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MORIN v. TRUPIN

May 8, 1990

SIMEON MORIN, ET AL., PLAINTIFFS,
v.
BARRY H. TRUPIN, ET AL., DEFENDANTS. KHALID F. AHMED, DAVID ACQUINO, ET AL., PLAINTIFFS, V. BARRY H. TRUPIN, BENNETT W. TRUPIN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Sweet, District Judge.

  OPINION

Plaintiffs in Morin v. Trupin and Ahmed v. Trupin move for an order of attachment against all property in New York State owned by defendant Barry H. Trupin ("Trupin"), RRI Realty Corp. ("RRI Realty"), and other defendants in these actions identified in the margin.*fn1 In addition, plaintiffs seek to restrain the law firm of Summit Rovins & Feldesman ("Summit"), formerly counsel to Trupin, RRI Realty, and certain other defendants in these actions, from foreclosing on a mortgage it holds on a property, known as Dragons Head, that is owned by defendant RRI Realty. For the reasons stated below, the motions are denied, subject to renewal upon further discovery.

The Parties, the Actions and the Facts

The underlying disputes and principal parties which are the subject of these lawsuits are recounted in prior opinions of the court, familiarity with which is assumed. In brief, plaintiffs are individual investors in unsuccessful limited partnerships formed to own and operate commercial office space properties. Trupin and numerous other defendants are alleged to have induced the plaintiffs to invest in the limited partnerships by misrepresenting the soundness of the investment properties in partnership offering materials and, thereafter, to have looted and misappropriated limited partnership funds by exercising control over the general partners and managing agents of the limited partnerships.

The present motions seek an order of attachment upon a multi-million dollar residential property, Dragons Head, which is unrelated to the limited partnership investment properties but which is an asset of one of the defendants, RRI Realty. Mildred Trupin, Trupin's mother, is the president of RRI Realty. Defendant BWT Corp. ("BWT") allegedly owns RRI Realty, and BWT in turn is owned by The Tara Jill Trupin 1983-O Trust ("1983-O Trust"), of which Trupin was trustee at time of its formation in 1983.

RRI Realty purchased Dragons Head in 1979. RRI Realty has held title to the property since then. Plaintiffs allege on information and belief that the property is one of the few assets that remain available to satisfy the judgment they hope to obtain in these actions.

On November 22, 1988, defendant RRI Realty, by its president Mildred Trupin, delivered a two million dollar mortgage on the Dragons Head property to Rosemary LaSorsa, who at that time was employed as a legal secretary by the Summit law firm. The Summit firm was at that time engaged as counsel by RRI Realty, Trupin and other defendants in these and other actions.*fn2 On June 7, 1989, Lasorsa assigned this mortgage to Summit. The mortgage secures a payment falling due on December 29, 1991.

Prior Proceedings

On March 5, 1990, Summit filed a motion returnable March 9, 1990 seeking leave to withdraw as counsel to the noted defendants in these actions, on grounds of non-payment of fees for past services rendered. Upon the hearing on that motion, plaintiffs opposed the withdrawal motion and cross-moved for an order of attachment against the defendants and for an injunction restraining Summit from foreclosing on its mortgage. Additional time was granted to the plaintiffs, defendants and Summit to file papers bearing on the attachment issues, resulting in further briefing and numerous submissions by plaintiffs and defendants up to May 1. Over plaintiffs' opposition, withdrawal was granted to Summit as against the defendants by order of March 30, 1990.

Standards for Attachment

These motions for an order of attachment for security purposes are governed by Article 62 of the New York Civil Practice Law and Rules.*fn3 A threshold requirement is that plaintiff "show, by affidavit and such other written evidence as may be submitted, that there is a cause of action [and] that it is probable that the plaintiff will succeed on the merits." CPLR § 6212(a). In addition, the plaintiff must satisfy at least one of the statutory grounds for attachment set forth in CPLR § 6201. The particular grounds for attachment urged here are those stated in subdivisions (1) and (3) of that provision:

  (1) the defendant is a non-domiciliary residing without the
  state, or is a foreign corporation not qualified to do business
  in the State; or . . .
  (3) the defendant, with intent to defraud his creditors or
  frustrate the enforcement of a judgment that might be rendered
  in plaintiff's favour, has assigned, disposed of, encumbered or
  secreted property, or removed it from the state or is about to
  do any of these acts []. . . .

Although it might be thought that the warrant for attachment under the former ground of non-residence is limited to the purpose of obtaining quasi in rem jurisdiction (and not security) in circumstances in which the party against whom attachment is sought might not otherwise be subject to in personam jurisdiction, the interpretation of the non-residence provision is to the contrary. See ITC Entertainment, Ltd. v. Nelson Film Partners, 714 F.2d 217, 220 (2d Cir. 1983) (the "statute continues to countenance attachments against nonresidents when appropriate to secure the judgment, even when unnecessary to secure jurisdiction") (citing New York cases). Thus, plaintiffs may rely on ยง ...


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