Goldberger v Eisner

[*1] Goldberger v Eisner 2009 NY Slip Op 51768(U) [24 Misc 3d 1236(A)] Decided on July 27, 2009 Supreme Court, Kings County Rivera, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 27, 2009
Supreme Court, Kings County

Erno Goldberger, a/k/a Abe, Anchel and Abraham Goldberger, et ano., Petitioners,

against

Sholom Eisner, et ano., Respondents.



31052/08



For Petitioner:

Dylan Murphy

200 Madison Avenue 5th floor

New York, NY 10016

212-213-8844

For Respondents:

Jeffrey Rosenberg

275 Madison Ave 11th floor

New York, NY 10016

212-661-9400

Francois A. Rivera, J.

Upon the foregoing papers, the motion by petitioners Erno Goldberger, a/k/a Abe, Anchel and Abraham Goldberger, and Malka Goldberger, a/k/a Magda Goldberger, (collectively, petitioners or the Goldbergers) for an order, pursuant to CPLR 5206(e), directing the sale of the real property at 1427 58th Street in Brooklyn and the motion by respondents Sholom Eisner and Pessi Eisner for an order, pursuant to CPLR 3211(a)(1) and (7), dismissing the petition herein are consolidated for disposition and, upon consolidation, the motions are granted to the extent only to directing the parties to appear for a hearing before a Judicial Hearing Officer in the TAP Part pursuant to Article 22 of the Judiciary Law, in accordance with the provisions of Part 122 of the Rules of the Chief Administrator of the Courts (12 NYCRR Part 122). Upon the filing of the requisite forms and the approval of the Administrative Judge, the date will be fixed by the Clerk of the Part. [*2]

On or about June 5, 1991, a default judgment (the Eisner Judgment) was entered in favor of Benjamin Eisner, the brother of Sholom Eisner, against the Goldbergers in the amount of $288,667.50. The judgment did not allegedly become known to petitioners until nine years later. On or about April 18, 2001, Benjamin Eisner assigned the judgment to Sholom Eisner. On May 11, 1993, in an unrelated action, Abraham Dyckman obtained a judgment against Benjamin Eisner for $348,273.40 (the Dyckman Judgment). That judgment was subsequently assigned to the Goldbergers. After the Goldbergers unsuccessfully attempted to vacate the default judgment against them, they paid Sholom Eisner approximately $666,000 in satisfaction of the Eisner Judgment. (Had the judgment not been assigned by Benjamin Eisner to his brother, the Dyckman Judgment would have completely offset the Eisner Judgment.) In 2002, after the Goldbergers were apparently unable to collect the Dyckman Judgment from Benjamin Eisner, they commenced an action against Sholom Eisner and Benjamin Eisner in which they alleged that the assignment of the Eisner Judgment was fraudulent and that they should therefore recover the sum of $666,000 which they paid to Sholom Eisner in satisfaction of the Eisner Judgment. On October 18, 2007, a bench trial in that action was held. Although Benjamin Eisner was present at the trial, Sholom Eisner was not and, therefore, a default judgment was taken against him. After trial, the court held that Benjamin Eisner had fraudulently transferred the Eisner Judgment to his brother for the purpose of remaining "judgment proof" and, consequently, the court ruled that the Eisner Judgment would be transferred back to Benjamin Eisner. A default judgment was then granted in favor of the Goldbergers against Sholom Eisner so that the Goldbergers could recover the $666,000 paid to him.[FN1] The Goldbergers then stipulated to discontinue the action against Benjamin Eisner. In the instant proceeding, petitioners seek to satisfy the November 7, 2008 judgment against Sholom Eisner by selling the real property at 1427 58th Street which was at one time in his name and subsequently transferred to his wife, Pessi Eisner.[FN2] Because the subject property was allegedly a fraudulent conveyance made by Sholom Eisner to avoid paying the Dyckman Judgment, petitioners request that the transfer to Pessi Eisner be disregarded and the property sold to satisfy the judgment.

In their motion, respondents contend that Sholom Eisner is not the owner of the subject real property and, therefore, this proceeding should be dismissed. In an affirmation, Sholom Eisner asserts that he transferred the property to Pessi Eisner, his estranged wife, on May 16, 2007 pursuant to an award from a rabbinical tribunal in the course of a divorce arbitration. Respondents add that, to the extent the Goldbergers seek a determination that Sholom Eisner owns the property, such relief cannot be granted in this proceeding. Respondents also explain that, following the vacatur of the assignment of the Eisner Judgment by the court, Benjamin Eisner once again became the Goldbergers' judgment creditor. Benjamin Eisner subsequently commenced a turnover proceeding in the Supreme Court, Bronx County, against Sholom Eisner and obtained a judgment in the amount [*3]of $893,975 against him based upon his receipt of the $666,000 paid by the Goldbergers. According to Sholom Eisner, on February 17, 2009, he paid the full amount of the judgment to his brother. Therefore, given his payment of the money to Benjamin Eisner, "in satisfaction of a debt petitioners owed to Benjamin, the judgment upon which this proceeding is based has been satisfied".

In opposition to respondents' motion, the Goldbergers contend that respondents, "through the help of several non-parties, have gone to great lengths, many of which appear to be unlawful and seem to perpetrate a fraud on this court, to avoid having petitioners' judgment attach to the subject premises." The Goldbergers question the legitimacy of the rabbinical tribunal which allegedly directed Sholom Eisner to transfer his house to his wife. Even assuming that the proceedings before the tribunal were valid, the Goldbergers point out that, according to the tribunal's order, the deed which was signed on May 16, 2007 was to be held in escrow until the end of December 2007 by which time certain conditions were to have been met. Since there was allegedly no unconditional delivery of the deed until it was recorded in January 2008 (one month after petitioner's judgment was docketed), they assert that their judgment has priority over the transfer. The Goldbergers add that Pessi Eisner's interest in the property never vested so as to preclude them from enforcing their judgment since the matrimonial award was not confirmed into a judgment that was entered and docketed prior to the docketing of petitioners' judgment. Petitioners also suggest that the transfer of title was fraudulent because Pessi Eisner was aware that her husband was a defendant in an action for damages brought by the Goldbergers and that the issue of whether the transfer was, in fact, fraudulent is properly before this court in this proceeding. With respect to the Bronx turnover proceeding, petitioners dismiss that matter as "nothing more than a sham intended to help Sholom Eisner avoid having to pay petitioners on the judgment they hold against him." They note, for example, that Sholom Eisner has repeatedly asserted that his brother owes him hundreds of thousands of dollars, rather than vice versa. Petitioners point out that they have moved to intervene in the turnover proceeding and to vacate the judgment and that their motion is pending. More importantly, they argue that any money paid by Sholom Eisner to Benjamin Eisner as a result of the Bronx turnover proceeding did not relieve him of liability herein since "he is not an innocent garnishee that unknowingly paid money belonging to the Goldbergers to an improper party." The Goldbergers also characterize as "suspect" the checks submitted as proof of payment by Sholom Eisner to his brother.

In a "reply affirmation in further support of [respondents'] motion," respondents dismiss the Goldbergers' opposition papers as "pages and pages of innuendo" marked by a "glaringly absent . . . explanation of the legal basis for maintaining this special proceeding." They accuse petitioners of ignoring the legal principal that a judgment may be satisfied where the judgment debtor's debtor (here, the Goldbergers' debtor, Sholom Eisner) pays the full amount of the judgment to the judgment creditor (in this case, Benjamin Eisner). They also point out that the deed to Pessi Eisner was delivered on May 16, 2007 and that conditions were only placed upon its recording. They add that, according to the records of the Kings County Clerk, petitioner's judgment was docketed no sooner than May 13, 2008, four months after respondents' deed was recorded.

In their reply papers, the Goldbergers challenge service of process upon them in the turnover proceeding, a matter which was allegedly commenced in the Bronx "to avoid detection by this court." They also question whether Sholom Eisner ever paid his brother any money and whether a satisfaction of the judgment which Benjamin Eisner had against his brother was ever filed. [*4]Moreover, the Goldbergers continue to insist that the conveyance to Pessi Eisner was fraudulent or, at a minimum, that the Dyckman Judgment has priority over the transfer.

In this case, it is not possible to summarily resolve the issues of whether the real property at issue was fraudulently conveyed by Sholom Eisner and whether he paid something of value to Benjamin Eisner in satisfaction of the judgment held by the latter. Accordingly, a hearing is necessary to resolve those issues (see Matter of Reda v Voges, 192 AD2d 611, 612 [1993]).

Since a challenge to an allegedly fraudulent conveyance in violation of the Debtor and Creditor Law must be prosecuted as an action (see Taskiran v Murphy, 8 AD3d 360 [2004]), the Goldbergers are directed to commence such an action against Sholom Eisner and Pessi Eisner prior to the hearing and to thereafter seek its consolidation with this proceeding.

The foregoing constitutes the decision and order of this court.

E N T E R,

J. S. C. Footnotes

Footnote 1:On December 5, 2007, a judgment was entered against Sholom Eisner in the amount of $764,969. By order dated October 28, 2008, the principal amount of the judgment was modified to $732,672.32 and an amended judgment in the amount of $891,310.50 was entered on November 7, 2008.

Footnote 2:By deed dated May 16, 2007 and recorded on January 16, 2008, the property was transferred for no consideration.