United States District Court, D. Connecticut
ORDER ON PENDING MOTIONS
W. Eginton Senior United States District Judge.
action, plaintiff Sberbank of Russia sought to enforce its
rights under three guaranty agreements executed by defendant
Yuri Traisman in connection with commercial loans issued by
plaintiff to a Russian company known as Sealand LLC. Traisman
asserted affirmative defenses and counterclaims alleging bad
faith conduct, failure to account for certain payments, lack
of actual loan default, improper execution of the guaranties,
and abuse of process.
prior rulings on summary judgment, this Court found in favor
of Sberbank on its claims and against Traisman, and against
Traisman on his affirmative defenses and counterclaims
against Sberbank. After the Court issued a judgment for
approximately $7.5 million, defendant failed to pay any
amount owed under that judgment. Plaintiff pursued
post-judgment discovery, issuing several subpoenas upon third
parties. Defendant has filed motions to quash the
post-judgment subpoenas and for protective order; third-party
Kolbrenner & Alexander, LLC has filed a motion to quash;
and plaintiff has filed a motion to compel Kolbrenner &
Alexander, LLC's compliance with plaintiff's
subpoena. For the following reasons, the motions to quash and
for a protective order will be denied; and plaintiff's
motion to compel will be granted.
to Federal Rule of Civil Procedure 45, a party may serve a
subpoena commanding a nonparty “to attend and
testify” or to “produce designated
documents.” A & R Body Specialty and Collision
Works, Inc. v. Progressive Cas. Ins. Co., 2013 WL
6511934, *1 (D. Conn.). At the same time, Rule
45(c)(3)(A)(iv) mandates that a court quash or modify a
subpoena that “subjects a person to undue
burden.” The party seeking to quash a subpoena bears
the burden to show that compliance with the subpoena will
prove burdensome. Aristocrat Leisure Ltd. v. Deutsche
Bank Trust Co. Americas, 262 F.R.D. 293, 299 (S.D.N.Y.
a subpoena imposes an undue burden depends upon factors such
as relevance, the requesting party's need for the
documents, the breadth of the document request, the time
period covered by it, the particularity with which the
documents are described, and the burden imposed. Concord
Boat Corp. v. Brunswick Corp., 169 F.R.D. 44, 48
(S.D.N.Y. 1996). In considering the question of an undue
burden, the Court should inquire into the reasonableness of
the subpoena and balance the interests served by compliance
against those served by quashing it. Aristocrat Leisure
Ltd., 262 F.R.D. at 300. The Court retains discretion in
determining whether the subpoena should be quashed due to an
undue burden. In re Fitch, Inc., 330 F.3d 104, 108
(2d Cir. 2003).
Rule of Civil Procedure 69(a)(2) provides that a judgment
creditor may conduct broad post-judgment discovery
“[i]n aid of the judgment or execution.” EM
Ltd. v. Republic of Argentina, 695 F.3d 201, 207-108 (2d
Cir. 2012). Judgment creditors are “entitled to a very
thorough examination of a judgment debtor with respect to its
assets, including discovery of the identity and location of
any of the judgment debtor's assets, wherever
located.” British Int'l Ins. Co. Ltd. v.
Seguros La Republica, S.A., 2000 WL 713057, at *5
(S.D.N.Y. June 2, 2000).
response to this Court's order granting Sberbank's
application for a prejudgment remedy (“PJR”),
Traisman provided financial disclosures, which indicated that
he was the current or former owner of six different
companies, and that he held only $17, 275 in assets other
than his 50% interest in his property in Greenwich,
Connecticut. Traisman submitted documents in support of
his affidavit or other motions that showed he had monthly
credit card bills of approximately $20, 000 for personal
expenses, monthly mortgage payments of $9, 400, and monthly
taxes of $5, 500. Accordingly, Traisman's disclosures
raise a question of whether he has additional assets that he
uses to afford such monthly expenses.
argues that Traisman lacks standing to object to the
subpeonas on third parties such as banks, accounting firms,
insurance firms and Airbnb. However, for purposes of this
ruling, the Court assumes that Traisman has standing to
object to the subpeonas. Nevertheless, the Court finds that
Traisman's objections lack merit.
Fargo, JP Morgan Chase Bank, First Niagara Bank, Palm Beach
objects to the Sberbank's subpoenas served upon
institutions where he banks on the basis that the date range
of the subpoena requests are too broad and unnecessarily
invade his privacy. However, a judgment creditor may request
asset information from banks during post-judgment discovery,
EM Ltd., 695 F.3d at 207, and a
judgment-debtor's privacy interest does not generally
outweigh the judgment-creditor's entitlement to
post-judgment discovery. Universitas Educ., LLC v. Nova
Group, Inc., 2013 WL 57892 at *5.
complains that Sberbank requests records from a time period
prior to the commencement of the litigation and from his
wife, who is not a party to this litigation. Sberbank asserts
that Traisman's prior transfer of his interest in the
Greenwich property to his wife after Sealand defaulted on its
loan payments to Sberbank indicates that he may have a
history of concealing assets. Thus, Sberbank seeks discovery
into Traisman's financial transactions prior to the time
that Traisman guaranteed Sealand's debt, and into
transfers to entities or individuals that may have
facilitated concealment of assets.
is entitled to a broad inquiry to discover Traisman's
hidden assets, if any. GMA Accessories, Inc. v. Electric
Wonderland, Inc., 2012 WL 1933558, at *4 (S.D.N.Y.).
However, inquiry into the assets of a non-party is only
permitted “where the relationship between the judgment
debtor and the non-party is sufficient to raise a reasonable
doubt as to the bona fides of the transfer of assets between
them.” Magnaleasing, Inc. v. Staten Island
Mall, 76 F.R.D. 559, 561-62 (S.D.N.Y. 1977).
Post-judgment discovery into the assets of a non-party
requires “a somewhat heightened showing of necessity
and relevance” through some demonstration of concealed
or fraudulent transfers or an alter ego relationship.
Uniden Corp. of America v. Duce Trading Co., LTD.,
1993 WL 286102, at *1 (W.D.N.Y. July 19, 1993). In light of
Traisman's conveyence of his property interest to his
wife, the Court finds that Sberbank is entitled to conduct
discovery into Nelly Traisman's banking records.
Sberbank's subpoenas served upon the banks are reasonably
calculated to assist in identifying whether Traisman has
hidden any assets that may be used to satisfy the judgment.
The motions to quash will be denied.