Wagner Ziv Plumbing & Heating Corp. v Tsabari

[*1] Wagner Ziv Plumbing & Heating Corp. v Tsabari 2012 NY Slip Op 51829(U) Decided on September 11, 2012 Civil Court Of The City Of New York, Queens County Capella, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 September 11, 2012
Civil Court of the City of New York, Queens County

Wagner Ziv Plumbing & Heating Corp., Plaintiff,

against

Brian Tsabari, EVEREST DEVELOPMENT GROUP, INC., and IMPACT HOMES, INC., , Defendants.



11940/08



Plaintiff's Attorney

Richard Farley, Esq.

Farley & Kessler

55 Jericho Tpk., Suite 204

Jericho, NY 11753

(516)433-4220

Defendant's Attorney

Stephen I. Feder, Esq.

116-55 Queens Blvd.

Forest Hills, NY 11378

(718)268-9040

Joseph E. Capella, J.

This action is a commercial case involving the plaintiff's claim against the defendants for goods delivered and services rendered in certain real estate development projects. The plaintiff ultimately prevailed at trial, and on June 13, 2011, plaintiff was awarded a money judgement for $32,731.31. In attempting to collect upon the judgment, the plaintiff learned that on November 4, 2010, the defendant, Barak Tsabari ("defendant-Tsabri"), transferred 90% of his stock in 119 Hillside Corporation to Mr. Sam Goldberg. Plaintiff also learned that on November 23, 2010, defendant-Tsabri transferred 100% of his stock in B & A Home Sales, Inc., to Mr. Baruch Abergel. Alleging that these transfers were fraudulent in nature and intended to thwart the plaintiff's attempts to collect upon the judgment, an order to show cause ("OSC") by the plaintiff was signed by the Court on April 6, 2012. Mr. Goldberg and Mr. Abergel were not parties to this action, nor were they served with the OSC.

Soon after the OSC was signed, the plaintiff commenced a new action against defendant-Tsabri, Mr. Goldberg and Mr. Abergel, alleging, inter alia, that the aforementioned stock transfers were a fraudulent conveyance. That action is currently pending in Supreme Court. According to defendant-Tsabri, he offered and is still willing to turn to over to the plaintiff his remaining 10% shares in 119 Hillside Corporation. The offer was rejected, and the parties were [*2]unable to resolve the instant OSC. Pursuant to court order dated June 30, 2012, the OSC was granted only to the extent of setting it down for a hearing regarding the alleged conveyances, and the matter was adjourned accordingly. On the adjourn date, the matter was transferred to this Part to conduct the hearing. The limited facts as previously stated are not in dispute, and after consultation with the parties' attorneys, the Court took the matter on submission.

The relief sought by the plaintiff in this OSC includes, inter alia, ordering defendant-Tsabri to turn over shares pursuant to CPLR 5225. Typically such equitable relief is not available in the Civil Court, as this is a court of limited jurisdiction with no equitable powers. (CCA § 202.) However, when seeking the enforcement of judgment(s), to the extent that the Civil Court has jurisdiction, then it has the same powers, including equitable relief, as those authorized in the Supreme Court. (CPLR § 5221, CCA § 1508(b).) CPLR 5225, which is an enforcement provision that provides for the delivery or "turning-over" of a judgment debtor's property, distinguishes between property in the debtor's possession (§ 5225(a)) and property not in the debtor's possession (§ 5225(b)). Where it is shown that a judgment debtor ("debtor") is in possession of money or personal property, a judgment creditor ("creditor") may by notice of motion/OSC seek a court order pursuant to CPLR 5225(a) directing the debtor to turn over said money or property. On the other hand, where the debtor has fraudulently transferred property, the creditor may seek to set aside this transfer by either (a) commencing a plenary action, which the plaintiff has done in Supreme Court, or (b) may commence a special proceeding under the turnover provisions of CPLR 5225(b).

A special proceeding under CPLR 5225(b) must be commenced against the transferee (emphasis added) - it does not require that the debtor be made a party. (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C5227:7.) In this type of proceeding, the creditor need not prove fraudulent intent, but only that its rights were superior to those of the transferee pursuant to section 273-a of the Debtor and Creditor Law. (Kashi v Gratsos, 712 F Supp 23 [SDNY 1989].) In other words, that fair consideration was not given in exchange for the conveyance, that an action for money damages was pending against the debtor at the time of the conveyance,[FN1] and that the judgment remains unsatisfied. In lieu of a special proceeding pursuant to CPLR 5225(b), the plaintiff opted to commence a collateral proceeding in Supreme Court.

The defendant-Tsabri concedes that he still has 10% of the shares in 119 Hillside Corporation. Therefore, pursuant to CPLR 5225(a), the defendant-Tsabri is ordered to turn over these shares to the plaintiff within 30 days of receipt of a copy of this order with notice of entry. As for the shares that have been transferred to Mr. Goldberg and Mr. Abergel, neither of these gentlemen were parties to this action; therefore, this court does not have the jurisdiction to order their turning over of shares. Such an order can only be accomplished via a special proceeding in which these gentleman are made a party to pursuant to CPLR 5225(b), or the collateral Supreme Court action. And any issue regarding the legitimacy of the stock transfers will likewise be resolved in the Supreme Court action. The plaintiff is directed to serve a copy of this [*3]decision/order upon the defendants with notice of entry by first class mail.

This constitutes the decision/order of this court.

_____9/11/12______________/S/_______________

DatedJudge, Civil Court Footnotes

Footnote 1: If the plaintiff had commenced a special proceeding, the fact that this action was pending at the time the stock transfer allegedly took place would address any concern that the transfer may have been back dated.