United States District Court, E.D. New York
OPINION & ORDER
GERSHON UNITED STATES DISTRICT JUDGE.
Partners Agency Services, LLC ("PPAS") has moved to
intervene in this litigation pursuant to Federal Rule of
Civil Procedure 24(a)(2) in order to move to vacate or amend
the May 1, 2017 Attachment Order. Disney Enterprises, Inc.
("Disney") has opposed this motion and, separately,
seeks an extension of the Attachment Order; Disney also asks
that I deem the restraining notice sent to Finanz
St. Honore B.V. ("Finanz") to have
been served. For the reasons set forth
herein, PPAS's motion is denied and Disney's
applications are granted.
I assume the parties' familiarity with the facts
underlying this litigation, I provide only a brief overview
of the litigation and a description of the facts pertinent to
the current dispute. On December 5, 2016, 1 granted summary
judgment as to liability against Finanz. The amount of
damages owed to plaintiff Disney was not resolved at that
time. Upon my granting summary judgment to Disney, Finanz,
after having vigorously defended the lawsuit, disappeared
from the litigation. Finanz's counsel, Lowenstein Sandler
LLP ("Lowenstein"), was granted leave to withdraw
on May 26, 2017. Since Lowenstein's withdrawal, Finanz
still has not appeared or retained new counsel. On April 26,
2017, fearing that Finanz would not pay
any judgment ultimately issued against it,
Disney moved for a pre-judgment attachment of Finanz's
assets, including Finanz's intellectual property. On May
1, 2017, 1 held a conference regarding Disney's
application. The conference was attended by counsel for
Disney, Lowenstein (which had yet to be relieved as counsel),
and Jeannine Chanes, Esq., who stated that she represented
non-party PPAS. As discussed at the conference, neither
Lowenstein, Disney's counsel, nor I knew that PPAS would
be appearing. At the conference, I granted Disney's
motion for an attachment and denied PPAS's oral
application to intervene.
to my order (the "Attachment Order"), Disney was
permitted to attach Finanz's assets in the amount of
$700, 000, and all persons and entities who received notice
of the Attachment Order, including PPAS, were enjoined and
restrained from transferring any property in which Finanz had
an interest, including its intellectual property
("Attached Assets"). On July 21, 2017, Disney was
granted summary judgment as to damages in the amount of $867,
31, 2017, PPAS filed its motion to intervene in this action.
After multiple extension requests by the parties, Disney
opposed this motion on October 13, 2017, and PPAS filed its
reply on November 17, 2017.
oral argument on December 11, 2017. At that time, Disney
stated that it did not intend to seek an extension of the
Attachment Order, which was set to expire on January 3, 2018.
On December 13, 2017, PPAS, based upon Disney's
representation that it was not going to seek an extension of
the Attachment Order, withdrew its motion to intervene.
However, on December 18, 2017, Disney wrote a letter to the
court asking that the Attachment Order be extended until
"either the Judgment is satisfied or a receiver is
appointed to take control of Finanz's assets."
Disney December 18 Letter ("Disney Letter") at 1.
In this letter, Disney also asks that the court deem
"the restraining notice DEI served on [Finanz] via
certified mail on October 26, 2017 sufficiently served and
effective as of that date." Id. PPAS responded
to Disney's letter on December 20th and argues that an
extension of the Attachment Order is unwarranted. Since I
will consider Disney's request for an extension of the
Attachment Order, I will treat PPAS as not having withdrawn
its intervention motion.
PPAS's Proposed Intervention
to Federal Rule of Civil Procedure ("FRCP")
24(a)(2), in order to intervene, a party must, inter
alia, assert an interest relating to the property or
transaction that is the subject of the action and be so
situated that, without intervention, disposition of the
action may, as a practical matter, impair or impede the
applicant's ability to protect its interest. See XL
Specialty Ins. Co. v. Lakian, 632 Fed.Appx. 667, 669 (2d
initial matter, PPAS does not have an interest in the subject
of this action-whether Disney is entitled to attorneys'
fees from Finanz. Rather, PPAS's concern arises from
Disney having obtained an Attachment Order to secure its
judgment against Finanz. PPAS argues that it is this
Attachment Order that gives it a basis to intervene because
it attaches assets that serve as collateral for loans made to
Finanz by the Lenders for whom PPAS represents it is an
PPAS's interest in the Attached Assets, it is not
"illegal nor improper to grant an order of attachment to
one creditor simply because another creditor claims a
priority. The order of attachment serves merely to preserve
plaintiffs rights. Once a plaintiff has its order of
attachment, then it or any other creditor may commence a
special proceeding to determine whose right is
superior." Manufacturers & Traders Trust Co. v.
Lowenstein, 91 A.D.2d 848 (4th Dept. 1982). To be sure,
the priority of creditors must be determined at some point.
As Disney indicated at oral argument and reinforced in its
letter, it intends to make a motion for a turnover and to
appoint a receiver. See Disney Letter at 1, n.l. I
conclude, and PPAS appears to agree, that the appropriate
time for PPAS to litigate whether its interest is superior to
that of Disney's is at such a proceeding. See
PPAS December 20, 2017 Letter at 2.
PPAS has not shown how the Attachment Order is currently
impairing or impeding its ability to protect its interest in
the Attached Assets. The Attached Assets serve as collateral
for loans made by the Lenders PPAS says it represents. Based
upon statements made at oral argument and PPAS's letter,
PPAS has not sought to foreclose on these Attached Assets and
the Attached Assets remain in Finanz's
possession. Since the Attachment Order only preserves
the status quo that has existed for many years prior to its
issuance, the prejudice in extending it is minimal (if any
prejudice exists at all). See SEC v. Callahan, 2
F.Supp.3d 427, 438 (E.D.N.Y. Mar. 5, 2014) (denying motion to
intervene because proposed intervenor would "suffer