Leser v. U.S. Bank Nat'l Ass'n
| Decision Date | 18 March 2011 |
| Docket Number | No. : 09-CV-2362 (KAM)(ALC),: 09-CV-2362 (KAM)(ALC) |
| Parties | ABRAHAM LESER Plaintiff, v. U.S. BANK NATIONAL ASSOCIATION, Defendant. U.S. BANK NATIONAL ASSOCIATION, Counterclaim Plaintiff, v. ABRAHAM LESER, Counterclaim Defendant. |
| Court | U.S. District Court — Eastern District of New York |
NOT FOR PRINT OR ELECTRONIC PUBLICATION
Defendant/counterclaim plaintiff U.S. Bank National Association ("USB") moved to hold non-party witness Robert Lovy ("Lovy") in civil contempt of court for his failure to comply with this Court's November 12, 2010 Order that Lovy comply with USB's subpoena seeking documents and testimony issued pursuant to Fed. R. Civ. P. 45 and served on Lovy on September 7, 2010 (the "subpoena" or "Rule 45 subpoena"). (See generally ECF No. 72, Mot. for Order to Show Cause and Mem. of Law in Supp. of USB's Order to Show Cause ("USB Mem.").) The Court held a Show Cause Hearing on March 1, 2011, at which Lovy did not appear. (Minute Entry, dated 3/1/11.)
As determined at the Show Cause Hearing, and for the reasons set forth below, Lovy is in civil contempt of the Court and the Court: (1) imposes a $500 per diem monetary sanction starting on March 26, 2011, in order to procure Lovy's compliance with Court Orders and the Rule 45 subpoena; and (2) awards reasonable attorney's fees and costs to USB in an amount to be determined in order to compensate USB for damages suffered while attempting to procure Lovy's compliance with its subpoena.
As set forth more fully below, the $500 per diem monetary sanction shall begin to accrue on March 26, 2011, unless Lovy fully purges his contempt by producing documents on or before March 18, 2011, and appearing and testifying at a deposition on or before March 25, 2011. Should Lovy fail to purge his contempt by close of business on March 25, 2011, USB shall immediately notify the court, and the $500 per diem monetary sanctions shall commence on March 26, 2011 and shall continue until Lovy fully purges his contempt.
Further, if, by April 4, 2011, Lovy continues in his failure to comply with this Court's Orders, including payment of all monetary sanctions, USB shall advise the Court by April 5, 2011, and, in addition to the continuing $500 per diem monetary sanction, the Court will issue an Order directing the United States Marshal to bring Lovy before the Court for incarceration. The incarceration and per diem monetary sanction shall both continue until such time as Lovy purges his contempt by complying with this Court's Orders and paying all monetary sanctions imposed by the Court.
The instant case involves two loans allegedly made by USB, totaling $39 million, to two entities controlled by plaintiff and counterclaim defendant Abraham Leser ("Leser"). (See ECF No. 1, Compl. against USB ("Compl.") at ¶¶ 5-18; ECF No. 11, Ans. at 55 5-24; USB Mem. at 1.) USB alleges that Leser's signature appears on most documents executed in connection with the two loans in question, including two personal guaranties for payment provided to USB. (See USB Mem. at 2.) Leser contests the genuineness of these signatures.
(See Compl. at ¶¶ 9, 10, 16, 17.) USB alleges that Lovy notarized one of the guarantees at issue, as well as several other documents related to the loans in question. (See USB Mem. at 2.) Accordingly, the parties sought to depose Lovy and have asked him to produce certain documents.
By letter motion filed on December 4, 2009 to Magistrate Judge Andrew L. Carter, USB sought to compel Lovy to produce documents and to appear for a deposition pursuant to a subpoena served upon him. (See ECF No. 47, Letter to Hon. Andrew L. Carter, Jr. by USB.) The letter motion explained that USB had served Lovy with a subpoena issued pursuant to Federal Rule of Civil Procedure 45 on October 19, 2009, by substitute service, by serving an individual at Lovy's residence of suitable age and discretion, who accepted service on Lovy's behalf. (See ECF No. 46, Certification of Contempt ("Certification") at 2.) The letter motion further explained that the subpoena required that Lovy produce documents by November 16, 2009 and appear for a deposition on November 25, 2009, but that Lovy neither produced the documents nor appeared for the deposition by the requested dates, nor provided an explanation for his failure to do so. (See id.) By Memorandum and Order dated February 18, 2010 and entered February 19, 2010 (the "February 19, 2010 Order"), Magistrate Judge Carter granted USB's motion to compel and ordered Lovy to produce the requested documents within one week of the service of the February 19, 2010 Order, and to appear for a deposition within three weeks of the service of the February 19, 2010 Order or to show cause by March 22, 2010 why he should not be held in contempt for failure to comply. (See ECF No. 29, 2/19/10 Mem. and Order at 9.)
On March 26, 2010, USB filed a letter motion advising Magistrate Judge Carter that Lovy had failed to respond or to show cause in response to the Court's February 19, 201 0 Order and requested that the Court enter a Certification of Contempt3pursuant to 28 U.S.C. § 636(e). (See ECF No. 38, Letter by USB; Certification at 1, 3.) The letter explained that, on February 23, 2010, USB had served Lovy with a copy of the February 19, 2010 Order by "nail and mail" after several attempts were made to personally serve Lovy.4 (See ECF No. 38, Letter by USB; Certification at 3.)
On April 15, 2010, Magistrate Judge Carter issued an Order directing Lovy to appear on April 28, 2010 to show cause why he should not be held in contempt of court for failing to abide by the Court's February 19, 2010 Order and warned Lovy that failure to appear may result in sanctions. (See 4/15/10 Order.) USB served a copy of the April 15, 2010 Order on Lovy by hand delivery and by UPS. (See Certification at 4.) By Order dated April 27, 2010, the show cause hearing was adjourned to May 6, 2010. (4/27/10 Order ("Due to unforeseen scheduling conflict that has arisen, the 4/28/2010 show cause hearing and status conference have both been adjourned to 5/6/10.").) Magistrate Judge Carter again warned Lovy that his failure to appear may result in sanctions. (See id.) Magistrate Judge Carter ordered USB to notify Lovy of the adjournment as soon as possible and, additionally, to serve the April 27, 2010 Order notifying Lovy of the adjournment date of May 6, 2010 via UPS by May 3, 2010. (See id.)
On May 6, 2010, Magistrate Judge Carter held a Show Cause Hearing at which Lovy did not appear. Magistrate Judge Carter issued a Certification of Contempt on May 14, 2010, certifying to the undersigned the facts which Magistrate Judge Carter found to be sufficient to hold Lovy in civil contempt and recommending that Lovy be directed to appear before the undersigned to show cause why he should not be found in civil contempt for failing to comply with the subpoena served on him and with Court orders. (Certification at 4.)
Based on the facts contained in the Certification of Contempt, on June 4, 2010, this Court issued an Order to Show Cause and granted the parties leave to move for contempt.5 (ECF No. 49, Order to Show Cause, dated 6/4/10.) However, upon further discussions with the parties, the Court discovered that the original subpoena the parties sought to enforce had been served on Lovy by substitute service without any attempts at personal service. Because the Court was not convinced that substitute service of the subpoena on a person of suitable age and discretion at Lovy's address, without more, complied with the service requirements of Rule 45 — i.e. that it was reasonably designed to ensure Lovy's actual receipt of the subpoena and reasonably calculated under the circumstances to provide Lovy with notice and an opportunity to provide objections, the Court vacated its June 4, 2010 Order to Show Cause and dismissed the motion for contempt without prejudice. (Minute Entry, dated 6/25/10.) The Court then ordered USB to effect proper service of the subpoena on Lovy in a manner prescribed by Rule 45. (Id.)
On August 6, 2010, after numerous attempts, 6 USB was able to serve Lovy personally with the subpoena, 7 and requested that this Court enter an order compelling Lovy's compliance with the subpoena by a date certain and that this Court issue an Order to Show Cause as to why Lovy should not be held in civil contempt of court. (See ECF No. 58, USB Letter, dated 8/12/10; ECF No. 58-1, Aff. of Service, dated 8/12/10.) After reviewing USB's papers, however, the Court noted that USB had served Lovy on August 6, 2010 with a stale subpoena dated October 16, 2009 and containing expired return dates of November 16, and 25, 2009. (Minute Entry, dated 8/25/10.) The Court alerted the parties to this deficiency in a telephone conference on August 25, 2010 and granted the parties leave to move to serve Lovy with an updated subpoena by alternative means. (Id.) USB so moved on September 2, 2010. (ECF No. 61, USB Letter, dated 9/2/10). Upon the legal and factual bases contained in USB's letter, including but not limited to USB's showing that it had attempted to personally serve Lovy over 35 times, that Lovy had purposefully evaded service, 8 and that additional costs and delays would result by requiring further attempts at personal service, the Court granted USB's motion for alternative service of an updated subpoena on Lovy.9 (9/3/10 Order.) The Court further found that, under the circumstances, service of an updated subpoena by "nail and mail" was reasonably designed to ensure actual receipt by Lovy and reasonably calculated to provide Lovy with...
To continue reading
Request your trial