Opinion
No. CV–27666/13.
12-28-2015
Sherwood Allen SALVAN, Plaintiff, v. Bryan LEWIS, Zoe Warrican and Class Iron Enterprises, Inc., Defendants.
David Lu, Esq. represented plaintiff and Leonard W. Stewart, Esq. represented the corporate defendant.
David Lu, Esq. represented plaintiff and Leonard W. Stewart, Esq. represented the corporate defendant.
DAVID B. COHEN, J.
On June 18, 2014, Sherwood Allen Salvan (“plaintiff”) was granted summary judgment against Class Iron Enterprises, Inc. (“defendant”) in the amount of $20,570.00 plus interest. After a bench trial, judgment was awarded to the defendants Bryan Lewis and Zoe Warrican and the case was dismissed against them personally. On December 30, 2014, plaintiff served on JP Morgan Chase, a non-party, a Judicial Subpoena and subpoena duces tecum seeking various documents and records relating to defendant and its transactions. JP Morgan Chase did not challenge the subpoena and complied with the requests by sending responses to plaintiff. After receiving the responses from JP Morgan Chase, plaintiff served an amended Notice of Deposition on Bryan Lewis to provide further information based upon the responses received from JP Morgan Chase.
The June 18, 2014 order also gave partial Summary Judgment to plaintiff against defendant Lewis, however, pursuant to the decision after trial, the parties had resolved that claim completely.
On May 21, 2015, defendant moved to have plaintiff's subpoena to JP Morgan Chase declared and void pursuant to the CPLR, and pursuant to CPLR 3013(a) and (c), to suppress the “improperly obtained” information and limit the scope of the Bryan Lewis' deposition. Defendant contends that the subpoena was invalid because plaintiff failed to serve it upon defendant and that the “Judicial” Subpoena was invalid pursuant to Judiciary Law 753(A)(5) because it was not signed by the Court.
By stipulation dated August 6, 2015, defendant withdrew the portion of his motion relating to lack of certification pursuant to CPLR 5224(a)(3)(i, ii).
On June 18, 2015, plaintiff cross-moved to compel defendant to produce the documents sought in the amended Notice of Deposition, including documents related to transactions between defendant and the work it performed for 44 EEA, LLC; directing defendant to produce its officer Bryan Lewis for deposition; directing Bryan Lewis and Zoe Warrican to return funds removed from defendant for non-business payments from the date of the commencement of this action; and to sanction defendant for filing a frivolous motion.
CPLR 5223 provides broad authority to a judgment debtor seeking disclosure of information about a judgment creditor's assets. It allows a judgment debtor to serve a subpoena on any person seeking “all relevant information” (id.; see U.S. Bank Nat. Ass'n v. APP Intern. Fin. Co., 100 AD3d 179, 183 [1st Dept 2012] [“all matter relevant to the satisfaction of the judgment is discoverable and the public policy is to put no obstacle in the path of those seeking to enforce a judgment”]; see also Richard C. Reilly, Practice Commentaries McKinney's CPLR § 5223 stating “[I]t permits such disclosure to be sought from any person who may be in a position to reflect on the judgment debtor's property, including the judgment debtor and his family and friends. Any third person may also be compelled to make disclosure.” Id. ). CPLR 5224 permits this broad disclosure by three methods (1) deposition; (2) subpoena duces tecum; and (3) an information subpoena. Generally, under New York law, judgment creditors are entitled to broad disclosure in aid of judgment enforcement (ICD Group, Inc. v. Israel Foreign Trade Co. (USA) Inc., 224 A.D.2d 293 [1st Dept 1996] ).
Defendant's motion for a protective order based upon plaintiff's alleged wrongdoings in obtaining information is denied. Defendant's use of a subpoena duces tecum to obtain information pursuant to CPLR 5224 is clearly permitted. Similarly, leave of Court to issue the subpoena was also not required (CPLR 2302(a) ).
Defendant's motion (after the August 6, 2015 stipulation) also argues that since plaintiff failed to provide notice of the third-party subpoena to defendant, the subpoena should be deemed and void and plaintiff should be prevented from using the information received from the third-party. Article 52 enforcement proceedings are supplementary proceedings (Commonwealth of N. Mariana Is. v. Can. Imperial Bank of Commerce, 21 NY3d 55 [2013] ; CPLR 5221(a)(3), see also Richard C. Reilly, Practice Commentaries McKinney's CPLR § 5223and Siegel, N.Y. Prac. § 493, 509 (5th ed.) ). Unlike pre-trial disclosure or disclosure in a pending civil judicial proceeding, which specifically requires that a third-party subpoena be served on all parties, disclosure in a supplementary proceeding under CPLR 5223 or 5224 has no such requirement (compare CPLR 5223 and 5224 with CPLR 2303(a) and 3120(3) ; Encalada v. Cps1 Realty LP, 2014 WL 2623602 [NY Sup 2014] ). It has also been held that a judgment debtor has no right to intervene in post-judgment discovery and may be prohibited from attending post-judgment deposition of a third party (ITT Commercial Fin. Corp. v. Bailey, 166 Misc.2d 24 [Sup Ct Chat Cty 1995]. Because a subpoena served on a third party in an enforcement supplementary proceeding pursuant to Article 52 of the CPLR does not have to be served on the judgment debtor, defendant's motion is denied.
Plaintiff's cross-motion to compel defendant to produce the documents sought in the amended Notice of Deposition, including documents related to transactions between defendant and the work it performed for 44 EEA, LLC, and directing defendant to produce its officer Bryan Lewis for a deposition is granted in its entirety. Plaintiff's motion directing Bryan Lewis and Zoe Warrican to return funds removed from defendant for non-business payments from the date of the commencement of this action is denied without prejudice for plaintiff to bring a separate cause of action for rescission (see Talbot Typographics, Inc. v. Tenba, Inc., 147 Misc.2d 922 [Civ Ct 1990] citing Hearn 45 St. Corp. v. Jano, 238 N.Y. 139 [1940] ). Plaintiff's motion for sanctions is denied.
It is hereby
ORDERED, that defendant's motion is denied in all respects; it is further
ORDERED, that defendant shall produce the documents sought in the amended Notice of Deposition, including documents related to transactions between defendant and the work it performed for 44 EEA, LLC; it is further
ORDERED, defendant shall produce its officer Bryan Lewis for a deposition; and it is further
ORDERED, that plaintiff's motion for an Order directing that Bryan Lewis and Zoe Warrican return certain funds is denied without prejudice.
This constitutes the decision and order of the Court.