Opinion
97 Civ. 2008 (LAK)
September 30, 2002
ORDER
Jacob Siegel Company ("Siegel") has moved to quash a subpoena and restraining order served upon it by plaintiff-judgment creditor and for a protective order and sanctions. Plaintiff has cross-moved for Rule 11 sanctions against Siegel. The motions are disposed of as follows:
1. Siegel's motion, insofar as it relates to the subpoena served upon it, is denied in all respects save that so much of the subpoena as incorporates document requests seeking information concerning Siegel's various relationships with "any other Italian Business Entity," as there defined, is quashed. While plaintiff may seek appropriate discovery from a non-party in an effort to enforce its judgment, and while there seems to be substantial reason to believe that the defendants-judgment debtors have engaged in transactions intended to frustrate plaintiff's ability to collect its judgment, the inclusion of the specifications referred to above renders the subpoena unreasonably broad.
2. Siegel's motion is denied in all other respects. There certainly is no basis for quashing the restraining notice insofar as it seeks to restrain payment of debts owed to the judgment debtors. While Siegel claims that it owes no such debts, the Court is in no position to verify that. The appropriate vehicle for such a determination would be a contempt proceeding in the event that plaintiff contends that a particular transfer violated the restraining notice. Nor, for the same reason, is there any occasion now to rule on so much of the restraining notice as purports to restrain payment of debts said to be owed to the alleged alter egos of the judgment debtors. N.Y. CPLR § 5222 bars transfers of property "in which [the restrained party] knows or has reason to believe the judgment debtor . . . has an interest." If Siegel lacks such knowledge, it has nothing to fear. If it has such knowledge, it transfers at its peril, assuming of course that there was a debt owed at the time the notice was served.
3. Plaintiff's cross-motion is denied. There is no basis for Rule 11 sanctions.
SO ORDERED.