Pahlavi v. Laidlaw Holdings, Inc.

• Decision Date: 27 February 1992
• Citation: 180 A.D.2d 595,580 N.Y.S.2d 303
• Parties: Ashraf PAHLAVI, Petitioner-Appellant, v. LAIDLAW HOLDINGS, INC., Respondent, and Phelan & Costello, P.C., Respondent-Respondent, The Bank of New York, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 303

580 N.Y.S.2d 303

180 A.D.2d 595

Ashraf PAHLAVI, Petitioner-Appellant, v. LAIDLAW HOLDINGS, INC., Respondent, and Phelan & Costello, P.C., Respondent-Respondent, The Bank of New York, Respondent.

Supreme Court, Appellate Division,

First Department.

Feb. 27, 1992.

Before CARRO, J.P., and MILONAS, ELLERIN and ROSS, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County (Burton S. Sherman, J.), entered December 14, 1990, which, inter alia, dismissed a petition against Phelan & Costello, P.C., requiring them to turn over certain funds to the Sheriff of the City of New York (Sheriff), in accordance with a pre-attachment temporary restraining order (TRO), is unanimously reversed, to the extent appealed from, and as limited by the parties' Appellate briefs, on the law and on the facts, petition reinstated and granted, and Phelan & Costello, P.C., directed to turn over to the Sheriff $50,000.00 and the interest thereon, with costs.

In February 1990, Ms. Ashraf Pahlavi commenced an action against Mr. Khusrow H. Nezhad for conversion of approximately $1.9 million, derived from the proceeds of the sale of various art works owned by Ms. Pahlavi. In addition to starting the underlying action, Ms. Pahlavi moved, by order to show cause, for an order of attachment of Mr. Nezhad's assets, and on February 16, 1990, an IAS Court (Shirley Fingerhood, J.), signed such an order, containing a temporary restraining order. In pertinent part, the TRO (see, Record on Appeal (RA), at 29), stated: "ORDERED that pending the hearing of this motion defendant [Mr. Nezhad] and his agents be and hereby are stayed and restrained from assigning, disposing of, encumbering, secreting or removing any of the defendant's property located within the state to the extent of $1,900,000 ..." [material in brackets added].

Thereafter, on February 16 and 17, 1990, copies of the order to show cause, together with the TRO, were served on Mr. Nezhad. Subsequently, on or about February 24, 1990, Mr. Nezhad consulted with attorneys associated with Phelan & Costello, P.C., Esqs. (law firm), concerning the commencement of the underlying action against him and the TRO, and Mr. John J. Phelan, III, a partner in the law firm, admits (see, RA, at 41-42) that, on or about February 27, 1990, Mr. Nezhad delivered two $25,000.00 checks payable to the order of the law firm, and those checks were "deposited in our bank accounts. The first check for $25,000.00 was a retainer deposit. The second...