Opinion
No. 32372/08.
2010-09-27
Joseph RUBASHKIN, Gutol Leiter and Rosie Sandman, Plaintiffs, v. Aaron RUBASHKIN, a/k/a Abraham Aaron Rubashkin, Defendant.
Day Pitney LLP, Jonathan Borg, Esq., New York, Non Party Bancorp. Sherman Citron and Karasik P.C., New York, Attorney for defendant.
Day Pitney LLP, Jonathan Borg, Esq., New York, Non Party Bancorp. Sherman Citron and Karasik P.C., New York, Attorney for defendant.
No Appearances for Defendant.
ARTHUR M. SCHACK, J.
Nonparty U.S. BANCORP EQUIPMENT FINANCE, INC. (U.S BANCORP) moves, by order to show cause, to: vacate a judgment by confession (the Judgment), dated December 2, 2008, in favor of plaintiffs JOSEPH RUBASHKIN (JOSEPH), GUTOL LEITER (GUTOL) and ROSIE SANDMAN (ROSIE) and against defendant AARON RUBASHKIN, a/k/a ABRAHAM AARON RUBASHKIN (RUBASHKIN); avoid any liens or executions of plaintiffs pursuant to same, including any with respect to RUBASHKIN'S interests in 452–53rd Realty Corp. (53SRC), A.A. Rubashkin & Sons, Inc. (AARS), 410 East 17th Street LLC (E17LLC) and 404 Realty Associates LLC (404 LLC); and, restrain plaintiffs from conveying their interests in, or permitting the transfer or encumbrance of any of the assets, except in the ordinary course of business, of the entities known as 53SRC, AARS, E17LLC and 404 LLC, or causing such entities to encumber or transfer any assets thereof.
Briefly, U.S. BANCORP, a judgment creditor of RUBASHKIN, seeks to vacate the Judgment because it is statutorily defective and fraudulent. The Judgment, for $2,255,000.00, is based upon RUBASHKIN's affidavit of confession, dated November 26, 2008, and entered by RUBASHKIN's attorney, not an attorney for plaintiffs. The three plaintiffs are respectively RUBASHKIN's son, daughter and granddaughter. RUBASHKIN, five days subsequent to the December 2, 2008 entry of the Judgment, on December 7, 2008, executed an assignment transferring all of his interests in 53SRC, AARS, E17LLC and 404 LLC to plaintiffs JOSEPH, GUTOL, and ROSIE. The Court, without addressing whether RUBASHKIN colluded with plaintiffs to defraud U.S. BANCORP, finds the Judgment invalid for its failure to comply with CPLR § 3218. Therefore, the Court grants nonparty U.S. BANCORP's order to show cause in its entirety.
Background
Defendant RUBASHKIN was the sole shareholder of a corporation called AGRIPROCESSORS, INC. (AGRIPROCESSORS), which had a meat processing plant in Postville, Iowa. AGRIPROCESSORS, “founded by Aaron Rubashkin, has a storybook history whose recent chapters have turned murky. After some of Rubshakin's Lubavitch Hasidic family moved here [Postville] from Brooklyn in 1987, the firm became the nation's largest processor of glatt kosher beef, the strictest kosher standard. It produces kosher and non-kosher beef, veal, lamb, turkey and chicken products under such brands as Iowa Best Beef, Aaron's Best and Rubashkin's.” (Spencer S. Hsu, Immigration Raid Jars a Small Town: Critics Say Employers Should Be Targeted, Washington Post, May 18, 2008).
AGRIPROCESSORS, between April 2004 and December 2004, entered into a series of lease agreements and schedules (the Lease) with U.S. BANCORP for various meat processing equipment. RUBASHKIN, on or about May 20, 2004, executed and delivered to U.S. BANCORP a personal guaranty (the Guaranty), to provide U.S. BANCORP with security for the repayment of the Lease, by which RUBASHKIN absolutely, unconditionally and irrevocably guaranteed U.S. BANCORP all payment and performance obligations of AGRIPROCESSORS under the Lease.
Federal Immigration and Customs Enforcement (ICE) agents, on or about May 12, 2008, raided AGRIPROCESSORS Postville facility because of alleged employment of numerous undocumented workers. This led to the filing of criminal charges against SHOLOM RUBASHKIN (SHOLOM), RUBASHKIN's son and Chief Executive Officer of AGRIPROCESSORS, as well as other officials connected with the plant. Then, the Iowa Attorney General, on or about September 9, 2008, charged AGRIPROCESSORS, RUBASHKIN, SHOLOM and other plant officials with 9,311 violations of child labor law and more than 1,500 violations relating to wages and hours worked. Subsequently, on or about October 29, 2008, the State of Iowa civilly fined AGRIPROCESSORS nearly $10,000,000.00 for labor law violations. SHOLOM, in November 2008, was arrested on federal bank fraud charges related to the diversion of millions of dollars to increase the apparent value of AGRIPROCESSORS's accounts receivable. He was subsequently convicted, in November 2009, in U.S. District Court on 86 counts, including bank fraud, making false statements to a bank, wire fraud, mail fraud and money laundering
On or about November 4, 2008, six days after the State of Iowa civilly fined AGRIPROCESSORS for labor law violations, AGRIPROCESSORS filed a voluntary petition in the United States Bankruptcy Court for the Eastern District of New York for relief, pursuant to Title 11, Chapter 11 of the United States Code. Venue was transferred, on December 12, 2008, to the United States Bankruptcy Court for the Northern District of Iowa.
As a result of AGRIPROCESSORS's failure to make payments to U.S. BANCORP under the Lease, from September 2008, and its subsequent bankruptcy filing, AGRIPROCESSORS defaulted under the terms of the Lease and RUBASHKIN defaulted under the terms of the Guaranty. Therefore, on December 1, 2008, U.S. BANCORP's counsel sent a written demand (the Demand Letter) to RUBASHKIN for payment of the monies due as a result of AGRIPROCESSORS' defaults under the Lease. RUBASHKIN failed to make payment in response to the Demand Letter. Then, U.S. BANCORP, on December 12, 2008, filed a complaint in the United States District Court for the Eastern District of New York (EDNY). (U.S. Bancorp Equipment Finance, Inc. v. Abraham A. Rubashkin, No. 08–CV–5021). United States District Court Judge Jack Weinstein, on August 12, 2009, granted summary judgment to U.S. BANCORP against RUBASHKIN. Judge Weinstein awarded U.S. BANCORP $902,334.44, plus interest from August 3, 2009. U.S. BANCORP entered the judgment on August 14, 2009 with the EDNY Clerk.
Then, U.S. BANCORP, on August 29, 2009, filed an abstract of the EDNY judgment in the Office of the County Clerk of Kings County, and, on September 18, 2009, served RUBASHKIN with a restraining notice, a subpoena duces tecum, and an information subpoena. Moreover, U.S. BANCORP claims that RUBASHKIN failed to comply with his obligations to produce documents and appear for examination. Thus, U.S. BANCORP has no way of determining if RUBASHKIN was in compliance with the restraining notice served upon him. Thereafter, pursuant to property executions dated December 4, 2009, U.S. BANCORP had New York City Marshal Martin A. Bienstock (Bienstock) levy upon RUBASHKIN's interests in and to his personal and real property, including his shares of stock in 53SRC and AARS, and his membership interests in E17LLC and 404LLC.
Subsequent to Marshal Bienstock's levy, counsel for RUBSHAKIN contacted counsel for U.S. BANCORP and Marshal Bienstock. He claimed that RUBASHKIN had no assets and RUBASHKIN did not intend to make payment or take any other action in response to the executions. According to U.S. BANCORP, no payment has been made to Marshal Bienstock in response to the levy of executions, the EDNY Judgment remains unsatisfied and U.S. BANCORP still is the owner of the EDNY judgment and a judgment creditor of RUBASHKIN.
RUBASHKIN's counsel eventually provided documents to counsel for U.S. BANCORP, including the subject Judgment by Confession, filed in the Office of the Kings County Clerk on December 2, 2008, based upon an affidavit for judgment by confession, dated November 26, 2008, in which RUBASHKIN confessed judgement in favor of plaintiffs and against himself, “for the sum of $2,255,000.” RUBASHKIN stated, in his confession affidavit, only the following regarding the alleged $2,255,000.00 debt:
This confession of judgment is to assure the plaintiffs against my liability arising upon the following facts: JOSEPH RUBASHKIN made a loan to me in the sum of $1,000,000 payable on demand, and GUTOL LEITER and ROSIE SANDMAN made loans to me in the sum of $1,255,000 payable on demand. I acknowledge that each have them have made demand upon me for payment of the loans given to me and that the loans have not been repaid and are in default [sic]. The sum confessed does not exceed the amount of my liability to plaintiffs.
U.S. BANCORP claims that the confession affidavit and the Judgment were entered on the same day, December 2, 2008, that RUBASHKIN received the Demand Letter from U.S. BANCORP. On December 7, 2008, the day prior to the day on which U.S. BANCORP demanded payment to be made, RUBASHKIN executed an assignment (the Assignment), by which he purported to transfer and assign to plaintiffs all of his right, title and interest in and to certain stock certificates and membership interests, in partial satisfaction of the Judgment. These ownership interests are: 200 shares of stock in 53SRC; 79 shares of stock in AARS; 100% of the membership interest in E17LLC; and, 100% of the membership interest in 404LLC.
Contentions of the parties
U.S. BANCORP contends that the Judgment must be vacated because RUBASHKIN's November 26, 2008–confession affidavit fails to comply with the requirements of CPLR § 3218 and the Judgment was entered through RUBASHKIN's collusion with plaintiffs to defraud U.S. BANCORP and RUBASHKIN's other creditors. U.S. BANCORP contends that RUBASHKIN's confession affidavit contains no substantive information regarding his purported debts to his relatives and cites the absence of: any indicia of the nature of the debt; any information regarding any written loan agreements or promissory notes; the date when the funds were purportedly lent or the manner in which they were advanced; a statement of the rate of interest; and, when the demands for payment were purportedly made by plaintiffs. Also, U.S. BANCORP asserts that it is clear from the language of RUBASHKIN's confession affidavit that: it was not executed as security for repayment of his purported debts at the time the loans were given or at any time prior to the demand for payment being made; it was executed only after RUBASHKIN defaulted in making payment to plaintiffs, after RUBASHKIN was in default under the Guaranty; and, it was made solely to enable plaintiffs, members of RUBASHKIN's immediate family, to quickly obtain a judgment against RUBASHKIN without filing a plenary action.
RUBASHKIN, in opposition, argues that his confession affidavit is sufficient because it sets forth his residence and gives a concise description of his indebtedness to plaintiffs, enabling U.S. BANCORP to investigate this information. Further, RUBASHKIN asserts, in ¶ 1 of his affirmation in opposition, that because his indebtedness “was unpaid in whole or in part and was non-interest bearing the date of the indebtedness and the failure of the Affidavit to specify the date of the indebtedness or any interest accrued thereon is irrelevant with respect to U.S. Bancorp's investigation” and the confession affidavit meets the pleading requirements of a complaint in a civil action. Moreover, RUBASHKIN avers that his transfers of assets were made for fair consideration and because U.S. BANCORP's Kings County judgment liens on defendant RUBASHKIN's Kings County properties were worthless, U.S. BANCORP was not prejudiced by the Judgment and lacks standing.
RUBASHKIN claims that AGRIPROCESSORS, before and after the May 2008 ICE raid on the Postville plant, experienced financial difficulty. He claims he was led by AGRIPROCESSORS's bank to believe that the latter would provide him with financing if he raised $5,000,000.00 on his own. Consequently, he claims, in ¶ 9 of his affirmation in opposition, that he borrowed money from plaintiffs on condition that the monies “would be repayable on demand, without interest as required by Jewish law and that I would transfer whatever remaining assets I owned to them in partial repayment of any Loans that they might make or had made to me.” Thus, he claims that he “insisted” that they take shares of stock and membership interests, as well as judgment liens on his real property, and asserts that the amount of the loans made to him far exceeded the value of the transfers. Moreover, he asserts, in ¶ 10 of his affirmation in opposition, that “[t]he Loans were always understood to be non-interest bearing loans ... for two reasons: one children and grandchildren should not charge interest on loans to their father or grandfather; second, charging interest on a loan by and to a member of the Jewish community violates Jewish law.”
RUBASHKIN states that he intended to grant plaintiffs a preferential position with respect to AGRIPROCESSORS's creditors, who were suing him as guarantor. While RUBASHKIN concedes that his confession affidavit failed to set forth the date of the loans or their interest rate, he denies that the loans from plaintiffs were fraudulent or collusive. He maintains, in ¶ 12 of his affirmation in opposition, that the “Affidavit met the requirements of CPLR § 3218 and that the Affidavit sets forth a concise statement concerning my indebtedness to my children and granddaughter.” Further, RUBASHKIN, in ¶ 13 of his affirmation in opposition, provides details, without documentary support, concerning: mortgages made by plaintiffs on their own properties, and states that the proceeds were transferred directly to AGRIPROCESSORS “on behalf of and as a loan to me”; a loan in the amount of $150,000.00 made by JOSEPH to AGRIPROCESSORS; and, a transfer of more than $2,000,000.00 from AARS to AGRIPROCESSORS with the consent of JOSEPH, a 13.66% shareholder of AARS.
Also, RUBASHKIN claims that his confession affidavit would satisfy the pleading requirements of CPLR § 3013, that “[s]tatements in a pleading shall be sufficiently particular” to give notice of the transactions that occurred. He alleges that a CPLR § 3218 confession affidavit should be treated the same as a CPLR § 3013 pleading.
RUBASHKIN, in arguing that U.S. BANCORP was not prejudiced by reason of the judgment liens on his properties in Kings County, claims that these properties, in which he had no equity, consisted of a survivorship interest in his home in Borough Park, Brooklyn, with an estimated market value of less than $995,000.00, subject to a mortgage in the amount of $2,750,000.00; and, a 14th Avenue, Brooklyn property, with a purported market value of $850,000.00, subject to a $1,000,000.00 mortgage.
Finally, RUBASHKIN claims that while the confession affidavit states the amount of his indebtedness to plaintiffs is $2,255,000.00, he actually owes at least $1,410,000.00 to JOSEPH and at least $1,255,000.00 to GUTOL. He attributes this discrepancy to his distraction caused by AGRIPROCESSORS's business failure.
Discussion
Professor David Siegel, in NY Prac § 299 at 485 [3d ed], instructs that
A confession of judgment dispenses with an adversary proceeding and gives the creditor the fruits of a successful one by permitting the creditor to file a judgment voluntarily confessed by the debtor. It serves as a security device by enabling the creditor to obtain judgment without an action even before a debt is due, although of course if may not be enforced until due. It the debt is already due, the confession of judgment is a concession of liability and still has the advantage of avoiding an action.
A confessed judgment is valid only if it conforms to the strict requirements of CPLR 3218.
Moreover, “[c]onfessions of judgments are always closely scrutinized (6 Williston, Contracts [rev. ed.], § 1724, p. 4871) and in judging them a liberal attitude should be assumed in favor of the judgment debtor (4 Weinstein–Korn–Miller, N.Y. Civ. Prac., p. 32–237).” (Rae v. Kestenberg, 23 A.D.2d 565 [2d Dept 1965] ). ( See Irons v. Roberts, 206 A.D.2d 683 [3d Dept 1994] ).
CPLR § 3218, the statute providing for judgment by confession, as is pertinent to the order to show cause, states:
(a) Affidavit of defendant. Except as provided in section thirty-two hundred one, a judgment by confession may be entered, without an action, either for money due or to become due, or to secure the plaintiff against a contingent liability in behalf of the defendant, or both, upon an affidavit executed by the defendant;
1. stating the sum for which judgment may be entered, authorizing the entry of judgment, and stating the county where the defendant resides or if he is a non-resident, the county in which entry is authorized;
2. if the judgment to be confessed is for money due or to become due, stating concisely the facts out of which the debt arose and showing that the sum confessed is justly due or to become due;
The statutory requirement that a judgment by confession be supported by an affidavit is premised on a policy of protecting third persons who might be prejudiced in the event that a collusively confessed judgment is entered. ( See Gold v. Committee on Professional Standards, Third Judicial Dept., 85 A.D.2d 776, 778 [3d Dept 1981]; McDaniel v. Sangenino, 67 A.D.2d 698 [2d Dept 1979]; Giryluk v. Giryluk, 30 A.D.2d 22, 25 [1d Dept 1968]; Mall Construction Corp. v. Chrisa Restaurant, Inc., 85 Misc.2d 613, 614 [App Term, 1d Dept 1976] ). Accordingly, the confession affidavit must be sufficiently informative to enable third persons to investigate the claim and ascertain its validity. ( See Wood v. Mitchell, 117 N.Y. 439, 441 [1889];Eurofactors Intern., Inc. v. Jacobowitz, 21 AD3d 443, 446 [2d Dept 2005]; Weinstein v. Pollack, 208 A.D.2d 615, 617 [2d Dept 1994]; Burtner v. Burtner, 144 A.D.2d 417 [1988];County Nat. Bank v. Vogt, 28 A.D.2d 793 [1967],affd21 N.Y.2d 800 [3d Dept 1968] ). “In order to accomplish this end the affidavit should separately state the amount of the loans, the dates upon which they were made, the amount of principal and the amount of interest ( Wood v. Mitchell, supra ).” ( McDaniel v. Sangenino, at 698). “In determining whether the statement is sufficient, nevertheless, it is not to be interpreted in a captious spirit, but is to be deemed sufficient if it adequately sets out the facts out of which the debt for which judgment is confessed arose (Rae v. Hotel Governor Clinton, 22 A.D.2d 783 [1d Dept 1964).” ( Giryluk v. Giryluk, at 25).
“Probably the most important function of the affidavit is its obligation of stating concisely the facts' out of which the debt arose or which explain the contingent liability” and third-party creditors “are entitled to see the complete picture of the transaction from the affidavit itself, sufficient to enable them to investigate the claim and ascertain its legitimacy.” (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 3218:9). Given the factual nature of the inquiry which must be conducted to determine whether an affidavit will withstand scrutiny upon a challenge by a third-party seeking to vacate a judgment by confession, there is no bright-line test for determining the confession affidavit's sufficiency. However, examples cited in reported cases are instructive. In Eurofactors Intern., Inc. v. Jacobowitz, at 444, the Court found that “[t]he affidavit confessing judgment in this matter, which set forth, inter alia, the date and amount of the loan, and the date when repayment was due, was sufficiently detailed to satisfy the statutory requirement.” While, in County Nat. Bank v. Vogt, at 794, a confession of a $40,000 liability accompanied by an affidavit containing the statement “[m]oney loaned by Plaintiff to Defendant and not repaid” was found “clearly insufficient since no information is given as to the amount of the loan, the date of the loan, the amount of the repayment, if any, or how much of the amount confessed is principal or interest.” A similar deficiency justifying vacature, pursuant to CPLR § 3218, was found in a confession affidavit stating, “[t]his Confession of Judgment is made to assure the return to the said corporation of the aforesaid sums of money which have been taken by me without authority and the return of which I hereby acknowledge I am completely liable.” (Franco v. Zeltser, 111 A.D.2d 367, 368 [2d Dept 1985] ). Recently, in a case in which a confession affidavit was executed by the perpetrator of a Ponzi scheme in favor of two of his victims, a Receiver appointed by the U .S. District Court moved to vacate the judgment by confession. The Court granted the motion to vacate the judgment by confession because the confession affidavit failed to detail any facts explaining why defendant was indebted to plaintiffs with respect to the money they invested with him, or why such debt was justly due. (Cole–Hatchard v. Nicholson, 73 AD3d 834 [2d Dept 2010] ).
Therefore, appellate authority amply supports U.S. BANCORP's contention that RUBASHKIN's confession affidavit does not meet the statutory standard of CPLR § 3218(a)(2), “stating concisely the facts out of which the debt arose and showing that the sum confessed is justly due or to become due.” RUBASHKIN's confession affidavit, other than stating the amount purportedly loaned to and not repaid by RUBASHKIN, fails to provide any detail as to the loan transactions upon which the judgment is based, and lacks any indicia of the dates the loans were made, the nature and purpose of the loans, the interest rates upon such loans, or the date when repayment was demanded. Thus, it is clearly insufficient.
RUBASHKIN's arguments to the contrary, which fail to rebut the clear inference
that his confession of judgment was the product of collusion, must be rejected. His conclusory assertions that his confession affidavit contained sufficient information to survive the instant challenge are devoid of merit, and belied by the vague language of his confession affidavit, which fails to give the dates of the loans or state how much of the money was for interest or principal. ( See Wood v. Mitchell, at 441). Moreover, RUBASHKIN's claim that Jewish law prohibits a transaction of the type which could be described in greater detail in the confession affidavit is self-serving and completely unsupported. The cases cited by plaintiffs, JOSEPH, GUTOL and ROSIE, and defendant RUBASHKIN for the proposition that no such information was required are distinguishable. These cases all involved factual situations where additional information was found to have provided third parties with sufficient knowledge of the transaction.
For example, in Princeton Bank & Trust Co. v. Berley (57 A.D.2d 348, 352–353 ), the confession affidavit was held to be sufficient because it stated the date of the incurrence of the liability and how much of the liability was interest and principal. In Keller v. Greenstone (253 AD 573 [1d Dept 1938] ), the Court affirmed a confession affidavit which included the date of the loan and annexed the promissory note. In Anderson v. Shutts (114 AD 308 [3d Dept 1906] ), the Court, at 310, noted that the “confession does not rest upon the statement that the indebtedness arose upon the promissory note set out, but goes further than that, and after stating that it arose upon such note and describing it as one given by defendants to plaintiffs on the 17th day of April, 1893 for the sum of $242, it is recited that it was for money then due to the plaintiff from the said defendants and theretofore had by said defendants from the said plaintiff, with interest.' “
Also, unconvincing is the convoluted claim by JOSEPH, GUTOL, ROSIE and RUBASHKIN that satisfying the liberal pleading requirement of CPLR § 3013 is all that is necessary to meet the “concise statement” standard required under CPLR § 3218(a)(2). The parties, in making this argument, rely on Professor Siegel's Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 3218:9, “ Stating the Substantive Facts in the Affidavit.” Professor Siegel states that “[t]he Advisory Committee concluded that a statement of the facts contained in the affidavit would suffice if their detail would satisfy the requirements for pleading the cause of action in a complaint.” However, plaintiffs and RUBASHKIN fail to address Professor Siegel's statement in the next paragraph that “[t]he relevance of all this to the current discussion of the confession of judgment is that pleadings have become so liberalized under the CPLR that we can't be sure today that a statement of facts sufficient to satisfy as a pleading will also satisfy for a confession of judgment under paragraphs 2 or 3 of CPLR 3218(a).” Further, the plaintiffs and RUBASHKIN fail to quote the next paragraph from Professor Siegel's commentary that “[t]he lesson is that the judgment creditor who would be on the safe side had best see to it that the affidavit contains some genuine detail.” Similarly, their reliance on language found in Mather v. Mather, 38 AD 32 , a case decided at a time when pleading requirements mandated strict technical compliance, fails to reconcile its holding with more recent controlling statutory and judicial authority which, as discussed above, sets forth specific requirements for the contents of a confession affidavit.
Indeed, RUBASHKIN's argument in this regard is unavailing even if accorded the widest possible latitude. It is well settled that a complaint must allege the material elements of the cause of action. ( See Kohler v. Ford Motor Company, Inc., 93 A.D.2d 205, 207 [3d Dept 1983]; Lewis v. Village of Deposit, 40 A.D.2d 730 [3d Dept 1972] ). Generally, the test of the sufficiency of the complaint is whether it gives sufficient notice of the transaction, occurrences, or series of transactions or occurrences intended to be proved and whether the requisite elements of any cause of action known to our law can be discerned from its averments. ( See JP Morgan Chase v. J.H. Elec. of New York, Inc., 69 A.D.2d 802 [2d Dept 2010]; Moore v. Johnson, 147 A.D.2d 621 [2d Dept 1989]; Foley v. D'Agostino, 21 A.D.2d 60 [1d Dept 1964] ). RUBASHKIN's vague averments are insufficient to satisfy this test.
While JOSEPH, GUTOL, ROSIE and RUBASHKIN contend that New York law requires that the Court should assume a liberal attitude in favor of the judgment debtor, they cite no applicable case law to support their position where the rights of a judgment creditor are in issue. The cases upon which they rely, Irons v. Roberts, supra and Rae v. Kestenberg, supra, restate the governing principle that judgments by confession are closely scrutinized, and deny the attempt of judgment creditors, in each instance, to expand the scope of the confessed judgment beyond its terms. No such “liberal attitude” has been shown to apply to the sufficiency of the confession affidavit itself.
Finally, the argument advanced by plaintiffs and RUBASHKIN that U .S. BANCORP lacks standing to make the instant order to show cause is devoid of merit. It is well settled that third-party creditors are entitled to demand strict compliance with CPLR § 3218 and may move to vacate a judgment by confession in any action where such a judgment is entered. ( See Gold v. Committee on Professional Standards, Third Judicial Dept., supra; McDaniel v. Sangenino, supra; Giryluk v. Giryluk, supra; Mall Construction Corp. v. Chrisa Restaurant, Inc., supra ). RUBASHKIN's self-serving attempt to claim that U.S. BANCORP does not have standing because the judgment liens are worthless is unrelated to the question of standing and rejected by the Court.
Conclusion
Accordingly, it is
ORDERED, that the order to show cause of nonparty U.S. BANCORP EQUIPMENT FINANCE, INC. is granted in its entirety, with the $2,255,000.00 judgment by confession of defendant AARON RUBASHKIN, a/k/a ABRAHAM AARON RUBASHKIN, entered on December 2, 2008, in favor of plaintiffs JOSEPH RUBASHKIN, GUTOL LEITER and ROSIE SANDMAN vacated; and it is further
ORDERED, that any liens or executions of plaintiffs JOSEPH RUBASHKIN, GUTOL LEITER and ROSIE SANDMAN with respect to defendant AARON RUBASHKIN, a/k/a ABRAHAM AARON RUBASHKIN's interests in 452–53rd Realty Corp., A.A. Rubashkin & Sons, Inc., 410 East 17th Street LLC and 404 Realty Associates LLC are voided; and it is further
ORDERED, that plaintiffs JOSEPH RUBASHKIN, GUTOL LEITER and ROSIE SANDMAN are restrained from conveying their interests in, or permitting the transfer or encumbrance of any of the assets, except in the ordinary course of business, of the entities known as 452–53rd Realty Corp., A.A. Rubashkin & Sons, Inc., 410 East 17th Street LLC and 404 Realty Associates LLC, or causing such entities to encumber or transfer any assets thereof.
This constitutes the Decision and Order of the Court.