Learn About the Law
Get help with your legal needs
Thupten GYELTSEN, Plaintiff, v. VOGEL & ROSENBERG and Donald Rosenberg, Defendants.
Plaintiff, Thupten Gyelsten, previously obtained a money judgment of more than $2 million against defendants, jointly and severally. Plaintiff, seeking to enforce that judgment, now moves under CPLR 5224 (a) (3) and CPLR 2308 (b) to compel defendant Donald Rosenberg to answer certain questions in an information subpoena. This branch of plaintiff's motion is granted. Plaintiff also requests an award under CPLR 2308 (b) (1) of damages caused by defendant's failure to comply. This branch of the motion is granted in part and denied in part. Rosenberg cross-moves to vacate the judgment. The cross-motion is denied.
In 2007, plaintiff, a Tibetan refugee, retained the (former) law firm of Vogel & Rosenberg to represent him in an action to recover damages for personal injuries suffered in a construction accident. Defendant Rosenberg, a principal of Vogel & Rosenberg, borrowed money against plaintiff's potential recovery in this action through a company known as CaseCash. Rosenberg settled plaintiff's personal-injury action for $500,000. He did not, however, repay the CaseCash loans, did not repay a workers’ compensation lien on plaintiff's recovery, and did not pay plaintiff his share of the settlement (approximately $350,000).1 As a result, both the State Workers’ Compensation Board and CaseCash pursued plaintiff for funds he had never received.
In 2014, plaintiff brought this action against Rosenberg and Vogel & Rosenberg, asserting claims sounding in malpractice, fraud, and Judiciary Law § 487.
In 2015, the Lawyers’ Fund for Client Protection awarded plaintiff $302,012—$100,000 to cover the money owed to CaseCash, $72,016 to cover the workers’ compensation lien, and the remaining $130,005 directly to plaintiff. (See NYSCEF No. 107.) In connection with Rosenberg's criminal prosecution, the New York County District Attorney's Office obtained an approximately $330,000 money judgment against Rosenberg and in favor of plaintiff. Plaintiff then assigned that judgment to the Lawyers’ Fund “only to the extent of the amount paid by the Lawyers’ Fund, to wit the sum of $302,021.” (NYSCEF No. 108.) The assignment agreement also subrogated the Lawyers’ Fund “to the extent of $302,021.” (Id.)
In 2016, this court granted plaintiff summary judgment on liability on default, and directed an inquest on damages. (See NYSCEF No. 39.) An inquest was held before a judicial hearing officer (Ira Gammerman, J.). (See generally NYSCEF No. 52.) Rosenberg did not appear at the hearing. JHO Gammerman recommended that this court award plaintiff $500,00 (the face value of the underlying personal-injury settlement), trebled under Judiciary Law § 487 to $1.5 million, plus $500,000 in punitive damages, for a total of $2 million. (See NYSCEF No. 52 at 12-15.) Plaintiff then moved to confirm JHO Gammerman's recommendation. (See NYSCEF No. 64.) Rosenberg did not oppose the motion. In June 2017, this court confirmed the recommendation on default and awarded plaintiff $2 million plus interest. (See NYSCEF No. 75.) With interest, plaintiff's judgment came to $2,134,660.27 (plus, at this point, significant post-judgment interest). (See NYSCEF No. 81.)
In April 2021, plaintiff served defendant with a subpoena to obtain information in aid of satisfying the judgment. Defendant refused to answer several subpoena questions, as follows:
“10. Q. What is the identity of the bank account into which your Social Security benefits are deposited?ANSWER: Declined based on exempt status of Social Security benefits”
“16. Q. Do you have children?ANSWER: yes”
“17. Q. If your answer to the foregoing question is in the affirmative, what is:a) the full name of each child;b) the address for each child;c) the age of each child?ANSWER: Declined”
“33. Q. Do you receive funds from any of the following: a pension, disability payments of any kind, contributions to your support, income (no matter how it is denominated)?ANSWER: yes”
“34. Q. If your answer to the foregoing question is in the affirmativea) identify the source;b) the amount of funds;c) the frequency of payments;d) the identity of the account into which the funds are deposited; andd) the identity of persons having access to the accounts into which the funds are deposited?ANSWER: Declined - see Answer #10”
“35. Q. What is the identity of the credit cards to which you had authority/permission to make purchases and/or borrow funds during the time period January 1, 2016 to the present?ANSWER: Declined”
“65. Q. What are the particulars of the employment or business of your family members?ANSWER: Declined”
(NYSCEF No. 91 at 3-6.)
Plaintiff alleges that a woman named “Ellen Rosenberg” may be receiving fraudulent transfers from defendant. Plaintiff attaches PDFs of unidentified websites stating that Rosenberg lives at defendant's address and owns defendant's phone number. (See NYSCEF No. 91, 100, 101.) Defendant states that Ellen Rosenberg does not exist. Plaintiff also claims that defendant “engaged in recent business activity” because (i) defendant's law website was allegedly renewed in April 2021 (although plaintiff does not identify who renewed the website); and (ii) defendant uses an email address related to his former practice. (See NYSCEF No. 91, 110, 111.) Defendant denies these allegations. Defendant states that he has no assets and that his sole income is from Social Security.
I. Plaintiff's Motion to Compel Defendant to Answer Questions in the Information Subpoena
A judgment creditor may compel disclosure of “all matter relevant to the satisfaction of the judgment” at any time before a judgment is satisfied or vacated. CPLR 5223. This “generous standard” permits creditors “a broad range of inquiry.” (Gryphon Domestic VI, LLC v GBR Info. Servs., Inc., 29 AD3d 392, 393 [1st Dept 2006].) New York public policy demands that “no obstacle be put in the path of a judgment creditor seeking to enforce the judgment of a court of competent jurisdiction.” (Raji v Bank Sepah-Iran, 139 Misc 2d 1026, 1032 [Sup Ct, NY County 1988].)
A judgment creditor is entitled to discovery from both the judgment debtor or a third party “to determine whether the judgment debtor concealed any assets or transferred any assets so as to defraud the judgment creditor or improperly prevent[ ]” collection of the judgment. (George v Victoria Albi, Inc., 148 AD3d 1119, 1119 [2d Dept 2017].) Courts hold that CPLR 5223 permits discovery into family members’ affairs in certain contexts. (See Siemens & Halske Gmbh. v Gres, 77 Misc 2d 745, 745 [Sup Ct, NY County 1973], affd without opn. 43 AD2d 1021 [1st Dept 1974] [holding discoverable joint income tax returns of defendant and her husband]; Aaron v McIntyre, 15 AD3d 475, 476 [2d Dept 2005] [holding discoverable the tax returns of judgment debtor's wife's business when debtor might have used the business to conceal income and assets].)
This court concludes that defendant must answer the questions in the information subpoena about defendant's bank accounts, credit cards, sources of income, and children. Plaintiff's questions are relevant under CPLR 5223 to enforcement of his judgment. Plaintiff argues that Ellen Rosenberg and defendant's alleged recent business activity suggest defendant may have fraudulently conveyed assets to avoid paying plaintiff. (See NYSCEF No. 106 at 5-6 [reply affirmation of Louis Venezia].) Defendant states that Ellen Rosenberg does not exist. Defendant denies the alleged potential fraudulent conveyances, and alleged recent business activity. (See NYSCEF No. 114 at 2 [reply affidavit of Donald Rosenberg].) However, the scope of discovery for judgement-enforcement subpoenas extends to “all matters relevant.” (See CPLR 5223.) Courts have upheld both discovery into family members’ affairs and discovery to determine whether a judgment debtor has fraudulently concealed or transferred assets. (See George, 148 AD3d at 1119; Siemens & Halske Gmbh., 77 Misc 2d at 745; Aaron, 15 AD3d at 476.) Thus, plaintiff's questions fit within the broad scope of discovery granted by CPLR 5223.
Defendant refused to answer questions about the bank account of his Social Security deposits. According to defendant, Social Security is exempt from application to the satisfaction of a money judgment under CPLR 5205. Defendant does not, however, identify authority to support his claim that he can refuse to answer subpoena questions about exempt property. Defendant must instead claim the Social Security exception when his financial institution is served with a restraining notice. (See Jackson v Bank of Am., N.A., 40 Misc 3d 949, 966 [Sup Ct, Kings County 2013], affd 149 AD3d 815 [2d Dept 2017].)
II. Defendant's Motion to Vacate the Judgment Against Him
Defendant argues this court should vacate plaintiff's $2,134,660.27 default judgment because plaintiff's lawsuit violated the Lawyers’ Fund's right of subrogation granted in the assignment agreement. (See NYSCEF No. 103 at 4 [affidavit of Donald Rosenberg].) Defendant argues plaintiff “needs to provide proof to this court that plaintiff's damages and claims against the within Defendant EXCEED $302,021 received as his award from the Fund.” (See NYSCEF No. 114 at 1 [reply affidavit of Donald Rosenberg].)
But plaintiff has already made that showing. Indeed, plaintiff obtained from this court a $2.1 million judgment—$1.5 million in compensatory damages after trebling, $500,000 in punitive damages, and approximately $134,000 in interest—that far exceeds the Lawyers’ Fund award. (See NYSCEF No. 81.)
Judiciary Law § 468-b provides that Lawyers’ Fund's lien on any award does not “extend to the claimant's right to recover additional restitution from the attorney for the claimant's unreimbursed loss.” And plaintiff's assignment of the District Attorney's judgment to the Lawyers’ Fund was limited to the extent of the $302,021 award from the Lawyers’ Fund to plaintiff. (See NYSCEF No. 72.) Plaintiff may therefore enforce against defendant that increment of the $2,134,660.27 judgment entered by this court that exceeds that $302,021 award.
III. Plaintiff's Requests for Costs
Under CPLR 2308(b) (1), if a person fails to comply with a subpoena, the issuer may move “to compel compliance.” If the court finds the subpoena was authorized, the court “shall order compliance and may impose costs not exceeding fifty dollars.” (Id.) The subpoenaed person “shall also be liable to the person on whose behalf the subpoena was issued for a penalty not exceeding fifty dollars and damages sustained by reason of the failure to comply.” (Id.)
Plaintiff requests $50 for costs and a $50 penalty. (See NYSCEF No. 91 at 3-6, 8.) This court concludes that plaintiff is entitled to a $50 penalty (because the judgment-enforcement subpoena was proper), and to $45 in costs (the costs that plaintiff actually incurred).
Plaintiff also seeks as damages at least $1,235.50 in attorney fees incurred in making this motion. (See NYSCEF No. 91 at 17 [attorney affirmation; NYSCEF No. 99 [fee affidavit].) Plaintiff's counsel, though, has previously indicated that he is representing plaintiff pro bono. (See NYSCEF No. 52 at 11 [inquest transcript].) A question thus arises whether damages under CPLR 2308 (b) (1) may encompass reasonable attorney fees incurred by a counsel providing pro bono representation. This court's research has not found any cases addressing this particular question. Considering the issue as a matter of apparent first impression, the court concludes that CPLR 2308 (b) (1) damages generally may not include the attorney fees of pro bono counsel—and that do not include counsel's fees in this case, in particular.
As noted above, the noncompliant party is liable specifically “to the person on whose behalf the subpoena was issued for ․ damages sustained by reason of the failure to comply.” (CPLR 2308 [b] .) That is, damages may be awarded under this provision only to redress the party's injury. And a party that has not had to pay attorney fees incurred as a result of subpoena-noncompliance—because the party is receiving pro bono representation—has not suffered an injury related to those (nonexistent) fees.
This is not to say that a party with pro bono counsel seeking relief under CPLR 2308 has been left unharmed by the delays, hassle, and other injuries that can result from a party's refusing to comply with a subpoena. That is particularly true when, as here, the subpoena is aimed at enforcing a judgment against the noncompliant party. Those injuries, though, whatever they may be in a given case, are generally not tied to the amount of attorney fees: That amount flows instead from counsel's reasonable billing rates and the hours spent by counsel (not by the party) on the matter. Thus, if a moving party's contention is that the party's own damages from noncompliance are somehow connected to the amount of pro bono counsel's reasonable (but not charged) attorney fees, that contention would entail an accompanying evidentiary showing above and beyond that necessary to justify the fees themselves. Plaintiff has not attempted to make this additional evidentiary showing here.
To be sure, the Appellate Division has made clear that language in fee-shifting statutes permitting recovery of attorney fees “incurred” by a prevailing party in specified actions or proceedings does not bar awards of fees under those statutes to pro bono counsel. (See Matter of Kohler-Hausmann v New York City Police Dept., 133 AD3d 437, 438 [1st Dept 2015] [collecting cases].) But these statutory provisions—Public Officers Law § 84 (FOIL), CPLR article 86, Real Property Law § 234, General Business Law § 198-b (Lemon Law), and the like—are aimed at furthering statute-specific goals by ensuring that everyone can obtain legal representation to pursue or defend claims under the statutes. Reading “incurred” broadly to encompass the reasonable fees of pro bono counsel is consistent with these provisions’ representation-furthering aims.
CPLR 2308 (b) (1), on the other hand, is not (or at least not necessarily) a fee-shifting provision; and it does not have a representation-furthering aim. No policy-oriented consideration points toward reading “damages” in CPLR 2308 (b) (1) in the same broad manner as “incurred” in fee-shifting statutes. Additionally, “liable for damages sustained by” the moving party more clearly connotes a monetary award serving to redress actual injury than does “liable for fees incurred by” the moving party.
Plaintiff has not established that Rosenberg's noncompliance caused him to sustain damages cognizable under CPLR 2308 (b) (1) in the amount of plaintiff's counsel's reasonable attorney fees. Nor has counsel provided evidence of any other damages suffered by plaintiff. (See Barkan v Barkan, 271 AD2d 466, 466 [2d Dept 2000] [reducing trial-court's award of damages under CPLR 2308 [a] for lack of record support].) Plaintiff's request for damages is denied.
Accordingly, for the foregoing reasons, it is
ORDERED that the branch of plaintiff's motion seeking to compel defendant Rosenberg to answer questions numbered 10, 16, 17, 33, 34, 35 and 65 in the information subpoena is granted; and it is further
ORDERED that the branch of plaintiff's motion seeking costs, penalties, and damages under CPLR 2308 (b) (1) is granted to the extent that defendant shall pay to plaintiff a $45 award for costs and a $50 penalty and otherwise denied; and it is further
ORDERED that Rosenberg's cross-motion to vacate the judgment is denied.
1. Rosenberg was later convicted of fraud and grand larceny for this and other similar conduct; he served approximately a year in state prison.
Gerald Lebovits, J.
Response sent, thank you
Docket No: Index No. 653418/2014
Decided: June 01, 2022
Court: Supreme Court, New York County, New York.
Search our directory by legal issue
Enter information in one or both fields (Required)
FindLaw for Legal Professionals
Search our directory by legal issue
Enter information in one or both fields (Required)