Opinion
Index No. 604712/2015
09-23-2022
Mil-Spec Industries Corp., Plaintiff, v. Expansion Industries, LLC, and RICHARD A. SMISSEN, Individually, JOHN DOES 1-X (SUCH PERSONS BEING PRESENTLY UNKNOWN) and CSC LEASING CO., Defendants.
Daruis A. Marzec, Esq., of the Marzec Law Firm, P.C. for Plaintiff. Josh Ketover, Esq., of Ketover & Associates, LLC for Defendant.
Unpublished Opinion
Daruis A. Marzec, Esq., of the Marzec Law Firm, P.C. for Plaintiff.
Josh Ketover, Esq., of Ketover & Associates, LLC for Defendant.
Conrad D. Singer, J.
The following papers have been read on this motion:
Plaintiff's Notice of Motion to Quash and Supporting Papers [Seq. 011] 1
Plaintiff's Notice of Motion to Extend Time and Supporting Papers [Seq. 012] 2
Defendants' Notice of Cross-Motion and Supporting Papers [Seq. 013] 3
Plaintiff's Reply Affirmation in Opposition to Defendants' Cross-Motion [Seq. 013] and in Further Support of Plaintiff's Motion to Quash [Seq. 011] and Motion to Extend Time [Seq. 012] 4
Defendants' Opposition to Plaintiff's Motion to Extend Time [Seq. 012] 5
The judgment debtor plaintiff, Mil-Spec Industries Corp. ["plaintiff"], moves [Seq. 011] for an Order: 1) pursuant to CPLR § 5240, quashing the Subpoena Duces Tecum dated January 13, 2022, and served by the judgment creditor defendants, Expansion Industries, LLC ["Expansion"], Richard A. Smissen ["Smissen"], and CSC Leasing Co. ["CSC"] [collectively, "Defendants"], on non-party M & T Bank, N.A. ["M & T Subpoena"]; and 2) pursuant to CPLR § 3103, granting the plaintiff a protective order denying production of any documents pursuant to any subpoena to M & T Bank, N.A., concerning or relating to the above-caption action until further order of this Court; and 3) pursuant to CPLR § 3103, denying or limiting any contact or communication with M & T Bank, N.A., or any of its employees, agents, subsidiaries, or other related business entities, concerning or relating to the above-captioned action; and 4) in the alternative, narrowing the scope of the information sought by the M & T Subpoena and limiting the production of plaintiff's private and confidential bank statements and any other documents in the possession and/or control of M & T Bank, N.A., to specific documents to be identified and redacted by the plaintiff; and 5) in the alternative, ordering all documents produced by M & T Bank, N.A., pursuant to the M & T Subpoena, to be produced to plaintiff's counsel only and have plaintiff's counsel respond to defendants' appropriate demands at that time, reserving all appropriate objections and redacting confidential information; and 6) in the alternative, conducting an in-camera review of all documents produced pursuant to the M & T Subpoena; and 7) granting the same relief as set forth in numbers 1 through 6 aforehand, but with respect to a subpoena dated January 13, 2022 and served by the defendants on non-party UPS Store No.1658.
The plaintiff also separately moves [Seq. 012] for an Order: 1) pursuant to CPLR § 2004 and CPLR § 5240, extending its time to respond, lodge objections and/or move to quash defendants' Informational Subpoena dated January 13, 2022; and 2) pursuant to CPLR § 2004 and CPLR § 5240, extending its time to respond, lodge objections and/or move to quash the defendants' Subpoena Duces Tecum dated January 13, 2022; and 3) extending its time to appear for defendants' Subpoena to take Deposition of Judgment Witness pursuant to CPLR § 2004 and CPLR § 5240.
The defendants cross-move [Seq. 013] for an Order: 1) pursuant to CPLR § 5223, compelling the plaintiff to comply with, and respond fully to, the subject post-judgment subpoena duces tecum; and 2) pursuant to CPLR § 5223, directing that non-party M & T Bank comply with, and respond fully to, the subject post-judgment subpoena duces tecum; and 3) pursuant to CPLR § 5223, directing non-party UPS Store, to comply with and respond fully to the subject post-judgment subpoena duces tecum; and 4) pursuant to CPLR § 5223, directing the plaintiff's owner, RON NAANE, to comply with and respond fully to the subject post-judgment subpoena duces tecum; and 5) pursuant to CPLR § 5223, directing the plaintiff's owner, RON NAANE, to comply with and respond fully to the subject post-judgment subpoena ad testificandum. The parties' three motions concern overlapping issues and facts, and have been consolidated and determined in this Decision and Order as hereinafter follows:
Following a bench trial before Hon. Julianne Capetola, JSC [retired], the judgment creditor defendant Expansion obtained a judgment against the plaintiff in the amount of FOUR MILLION TWENTY-NINE THOUSAND EIGHT HUNDRED THIRTY-SIX AND 05/100 [$4,029,836.05] DOLLARS with 9% interest compounded running from October 15, 2019 to date; and the judgment creditor defendant CSC obtained a judgment against the plaintiff in the amount of ONE HUNDRED FORTY-FIVE THOUSAND SEVEN HUNDRED THIRTY-ONE and 82/100 [$145,731.82] DOLLARS with 9% interest compounded running from October 15, 2019 to date. The Second Department affirmed the judgment in a Decision and Order dated January 5, 2022.
On or about January 13, 2022, the judgment creditor defendants cause to be served the following subpoenas upon:
1) Mil-Spec Industries Corp: Subpoena Duces Tecum ["Mil-Spec Subpoena Duces Tecum"] and Informational Subpoena Duces Tecum with Restraining Notice ["Mil-Spec Informational Subpoena Duces Tecum"];
2) M & T Bank: Subpoena Duces Tecum ["M & T Subpoena Duces Tecum"] and Informational Subpoena Duces Tecum with Restraining Notice ["M & T Informational Subpoena Duces Tecum"];
3) UPS Store #1658: Subpoena Duces Tecum ["UPS Subpoena Duces Tecum"] and Informational Subpoena Duces Tecum with Restraining Notice ["UPS Informational Subpoena Duces Tecum"]; and,
4) Ron Naane, President of Mil-Spec Industries Corp: Subpoena to take Deposition of Judgment Witness ["Naane Deposition Subpoena"].
The plaintiff moves to quash the M & T Subpoena Duces Tecum and the UPS Subpoena Duces Tecum. It argues first that the two non-party Subpoenas Duces Tecum are deficient as they fail to include all of the information required in a proper Subpoena Duces Tecum.
CPLR § 5223 authorizes post-judgment disclosure to aid a judgment creditor in determining the extent and location of property that may be applied to its judgment. With respect to the information that must be included in a post-judgment subpoena, CPLR § 5223 provides as follows:
"At any time before a judgment is satisfied or vacated, the judgment creditor may compel disclosure of all matter relevant to the satisfaction of the judgment, by serving upon any person a subpoena, which shall specify all of the parties to the action, the date of the judgment, the court in which it was entered, the amount of the judgment and the amount then due thereon, and shall state that false swearing or failure to comply with the subpoena is punishable as a contempt of court.[CPLR § 5223] [emphasis supplied].
The Court has reviewed the M & T Subpoena Duces Tecum and the UPS Subpoena Duces Tecum and finds that, contrary to the arguments advanced by the plaintiff, they contain the information required pursuant to CPLR § 5223.
The plaintiff also argues that the subject Subpoena Duces Tecum should be quashed because they seek information that is overbroad, impermissible, utterly irrelevant, and immaterial, in that the subpoenas seek to discover personal and confidential information, including personal information concerning the plaintiff's president, Mr. Naane, personal information concerning the plaintiff's personnel, and information related to the government and to national security matters.
They object to demands set forth in the subpoenas for documents such as loan applications, supporting documents, and financial statements and argue that such documents could contain confidential government information and personal identifiers of the plaintiff's president and other personnel. Defendants argue in opposition that the subpoenas are clearly limited to anything relating to the judgment debtor, a corporation, so it defies credibility that any information would be included in any response, assuming there was no comingling or conflation of personal and corporate items and identities.
"A judgment creditor is entitled to discovery from either the judgment debtor or a third party in order to determine whether the judgment debtor concealed any assets or transferred any assets so as to defraud the judgment creditor or improperly prevented the collection of the underlying judgment." (Elavon, Inc. v Meyer, 203 A.D.3d 1030, 1030-1031 [2d Dept 2022]). "A party or nonparty moving to quash a subpoena has the initial burden of establishing either that the requested disclosure is utterly irrelevant to the action or that the futility of the process to uncover anything legitimate is inevitable or obvious". (Elavon, Inc., 203 A.D.3d at 1031) (citations omitted). "Should the movant meet this burden, the subpoenaing party must then establish that the discovery sought is 'material and necessary' to the prosecution or defense of the action". (Elavon, Inc., 203 A.D.3d at 1031).
In this case, the Court finds that the plaintiff has failed to meet its burden to succeed on its motion to quash. The plaintiff asserts that it is no longer an operational company, that it has wound up its business. Accordingly, the Court rejects the plaintiff's assertion that the defendants' request for the company's past loan applications and past financial statements and records would be irrelevant to their efforts to enforce their judgment. Additionally, the plaintiff does not deny that M & T Bank has or may have accounts in the plaintiff's name or on its behalf and also does not deny that UPS Store # 1658 has a box in the plaintiff's name.
Furthermore, the plaintiff has only proffered speculative and bare allegations that the non-parties' responses to the subject subpoenas duces tecum might require the production of documents containing its principal's private and confidential information, and the plaintiff has failed to refute the defendants' argument that the financial documents of the corporate plaintiff should not contain private and confidential information of its principal absent commingling and conflation of entities and identity. Overall, the plaintiff has failed to demonstrate in any way that the information sought through the subject subpoenas duces tecum is "utterly irrelevant" to the defendants' enforcement of their judgments. Nor has the plaintiff established that the "futility of the process to uncover anything legitimate is inevitable or obvious". (Elavon, Inc., 203 A.D.3d at 1031).
Likewise, the Court finds that the plaintiff's conclusory and bare allegations that the "lengthy requests" contained in the subject Subpoenas Duces Tecum would cause "unreasonable annoyance, disadvantage and prejudice", fail to justify quashing the subject subpoenas. To the contrary, the Court finds that the demands contained in the subpoenas are reasonably tailored to require production of documents "in the name of the Judgment Debtor" or for the Judgment Debtor's behalf. The Court further notes that the demands served upon the non-party bank M & T are, as one would expect, lengthier and broader than those served upon the UPS store, and finds that the demands served upon M & T are still tailored to reveal information that is relevant to the judgment creditor defendants' efforts to enforce their judgment.
As the plaintiff has failed to meet its burden on its motion to quash, the plaintiff's Motion to Quash [Seq. 011] is DENIED in its entirety.
The defendants' cross-motion [Seq. 013] to compel the plaintiff and the non-parties to respond to the subpoenas served upon them is GRANTED, to the extent that the plaintiff and non-parties are directed to respond to subpoenas served upon them within thirty (30) days after the defendants have served them with of a copy of this Order together with notice of its entry.
The plaintiff's motion [Seq. 012], seeking an extension of 90 days to respond to the defendants' Informational Subpoena dated January 13, 2022, and to the Subpoena Duces Tecum dated January 13, 2022, and to the Subpoena to Take Deposition of Judgment Witness served on plaintiff's principal Ron Naane, is GRANTED to the extent that the plaintiff shall respond to the subject subpoenas within thirty (30) days after the defendants have served them with a copy of this Order together with notice of its entry, and the motion [Seq. 012] is otherwise DENIED.
Accordingly, it is hereby
ORDERED, that the plaintiff's Motion to Quash [Seq. 011] is DENIED in its entirety; and it is further, ORDERED, that the plaintiff's Motion to Extend [Seq. 012] is GRANTED to the extent that the plaintiff and its principal, Ron Naane, shall respond to the subpoenas served upon them within thirty (30) days after the defendants have served them with a copy of this Order together with notice of its entry, and the plaintiff's Motion to Extend is otherwise DENIED; and it is further, ORDERED, that defendants' Cross-Motion to Compel is GRANTED, and it is further, ORDERED, that the plaintiff and nonparties M & T Bank, UPS Store #1658, and Ron Naane, are directed to respond to the subpoenas previously served upon them within thirty (30) days following the defendants' service of a copy of this Order together with notice of its entry; and it is further, ORDERED, that all other requests for relief not specifically addressed herein are deemed DENIED.
This constitutes the Decision and Order of this Court.