Morin v. Trupin

• Decision Date: 08 May 1990
• Docket Number: 89 Civ. 7645 (RWS).,No. 88 Civ. 5743 (RWS),88 Civ. 5743 (RWS)
• Citation: 738 F. Supp. 98
• Parties: Simeon MORIN, et al., Plaintiffs, v. Barry H. TRUPIN, et al., Defendants. Khalid F. AHMED, David Acquino, et al., Plaintiffs, v. Barry H. TRUPIN, Bennett W. Trupin, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

738 F. Supp. 98

Simeon MORIN, et al., Plaintiffs, v. Barry H. TRUPIN, et al., Defendants.

Khalid F. AHMED, David Acquino, et al., Plaintiffs, v. Barry H. TRUPIN, Bennett W. Trupin, et al., Defendants.

Nos. 88 Civ. 5743 (RWS), 89 Civ. 7645 (RWS).

United States District Court, S.D. New York.

May 8, 1990.

COPYRIGHT MATERIAL OMITTED

Fink Weinberger, P.C., New York City, Attorney for Simeon Morin, et al.; Stephen E. Powers, Eric W. Berry, Paul R. McMenamin, of counsel.

Phillips, Nizer, Benjamin, Krim & Ballon, New York City, for Barry Trupin, RRI Realty Corp., BWT Corp. and Tara Jill Trupin 1983-O Trust; Jay Gordon, Martin H. Samson, of counsel.

O'Donnell, Fox & Gartner, P.C., New York City, for Khalid F. Ahmed, et al.; William S. O'Connell, of counsel.

Summit Rovins & Feldesman, New York City, pro se; John L. Amabile, of counsel.

OPINION

SWEET, District Judge.

Plaintiffs in Morin v. Trupin and Ahmed v. Trupin move for an order of attachment against all property in New York State owned by defendant Barry H. Trupin ("Trupin"), RRI Realty Corp. ("RRI Realty"), and other defendants in these actions identified in the margin.¹ In addition, plaintiffs seek to restrain the law firm of Summit Rovins & Feldesman ("Summit"), formerly counsel to Trupin, RRI Realty, and certain other defendants in these actions, from foreclosing on a mortgage it holds on a property, known as Dragons Head, that is owned by defendant RRI Realty. For the reasons stated below, the motions are denied, subject to renewal upon further discovery.

The Parties, the Actions and the Facts

The underlying disputes and principal parties which are the subject of these lawsuits are recounted in prior opinions of the court, familiarity with which is assumed. In brief, plaintiffs are individual investors in unsuccessful limited partnerships formed to own and operate commercial office space properties. Trupin and numerous other defendants are alleged to have induced the plaintiffs to invest in the limited partnerships by misrepresenting the soundness of the investment properties in partnership offering materials and, thereafter, to have looted and misappropriated limited partnership funds by exercising control over the general partners and managing agents of the limited partnerships.

The present motions seek an order of attachment upon a multi-million dollar residential property, Dragons Head, which is unrelated to the limited partnership investment properties but which is an asset of one of the defendants, RRI Realty. Mildred Trupin, Trupin's mother, is the president of RRI Realty. Defendant BWT Corp. ("BWT") allegedly owns RRI Realty, and BWT in turn is owned by The Tara Jill Trupin 1983-O Trust ("1983-O Trust"), of which Trupin was trustee at time of its formation in 1983.

RRI Realty purchased Dragons Head in 1979. RRI Realty has held title to the property since then. Plaintiffs allege on information and belief that the property is one of the few assets that remain available to satisfy the judgment they hope to obtain in these actions.

On November 22, 1988, defendant RRI Realty, by its president Mildred Trupin, delivered a two million dollar mortgage on the Dragons Head property to Rosemary LaSorsa, who at that time was employed as a legal secretary by the Summit law firm. The Summit firm was at that time engaged as counsel by RRI Realty, Trupin and other defendants in these and other actions.² On June 7, 1989, Lasorsa assigned this mortgage to Summit. The mortgage secures a payment falling due on December 29, 1991.

Prior Proceedings

On March 5, 1990, Summit filed a motion returnable March 9, 1990 seeking leave to withdraw as counsel to the noted defendants in these actions, on grounds of nonpayment of fees for past services rendered. Upon the hearing on that motion, plaintiffs opposed the withdrawal motion and cross-moved for an order of attachment against the defendants and for an injunction restraining Summit from foreclosing on its mortgage. Additional time was granted to the plaintiffs, defendants and Summit to file papers bearing on the attachment issues, resulting in further briefing and numerous submissions by plaintiffs and defendants up to May 1. Over plaintiffs' opposition, withdrawal was granted to Summit as against the defendants by order of March 30, 1990.

Standards for Attachment

These motions for an order of attachment for security purposes are governed by Article 62 of the New York Civil Practice Law and Rules.³ A threshold requirement is that plaintiff "show, by affidavit and such other written evidence as may be submitted, that there is a cause of action and that it is probable that the plaintiff will succeed on the merits." CPLR § 6212(a). In addition, the plaintiff must satisfy at least one of the statutory grounds for attachment set forth in CPLR § 6201. The particular grounds for attachment urged here are those stated in subdivisions (1) and (3) of that provision:

(1) the defendant is a non-domiciliary residing without the state, or is a foreign corporation not qualified to do business in the State; or ...

(3) the defendant, with intent to defraud his creditors or frustrate the enforcement of a judgment that might be rendered in plaintiff's favor, has assigned, disposed of, encumbered or secreted property, or removed it from the state or is about to do any of these acts ....

Although it might be thought that the warrant for attachment under the former ground of non-residence is limited to the purpose of obtaining quasi in rem jurisdiction (and not security) in circumstances in which the party against whom attachment is sought might not otherwise be subject to in personam jurisdiction, the interpretation of the non-residence provision is to the contrary. See ITC Entertainment, Ltd. v. Nelson Film Partners, 714 F.2d 217, 220 (2d Cir.1983) (the "statute continues to countenance attachments against nonresidents when appropriate to secure the judgment, even when unnecessary to secure jurisdiction") (citing New York cases). Thus, plaintiffs may rely on § 6201(1) to obtain an attachment of Trupin's New York property for purposes of securing a prospective judgment if Trupin is found to be a nondomiciliary residing without the state.

Non-Resident Non-Domiciliary Status of Trupin

On the record to date plaintiffs have failed to establish Trupin's non-domiciliary status, but shall be permitted the opportunity to engage in further discovery on the question of Trupin's domicile and residence. Plaintiffs previously argued (for service of process reasons) that there is "overwhelming" proof that Trupin maintains a residence in New York as his usual abode, and has done so from 1986 to 1990. Plaintiffs have not disavowed that prior showing, which points against a finding that Trupin is a non-domiciliary. Trupin, for his part, disagrees with the suggested past continuity of his residence in New York, but states by affidavit that he now resides in New York, much as he did permanently prior to 1986. Exactly where in New York City Trupin resides is open to question,⁴ but Trupin's affidavit states his full intention to make New York again his permanent residence and that he has no intention of residing elsewhere.

The residential presence demanded of a defendant under the attachment provision is more substantial than that necessary to establish fair notice of service at a New York "dwelling place or usual place of abode" for process purposes. ITC Entertainment, Ltd. v. Nelson Film Partners, 714 F.2d at 221. Hence, the fact that defendant Trupin assertedly is (or was) amenable to service under CPLR § 308 by virtue of maintaining a suitable dwelling place within the state does not ineluctably dictate that he is a resident of New York under CPLR § 6201(1) and therefore not subject to an order of attachment. Id. Moreover, a defendant may not defeat an attachment motion grounded on non-residency simply by residing temporarily in a hotel room within the state for litigation purposes, away from his or her established permanent residence elsewhere. Id. As attachment is intended to protect against "defendant's ability to pack his bags, abandon his place of convenience within the state, and remain at his permanent residence outside the reach of New York enforcement procedures," the decision must "rest on practical judgments of whether the defendant is in fact a non-resident." Id. (citation omitted).

Trupin's convenient timing notwithstanding, the present record does not contain any affirmative evidence permitting the conclusion that Trupin resides without the state within the meaning of § 6201(1). In ITC Entertainment, the defendant was found to be a nonresident of New York in that his principal and permanent abode was clearly in another state, where he had lived for the past sixteen years with his family, voted and paid taxes, and had chosen to involve himself in civic activities. That defendant's ownership of, and occasional stays in, a cooperative apartment in a New York hotel for business purposes therefore failed to support his convenient claim of New York residency asserted in opposition to the attachment motion. Id. at 219, 222. Unlike ITC Entertainment, here no evidence is presented establishing a location other than New York at which Trupin maintains a permanent residence or place of abode. See also Strater v. Strater, 20 A.D.2d 889, 248 N.Y.S.2d 945, 946 (1st Dep't 1964) (defendant held non-domiciliary where he clearly had abandoned New York residence and established as his sole abode a city outside of the state); Harshbarger v. Sherron Metallic Corp., 179 Misc. 1037, 40 N.Y.S.2d 651 (Sup.Ct.1943) (finding of non-residency despite defendant's lease of New York City apartment where defendant maintained a home and lived with family in New Jersey). Thus, Trupin's rediscovery of the virtues of life in New York may appear motivated by convenience, but the present state of the record does not indicate that he maintains a permanent...