Exhibit,Appendix: Capital Advance Services, Llc v. Zomongo.Tv Usa Inc. D/B/A ZOMONGO.TV USA, Jocelyne Lisa Hughes-Ostrowski, Jeremy Gene Ostrowski

On May 29, 2018 a Exhibit,Appendix was filed involving a dispute between Capital Advance Services, Llc, and Jeremy Gene Ostrowski, Jocelyne Lisa Hughes-Ostrowski, Zomongo.Tv Usa Inc. D B A Zomongo.Tv Usa, for Torts - Other (CONVERSION) in the District Court of Kings County.

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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
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CAPITAL ADVANCE SERVICES, LLC, Index No. 1229/2018

Plaintiff, Hon. Lillian Wan, A.J.S.C.

-against- Returnable: 9/22/21

ZOMONGO.TV USA INC. D/B/A ZOMONGO.TV ORAL ARGUMENT
USA, and JEREMY GENE OSTROWSKI and REQUESTED
JOCELYNE LISA HUGHES-OSTROWSKI,

Defendants.
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PLAINTIFF’S MEMORANDUM OF LAW
IN OPPOSITION TO DEFENDANTS’ MOTION

Stein Adler Dabah & Zelkowitz, LLP
Attorneys for Plaintiff
Capital Advance Services, LLC
1633 Broadway, 46th Floor
New York, New York 10019
Tel: (212) 867-5620
E-Mail: cmurray@steinadlerlaw.com

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TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................................ ii

TABLE OF AUTHORITIES ......................................................................................................... iv

PRELIMINARY STATEMENT .................................................................................................... 1

STATEMENT OF FACTS ............................................................................................................. 3

I. THE PARTIES..................................................................................................................... 3

II. THE TRANSACTIONS. ..................................................................................................... 3

A. The February Agreement. ................................................................................................ 3

B. The April Agreement. ...................................................................................................... 4

C. The Defendants Breached The April Agreement. ............................................................ 5

III. THE JUDGMENT BY CONFESSION WAS ENTERED AND SATISFIED. .............. 6

ARGUMENT .................................................................................................................................. 7

I. DEFENDANTS’ MOTION IS UNTIMELY....................................................................... 7

A. Defendants’ Motion Must Be Denied Because Their Three Year Delay Was
Unreasonable........................................................................................................................... 7

B. Defendants’ Argument That Their Motion May Never Be Untimely Is Premised Upon
A Fundamental Misunderstanding Of The Law. .................................................................... 9

II. THE DEFENDANTS’ MOTION MUST BE DENIED FOR LACK OF STANDING
AND CAPACITY. .................................................................................................................... 10

A. The Defendants Lack Standing To Object To Service On The Bank. ........................... 10

B. The Defendants Lack Standing To Invoke The Separate Entity Rule. .......................... 11

C. Zomongo Lacked The Legal Capacity To File This Motion And, As Such, The Motion
Must Be Denied. ................................................................................................................... 13

D. The Individual Defendants Lack Standing To Object To An Execution Of Funds
Allegedly Owned By The Corporate Defendant. .................................................................. 14

E. The Individual Defendants Do Not Own Any Claims Or Objections In Their Own Right
Because They Filed For Bankruptcy In Canada. .................................................................. 15

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III. THE DEFENDANTS’ OBJECTIONS TO SERVICE, JURISDICTION, AND THE
SEPARATE ENTITY RULE FAIL BECAUSE THE DEFENDANTS AND THE BANK
WAIVED THEIR OBJECTIONS............................................................................................. 16

IV. DEFENDANTS FUNDAMENTALLY MISUNDERSTAND THE DISTINCTION
BETWEEN VOID PROCESS AND A DISPUTE OVER SERVICE...................................... 18

V. THE COURT SHOULD DENY DEFENDANTS’ REQUEST FOR RESTITUTION....... 20

A. Defendants’ Request For Restitution Under CPLR 5015(d) Is Not Warranted. ............ 20

B. Even Assuming Arguendo That The Execution And Levy Were Deficient, The Court
Should Order That The Funds Be Used To Satisfy The Judgment Nunc Pro Tunc. ............ 22

C. Defendants’ Request For Restitution From Plaintiff Must Fail For Public Policy
Reasons. ................................................................................................................................ 23

CONCLUSION ............................................................................................................................. 24

iii

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TABLE OF AUTHORITIES

Cases

Aviation S.A.R.L.,
78 A.D.3d 137 (1st Dept. 2010) .......................................................................................................... 17

Bam Bam Entertainment LLC v Pagnotta,
59 Misc. 3d 906 (Sup. Ct. Kings Cty. 2018) ................................................................................. 19, 21

Bank of N.Y. v. Stradford,
55 A.D.3d 765 (2d Dept. 2008) ............................................................................................................. 8

Bd. of Managers of Soho Int'l Arts Condo. v. City of N.Y.,
2005 U.S. Dist. LEXIS 9139 (S.D.N.Y. May 13, 2005) ..................................................................... 14

Brunswick Hosp. Ctr., Inc. v. Hynes,
52 N.Y.2d 333 (1981) .................................................................................................................... 16-17

Calvary LLC v Funding Metrics, LLC,
2021 N.Y. Misc. LEXIS 4586 (Sup. Ct. Orange Cty. 2021) ................................................................. 5

Cash & Carry Filing Serv., LLC v Perveez,
149 A.D.3d 578 (1st Dept. 2017) .................................................................................................. 19, 21

Cronan v. Schilling,
100 N.Y.S.2d 474 (Sup. Ct. N.Y. Cty. 1950) ...................................................................................... 11

Cruz v. TD Bank, N.A.,
22 N.Y.3d 61 (2013) ............................................................................................................................. 7

Duttle v. Bandler & Kass,
1992 U.S. Dist. LEXIS 8894 (S.D.N.Y. June 23, 1992) ..................................................................... 10

Empire St. Conglomerates v. Mahbur,
105 A.D.3d 898 (2d Dept. 2013) ........................................................................................................... 8

ERA Realty Co. v. RBS Props.,
185 A.D.2d 871 (2d Dept. 1992) ......................................................................................................... 18

Frontera Res. Azer. Corp. v. State Oil Co. of the Azer. Republic,
582 F.3d 393 (2d Cir. 2009) ................................................................................................................ 16

Gilbert v. Burnstine,
255 N.Y. 348 (1931) ........................................................................................................................... 16

Gryphon Domestic VI, LLC v. APP Int’l Fin. Co., B.V.,
41 A.D.3d 25 (1st Dept. 2007) ............................................................................................................ 22

Guardian Loan Co. v. Early,
392 N.E.2d 1240 (1979) ........................................................................................................................ 7

IBIS Capital Grp., LLC v. Four Paws Orlando LLC
2017 NY Slip Op 30477(U), *6 (Sup. Ct. Nassau Cty. 2017) .............................................................. 3

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In re Feit & Drexler, Inc.,
760 F.2d 406 (2d Cir.1985) ................................................................................................................. 22

Ins. Corp. of Ir. v. Compagnie Des Bauxites De Guinee,
456 U.S. 694 (1982) .................................................................................................................. 9, 10, 16

Koehler v. Bank of Bermuda Ltd.,
12 N.Y.3d 533 (2009) ....................................................................................................... 12, 17, 19, 23

L.R. Dean, Inc. v Intl. Energy Resources,
213 A.D.2d 455 (2d Dept. 1995) ......................................................................................................... 21

Matter of Int'l Legal Consulting Ltd. v. Malabu Oil & Gas Ltd.,
35 Misc. 3d 1203(A) (Sup. Ct. N.Y. Cty. 2012) ........................................................................... 11, 12

Matter of Sessa v. Bd. of Assessors of Town of N. Elba,
46 A.D.3d 1163 (3d Dept. 2007) ......................................................................................................... 16

Motorola v. Standard Bank,
24 N.Y.3d 149 (2014) ................................................................................................................... 11, 12

O'Brien v. Fago,
54 Misc. 2d 203 (Sup. Ct. Erie Cty. 1967) .......................................................................................... 14

O'Connell v. Three Park Ave. Bldg. Co., L.P.
(In re Blutrich Herman & Miller), 227 B.R. 53 (Bankr. S.D.N.Y. 1998) ....................................... 9, 10

Paz v. Long Island R.R.,
241 A.D.2d 486 (2d Dept. 1997) .................................................................................................... 14-15

Posner v Posner,
277 A.D.2d 298 (2d Dept. 2000) ................................................................................................... 19, 21

Rubino v Csikortos,
258 A.D.2d 638 (2d Dept. 1999) ......................................................................................................... 21

Sayles v. Pac. Eng'rs & Constructors, Ltd.,
2009 U.S. Dist. LEXIS 124819 (W.D.N.Y. Jan. 16, 2009) ................................................................ 10

Scheckter v. Ryan,
555 N.Y.S.2d 99 (1st Dept. 1990) ....................................................................................................... 20

Seyfarth v. Bi-County Elec. Corp.,
73 Misc. 2d 363 (Sup. Ct. Nassau Cty. 1973) ..................................................................................... 15

Signature Bank v. HSBC Bank USA, N.A.,
67 A.D.3d 917 (2d Dept. 2009) ........................................................................................................... 22

Silberstein v. Presbyterian Hosp. in N.Y.,
96 A.D.2d 1096 (2d Dept. 1983) ......................................................................................................... 18

Silver Cup Funding LLC v. Horizon Health Ctr., Inc.,
2020 N.Y. Misc. LEXIS 10739 (Sup. Ct. Ontario Cty. 2020) ............................................................ 20

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Simon v GTR Source, LLC,
2019 U.S. Dist. LEXIS 221111 (S.D.N.Y. Dec. 26, 2019) ................................................................. 19

Starbare Partners, L.P. v. Sloan,
216 A.D.2d 238 (1st Dept. 1995) ........................................................................................................ 23

Subway Int'l B.V. v. Bletas,
512 F. App'x 82 (2d Cir. 2013) ....................................................................................................... 9, 16

Therm-X-Chemical & Oil Corp. v. Extebank,
444 N.Y.S.2d 26 (2d Dept. 1981) ....................................................................................................... 12

Transpolymer Indus. v. Chapel Main Corp.,
1990 Del. LEXIS 317 (Sep. 18, 1990) ................................................................................................ 14

Tripoint Glob. Equities, L.L.C. v. Fasolino,
2013 WL 5677126 (S.D.N.Y. Oct. 18, 2013) ..................................................................................... 21

Voccola v. Shilling,
88 Misc. 2d 103 (Sup. Ct. Kings Cty. 1976) ....................................................................................... 21

Statutes
8 Del. C. §277 ........................................................................................................................................... 14
BCL 1301 .................................................................................................................................................. 13
CPLR 1021 ................................................................................................................................................ 16
CPLR 3215 ................................................................................................................................................ 20
CPLR 3218 ................................................................................................................................................ 20
CPLR 5015 .................................................................................................................................. 2, 9, 20, 21
CPLR 5225 ...................................................................................................................................... 2, 22, 23
CPLR 5240 ........................................................................................................................................ 7, 8, 14
CPLR 5230 ................................................................................................................................................ 24
Del. Code. Ann. Tit. 8 §136 ...................................................................................................................... 13
N.Y. BCL 1301 ........................................................................................................................................... 2

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PRELIMINARY STATEMENT

Plaintiff/Judgment-Creditor, Capital Advance Services, LLC (“CAS”), respectfully

submits this Memorandum of Law in Opposition to the Motion seeking to vacate an execution and

levy filed by the Defendants/Judgment-Creditors, Zomongo.Tv USA Inc. D/B/A Zomongo.Tv,

USA (“Zomongo” or “Corporate Defendant”), and Jeremy Gene Ostrowski (“JGO”) and Jocelyne

Lisa Hughes-Ostrowski (“JLHO”) (JGO and JLHO are collectively referred to as the “Individual

Defendants”).

The crux of the Defendants’ motion is a request to vacate an execution and Marshal’s levy

on Zomongo’s bank account more than three years ago on a judgment that was marked fully

satisfied in June, 2018, and a request for the Court to order CAS to return all funds collected

pursuant to the judgment three years ago. Defendants’ motion relies upon misstatements of fact,

inapposite authorities, and arguments that cannot be properly raised in a post-judgment motion.

Contrary to Defendants’ contentions, the New York Court of Appeals has expressly held

that a motion to vacate a post-judgment enforcement device shall be deemed time-barred where

the judgment-debtor fails to make a motion within a reasonable time after service of the post-

judgment execution device. The Second Department has consistently found that even a two-year

delay is unreasonable and warrants denial of a motion, thus Defendants’ three-year delay is fatal

to their motion. Defendants’ arguments to the contrary are inapposite and have nothing to do with

judgment enforcement devices, but instead relate exclusively to vacatur of a default judgment

entered without personal jurisdiction over a defendant.

Additionally, the Defendants’ motion, which argues that the Marshal did not properly serve

an execution on BMO Harris Bank, N.A. (the “Bank”), must also fail because the Defendants lack

standing to object to when, where, or how the Bank was served the execution and levy by the

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Marshal. Indeed, settled law establishes that such objections belong to the bank, that the bank can

and did waive its objections, and that a judgment-debtor suffers no injury simply because the bank

decides to consent to jurisdiction and service. However, even if Defendants could raise an

objection, the Bank’s deposit account terms included a waiver of such objections by Defendants.

Furthermore, the Defendants’ motion fails because the Individual Defendants lack standing

to file a motion seeking the vacatur of an execution on Zomongo’s bank account or restitution of

funds belonging to Zomongo. While Zomongo would have been the appropriate party for such a

motion, it lacks capacity to seek any kind of redress in Court under Delaware Law and N.Y. BCL

1301(a) because its corporate charter was forfeited. Thus, none of the Defendants can seek the

relief requested in their motion because they lack standing and capacity to do so.

Even assuming arguendo that the Defendants had standing, had capacity, and had made

their motion in a timely manner, the Defendants’ request for restitution under CPLR 5015(d) would

fail. At a basic level, CPLR 5015(d) does not apply to judgments by confession or to levies and

executions. Moreover, the Court may grant restitution under CPLR 5015(d) only if the underlying

judgment has been vacated. Absent a prior order vacating the underlying judgment by confession

in a plenary action, the money collected post-judgment is still indisputably due and owing by the

Defendants to CAS. Finally, the Defendants’ application is academic. Even if the Defendants

had standing and capacity, and had timely filed their motion, CPLR 5225 provides that CAS would

be entitled to a turnover order whereby the Court directs the funds be paid to CAS nunc pro tunc.

Thus, absent a pre-existing order vacating the underlying judgment by confession, which Plaintiffs

do not and cannot request in their motion, Defendants’ motion cannot have any effect.

For the reasons set forth herein, the Court should deny the Defendants’ motion in its

entirety and award CAS such other and further relief as the Court deems just and proper.

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STATEMENT OF FACTS

I. THE PARTIES.

CAS is a New York limited liability company principally doing business in New York. Ex.

B, p.1. CAS’s business consists of purchasing future accounts receivable from other businesses1

for an upfront lump sum from CAS. Ex. B, p.1.

Zomongo was a Delaware corporation doing business throughout the United States, but

with its purported headquarters in Arizona. See Ex. A, p.4. JGO’s contention in his affidavit that

“Zomongo is a Canadian corporation headquartered in Calgary” (JGO Aff., p. 1, ¶5) is

demonstrably false when one reviews Delaware public corporations records. Ex. N. JGO and

JLHO were the former owners and operators of Zomongo. Ex. A. Zomongo’s corporate charter

was forfeited to the State of Delaware on December 15, 2019 and has not been restored. Ex. N.

II. THE TRANSACTIONS.

A. The February Agreement.

On or about February 2, 2018, the Defendants solicited CAS with offers to sell a portion

of their future receivables for an upfront lump sum from CAS. On February 12, 2018, CAS and

Zomongo executed a purchase and sale of future receivables agreement (the “February

Agreement”) whereby Zomongo sold $449,700 of its future receivables to CAS for an upfront

payment of $300,000, less any agreed upon fees. Ex. B, p.13. CAS performed by paying the

purchase price and Zomongo began performing in February and March.

1
“Purchases and sales of future receivables and sales proceeds are common commercial transactions expressly
contemplated by the Uniform Commercial Code.” IBIS Capital Grp., LLC v. Four Paws Orlando LLC, 2017 NY Slip
Op 30477(U), *6 (Sup. Ct. Nassau Cty. 2017).

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B. The April Agreement.

In April 2018, Zomongo solicited CAS with an offer to sell additional future receivables

to CAS. After negotiating terms, CAS agreed to purchase $861,925 in future receivables from

Zomongo for the purchase price of $575,000 (the “April Agreement”). Ex B, p.1. Zomongo and

CAS agreed that the $369,558 of the balance outstanding from the February Agreement would be

applied to pay a portion of the purchase price and the February Agreement would be superseded

by the April Agreement. Ex B, p.10.

Pursuant to the terms of the April Agreement, Zomongo would remit the future receivables

to CAS from 15% of its daily sale proceeds. Ex. B, p.1. In order to effectuate the April Agreement,

all of Zomongo’s receivables were to be deposited into a single designated deposit account, from

which CAS and Zomongo would each take their respective share - 85% for Zomongo and 15% for

CAS. Ex. B, p.1. At Zomongo’s insistence, the parties executed an addendum contemporaneous

with the rest of the April Agreement, which provided that CAS would debit an estimated amount

from the designated deposit account on each business day and that, at the end of the month, if the

estimated amount debited was higher or lower than 15% of Zomongo’s receivables, Zomongo

could demand a reconciliation of the estimated amount with the actual 15% share. Ex. B, p.11,

¶¶a, c-d. If the estimated amount was greater than the actual 15%, then CAS was obligated to

refund the overcollection and, if the estimated amount was less than the actual 15%, Zomongo was

obligated to remit the difference. Ex. B, p.11, ¶¶c-d. The sole point of discretion vested in CAS

was that CAS could request “evidence and documentation” that was “necessary to identify the

appropriate amount of – and effectuate – the Specified Percentage.” Ex. B, p.11, ¶c.

Zomongo and CAS each had the right to choose to revert to manually calculating the 15%

at any time for any reason. Ex. B, p.11, ¶d. Thus, if Zomongo felt the estimated daily payments

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with reconciliation were slow, inaccurate, or no longer desirable, they had the unfettered right to

revert to daily manual calculation of the receivables. Ex. B, p.11, ¶d. Moreover, if the Plaintiffs

had disagreed with CAS on the outcome of a reconciliation, or any other dispute or claim had

arisen over which the Plaintiffs were dissatisfied, the Plaintiffs were empowered to force CAS into

an arbitration before the American Arbitration Association and require CAS to pay their arbitration

filing fees. Ex. B, p.5, §4.13.

Furthermore, Payments to CAS were wholly contingent upon Zomongo actually generating

and collecting the purchased receivables, and the Agreement explicitly provides that “[p]ayments

made to [CAS] in respect to the full amount of the Receipts shall be conditioned upon [Zomongo]’s

sale of products and services and the payment therefore by [Zomongo]’s customers…” Ex. B, p.2,

§1.8. Consequently, if Zomongo did not generate and collect receivables, or their business failed

in its ordinary course, Zomongo would not be in breach or default under the Agreement and, CAS

would bear the loss without recourse. Ex. B, p.2, §1.8.

C. The Defendants Breached The April Agreement.

While CAS promptly performed on April 11, 2018, and acted in good faith, the Defendants

did not. Rather, in April and May of 2018, Zomongo and its owners orchestrated a massive

financial fraud in which they promised to sell the same receivables to numerous buyers in exchange

for millions of dollars. Indeed, in April and May of 2018 alone, Zomongo sold well over 100% of

its daily sale proceeds to other companies. See Berkovitch Affirm. ¶¶5-9; Exs. C-J. Plaintiffs’

scheme to defraud its various counterparties, including CAS, resulted in the theft of millions of

dollars and demonstrated Defendants’ intent to perpetrate larceny by false promise. Calvary LLC

v Funding Metrics, LLC, 2021 N.Y. Misc. LEXIS 4586, *20-22 (Sup. Ct. Orange Cty. 2021).

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III. THE JUDGMENT BY CONFESSION WAS ENTERED AND SATISFIED.

Faced with a recalcitrant counter-party refusing to perform, CAS retained counsel and filed

the affidavit of confession of judgment previously executed by Plaintiffs. Berkovitch Affirm, ¶4.

Consistent with the terms of the affidavit, CAS filed an accompanying client affidavit crediting

Plaintiffs with all payments made and received by CAS. Ex. A. Thereafter, the Judgment by

Confession was entered in favor of CAS. Ex. A.

CAS’s counsel issued a writ of execution to the New York City Marshal to execute the

judgment on any bank holding assets belonging to Zomongo that would accept service of a levy

and consent New York jurisdiction. Berkovitch Affirm., ¶¶10-14. As the Bank’s policy is to

require its account holders to authorize the Bank to consent to service and jurisdiction for levies

and demands, the execution and levy were served on the Bank. Berkovitch Affirm., ¶¶10-14; Ex.

K. The Bank consented to service and jurisdiction in this case and promptly honored the levy by

delivering the funds to the Marshal. Berkovitch Affirm., ¶14. The funds were applied to the

judgment and the judgment was satisfied on June 4, 2018. Ex. L.

The Defendants never objected to the Judgment, execution, or levy. They did not serve an

exemption claim or a motion challenging the Judgment, execution, or levy. Berkovitch Affirm.,

¶¶15-16. Indeed, the Defendants have been silent for three years until mailing an untimely motion

on May 28, 2021. Berkovitch Affirm., ¶¶15-16.

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ARGUMENT

I. DEFENDANTS’ MOTION IS UNTIMELY.

A. Defendants’ Motion Must Be Denied Because Their Three Year Delay Was
Unreasonable.

Despite the prolixity of Defendants’ papers and their inclusion of scurrilous, irrelevant, and

inaccurate allegations pertaining largely to various non-parties, Defendants’ motion is merely an

untimely motion seeking to vacate a post-judgment execution and levy pursuant to CPLR 5240.

CPLR 5240 provides that “[t]he court may at any time, on its own initiative or the motion

of any interested person, and upon such notice as it may require, make an order denying, limiting,

conditioning, regulating, extending or modifying the use of any enforcement procedure.” While

CPLR 5240 uses the phrase “at any time,” all of the relief authorized by the statute presumes that

enforcement is either incomplete or ongoing, rather referring to post-judgment enforcement

procedures that have since been completed. CPLR 5240 “vests the court with broad discretion to

prevent abuse in the use of enforcement procedures of CPLR article 52.” Guardian Loan Co. v.

Early, 392 N.E.2d 1240, 1241 (1979). Nevertheless, “[h]owever unfortunate the judgment

debtor’s plight may be…[CPLR 5240] has no application after the threatened use of an

enforcement procedure is a fait accompli.” Id. at 1243.

More recently, however, the Court of Appeals has reasoned that that the Court may

consider a motion to vacate an execution pursuant to a combination of CPLR 5240 and the court’s

inherent powers. Nevertheless, the Court explained that although “[t]here is no concrete temporal

limitation on initiation of a CPLR 5240 proceeding,” a motion under CPLR 5240 that invokes the

court’s inherent powers “should be pursued within a reasonable time after the injury is incurred.”

Cruz v. TD Bank, N.A., 22 N.Y.3d 61 (2013) (note 4). If the motion was not promptly filed, it

should be denied for unreasonable delay. Id.

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In the case at bar, Defendants’ motion was untimely regardless of whether the Court applies

the older concrete deadline of Guardian Loan Co. or the newer reasonableness standard from Cruz.

The execution allegedly occurred on or about May 29, 2018, and, according to Defendants, was

completed days later by June 4, 2018. The matter was a fait accompli by June 4, 2018. While

Defendants contend that the bank should have waited fifteen days before disbursing the funds to

the New York City Marshal’s office, under Guardian Loan Co., that would suggest they should

have had until June 13, 2018. Their argument over whether the bank should have disbursed funds

on June 4, 2018 or June 13, 2018 is academic because they did not object or make a motion during

either time period.

The Defendants waited three years before filing their motion in 2021. Defendants offer

no excuse for their delay and did not even argue that their three-year delay was reasonable. They

did not dispute that they had knowledge of all the facts necessary to bring a motion or otherwise

object in June, 2018. An unexcused delay of three years before making a motion is facially

unreasonable. The Second Department consistently holds that a two year or less delay between an

act and a motion to vacate is unreasonable and warrants denial of a motion. See, e.g., Empire St.

Conglomerates v. Mahbur, 105 A.D.3d 898, 899 (2d Dept. 2013) (affirming March 2012 order

denying motion to vacate December 2010 judgment); Bank of N.Y. v. Stradford, 55 A.D.3d 765,

765 (2d Dept. 2008) (two-year delay in making motion was unreasonable where movants knew

facts for motion from the beginning).

Consequently, Defendants’ motion pursuant to CPLR 5240 should be denied as untimely.

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B. Defendants’ Argument That Their Motion May Never Be Untimely Is
Premised Upon A Fundamental Misunderstanding Of The Law.

Defendants, citing no applicable authority, argue that their motion may never be deemed

untimely and liken their motion to vacate an execution and a levy as being akin to a motion to

vacate a judgment for lack of personal jurisdiction under CPLR 5015(a)(4).

Defendants’ invocation of and analogy to CPLR 5015(a)(4) fundamentally misunderstands

the law and facts at issue. Defendants argue that they may challenge the execution because there

was a lack of personal jurisdiction arising from allegedly deficient service by a New York City

Marshal. However, their argument is that the Court lacked personal jurisdiction over the Bank,

not them. This is a crucial distinction.

“Insufficiency of process and lack of personal jurisdiction are personal defenses which,

therefore, may not be raised on behalf of another.” O'Connell v. Three Park Ave. Bldg. Co., L.P.

(In re Blutrich Herman & Miller), 227 B.R. 53, 58 (Bankr. S.D.N.Y. 1998). “Because the

requirement of personal jurisdiction represents first of all an individual right, it can, like other such

rights, be waived.” Ins. Corp. of Ir. v. Compagnie Des Bauxites De Guinee, 456 U.S. 694, 703

(1982). [L]ack of personal jurisdiction is a defense that can be waived by failure to assert it

seasonably or by submission through conduct.” Subway Int'l B.V. v. Bletas, 512 F. App'x 82, 83

(2d Cir. 2013).

Defendants’ entire argument is an attempt to raise an objection to personal jurisdiction and

service of process on behalf of the Bank, which has never objected to either. The law is clear,

Defendants lack standing to object to service of an execution and levy on behalf of the Bank. As

the Defendants cannot raise or rely upon objections predicated upon a lack of jurisdiction over the

Bank or deficient service on the Bank, their arguments arising from case law involving a lack of

personal jurisdiction must fail.

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II. THE DEFENDANTS’ MOTION MUST BE DENIED FOR LACK OF
STANDING AND CAPACITY.

A. The Defendants Lack Standing To Object To Service On The Bank.

The Defendants’ motion must be denied because they lack standing to raise objections

belonging to a non-party garnishee bank.

The Defendants’ primary arguments are that the New York City Marshal failed to

personally serve the Bank and, instead, faxed the restraining notice, execution, and levy to the

Bank. However, “[i]nsufficiency of process and lack of personal jurisdiction are personal defenses

which, therefore, may not be raised on behalf of another.” O'Connell, 227 B.R. at 58. It is well

settled that a party lacks standing to object to any exercise of personal jurisdiction over another.

Sayles v. Pac. Eng'rs & Constructors, Ltd., 2009 U.S. Dist. LEXIS 124819, *18 (W.D.N.Y. Jan.

16, 2009); Duttle v. Bandler & Kass, 1992 U.S. Dist. LEXIS 8894, *15-16 (S.D.N.Y. June 23,

1992). As explained in Duttle, objections based upon personal jurisdiction and service of process

are not restrictions on judicial power or sovereignty, but rather a waivable right belonging only to

the person that was allegedly served process. Duttle, 1992 U.S. Dist. LEXIS 8894 at *15-16.

Indeed, the United States Supreme Court has explained that personal jurisdiction and service may

only be raised or relied upon by the person over whom jurisdiction or service was asserted. Ins.

Corp. of Ir., 456 U.S. at 703-05.

Ultimately, Defendants’ argument against the post-judgment execution is not a ground that

Defendants may raise. Moreover, as explained in Duttle and Ins. Corp. of Ir., the arguments arising

from personal jurisdiction over the Bank or service of process cannot render the restraint, execution

and levy void from inception because they hinge upon whether or not the Bank raised an objection.

For the foregoing reasons, the Court should deny the Defendants’ motion.

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B. The Defendants Lack Standing To Invoke The Separate Entity Rule.

The Defendants argue that the execution and levy should be vacated based upon the

argument that the separate entity rule requires that service of a levy must be made on the bank

where an account was opened or the principal offices of the garnishee bank.

The separate entity rule is not a statutory requirement or a law arising from any substantive

right, but a judicially crafted doctrine dating from approximately a century ago. Motorola v.

Standard Bank, 24 N.Y.3d 149, 165 (2014) (dissenting). The first purpose of the separate entity

rule was to protect international banks from being subjected to competing claims in foreign

jurisdictions and avoid conflicts among competing legal systems. Id. at 162. Moreover, as

explained by the Court of Appeals, the separate entity rule is intended to apply “as a limiting

principle in the context of international banking, particularly in situations involving attempts to

restrain assets held in a garnishee bank’s foreign branches.” Id. at 161. The second purpose of the

separate entity rule was to treat each bank branch as a separate entity so as to alleviate the

compliance burden on the bank, which would have to notify every branch simultaneously. Cronan

v. Schilling, 100 N.Y.S.2d 474, 476 (Sup. Ct. N.Y. Cty. 1950). “The separate entity rule was

historically justified on the basis of both the impracticability of requiring constant transmission of

reports on the status of accounts in one branch to all other branches, and on the recognition that

any bank

Case Info

Judge

Lara J Track Judge’s New Case

Case No.

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Document Filed Date

October 03, 2023

Case Filing Date

May 29, 2018

County

Parties

CAPITAL ADVANCE SERVICES, LLC Plaintiff
COLONNA COHEN, ASHLEE VICTORIA Attorney for the Defendant
Jeremy Gene Ostrowski Defendant
Jocelyne Lisa Hughes-ostrowski Defendant
MURRAY, CHRISTOPHER RYAN Attorney for the Plaintiff
ZOMONGO.TV USA INC. D/B/A ZOMONGO.TV USA Defendant
STEVEN ADLER Attorney
STEVEN BERKOVITCH Attorneys for Plaintiffs
ARIEL BOUSKILA Attorneys for Plaintiffs
NATHAN COHEN Attorney
EVAN NEWMAN Attorney
JEFFREY FLEISCHMANN Attorney
PHILLIP SPINELLA Attorneys for Defendants
ROBERT GRIMBLE Attorney

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Exhibit,Appendix: Capital Advance Services, Llc v. Zomongo.Tv Usa Inc. D/B/A ZOMONGO.TV USA, Jocelyne Lisa Hughes-Ostrowski, Jeremy Gene Ostrowski

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