Madigan v. Berkeley Capital LLC

2023 NY Slip Op 50879(U)

Faye T. Madigan, Independent Administrator of Estate of Kenneth M. Thompson, deceased, Plaintiff, v. Berkeley Capital LLC, Rosa Bronstein, Oceana Holding Corp., Faina Bronstein Aka Faina Tsynman, Yanina Ilan, M&R Brighton Land Corp., M.R.O.D. Realty Corp, 2640 Management Properties, L.L.C., 2640 East 14 L.L.C., Corporation Doe 1-10, John Doe 1-10 and Jane Doe 1-10 (as being unnamed entities who are either alter ego or hold assets of Judgment debtor Aron O. Bronstein), Defendants.

Index No. 516351/2017

Supreme Court, Kings County

August 25, 2023

Unpublished Opinion

Joseph Paukman, Brooklyn, for Plaintiff.

Law Offices of Daniel S. Steinberg P.C., New York City (Daniel S Steinberg of counsel), for Defendant Oceana Holding Corp.

Aaron D. Maslow, J.

The following numbered papers were read on this motion ^[1]

Submitted by Defendant Oceana Holding Corp.

NYSCEF Doc No. 358 - Notice of Motion

NYSCEF Doc No. 359 - Affirmation of Daniel S. Steinberg in Support of Motion

NYSCEF Doc No. 360 - Exhibit A: Stay Order of Supreme Court dated Nov. 6, 2017

NYSCEF Doc No. 361 - Exhibit B: Protective Order of Supreme Court dated Oct. 22, 2018

NYSCEF Doc No. 362 - Exhibit C: Appellate Division Order &amp Opinion dated May 18, 2022

NYSCEF Doc No. 363 - Exhibit D: Printer's Invoices for Appellate Division Appeal

NYSCEF Doc No. 364 - Exhibit E: Order to Show Cause to Hold Plaintiff in Contempt dated Sept. 6, 2018

NYSCEF Doc No. 365 - Affirmation of Legal Services of Daniel S Steinberg

NYSCEF Doc No. 366 - Exhibit A: List of Cases for Daniel S Steinberg

NYSCEF Doc No. 367 - Exhibit B: Invoices of Daniel S. Steinberg P.C.

Submitted by Plaintiff

NYSCEF Doc No. 368 - Adjournment Request

Submitted by Defendant Oceana Holding Corp.

NYSCEF Doc No. 369 - Response to Adjournment Request

Submitted by Plaintiff

NYSCEF Doc No. 373 - Adjournment Request

NYSCEF Doc No. 374 - Exhibit A: Appellate Division Order & Opinion dated May 18, 2022

NYSCEF Doc No. 375 - Exhibit B: Stay by Appellate Division Pending Perfection of Appeal dated Dec. 27, 2018

NYSCEF Doc No. 376 - Exhibit C: Notice of Motion to Appellate Division

NYSCEF Doc No. 377 - Exhibit D: Motion for Leave to Appeal to Court of Appeals

NYSCEF Doc No. 378 - Affirmation of Joseph Paukman in Opposition to Motion

NYSCEF Doc No. 379 - Exhibit A: Appellate Division Order & Opinion dated May 18, 2022

NYSCEF Doc No. 380 - Exhibit B: Stay by Appellate Division Pending Perfection of Appeal dated Dec. 27, 2018

NYSCEF Doc No. 381 - Affirmation of Joseph Paukman in Opposition to Motion

Submitted by Defendant Oceana Holding Corp.

NYSCEF Doc No. 382 - Reply Affirmation of Daniel S. Steinberg in Support of Motion

NYSCEF Doc No. 383 - Exhibit A: Order to Show Cause of Appellate Division dated June 3, 2022

NYSCEF Doc No. 384 - Exhibit B: Order to Show Cause of Appellate Division dated Dec. 8, 2022

NYSCEF Doc No. 385 - Exhibit C: Proposed Order to Show Cause Submitted to Court of Appeals

NYSCEF Doc No. 386 - Exhibit D: Response to Appeal to Court of Appeals

Submitted by Plaintiff

NYSCEF Doc No. 387 - Affirmation of Joseph Paukman in Opposition to Motion

NYSCEF Doc No. 388 - Affirmation of Joseph Paukman in Opposition to Motion

NYSCEF Doc No. 389 - Affirmation of Joseph Paukman in Opposition to Motion

Submitted by Defendant Oceana Holding Corp.

NYSCEF Doc No. 392 - Letter to Court re Court of Appeals Dismissing Appeals

Submitted by Plaintiff

NYSCEF Doc No. 393 - Letter to Court re Appeals

NYSCEF Doc No. 398 - Adjournment Request

NYSCEF Doc No. 399 - Adjournment Request

Submitted by Defendant Oceana Holding Corp.

NYSCEF Doc No. 400 - Response to Adjournment Request

Submitted by Plaintiff

NYSCEF Doc No. 401 - Reply in Support of Adjournment Request

NYSCEF Doc No. 411 - Letter to Court Reviewing Documents Filed

NYSCEF Doc No. 414 - Adjournment Request

Submitted by Defendant Oceana Holding Corp.

NYSCEF Doc No. 423 - Adjournment Request

Submitted by Defendant Oceana Holding Corp.

NYSCEF Doc No. 424 - Response to Adjournment Request

Submitted by Plaintiff

NYSCEF Doc No. 425 - Reply in Support of Adjournment Request

NYSCEF Doc No. 426 - Exhibit A: Letter from Korenblit & Vasserman, PLLC to Exclusive Land Services

Introduction

Upon remittal from the Appellate Division, Second Department having read the foregoing papers and heard oral argument at a hearing before this Court on July 6, 2023, and due deliberation having been had thereon, the within motion is determined as follows.

Relevant history is provided in the Appellate Division, Second Department's Decision-Order in this case:

In 2001, nonparty Aron Bronstein pleaded guilty to 1 count of conspiracy to commit securities fraud and wire fraud and 13 counts of securities fraud in the United States District Court for the Southern District of New York (hereinafter the Southern District). As part of the disposition of those charges, Bronstein, together with his codefendants, was ordered to pay restitution to the victims of the fraud. The plaintiff's decedent was among those entitled to restitution pursuant to Bronstein's judgment of conviction (hereinafter the criminal judgment).

In 2003, the plaintiff obtained a default judgment against Bronstein in the United States District Court for the Northern District of Georgia (hereinafter the Georgia judgment) in an action seeking civil damages for the same underlying conduct. The plaintiff commenced litigation in the United States District Courts for the Eastern District of New York (hereinafter the Eastern District) and the Southern District in 2016 and 2018, respectively, for the purpose of enforcing the criminal and the Georgia judgments.

In 2017, the plaintiff commenced this action in the Supreme Court, Kings County, against various persons and entities associated with Bronstein, alleging, inter alia, fraudulent conveyance interfering with her ability to enforce the restitution provisions of the criminal judgment.

(Madigan v Berkeley Capital, LLC, 205 A.D.3d 900, 901-902; NYSCEF Doc No. 362 at 3-4.)

This action was commenced via a summons, notice, and subpoena with restraining notice by the plaintiff, Faye T. Madigan ("Plaintiff"), as executor of the Estate of Kenneth Thompson, against various Defendants, including Oceana Holding Corp. ("Oceana"). It was alleged that Plaintiff was a holder of a judgment against Mr. Bronstein, who had been convicted as described above. Plaintiff's deceased husband was one of those allegedly defrauded by Mr. Bronstein. Plaintiff alleged that certain Defendants, including Oceana, were aiding Mr. Bronstein in concealing his assets, including through his fraudulent conveyance of the money he stole; that in fact they were alter egos for Mr. Bronstein; and that Defendants continued to assist Mr. Bronstein in evading his obligation to pay the judgment. (See NYSCEF Doc No. 2, Summons, Notice & Subpoena with Restraining Notice.)

Defendant Oceana Holding Corp. ("Oceana") moves for relief as follows:

Pursuant to (a) the Kings County Supreme Court Order issued by Hon. Justice Kathy J. King, which was dated October 22, 2018 and entered October 25, 2018 ("Protective Order") (see NYSCEF Doc No. 361); (b) the Decision and Order of the Second Department, dated and entered May 18, 2022 ("Appellate Division Decision-Order") (see NYSCEF Doc No. 362); and (c) CPLR §8107, ^[2] CPLR §8203 (a), ^[3] and CPLR §8301, ^[4] Oceana seeks a judgment against Plaintiff and her counsel, Joseph Paukman, Esq. ("Plaintiff's counsel") for costs and disbursements in the amount of $13,638.45.

Based on (a) the Appellate Division Decision-Order finding Plaintiff's counsel, Joseph Paukman, Esq., in criminal contempt and imposing a criminal sanction of $10,000.00; and (b) Judiciary Law §§790 ^[5] and 791, ^[6] Oceana seeks an Order directing the Clerk of the Court to prepare a schedule and issue a warrant with respect to the criminal sanction and commanding the Sheriff of Kings County to collect the sum set forth in the schedule, for payment to the Comptroller of the City of New York.

1. Pursuant to the Protective Order, the Appellate Division Decision-Order, and 22 NYCRR 130-1.1, Oceana seeks a judgment against Plaintiff and her counsel, Joseph Paukman, Esq. for the reasonable attorney's fees to which Oceana is entitled.

To fully grasp the genesis of this motion as well as the nature of Plaintiff and her counsel's (Mr. Paukman ^[7] actions leading up to it, one is constrained to gain an understanding of previous orders issued in this case.

Justice Kathy J. King's Stay of Proceedings Order

Early in this 2017 case, the Kings County Supreme Court, per Hon. Justice Kathy J. King, issued a broad stay of proceedings order, dated November 6, 2017 and entered November 9, 2017 (the "Stay Order") (see NYSCEF Doc No. 360). In the Stay Order, Justice King granted the motion interposed by Oceana for a stay of the action pursuant to CPLR 2201. The stay pended certain enforcement activity in light of proceedings taking place in the U.S. District Court for the Eastern District of New York with respect to the validity and enforceability of the Georgia federal judgment. (Id.)

Specifically, in the Stay Order in question, Justice King issued a sweeping stay directive as follows:

ORDERED that all proceedings in this action, including those for the domestication and/or enforcement of (i) a foreign judgment originally entered in the United States District Court, Northern District of Georgia on April 2, 2003 (the "Georgia Judgment") and (ii) a judgment in a criminal case entered on March 23, 2001 in the United States District Court, Southern District of New York (the "Criminal Case Judgment"), are stayed[.]

(Id. at 2.)

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