Opinion
13220/05.
Decided December 7, 2006.
These three related actions arise from a series of questionable real estate transactions between Riccardo Tedesco, Sr. (Riccardo Sr.), the individual defendant in Action 1, and his son and daughter, Riccardo Tedesco, Jr. (Riccardo Jr.) and Lydia Tedesco Nioras (Lydia). With each of these parties jockeying for control of several properties originally purchased by Riccardo Sr. through certain corporate entities, now before the Court are five motions seeking various forms of interim and enforcement relief.
The following papers numbered 1 to 111 were read on these five motions.
PAPERS NUMBERED
Order to Show Cause/Affirmation/Affidavits (Riccardo Jr.) 1-4
Order to Show Cause/Affirmation/Affidavits (Lydia) 25-29
Order to Show Cause/Affirmation/Affidavit (Lydia) 54-56
Order to Show Cause/Affirmations/Affidavits/Memoranda of Law (Riccardo Sr.) 64-68
Order to Show Cause/Affirmation (Lydia/Riccardo Jr.) 79-80
Memorandum of Law in Opposition (Lydia/Riccardo Jr.) 81
Affirmation (Salerno) 85 Affirmation/Affidavit in Opposition (Ricardo Sr.) 86-87
Reply Affirmation (Lydia 94
Reply Affirmation/Affidavit (Ricardo Sr.) 103-104
Reply Affidavit (Lydia) 108
Exhibits 5-24, 30-53, 57-63, 69-78, 82-84, 88-93, 95-102, 105-107, 109-111
I. FACTUAL AND PROCEDURAL BACKGROUND In 1984 Riccardo Sr. found an opportunity to purchase a shopping center located at 122-140 West Post Road in White Plains, New York (the Shopping Center). Shortly thereafter, he and his sister, Flavia Margotta (Flavia), formed 122 W.P.R. Corp. (WPR), which bought the property. Flavia transferred her interest in WPR to Riccardo Sr. on January 9, 1989. Although denied by Riccardo Sr., Lydia asserts that in December 1992 Riccardo Sr. transferred his interest in WPR to her. It is undisputed that since 1993 Lydia has managed the Shopping Center and that the corporate income tax returns filed by WPR have reported that she is the 100% shareholder of that entity.
In 1985, Riccardo Sr. also formed another corporation, Briar Vista Construction Corp. (Briar Vista), one of the plaintiffs in Action 3 (Briar Vista). On July 27, 1985, Briar Vista purchased a property, located at 80 Hawkes Avenue, Ossining, New York (80 Hawkes), which was improved with a two-family home. Briar Vista transferred ownership of 80 Hawkes to Thornwood Equities, Inc. (Thornwood), another corporation owed by Riccardo Sr., on October 10, 1985. Then, on June 9, 1987, Thornwood transferred 80 Hawkes to RTJ Landscaping Company, Inc. (RTJ), an entity owned by Riccardo Jr., which is one of the defendants in Action 1. Riccardo Sr. alleges that the transfer to RTJ was made upon Riccardo Jr.'s agreement that he would transfer 80 Hawkes back to Riccardo Sr. at any time he requested. In support of that claim, he offers a one-page agreement purportedly signed by Riccardo Jr. (the 80 Hawkes Nominee Agreement), which states in relevant part:
"I, RICCARDO TEDESCO, JR., am the title owner of the real property together with improvements thereon located at 80 Hawkes Avenue, Ossining, New York. I am holding this property as Nominee for the true owner of the property, my father, RICCARDO TEDESCO. Upon request of RICCARDO TEDESCO, without consideration, I will execute a Deed and such other documentation that may be necessary to convey fee simple title to said property to RICCARDO TEDESCO." (Riccardo Tedesco, Sr. Affid., 6/30/06, Exh.G, p. 1 [capitalization in original]).
The 80 Hawkes Nominee Agreement is dated May 10, 1990, but was notarized on May 14, 1990. It bears a signature of a "Riccardo Tedesco, Jr.", although in these actions Riccardo Jr. states that he has no recollection of having signed that document.
On October 16, 1990, Riccardo Sr. purchased a property located at 542 Commerce Street, Thornwood, New York (542 Commerce) which was improved with a two-family home. However, he placed title of 542 Commerce in Riccardo Jr.'s name. It is Riccardo Sr.'s position that he did so upon the agreement that when requested by him, Riccardo Jr. would re-convey 542 Commerce to him. Unlike the situation with respect to 80 Hawkes, Riccardo Sr. does not claim that there is any written agreement providing for the reconveyance of 542 Commerce.
Another of Riccardo Sr.'s corporations, Anlidia, Inc. (Anlidia), purchased a vacant parcel of property located on Elmwood Avenue, Hawthorne, New York (Elmwood Avenue) in July 1995, financed in part with a mortgage that Riccardo Sr. obtained. In June 2001, approximately four years after that mortgage had been satisfied, Anlidia sold Elmwood Avenue to RTJ for $36,000. Among the many claims put forth by Riccardo Sr. in this litigation is that RTJ paid only $10,000 of the purchase price, and still owes the $26,000 balance.
In 1996, Riccardo Sr., who already had a State Court felony conviction for a crime involving fraudulent conduct, entered a guilty plea in Federal District Court in New Jersey to the crimes of Conspiracy to Commit Bank Fraud and Bribery of a Bank Officer, in satisfaction of certain charges related to fraudulent mortgages obtained by him. At his sentencing he was spared incarceration, apparently as a result of his cooperation in the investigation. However, he was ordered to make certain restitution payments. In addition, there were substantial money judgments outstanding against him.
Seeking a reduction of the amounts that he was required to pay as restitution, Riccardo Sr. filed a financial affidavit with the Federal District Court in which he denied owning any real property or having any other assets. Based upon that application, in June 1997 Federal District Court Judge Alfred J. Lechner, Jr. issued an order reducing the amount that Riccardo Sr. was required to pay Surburban National Bank from $50,000 to $25,000.
In May 2005, Lydia and Riccardo Jr. commenced a proceeding pursuant to Mental Hygiene Law Part 81 seeking to have themselves appointed as co-guardians of Riccardo Sr.'s property (the Guardianship Proceeding). Their petition alleged, inter alia, that Riccardo Sr. was suffering from "dementia and/or other neurological disorders" and that he was the victim of certain scams involving the transfer of substantial assets to Nigeria (Riccardo Tedesco Sr. Affid., 6/30/06, Exh. A, Petition, p. 2, 3). Shortly after commencing the Guardianship Proceeding, which was opposed by their father, Lydia and Riccardo Jr. withdrew their petition.
Riccardo Sr.'s response to the Guardianship Proceeding was to demand the reconveyance of 80 Hawkes and 542 Commerce. Faced with Riccardo Jr.'s refusal to transfer those properties back to him. Riccardo Sr., together with Thornwood and Anlidia, commenced Action 1 against Riccardo Jr. and RTJ, seeking declaratory relief and money damages.
Unknown to Riccardo Jr., while Action 1 was pending Riccardo Sr. obtained a $175,000 mortgage against 542 Commerce from Ashlar Mechanical Corp. (Ashlar), notwithstanding that neither Riccardo Sr. nor any of his entities was the titled owner of that property. On February 16, 2006, Ashlar filed a satisfaction of its mortgage (the Ashlar Mortgage) after Riccardo Sr. repaid the obligation. Lydia then commenced Action 2 against Riccardo Sr., concerning her claim of ownership of WPR and the Shopping Center. Finally, Riccardo Sr., Buena Vista and Anlidia sued Lydia, Riccardo Jr. and two of their corporations with regard to other properties whose ownership is in dispute.
Beginning in March of this year, the parties engaged in the motion practice that is the subject of this decision and order. First, on March 1, 2006, Lydia filed an order to show cause (OTSC L1) to bring on a motion (Lydia Motion 1) seeking a preliminary injunction against Riccardo Sr. that would bar him from taking any action with respect to WPR and the Shopping Center. When OTSC L1 was signed by Justice Orazio R. Bellantoni on March 1st, it included a temporary restraining order (TRO L1) which prohibited Riccardo Sr. "from entering into or recording any mortgage or other encumbrance upon any properties of record in the name of, or owned or managed by, or claimed to be owned by, [Lydia], or [WPR]" (OTSC L1, p. 2-3).
Simultaneously with the filing of OTSC L1, Riccardo Jr. filed an order to show cause (OTSC Jr.) to bring on his motion (Riccardo Jr. Motion) for a preliminary injunction, leave to serve an amended answer including claims related to the Ashlar Mortgage and other relief with respect to 80 Hawkes, 542 Commerce and Elmwood Avenue (collectively hereinafter "the Three Riccardo Jr. Properties"). On March 1st, when he signed OTSC Jr., Justice Bellantoni included a temporary restraining order (TRO Jr.) prohibiting Riccardo Sr. from "entering into or recording any mortgage or other encumbrance upon any properties of record in the name of, or owned by, or claimed to be owned by, [Riccardo] Jr. or jointly by [Riccardo] Jr. and Lydia Tedesco Norias".
On May 5, 2006, E.R. Holdings LLC filed a mortgage in the amount of $550,000 against the Shopping Center (the First Shopping Center Mortgage) that had been executed on February 13, 2006 by Riccardo Sr., as President of WPR. Upon learning of that mortgage, Lydia moved by order to show cause (OTSC L2) to bring on a motion (Lydia Motion 2) for various forms of interim relief against her father with respect to WPR and the Shopping Center (Lydia Motion 2).
When she signed OTSC L2, Justice Linda S. Jamieson, to whom Action 1 and Action 2 were then assigned, issued three interim orders, as follows:
1. Riccardo Sr. was "restrained and enjoined from entering into or recording any mortgage or other encumbrance upon any properties of record in the name of, or owned or managed by, or claimed to be owned by [Lydia], by Riccardo Tedesco, Jr., or by [WPR]" (OTSC L2, p. 3-4 [hereinafter "the May 17 Encumbrance TRO"]); 2. Riccardo Sr. was "stayed and enjoined from spending, disbursing or utilizing any monies from the [First Shopping Center] Mortgage proceeds, except that [he], his agents, servants and employees are directed to timely make any and all payments required on the [First Shopping Center] Mortgage until the hearing and determination of [Lydia] Motion 2" ( id., p. 4 [hereinafter "the First Shopping Center Mortgage TRO"]; and 3. Riccardo Sr. was "stayed and enjoined from interfering with [Lydia's] operation of the [Shopping Center] . . . or collecting or seeking to collect any rents or other income therefrom pending further order of this Court" ( ibid.).
Justice Jamieson also required the parties to appear before her for a conference on June 2, 2006 (the June 2 Conference).
At the June 2 Conference, the parties addressed several of the cross-accusations related to the properties at issue. During the conference Riccardo Sr.'s new counsel, John C. Guttridge, Esq., conceded that his client had obtained the First Shopping Center Mortgage, before the issuance of TRO L1, and had obtained another mortgage for $320,000 against the Shopping Center (the Second Shopping Center Mortgage) after that restraining order was issued. Under questioning from Justice Jamieson, it was also acknowledged that the proceeds of the Second Shopping Center Mortgage had been sent to Africa by Riccardo Sr. as part of an investment. Moreover, Guttridge represented that his client's position is that he could not currently return those monies to the jurisdiction of the Court. After hearing from the parties and expressing her preliminary view that Riccardo Sr. had violated TRO L1 by securing the Second Shopping Center Mortgage, Justice Jamieson issued certain directives from the bench. Among those was an order requiring Riccardo Sr. to submit a list of his properties to the Court by the following Wednesday, that being June 7, 2006. As evident from Justice Jamieson's remarks during the conference, the purpose of ordering the production of that information was to provide a basis for her to subsequently establish some type of security for the proceeds of the First Shopping Center Mortgage and the Second Shopping Center Mortgage (together hereinafter "the Two Shopping Center Mortgages").
By letter dated June 7, 2006, Guttridge identified three properties purportedly owned by his client, but requested an additional two weeks to provide a complete list of Riccardo Sr.'s assets. That letter drew a June 8, 2006 letter in response from counsel for Lydia and Riccardo Jr. challenging Riccardo Sr.'s claims to ownership of one of those three properties and disputing Riccardo Sr.'s representations as to the current values of the two others.
One month after the June 2 Conference, Riccardo Sr. filed an order to show cause (OTSC Sr.) to bring on a motion (the Riccardo Sr. Motion) for injunctive relief in his favor and the appointment of a receiver for the Shopping Center, 80 Hawkes, 542 Commerce and two other properties located at 677 Commerce Street and 696 Commerce Street in Thornwood, New York (hereinafter "677 Commerce" and "696 Commerce", respectively). Included in OTSC Sr. was a proposed temporary restraining order and an order appointing a temporary receiver for those properties.
It appears that Lydia is the titled owner of 696 Commerce Street, albeit Riccardo Sr. has presented a copy of an agreement (the 696 Commerce Nominee Agreement) similar to the 80 Hawkes Nominee Agreement which obligates her to reconvey that property to Riccardo Sr. for no consideration whenever requested by him. The 696 Commerce Nominee Agreement bears the same execution and notarization dates as the 80 Hawkes Nominee Agreement.
Upon receipt of OTSC Sr. and pursuant to its IAS Part rules, this Court conducted a conference to determine whether to grant the interim relief as Riccardo Sr. proposed. After hearing from the parties, the Court signed OTSC Sr. but denied the request for interim relief pending the determination of the Riccardo Sr. Motion.
Thereafter, counsel for the parties met with the Court's Law Clerk to establish a comprehensive schedule for the filing of papers on the pending motions. Pursuant to the discussion at that conference, on July 14, 2006 Lydia and Riccardo Jr. filed an order to show cause (OTSC L3) to bring on a motion seeking a contempt adjudication against Riccardo Sr. for allegedly violating certain of the interim orders issued in this case (the Contempt Motion). With all papers now before the Court, the Court addresses the five motions in the order that it deems most logical.
II. RICCARDO JR. MOTION
On his motion, Riccardo Jr. seeks eight forms of relief. Riccardo Sr. consents to some, but not all, of these requests.
A. Amendment: First, Riccardo Jr. asks for leave to serve an amended Answer asserting a counterclaim against Ashlar seeking a declaration that the Ashlar Mortgage is invalid. Because it is undisputed that the Ashlar Mortgage has been satisfied, this application is denied as moot.
B. Service: Second, Riccardo Jr. requests permission to serve his proposed Amended Answer upon counsel for Riccardo Sr. and upon Ashlar pursuant to CPLR 311. In view of the denial of the first application, this request is also denied as moot.
C. Caption: Third, Riccardo Jr. moves for leave to amend the caption of Action 1 to reflect Ashlar's position as an additional defendant on the proposed counterclaims. Again, the denial of leave to serve the proposed amended answer compels the denial of this branch of the motion as moot.
D. Cancellation of Mortgage: Fourth, it is requested that the Court declare the Ashlar Mortgage to be invalid and to "cancel and expunge [it]" (OTSC Jr., p. 3). This application is also denied as moot since the Ashlar Mortgage has been satisfied.
E. Notice of Pendency: The fifth branch of the motion seeks an order cancelling and expunging the two notices of pendency filed by Riccardo Sr. on August 10 and 18, 2006, respectively, because they were superceded by amended notices of pendency filed on September 12, 2005, the latter of which do not include Elmwood Avenue. Because neither party has provided this Court with copies of any of the notices of pendency in issue, it cannot be determined whether there is a valid ground for the relief sought. For that reason, this application is denied, without prejudice.
The amendment was necessary because there is no claim by Riccardo Sr. that he owns Elmwood Avenue, but instead, he only sues upon a claim of breach of contract for Riccardo Jr.'s alleged failure to pay the balance of the purchase price of that property.
F. Injunction: At the core of this motion is Riccardo Jr.'s request for a temporary injunction barring Riccardo Sr. from further encumbering "[any] properties owned by, or claimed to be owned by, any of the children of [Riccardo] Sr., or as to which any of them, or a corporation or entity owned by them, is the title holder of record, without prior permission from this Court" ( ibid.). In response, Riccardo Sr. consents to this relief, although arguing on his own motion that he is also entitled to a similar preliminary injunction against Riccardo Jr.
Based upon the showing made by Riccardo Jr. and the consent of Riccardo Sr., this application is granted to the extent set forth below. Riccardo Sr.'s request for injunctive relief is addressed in the discussion of his motion that follows.
G. Discovery: Included as part of the application for a preliminary injunction is Riccardo Jr.'s request that Riccardo Sr. be ordered "to produce and disclose to this Court immediately any other mortgage transactions he has entered into since 1996, and any mortgage applications he has made or filed since 1996, and any financial statements he has made or filed since 1996" ( ibid.). Riccardo Sr. opposes this request, arguing that this information should be part of the pretrial discovery that shall be exchanged by the parties.
Ordinarily, the Court would agree that all of the information sought by Riccardo Jr. should await pretrial discovery. Here, however, there is a history of efforts by Riccardo Sr. to obtain mortgages on properties that, at least as appears from the existing title documents, are not owned by him or any entity controlled by him. For that reason, as relates to the properties in issue, some immediate discovery is warranted.
Accordingly, this branch of the motion is granted to the extent that by no later than December 29, 2006, Riccardo Sr. shall submit his own affidavit to Riccardo Jr. in which he identifies all mortgages that he has taken out against the Three Riccardo Jr. Properties since January 1, 2005. In all other respects, this application is denied, and the parties shall exchange required information pursuant to a schedule to be established at the preliminary conference, as directed below.
H. Counsel Fees: Finally, Riccardo Jr. seeks an award of counsel fees based upon his claim that Riccardo Sr. was guilty of fraud by obtaining the Ashlar Mortgage. Because an insufficient showing of entitlement to fees as a sanction under 22 NYCRR Part 130 has been made by Riccardo Jr., this application is denied.
The Court has reviewed this request under the requirements applicable to the sanction rules because Riccardo Jr. has offered no other basis for a counsel fees award ( see Marotta v. Blau, 241 AD2d 664 [3rd Dept.1997] ["As a general rule, counsel fees are not recoverable in an action unless specifically provided for by statute or contract"]).
III. LYDIA MOTION 1
Lydia's first motion requests four forms of relief. Once again, Riccardo Sr. consents to the motion in part.
A. Consolidation: First, Lydia moves to consolidate Action 1 and Action 2. Riccardo Sr. consents to this relief. In fact, consolidation of the two actions was previously granted by Justice Jamieson at the June 2 Conference. Moreover, the parties subsequently consented to consolidation of all three actions captioned above. Therefore, this application is moot.
B. Injunction: Like her brother, Lydia asks the Court to award her a preliminary injunction against their father. Specifically, she proposes that the interim relief prohibit Riccardo Sr. from "attempting to enter into or to record, or entering into or recording any encumbrances or mortgages on property owned by, or claimed to be owned by, [her] or a corporation or entity wholly owned or partly owned by her, or as to which she or it is the record owner, without prior permission from the Court" (OTSC L1, p. 2). As with his son's similar request, Riccardo Sr. consents to this relief, although arguing that he is entitled to injunctive relief against Lydia.
Based upon the showing made by Lydia and Riccardo Sr.'s consent, this branch of the motion is granted to the extent set forth below. Riccardo Sr.'s request for injunctive relief against Lydia is addressed in the discussion of his motion that follows.
C. Discovery: Third, Lydia seeks the same discovery as to mortgages and mortgage applications that was made by her brother. In addition, she asks the Court to require Riccardo Sr. to produce "the minute books, management books and stock transfer ledger for [WPR] and any other materials in the possession, custody or control of [Riccardo Sr.] relating to said corporation" (OTSC L1, p. 2). Riccardo Sr. responds with a demand that any disclosure be made reciprocal, to include an accounting by Lydia of rent monies received by her from the Shopping Center tenants.
Under the circumstances presented, Lydia is entitled to the same type of information as ordered above on her brother's motion. Therefore, this application is granted to the extent that by no later than December 29, 2006, Riccardo Sr. shall submit his own affidavit to Lydia in which he identifies all mortgages that he has taken out against the Shopping Center since January 1, 2005. In all other respects, this request is denied, and the parties shall exchange required information pursuant to a schedule to be established at the preliminary conference, as directed below.
D. Rent Collection: Finally, as part of the third branch of her motion Lydia also urges the Court to bar Riccardo Sr. "from advising tenants of [WPR] that [he] or his agents are authorized or empowered to collect rents therefrom and/or accepting or retaining such rents" ( ibid.). In view of the discussion below concerning the lack of merit of Riccardo Sr.'s claim to the Shopping Center and the other properties in issue in these actions, this branch of the motion is also granted, and a temporary injunction shall issue as directed below.
IV. RICCARDO SR. MOTION Complaining that he is actually the aggrieved party in this litigation, and that he has been the victim of his ungrateful children's efforts to steal his assets from him, Riccardo Sr. moves for two forms of interim relief and summary judgment on his claims of ownership of the Shopping Center, 80 Hawkes, 542 Commerce, 677 Commerce and 696 Commerce (collectively hereinafter "the Five Properties"). Lydia and Riccardo Jr. oppose the motion in all respects.
A. Injunction: First, Riccardo Sr. asks the Court for a preliminary injunction barring Lydia and Riccardo Jr. from "selling, gifting or otherwise transferring, entering into or recording any encumbrances or mortgages on property owed by, or claimed to be owned by [him] or any corporation or entity wholly or partly owned by him, or as to which he or it is the record owner", including the Five Properties. To prevail on this branch of his motion under CPLR 6301, Riccardo Sr. "must prove three things: (1) likelihood of his ultimate success on the merits; (2) irreparable injury to him absent granting of the preliminary injunction; and (3) a balancing of equities" in his favor ( Albini v. Solork Associates, 37 AD2d 835 [2nd Dept. 1971]). Here, consideration of only the first element of this standard warrants the conclusion that Riccardo Sr. is not entitled to injunctive relief.
To establish a likelihood that he will prevail on his claims of ownership of the Five Properties, Riccardo Sr. must prove that he is the titled owner of those properties, that he has a claim that the properties are held for him by others, or that on some equitable theory title must be deemed to be in his name. What is problematic for Riccardo Sr. on these motions, and may be fatal to his claims when they are addressed on a dispositive motion or at trial, is the application of the doctrine of judicial estoppel, as relied upon by his two children.
As is well-settled in the jurisprudence of this State: "Judicial estoppel, or the doctrine of inconsistent positions, precludes a party who assumed a certain position in a prior legal proceeding and who secured a judgment in his or her favor from assuming a contrary position in another action simply because his or her interests have changed" ( Ford Motor Credit Company v. Colonial Funding Corp., 215 AD2d 435, 436 [2nd Dept. 1995]). The effect of that doctrine in the context of a sentencing proceeding wholly undermines Riccardo Sr.'s motion for a preliminary injunction, as recently explained by the Appellate Division, Second Department in Festinger v. Edrich ( 32 AD2d 412 [2nd Dept. 2006]).
In Festinger, the plaintiff sought to impose a constructive trust upon property whose purchase he allegedly funded for his sister with the understanding that she would hold the property for his benefit. On the defendant's summary judgment motion, evidence was offered that at his sentencing for a violation of probation regarding his failure to report assets and income which were available to make restitution, "the plaintiff, through his counsel, repeatedly advised the United States District Court that he was broke,' that he had no money or assets, and that he had used all of his resources toward the payment of restitution" ( id., at 413). Based upon the fact that his representation that he lacked any assets resulted in leniency from the sentencing Court, the Appellate Division held that the plaintiff was estopped from asserting an ownership interest in the property that was the subject of his lawsuit. As expressed by the Festinger Court, "the application of the doctrine [of judicial estoppel] was essential to avoid a fraud upon the court and a mockery of the truth-seeking function" ( ibid.). In addition, that Court held that "the plaintiff is bound by his prior representations in the federal proceeding, which constitute judicial admissions" ( id., at 414).
In this case, it is undisputed that in support of his application for a reduction of the financial penalty imposed upon him following his guilty plea, Riccardo Sr. represented to the Federal District Court that he owned no real estate or other assets, and that no one was holding any assets in his behalf. Those representations helped to secure him the sentence reduction that he sought. Having disclaimed ownership of any realty in a financial statement which he certified to be true on March 7, 1996, a date after the transactions giving rise to his claims in this litigation, Riccardo Sr. cannot be heard to assert any interest in the Five Properties for the purposes of any of the five motions before this Court ( Festinger v. Edrich, supra). Consequently, because he has failed to demonstrate any likelihood that he will prevail on his ownership claims, the motion for a preliminary injunction is denied ( see Schweizer v. Town of Smithtown, 19 AD3d 682, 682-683 [2nd Dept. 2005] [Injunctive relief denied where movant "did not demonstrate a likelihood of success on the merits of his claim"]).
B. Receiver: Relying upon his same claims of ownership, Riccardo Sr. moves for the appointment of a temporary receiver for the Five Properties. As has been recognized, "[the] [a]ppointment of a temporary receiver is an extreme remedy and should not be lightly granted" ( Emblem v. Juras, 112 AD2d 134 [2nd Dept. 1985]).
Here, as noted, there is significant doubt that Riccardo Sr. will prevail on his ownership claims in view of his representations to the contrary in Federal District Court. In view of the highly-questionable merit to his claims, he has failed to meet his burden of proving that a temporary receiver is necessary to protect his interest as a party to the action ( see Groh v. Halloran, 86 AD2d 30, 33 [1st Dept. 1982] ["In the absence of clear proof of the danger of irreparable loss or damage, and proof that a receiver is necessary for the protection of the parties to the action and their interests, a temporary receiver should not be appointed"]). Therefore, this application is denied.
C. Summary Judgment: The final branch of Riccardo Sr.'s motion seeks a determination that the Five Properties are being held in a constructive trust for him. Although not designated as such, since this application is one for a summary disposition of his constructive trust causes of action, it is clearly a summary judgment motion.
Putting aside the question of whether issue has been joined as to all of the claims and counterclaims of the parties ( see Chakir v. Dime Savings Bank, FSB, 234 AD2d 577, 578 [2nd Dept. 1996] [Where issue has not been joined as required by CPLR 3212(a), trial court is "powerless to grant summary judgment"]), based upon the application of the judicial estoppel doctrine to the undisputed facts at bar, Riccardo Sr. is not entitled to summary judgment in his favor. Accordingly, this branch of the motion is also denied.
V. LYDIA MOTION 2
As set forth in OTSC L2, there are eight branches on Lydia Motion 2. Except to the extent noted, Riccardo Sr. opposes the motion.
A. Consolidation: Once again, there is a request to consolidate Action 1 and Action 2. Since the parties are now in agreement that all three of the pending actions should be consolidated, an appropriate order shall be entered. Rather than directing consolidation, however, an order shall be entered joining all three actions for all purposes, including trial, because the parties in the three actions are not all similarly aligned ( see Mascioni v. Consolidated Rail Corp., 94 AD2d 738, 739 [2nd Dept. 1983] [Joint trial, as opposed to consolidation, is appropriate where "there is not an identity of parties in the two actions"]).
B. Escrow: The central issue in dispute on this motion is Lydia's application for an order requiring Riccardo Sr. to immediately place into escrow "any and all [of the proceeds of the Two Shopping Center Mortgages] remaining in [his] possession, custody or direct or indirect control" (OTSC L2, p. 2). In Lydia's view, "[o]nly by freezing and escrowing with this Court the new mortgage proceeds immediately and requiring an accounting from [Riccardo Sr.], along with the other relief herein requested, can this Court preserve and restore the status quo ante, and hopefully protect my corporation and its property from [his] false and fraudulent actions" (Lydia Tedesco Nioras Affid., 5/15/06, par.5). Riccardo Sr. opposes this request, arguing again that "there are no remaining funds from the proceeds" because they have been invested overseas (Guttridge Affirm., 6/30/06, par.10).
As relates to the proceeds of the Second Shopping Center Mortgage, an escrow order on this motion is unnecessary because, as set forth below, the payment of an amount equal to those proceeds for deposit into an escrow account is a purge condition upon the contempt adjudication against Riccardo Sr. on the Contempt Motion, and he shall be required to make the monthly payments on the Second Shopping Center Mortgage. And although the Court agrees with Lydia that Riccardo Sr. should not be permitted to receive the benefit of the proceeds of the First Shopping Center Mortgage, since he must also make the monthly mortgage payments toward the earlier mortgage current and continue to pay them pending further order of the Court, an appropriate level of interim relief has been provided to her with respect to the proceeds of the Two Shopping Center Mortgages (the Shopping Center Mortgage Proceeds). Accordingly, this branch of the motion is denied.
C. Accounting: Third, Lydia moves for an accounting of all monies received or disbursed by Riccardo Sr. from the proceeds of the Second Shopping Center Mortgage. Riccardo Sr. also opposes this request.
In view of the interim relief granted to her with respect to mortgage information on Lydia Motion 1, this application is duplicative. Therefore, this request is denied. To the extent that any information sought by her is not provided pursuant to the directive with respect to Lydia Motion 1, such information shall be obtained during pretrial discovery.
D. Non-party Discovery: Next, Lydia seeks leave to conduct depositions of Riccardo Sr.'s former counsel, the attorney who had been holding the corporate records for WPR, Ashlar and its President and other non-parties. Although he does not object to the request, Riccardo Sr. suggests that this application be addressed at a preliminary conference. The Court agrees. Therefore, this branch of the motion is denied. Lydia may seek any non-party discovery to which she is entitled in accordance with the procedures established by CPLR Article 31.
E. Stay of Proceedings: On two earlier orders to show cause signed by Justice Mary J. Smith with respect to motions to be relieved brought by Riccardo Sr.'s former counsel, stays of Action 1 and Action 2 were issued. The fifth branch of the motion seeks vacatur of the stays and a denial of the requests to be relieved sought by Riccardo Sr.'s former counsel.
At the June 2 Conference, Justice Jamieson vacated the stays. Moreover, Riccardo Sr. obtained new counsel after the two motions to be relieved were filed. Consequently, this branch of the motion is moot.
F. Response Dates: The sixth and seventh branches of the motion seek a schedule of dates for the submission of certain pleadings and responsive papers on the motions before this Court. Since those dates were set at the conference with the Court's Law Clerk, both of these applications are moot.
G. Discovery Dates: Finally, Lydia asks the Court to set a date certain for Riccardo Sr. to respond to her previous discovery demands. This application is granted solely to the extent that a preliminary conference shall be conducted, as directed below.
VI. CONTEMPT MOTION Perhaps the most significant of the motions before this Court is the Contempt Motion. On this motion, Lydia and Riccardo Jr. allege that Ricardo Sr. is guilty of civil contempt for violating:
1. TRO L1 by obtaining the Second Shopping Center Mortgage and receiving the proceeds of $320,000 (Violation 1); 2. TRO Jr. by attempting to mortgage 542 Commerce (Violation 2); 3. The May 17 Encumbrance Order by attempting to mortgage 542 Commerce (Violation 3); 4. The First Shopping Center Mortgage TRO by failing to make the monthly mortgage payments on the First Shopping Center Mortgage (Violation 4); 5. The First Shopping Center Mortgage TRO by failing to make the monthly mortgage payments on the Second Shopping Center Mortgage (Violation 5); 6. The First Shopping Center Mortgage TRO by spending or using the Shopping Center Mortgage Proceeds (Violation 6); 7. The bench order of Justice Jamieson issued at the June 2 Conference by failing to account to the Court, or to timely return to the Court, the Shopping Center Mortgage Proceeds (Violation 7); and 8. The bench order of Justice Jamieson issued at the June 2 Conference by "fail[ing] and neglect[ing] to provide the Court by June 7, 2006 or to date a Bond or with properties owned by [him] and the documents pertaining thereto, for escrow by the Court as security and collateral of value equivalent to the [Shopping Center Mortgage Proceeds]" (Order to Show Cause, 7/18/06, p. 3 [Violation 8]).
Based upon those claims (collectively hereinafter "the eight violations"]), Lydia and Riccardo Jr. ask this Court to punish Riccardo Sr. for civil contempt, although they do not specify the penalties sought by them.
Because they seek a civil contempt adjudication against their father on each of the eight violations, it is the children's burden to establish that Riccardo Sr. violated a clear and unequivocal court order, thereby prejudicing Lydia's or Riccardo Jr.'s rights in this litigation ( Goldsmith v. Goldsmith, 261 AD2d 576, 577 [2nd Dept. 1999]). Of course, this standard must be applied with respect to each of the eight violations.
Because this is not a contempt adjudication pursuant to DRL § 245, there is no obligation to demonstrate that a less drastic means of enforcement than contempt would be ineffectual ( cf. De Meo v. De Meo, 281 AD2d 662 [3rd Dept. 2001]).
A. THE UNPROVEN VIOLATIONS Turning first to Violation 2, it is alleged by Riccardo Jr. that his father violated TRO Jr. by attempting to mortgage 542 Commerce. However, the language of that order only bars Riccardo Sr. from "entering into or recording any mortgage or other encumbrance" against any properties in the name of, or owned by, or claimed to be owned by, Lydia or Riccardo Jr. As is evident, that language does not even address, much less prohibit, an unsuccessful attempt at mortgaging any properties claimed to be owned by the two children. Thus, even if such an attempt was made, it would not support a contempt adjudication on Violation 2 because there was no clear order prohibiting that conduct ( cf. Obadiah v. Shaw, 266 AD2d 520, 521 [2nd Dept. 1999] ["To prevail on a motion to punish a party for civil contempt, the movant must demonstrate that the party so charged violated a clear and unequivocal court order"]).
The same result follows with respect to Violation 3, which is a claim that Riccardo Sr. violated the May 17 Encumbrance Order by attempting to mortgage 542 Commerce. The May 17 Encumbrance Order uses the same language as TRO Jr. in barring Riccardo Sr. from mortgaging any of the properties that are the subject of ownership claims by Lydia or Riccardo Jr. Since an attempt to obtain a mortgage against 542 Commerce does not constitute a violation of the May 17 Encumbrance Order, the motion to adjudicate Riccardo Sr. guilty of civil contempt on Violation 3 is denied.
Similarly without support is Violation 5, which is an allegation that Riccardo Sr. violated the First Shopping Center Mortgage TRO by failing to make the monthly mortgage payments on the Second Shopping Center Mortgage. The First Shopping Center TRO contains no requirement that Riccardo Sr. make such payments. To the contrary, under that interim order he was directed to make the monthly payments on the First Shopping Center Mortgage, referred to in OTSC L2 as the "New Mortgage" (OTSC L2, p. 4). Therefore, no contempt adjudication is entered on Violation 5 ( cf. Gerelli Insurance Agency, Inc. v. Gerelli, 23 AD3d 341, 342 [2nd Dept. 2005] [Contempt application properly denied because "the language which purportedly granted the injunction failed to indicate clearly that a preliminary injunction was being granted or to specify precisely what action or actions were being enjoined"]).
The "New Mortgage" is identified in that order to show cause as the mortgage between WPR and E.R. Holdings LLC entered into on February 13, 2006 and recorded on May 5, 2006. As is apparent from the relevant facts cited above, this is the encumbrance referred to herein as the First Shopping Center Mortgage.
Violation 6, which is an allegation that Riccardo Sr. violated the First Shopping Center Mortgage TRO by spending, disbursing or otherwise using the Shopping Center Mortgage Proceeds, fails for two distinct reasons. That branch of the claim which rests upon Riccardo Sr.'s expenditure of the $550,000 proceeds of the First Shopping Center Mortgage is unsupported by any proof that any part of those funds was disposed of after the issuance of the First Shopping Center Mortgage TRO on May 17, 2006. Absent such proof, there can be no finding that Riccardo Sr. violated an existing court order, which is a requisite for a contempt adjudication ( Matter of Board of Education of City School District of City of New York v. Mills, 25 AD3d 952, 954 [3rd Dept. 2006] [To warrant contempt finding "it must appear with reasonable certainty that the order in question has in fact been disobeyed"]). And to the extent that Violation 6 relates to the proceeds of the Second Shopping Center Mortgage, it is without support in the record because, as noted above, the First Shopping Center Mortgage TRO applies only to the First Shopping Center Mortgage ( cf. Gerelli Insurance Agency, Inc. v. Gerelli, supra).
Next, Violation 7 is a claim that Riccardo Sr. violated a bench order issued by Justice Jamieson at the June 2 Conference by "failing to account to the Court, or to timely return to the Court", the Shopping Center Mortgage Proceeds. Although it is beyond credible dispute that Justice Jamieson believed that those funds should be returned to the jurisdiction of the Court and that she intended to issue an order requiring the return of those proceeds, as is also evident from a review of the transcript of the June 2 Conference, she never actually issued such a directive. For that reason, Lydia has failed to prove Violation 7.
Although the Court concludes that Violations 7 and 8 have not been proven, it notes that Riccardo Sr.'s argument that he may not be found guilty of contempt because "any directives issued by Judge Jamieson were not reduced to writing nor served on [Guttridge] or [him]" is without merit (Guttridge Affirm., 7/28/06, par.14). Contrary to that view, it is settled law that it is not necessary that an order actually have been served upon the obligated party if he has actual notice of its provisions ( see Graham v. Graham, 152 AD2d 653, 654 [2nd Dept. 1989]). Thus, any directive issued from the bench at the June 2 Conference would be binding upon Riccardo Sr. and would support a contempt adjudication ( Matter of Betancourt v. Boughton, 204 AD2d 804, 808 [3rd Dept. 1994] ["[P]revailing case law indicates that an oral order' or directive, issued in the contemnor's presence, placed upon the record and transcribed into the minutes of the proceeding, . . . may form the basis for [a] contempt adjudication]").
Failing for the same reason is Violation 8, which is premised on the contention that Riccardo Sr. violated a bench order issued by Justice Jamieson at the June 2 Conference by failing and neglecting to provide the Court with either a bond or with properties owned by him to be held in escrow by the Court as security for the Shopping Center Mortgage Proceeds. Again, it is plain that Justice Jamieson believed that such security should be posted. Indeed, she ordered Riccardo Sr. to provide her with a list of his properties by June 7, 2006 so that she could determine what would be required to later be posted as security. However, at no time during the June 2 Conference did she ever issue a directive that any bond be posted or that any property be placed in escrow. For that reason, Violation 8 also provides no basis for a contempt adjudication ( see Obadiah v. Shaw, supra).
Notably, while counsel for the two children asserts in conclusory fashion in his supporting affirmation that Riccardo Sr. has violated the bench directives upon which Violations 7 and 8 are founded, he provides no citations to the transcript of the June 2 Conference which support either alleged violation.
B. PROVEN VIOLATIONS As relates to Violation 1, Lydia has established that: (1) as of March 1, 2006 there was a valid order in effect, i.e., TRO L1, which prohibited Riccardo Sr. and any of the entities he controlled "from entering into or recording any mortgage or other encumbrance upon any properties of record in the name of, or owned or managed by, or claimed to be owned by [her], or [WPR]" (OTSC L1, p. 2-3 [emphasis added]); (2) the order "clearly express[ed] an unequivocal mandate" ( Matter of Department of Environmental Protection of New York v. Department of Environmental Conservation of State of New York, 70 NY2d 233, 240); (3) Riccardo Sr. had knowledge of the terms of the order ( Graham v. Graham, supra); (4) he violated the order by obtaining the Second Shopping Center Mortgage and receiving the proceeds of $320,000; and (5) his conduct was calculated to or actually did defeat, impair, impede, or prejudice her rights or remedies in Action 2 ( Clinton Corner H.D.F.C. v. Lavergne, 279 AD2d 339, 341 [1st Dept. 2001]). Similarly, Lydia has proven that: (1) as of May 17, 2006 the First Shopping Center Mortgage TRO required Riccardo Sr. "to timely make any and all payments required on the [First Shopping Center] Mortgage until the hearing and determination of [Lydia Motion 2]" (OTSC L2, p. 4); (2) the requirement that he continue to make those payments (the First Shopping Center Mortgage Payments) was clearly and unequivocally expressed; (3) Riccardo Sr. had knowledge of the terms of the First Shopping Center Mortgage TRO; (4) he violated that order by failing to make the First Shopping Center Mortgage Payments since the order was issued; and (5) his conduct was calculated to or actually did defeat, impair, impede, or prejudice her rights or remedies in Action 2. Those showings are sufficient to entitle Lydia to a civil contempt adjudication against her father on Violations 1 and 4 ( see Garry v. Garry, 121 Misc 2d 81, 85 [Sup. Ct. Nassau Co. 1983] [Defendant established entitlement to contempt finding upon proof that "the judgment upon which [she] relie[d] explicitly provide[d] that she is to have exclusive occupancy' of the condominium apartment and provides further that plaintiff has no right to the contents of the apartment[;] that [p]laintiff's actions in entering the apartment, changing the locks, and removing certain property, are clearly prohibited by the terms of the judgment[;] and [that plaintiff's conduct] equally clearly ha[d] the immediate effect of defeating defendant's rights as established by the judgment"]). Here, Riccardo Sr. admits each of the elements of the contempt showings made by Lydia. Seeking to avoid a contempt adjudication in the face of those admissions, he offers four arguments. None is sufficient to defeat the Contempt Motion.
First, he argues that any resolution of the contempt application should await a trial of these actions. As explained by Guttridge, "until such time as a determination is made as to the true ownership of the properties in dispute, there can be no finding that any actions taken by [Riccardo] Sr. has in any way prejudiced the rights of [Lydia] and [Riccardo] Jr.", because "[q]uite simply, [Lydia's] claim to WPR , is tenuous at best" (Guttridge Affirm., 7/28/06, par.3).
This argument borders on the frivolous, as it is founded upon the position that until a final disposition of this litigation the Court is bound by Riccardo Sr.'s evaluation of the merits of Lydia's claims. Contrary to that view, if there is a valid order issued by a Court, which is not contested at bar, no reason exists why enforcement of its terms should be delayed to the prejudice of a party to the action. And while Riccardo Sr. contends that no prejudice has been established, it is evident that to the extent that the value of WPR has been diminished by the encumbrances placed against the Shopping Center, Lydia, as the party who may very well be determined to own that corporation and its main asset, the Shopping Center, has been prejudiced ( cf. Goldsmith v. Goldsmith, supra, 261 AD2d, at 577 ["[Husband] violated a clear and unequivocal order of the court by executing a confession of judgment in favor of his friend which prejudiced the [wife] by elevating this individual's claim over her right to equitable distribution of the parties' cooperative apartment"] [internal citation omitted]).
Second, as to Violation 1, Riccardo Sr. makes a claim of lack of understanding of the terms of TRO L1. In particular, he states:
"I will tell this Court that although I can now say that I understand my obligations and responsibilities with regard to the temporary restraining order, I was unclear about my obligations and responsibilities at the time, since it was and still is my belief that I solely own the properties which are the subject of the restraining order. I did not know that I could not mortgage property that I own. As such, I was not truly aware that I was disobeying a court order when I mortgaged the [Shopping Center] . . . on March 17, 2006. But I can say that it was not done with an intention on my part to defraud anyone, especially the Court." (Riccardo Tedesco, Sr. Affid., 7/29/06, par.4).
Without reaching a determination as to the credibility of this claim, the Court rejects it as a defense to the contempt application regarding Violation 1.
Because the Court is granting the motion without a hearing, no credibility determination is necessary. If a ruling upon the credibility of this claim was warranted, Riccardo's criminal history, including both State and Felony fraud convictions, would certainly undermine his position on this motion. So too would his misrepresentations to the Federal District Court in the financial statement filed in support of his application for a sentence reduction. Clearly, Riccardo Sr. has not hesitated to make false statements to others, including a Federal District Court Judge, to advance his personal interests.
As is evident from a reading of TRO L1, it states in the plainest of terms that Riccardo Sr. and any entity he controls is barred from obtaining a mortgage against any property to which Lydia has made a claim of ownership. There is no language in TRO L1 that could confuse any honest reader as to the actions that it prohibited. Thus, it is obvious to this Court that rather than having been confused in any manner when TRO L1 was issued, Riccardo Sr. simply chose to ignore it and, when his violation was discovered, attempted to place his own interpretation upon the order to create a defense. Having made that choice, he must bear the legal consequences ( see McComb v. Jacksonville Paper Co., 336 U.S. 187, 192 ["[Respondents] undertook to make their own determination of what the decree meant. They knew they acted at their peril."]; see also Matter of McCormick v. Axelrod, 59 NY2d 574, 585 [Counsel who made his own interpretation of effect of stay order did so "at his peril"]).
If Riccardo Sr. was actually confused as to the scope of TRO L1, he could simply have requested his former counsel to seek clarification from the Court ( see Allan Dampf, P.C. v. Bloom, 122 AD2d 185, 186 [2nd Dept. 2006] ["If the defendant thought that the injunction was ambiguous in failing to precisely delineate who were the plaintiff's patients', he should have sought a clarification from the court before acting on his own hypertechnical and bad-faith reading of this term"]). Obviously, he had no real interest in requesting a determination from the Court before proceeding with a mortgage application, because the plain language of the order would have compelled a ruling contrary to his intentions.
Next, as to Violation 4, Riccardo Sr. asserts that the lacks the funds necessary to make the First Shopping Center Mortgage Payments, beyond the one payment that he represents has been made by him. As explained by Riccardo Sr.: "When I obtained the mortgages, it was my intention and my belief, that I as the rightful owner of the corporation and properties, would be able to use the income of the corporation and the properties to pay the mortgages" (Riccardo Tedesco, Sr. Affid., 7/29/06, par.3).
The Court notes that no proof of that payment has been presented.
This argument is unavailing for two reasons. First, having created the purported inability to make those payments, by executing a mortgage and then quickly disposing of the proceeds, amounting to more than one-half million dollars, Riccardo Sr. cannot be heard in defense of the alleged violation to complain that he now cannot satisfy the mortgage obligation that he voluntarily incurred ( see Benson Realty Corp. v. Walsh, 73 Misc 2d 889, 893 [Sup. Ct. NY Co. 1973] ["[I]t has been aptly observed that inability to obey the court's mandate is no defense where such default was occasioned by the acts of the party charged"]; cf. also Mirtuono v. Mirtuono, 104 AD2d 974 [2nd Dept. 1984] ["A party who willfully disables himself from complying with the terms of a judgment of separation is not thereby excused from compliance by reason of his financial inability to pay"]). Second, he has failed to demonstrate that no portion of those significant proceeds are available to him to make the monthly payments while the litigation continues. Indeed, other than asserting that he used some unspecified amount of the proceeds to satisfy a mortgage on 542 Commerce, he has not disclosed what was done with the approximately $515,000 that he received on behalf of WPR at the mortgage closing.
Finally, he asserts that "[b]efore any Order of Contempt, particularly an Order of Confinement, is issued, this Court should at least extend the due process of a hearing to determine [his] knowledge and understanding of the prior court order, and his ability at this time . . . to rectify the situation" (Guttridge Affirm., 7/28/06, par.3). The Court disagrees.
"[A]n application to adjudicate a party in contempt is treated in the same fashion as a motion and a hearing must be held if issues of fact are raised ( Quantum Heating Services Inc. v. Austern, 100 AD2d 843, 844 [2nd Dept. 1984] [internal citation omitted]). However, "a hearing is unnecessary where the facts are not in dispute" ( Garry v. Garry, supra, 121 Misc 2d, at 85). Thus, in this case, where Riccardo Sr. has admitted all of the elements of civil contempt as relates to Violations 1 and 4, no hearing is required ( ibid.; Matter of Ida Luz M., 131 Misc 2d 1053, 1059 [Fam. Ct. Richmond Co. 1986] ["When an alleged contemnor admits the acts in question or fails to deny them in the face of an OSC, the court need not hold a hearing on contempt"]).
Moreover, assuming, arguendo, that notwithstanding that he created his inability to pay, a hearing could be available to Riccardo Sr. on the issue of his ability to make the First Shopping Center Mortgage Payments, no basis for a hearing has been demonstrated in this case. Even in the context of contempt applications to enforce payment orders and judgments issued in matrimonial proceedings, where the defense of inability to pay is recognized by statute (DRL § 246), and where it is the general rule that a party claiming that defense is entitled to a hearing to determine whether he is financially unable to comply with the order ( see Boritzer v. Boritzer, 137 AD2d 477, 477 [2nd Dept. 1988]), a hearing is not to be granted merely because it is requested by the obligated party. To the contrary, a party asserting such a defense must still demonstrate the existence of factual issues that cannot be determined solely upon the basis of the motion papers ( see Bowie v. Bowie, 182 AD2d 1049, 1050 [3rd Dept. 1992] ["While in matrimonial matters the insertion of the financial inability to pay defense in response to a contempt application often requires the conducting of a hearing", [the cases recognizing the right to a hearing] are not to be read as requiring a hearing in every instance where the financial inability defense is raised; demonstrated factual issues must still exist"] [internal citations omitted]).
Consequently, to be entitled to a hearing on this defense, Riccardo Sr. was required to submit "a detailed affidavit as to his inability to pay" ( see Farkas v. Farkas, 209 AD2d 316, 318 [1st Dept. 1994] [italics in original]) or relevant financial records, which "demonstrate a genuine issue as to whether [he] is able to abide by the terms of [the First Shopping Center Mortgage TRO]" ( see id., at 318; see also Bowie v. Bowie, supra, 182 AD2d, at 1051 [Obligated party must present "current documentation supporting" the defense which has "probative value in assessing [his] current ability to pay"] [italics in original]). Having only offered his conclusory mantra that he no longer has the funds necessary to meet his obligations under the First Shopping Center Mortgage TRO, he has failed to establish his entitlement to a contempt hearing as to Violation 4 ( see Farkas v. Farkas, supra, 209 AD2d, at 317-318 [An obligated party is not entitled to a hearing where he merely offers "[t]he bare conclusory claim of inability . . ., unsupported by tax returns or other documentation"]). Thus viewed, Riccardo Sr. has failed to assert a viable defense, or even to demonstrate the existence of a factual issue requiring a hearing as to either Violation 1 or Violation 4. Consequently, this Court adjudicates him guilty of civil contempt for wilfully violating TRO L1 by obtaining the Second Shopping Center Mortgage. The Court further adjudicates Riccardo Sr. guilty of civil contempt for wilfully violating the First Shopping Center Mortgage TRO by failing to make the First Shopping Center Mortgage Payments from May 17, 2006 through July 18, 2006, the latter being the date this Court signed OTSC L3. In determining an appropriate punishment, the Court notes that because the contumacious conduct continues, the use of its coercive contempt power is appropriate (Judiciary Law § 774 ["Where the misconduct proved consists of an omission to perform an act or duty, which is yet in the power of the offender to perform, he shall be imprisoned only until he has performed it, and paid the fine imposed"]. Therefore, as purge conditions, Riccardo Sr. shall be required to: (1) pay $320,000 to Lydia's attorneys, which shall be deposited into an escrow account to be maintained by them pending further order of the Court, that being the face amount of the Second Shopping Center Mortgage; and (2) make all payments necessary to make the First Shopping Center Mortgages current. In addition, because Lydia and Riccardo Jr. have not proven the amount of any actual loss, the Court shall require the payment of a fine in the amount of $250 (Judiciary Law § 773), which shall be a further purge condition ( see Quantum Heating Services Inc. v. Austern, supra, 100 AD2d, at 844 ["[P]ursuant to sections 753 and 773 of the Judiciary Law, any fine must be limited to either (1) the actual loss or injury produced by reason of [the accused's] misconduct or (2) $250, plus legal costs and expenses, in the event there has been no actual damage'"]).
Although Lydia asks the Court to award her "motion costs, and the fees and disbursements of her attorneys in these proceedings", she has not presented any proof of those expenses. For that reason, no such award has been made.
VII. FURTHER PROCEEDINGS
It appears that there has been no preliminary conference conducted in this action except as to Action 1. Now that the three actions are joined for trial, a preliminary conference must be conducted to establish a schedule for the completion of all remaining discovery. Counsel for all parties shall appear before this Court for that conference at 9:30 a.m. on January 4, 2007.
WHEREFORE, it is
ORDERED that pending further order of the Court, Riccardo Tedesco, Sr., his agents, employees and anyone acting in his behalf, are prohibited from selling, transferring, mortgaging, encumbering or otherwise disposing of any properties owned by, or claimed to be owned by, Riccardo Tedesco, Jr., or as to which Riccardo Tedesco, Jr., or a corporation or entity owned by him, is the title holder of record, or attempting to do any of those acts, without prior permission from the Court; and it is further
ORDERED that by no later than December 29, 2006, Riccardo Tedesco, Sr. shall submit his own affidavit to Riccardo Tedesco, Jr. in which he identifies all mortgages that he has taken out against any of the properties identified herein as the Three Riccardo Jr. Properties since January 1, 2005; and it is further ORDERED that pending further order of the Court, Riccardo Tedesco, Sr., his agents, employees and anyone acting in his behalf, are prohibited from selling, transferring, mortgaging, encumbering or otherwise disposing of any properties owned by, or claimed to be owned by, Lydia Tedesco Nioras, or as to which Lydia Tedesco Nioras, or a corporation or entity owned by her, is the title holder of record, or attempting to do any of those acts, without prior permission from the Court; and it is further
ORDERED that by no later than December 29, 2006, Riccardo Tedesco, Sr. shall submit his own affidavit to Lydia Tedesco Nioras, in which he identifies all mortgages that he has taken out against the property identified herein as the Shopping Center since January 1, 2005; and it is further
ORDERED that Riccardo Tedesco, Sr., his agents, employees and anyone acting is his behalf, are prohibited from informing tenants of the property identified herein as the Shopping Center or any other property owned or managed by 122 W.P.R. Corp. that he or those acting for him are authorized or empowered to collect rents from any such tenants or to retain such rents; and it is further ORDERED that pending further order of the Court, Riccardo Tedesco, Sr. shall make all monthly mortgage payments on the mortgages identified herein as the First Shopping Center Mortgage and the Second Shopping Center Mortgage; and it is further
ORDERED that the actions captioned above as Action 1, Action 2 and Action 3 are joined for all purposes, including trial; and it is further
ORDERED AND ADJUDGED that Riccardo Tedesco, Sr. is guilty of civil contempt of court for his wilful violation of the temporary restraining order issued as part of an order to show cause signed on March 1, 2006 in the action captioned Lydia Tedesco Nioras v. Riccardo Tedesco, Sr. (Westchester County Index No. 3453/06) by obtaining a mortgage in the amount of $320,000 against the property of 122 W.P.R. Corp. identified herein as the Shopping Center from E.R. Holdings LLC on March 17, 2006; and it is further
ORDERED AND ADJUDGED that said civil contempt was calculated to and did actually defeat, impair, impede and prejudice the rights of Lydia Tedesco Nioras; and it is further
ORDERED AND ADJUDGED that Riccardo Tedesco, Sr. is guilty of civil contempt of court for his wilful violation of the temporary restraining order issued as part of an order to show cause signed on May 17, 2006 in the action captioned Lydia Tedesco Nioras v. Riccardo Tedesco, Sr. (Westchester County Index No. 3453/06) by failing to make the monthly payments on a mortgage in the amount of $550,000 against the property of 122 W.P.R. Corp. identified herein as the Shopping Center that he obtained from E.R. Holdings LLC on February 13, 2006; and it is further
ORDERED AND ADJUDGED that said civil contempt was calculated to and did actually defeat, impair, impede and prejudice the rights of Lydia Tedesco Nioras; and it is further
ORDERED that pursuant to Judiciary Law § 773 Riccardo Tedesco, Sr. is fined in the amount of $250.00, which he shall pay to the law firm of McCarthy Fingar LLP, in behalf of Lydia Tedesco Nioras; and it is further
ORDERED that Riccardo Tedesco, Sr. will be purged of these civil contempts if, by no later than 1:00 p.m. on January 3, 2007, he does all of the following: (1) pays $320,000 to the law firm of McCarthy Fingar LLP, the attorneys for Lydia Tedesco Nioras, which they shall deposit into an interest-bearing escrow account to be maintained by them at the bank where they maintain their attorney office account, and which funds shall not be disbursed until further order of the Court; (2) provides proof that he has made all payments necessary to bring current the mortgage against the property of 122 W.P.R. Corp. identified herein as the Shopping Center that he obtained from E.R. Holdings LLC on February 13, 2006; and (3) pays a fine in the amount of $250.00 to the law firm of McCarthy Fingar LLP, in behalf of Lydia Tedesco Nioras; and it is further
ORDERED that Riccardo Tedesco, Sr. shall appear before this Court on January 4, 2007 at 9:30 a.m. to offer proof that he has purged himself of this civil contempt as set forth above; and it is further
ORDERED that if Riccardo Tedesco, Sr. fails to purge himself of this civil contempt as set forth above, then at 9:30 a.m. on January 4, 2007 he shall be committed to the custody of the Westchester County Commissioner of Corrections to be incarcerated at the Westchester County Jail until he has offered proof to this Court that he has fully satisfied the purge conditions as set forth above; and it is further
ORDERED that if Riccardo Tedesco, Sr. fails to appear before this Court at 9:30 a.m. on January 4, 2007, a bench warrant shall be issued for his arrest; and it is further
ORDERED that counsel for all parties in the three joined actions shall appear before this Court on January 4, 2007 at 9:30 a.m. for a preliminary conference. The foregoing shall constitute the decision and order of the Court.