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AQ Asset Management LLC v. Levine

Supreme Court, New York

July 3, 2013

AQ ASSET MANAGEMENT LLC (as Successor to Artist House Holdings Inc.), ANTIQUORUM, S.A., ANTIQUORUM USA, INC. and EVAN ZIMMERMANN, Plaintiffs,
v.
MICHAEL LEVINE, HABSBURG HOLDINGS LTD. and OSVALDO PATRIZZI Defendants. MICHAEL LEVINE, Cross-claim plaintiff,
v.
OSVALDO PATRIZZI, SIMON LEO VERHOEVEN, KERRY GOTLIB and MICHAEL HASKEL, Cross-claim defendants. Index No. 652367/2010

Unpublished Opinion

DECISION & ORDER

KORNREICH, SHIRLEY WERNER, J.

Defendant Michael Levine moves to hold cross-claim defendant and opposing counsel Kerry Gotlib in criminal contempt for making false statements to the court. While the court is extremely troubled by Gotlib's conduct, it denies Levine's motion.

I. Background

This action concerns, among other things, purchase money from a stock transaction that was held by Levine as escrow agent until he was granted leave to deposit the remainder into court in March 2013. Defendants Habsburg Holdings Ltd. (Habsburg) and Osvaldo Patrizzi have claimed that Levine colluded with plaintiffs to deny Habsburg and Patrizzi the benefit of the funds in escrow. On August 22, 2012, Gotlib, counsel for Habsburg and Patrizzi, seeking reargument of a number of issues through a proposed order to show cause, filed an affirmation in which he informed the court that he had "recently learned" that Levine was "receiving payments of $30, 000 per month from [plaintiff] Zimmermann, yia [plaintiff Antiquorum USA, Inc.]'s account" (affirmation of Kerry Gotlib, August 22, 2012, ¶ 45). The court declined to sign the proposed order to show cause (AQ Asset Mgt. LLC v Levine, Sup Ct, NY County, Aug. 22, 2012, Kornreich, J., index No. 652367/2010).

On November 19, 2012, Levine moved for sanctions against Gotlib and his co-counsel, Michael Haskel, claiming that the allegation that he was receiving such payments was utterly frivolous and demanding to know the basis for it. In opposition, Gotlib stated that "[a] reliable source has imparted this information, which is and was the basis for the statement, " but declined to otherwise elaborate (affirmation of Kerry Gotlib, Nov. 28, 2012, ¶ 28).

Oral argument on the sanctions motion was held on February 5, 2013. The following colloquy took place:

THE COURT: Let's first focus on the issue of... Mr. Levine, according to you, getting improper payments of 30, 000 a month. Is there any evidence that this is occurring?
MR. GOTLIB: Your Honor, Mr. Verhoeven [a principal of Habsburg], during his trip to New York this summer, had lunch with a former employee in the payment office-in the payable office-of Antiquorum who imparted this information to Mr. Verhoeven. He's a very credible guy-
THE COURT: That's double hearsay. That's double hearsay, and you're saying to me that that is the only basis for this?
MR. GOTLIB: Judge, we asked, in this case-
THE COURT: Did you speak to this person?
MR. GOTLIB: Did I speak with him?" No. I spoke to Mr. Verhoeven. We-we made this on the basis of Mr. Verhoeven's interview with this guy, who he also used to work with (transcript, Feb." 5, 2013, 14-15).

The court later returned to the issue, and Gotlib stated, "Judge, I have told you the basis for my making that allegation: based upon what I considered to be a person with personal knowledge who write-who wrote-the checks for this ...


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