Court Conditionally Grants Motion For Contempt For Failure To Respond To Post-Judgment Discovery

On December 21, 2024, Justice Andrea Masley issued a Decision and Order in Picken v. RN Realty, LLC, Index No. 653313/2014, conditionally granting plaintiffs’ motion for contempt. Following a jury trial, plaintiffs were awarded $2,127,840.44 in damages, which defendant failed to satisfy. Plaintiffs then served information subpoenas with restraining notices and subpoenas for depositions, to which defendant failed to respond. Plaintiffs moved for contempt. In ruling, the Court explained:

RN challenges service of the subpoenas. Allison Schwartz was not served properly with the Information Subpoena since CPLR 5224(a)(3) requires certified mail. (See NYSCEF 628, Allison Schwartz Information Subpoena at 20/20.) However, the court rejects RN's opposition to service on Realty and Neal Schwartz since the Information Subpoenas were served on them by certified mail. (NYSCEF 636, Olajide Aff of Service; NYSCEF 638 Patrick Aff of Service.) Although the service was consistent with CPLR 5224(a)(3), because jail time is a possibility here, the court directed plaintiffs to serve the Schwartzs with personal service by December 31, 2024. RN's counsel was directed to provide the Schwartzs' addresses by December 17, 2024, at 5:00 p.m.

The court rejects RN's opposition based on CPLR 5224(a)(3)(iv) and CPLR 2308(b). The use of the word "may" is not compulsory, contrary to RN's assertion. Indeed, RN fails to provide any law to support its flawed interpretation. [footnote omitted].

The court rejects RN's argument that there is no contempt because RN's counsel was not served. The law is otherwise. (See ITT Commercial Fin. Corp. v Bailey, 166 Misc 2d 24, 27 [Sup Ct, Chautauqua County 1995].)

RN is wrong again in its argument that plaintiffs' motion for contempt is premature. (See Goetz Fitzpatrick LLP v OTR Media Grp, Inc., 192 AD3d 474, 474 [1^st Dept 2021 ], Iv dismissed 37 NY3d 1080 [2021].)

As stated on the record on December 16, 2024, plaintiffs' motion for contempt is granted conditionally. Plaintiffs shall submit the transcript to be so ordered. Plaintiffs' request for an award of attorneys' fees incurred in seeking compliance with the Information Subpoenas and for a fine of $250 must await RN's compliance with the deadlines. (Judiciary Law §773.)

At oral argument, RN's counsel advised the court that he may be unavailable to work with his clients to comply with the deadlines. Of course, the court appreciates the professional difficulties when a family member is not well. Counsel also has a professional responsibility to his clients who are before the court on a contempt motion in a 2014 action. (See Rules of Prof Conduct [22 NYCRR 1200.0] rule 1.3 [diligence].) If counsel is not able to represent his clients, then he has a responsibility to get help from an associate or partner or others or withdraw as counsel without prejudicing his client. (6A N.Y. Jur. 2d Attorneys at Law§ 87.)

Accordingly, the Court ordered defendant and the Schwartzs to respond to the subpoenas by a date certain or they would be in contempt of court.

The attorneys at Schlam Stone & Dolan frequently litigate contempt issues. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.