MEMORANDUM
SUPREME COURT, NASSAU COUNTY
BY: HON. THOMAS A. ADAMS
U.S.A. CENTRAL STATION ALARM CORP.,
DATE: FEBRUARY 15,2000
Plaintiff,
-against- INDEX NO.
11922/97
SECUREX SECURITY SYSTEMS, INC.,
Defendant.
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Application by plaintiff for an order pursuant to CPLR 5251 and Judiciary Law '753, adjudging defendant Securex Security Systems, Inc. ("Securex"), and non-parties Peter Garf a/k/a Peter Graf, Terry Garf a/k/a Theodora Garf, and Executive Technology Systems, Inc. ("Executive") in contempt of court punishable by fine, imprisonment, or both, is granted, following a hearing, to the extent that each is adjudged to be in civil contempt punishable by a fine. The appropriate amount of the fine shall be the amount of the judgment against Securex, with interest to the date of this order, plus all costs and attorneys' fees incurred by plaintiff in adjudicating this contempt issue. The amount of the costs and attorneys' fees shall be determined by this Court upon the submission of an affirmation of plaintiff s attorneys, together with the proposed order herein, on fifteen (15) days notice to each of the contemnors.
On August 11, 1997, plaintiff obtained a judgment against Securex in the amount of $54,054.82. A restraining notice dated September 26, 1997 was served on Securex. A restraint was placed on Securex's bank account in Citibank on December 26,1997. By order of Mr. Justice Franco dated July 15, 1998 ("the July 15, 1998 order"), plaintiff s president was appointed receiver of Securex, and was authorized, inter alia, to collect all monies owed to Securex. Securex and Peter Garf, its president were directed to deliver to the receiver all contracts with Securex subscribers. In addition, Securex, Peter Garf, their agents, employees and attorneys were prohibited from interfering with the property, contracts and records of Securex.
Peter Garf was deposed on September 3, 1998. Terry Garf was deposed on January 7, 1999., The contempt hearing herein was held before this Court in June, 1999.
It is well established that to sustain an order of civil contempt it must be shown that the contemnor violated an unequivocal court order, with knowledge of the order, and that the violation prejudiced a right of a party to the litigation. (McCain v Kinkins, 84 NY2d 216, 226.) The record here fully supports a finding that the Garfs, individually, and through Securex and Executive, violated the restraining notice dated September 26, 1997 served on Securex, and the July 15, 1998 order.
Although Securex had been in business for 15 or 16 years until it ceased doing, business sometime in 1997, less than $500.00 was in its account when the account was restrained in December, 1997. Securex, and the Garfs, failed to produce any records on the grounds that Securex's former attorney absconded with all records to California in 1996, and the whereabouts of all post '96 records is allegedly unknown. However, bank records subpoenaed from Citibank show that from August 1997, after plaintiff obtained its judgment against Securex, through December 1997, Terry Garf wrote many checks on Securex's account to "CASH" and in payment of personal bills. Terry Garf=s testimony that the Garfs remodeled their kitchen in 1997 as a gift from Mr. Garf s dying mother is simply unworthy of belief. (See Quantum Heating Services Incorporated v Austern, 121 AD2d 437.) Mrs. Garf=s credibility was further impeached by major discrepancies between her hearing and deposition testimony and plaintiff s exhibits.
Although Executive was started in 1998 with Terry Garf as its president, and although Terry Garf testified that Executive does not perform the same alarm services as Securex had performed, 272 accounts of Securex had become accounts of Executive. Furthermore, notwithstanding the July 15, 1998 order, a form letter on Executive's stationery dated August 1, 1998 was sent "TO ALL OF OUR CLIENTS" by Terry Garf, advising that Executive "is still here to serve your needs" and A. . . there has been no interruption in your service".
The only serious objection raised by the Garfs and Executive is that they are non-parties to this action. However, CPLR 5251 expressly authorizes contempt as a remedy against "any person" who fails to obey a restraining notice or order, and all that is required for enforcement is knowledge of the existence of the restraining notice or order. (McCain, supra, at p. 226.) Here, it is plain that the Garfs had actual notice of the restraining notice served on Securex at their home. Indeed, Terry Garf signed the return receipt for the restraining notice. The July 15, 1998 order was served on Securex's attorney on July 15, 1998. In addition, Securex, Peter Garf, Terry Garf and Executive were served with two separate orders to show cause to punish them for contempt. Under these circumstances, the Garfs, Securex and Executive have failed to raise an issue of fact as to knowledge of the restraining notice and the July 15, 1998 order, or service of the contempt motion. (North Fork Bank v Adventurers, Inc., 251 AD2d 26 1.) Furthermore, although Terry Garf and Executive were not specifically mentioned in the restraining notice or the July 15, 1998 order, Terry Garf was plainly an agent or employee of Securex based on the evidence presented, and Executive is the successor to the interest of Securex for the purposes of this determination.
The evidence presented establishes a calculated plan to prevent plaintiff from collecting its judgment by rendering Securex judgment-proof and continuing business as Executive. As both Securex and Executive were operated out of the Garf home, the Garfs have failed to produce any of Securex's records whatsoever, and the Garfs' testimony was evasive and lacked credibility, the Court is compelled to conclude that the Garfs' conduct, and that of their new corporation, Executive, constitutes contempt of both the restraining notice and the July 15, 1998 order.
As the goal of civil contempt is to compensate the private complainant (State of NY v Unique Ideas, 44 NY2d 345), the Court finds it appropriate that the civil contempt fine to be assessed herein shall be the amount of the unpaid judgment plaintiff has against Securex, (Corpuel v Galasso, 240 AD2d 53 1) together with plaintiff s attorneys' fees and costs as set forth above. (Guiliano v Carlisle, 236 AD2d 364.) As the Garfs are the parents of three young children, the Court, in its discretion, declines to make a finding of criminal contempt, warranting imprisonment, at this time.
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J.S.C.