J. Remora Maintenance LLC v Efromovich

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J. Remora Maintenance LLC v Efromovich 2018 NY Slip Op 32620(U) October 12, 2018 Supreme Court, New York County Docket Number: 650943/2011 Judge: Marcy Friedman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] NEW YORK COUNTY CLERK 10/15/2018 09:26 AM NYSCEF DOC. NO. 155 INDEX NO. 650943/2011 RECEIVED NYSCEF: 10/15/2018 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NE\V YORK: COMMERCIAL DIVISION PART 60 --------------------------------------------------------------------------------X l REMORA MAINTENANCE LLC and REMORA MAINTENANCE LLC, MOTION DATE MOTION SEQ. NO. Plaintiffs, 005 GERMAN EFROMOVICH, DECISION AND ORDER Defendant. The following 100, 101, !02, 123, 124, 125, 149, 150, 151, e-filed documents, listed by NYSCE.F document number (Motion 005) 93, 94, 95, 96, 97, 98, 99, 103, 104, 105, !06, 107, !08, 109, 110, 111, 112, 113, 114, 115, 116, ll7, 118, 119, 120, 121, 122, 126, 127, 128, 129, !30, 13 l, 133, 134, 135, 136, 137, 138, 139, 142, 143, 144, 145, 146, 147, 148, 152, 153, 154 were read on this motion to/for CONTEMPT/TURN OVER/INSTALLMENT ORDER . ...............................---------------------------· ----------------------------------------··································"••""""""",,_...~ This action arises out of the breach of a personal guaranty. Plaintiffs J. Remorn Maintenance LLC and Remora Maintenance LLC (together, Remora) seek to enforce a jud6JTI1ent, entered on January 30, 2014, in their favor and against defendant German Efromovich, in the a.mount of approximately $12. 7 million, 011 June 10, 2014, Remora served a restraining notice and infom1ation subpoena upon Efromovich. (Remora Memo. In Supp., at 3.) By notice of motion, dated June 17, 2014, Efromovich moved to vacate or quash the restraining notice and information subpoena. (Notice of Motion to Vacate or Quash [NYSCEF Doc. No. 62].) By decision on the record, dated November 13, 2014 and so ordered on March 23, 2015, this court upheld the restraining notice, but vacated the information subpoena without prejudice to reservice of a more appropriately limited information subpoena. (Se(','. Transcript at 17 [NYSCEF Doc. No. 89],) On or about December 8, 2014, Remora served Efromovich \:vith a revised information subpoena. (Aff. of Jonathan PerreUe [Pls.' attorney], Revised Information Subpoena [Exh. E].) Efromovich served 650943/2011 J. REMORA MAINTENANCE LLC Motion No. 005 vs. EFROMOVICH, GERM.AN . 1 of 4 Page 1 of4 [*FILED: 2] NEW YORK COUNTY CLERK 10/15/2018 09:26 AM NYSCEF DOC. NO. 155 INDEX NO. 650943/2011 RECEIVED NYSCEF: 10/15/2018 a sworn response, dated January 13, 2015. (Perrelle Aff., Response to Revised Information Subpoena [Exh. F].) For more than three years, no further enforcement proceedings were taken in this action. The instant motion, returnable on February 22, 2018, is the first docketed activity since the court's decision on the record on November 13, 2014. Remora moves for an order, pursuant to CPLR 5251, holding Efromovich in contempt for allegedly violating the restraining notice and allegedly falsely answering the information subpoena; ru1 order, pursuant to CPLR 5225, directing Efromovich to tum over assets in a bank account at Itau (Pananrn), S ..A., formerly known as Helm Bank; and an order, pursuant to CPLR 5226, directing payment to Remora of compensation to be rece1ved by Efromovich as a director of Avianca Holdings, S.A. Efromovich cross-moves to strike Rernora's December 8, 2014 revised information subpoena. A. s a threshold matter, the court holds that the continuing retention of jurisdiction over this enforcement proceeding is not proper, as the Commercial Division Rules provide that proceedings to enforce a judgment are cases that "will not be heard in the Commercial Division," 12919298, * 2 [Sup Ct, NY County 2012],) The court notes, rnoreover, that Remora provides no explanation for its delay in seeking enforcement of the judgment in the context of this action. The issues raised by Re1nora's motion are, in any event, more appropriately addressed in a special proceeding. The branch ofRemora's motion to punish Efromovich for contempt is based on the allegation that "[a]fter the Restraining Notice was validly served, Defendant transforred over $3 million of assets from his personal bank accounts to third parties. $2.1 .million of these transfers were to entities ultimately ovmed and controlled by Defendant." (Remorn Memo, In Supp,, at 9.) Remora further claims that Efromovich "made false sworn 650943/2011 J. REMORA MAINTENANCE LLC vs. EFROMOVICH, GERMAN Motion No. 005 · 2 of 4 Page 2 of 4 [*FILED: 3] NEW YORK COUNTY CLERK 10/15/2018 09:26 AM NYSCEF DOC. NO. 155 INDEX NO. 650943/2011 RECEIVED NYSCEF: 10/15/2018 statements in his response to the Information Subpoena by failing to disclose assets, bank accounts, ownership interests, and transfers, all of which served to obscure information that would have aided Plaintiffs in satisfying the Judgment" (Id.) The branch of the motion for a tum over order seeks funds allegedly held by Efromovich in the Panama bank account, as well as the tum over of "assets in [Efromovich's] other, yet to be identified, bank accounts," (Remora Memo. In Reply, at 13.) In moving for contempt and for the tum over order, Remora asserts that Efromovich failed "to identify all entities whoHy ovtned and/or controlled by him, [and that] Defendant identified a single company, omitting the 84 companies that Plaintiffs have identified as being controlled by him." (Remora Memo. In Supp., at 9-10.) In response, Efromovich argues that the entities themselves own the assets, and that the· assets "are not in any sense 'owned"' by Efromovich. (Efromovich Memo. In Opp., at 9.) Efromovich's roles in numerous entities with which he may be affiliated are therefore at issue in both the contempt and the tum over motions. The court assumes without deciding, for purposes of this motion, that Remora may ultimately be able to .meet the legal threshold required to reach assets in entities with vvhich Efromovich is affiliated~ e.g. to make a showing sufficient to pierce the corporate veil Such a showing would, however, likely require a factuaUy intensive inquiry that is more appropriately undertaken in a special proceeding. Under CPLR 103 (c), this court has the power "to convert a motion into a special proceeding .. ," and will therefore do so. 1 As to the branch of the motion for an installment order under CPLR 5226, Remora seeks Efromovich's compensation from Avianca Holdings, S.A. According to Remt?ra, "[t]he Avianca 1 ln converting the motion, the court notes that Remora moves under CPLR 5225 (a) for the tum over order. To the extent that Remora seeks funds from other entities, an issue exists as to whether relief must be sought pursuant io CPLR 5225 (b}, which requires the commencement of a special proceeding. 65094312011 J. REMOAA MAlNTENANCE l:LC vs. EFROMOVICH, GERMAN Motion No. 005 3 of 4 Page 3 of 4 [*FILED: 4] NEW YORK COUNTY CLERK 10/15/2018 09:26 AM NYSCEF DOC. NO. 155 INDEX NO. 650943/2011 RECEIVED NYSCEF: 10/15/2018 Holdings Form 20-F reports that Defondant is the ultimate beneficial owner of Synergy Aerospace, ... " (Remora Memo. In Reply, at 13.) The factual issues on the 5226 claim also overlap with the factual issues on the contempt and 5225 claims regarding Efromovich's roles in the affiliated entities, This branch of the motion will therefore also be converted to a special proceeding, pursuant to CPLR 103 ( c). Nothing in this order converting the mo_tions shall be construed as precluding Efromovich from raising any defense to the special proceeding. Efromovich's cross-motion will also be heard in the context of the special proceeding. It is accordingly hereby ORDERED that the motion of plaintiffs J. Remora Maintenance LLC and Remora Maintenance LLC is converted into a special proceeding and the cross-motion of Efromovich shall be transferred to the special proceeding for hearing therein; and it is further ORDERED that the special proceeding and cross-motion shall be reforred to the Trial Support Office for random reassignment to an IAS Part. This constitutes the decision and order of the court Dated: New York, New York October 12, 2018 r~~~~~l CHECK ONE: CASE DISPOSED [.......1GRANTED APPUCATiON; CHECK lF APPROPRIATE: 65094312011 D r·;··i DENIED j ! SETTLE ORDER r"'~. . . ". . .·-··1 INCLUDES TRANSFERfRF.ASSIGN . . . . . . . .3 NON-FINAL DISPOSITtON r-------1 GR,\NTRD IN PART l-·1 .............. SUIIMH ORDER :- i ..;: I FIDUCIARY AE'J>OINTMENT ;..................... \ J. REMORA MAINTENANCE LLC vs. EFROMOVICH, GERMAN Motion No. 005 4 of 4 0 D OTHER REFERENCE Page 4 of 4

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