Opinion
19790/90.
Decided October 26, 2004.
Plaintiff was represented by Allen M. Rosenthal, Brooklyn, New York, Defendant was pro se.
In July 2004, defendant Pamela Pettyjohn asked this Court to sign an Order to Show Cause to vacate a freeze on her bank accounts, and presented proof that the default judgment on which the freeze was based had been vacated more than four months before. At that time, it seemed possible that the plaintiff's attorney, Alan Rosenthal, had simply made an error, and that Ms. Pettyjohn would soon be able to put this matter behind her. However, two weeks later, and then two months later, Ms. Pettyjohn suffered the inconvenience, financial disruption and embarrassment of having her accounts frozen yet again, based solely and improperly on a judgment that had been vacated in an action that had been dismissed. On these consolidated motions, the Court is confronted with the problem of formulating an appropriate remedy for Ms. Pettyjohn and an appropriate sanction against those responsible.
For the reasons set forth below, the Court issues a conditional order of civil contempt and sanctions against attorney Rosenthal, and assesses against him a fine of $2,451.61, and sanctions in the amount of $2,000.00, pursuant to the terms set out below.
FINDINGS OF FACT
Based on the testimony adduced and the exhibits admitted at the contempt hearing, the Court makes the following findings of fact.
Because neither party ordered a transcript of the hearings in this matter, the Court is basing its findings on the Court's own notes and memory, as well as the exhibits.
In or about 1990, Mr. Rosenthal commenced this action against defendant, Pamela Pettyjohn, allegedly to collect a consumer debt. Because Ms. Pettyjohn did not receive any notice of the lawsuit, she did not appear and answer. On or about March 13, 1990, Mr. Rosenthal obtained a judgment on default against Ms. Pettyjohn in the amount of $3,629.05 ("the Judgment"). During the next 13 years, plaintiff took no action to enforce the judgment.
On December 1, 2003 and again on December 16, 2003, Mr. Rosenthal signed an Information Subpoena with Restraining Notice ("the Dec. 1 Restraining Notice" and "Dec. 16 Restraining Notice" respectively, or collectively, "the Restraining Notices") addressed to various banks. Each Restraining Notice directed the addressee bank to hold any funds belonging to Ms. Pettyjohn on account of a judgment against her in the amount of $3,620.05, on which interest had accumulated so that the amount sought was over $8,000.00. Mr. Rosenthal caused his office to send the Restraining Notices to several banks, including at least GreenPoint and HSBC. In addition, sometime in 2003, Mr. Rosenthal engaged the services of Marshal Ronald Moses to collect on the Judgment.
In January 2004, Ms. Pettyjohn received a notice from her employer that her wages would be garnished as a result of a garnishment order from Marshal Moses. That was the first notice Ms. Pettyjohn received that plaintiff had commenced this lawsuit against her. She promptly brought on an Order to Show Cause to vacate the Judgment and to obtain ancillary relief. On February 2, she personally served the Order to Show Cause on Mr. Rosenthal's office, and Jennifer Banton, Mr. Rosenthal's bookkeeper, acknowledged service on the back of Ms. Pettyjohn's copy of the Order to Show Cause. The next day, Ms. Pettyjohn served the Order to Show Cause on Marshal Moses by mail.
On February 17, 2004, the return date of defendant's motion, no one appeared in court for plaintiff. Judge Sarah Krauss granted Ms. Pettyjohn's motion on default and entered an order vacating the Judgment and all post-judgment enforcement ("the Order"), provided that Ms. Pettyjohn serve and file an Answer and a copy of the Order on plaintiff, and file proof of service of the Answer and the Order within twenty days. Ms. Pettyjohn mailed her Answer and the Order to Mr. Rosenthal and to Marshal Moses and filed them, together with the proof of service, the very same day. I find that Mr. Rosenthal's office and Marshal Moses received the Order and Ms. Pettyjohn's Answer. In the Answer, she asserted that she did not owe anything to plaintiff and that she had not been served.
In late March, Ms. Pettyjohn received a postcard from the Court advising her that her case would appear on the Part 11 calendar on May 3, 2004 at 9:30 am. The Court takes judicial notice that it is the practice of the Clerk's office to send out such postcards to both parties to an action, and that the Court had Mr. Rosenthal's address on file. Accordingly, I find that the Clerk's office mailed an identical postcard to Mr. Rosenthal and that he received it. On May 3, Ms. Pettyjohn appeared in Part 11, but no one appeared for plaintiff. The judge presiding in Part 11 advised Ms. Pettyjohn that the case was dismissed, and the Court takes judicial notice that it was in fact dismissed.
On or about June 11, 2004, plaintiff received a notice from GreenPoint Bank that it had recently received an Information Subpoena with Restraining Notice which required it to hold up to twice the amount of the judgment debt from her account funds. It also advised her that she would be charged a "legal process fee." Attached to the notice was the December 16 Restraining Notice stating that the Judgment amount, including interest, was $8,172.08. I find that Mr. Rosenthal caused the Dec. 16 Restraining Notice to be served on GreenPoint in early June, 2004.
On June 16, 2004, Mr. Rosenthal signed an Execution with Notice to Garnishee, addressed to GreenPoint Bank, directing it to execute on Ms. Pettyjohn's assets to satisfy a judgment of $3,629.05. Mr. Rosenthal caused the Execution to be delivered to Marshal Moses, who, in turn, sent it, together with a "Levy and Final Demand," to GreenPoint. The Levy stated that the amount of the Judgment against Ms. Pettyjohn, including interest, was $8,747.50, and directed the Bank to turn over to Marshal Moses funds belonging to Ms. Pettyjohn in that amount.
On June 21, defendant consulted an attorney concerning the letter and Restraining Notice that she had received from GreenPoint. She then went to Mr. Rosenthal's office and spoke with his employee, Mr. King. She showed Mr. King both the Order and the letter from GreenPoint. Mr. King gave her a letter to take to GreenPoint to obtain the release of her funds. The letter was signed by Jennifer Banton, as Office Manager for Alan Rosenthal. Mr. Rosenthal testified that, around the same time, he directed that his office prepare letters to GreenPoint Bank and to HSBC lifting the restraining notices. Mr. Rosenthal did not provide any credible testimony that any letters were in fact mailed or faxed to the respective banks.
Ms. Pettyjohn took the letter from Ms. Banton to GreenPoint, but GreenPoint refused to release her funds. Indeed, on or about June 29, Ms. Pettyjohn received a further letter from GreenPoint, dated June 28, 2004, stating that it had received a Marshal's Levy directing it to remit $8,747.50 from her account to Marshal Moses on July 19. To the letter was appended the "Levy and Final Demand" signed by Marshal Moses on June 21, 2004.
Ms. Pettyjohn returned to Court on July 6, 2004, and obtained an Order to Show Cause directing plaintiff to show cause on July 9, 2004 why the Court should not enter an order lifting the restraints on her bank account, imposing sanctions on plaintiff, plaintiff's counsel and the Marshal for their failure to comply with the Order dated February 17, 2004, and directing plaintiff to pay any costs incurred by defendant as a result of plaintiff's failure to comply with the Order. The Order to Show Cause also stayed all enforcement proceedings. The same day, plaintiff served a copy of the Order to Show Cause personally on Mr. Rosenthal's office and handed it to Mr. King. Mr. King handed Ms. Pettyjohn's copy of the Order to Show Cause to Mr. Rosenthal's receptionist who acknowledged service on the back of it, by signing it and stamping it with Mr. Rosenthal's stamp. Ms. Pettyjohn also served the July 6 Order to Show Cause on Marshal Moses and GreenPoint Bank by mail. On July 9, the return date of the motion, only Ms. Pettyjohn appeared. The Court advised her that it would grant her motion on default, and took the matter on submission in order to issue a written opinion.
Notwithstanding the order restraining enforcement proceedings in the July 6 Order to Show Cause, Ms. Pettyjohn received a letter from Washington Mutual, on or about July 14, 2004, advising her that, on July 13, it had received a copy of the Dec. 16 Restraining Notice signed by Mr. Rosenthal. The letter further advised Ms. Pettyjohn that, based on the Restraining Notice, the bank had placed a "legal hold" on her accounts, and had frozen her ATM card. I find that Mr. Rosenthal caused the December 16 Restraining Notice to be sent to Washington Mutual on or about July 10, 2004, either by Mr. Rosenthal's office or by Marshal Moses, acting as Mr. Rosenthal's agent.
After receiving the letter from Washington Mutual, Ms. Pettyjohn called Mr. Rosenthal's office and again spoke to Mr. King. She told him about the letter from Washington Mutual. He told her that he would straighten it out, and would call her back after doing so. Ms. Pettyjohn then called Marshal Moses' office and spoke to a Ms. Higgins, who denied that Marshal Moses had taken any steps with regard to the Washington Mutual account, and said that it was "out of [her] hands." Ms. Pettyjohn then received a telephone call from Mr. King who said that he had called GreenPoint. She reminded him that she had called him about Washington Mutual not GreenPoint. He said he did not know anything about that, but would send a letter to Washington Mutual. Although Mr. Rosenthal produced a letter to Washington Mutual dated July 16, there is no credible evidence that it was in fact sent.
Ms. Pettyjohn returned to court on July 16, 2004 and obtained a further Order to Show Cause, staying all enforcement proceedings and directing plaintiff to appear for a hearing on July 23, 2004 on why the restraints on her accounts at Washington Mutual should not be lifted. She personally took a copy of the Order to Show Cause to Mr. Rosenthal's office and handed it to Mr. King. Mr. Rosenthal's receptionist stamped and signed Ms. Pettyjohn's copy of the Order to Show Cause. While this was taking place, Mr. Rosenthal entered the office and walked through the reception area. Ms. Pettyjohn also served a copy of the July 16 Order to Show Cause by mail on Marshal Moses and Washington Mutual.
On the return date of the July 16 Order to Show Cause, no one appeared for plaintiff. On July 22 and 23, 2004, the Court issued Orders ("the July Orders") on default, deciding the motions heard on July 9 and July 23. The July Orders directed GreenPoint and Washington Mutual to release all restraints on defendant's account; ordered plaintiff, Mr. Rosenthal and Marshall Moses to refrain from taking any further steps to enforce the Judgment; ordered plaintiff, Mr. Rosenthal and Marshal Moses to return to defendant all funds in their possession as a result of the enforcement of the Judgment; and directed plaintiff, Mr. Rosenthal and Marshal Moses to appear for a hearing on August 4, 2004 to show cause why they should not be held in contempt or be assessed sanctions and costs. The July Orders included the warning language required by Judiciary Law § 756. My Court Attorney mailed the July Orders to plaintiff, Mr. Rosenthal and Marshal Moses. She also mailed the July 22 Order to GreenPoint and the July 23 Order to Washington Mutual. Mr. Rosenthal acknowledges receipt of the July Orders.
The Court held a hearing on August 4, 2004 at which Mr. Rosenthal appeared but Marshal Moses did not. Mr. Rosenthal testified that he had not seen either the February 17 Order or any of the Orders to Show Cause. Mr. Rosenthal also testified that he could not remember his receptionist's name. Mr. Rosenthal submitted to the Court a letter from Marshal Moses acknowledging service of an Order to Show Cause on June 29, 2004. Mr. Rosenthal testified that he was willing to compensate Ms. Pettyjohn for any expenses that she had incurred as a result of his enforcement of the Judgment. At the close of the hearing, the Court took the matter on submission.
On September 27, 2004, Ms. Pettyjohn received a letter from Washington Mutual, essentially identical to the one she had received in July, advising her that it had placed a "legal hold" on her accounts. Attached to the letter was the December 1 Restraining Notice; that is, a different Restraining Notice from the one dated December 16, 2003 which had been attached to the prior letters from GreenPoint and Washington Mutual. I find that the December 1, 2003 Restraining Notice was sent to Washington Mutual at the direction of Mr. Rosenthal. Ms. Pettyjohn promptly called Washington Mutual and was advised that the hold on her accounts would not be lifted unless she went to court.
The next day, Ms. Pettyjohn went to court and obtained a further Order to Show Cause which vacated all restraints on her accounts forthwith. The Order to Show Cause further directed the parties to appear for a hearing on October 8, 2004 as to why the Court should not impose sanctions on Mr. Rosenthal, Marshal Moses and Washington Mutual or hold them in contempt. The Order to Show Cause contained the warning language required by Judiciary Law § 756. Ms. Pettyjohn served the Order to Show Cause by mail on Mr. Rosenthal, Marshal Moses and Washington Mutual, and I find that they received it.
On October 8, 2004, only Mr. Rosenthal and Ms. Pettyjohn appeared for the hearing. Mr. Rosenthal produced letters dated September 28, addressed to Washington Mutual and HSBC Bank and signed by Mr. Roper, directing them to release Ms. Pettyjohn's funds. However, he did not produce any credible evidence that the letters were actually sent.
As a result of the restraints on her accounts in June and July, Ms. Pettyjohn made seven trips to downtown Brooklyn between June 21 and August 4, 2004: five to Court, one to get advice from the Brooklyn Bar Association and one to consult an attorney. Because of a leg injury she suffered in June, she must use crutches and is unable to take public transportation. Consequently, she paid $46.00 to a car service each time that she went to downtown Brooklyn, for a total cost of $322.00. She also incurred legal fees of $25.00 and bank fees of $692.92. In addition, she had to pay many bills late, because she could not get access to her funds; as a result, she incurred late fees, interest charges and bank charges totaling $323.71. She paid $12.60 for postage for the various court papers. She also borrowed $625.00 and used $400.00 of her overdraft protection for both of which she incurred interest charges, which the Court estimates at $188.38.
As a result of the restraint on her account in September, Ms Pettyjohn made two more trips to downtown Brooklyn, incurring costs of $104.00. She was also charged returned check fees of $120.00 by Washington Mutual, and $38.00 by American Express, to whom she had sent a check which was returned. Ms. Pettyjohn had also paid bills to Chase, Triple A Credit and the New York City Water Board with checks that were returned because of the hold on her accounts. She will bear costs of approximately $125.00 more as a result.
ANALYSIS
THE LAW OF CONTEMPT
Under the New York City Civil Court Act (NYCCA) § 1509, the Civil Court has the authority to hold individuals in either civil or criminal contempt for any act that would be punishable as contempt in the Supreme Court. The two punishments serve different, albeit overlapping goals; as the Court of Appeals has explained:
Civil contempt has as its aim the vindication of a private right of a party to litigation and any penalty imposed upon the contemnor is designed to compensate the injured private party for the loss of or interference with that right (State of New York v. Unique Ideas, 44 NY2d 345 [1978]). Criminal contempt, on the other hand, involves vindication of an offense against public justice and is utilized to protect the dignity of the judicial system and to compel respect for its mandates ( King v. Barnes, 113 NY476 [1889]).
( McCormick v. Axelrod, 59 NY2d 574, 582-583).
Disobedience to a lawful mandate of the Court may result in a finding of either civil or criminal contempt, or both, provided that the individual knew of the order, and it was clear and unequivocal. (Judiciary Law §§ 750[A][3], 753[A][1] and [3]; McCain v. Dinkins, 84 NY2d 216, 226; McCormick v. Axelrod, 59 NY2d 574, 583) A person not a party can be held in contempt for a violation of an order of which he had knowledge. "No person with knowledge of the terms of an injunction, even if not a party himself, can aid or co-operate with a party in doing the prohibited act without incurring the penalty prescribed by statute. Otherwise, in order to make an injunction effective it would be necessary to join every person who could become an agent of a party in violating it. The law is not so tender of those who defy its power and trample upon its command as to exempt them from punishment because they were not named as defendants in the action." ( People ex rel. Stearns v. Marr, 181 NY 463, 468-469).
Disobedience to a lawful mandate is the only grounds for contempt that is relevant to this case, but other conduct may also result in a finding of civil or criminal contempt (See Jud. Law §§ 750 and 753.)
In order for disobedience to a lawful mandate to constitute civil contempt, the court must also find, by clear and convincing evidence, that the rights of the person protected by the order were defeated, impeded, impaired or prejudiced. ( Judiciary Law § 753; McCain v. Dinkins, 84 NY2d 216, 226); such a finding need not be made for a finding of criminal contempt ( In re Ganz, 38 Misc. 666, 668 [Sup Ct, NY County 1902] affd sub nom Granz v. Ronginsky, 78 AD 399, 400 [1st Dept 1903]).
A finding of criminal contempt must be based on "wilful disobedience to [the court's] lawful mandate," whereas a finding of willfulness is not necessary for a civil contempt which need only be based on a finding of "disobedience to a lawful mandate of the court." ( Compare Jud. Law § 750 (A)(3) and Jud. Law § 753(A)(3)). Consequently, a court can punish for criminal contempt only upon a finding that the alleged contemnor willfully violated the order; that is, that he took the action knowing that he was violating a court order and intending to do so. In contrast, a finding of civil contempt requires only the mere fact of disobedience which actually impaired the rights of a party; it is sufficient that the defendant have intended to do the act which violated the order, even though he may not have intended to violate the order. ( People ex rel. Stearns v. Marr, 181 NY 463, 471; Torah v. Kesher Int'l Trading Corp., 246 AD2d 538 [2d Dept 1998]; Gordon v. Janover, 121 AD2d 599, 600 [2d Dept 1986]; Yalkowsky v. Yalkowsky, 93 AD2d 834 [2d Dept 1983]).
Moreover, a criminal contempt must be proven beyond a reasonable doubt, while a civil contempt need only be proven by clear and convincing evidence ( compare Yorktown Cent. School Dist. v. Yorktown Congress of Teachers, 42 AD2d 422, 426 [2d Dept 1973] [criminal contempt] with Yalkowsky v. Yalkowsky, 93 AD2d 834, 835 [2d Dept 1983]).
Finally, as a consequence of the different goals served by civil and criminal contempt, any fine ordered to be paid as a result of a civil contempt is paid to the injured individual in an amount sufficient to compensate for the actual loss suffered, while a criminal fine is paid to the clerk of the county in an amount intended to punish the contemnor for the wrongful conduct. ( Goodman v. State, 31 NY2d 381, 385; Beth-El Hospital v. Davis, 231 NYS2d 635, aff'd 18 AD2d 1138 [2d Dept 1963]; Englander Co. v. Tishler, 285 AD 1070 (2d Dept. 1955). The fine on a civil contempt may be in the amount of the complainant's costs and expenses plus two hundred fifty dollars. ( See Jud. Law § 773).
As a separate punishment, the court may award costs or sanctions, under 22 NYCRR 130-1.1, against any party or attorney in a civil action who engages in frivolous conduct, which is defined to include conduct which is "completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law." ( See, e.g., Pires v. Frota Oceanica Brasileira, S.A., 92 NY2d 200; Intercontinental Credit Corp. Div. of Pan American Trade Dev. Corp. v. Roth, 78 NY2d 306, 308).
ALLEN ROSENTHAL'S CONDUCT
For the reasons set forth below, the Court finds that there are grounds to punish Mr. Rosenthal for civil contempt and to issue sanctions against him.
January to July 2004:
On February 17, 2004, Ms. Pettyjohn mailed to Mr. Rosenthal at his office a copy of Judge Krauss's Order dated February 17, 2004 ("the Order'), together with a copy of her Answer, which stated on its face that it had been filed that day. Her testimony creates a presumption that the Order and Answer were received by Mr. Rosenthal's office. ( Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001]). Mr. Rosenthal's mere conclusory statement that he did not receive it is insufficient to rebut the presumption of receipt (Rodriguez v. Wing, 251 AD2d 335, 336 [2d Dept1998]; Orlando v. Corning Inc., 213 AD2d 464 [2d Dept1995]; Rapuzzi v. New York, Civil Service Com., 161 AD2d 715, 716 [2d Dept 1990]). His denial of receipt is particularly questionable, since Mr. Rosenthal claimed non-receipt not only of documents properly mailed to him but even of the Orders to Show Cause which his office staff acknowledged receiving. Moreover, he testified that, after receiving the July 6 Order to Show Cause, he directed the Marshal to advise the banks to release Ms. Pettyjohn's accounts and also directed his office to contact the banks directly. While I do not conclude from this either that Mr. Rosenthal directly communicated with Marshal Moses or that anyone from his office actually contacted the banks, I do note that this portion of his testimony was inconsistent with his earlier statements that he did not receive any of the Orders to Show Cause. This causes me to conclude that his testimony that he did not receive the Order or any of the Orders to Show Cause was not reliable.
Moreover, Mr. Rosenthal submitted no evidence to rebut the presumption of receipt, such as evidence of a wrong address ( Holland v. New York City, 271 AD2d 609, 610 [2d Dept 2000]) or of his own office procedures for logging incoming mail ( Jeraci v. Froehlich, 129 AD2d 557, 559 [2d Dept 1987]; cf De Leonardis v. Gaston Paving Co., 271 AD2d 839, 840 [2d Dept 2000]). Indeed, even if he had testified about his office procedures, the Court would not have been inclined to find him credible. It became painfully clear, after listening to his testimony, that he has very little idea of how things are done in his office, even to the extent that he does not know the name of his receptionist, one of only four employees in his office. Consequently, the Court finds that Mr. Rosenthal was served with the Order.
There is no evidence that plaintiff had notice of the Order. Consequently, the Court concludes that plaintiff may not be punished for contempt. (See Mayfair Nursing Home v. Neidhardt, 173 AD2d 794, 795 [2d Dept 1991]).
The Court further finds that the Order was clear and unambiguous. The Order granted Ms. Pettyjohn's motion to vacate the judgment, provided that she serve an Answer and a copy of the Order on the plaintiff and file proof of service of the Answer and the Order with the Court and the Clerk. The Order further stated that, upon compliance with those conditions, the Judgment and all post judgment enforcement would be vacated without further Court order. Since Ms. Pettyjohn mailed her Answer to Mr. Rosenthal together with the copy of the Order, he was on notice that Ms. Pettyjohn had complied with the first condition. Consequently, he was on notice that the Judgment would be vacated upon filing of proof of service of the Order and the Answer.
On or about March 26, 2004, the Court mailed to Mr. Rosenthal a postcard directing him to appear for a hearing in this action. Since Mr. Rosenthal did not rebut the presumption of receipt of the postcard, the Court finds that he received the postcard on or about March 31, 2004. The Court finds that, as an attorney, Mr. Rosenthal knew that the Court would not have scheduled the matter for trial unless the Judgment had been vacated. Consequently, at least as of April 1, Mr. Rosenthal was on notice that Ms. Pettyjohn had complied with all of the conditions in the Order and that, therefore, the Judgment had been vacated.
Once the conditions in the Order had been satisfied, the Order also directed that all post judgment enforcement "shall be vacated without further Order of the Court." The Court holds that this provision imposed on Mr. Rosenthal an affirmative duty to withdraw any post judgment notices that he had served. Specifically, Mr. Rosenthal testified that he had sent out the Restraining Notices in December to various banks and that he had, at about the same time, retained Marshal Moses to collect on the Judgment. Therefore, the Court holds that the Order imposed on Mr. Rosenthal an affirmative duty to advise Marshal Moses to cease taking steps to enforce the judgment, and to advise the banks to whom he had sent the Restraining Notices that they should take no action with regard to Ms. Pettyjohn's accounts. This is comparable to the situation in Marino v. Griev. Comm. of the Eighth Judicial Dist. ( 303 AD2d 10, 11 [4th Dept 2002]) where an attorney was held in criminal contempt of his disbarment order in part because he failed to affirmatively advise a client that he had been disbarred. An individual can be held in contempt for violation of an order where his actions, although not in violation of the explicit terms of the order, are inconsistent with it. For example, in Gresswell v. O'Rourke (163 NYS 580 [Sup Ct, NY County 1917]), a defendant who had obtained a stay of execution of a judgment and then transferred his funds was held in contempt although there was no order in effect barring him from transferring his funds. Thus, in order to comply with the Order, Mr. Rosenthal had an affirmative duty to take steps to rescind the Restraining Notices. There is no credible evidence that Mr. Rosenthal did so, and I find that his failure to do so constitutes disobedience of the Order.
I further find that Mr. Rosenthal violated the Order by his affirmative actions, as well as by his failure to act. Specifically, GreenPoint's letter to Ms. Pettyjohn dated June 10, 2004, which the Court took into evidence without objection by Mr. Rosenthal, states that it had "recently" received the December 16 Restraining Notice. Consequently, the Court finds that Mr. Rosenthal caused the December 16 Restraining Notice to be served on GreenPoint in early June, in direct violation of the Order vacating all post-judgment enforcement.
In yet a more direct violation of the Order, on June 16, 2004, Mr. Rosenthal signed an "Execution with Notice to Garnishee" ("the Execution"), directing GreenPoint Bank to transfer all funds belonging to Ms. Pettyjohn to the levying officer, allegedly based on a judgment entered on March 13, 1990. Mr. Rosenthal delivered that Execution to Marshal Moses, who, in turn, caused it to be delivered to GreenPoint Bank, together with a "Levy and Final Demand." GreenPoint Bank then froze Ms. Pettyjohn's funds. I find that the evidence shows that Mr. Rosenthal disobeyed the Order by signing the Execution and causing it to be delivered to GreenPoint Bank.
Mr. Rosenthal claimed that his office then sent a letter to GreenPoint Bank on June 24, 2004 directing it to lift the restraints. However, Mr. Rosenthal did not claim to have personal knowledge that the letter was actually mailed, and did not testify to any office procedures on which he based his belief that the letter was mailed. Consequently, the Court does not find that the letter was mailed.
Even after being served with the Order to Show Cause on July 6, 2004, which stayed all actions by the attorneys in this matter, Mr. Rosenthal took no action to rescind either the Restraining Notices or the Execution or to instruct Marshal Moses to desist from any further action to collect on the non-existent judgment. Instead, on or about July 10, 2004, Mr. Rosenthal caused the December 16 Restraining Notice to be served on Washington Mutual, in direct violation of the Order. I base this finding on the letter to Ms. Pettyjohn from Washington Mutual dated July 13, 2004, which the Court received into evidence without objection by Mr. Rosenthal. That letter states that Washington Mutual received the December 16 Restraining Notice on July 13, 2004. Therefore, I find that Mr. Rosenthal caused the December 16 Restraining Notice to be served on Washington Mutual on or about July 10, 2004.
Accordingly, I find that the record shows, by clear and convincing evidence, that Mr. Rosenthal was served with the Order; that the Order was clear and unambiguous; that he violated it: 1) by failing to rescind the Restraining Notices and Execution; 2) by causing the December 16 Restraining Notices to be served on GreenPoint in early June and on Washington Mutual in early July; and 3) by issuing the Execution and causing it to be served on GreenPoint. I further find that Ms. Pettyjohn's rights were prejudiced by these actions. While she was not able to establish the precise amount of the damages that she suffered, she did show that she had incurred costs and expenses of $1,564.61 as a result of Mr. Rosenthal's acts.
Mr. Rosenthal argued, in essence, that he did not know about the Order and therefore cannot be held in contempt of it. I reject this argument for two reasons. First, I find that, since the Court has found that his office was properly served with the Order, Mr. Rosenthal is estopped from disclaiming knowledge of it. Mr. Rosenthal did not cite any authority for his argument that his lack of personal knowledge of an order which was properly served on his office excuses him from complying with it. The Court searched for cases on point, and could find nothing. The absence of such cases suggests that most attorneys would be embarrassed to make such an argument. Clearly, if an attorney could avoid the effect of service by disclaiming personal knowledge of any document duly served on him, the provision of the CPLR providing for service on an attorney, CPLR § 2103, would be rendered a nullity, and attorneys would have to personally serve their adversaries with every court paper. The closest case found by the Court is Silverstein v. Diaz ( 124 Misc2d 597, 599 [Civil Ct, Queens County1984]). In that case, an Order to Show Cause mailed to the respondent landlord was returned as undeliverable. The tenant testified that he had gone to the landlord's address and observed that there were no mailboxes or other receptacles for mail. The court found that the landlord had been properly served, noting:
A landlord engaged in the business of providing facilities, space and services to tenants in return for rent cannot physically shield or isolate himself from the mandate of this court or any other court for that matter in order to escape the consequences of his actions or to defeat jurisdiction by either refusing to accept service by mail or preventing postal authorities, by acts of omission or commission on his part, from accomplishing their mail deliveries. ( Bossuk v. Steinberg, 88AD2d 358, affd 58 NY2d 916) Nor may he superimpose upon the requirements of statute his own additional requirements as a prerequisite to obtaining jurisdiction over his person.
This line of reasoning applies with even greater force to attorneys, who cannot be permitted to shield themselves from court orders simply by running their offices in such a way that they do not see the papers served on them. The Court will not permit Mr. Rosenthal to escape the obligations that flow from having been properly served by claiming that he did not see this Court's Orders. Accordingly, the Court rejects Mr. Rosenthal's argument.
Secondly, I find that, even if Mr. Rosenthal did not intend to violate the Order, he in fact disobeyed it, and his disobedience alone is a sufficient basis for a finding of civil contempt. ( Yalkowsky v. Yalkowsky, 93 AD2d 834 [2d Dept 1983]). I further find that his conduct constitutes "frivolous conduct" within the meaning of 22 NYCRR § 130-1.1, since his continued actions to enforce a judgment which had been vacated were not supported by any legal argument. Consequently, the Court is authorized to enter sanctions against Mr. Rosenthal.
While the evidence clearly established that Mr. Rosenthal violated the Order, and injured Ms. Pettyjohn as a result, the Court also notes that, at the hearing on August 4, Mr. Rosenthal did express genuine regret for his actions. He apologized to the Court and to Ms. Pettyjohn for what he described as a tragedy and "a terrible mixup," and he took personal responsibility for what had occurred. He stated that he was willing to pay Ms. Pettyjohn for any losses she incurred as a result of his actions, including but not limited to her late charges and bank charges. Consequently, rather than entering an order punishing Mr. Rosenthal for contempt, I am entering a conditional order, directing Mr. Rosenthal to pay to Ms. Pettyjohn, within 30 days of the date of this Order, the sum of $1,814.61, representing her actual losses from the incidents in June and July, plus a fine of $250.00. In the event that Mr. Rosenthal fails to pay $1,814.61, then, upon submission to the Court of an affidavit by Ms. Pettyjohn that she has not received that amount, the Court will enter an Order punishing Mr. Rosenthal for civil contempt, and entering a judgment against him for a fine payable to Ms. Pettyjohn in the amount of $1,814.61, and entering a further judgment against him for sanctions, pursuant to 22 NYCRR § 130-1.1, in the amount of $1,000.00.
August to September 2004:
Mr. Rosenthal acknowledged receipt of the July Orders. The July Orders explicitly directed Mr. Rosenthal to "refrain from taking any further steps to enforce the Judgment."
In addition, by its July Orders, the Court directed Washington Mutual to release Ms. Pettyjohn's accounts within 10 days, and Washington Mutual did so. However, sometime thereafter, Mr. Rosenthal caused the December 1 Restraining Notice to be served again on Washington Mutual. I base that conclusion on the letter from Washington Mutual dated September 24, 2004, which was admitted into evidence without objection from Mr. Rosenthal. That letter stated that Washington Mutual was freezing Ms. Pettyjohn's ATM card and placing a "legal hold" on her accounts based on the December 1 Restraining Notice. The Court finds that Washington Mutual received the December 1 Restraining Notice after it released Ms. Pettyjohn's accounts in response to the Court's July Orders because, if Washington Mutual had been in possession of the December 1 Restraining Notice before it received the July Orders, there would have been no reason for it to again freeze Ms. Pettyjohn's accounts. Therefore, the Court finds that the clear and convincing evidence establishes that, after the effective date of the July Orders, Mr. Rosenthal caused the December 1 Restraining Notice to be sent to Washington Mutual or, at the very least, failed to take steps to rescind the Restraining Notices. I further find that, by doing so, Mr. Rosenthal violated the July Orders. As a result, Ms. Pettyjohn was again harmed. While it is difficult to quantify her damages precisely, she incurred costs and expenses of $387.00.
When Mr. Rosenthal appeared on the return date of the second motion, he expressed a willingness to compensate Ms. Pettyjohn for her out-of-pocket losses. His only defense, stated repeatedly, was that his office had done everything right. While he stated that he had undertaken an investigation of how this had occurred, it appeared that the investigation consisted solely of putting into one file all of the papers related to Ms. Pettyjohn. Moreover, Mr. Rosenthal's testimony showed that, even after the August 4 hearing, Mr. Rosenthal did not take personal responsibility to ensure that Ms. Pettyjohn's accounts would not be inappropriately frozen yet again. He did not personally call Washington Mutual, but testified instead that he asked someone else to do so. Although he testified that he instructed his office to write a letter to Washington Mutual releasing Ms. Pettyjohn's accounts, he did not personally sign the letter, and he took no steps to ascertain whether it was in fact mailed. He did not produce any individuals to testify that the phone calls were made or that the letters were sent. He also did not testify that he had undertaken any serious inquiries to find out what had been done with the Orders to Show Cause after they were received by his office.
The Court is extremely troubled by Mr. Rosenthal's failure to ensure that Ms. Pettyjohn would not suffer any further prejudice as a result of this lawsuit. The Court is further concerned that Mr. Rosenthal's failure to take affirmative steps to comply with the Court's July Orders indicates disrespect for the Court. However, the Court cannot conclude that the evidence establishes beyond a reasonable doubt that Mr. Rosenthal willfully violated either the February Order or the July Orders; rather, the evidence establishes that he violated the July Orders carelessly and recklessly, by failing to act personally to comply with the Orders and by not even taking affirmative steps to make sure that this violation of Ms. Pettyjohn's rights would not recur. Based on this, the Court finds that all of the elements for a finding of civil contempt have been met. The Court further finds that Mr. Rosenthal's actions were frivolous, within the meaning of 22 NYCRR § 130-1.1. However, in recognition of Mr. Rosenthal's willingness to compensate Ms. Pettyjohn, I am entering a conditional order, directing Mr. Rosenthal to pay to Ms. Pettyjohn, within 30 days of the date of this Order, the sum of $637.00, representing her actual losses from the incident in September plus a fine of $250.00, and further directing him to pay $1,000.00 to the Lawyers' Fund for Client Protection within 30 days of the date fo this Order. In the event that Mr. Rosenthal fails to pay that amount, to both Ms. Pettyjohn and the Lawyers' Fund for Client Protection, then, upon submission to the Court either of an affidavit by Ms. Pettyjohn that she has not received the amount due her or of a statement from the Lawyers' Fund for Client Protection that it has not received the $1,000.00 sanction, the Court will enter an Order punishing Mr. Rosenthal for civil contempt, and entering a judgment against him for a fine payable to Ms. Pettyjohn in the amount of $637.00, and entering a further judgment against him for sanctions, pursuant to 22 NYCRR § 130-1.1, in the amount of $1,000.00.
MARSHAL MOSES
In order for the Court to punish a non-party for contempt, jurisdiction must be acquired by personal service of the application for contempt. ( Caiola v. Allcity Ins. Co., 305 AD2d 350, 351 [2d Dept 2003]; John Sexton Co., Div. of Beatrice Foods, Inc. v. Law Foods, Inc., 108 AD2d 785, 786 [2d Dept 1985]). In this case, the Court erroneously permitted defendant to serve the Orders to Show Cause on Marshal Moses by mail. Unlike Mr. Rosenthal, Marshal Moses did not waive this defect by appearing and defending the motion on the merits. ( People ex rel. Golden v. Golden, 57 AD2d 807 [1st Dept 1977]; Maigille v. Leonard, 102 AD 367, 369 [2d Dept 1905] affd 181 NY 558). Therefore, the Court may not punish Marshal Moses for contempt.
However, the Court notes that the evidence before it showed that the February Order, the July Orders to Show Cause, the July Orders and the September Order to Show Cause were all mailed to Marshal Moses. The Court further notes that the letter from Marshal Moses, proferred to the Court by Mr. Rosenthal, suggests that Marshal Moses received at least some of these documents. The Court further notes that the evidence shows that Marshal Moses executed the "Levy and Final Demand" on June 21 and sent it to GreenPoint Bank. This action was clearly inconsistent with the February Order. In light of this, the Court will send a copy of this decision to the Department of Investigation, which is responsible for the supervision and discipline of marshals, so that it may take whatever action it may deem appropriate ( See Fraiman v. Mancuso, 30 AD2d 108 [1st 1968] aff'd 24 NY2d 891; NYCCA § 1610).
CONCLUSION
The Court is sending a copy of this Order to the parties and to Mr. Rosenthal, Marshal Moses and Washington Mutual, as well as to the Lawyers' Fund for Client Protection and the Department of Investigation. The Court is also sending the exhibits to the party who proffered them.
This constitutes the Order of the Court.