JARED CALVIN LLOYD JARED LLOYD v. LLC SPJJ LLC DENISE KERR MANUEL LEMA NATHANIEL SOMMER AARON SOMMER PHILLIP SCHONBERGER JOSEPH SCHONBERGER STEVEN SCHONBERGER RAYMOND CANARIO WAYNE BALLARD VILLAGE OF SPRING VALLEY VILLAGE OF SPRING VALLEY EMPLOYEES JOHN DOES 10 (2026)

Plaintiff Sabrail Davenport, as Administrator of the Estate of Jared Calvin Lloyd, a/k/a Jared Lloyd, moves by letter application dated July 29, 2026 (NYSCEF Doc. No. 200) for an order compelling defendants Joseph Schonberger, Steven Schonberger, Jeffrey Schonberger, Phillip Schonberger, Evergreen Court Home for Adults, LLC (hereinafter "Evergreen"), and SPJJ, LLC (hereinafter "SPJJ") to answer deposition questions concerning: (1) the receipt and disposition of insurance proceeds paid on account of the March 22, 2021 fire at Evergreen; (2) distributions, draws, and payments of the individual defendants' personal expenses by Evergreen, SPJJ, and affiliated entities; (3) inter-entity transfers among those entities, including any involving SFS Management Group, LLC; (4) the substance of litigation between the Schonberger brothers; and (5) a mortgage placed on the Evergreen property in March 2026, including its purpose, terms, negotiation, and the disposition of its proceeds. Plaintiff further seeks an order directing that the remaining depositions of Steven, Jeffrey, and Phillip Schonberger proceed on the understanding that objections to this category of questions are overruled and directing that Joseph Schonberger appear for a continued deposition. Defendants Evergreen, SPJJ, Joseph Schonberger, Steven Schonberger, and Jeffrey Schonberger oppose by letter dated August 7, 2026 (NYSCEF Doc. No. 207), in which counsel for Defendant Phillip Schonberger joins. For the reasons set forth below, the motion is granted in part and denied in part.

I. BACKGROUND

This is a wrongful death action arising from a fire that occurred at Evergreen Court Home for Adults on March 22, 2021, in which Firefighter Jared Calvin Lloyd was killed. The verified complaint names as Defendants the corporate operator of the facility, Evergreen; the entity that owned the underlying real property and leased it to Evergreen, SPJJ; four individual members of both entities, Joseph, Steven, Jeffrey, and Phillip Schonberger; the facility's regional director, Denise Kerr; and others connected with the koshering of the facility's kitchen the night of the fire.

The Verified Complaint sets forth allegations concerning the Schonberger defendants' individual ownership, operation, maintenance, control, supervision, and lessee status with respect to the premises (¶¶ 19-72); a duty to safely operate the facility (¶ 73); respondeat superior liability for the acts of other Evergreen personnel (¶¶ 74-121); notice (¶¶ 131-134); and causes of action for conscious pain and suffering and wrongful death.

On July 28, 2026, Plaintiff deposed Defendant Joseph Schonberger, who was produced both individually and as the corporate designee of SPJJ. Mr. Schonberger testified that he has functioned, since the early 2000s, as the financial manager for approximately seven family-owned adult-care facilities, including Evergreen, working out of a family office in Lakewood, New Jersey, and that he was responsible for banking, accounting, and tax matters for those entities, while day- to-day operational matters were handled principally by his brother-in-law, Isaac Friedman, and the facility's regional director, Denise Kerr. He further testified that SPJJ — whose sole asset before the fire was the land and building at 65 Lafayette Street, Spring Valley, leased to Evergreen under a triple-net lease — received approximately $10 million in insurance proceeds from Church Mutual on account of the fire, and that Evergreen separately received approximately $1 to $1.5 million in business-interruption proceeds. He acknowledged that SPJJ's real property is now a vacant lot generating no rental income, and that in March 2026 SPJJ placed a $1 million mortgage on that property.

At numerous points during the deposition, defense counsel, David T. Verschell, Esq., instructed the witness not to answer, principally on relevance grounds, questions concerning: the disposition of the Church Mutual insurance proceeds (Tr. 62:20-63:19); which entities paid for the individual defendants' automobiles, EZ-Pass accounts, and related personal expenses (Tr. 83:8- 85:8); whether SFS Management Group, LLC had employees, its members, and its involvement in the March 2026 mortgage (Tr. 114:1-4, 115:15-25, 119:22-25); the March 2026 mortgage — its date, amount, purpose, the identity and role of the lender (the Schonbergers' mother, Gloria Schonberger), whether she in fact advanced funds, who negotiated its terms, whose idea it was, whether an appraisal was performed, and the guarantors (Tr. 91:13-94:14); the involvement of several family-affiliated entities and trusts (1226 57th Street Owners, LLC; 1226 57th Street Realty, LLC; JS Residence Trust; and the Jacob & Gloria Schonberger Charitable Trust) in the mortgage (Tr. 119:16-129:25); the outstanding balance of the pre-fire mortgage and whether insurance proceeds were used to satisfy it (Tr. 111:10-18); and whether Denise Kerr's post-fire expense disputes were raised with the witness (Tr. 89:8-16).

Counsel for Defendant Phillip Schonberger separately noted objections to several of these lines of inquiry. Plaintiff's counsel, Charles E. Green, Esq., marked each such instruction for a ruling and reserved the right to recall the witness.

II. THE PARTIES' CONTENTIONS

Plaintiff argues that the withheld testimony bears on Plaintiff's contention that the Schonberger owners operated Evergreen and SPJJ as their alter egos and personal instrumentalities, commingling funds and disregarding corporate formalities, such that Plaintiff should ultimately be entitled to pierce the corporate veil and hold the individual owners personally liable.

In support, Plaintiff's July 29, 2026 letter annexes: a February 21, 2022 email from Joseph Schonberger to his brothers, produced in the related Schonberger family litigation, stating that the owners "have already voted by majority to distribute the SPJJ insurance proceeds and discontinue the monthly draws," and itemizing draws that included a $35,000 cash distribution and payment of the owners' and their spouses' life, health, dental, and automobile insurance, tuition, and EZ- Pass and telephone charges; a January 2, 2022 sworn certification of Steven Schonberger, filed in litigation between Phillip Schonberger and his brothers, stating that the seventeen affiliated Schonberger-family LLCs are operated from a single "back office" and that the entities paid over $100,000 of Phillip's personal expenses in the first half of 2021 alone, with comparable payments in prior years "ranging between $550,000 and $820,000 a year"; the recorded March 2026 mortgage instrument itself; and a February 17, 2022 letter, signed by three of the four brothers, notifying the members that $10,519,818.48 in insurance proceeds had been received, that $7,198,666.68 remained after paying off the pre-fire mortgage and an adjuster's fee, and that the remainder would be distributed in four equal shares. Plaintiff contends that because the withheld testimony goes directly to matters that the Schonberger defendants' own sworn submissions in other litigation have already placed at issue, Plaintiff is entitled to explore them at deposition, and that none of defense counsel's instructions not to answer falls within the narrow grounds for such an instruction under 22 NYCRR 221.2.

Defendants respond that no alter-ego, veil-piercing, or fraudulent-conveyance theory has been pleaded in this action. Defendants observe that the terms "self-dealing," "alter ego," "personal piggy banks," "pierce," and "corporate veil," along with numerous related terms such as "fraud," "fraudulent transfer," "mortgage," "encumber," "insurance proceeds," and "fraudulent conveyance," appear nowhere in the 155-paragraph verified complaint, which is instead framed in terms of ordinary premises-liability negligence, respondeat superior, and wrongful death. Defendants further note that Plaintiff's document demands and bill of particulars, served long before the withheld testimony was sought, likewise contained no request for financial or transactional records beyond koshering invoices and copies of the applicable insurance policies.

Defendants argue that Civil Practice Law and Rules § 3101(a) discovery must bear a genuine relationship to claims and defenses actually placed in controversy by the pleadings, and that a plaintiff who has not pleaded an alter-ego theory with the requisite substantive factual allegations may not use discovery to develop such a theory after the fact, citing Foster v Herbert Slepoy Corp., 74 AD3d 1139 [2d Dept. 2010]; Crazytown Furniture, Inc. v Brooklyn Union Gas, 150 AD2d 420 [2d Dept. 1989]; Tabchouri v Hard Eight Restaurant Corp., LLC, 219 AD3d 528 [2023]; Americore Drilling and Cutting Inc. v EMB Contract Corp., 198 A3d 941 [2d Dept. 2021]; and East Hampton Union Free School Dist. v Sandpebble Builders, Inc., 66 AD3d [2d Dept. 2009].

Defendants further contend that any remedy for piercing the corporate veil or unwinding a fraudulent conveyance under Civil Practice Law and Rules § 5223 is unavailable to plaintiff pre- judgment, and that personal and corporate financial information otherwise unconnected to the pleaded claims is not a proper subject of discovery, citing Otto v Triangle Aviation Services, Inc., 258 AD2d 448 [2d Dept. 1999)], and Zimmer v Cathedral School of St. Mary & St. Paul, 204 AD2d 538 [2d Dept. 1994].

III. LEGAL STANDARD

A. Civil Practice Law and Rules § 3101(a) and the Scope of Disclosure

Civil Practice Law and Rules § 3101(a) entitles a party to "full disclosure of all matter material and necessary in the prosecution or defense of an action." The phrase "material and necessary" is to be interpreted liberally, requiring disclosure of any facts bearing on the controversy that will assist a party in preparing for trial by sharpening the issues, and the test is one of usefulness and reason. See Allen v Crowell-Collier Publ'g Co., 21 NY2d 403 [1968]. The scope of discovery is broader than mere admissibility at trial. Discovery is not, however, unlimited: the information sought must bear a genuine relationship to the claims and defenses actually in controversy in the litigation, and Civil Practice Law and Rules § 3101(a) does not authorize a fishing expedition for material unconnected to the pleadings. See Foster v Herbert Slepoy Corp., 74 AD3d 1139; See also Crazytown Furniture, Inc. v. Brooklyn Union Gas, 150 AD2d 420.

B. Directions Not to Answer

Under section 221.2 of the Uniform Rules for the Conduct of Depositions, a deponent must answer all deposition questions except: (i) to preserve a privilege or right of confidentiality, (ii) to enforce a limitation set forth in a court order, or (iii) when the question is "plainly improper" and would, if answered, "cause significant prejudice to any person." An attorney may not direct a witness not to answer on any other ground, including ordinary relevance, and any refusal or direction not to answer must be accompanied by a succinct statement of its basis, leaving the examining party free to complete the remainder of the deposition and to seek a ruling. The rule reflects a deliberate choice to reserve outright non-answer for narrow circumstances and to otherwise permit the deposition to proceed subject to objection, with relevance and admissibility disputes generally resolved after the fact rather than through unilateral refusal at the table.

C. Discovery Directed at Piercing the Corporate Veil

A plaintiff who has not pleaded a basis for disregarding the corporate form generally may not use pretrial discovery to develop such a theory in the first instance; the plaintiff must, at a minimum, plead facts that, if true, would establish that the privilege of conducting business in the corporate form was abused to commit a wrong against the plaintiff. See Tabchouri v Hard Eight Restaurant Corp., LLC, 219 AD3d 528; See also Americore Drilling and Cutting Inc. v EMB Contract Corp., 198 AD3d 941. Where no such allegations appear in the pleadings, a party is not ordinarily entitled to disclosure concerning the finances, ownership, or internal dealings of affiliated non-party entities merely to see whether a viable veil-piercing claim might be constructed after the fact. See East Hampton Union Free School Dist. v Sandpebble Builders, Inc., 66 AD3d. This principle, however, does not immunize from discovery matters that independently bear on claims already in controversy, nor does it necessarily foreclose inquiry into a named defendant's own post-litigation disposition of its own assets, a subject addressed further below.

IV. DISCUSSION

A. The Blanket Instructions Not to Answer Were, in Substantial Part, Procedurally Improper

As an initial matter, the transcript reflects that defense counsel repeatedly instructed the witness not to answer entire lines of inquiry on the stated ground that the subject matter was "irrelevant," "not related to Evergreen," or sought "proprietary" or "financial information," without identifying any privilege, any pre-existing limitation ordered by this court, or any basis to conclude that an answer would cause "significant prejudice" within the meaning of 22 NYCRR 221.2. A bare relevance objection, without more, is not among the three enumerated grounds for a direction not to answer. The customary and preferred practice, where counsel believes a question exceeds the proper scope of discovery, is to object, permit the answer subject to the objection, and, if warranted, move for a protective order under Civil Practice Law and Rules § 3103(a) — not to instruct the witness unilaterally not to respond.

This practice preserves the examining party's ability to complete the deposition and allows relevance disputes to be resolved by the court on a developed record, rather than through an ad hoc series of refusals extending across dozens of questions and multiple subject areas. The rulings below are not premised on any concession that counsel's blanket approach to withholding testimony was procedurally sound; rather, having independently reviewed each disputed subject on the merits, the court reaches the results set forth in the following sections.

Counsel are directed that, at any continued or future deposition in this action, an instruction not to answer must be limited to the three grounds enumerated in 22 NYCRR 221.2 and must be accompanied by a succinct statement of the specific ground relied upon.

B. Discovery Devoted Solely to Developing an Unpled Alter-Ego Theory Is Not, at This Juncture, Warranted

The court agrees with the Defendants that the Verified Complaint, as presently framed, contains no allegation that the Schonberger defendants disregarded the corporate form, commingled personal and corporate funds, or operated Evergreen and SPJJ as their alter egos. The complaint's extensive factual allegations concerning the individual defendants' ownership, operation, maintenance, control, and supervision of the premises (¶¶ 19-72) sound in direct premises-liability and respondeat superior theories against the individual defendants and the corporate entities alike; they do not, without more, place the internal financial dealings among the Schonberger-family entities in controversy.

Under Tabchouri, Americore, and East Hampton, Plaintiff is not entitled to use deposition discovery to assemble, after the fact, the factual predicate for a veil-piercing cause of action that has not been pleaded. Accordingly, to the extent Plaintiff's application seeks testimony whose relevance is asserted solely by reference to an alter-ego or veil-piercing theory — namely, the payment of the individual defendants' personal expenses, draws, and benefits (car leases, EZ-Pass accounts, insurance premiums, tuition, and the like) by Evergreen, SPJJ, or affiliated entities, and the substance of the litigation among the Schonberger brothers concerning their respective ownership shares — the motion is denied.¹

C. The March 2026 Mortgage Stands on a Different Footing, and Testimony Concerning It Is Compelled

The March 2026 mortgage transaction is not, however, merely evidence offered in support of an unpled veil-piercing theory; it is a transaction by a named Defendant, concerning that Defendant's only remaining asset, executed after this wrongful-death action was commenced and while it remained pending. The undisputed record establishes that SPJJ's real property is now vacant and produces no income; that in March 2026 SPJJ encumbered that property for $1 million in favor of the individual Defendants' mother, on a six-month balloon obligation; and that the instrument was executed by three of SPJJ's four members but not by the fourth, Phillip Schonberger.

A transaction bearing these characteristics — an insider lender, an encumbrance of substantially all of a litigant's remaining assets, timing after the commencement of litigation against the encumbering party, and incomplete assent among the entity's own members — implicates the traditional indicia of fraud relevant to a fraudulent-conveyance inquiry under the Uniform Voidable Transactions Act (Debtor and Creditor Law Article 10), regardless of whether such a cause of action has yet been pleaded. A plaintiff holding an unliquidated tort claim against a defendant is nonetheless a creditor for purposes of that inquiry, and discovery reasonably calculated to determine whether an existing defendant's remaining assets have been placed beyond the reach of a future judgment is "material and necessary" to the litigation within the broad meaning of Civil Practice Law and Rules § 3101(a), whether or not the complaint presently contains a claim styled as one for fraudulent conveyance.

Unlike the personal-expense and sibling-litigation discovery addressed in Part IV(B) supra, this inquiry does not require plaintiff first to plead and particularize a veil-piercing theory; it concerns SPJJ's own disposition of SPJJ's own asset, and SPJJ is, and has been throughout this litigation, a named defendant. Accordingly, the motion is granted to the extent that Defendant Joseph Schonberger, and thereafter Steven and Jeffrey Schonberger at their respective depositions, shall answer questions concerning the March 2026 mortgage, including but not limited to when and by whom it was negotiated, its purpose, whether the stated lender in fact advanced the funds, the disposition of the proceeds, whether an appraisal was performed, and the identity of any guarantors. This ruling is confined to the mortgage transaction itself and to entities directly implicated in its negotiation or execution; it does not extend, at this juncture, to the broader ownership, finances, or purposes of the family trusts and holding entities identified at the deposition (the Jacob and Gloria Schonberger Charitable Trust, JS Residence Trust, 1226 57th Street Owners, LLC, and 1226 57th Street Realty, LLC) beyond their role, if any, in the mortgage transaction, which remains a proper subject of inquiry.²

D. Testimony Concerning the Disposition of Insurance Proceeds Is Compelled

Defendants' own February 17, 2022, letter, annexed to Plaintiff's application, already discloses that SPJJ received $10,519,818.48 in insurance proceeds, that $7,198,666.68 remained after satisfying the pre-fire mortgage and adjuster's fee, and that the balance was distributed in four equal shares to the members. Given that this information is already part of the record through the Defendants, no cognizable prejudice results from permitting deposition testimony that confirms, clarifies, or supplements it.

Moreover, because SPJJ's real property was, by Mr. Schonberger's own testimony, its only asset, and that property has since been further encumbered, the disposition of the insurance proceeds paid on account of the very loss at issue in this action bears directly on the financial condition of two named defendants against whom plaintiff seeks a judgment, independent of any alter-ego theory. The motion is therefore granted to the extent that the witness shall answer questions concerning the amount of insurance proceeds received by SPJJ and by Evergreen, the accounts or entities into which those proceeds were placed, and their ultimate distribution or use, including the balance of any pre-fire mortgage satisfied from those proceeds.

E. Operational Control and Agency Discovery Remains Available Independent of Any Alter-Ego Theory

Testimony concerning the role of SFS Management Group, LLC in the day-to-day operation of Evergreen — including the identity of Denise Kerr's employer and the entities responsible for staffing, supervision, and safety practices at the facility — bears on the respondeat superior and control allegations already pleaded at paragraphs 74 through 121 of the verified complaint, and is discoverable on that independent basis without regard to any veil-piercing theory.

The motion is granted to the extent that the witness shall identify which entities employed personnel who worked at Evergreen, including Denise Kerr, and shall describe SFS Management Group's operational functions with respect to Evergreen. The motion is denied to the extent it seeks testimony concerning SFS Management Group's membership, capital structure, fee arrangements, or insurance coverage untethered to its operational role at Evergreen, as that inquiry is, on this record, directed at the same unpled alter-ego theory addressed in Part IV.B, above.

F. Denise Kerr's Post-Fire Expenses

The parties dispute the scope of a prior informal ruling concerning inquiry into which entities paid Denise Kerr's expenses. To the extent the witness has already been permitted, and has answered to the best of his recollection, whether Evergreen or SPJJ paid Denise Kerr's car lease, that ruling stands and requires no further order. To the extent plaintiff seeks testimony concerning Ms. Kerr's expenses as paid by, or a dispute over her expenses raised with, entities other than Evergreen or SPJJ, that testimony falls within the personal-expense category addressed in Part IV.B and is denied on the same basis.

For the foregoing reasons, it is hereby

ORDERED, that plaintiff's application to compel is GRANTED to the extent that defendant Joseph Schonberger shall appear for a continued deposition, at a date to be agreed upon by counsel within thirty (30) days of this order, and shall answer questions concerning: (1) the receipt, amount, and disposition of insurance proceeds paid to SPJJ and to Evergreen on account of the March 22, 2021 fire; (2) the March 2026 mortgage on the Evergreen property, including its negotiation, purpose, terms, the disposition of its proceeds, whether an appraisal was performed, and the identity of any guarantors; and (3) the operational role of SFS Management Group, LLC at Evergreen and the identity of the employer of Evergreen personnel, including Denise Kerr; and it is further

ORDERED that the application is DENIED, without prejudice as set forth in Part IV.B above, to the extent it seeks testimony concerning the personal expenses, draws, and benefits paid to the individual defendants by Evergreen, SPJJ, or affiliated entities, and the substance of litigation among the Schonberger brothers; and it is further

ORDERED that the depositions of Steven, Jeffrey, and Phillip Schonberger shall proceed on the same terms set forth above, with objections as to the categories of testimony compelled herein deemed overruled, subject to the witnesses' rights as to form, and with objections as to the categories denied herein preserved; and it is further

ORDERED that any direction not to answer at a future deposition in this action shall be limited to the three grounds enumerated in 22 NYCRR 221.2, accompanied by a succinct statement of the specific ground relied upon; and it is further

ORDERED that this constitutes the Decision and Order of the Court.

Dated: August 11, 2026

New City, New York

HON. JOHN P. COLLINS, JR., J.S.C.

FOOTNOTES

1.   This denial does not leave Plaintiff without recourse to determine whether SPJJ's remaining assets have been placed beyond the reach of a future judgment. Several procedural avenues under the Civil Practice Law and Rules exist independent of the causes of action presently pleaded here.First, Civil Practice Law and Rules § 6220 authorizes disclosure, in advance of and separate from any application for an order of attachment, to aid a plaintiff in determining whether such an order should be sought and whether property of a defendant subject to attachment exists and can be located; that disclosure is not confined to the parties to this action or to the causes of action presently pleaded.Second, should the facts warrant, Plaintiff may move for an order of attachment under Civil Practice Law and Rules §§ 6201(3) and 6212 upon a showing that a Defendant has assigned, disposed of, or encumbered property with intent to defraud creditors or to frustrate the enforcement of a judgment, a showing that does not require a fraudulent-conveyance cause of action to have been pleaded in this action.Third, in the event of judgment for the Plaintiff, Plaintiff will have recourse to post-judgment enforcement discovery under Civil Practice Law and Rules §§ 5223 and 5224, which the parties correctly note is not presently available. Finally, because a party holding an unliquidated tort claim is a creditor within the meaning of the Uniform Voidable Transactions Act, Plaintiff may, if warranted, pursue a fraudulent-conveyance claim in a separate plenary action without amending the pleadings in this action.This Court expresses no view on the merits, availability, or advisability of any such application; it notes only that the denial of discovery is confined to the deposition record presently before the Court and forecloses none of these alternative avenues.

2.   A distinction exists between discovery in a pending tort action and the relief required to plead fraud. This Court has addressed, in Part IV(C) supra, the extent of reach of ordinary discovery pursuant to Civil Practice Law and Rules § 3101(a). The inquiry as to the named Defendant SPJJ's disposition of its own assets is material and necessary here without a cause of action for alter-ego or fraudulent conveyance. Nonetheless, that discovery does not reach non-parties like Gloria Schonberger, or the various trusts and holding LLCs. However, this Court's decision does not prevent Plaintiff from later exercising their rights pursuant to Civil Practice Law and Rules § 6220 for disclosure of information about the nature, location and extent of property of the Defendants after an order of attachment has been granted but prior to the granting of a final judgment.

John P. Collins, Jr., J.