Yong Hong Xie, respondent, v. Lan Chen, et al., appellants, et al., defendant. (2026)

Argued—September 19, 2025

DECISION & ORDER

O/

In an action, inter alia, to recover damages for breach of contract and breach of fiduciary duty, the defendants Lan Chen and Kun Yi Kay Zeng appeal from an order of the Supreme Court, Queens County (Leonard Livote, J.), entered August 30, 2023.  The order denied those defendants' motion to vacate an order of the same court entered December 9, 2022, (1) directing those defendants to produce copies of all federal and state tax returns, including all schedules and riders, filed by or on behalf of those defendants for the tax years 2012 through the present on or before December 14, 2022, and (2) stating that if those defendants violated the order, the court would hold those defendants in contempt and impose sanctions upon those defendants and their counsel without further notice.

In March 2023, the defendants moved to vacate the December 2022 order.  In an order entered August 30, 2023, the Supreme Court denied the motion.  The defendants appeal.

The Supreme Court should have granted that branch of the defendants' motion which was to vacate so much of the December 2022 order as conditionally held the defendants in contempt.  Pursuant to Judiciary Law § 756, a contempt application must be in writing, must be made upon at least 10 days' notice, and must contain on its face the statutory warning that “FAILURE TO APPEAR IN COURT MAY RESULT IN YOUR IMMEDIATE ARREST AND IMPRISONMENT FOR CONTEMPT OF COURT” (id.;  see Community Preserv.  Corp. v Northern Blvd. Prop., LLC, 139 AD3d 889, 890).  Here, among other things, the defendants were never provided with the warning required by Judiciary Law § 756 (see id.;  Board of Mgrs. of Brightwater Towers Condominium v M. Marin Restoration, Inc, 206 AD3d 605, 607;  Community Preserv.  Corp. v. Northern Blvd. Prop., LLC, 139 AD3d at 890).  Further, an order requiring the performance of an act may not include an additional clause stating that in default thereof, the party will be guilty of contempt of court (see Murrin v. Murrin, 93 A.D.2d 858).

The Supreme Court also should have granted that branch of the defendants' motion which was to vacate so much of the December 2022 order as conditionally imposed sanctions upon the defendants and their counsel.  “A court does not have the authority to impose a penalty or sanction absent enabling legislation or court rule authorizing the penalty or sanction” (Matter of Fernandez v. Nigro, 178 AD3d 703, 704).  Here, the court cited to no legislation or court rule to support the imposition of sanctions.  To the extent that the court relied upon 22 NYCRR 130–1.1, it should not have done so.  Among other reasons, the December 2022 order did not set forth the conduct on which the imposition of sanctions was based and the reason why the court found the conduct to be frivolous (see 22 NYCRR 130–1.2;  Glen v. Annunziata, 53 AD3d 565;  Hamilton v. Cordero, 10 AD3d 702).

However, contrary to the defendants' contentions, the Supreme Court properly denied that branch of the defendants' motion which was to vacate so much of the December 2022 order as directed the defendants to produce the tax returns on or before December 14, 2022 (see Yong Hong Xie v. Lan Chen, _ AD3d _ [Docket No. 2022–08158;  decided herewith] ).

The parties' remaining contentions are without merit.

CONNOLLY, J.P., BRATHWAITE NELSON, HOM and GOLDBERG VELAZQUEZ, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court