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Charles Schwab & Co. Inc. v. Makowska

United States District Court, E.D. New York

February 11, 2015

CHARLES SCHWAB & CO., INC., Plaintiff,
v.
MALGORZATA MAKOWSKA, NORBERT TROKKI, and THE UNITED. STATES OF AMERICA, Defendants.

BARITZ & COLMAN LLP, David S. Richan, New York, New York, for Plaintiff Charles Schwab & Co., Inc.

KATHRYN KENEALLY, Assistant Attorney General, Julie C. Avetta, Esq. Tax Division U.S. Department of Justice, Washington, D.C., for the Defendant United States of America.

BLODNICK, FAZIO, & ASSOCIATES PC Jessica A. Gould, Esq., Garden City, New York, for Defendant Malgorzata Makowska.

MEMORANDUM & ORDER

DENIS R. HURLEY, Senior District Judge.

This action for interpleader relief against defendants Norbert Trokki ("Trokki"), Malgorzata Makowska ("Makowska"), and the United States of America ("United States"), (collectively, "Defendants"), was brought by plaintiff Charles Schwab & Co., Inc. ("Schwab") to determine the rightful owner of proceeds of a Schwab brokerage account.

Presently before the Court is Schwab's motion for discharge of liability and an award of attorney's fees and costs and Makowska's motion for release of the entirety of the interpleader fund to her.

BACKGROUND

Makowska and Trokki were parties to a matrimonial action pending before the Supreme Court of New York in Suffolk County, which, according to Makowska, she commenced on October 14, 2010 after having been married to Trokki for nearly ten years. On January 19, 2011, the Supreme Court ordered the sequestration of certain of Trokki's properties, including property in accounts held by Schwab, and appointed Makowska temporary receiver of said property pending determination of her motion (the "Sequestration Order"). Makowska subsequently requested that certain disbursements be made to her from Trokki's Schwab Account. However, Schwab believed that because its obligations to Trokki and Makowska under the terms of the Sequestration Order were ambiguous and unclear, any disbursement of or failure to disburse assets from the Account could expose Schwab to liability to either Trokki or Makowska. On February 17, 2011, Schwab commenced an action in the Supreme Court of New York in Suffolk County against Makowska and Trokki for interpleader relief.

Trokki was indebted to the United States for unpaid federal tax liabilities for the income tax year ending December 31, 2010. On May 30, 2011, the United States made an assessment of tax liabilities against Trokki and thereafter filed a Notice of Federal Tax Lien with the Suffolk County Clerk reflecting Trokki's tax liabilities and served a Notice of Levy on Schwab identifying Trokki's Account as a source of funds. On or about July 1, 2011, Schwab filed an Amended Complaint in the Supreme Court naming the United States Department of Treasury as an additional defendant. Thereafter, on August 3, 2011, the United States removed this action to the United States District Court for the Eastern District of New York, noting that Schwab had improperly named and sued the United States Department of Treasury as a defendant when the United States of America was the proper defendant.

According to Schwab, it was unable to ascertain the true and correct ownership of the assets or the right to manage, control and disburse funds from the Account and therefore it commenced the interpleader action to determine the rightful owner of the proceeds of the Account. Schwab paid the disputed funds from the Account, $569, 063.61 into court custody ("Interpleader Fund"). By Order dated March 18, 2014, this Court directed the Clerk of Court to remit payment to the United States from the Interpleader Fund the amount of $529, 858.26 in payment of Trokki's federal tax liability. Thus approximately $39, 000 remains in the Interpleader Fund.

Schwab seeks $23, 544.13 in attorney's fees and costs. Makowska maintains she is entitled to the entire balance of the Interpleader Fund as Schwab did not properly commence the interpleader action and because she is entitled to receive 25% of the amount in Trokki's Schwab account that she was awarded in the divorce action, as well as additional monies that remain owing by Trokki to her. Alternatively, she argues that, at best, Schwab should receive $9, 696.89 in fees and costs.

DISCUSSION

I. The Motion for Discharge of Liability

Makowska opposes Schwab's discharge from liability on the grounds that interpleader relief was not properly sought. The Court ...


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