SPIN CAPITAL LLC v. Fred Stevens, Nonparty Receiver-Respondent. (2025)

Judgment, Supreme Court, New York County (Andrew Borrok, J.), entered December 3, 2024, adjudging defendant Stefan Leer liable to nonparty Receiver Fred Stevens for $2,230,197.11, and bringing up for review an order, same court and Justice, entered April 26, 2024, which declared Leer in criminal contempt ordering him to remit to the Receiver $2,139,685.91, plus interest, and to turn over the requested documents, and which granted the motion of the Receiver to enforce two orders, same court and Justice, dated January 4, 2023, appointing the Receiver (the Receivership Order), and January 4, 2024, holding Leer in civil contempt and directing him to turn over to the Receiver $1,985,367.42 in receivership property by January 5, 2024, unanimously affirmed, with costs.  Appeal from the April 26, 2024, order, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Supreme Court properly held Leer in criminal contempt because he individually disobeyed the injunction in the court's Receivership Order and took actions that were calculated to or actually did defeat, impair, impede, or prejudice the receiver's rights or remedies in preserving collateral for plaintiff (see El–Dehdan v. El–Dehdan, 26 N.Y.3d 19, 22, 19 N.Y.S.3d 475, 41 N.E.3d 340 [2015];  Hero Boy, Inc. v. Dell'Orto, 306 A.D.2d 226, 227, 761 N.Y.S.2d 648 [1st Dept. 2003]).

Leer willfully applied for death benefit proceeds on behalf of defendant Life Shares 1019 (LS 1019) despite the Receivership Order, which explicitly prohibited that from being done.  Thus, in its January 4, 2024, order, the court properly held Leer in civil contempt.  Leer then violated that civil contempt order by failing to turn over the proceeds to the Receiver, resulting in the criminal contempt order from which he now appeals.  Although Leer was given opportunities to provide the requested documents to show his claimed inability to pay, Leer's attorney and LS 1019's attorney offered no good response for why Leer failed to produce those documents (see El–Dehdan, 26 N.Y.3d at 35–36, 19 N.Y.S.3d 475, 41 N.E.3d 340).

We reject Leer's jurisdictional objection to the Receivership Order.  First, LS 1019 cannot argue that the court lacked personal jurisdiction over it because it submitted an answer which did not assert lack of personal jurisdiction and then participated actively in the litigation.  Secondly, Leer, individually, was properly held in contempt.  The Receivership Order “was valid on its face ․ [so it] was to be obeyed even if erroneously made” (New York City Coalition to End Lead Poisoning v. Giuliani, 248 A.D.2d 120, 121, 669 N.Y.S.2d 552 [1st Dept. 1998]).

Leer's reliance on there being a corporate separateness between him individually and LS 1019 is unavailing because he is being held liable for his own contempt (see Vastwin Invs. v. Aquarius Media Corp., 295 A.D.2d 216, 217, 743 N.Y.S.2d 492 [1st Dept. 2002], lv dismissed 99 N.Y.2d 637, 760 N.Y.S.2d 91, 790 N.E.2d 264 [2003]).