Lyon Fin. Servs., Inc. v Pinto Trading Co.

[*1] Lyon Fin. Servs., Inc. v Pinto Trading Co. 2009 NY Slip Op 51783(U) [24 Misc 3d 1237(A)] Decided on August 17, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 17, 2009
Supreme Court, Kings County

Lyon Financial Services, Inc. d/b/a/ US Bancorp Manifest Funding Services, Plaintiff,

against

Pinto Trading Company and Yevgeniu Gibatove a/k/a Yevgeniy Gibatov a/k/a Gibatov Yevgeniy, Defendants.



19478/07



For Plaintiff:

Charles A. Gruen

44 Court Street Suite 1212

Brooklyn, NY 11201

Francois A. Rivera, J.

By notice of motion filed on May 12, 2009 under sequence number three, plaintiff Lyon Financial Services, Inc. (hereinafter plaintiff or LFS) moves this court for an order finding the defendants, Pinto Trading Company (Pinto) and Yevgeniu Gibatove (Gibatove) in contempt. The notice of motion was served upon defendants by certified mail and by regular mail on May 7, 2009. On June 26, 2009, the date scheduled for oral argument in Part 52 of this Court, neither defendant appeared or submitted opposition to the motion.

BACKGROUND

On May 31, 2007, plaintiff commenced the instant action by filing a summons and complaint with the Kings County Clerks Office. LFS served the summons and complaint on Pinto on July 20, 2007, and on Gibatove on September 12, 2007. The complaint alleges that on or about September 17, 2004, the defendants breached a lease agreement that they entered into with plaintiff's assignor. Neither defendant appeared in the action. Accordingly, on February 6, 2008, plaintiff made an application for a default judgment. On February 13, 2008 a judgment in the amount of $37,338,43 was entered against the [*2]defendants.

MOTION PAPERS

Plaintiff's motion papers consists of a notice of motion and affidavit of service, an affirmation of counsel, and two annexed exhibits. Exhibit A is a copy of the statement for judgment dated February 13, 2008, entered against the defendants in the amount of $37,338,43. Exhibit B consists of a letter dated June 3, 2008, from plaintiff's counsel to the defendants; two information subpoenas, and a subpoena duces tecum issued pursuant to CPLR §5224(a)(3).

APPLICABLE LAWCPLR § 5224(a)(3)(iv) provides in pertinent parts as follows:

Subpoena; procedure. (a) Kinds and service of subpoena. Any or all of the following kinds of subpoenas may be served:

(3) an information subpoena, accompanied by a copy and original of written questions and a prepaid, addressed return envelope. Service of an information subpoena may be made by registered or certified mail, return receipt requested. Answers shall be made in writing under oath by the person upon whom served, if an individual, or by an officer, director, agent or employee having the information, if a corporation, partnership or sole proprietorship.

(iv) failure to comply with an information subpoena shall be governed by subdivision (b) of section twenty-three hundred eight of this chapter, except that such motion shall be made in the court that issued the underlying judgment.

CPLR § 2308 addresses the disobedience of a subpoena, the instances in which contempt is available as a punishment and provides in relevant part as follows:

a) Judicial: Failure to comply with a subpoena issued by a judge, clerk or officer of the court shall be punishable as a contempt of court. If the witness is a party the court may also strike his or her pleadings. A subpoenaed person shall also be liable to the person on whose behalf the subpoena was issued for a penalty not exceeding one hundred fifty dollars and damages sustained by reason of the failure to comply.

b) Non-judicial. (1) Unless otherwise provided, if a person fails to comply with a subpoena which is not returnable in a court, the issuer or the person on whose behalf the subpoena was issued may move in the supreme court to compel compliance. If the court finds that the subpoena was authorized, it shall order compliance and may impose costs not exceeding fifty dollars. A 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.

Judiciary Law § 753 (A)(5) provides in pertinent as follows: Power of courts to punish for civil contempt. (A) A court of record has power to punish, by fine and imprisonment, or either, a neglect or violation of duty, or other misconduct, by which a right or remedy of a party to a civil action or special proceeding, pending in the court may be defeated, impaired, impeded, or prejudiced, in any of the following cases:

(5). A person subpoenaed as a witness, for refusing or neglecting to obey the subpoena, or to attend, or to be sworn, or to answer as a witness.

DISCUSSION

The motion papers demonstrate that plaintiff's counsel served upon the defendants two information subpoenas and a subpoena duces tecum pursuant to CPLR §5224(a)(3). The subpoena duces tecum scheduled the deposition of defendant Gibatove for June 25, 2008 at 10:00 a.m at the office of plaintiff's counsel. It further establishes that the defendants failed to respond to the information subpoenas and did not appear for the oral deposition.

There are three statutes that must be analyzed in relation to the instant motion, namely, CPLR §5224(a)(3), CPLR § 2308 and section 753 of the Judiciary Law. The two information subpoenas in question directed the defendants to return their responses to the law office of plaintiff's counsel. The subpoena duces tecum served upon Gibatove scheduled his deposition at the law office of plaintiff's counsel. All three subpoenas were issued after a judgment had been entered against the defendants and were intended to seek information for purposes of enforcing the judgment.

The purpose of a judicial subpoena duces tecum is to compel the production of specific documents that are relevant and material to facts at issue in a pending judicial proceeding (In re State Police Administrative Disciplinary Hearing on April 27, 2004, 13 AD3d 884, [3 Dept., 2004]). "Thus, we have emphasized repeatedly that except in narrowly defined circumstances not applicable here, a judicial subpoena may be issued only in the context of an action or proceeding pending before the court" (In re State Police Administrative Disciplinary Hearing on April 27, 2004, supra). CPLR §2308(a) governs judicial subpoenas and 2308 (b) governs non-judicial subpoenas.

As an officer of the court, an attorney in the case may issue a judicial subpoena (McKinney's CPLR § 2308[a]). However, what distinguishes a judicial from a non-judicial subpoena is not who issued the subpoena but rather where it is returnable. Judicial subpoenas are those which are returnable in a court, and non-judicial subpoenas as those which are not [*3]returnable in a court.

While disobedience of a judicial subpoena may be punished as a contempt, disobedience of a non-judicial subpoena may not. In such instance, the party seeking enforcement must first seek a court order to compel compliance with a non-judicial subpoena. A person who is served with non-judicial subpoena cannot be held in contempt for failure to comply unless and until the court has issued an order compelling compliance, which order has been disobeyed (Reuters Ltd. v. Dow Jones Telerate, Inc., 231 AD2d 337 [1 Dept.,1997].

The motion papers clearly demonstrate that the three subpoenas in question were non-judicial subpoenas. Therefore, the defendants failure to comply with same may not serve as a basis for an order of contempt but may serve as a basis for a motion to compel. Although the defendants did not appear or oppose the motion, plaintiff's motion for an order finding the defendants in contempt is denied without prejudice.

The foregoing constitutes the decision and order of this court.

____________________________X

J.S.C.