IN RE: the Application of John NEWMAN (2022)

PAPERS CONSIDERED:

Order to show cause and petition 1-2

Interim court Evaluator Report in support[in camera] 3-4

Affirmation in support 5

Affirmation in opposition 6

Upon the forgoing papers, and after oral argument, the motion by the temporary guardian of the personal and property management needs of Steven S., an alleged incapacitated person, for an order pursuant to CPLR 6401, appointing a temporary receiver for all of Steven S.’s business interests in 52 West Associates LLC, Arbah Hotel Corp. d/b/a Meadowlands View Hotel, a/k/a The View Hotel, Inc., Silverberg Management, Inc., and any other business interest Steven S. may have, is granted.

This contested special proceeding was commenced by petitioner Corrine S., pursuant to Article 81 of the Mental Hygiene Law, for the appointment of a guardian for the personal and property management needs of her 78 year-old father, Steven S., who petitioner alleges is an incapacitated person (“AIP”) as a result of a stroke and an accident. In view of the very serious allegations set forth in the petition of possible financial improprieties and poor business judgment committed by cross-petitioner Mark Wysocki, a business associate of Steven S. who is seeking to become the permanent guardian of Steven S., the court appointed a temporary guardian, a court evaluator, counsel for Steven S., and suspended the power of attorney executed by Steven S. in favor of Mark Wysocki Shortly thereafter, after a conference on the record with all the parties, this court appointed special labor counsel to the temporary guardian to represent Steven S.’s interest in Arbah Corp. in federal court in New Jersey, where Mr. Wysocki was held in contempt for non-payment of wages to hotel employees. The hotel is not operational and is in need of significant repairs; according to Mr. Wysocki's counsel, there are plans submitted by Wysocki waiting to be approved by the planning board where the hotel is located to renovate the hotel and build a retractable roof. If these grandiose plans are granted, it appears that significant monetary assets of Steven S. would be utilized to help Wysocki realize his dream for the hotel.

Those dreams appear to be fueled by the sale engineered by cross-petitioner Wysocki in June, 2022, to sell real property owned by 52 West Associates LLC. for over $33,000,000.00 on West 52nd street in Manhattan. However, Wysocki has yet to comply with the temporary guardian and court evaluator's requests for documentation inter alia confirming the location of the proceeds of the sale, documents pertaining to the fees and commissions purportedly paid, and why the sale was executed even though the original premise underlying the sale was for an IRC 1031 exchange that never took place, but would have resulted in a tax savings of millions of dollars.

Two years prior to the sale of this valuable property, on May 20, 2022, Steven S. transferred or gifted to Wysocki 15 per cent of his 100 per cent interest in Arbah Corp. and 52 West Associates LLC. However, both the court evaluator and the temporary guardian, based upon evidence reviewed in camera by the Court, contend that Steven S. may not have had capacity when he executed the documents transferring his interests in those corporations.

“ ‘A party moving for the appointment of a temporary receiver must submit ‘clear and convincing evidence of irreparable loss or waste to the subject property and that a temporary receiver is needed to protect [that party's] interests’ (Board of Mgrs. of Nob Hill Condominium Section II v Board of Mgrs. of Nob Hill Condominium Section I, 100 AD3d 673, 673, 954 N.Y.S.2d 145, quoting Natoli v Milazzo, 65 AD3d 1309, 1310, 886 N.Y.S.2d 205; see Suissa v Baron, 107 AD3d 689, 968 N.Y.S.2d 508)” (Rozenberg v. Perlstein, 200 AD3d 915, 920, 158 AD3d 233, 239 [2nd Dept. 2021]).

This court is cognizant that the appointment of a temporary receiver is not only an extraordinary provisional remedy (see, e.g., HSBC Bank USA, N.A. v. Rubin, 210 AD3d 73, 80 [2nd Dept. 2022]), it does not appear that there is a reported decision for the appointment of a temporary receiver in a guardianship proceeding. Here, however, both the temporary guardian and the court evaluator have made a clear evidentiary showing that the immediate appointment of a temporary receiver is warranted to protect the substantial monetary and real property assets of Steven S from cross-petitioner Mark Wysocki, which appear to have been misappropriated and mismanaged by Wysocki (see, Meagher v. Doscher, 157 AD3d 880, 884 [2nd Dept. 2018]). Furthermore, clear and convincing evidence has been submitted to the Court that there is a likelihood that Steven S. was the victim of elder abuse in the form of financial exploitation by cross-petitioner Wysocki.

Accordingly, the Court appoints Anthony F. Marano, Esq., fiduciary number 133615 to be the temporary receiver over all of Steven S.’s business interests, and Thomas J. McNamara Esq., fiduciary number 121059, as counsel to the receiver.

See also long form order dated December 23, 2022.

The foregoing constitutes the decision and order of this Court.

Gary F. Knobel, J.