. Gambardella of counsel), for defendant.
Unpublished Opinion
Eric Streich, P.C., White Plains, NY (Eric Streich of counsel), for plaintiff.
Kucker Marino Winiarsky & Bittens, LLP, New York, NY (Andrew D. Cassady, Eric R. McAvey, and Craig P. Gambardella of counsel), for defendant.
Gerald Lebovits, J.
On July 13, 2023, this court granted summary judgment for plaintiff-landlord Flatiron 30 LLC against defendant-tenant Continuum Company LLC. (NYSCEF No.56.) The court awarded plaintiff $1,115,457.23 in unpaid and overdue rent.
Defendant received a Marshal's notice of levy on its assets located at its office on 49 West 23rd Street in Manhattan. (NYSCEF No. 80.) On motion sequence 003, defendant, moving on behalf of nonparties Ian Bruce Eichner (defendant's managing member) and Continuum OE, LLC, seeks to vacate the Marshal's notice or to limit its scope to only that property at the office belonging to defendant. Defendant argues that when plaintiff executes the Marshal's notice at the office, plaintiff will not know which property belongs to defendant and which to other entities or individuals, and therefore might mistakenly take property belonging to Eichner/Continuum OE. Defendant's motion is granted with respect to two items identified in Eichner's affidavit, and otherwise denied.
Defendant also sought an interim stay restraining the Marshal from executing on the notice. (See NYSCEF No. 75 at 2 [proposed order to show cause].) This court granted the interim stay without opposition. (See NYSCEF No. 85 at 2 [signed order to show cause].)
Plaintiff served a subpoena on plaintiff for documents that plaintiff believes will provide information on defendant's assets and finances for purposes of executing the Marshal's notice. On motion sequence 004, defendant moves to quash the subpoena, claiming that the requests are either irrelevant, overly broad, or probative of non-party assets or tax information. The court grants the motion only to the extent of quashing subpoena requests 2, 3, and 6.
DISCUSSION
I. Defendant's Motion to Vacate or Modify the Marshal's Notice (Mot Seq 003)
On motion sequence 003, defendant moves to vacate or modify the Marshal's notice. Plaintiff argues that the motion is invalid because it is brought on behalf of nonparties (Eichner/Continuum OE). But even assuming the motion should be ascribed to those nonparties, this court may properly exercise its discretion to treat the motion as a special proceeding under CPLR 5239 and decide it on the merits. (See Born to Build, LLC v Saleh, 125 A.D.3d 706, 708 [2d Dept 2015] [holding that a non-party may bring a motion as a special proceeding in an action regarding a Marshal's notice to levy and sell property].) This court elects to reach the merits of the motion.
In conjunction with CPLR 5239, CPLR 5240 grants the court the power to "make an order denying, limiting, conditioning, regulating, extending or modifying the use of any enforcement procedure." In Ayyash v Koleilat, the court used its discretion to deny an enforcement procedure that would have caused "great annoyance and expense" to the other party. (115 A.D.3d 495, 495 [1st Dept 2014].) In Davis-Delaney-Arrow, Inc. v Gerson-Ogden, Inc., Supreme Court held that a court's discretionary power can protect "persons from unreasonable annoyance and abuse in enforcing judgments." (104 Misc.2d 7, 8 [Sup Ct, NY County 1980], citing Tweedie Constr. Co. v Stoesser, 65 A.D.2d 657 [3d Dept 1978]; accord Cook v H. R. H. Constr. Corp., 32 A.D.2d 806 [2d Dept 1969].)
Here, the Marshal's notice permits plaintiff to levy only on defendant's property-not on all assets on the premises. Defendant asks the court to regulate the execution of the Marshal's notice to avoid any future potential of unreasonable annoyance and abuse in the levy and sale of property at the office, by ensuring that only defendant's own property is levied on. Distinguishing between the property of defendant and that of nonparties, and ensuring that the Marshal levies only on defendant's property, comes within this court's authority under CPLR 5239 and CPLR 5240.
The burden to show that property is not subject to a Marshal's notice rests on the moving party. (See Matter of Soressi v SWF, L.P., 81 A.D.3d 1143, 1144, [3d Dept 2011].) Eichner submits an affidavit identifying certain items as personally owned by him or Continuum OE, rather than by defendant. (See NYSCEF No. 79 at ¶¶ 18-19.) Plaintiff does not affirmatively contest the ownership of the items identified in the Eichner affidavit. (See NYSCEF No. 87 at ¶ 10.) Nonetheless, the affidavit, standing alone, is insufficient with respect to most of the property at issue, because for those items, it makes only conclusory statements of ownership, without supporting evidence or documentation. (See Born to Build, LLC, 125 A.D.3d at 708; Viggiano v Viggiano, 136 A.D.2d 630, 630 [2d Dept 1988].) The only items for which sufficient supporting evidence has been provided on this motion are two artworks owned by Eichner, identified at ¶ 19 (a) and (e) of the Eichner affidavit. (Compare NYSCEF No. 79 at ¶ 19 [affidavit], with NYSCEF No. 81 [ownership documentation].) Defendant's motion is granted as to those two items, and otherwise denied without prejudice.
II. Defendant's Motion to Quash Plaintiff's Post-Judgment Subpoena (Mot Seq 004)
On motion sequence 004, defendant moves to quash plaintiff's subpoena. Defendant claims that the requests are irrelevant, overly broad, seek tax information, or improperly reveal information about nonparty assets.
CPLR 5223 permits judgment creditors broad discovery into the finances of judgment debtors. Under CPLR 2304 and 3103, a court may impose reasonable conditions when granting or denying a motion to quash or modify a subpoena. The subpoenaing party must sufficiently state the circumstances or reasons for disclosure. (Kapon v Koch, 23 N.Y.3d 32, 34 [2014].) The burden, however, shifts to the non-subpoenaing party when the party moves to quash or modify the subpoena. (Id. at 39.) If the movant satisfies the burden to vacate or modify the subpoena under the circumstances, then the subpoenaing party must demonstrate that the requests are "material and necessary." (Forman v Henkin, 30 N.Y.3d 656, 661 [2018].)
With respect to subpoena requests 1, 5, 7, 8, 9, 10, 11, 12, 13, 15, 16, and 18-47 defendant does not meet the "utter irrelevance" burden required to warrant quashing these requests. (See Gryphon Domestic VI, LLC v GBR Information Services, Inc., 29 A.D.3d 392, 393 [1st Dept 2006].) Defendant states merely that these requests are irrelevant and broad, but provides no other compelling argument. And this court agrees with plaintiff that the information sought in these requests is relevant to enabling plaintiff to determine what assets of defendants are available for plaintiff to levy on to satisfy its judgment.
With respect to requests 4, 14, and 17, defendant argues that the court should quash these requests because they include information about non-parties. (See NYSCEF No. 100 at 6-11.) This argument is unpersuasive. Judgment creditors may request documents from judgment debtors that might contain or reveal information about nonparty property, so long as the documents sought pertain to the judgment debtor's assets. (See Young v Torelli, 135 A.D.2d 813, 815 [2d Dept 1987].) Defendant relies on Deutsche Bank AG v Sebastion Holdings, Inc., 2017 NY Slip Op 30241[U] [Sup Ct, NY County 2017]). But unlike in that case, plaintiff here does not ask numerous non-parties for documents. Plaintiff seeks information about judgment-debtor's assets that might also contain information about nonparty assets. That is quite different. (See Rossini v Republic of Arg., 453 Fed.Appx. 22, 24 [2d Cir. 2011].) The request to quash requests 4, 14, and 17 is denied.
Requests 2 and 3 seek tax information. When a party requests tax returns, the subpoenaing party must demonstrate that the information sought is "indispensable to this litigation and unavailable from other sources" and that no other avenue to obtain this information exists. (Briton v Knotts Hotels Corp., 111 A.D.2d 62, 63 [1st Dept 1985]; accord Haenel v November & November, 172 A.D.2d 182, 183 [1st Dept 1991].) Plaintiff has not, on the current record, met this demanding burden.
Request 6 seeks "[a]ll records and papers of business activities." Even plaintiff concedes that this request "may be considered improper as it might be too general in nature." (NYSCEF No. 99 at 11.) The court has little difficulty concluding that request 6 should be quashed as overly broad and burdensome.
Accordingly, it is
ORDERED that defendant's motion to modify the Marshal's notice (mot seq 003) is granted only with respect to the artworks identified at ¶ 19 (a) and ¶ 19 (e) of the Eichner affidavit appearing at NYSCEF No. 79, and otherwise denied without prejudice; and it is further
ORDERED that the Marshal's notice appearing at NYSCEF No. 80 is modified to exclude expressly the two items of property identified in the preceding paragraph from the scope of the levy; and it is further
ORDERED that defendant's motion to quash plaintiff's subpoena (mot seq 003) is granted only with respect to subpoena items 2, 3, and 6, and otherwise denied; and it is further
ORDERED that plaintiff serve a copy of this order with notice of its entry on defendant by e-filing on NYSCEF; and on nonparties Eichner, Continuum OE, and Marshal Bienstock by certified mail, return receipt requested, directed to their respective last-known addresses; and it is further
ORDERED that the interim stay granted by this court at NYSCEF No. 85 is continued for seven days after service of notice of entry.