UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
April 19, 2012
ALLSTATE INSURANCE COMPANY, ALLSTATE INDEMNITY COMPANY, ALLSTATE PROPERTY & CASUALTY INSURANCE COMPANY, ALLSTATE NEW JERSEY INSURANCE COMPANY, PLAINTIFFS-APPELLANTS,
DANIEL LEVY A/K/A DIMA, ALEX LEVY A/K/A SASHA, HOI YAT KAM, M.D., SALVATORE LENTINI, D.C., YAN YAN YU A/K/A ANGELA, HAROUTYOUN TIKRANIAN, D.C., LAI FAIN XUE, A/K/A LISA, CHENG HE SU, ALEKSANDRA GASHINSKAYA, M.D., BRONX SHERIDAN MEDICAL, P.C., NEW LITE BRONX MEDICAL, P.C., COMFORT CHIROPRACTIC, P.C., ALIGN CHIROPRACTIC CARE, P.C., QI BAO ACUPUNCTURE, P.C., DESMOND CONNELL, ESQ., MARY JIMENEZ, LLOYD MODESTO, RONALD SCHWARTZ, DAN MADRID, BEST STAR ADVERTISEMENT CORPORATION, PRO-TWO MANAGEMENT CORPORATION, UNITED MEDICAL BILLING & COLLECTION CORPORATION, DEFENDANTS-APPELLEES.
Appeal from an order of the United States District Court for the Eastern District of New York (Block, J.) denying Plaintiffs-Appellants' motion for prejudgment attachment.
Allstate Insurance Co. et al. v. Daniel Levy et al.
Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and this court's Local Rule 32.1.1. When citing a summary order in a document filed with this court, a party must cite either the Federal Appendix or an electronic database (with the notation "summary order"). A party citing a summary order must serve a copy of it on any party not represented by counsel.
1 At a stated term of the United States Court of Appeals for the Second Circuit, held at the 2 Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York, on 3 the 19th day of April, two thousand twelve.
4 Present: 5 DEBRA ANN LIVINGSTON, 6 GERARD E. LYNCH, 7 CHRISTOPHER F. DRONEY, 8 Circuit Judges.
1 UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, and DECREED 2 that the Plaintiffs-Appellants' appeal is DISMISSED for lack of appellate subject-matter 3 jurisdiction.
4 Plaintiffs-Appellants Allstate Insurance Company, Allstate Indemnity Company, Allstate 5 Property & Casualty Company, and Allstate New Jersey Insurance Company (collectively, 6 "Allstate") appeal from a January 31, 2011 Memorandum and Order of the United States District 7 Court for the Eastern District of New York (Block, J.) adopting a December 29, 2010 Report and 8 Recommendation of the United States Magistrate Judge for the Eastern District of New York 9 (Pohorelsky, J.) and denying Allstate's motion for prejudgment attachment for Allstate's failure to 10 demonstrate that the Defendants-Appellees secreted property "with intent to defraud [their] creditors 11 or frustrate the enforcement of a judgment that might be rendered in [Allstate's] favor." N.Y. 12 C.P.L.R. § 6201(3).*fn1 Allstate argues that we have jurisdiction over this appeal pursuant to the 13 collateral order doctrine, which holds that 28 U.S.C. § 1291 "permits the interlocutory appeal of 14 decisions falling 'in that small class which finally determine claims of rights separable from, and 15 collateral to, rights asserted in the action, too important to be denied review and too independent of 16 the cause itself to require that appellate consideration be deferred until the whole case is 17 adjudicated.'" Dayco Corp. v. Foreign Transactions Corp., 705 F.2d 38, 39 (2d Cir. 1983) (quoting 18 Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949)). We assume the parties' 19 familiarity with the underlying facts, procedural history of the case, and issues on appeal.
1 To be among that "small class" of interlocutory rulings appealable under the Cohen doctrine, 2 an order must (i) "conclusively determine the disputed question"; (ii) "resolve an important issue 3 completely separate from the merits of the action"; and (iii) "be effectively unreviewable on appeal 4 from a final judgment." Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978) (internal 5 quotation marks omitted). We have added a fourth requirement to the collateral order doctrine: the 6 district court's ruling must "present serious and unsettled questions of law." Banque Nordeurope 7 S.A. v. Banker, 970 F.2d 1129, 1131 (2d Cir. 1992) (per curiam). We have recognized that orders 8 denying a motion for attachment are "paradigms of final collateral orders that are unreviewable on 9 appeal from a final judgment" and thus often fall within the scope of the collateral order doctrine.
10 See Result Shipping Co. v. Ferruzzi Trading USA Inc., 56 F.3d 394, 398 (2d Cir. 1995). Pursuant 11 to Banque Nordeurope S.A., however, the interlocutory appeal of such orders is warranted only 12 when they "present an important question of law whose resolution will guide courts in other 13 cases." 970 F.2d at 1130-31 (holding that appeal involving mere "application of well-settled 14 principles of law to particular facts" should not be heard before final judgment); see also Kensington 15 Int'l Ltd. v. Republic of Congo, 461 F.3d 238, 241 (2d Cir. 2006) ("[E]ven if an order . . . satisfies 16 Cohen, courts have leeway to determine whether the issue on appeal is an important issue of law, 17 the resolution of which may have relevance for future cases."); Result Shipping, 56 F.3d at 398-99 18 (exercising jurisdiction over appeal from denial of security where Cohen requirements were met, 19 appeal concerned "relatively unexplored region of the law," and "resolution of the issues 20 [presented would] provide necessary guidance to trial courts"). 21 Allstate's appeal presents no serious or unsettled questions of law. Allstate argues 22 principally that the District Court erred in concluding that § 6201(3) "can only be satisfied when the 4 1 defendants' asset transfers were performed after the initiation of litigation, or following the 2 commencement of an investigation and/or criminal action," and thus failed to assess whether asset 3 transfers by the Defendants-Appellees which predated the initiation of suit were sufficient to 4 establish a basis for attachment pursuant to § 6201(3). Contrary to Allstate's claim, however, it is 5 well-established under New York law that in determining whether a defendant has disposed of 6 property with intent to defraud its creditors for the purpose of applying § 6201(3), courts may 7 consider evidence of the defendant's fraudulent conduct predating the initiation of suit by the 8 plaintiff. See N.Y. Dist. Council of Carpenters Pension Fund v. KW Constr., Inc., 2008 WL 9 2115225, No. 07 Civ. 8008 (RJS), at *6 (S.D.N.Y. May 16, 2008) (observing that "the 10 overwhelming weight of authority in New York State courts and courts in [the Southern District of 11 New York] favors the view that § 6201(3) may be satisfied where the plaintiff merely demonstrates 12 past fraudulent transfers by the defendant"); see also Mineola Ford Sales Ltd. v. Rapp, 661 N.Y.S.2d 13 281 (App. Div. 1997) (in the context of motion for a prejudgment attachment, finding defendant 14 acted with intent to defraud the creditor-plaintiff based on lengthy history of conduct predating 15 litigation, including the falsification of business records and the diversion of funds). Moreover, the 16 District Court here, in adopting the Report and Recommendation, specifically noted that Allstate 17 correctly stated the law in contending that a defendant's conduct prior to litigation and before 18 investigation may demonstrate such a disposal of property for the purpose of § 6201(3).
19 Allstate further argues that the District Court erred in concluding that "the defendants' 20 transfer of No-Fault payments -- payments that were obtained in violation of New York law, and 21 then transferred to the unlicensed laypersons in a manner that represented a violation of federal law 22 -- did not constitute evidence of defendants' secretion of property with the intent to defraud 5 1 creditors." This argument, however, amounts to the claim that the District Court erred in applying 2 the requirements of § 6201(3) to the facts of this case. We conclude that this argument does not 3 present a question of law warranting review under the collateral order doctrine. This appeal 4 therefore does not satisfy the requirement of the collateral order doctrine that it present "an 5 important question of law whose resolution will guide courts in other cases," Banque Nordeurope 6 S.A., 970 F.2d at 1131.
7 We have considered Allstate's remaining arguments and determined them to be without 8 merit. Having concluded that the appeal does not meet the requirements for application of the 9 collateral order doctrine, we lack appellate jurisdiction to hear this appeal. Accordingly, we hereby 10 DISMISS Allstate's appeal for lack of appellate subject-matter jurisdiction.
FOR THE COURT:
Catherine O'Hagan Wolfe, Clerk