United States District Court, E.D. New York
ORDER TO SHOW CAUSE, SCHEDULING ORDER &
NICHOLAS G. GARAUFIS, UNITED STATES DISTRICT JUDGE.
the court is a motion by Defendants United Jewish Appeal,
Inc.; United Jewish Appeal-Federation of Jewish
Philanthropies of New York; United Jewish Appeal Federation
of New York Charitable Fund LLC; and Self Help Community
Services, Inc., and its employees (collectively, the
"Self Help Defendants") for coercive contempt
sanctions against non-party Richard Borzouye, former counsel
for Plaintiff Robert Friedman (the "Second Contempt
Motion"). (Apr. 26, 2018, Request to Renew Mot. for
Contempt ("2d Contempt Mot.") (Dkt. 169).) Last
year, following submission of the Self Help Defendants'
first attempt to have the court impose contempt sanctions
upon Borzouye (the "First Contempt Motion") (May 9,
2017, Appl. That Borzouye Show Cause ("1st Contempt
Mot.") (Dkt. 150)), the undersigned referred this matter
to Magistrate Judge James Orenstein for a report and
recommendation ("R&R") (Sept. 7, 2017, Order).
On May 21, 2018, Judge Orenstein issued a sua sponte
R&R recommending that the court deny the Self Help
Defendants' various requests for coercive sanctions.
(See May 21, 2018, R&R ("R&R")
(Dkt. 175).) For the following reasons, the court REJECTS the
R&R and ORDERS Borzouye to SHOW CAUSE why coercive
contempt sanctions, including imprisonment, should not issue
latest chapter in this long-running case is a sad one indeed.
On March 17, 2015, following a pattern of misconduct and poor
performance by Borzouye in the course of his representation
of Friedman, the court imposed sanctions against him pursuant
to Federal Rule of Civil Procedure 11. (See Mar. 17,
2015, Mem. & Order (Dkt. 121) at 9-11, 13; Clerk's J.
(Dkt. 122).) After briefing, the court ordered Borzouye to
pay $20, 000 to the Self Help Defendants (the "Sanctions
Order"). (See Feb. 17, 2017, Mem. & Order
("Feb. 17, 2017, M&O") (Dkt. 143) at 7;
Clerk's J. (Dkt. 144).) When Borzouye did not pay the
sanctions despite repeated requests, the Self Help Defendants
moved to hold Borzouye in contempt of court (1st Contempt
Mot.) and the court ordered him to show cause why he should
not be held in contempt (the "OTSC") (see
Aug. 10, 2017, Order to Show Cause ("OTSC") (Dkt.
154)). Borzouye did not respond to the OTSC. (See
Sept. 7, 2017, Order.) The undersigned referred this matter
to Judge Orenstein, who, after Borzouye declined to appear at
a mandatory status conference, announced that he would
recommend that the court hold Borzouye in detention until he
complied with the Sanctions Order. (See Oct. 5,
2017, Min. Entry (Dkt. 156).) At a status conference on
January 25, 2018, the Self Help Defendants and Borzouye-who
had, by this point, been suspended from the practice of law
in New York State-announced their intention to attempt to
negotiate a payment plan to satisfy Borzouye's
outstanding debt. (See Jan. 25, 2018, Min. Entry
(Dkt. 161); Tr. of Jan. 25, 2018, Status Conference
("Jan 25 Conf. Tr.") (Dkt. 178).) On March 13,
2018, Borzouye and the Self Help Defendants agreed to a
payment schedule and stipulation of forbearance. (Stipulation
& Order of Forbearance (Dkt. 167).) Judge Orenstein
deemed the motion for coercive sanctions to be moot, and this
story had a happy ending... almost. (See Mar. 13,
April 26, 2018, the Self Help Defendants informed the court
that they never received Borzouye's first payment, which
was due on April 1, 2018. (2d Contempt Mot.) They reached out
to Borzouye's attorney to figure out what had gone wrong,
but the attorney stated that he too had not been able to
reach his client to resolve this issue. Id. at 1.)
At that point, the Self Help Defendants averred that they had
"done all that is reasonably] possible to compel Mr.
Borzouye's compliance with the orders of this Court"
and renewed their request for coercive
sanctions. (Id. at 2.) At a status
conference on May 8, 2018, Borzouye's attorney asked for
"a little more time" on behalf of his client and
proposed that Borzouye assign to the Self Help Defendants a
$10, 000 lien against his proceeds from another case. (Tr. of
May 8, 2018, Status Conference ("May 8 Conf. Tr.")
(Dkt. 179) 3:18-21, 6:16-7:1.) Judge Orenstein ordered the
parties to try to work out an agreement and to report back to
the court "by the end of the week." (Id.
8:22-23.) That Friday, however, the Self Help Defendants
reported that they had "received no information"
from Borzouye or his attorney concerning "the existence
and value of the $10, 000 lien." (Self Help Defs. May
11, 2018, Letter (Dkt. 174).) Accordingly, the Self Help
Defendants reiterated their request to hold Borzouye in
coercive detention. (Id.)
21, 2018, Judge Orenstein issued an R&R recommending that
the court deny the Self Help Defendants' request that the
court issue a warrant for Borzouye's arrest. (R&R.)
Although "frustrat[ed] at the inability to find a better
resolution" (id. at 1), Judge Orenstein found
that a civil contempt sanction would not be appropriate in
this instance because "the record does not suffice to
demonstrate that Borzouye's failure to pay the Self Help
Defendants what he owes them has been willful"
(Id. at 3). Noting that the Self Help Defendants
"continue to have an enforceable judgment against
Borzouye," Judge Orenstein advised that they
"retain the right to renew their request at any time if
they learn that Borzouye has become able to pay the amount
owed but fails to do so." Id. at 4.)
Self Help Defendants timely objected to the R&R. (Self
Help Defs. Objs. to R&R ("Objs.") (Dkt. 176);
see R&R at 4 ("Any objections to this
Report and Recommendation must be [filed] no later than June
4, 2018.").) In particular, the Self Help Defendants
object to the following:
a) The R&R's conclusion that Borzouye has shown
"contrition" and a "sincere desire to find
some way to satisfy his debt";
b) The R&R's conclusion that it was the [Self Help]
Defendants' burden to prove that Borzouye has no assets
rather than it being Borzouye's burden to prove his
inability to pay the Rule 11 sanction (as modified by
c) The R&R's conclusion that Borzouye must have no
assets because he refused to pay even after he was warned
that he could be arrested; and
[d]) The R&R's recommendation that this Court deny
the request to issue a warrant for Borzouye's arrest.
(Objs. at 1-2.) Borzouye did not submit a response to the
Self Help Defendants' objections. See Fed. R.
Civ. P. 72(b)(2) ("A party may respond to another
party's objections within 14 days after being served with
reviewing an R&R from a magistrate judge regarding a
dispositive motion, the district court "may adopt those
portions of the Report to which no objections have been made
and which are not facially erroneous." Romero v.
Bestcare Inc.. No. 15-CV-7397 (JS), 2017 WL 1180518, at
*2 (E.D.N.Y.Mar. 29, 2017) (internal citation omitted);
see Impala v. U.S. Dep't of Justice. 670
Fed.Appx. 32, 32 (2d Cir. 2016) (summary order)
("[F]ailure to object timely to a magistrate's
report operates as a waiver of any further judicial review of
the magistrate's decision ...." (internal citation
omitted)); Gesualdi v. Mack Excavation & Trailer
Serv., Inc., No. 09-CV-2502 (KAM), 2010 WL 985294, at *1
(E.D.N.Y. Mar. 15, 2010) ("Where no objection to the
[R&R] has been filed, the district court need only
satisfy itself that there is no clear error on the face of
the record." (internal quotation marks and citation
omitted)). "A decision is 'clearly erroneous'
when the Court is, 'upon review of the entire record,
left with the definite and firm conviction that a mistake has
been committed.'" DiPilato v. 7-Eleven,
Inc., 662 F.Supp.2d 333, 339-40 (S.D.N.Y. 2009) (quoting
United States v. Snow, 462 F.3d 55, 72 (2d Cir.
district court must review de novo "those
portions of the report... to which objection is made."
28 U.S.C. § 636(b)(1); see Fed. R. Civ. P.
72(b)(3). To obtain this de novo review, an
objecting party "must point out the specific portions of
the [R&R]" to which objection is made.
Sleeov's LLC v. Select Comfort Wholesale Corp.,
222 F.Supp.3d 169, 174 (E.D.N.Y. 2016); see also
Fed.R.Civ.P. 72(b)(2) ("[A] party may serve and file
specific written objections to the [R&R]."). If a
party "makes only conclusory or general objections, or
simply reiterates his original arguments, the Court reviews
the [R&R] only for clear error." Pall Corp. v.
Entegris, Inc., 249 F.R.D. 48, 51 (E.D.N.Y. 2008)
(citations omitted); see also Mario v. P & C Food
Mkts., Inc., 313 F.3d 758, 766 (2d Cir. 2002) (holding
that plaintiffs objection to an R&R was "not
specific enough" to "constitute an adequate
objection under... Fed.R.Civ.P. 72(b)").
[Borzouye] may be held in contempt, due process requires that
he receive notice that he is a defendant in a contempt
hearing, and that if he is to face the possibility of
incarceration, that he be afforded the right to
counsel." Bank of Credit & Commerce Int'l
(Overseas) Ltd. v. Tamraz, No. 97-CV-4759 (SHS), 2006 WL
1643202, at *3 (S.D.N.Y. June 13, 2006): accord SerVaas
Inc. v. Mills, 661 Fed.Appx. 7, 9 (2d Cir. 2016)
(summary order); see also Leser v. U.S. Bank Nat'l
Ass'n, No. 09-CV-2362 (KAM), 2011 WL 1004708, at *7
(E.D.N.Y. Mar. 18, 2011) (collecting cases); Local Civ. R.
83.6(a) ("A proceeding to adjudicate a person in civil
contempt... shall be commenced by the service of a notice of
motion or order to show cause."). The court finds that
the notice given to Borzouye regarding the contempt
proceeding, including the possibility of incarceration,
comports with the due-process requirements.
Borzouye was still proceeding pro se, the court and
the Self Help Defendants promulgated a number of documents
relating to the possibility of contempt against him: the
First Contempt Motion; the court's OTSC; the Self Help
Defendants' response to the OTSC; Judge Orenstein's
order that Borzouye needed to appear at a status conference
on October 5, 2017, lest he face incarceration; and, finally,
Judge Orenstein's promise that a recommendation of
custodial sanctions would be formcoming. The problem is that
there is no evidence that any of these documents was served
on Borzouye. The Self Help Defendants provided the court with
copies of letters sent to Borzouye, but there is no proof of
service that would allow the court to be certain that these
documents ever reached him. See Indiv. R. I(C).
While the court and Judge Orenstein sent copies of all court
documents to Plaintiff, it is not true that these
documents necessarily would have reached Borzouye, especially
given that Borzouye was relieved as counsel to Plaintiff on
March 7, 2014. (See Mar. 7, 2014, Min. Entry (Dkt.
99).) The court additionally notes that at least one document
mailed to Plaintiff was returned as undeliverable. (Notice of
Mail Returned as Undeliverable (Dkt. 157).) Even though
Borzouye certainly seemed on notice of the possibility of
contempt, including incarceration, during the January 25,
2018, status conference (see Jan. 25 Conf. Tr.
5:3-6), the court will not rely on any events prior to this
point in determining whether he has notice of the contempt
proceedings, given the great stakes at issue here and the
heightened need for notice.
January 24, 2018, however, Borzouye has been represented by
counsel. (See Jan. 24, 2018, Letter (Dkt. 160).) The
court considers Borzouye to have had notice of any statements
by the court or parties regarding the possibility of contempt
sanctions following this point, whether made during court
conferences or in documents filed with the court.
See Local Civ. R. 5.2(a). Borzouye thus has notice
of the Second Contempt Motion, which renewed all the requests
in the First Contempt Motion. In addition, at the status
conference on May 8, 2018, Judge Orenstein and Borzouye's
attorney engaged in a discussion of the propriety of coercive
custody. (See May 8 Conf. Tr. 4:4-8 (statement of
Michael E. Talassazan, attorney for Borzouye: "I think,
you know, a stiff penalty of, you know, coercive custody
might push the progress even further back ... [and] I ...