Preview
FILED: NEW YORK COUNTY CLERK 10/24/2017 12:24 PM INDEX NO. 151093/2017
NYSCEF DOC. NO. 128 RECEIVED NYSCEF: 10/24/2017
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
______________________________________________X Index No.: 151093/2017
MICHAEL GOLDENBERG and
RACHEL GOLDENBERG,
Petitioners, AFFIRMATION IN
OPPOSITION TO
-against- PETITIONERS’ ORDER
TO SHOW CAUSE TO
PUNISH SHAINDY LAX
FOR CONTEMPT
CHANA WEISZ a/k/a SHAINDY LAX, MOSHE
LAX, DIAMOND DYNAMICS, LLC, and
MADISON AVENUE DIAMONDS, LLC d/b/a
IVANKA TRUMP FINE JEWELRY,
Respondents.
_____________________________________________X
JASON J. REBHUN, duly admitted to practice before the Courts of the State of New
York, hereby affirms the following under penalties of perjury:
1. I am counsel for the Respondents CHANA WEISZ a/k/a SHAINDY LAX and MOSHE
LAX, DIAMOND DYNAMICS, LLC, and MADISON AVENUE DIAMONDS, LLC
d/b/a IVANKA TRUMP FINE JEWELRY (collectively “Respondents”), and as such am
fully familiar with the facts and circumstances herein.
2. I submit this affirmation in opposition to Petitioners MICHAEL GOLDENBERG and
RACHEL GOLDENBERG’s (collectively “Petitioners”) order to show cause to hold
CHANA WEISZ a/k/a SHAINDY LAX in civil and criminal contempt.
3. Given that the Court found that only Shaindy was served with the Order to Show Cause,
this opposition only addresses arguments related to her.
4. Petitioners’ Order to Show Cause must be denied because Shaindy Lax has affirmed that
she does not have any of the subject shares to turn over.
1
1 of 5
FILED: NEW YORK COUNTY CLERK 10/24/2017 12:24 PM INDEX NO. 151093/2017
NYSCEF DOC. NO. 128 RECEIVED NYSCEF: 10/24/2017
5. As Ms. Lax stated in her May 17, 2017 Affirmation (NYSECF document 58), she
personally does not hold any interest in Diamond Dynamics, LLC or Madison Avenue
Diamonds LLC. The shares are not owned by her. Further, even if she did own the shares
in Diamond Dynamics, LLC and/or Madison Avenue Diamonds LLC, the shares are
subject to an earlier judgment and are controlled by other debtors which obtained a
judgment in the approximate amount of $3,505,036.44 who thereupon levied the shares
as part of their collection efforts. An entity known as “KGK” levied all the bank
accounts, customers, vendors, etc. that had anything to do with those shares and Madison
Avenue Diamonds LLC. See Exhibit 1.
6. In fact, with respect to Shaindy Lax’s purported interest in Diamond Dynamics, in an
action recently commenced in this Court, the Petitioner in that case (Dynamic Three Plus
LLC and Diamond Dynamics LLC v. KGK Jewelry LLC, et al – 157016/2017) states that
Shaindy is not, and never has been, a member of Diamond Dynamics. See Exhibit 2,
paragraph 6.
7. As that Petition states, even if Shaindy were a member of Dynamics, Shaindy Lax would
have no interest in the Subject Diamonds, first because Dynamics never owned these
Diamonds and consigned them to Tiffanys only as an agent of Three Plus and, second,
because under New York law, an LLC member has no interest in the LLC's property in
any event.
8. See also paragraph 32 of the Petition: “Shaindy Lax was never a member of Dynamics.
Since 2013, the only members of that entity are two limited liability companies, SL
Holdings II, LLC and Jacob and Sarah Realty, LLC. (Exhibits 1&4).”
2
2 of 5
FILED: NEW YORK COUNTY CLERK 10/24/2017 12:24 PM INDEX NO. 151093/2017
NYSCEF DOC. NO. 128 RECEIVED NYSCEF: 10/24/2017
9. Thus, as Shaindy sets forth, she does not hold any interest in Diamond Dynamics LLC
and the Amended and Restated Operating Agreement filed in the referenced case
confirms same. See that Exhibit 2 and Exhibit 3 herein.
10. Further, in that action, that Plaintiff-Petitioner annexed a Settlement Agreement
(NYSECF document 29) on behalf of Madison Avenue Diamonds wherein Shaindy Lax
signed a personal guarantee having nothing to do and no connection with that entity.
11. In support of Petitioners’ Order to Show Cause seeking harsh civil and criminal contempt
remedies, Petitioners’ cite Respondents’ alleged failure to produce documentation
regarding Respondent Shaindy Lax’s membership interests in Diamond Dynamics, LLC
and Madison Avenue Diamonds, LLC. As a result of this alleged failure, Petitioners
claim that their rights have been “impeded, impaired, prejudiced, and defeated by the
Respondents.” Petitioners however, fall short of establishing the proper prima facie
showing given that Respondents’ conduct is anything but willful.
12. Petitioners’ Order to Show Cause for contempt pursuant to CPLR § 5251 and Judiciary
Laws § 753 and 756 contradicts law and logic. In fact, Respondents filed an Order to
Show Cause for Summary Judgment because there is nothing to turn over which has been
denied.
13. In order to support civil and/or criminal contempt for lack of providing disclosure “the
moving party must show that the alleged contemnor has violated a clear and unequivocal
court order and that the violation prejudiced a right of a party to the litigation.” See,
Troiano v. Ilaria, 205 A.D.2d 752, 752, 614 N.Y.S.2d 916 (2d Dep’t 1994).
14. Here, Shaindy should not be held in contempt because she does not have anything to turn
over. This should have been made clear to Petitioners given that Respondents reiterated
3
3 of 5
FILED: NEW YORK COUNTY CLERK 10/24/2017 12:24 PM INDEX NO. 151093/2017
NYSCEF DOC. NO. 128 RECEIVED NYSCEF: 10/24/2017
that they do not have any assets in the aforementioned entities throughout their
application to the Court.
15. Furthermore, Shaindy’s conduct has not been shown to be “willful and contumacious” as
required. It is well established that the moving party has the burden to show that the
delinquent party’s conduct has risen to a level of “willful and contumacious.” The Second
Department has held “The Supreme Court… improvidently exercised its discretion in
granting…respondent’s motion to strike the [pleading] absent a clear showing that the
[parties] failure to comply with disclosure was willful and contumacious” See, ACME
ANC Corp. v. Read, 55 A.D.3d 854 (2nd Dep’t, 2008).
16. Further, given that the LLC is subject to various levies referenced in the other action,
there should not be a finding that Shaindy willfully frustrated or prejudiced these
Petitioner’s ability to collect.
17. Petitioners’ claim for attorneys’ fees, costs and expenses, and a fine of $250 pursuant to
Judiciary Laws § 773 has no basis. Ms. Lax cannot be sanctioned for their inability to
produce documents that they do not have.
18. Likewise, and equally moot, is Petitioners’ demand to compel the production of these
documents. These documents are not in Ms. Lax’s possession. Accordingly, Petitioners’
demands in their current application are illogical and irrational.
19. Therefore, it is respectfully submitted that Petitioners’ motion to hold Ms. Lax in
contempt should be denied in full because the record does not reflect that the Ms. Lax
acted with the requisite level of willfulness needed to sustain civil and criminal contempt
and costs, expenses, attorney’s fees and sanctions should not be awarded; and an Order
4
4 of 5
FILED: NEW YORK COUNTY CLERK 10/24/2017 12:24 PM INDEX NO. 151093/2017
NYSCEF DOC. NO. 128 RECEIVED NYSCEF: 10/24/2017
directing the Ms. Lax to comply with the document production should be denied, given
that Ms. Lax have no documents to produce.
Dated: New York, New York
October 24, 2017 Yours, etc.
Jason J. Rebhun
_________________________________________
JASON J. REBHUN
5
5 of 5
Preview
FILED: NEW YORK COUNTY CLERK 10/24/2017 12:24 PM INDEX NO. 151093/2017 NYSCEF DOC. NO. 128 RECEIVED NYSCEF: 10/24/2017 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ______________________________________________X Index No.: 151093/2017 MICHAEL GOLDENBERG and RACHEL GOLDENBERG, Petitioners, AFFIRMATION IN OPPOSITION TO -against- PETITIONERS’ ORDER TO SHOW CAUSE TO PUNISH SHAINDY LAX FOR CONTEMPT CHANA WEISZ a/k/a SHAINDY LAX, MOSHE LAX, DIAMOND DYNAMICS, LLC, and MADISON AVENUE DIAMONDS, LLC d/b/a IVANKA TRUMP FINE JEWELRY, Respondents. _____________________________________________X JASON J. REBHUN, duly admitted to practice before the Courts of the State of New York, hereby affirms the following under penalties of perjury: 1. I am counsel for the Respondents CHANA WEISZ a/k/a SHAINDY LAX and MOSHE LAX, DIAMOND DYNAMICS, LLC, and MADISON AVENUE DIAMONDS, LLC d/b/a IVANKA TRUMP FINE JEWELRY (collectively “Respondents”), and as such am fully familiar with the facts and circumstances herein. 2. I submit this affirmation in opposition to Petitioners MICHAEL GOLDENBERG and RACHEL GOLDENBERG’s (collectively “Petitioners”) order to show cause to hold CHANA WEISZ a/k/a SHAINDY LAX in civil and criminal contempt. 3. Given that the Court found that only Shaindy was served with the Order to Show Cause, this opposition only addresses arguments related to her. 4. Petitioners’ Order to Show Cause must be denied because Shaindy Lax has affirmed that she does not have any of the subject shares to turn over. 1 1 of 5 FILED: NEW YORK COUNTY CLERK 10/24/2017 12:24 PM INDEX NO. 151093/2017 NYSCEF DOC. NO. 128 RECEIVED NYSCEF: 10/24/2017 5. As Ms. Lax stated in her May 17, 2017 Affirmation (NYSECF document 58), she personally does not hold any interest in Diamond Dynamics, LLC or Madison Avenue Diamonds LLC. The shares are not owned by her. Further, even if she did own the shares in Diamond Dynamics, LLC and/or Madison Avenue Diamonds LLC, the shares are subject to an earlier judgment and are controlled by other debtors which obtained a judgment in the approximate amount of $3,505,036.44 who thereupon levied the shares as part of their collection efforts. An entity known as “KGK” levied all the bank accounts, customers, vendors, etc. that had anything to do with those shares and Madison Avenue Diamonds LLC. See Exhibit 1. 6. In fact, with respect to Shaindy Lax’s purported interest in Diamond Dynamics, in an action recently commenced in this Court, the Petitioner in that case (Dynamic Three Plus LLC and Diamond Dynamics LLC v. KGK Jewelry LLC, et al – 157016/2017) states that Shaindy is not, and never has been, a member of Diamond Dynamics. See Exhibit 2, paragraph 6. 7. As that Petition states, even if Shaindy were a member of Dynamics, Shaindy Lax would have no interest in the Subject Diamonds, first because Dynamics never owned these Diamonds and consigned them to Tiffanys only as an agent of Three Plus and, second, because under New York law, an LLC member has no interest in the LLC's property in any event. 8. See also paragraph 32 of the Petition: “Shaindy Lax was never a member of Dynamics. Since 2013, the only members of that entity are two limited liability companies, SL Holdings II, LLC and Jacob and Sarah Realty, LLC. (Exhibits 1&4).” 2 2 of 5 FILED: NEW YORK COUNTY CLERK 10/24/2017 12:24 PM INDEX NO. 151093/2017 NYSCEF DOC. NO. 128 RECEIVED NYSCEF: 10/24/2017 9. Thus, as Shaindy sets forth, she does not hold any interest in Diamond Dynamics LLC and the Amended and Restated Operating Agreement filed in the referenced case confirms same. See that Exhibit 2 and Exhibit 3 herein. 10. Further, in that action, that Plaintiff-Petitioner annexed a Settlement Agreement (NYSECF document 29) on behalf of Madison Avenue Diamonds wherein Shaindy Lax signed a personal guarantee having nothing to do and no connection with that entity. 11. In support of Petitioners’ Order to Show Cause seeking harsh civil and criminal contempt remedies, Petitioners’ cite Respondents’ alleged failure to produce documentation regarding Respondent Shaindy Lax’s membership interests in Diamond Dynamics, LLC and Madison Avenue Diamonds, LLC. As a result of this alleged failure, Petitioners claim that their rights have been “impeded, impaired, prejudiced, and defeated by the Respondents.” Petitioners however, fall short of establishing the proper prima facie showing given that Respondents’ conduct is anything but willful. 12. Petitioners’ Order to Show Cause for contempt pursuant to CPLR § 5251 and Judiciary Laws § 753 and 756 contradicts law and logic. In fact, Respondents filed an Order to Show Cause for Summary Judgment because there is nothing to turn over which has been denied. 13. In order to support civil and/or criminal contempt for lack of providing disclosure “the moving party must show that the alleged contemnor has violated a clear and unequivocal court order and that the violation prejudiced a right of a party to the litigation.” See, Troiano v. Ilaria, 205 A.D.2d 752, 752, 614 N.Y.S.2d 916 (2d Dep’t 1994). 14. Here, Shaindy should not be held in contempt because she does not have anything to turn over. This should have been made clear to Petitioners given that Respondents reiterated 3 3 of 5 FILED: NEW YORK COUNTY CLERK 10/24/2017 12:24 PM INDEX NO. 151093/2017 NYSCEF DOC. NO. 128 RECEIVED NYSCEF: 10/24/2017 that they do not have any assets in the aforementioned entities throughout their application to the Court. 15. Furthermore, Shaindy’s conduct has not been shown to be “willful and contumacious” as required. It is well established that the moving party has the burden to show that the delinquent party’s conduct has risen to a level of “willful and contumacious.” The Second Department has held “The Supreme Court… improvidently exercised its discretion in granting…respondent’s motion to strike the [pleading] absent a clear showing that the [parties] failure to comply with disclosure was willful and contumacious” See, ACME ANC Corp. v. Read, 55 A.D.3d 854 (2nd Dep’t, 2008). 16. Further, given that the LLC is subject to various levies referenced in the other action, there should not be a finding that Shaindy willfully frustrated or prejudiced these Petitioner’s ability to collect. 17. Petitioners’ claim for attorneys’ fees, costs and expenses, and a fine of $250 pursuant to Judiciary Laws § 773 has no basis. Ms. Lax cannot be sanctioned for their inability to produce documents that they do not have. 18. Likewise, and equally moot, is Petitioners’ demand to compel the production of these documents. These documents are not in Ms. Lax’s possession. Accordingly, Petitioners’ demands in their current application are illogical and irrational. 19. Therefore, it is respectfully submitted that Petitioners’ motion to hold Ms. Lax in contempt should be denied in full because the record does not reflect that the Ms. Lax acted with the requisite level of willfulness needed to sustain civil and criminal contempt and costs, expenses, attorney’s fees and sanctions should not be awarded; and an Order 4 4 of 5 FILED: NEW YORK COUNTY CLERK 10/24/2017 12:24 PM INDEX NO. 151093/2017 NYSCEF DOC. NO. 128 RECEIVED NYSCEF: 10/24/2017 directing the Ms. Lax to comply with the document production should be denied, given that Ms. Lax have no documents to produce. Dated: New York, New York October 24, 2017 Yours, etc. Jason J. Rebhun _________________________________________ JASON J. REBHUN 5 5 of 5