UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 02-22361
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JUDITH E. HERSKOWITZ, Plaintiff, vs. STEVEN DELIBERT, SUSAN CHARNEY, Defendants. __________________________________________/ |
200 Riverside Drive
(92nd Street)
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COMPLAINT
Plaintiff JUDITH HERSKOWITZ sues Defendants and alleges as follows:
1. This is an action for (1) damages pursuant to Title 42 U.S. Code §1983 and §1985 and Bievens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 91 S. Ct. 1999 (1971) for violation of civil rights guaranteed under the First, Fifth, Seventh, Ninth, Thirteenth and Fourteenth Amendments to the United States Constitution, and by the laws of United States; (2) for declaratory and injunctive relief; (3) civil conspiracy; (4) conversion; (5) waste, embezzlement and statutory larceny; (6) for Civil R.I.C.O., under 18 U.S.C. §1961, §1962 and §1964; (7) replevin of real property; (8) abuse of process; (9) intentional infliction of emotional and physical distress; and (10) recission of contract.
JURISDICTION AND VENUE
2. The Court has jurisdiction of this cause under provisions of Title 28 U.S. Code, as particularly provided under Section 1331, federal question jurisdiction; Section 1337, commerce and antitrust regulations;
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Section 1343, power of court to entertain civil rights cases; Section 2201 declaratory judgment jurisdiction; Section 2283 power of court to grant injunction to stay State court proceedings; Section 1332 power of the court to hear controversies between citizens of different states where the amount in controversy exceeds $75,000.00 exclusive of interest and costs; and pendent claims authorized by F.R.Civ.P. 18(a) arising under the doctrine of pendent jurisdiction because the state law claims and federal claims arise out of a common nucleus of operative facts as set forth in United Mine Workers v. Gibbs 383 U.S. 715 (1966).
3. Venue is proper in this district under 28 USC 1391 because,
(a) a substantial part of the events or omissions giving rise to the claims herein asserted occurred in the Southern District of Florida;
(b) a substantial part of the property that is the subject of this action are located in this District;
(c) Defendants are subject to personal jurisdiction in this district at the time of commencement of this action; and
(d) it has been demonstrated that Plaintiff cannot get a full and fair hearing in the federal courts of New York and New Jersey.
4. Process may be served upon Defendants Charney, Delibert and Bezner pursuant to §48.193, Fla. Stat., because
(a) the cause of action arises out of tortious acts committed by Defendants personally and/or through their agents within the State of Florida; and
(b) Defendants personally and/or through their agents caused injury to Plaintiff within the State of Florida and/or were at the time of injury, engaged in substantial and not isolated activity in the State of Florida.
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PARTIES
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. Plaintiff JUDITH HERSKOWITZ, sometimes known as JUDY EVA HERSKOWITZ is a citizen of the State of Florida.6. Defendant SUSAN CHARNEY (hereinafter referred to as "Charney") is a citizen of the State of New York and at times appeared individually and/or purportedly on behalf of North Jersey Trading Corporation..
7. Defendant STEVEN DELIBERT (hereinafter referred to as "Delibert") is a citizen of the State of New York. At all times material hereto defendant Delibert an attorney a single practioner, was licensed by the State of New York to practice law and appeared in various courts to represent his interests and that of Susan Charney individually and/or purportedly on behalf of North Jersey Trading Corporation.
8. Defendant KAREN E. BEZNER (hereinafter referred to as "Bezner") is a citizen of the State of New Jersey. At all times material hereto Defendant Bezner an attorney was a single practioner, licensed by the State of New Jersey to practice law and was the court appointed trustee for North Jersey Trading Corporation and acted as attorney for herself as trustee in the New Jersey Bankruptcy Court proceedings.
9. Defendant Judge ALAN R. SCHWARTZ (hereinafter referred to as "Judge Schwartz") is and all times material hereto was the Chief Judge of the District Court of Appeal of Florida, Third District and is a Defendant only for the purposes of declaratory and injunctive relief. Judge Schwartz was one of the judges on the three judge panel who presided in Charney v. Herskowitz, 689 So.2d 1101 (Fla. 3d DCA 1997).
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10. Defendant JUDGE MARIO P. GODERICH (hereinafter referred to as "Judge Goderich")is and all times material hereto was a Judge of the District Court of Appeal of Florida, Third District and is a Defendant only for the purposes of declaratory and injunctive relief. Judge Goderich was one of the judges on the three judge panel who presided in Charney v. Herskowitz, 689 So.2d 1101 (Fla. 3d DCA 1997).
11. Defendant JUDGE MELVIA B. GREEN (hereinafter referred to as "Judge Green") is and all times material hereto was a Judge of the District Court of Appeal of Florida, Third District and is a Defendant only for the purposes of declaratory and injunctive relief. Judge Green was one of the judges on the three judge panel who presided in Charney v. Herskowitz, 689 So.2d 1101 (Fla. 3d DCA 1997).
GENERAL ALLEGATIONS
12. On or around December 20, 1988 Charney, represented by her attorney Delibert, attempted to commence an action against Judith Herskowitz, Robert Herskowitz, Mark Herskowitz and Alex Fried in the Supreme Court, State of New York, County of New York1 Index No. 24517/88, by purporting to serve them with motion papers in the form of an Order to Show Cause for Preliminary Injunction and Temporary Restraining Order.2
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1 The Supreme Court is the lower State Court in New York the equivalent of the Circuit Court in Florida. The judges addressed as "Justice".
2 Susan Charney (the Plaintiff) moved to restrain Alex Fried, Judith, Robert and Mark Herskowitz and North Jersey (named as the Defendants) from taking certain specified acts pertaining to the reorganization of North Jersey as Subchapter S corporation for tax purposes. Charney also filed a lis pendens against the real property of North Jersey.
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13. Among the "exhibits" attached to Charney’s motion was a Verified Complaint in which among others Charney alleged that, Judith Herskowitz her sons Robert and Mark Herskowitz and herher father Alex Fried were the stockholders of North Jersey and that they did not recognize her to be a stockholder of North Jersey. Charney sought a judgment: to declare her to be an owner of forty shares of the 100 issued and outstanding stocks of North Jersey; to be awarded damages of three million dollars;3 an injunction; to allow her to inspect the corporate books and records; and to appoint a receiver for the real property of North Jersey.
14. North Jersey Trading Corporation (hereinafter referred to as "North Jersey") a closed New Jersey corporation, owned a 54 unit apartment building, in Manhattan on 92nd Street, at the address known as 200 Riverside Drive, New York City. The apartment building was the sole asset of North Jersey. It was purchased in 1958 by Alex Fried and his wife Hedy Fried. Hedy Fried died in 1981. The Frieds managed the building during their lifetime.
15. Pursuant to New York CPLR 304 in effect in 1988, both the action was commenced and jurisdiction was acquired by the service of summons. To pursue an action in the State of New York for declaratory judgment for ownership of stock, Charney was required to join all the shareholders as necessary parties4 and personal jurisdiction was essential over each shareholder. To pursue an action on behalf of North Jersey, Charney had to be a stockholder.
16. In attempts to gain in personam jurisdiction over the North Jersey shareholders, Judith Herskowitz,
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3 Charney was the estranged daughter of Alex Fried. Charney had an acrimonious relationship with Fried. She expressly documented in writing that she wanted nothing to do with Fried and wanted only his money. Nevertheless, Fried offered to make a financial provision for Charney but, instigated by Delibert, Charney rejected it as insufficient and they schemed to sue for "millions" on sham claims.
4 All the shareholders in a closed corporation "who have a claim in the subject matter of action for a declaratory judgment or who may be effected by the result must be joined as necessary parties." Sassower v. Himwich, 236 N.Y.S.2d 491 495 (Sup.Ct. N.Y. Co. 1962) aff’d , 19 A.D.2d 946 (N.Y. 1st Dept. 1963), where two shareholders in the closed corporation were not joined, the court ruled it "must refuse to grant such declaratory relief".
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Robert Herskowitz, Mark Herskowitz (hereinafter referred to as "the Herskowitzes") and Alex Fried (hereinafter referred to as "Fried") Charney falsely claimed under oath in her Verified Complaint that they were citizens of New York, when in fact both Charney and Delibert were fully aware that Fried and the Herskowitzes were domiciled in and were permanent residents of the State of Florida and not New York.
17. Each of the Herskowitzes and Fried filed a Motion to Dismiss Charney’s purported action on the ground of lack of personal jurisdiction and contested her attempted service because, it was made only with a Motion Preliminary Injunction and Temporary Restraining Order and not with the required summons; the attempted personal service and substituted ser-vice were deficient; and the Herskowitzes and Fried were not amenable to long arm jurisdiction of the New York court or to extra-territorial service of process because they had not committed any act or engaged in any activity in New York and had no legal relations with Charney which could be construed as subjecting them to the jurisdiction of the New York courts.
18. In January 1989, Charney moved to allow her to serve an Amended Complaint to correct her deficient pleading. Charney added a derivative suit on sham claims for multi million dollar damages on behalf of North Jersey, personally against the Herskowitzes.
19. By order dated March 8, 1989 Justice Jacqueline Silbermann denied the Motion for Preliminary Injunction and Temporary Restraining Order; set down the Herskowitzes’ and Fried’s Motion to Dismiss for an evidentiary hearing on the service of the Order to Show Cause; and made the service of the Amended Complaint subject to the outcome of the evidentiary hearing. In a March 29, 1990 order Justice Silbermann recognized that,
"Plaintiff’s [Charney’s] papers, at the best, state a claim for stock interest in a corporation which owns realty; such a claim does not constitute a proper basis for a lis pendens."
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20. In May 1989, an evidentiary hearing on the jurisdictional issues was commenced before Justice Phyllis Gangel Jacob. The hearing was conducted for four days, but was not completed. In a May 8, 1990 order Justice Silbermann directed to resume the evidentiary hearing on the service before Justice Gangel Jacob. Without resuming that evidentiary hearing, without notice to the Herskowitzes and without any stated reason Justice Gangel Jacob was removed from the case and it was reassigned to Justice Harold Tompkins.
21. In September 1990, Charney personally came to Dade County, Florida to institute incompetency proceedings in the Dade County Probate Court against the 87 year old Fried who became ill and was hospitalized. Charney acknowledged in her petition for incompetency that Fried was a "resident" of Dade County, Florida.5 A guardian was appointed for Fried.
22. By motion dated January 18, 1991 Charney moved in the New York court for the appointment of a guardian ad litem for Fried based on the Florida determination of incompetency. In that same motion paper Charney attempted to dispense with the evidentiary hearing, also with the determination on the jurisdictional issues and sought to foreclose the Herskowitzes "from presenting any evidence in opposition to her claim to be stockholder of North Jersey" by moving for a judgment by default against the Herskowitzes for alleged failure to answer the Amended Complaint. The Herskowitzes opposed the motion among others on the ground, that no response to the Amended Complaint was due under prior court orders.
23. To take control of the real property of North Jersey, by motion dated February 7, 1991 Charney also moved for the appointment of a receiver. Because, the building was under rent control the rents were artificially low. To increase income, a number of apartments were kept vacant with a plan initially by Fried, to co-op or to refurbish them to rent at "market".
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5 Under §744.201 Fla.Stat. that Fried was a resident, was the equivalent that he was a Florida "domiciliary".
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Charney called this mismanagement and diversion of income, on which to appoint a receiver.
24. In a decision dated April 9, 1991 Justice Tompkins "declined to grant a default judgment" upon finding no ground for a default and expressly noted that the Herskowitzes had a legitimate and an "evident dispute with plaintiff [Charney] on the underlying facts". Justice Tompkins without holding an evidentiary hearing on the disputed issues of the service and without making a determination on long arm jurisdiction merely directed the Herskowitz
"defendants, with the exception of defendant Alexander Fried, to answer within 30 days after service of a copy of this order with notice of entry."
25. Without a determination on whether Charney was a shareholder and without an evidentiary hearing on the disputed claim of mismanagement and misuse of corporate funds, in that same April 9, 1991 decision Justice Tompkins summarily appointed attorney Paul Windels III as temporary receiver for the real property of North Jersey and as guardian ad litem for Fried. An order settling the April 9th decision was entered on May 21, 1991.
26. In a Stipulation entered into on June 26, 1991 between Delibert and Stephen King, New York attorney for the Herskowitzes, it was expressly clarified and agreed upon that the May 21, 1991 order directing the Herskowitzes to "answer" did not limit them to "answer" Charney’s Amended Complaint, but, they could "move" that is with a Motion to Dismiss.6
27. On July 2, 1991 the Herskowitzes then filed a Motion to Dismiss, addressed to the Amended Complaint raising their ongoing defense of lack of personal jurisdiction. They objected to the insufficiency of the service and demonstrated that neither Fried nor the Herskowitzes had any contact with the State of New York or with Charney on which long arm jurisdiction could be based. Supported with well settled authorities the Herskowitzes argued that even if Charney could execute a technically correct service she would be still facing the same problem of lack of long arm jurisdiction over all the North Jersey shareholders.
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6 Under N.Y. CPLR 3211(e) defenses may be raised by motion before service of a responsive pleading on one or more grounds set forth in subdivision (a) one of which is subdivision (8) the court has no jurisdiction of the person of the defendant.
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28. Charney’s response to the Motion to Dismiss was supported with Delibert’s affirmation dated August 1, 1991 in which Delibert acknowledged under penalty of perjury that the Herskowitzes’ initial Motion to Dismiss was never ruled on the merits and that he did enter into the June 26, 1991 stipulation with counsel for the Herskowitzes saying as follows:
"An order was entered on May 21, 1991 (Exhibit E), and Notice of Entry directed to all parties; at the request of new counsel for defendants, plaintiff extended their time "to answer or to move" until July 3, 1991." (Emph. added)
29. Charney repeatedly acknowledged in Delibert’s subsequent affirmations and memoranda of law that, personal jurisdiction over the Herskowitzes was not yet determined. Charney conceded that the extraterritorial service on Mark Herskowitz was invalid and that the New York court did not have long arm jurisdiction over him. Charney claimed that a ruling on the Motion to Dismiss was premature before she conducts discovery on jurisdiction and moved for leave to file an amended complaint to state facts for long arm jurisdiction.
30. Justice Tompkins then dispensed with the evidentiary hearing on the service and with the required determination on personal jurisdiction by simply fictionalizing the facts of a prior May 8, 1990 order. Justice Tompkins falsely asserted in his October 2, 1991 order that the Herskowitzes withdrew their jurisdictional defenses before a predecessor judge, and prohibited the Herskowitzes from raising the jurisdictional issues saying as follows:
"The extensive prior history of the numerous prior motions have given the Court familiarity with the action. North Jersey and the defendant Fried and the Herskowitz defendants have repeatedly raised and reraised the issue of jurisdiction in spite of Justice Silbermann’s order of May 8, 1990 which permitted the withdrawal of the jurisdictional claim. North Jersey, defendant Fried and the Herskowitz defendants may not re-raise the jurisdictional issue."
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31. Under the false pretext that the Motion to Dismiss was a reargument of the May 8, 1990 order, Justice Tompkins declined to rule on the Herskowitzes’ Motion to Dismiss and denied Charney’s Motion for Discovery and To Amend the Complaint because it was "moot".
32. In a Motion to Reargue filed on November 27, 1991 the Herskowitzes have shown that the October 2, 1991 order was unsupported by the record because: there was no ruling in that May 8, 1990 order on any withdrawal of jurisdictional objections; the Herskowitzes have withdrawn only an April 19, 1989 Motion to Reargue in which they objected to a March 8, 1989 order scheduling for March 21, 1989 an evidentiary hearing on the service, because of the added expense to travel from Florida in the holiday season; since that hearing was rescheduled and was commenced on May 12, 1989; so the issue became moot and in an April 9, 1990 letter the Herskowitzes asked permission to withdraw the motion. Thereupon, Justice Silbermann ruled in her May 8, 1990 order only that "this court grants their written application and permits their motion to be withdrawn" and directed to resume the hearing on the service as follows:
"The court sets those parts of the motions which relate to service of the Orders to Show Cause on all defendants down for a traverse [evidentiary] hearing."
Without any hearing and without making any ruling on the Motions to Reargue Justice Tompkins instructed a deputy clerk to mail back to the Herskowitzes their motion papers.
33. Then without serving a motion and without notice and hearing to the Herskowitzes, on Delibert’s ex parte communications Justice Tompkins issued an ex parte order on December 10, 1991 sanctioning and imposing a fine of $5,000.00 on the Herskowitzes in retaliation for exercising their constitutional right to object to jurisdiction. Justice Tompkins justified the sanctions because, the Herskowitzes with their "motions for dismissal based on jurisdictional arguments" were impeding the case from reaching the merits and were delaying it.
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34. Charney then purported to proceed on the merits of her case with a Motion for Partial Summary Judgment dated December 12, 1991 seeking to be declared the owner of (20) twenty shares of North Jersey. Without receding from their position that the New York Court lacked jurisdiction over their persons, the Herskowitzes, opposed the motion with an affidavit stating, that Charney’s claim was based on a purported promise of a gift of stocks by the Frieds, which was a claim against the Frieds and not against the Herskowitzes; that although the guardian ad litem Paul Windels III never qualified and did not represent Fried, the record was replete with Fried’s denial of the alleged gift of stocks; and that Charney’s claim was unsupported by the corporate records of North Jersey, of which they submitted copies.
35. Although, the Herskowitzes’ final response to Charney’s motion was received by the court as was directed by Justice Tompkins by March 3, 1992, he again refused to take their papers into consideration. Justice Tompkins granted Charney’s motion on the disputed issues of fact, without an opportunity for the Herskowitzes to be heard in any hearing evidentiary or otherwise and issued an ex parte order dated March 5, 1992 on the pretext that Charney’s motion was unrebutted, because the Herskowitzes’ papers were not received by the court.
36. However, upon finding that the Herskowitzes’ opposition papers were received by the court on March 3, 1992 Justice Tompkins acknowledged in his March 6, 1992 order that he did have the Herskowitzes’ papers on March 5, 1992 the day he entered his March 5, 1992 decision granting Charney’s motion. But, then in his June 3, 1992 order, Justice Tompkins claimed that the Herskowitzes’ papers were merely a "reargument" of his March 5, 1992 order and so he refused to take their papers into consideration, without regard, that the papers were received by the court prior to the March 5, 1992 order.
37. Alex Fried died on March 25, 1992, in Miami-Dade County, Florida. Alex Fried disinherited Charney.
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Charney never contested his Will. No party was substituted and no one qualified to act in place and stead of Fried in the New York Supreme Court case.
38. By decision dated June 23, 1992 the Herskowitzes were denied their constitutional right to appeal from the October 2, 1991 order of Justice Tompkins with its fictionalized ruling, that the Herskowitzes withdrew their objections to personal jurisdiction. The New York Appellate Division, First Department dismissed the appeal on the pretext that the October 2, 1991 order was not appealable because, the Motion to Dismiss was deemed by the lower court to be a motion for reargument and under New York law no appeal lies from an order denying a motion for reargument. However, since there was no May 8, 1990 order allowing the Herskowitzes to withdraw their jurisdictional objections, there was no order to appeal from.
39. In yet further attempts to confiscate the real property of North Jersey, on September 18, 1992 on Charney’s motion, Justice Tompkins issued an order compelling the Herskowitzes to turnover to the Sheriff of the City of New York "within 20 days after service of copy of the order with notice of entry" all of their North Jersey stock certificates "in aid of satisfaction" of a prior $5,000.00 fine, which Charney reduced to judgment. Disregarded was the fact that their North Jersey shares had a value far in excess of $5,000.00.7
40. In that same September 18, 1992 order Justice Tompkins granted Charney’s motion to strike the Herskowitzes’ pleadings, unless they "appear and submit to depositions commencing on October 29, 1992, 9:30 A.M. at the Supreme Court, 60 Centre Street, Room 252, New York, New York" the courtroom of Justice Tompkins. That October 29, 1992 day of deposition was but, a few days following the day when the
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7 N.Y. CPLR 5225(a) provides that a judgment debtor can be compelled to turn over only so much of his property "as is sufficient to satisfy the judgment."
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North Jersey shares were required to be turned over to the Sheriff under the September 18th order. The Herskowitzes’ objections that as out of state defendants they cannot be forced to travel for a deposition to a distant forum was rejected. It was evident that the deposition was a ploy to force the Herskowitzes into the New York court’s jurisdiction, to confiscate all their North Jersey stocks without allowing them any defense, including on the threshold issue of jurisdiction.
41. After effectively barring the Herskowitzes from appearing for their deposition with the aforementioned orders, Delibert on behalf of Charney procured from Justice Tompkins an order dated January 19, 1993 holding the Herskowitzes in contempt of court for failure to appear for their deposition. Delibert was awarded the sum of $23,500.00 for alleged counsel fees and expenses, jointly and severally against all the Herskowitzes to be paid on or before February 4, 1993. The order further provided that if the $23,500.00 were not paid as directed, then on Charney’s ex parte application an order would be entered to arrest and to incarcerate the Herskowitzes until compliance with the order.
42. Charney procured from Justice Tompkins a further order dated January 19, 1993 striking the Herskowitzes’ pleadings for failure to appear for their deposition. Then, without any opportunity to be heard at any hearing evidentiary or otherwise and without any further proof, Charney was declared to be the owner of yet another 20 shares of stock, for a total 40 shares of the 100 issued and outstanding shares of common stock of North Jersey. In that same January 19th order the Herskowitzes were also denied any defense on the issue of liability in Charney’s derivative suit. The case was then set down for a hearing before a referee, but only on the amount of the damages, which was yet to be concocted by Charney and Delibert.
43. On January 19, 1993 Justice Tompkins issued a further order holding the Herskowitzes in contempt of court, for not delivering their North Jersey stock certificates to the Sheriff and awarded a fee of $7,000.00 to
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Delibert jointly and severally against the Herskowitzes. The order provided that the Herskowitzes may purge themselves of the fine by turning over their North Jersey stock certificates to the Sheriff on or before February 4, 1993. In the event of failure of compliance, the order provided for an ex parte application,
"for an order of commitment directing the Sheriff of the City of New York or the sheriff of any county within the state wherein the Petitioners, may be apprehended, commanding him forthwith to arrest the said Petitioners, JUDITH HERSKOWITZ, ROBERT HERSKOWITZ and MARK HERSKOWITZ, to be brought before IAS Part 13 of this Court during the time when such part is in session, to be committed until they shall purge their contempt by complying with the Order of this Court entered the 21st day of September, 1992, by turning over to the Sheriff of the City of New York the shares of stock...." (Emphasis supplied)
44. On February 19, 1993, Justice Tompkins issued an ex parte Order of Commitment, directing the Sheriff to arrest the Herskowitzes and to bring them before him for their alleged failure to purge themselves by paying the fine of $7,000.00 and by delivering all their North Jersey stock certificates to the Sheriff. Yet another ex parte Order of Commitment of the same date was entered by Justice Tompkins for the arrest of the Herskowitzes for their alleged failure to pay the $23,500.00 fine imposed on them by the January 19, 1993 order.
45. With these schemes, to seize their North Jersey stocks certificates and warrants of arrest to incarcerate them, the Herskowitzes were effectively barred from participating in the hearing on Charney’s derivative suit, to testify and to offer evidence against her fabricated damages, master-minded by Delibert. The Referee noted in his March 22, 1993 Report that his recommendation was based on Charney’s unopposed claims.
46. Because of the detrimental effect that Charney’s then five years of litigation had on North Jersey with her false claims for corporate shares and fabricated derivative suit, in March 1993, North Jersey filed a voluntary petition for relief under Chapter 11 in the United States Bankruptcy Court in Trenton New Jersey, Case No. 93-31620.
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47. In May 1993, also represented by Delibert, Charney filed in the Bankruptcy Court a Motion for Relief from Automatic Stay and for Appointment of Trustee. Charney sought permission to continue her New York derivative suit on behalf of North Jersey to enter judgments against the Herskowitzes. Charney also sought the appointment of a trustee based on her fabricated claims of mismanagement of the real property of North Jersey in her New York derivative suit, to which the Herskowitzes were denied a defense.
48. North Jersey represented by Bruce Levitt, objected to Charney’s motion on the ground that she had no standing and the New York proceedings were a nullity because, no determination on the merits was made on jurisdiction over the Herskowitzes or on any other issues. Bankruptcy Judge Stephen Stripp refused to consider and to rule on those objections. Acting in concert with Delibert, Judge Stripp was eager to rely on the New York derivative suit as a pretext for appointing a trustee to confiscate the valuable real property of North Jersey.
49. By order issued on October 12, 1993 Judge Stripp granted Charney’s motion and appointed Bezner as trustee, ousting North Jersey as debtor in possession. Bezner was appoint-ed not only as trustee, but for a double dipping of fees, also as attorney for herself as trustee. By order issued on October 27, 1993, Judge Stripp granted Charney relief from automatic stay.
50. In flagrant violation of the right to due process protected under the Fourteenth Amendment, without ever according the Herskowitzes a full and fair or any opportunity to litigate the New York court’s jurisdiction over their person or any of the other issues, Justice Tompkins entered judgments by default against the Herskowitzes in Charney’s New York derivative suit. This denial of due process was made all the more egregious, by the imposition of sanctions on the Herskowitzes in retaliation for exercising their right to object to jurisdiction.
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51. On November 22, 1993 Justice Tompkins entered a default judgment against Robert and Mark Herskowitz in the sum of $4,251,947.87 and on January 21, 1994 entered the same default judgment against Judith Herskowitz in the sum of $4,300.024.42, without jurisdiction over the Herskowitzes. Although the judgments bear different dates, they were entered in the same derivative suit;8 were jointly and severally against Judith, Robert and Mark Herskowitz and were based on the same alleged damages contrived by Charney and Delibert.9
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8 The judgments were entered on different dates because, of a bankruptcy court stay. The difference in the judgments was due to additional interest between November 22, 1993 and January 21, 1994, interest of, $987,919.54 against Robert and Mark and $1,035,761.00 against Judith on the identical principle amount of $2,104,963.33; $960,000 and $200,000.
9 The damage was an alleged loss of rental income by North Jersey from January 1985 to February 1993, fabricated by Delibert in the sum of $2,104,963.33. Included was the loss of income on apartments kept vacant to co-op or to refurbish to rent at market, which was obstructed since 1988 by Charney’s litigation! Disregarded was, that all the income belonged to Fried, it was his livelihood, that Charney was never entitled to, never received any income or any accounting and never worked for North Jersey. The only expenses against the gross rental income were the city property taxes, utility bills, mortgage payments, and salary for one superintendent. Omitted was the income received by Fried; also expenses i.e. corporate taxes, legal and accounting fees, telephone, the loss of income on tenants who skipped payment and the capitol improvements i.e. windows, a new boiler, etc. Delibert then added on $960,000,00 as penalty plus interest. So, the Herskowitzes were made responsible for the support of Fried, for the expenses of North Jersey and for the lost income on apartments kept vacant by Fried.
10 "Q.....is
there any document that you have knowledge of where the defendants Judith
Herskowitz, Mark Herskowitz, Robert Herskowitz and Alex Fried withdrew their
jurisdictional objections in the New York court?
A. In so many words, I don't believe so.
Q. You do not have any such document?
A. I don't believe there is such a document in so many words."
Q. I am asking you if there
is any such document wherein these parties withdrew their
jurisdictional objections. The same parties as above.
A. I know of no document stating an expressed withdrawal of the objections."
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52. On December 29, 1993 Delibert appeared in the Bankruptcy Court in Dade County, Florida to testify10 in the case of Judith Herskowitz (dismissed at a later date) and conceded underoath that Judge Tompkins’ ruling in his October 2, 1991 order that, the Herskowitzes withdrew their objections to personal jurisdiction was unsupported by the record.
53. About the same time in December 1993 and the beginning of 1994 Charney recorded in the Eleventh Judicial Circuit Court for Miami-Dade County, Florida, her New York judgments for domestication to enforce those judgments against the Herskowitzes, Case No(s). 93-22064, 94-669 and' 94-3614. The Herskowitzes filed actions challenging the New York judgments for lack of personal jurisdiction, Case No(s) 94-472, 94-2887 and 94-5714.
54. In a letter dated February 17, 1994 supported with extensive documents, Judith Herskowitz brought to the attention of Bezner the history of Charney’s New York litigation, evidencing that Charney’s New York case including the derivative suit was founded on baseless, false claims. Bezner was urged to examine the facts and the documents. However, Bezner’s interest was not to keep North Jersey as a going concern, but to liquidate its real property to turn it into a cash cow for her maximum fees and other personal benefits.
55. Almost immediately following her appointment as trustee, Bezner sought buyers for the real property of North Jersey. The building being in the upscale neighborhood on the West Side of New York City, facing Riverside Drive was easily marketable. On January 18, 1994 Bezner executed a contract of sale for 1.9 million dollars with an Abe Haruvi and on March 4, 1994 she filed a Motion for Private Sale of the North Jersey Property.
56. In addition to paying the obligations of North Jersey, Bezner noted in her Motion for Private Sale, substantial "administrative expenses" to be incurred on the sale, among others a commission of 6% on the gross sale price in the sum of $114,000.00 for the real estate broker she retained; fees and costs for the attorneys she retained to assist her on the sale; accounting fees; attorney fees and costs for herself; and
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"in addition, your Trustee will seek a commission upon sale of the property and distribution of the proceeds of sale in the amount not to exceed 3% of the total amount so distributed."
57. North Jersey vigorously opposed the proposed sale. Bruce Levitt the attorney for North Jersey had already negotiated the claims of creditors, many for less than the amount claimed. The Herskowitzes retained an architect and secured the services of other professionals to testify on the cost of repairs, which Bezner asserted had to be done to rent the vacant apartments. The Herskowitzes also secured a commitment for refinancing and North Jersey filed a plan of reorganization.
58. Charney through Delibert proposed no plan of reorganization but, sought to purchase the North Jersey property for themselves. To raise funds among others, they pursued the Herskowitzes to collect on the void New York derivative judgments. They moved to require the Herskowitzes to deliver all their North Jersey stock certificates to Bezner as trustee. They sought to appropriate a subscription agreement for the right to purchase a New York apartment as a co-op, left for the Herskowitzes by the late Alex Fried. Without notice and hearing, Charney procured in the Dade County Circuit Court an ex parte order from Judge Arthur Rothenberg, enjoining Judith Herskowitz from collecting the sum $80,000.00 deposited with the court for payment on her judgment of divorce by the estate of her late husband.
59. Not only did Bezner fail and refuse to propose a plan of reorganization for North Jersey, but, she vigorously obstructed and objected to North Jersey’s plan of reorganization. While on the one hand Bezner supported her motion to liquidate North Jersey’s sole asset the real property, with claims that it was a "wasting asset" because of the need for repairs and insufficient income, on the other hand Bezner obstructed the Herskowitzes’ attempt to make sufficient repairs to rent the vacant apartments under provisions of the New York Rent Stabilization Law and to increase North Jersey’s income.
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60. Bezner’s stated goal was to increase the marketability of the building, by continuing to warehouse over twenty vacant apartments out of the fifty four, which made the property highly desirable. Bezner maintained that these apartments should not be rented for the amount established under provisions of the New York Rent Stabilization Law but, at "market". Bezner projected an exorbitant sum of $200,000.00 to one million as the cost of refurbishing each of the vacant apartments to bring up to "market" without any evidence of the actual cost. Bezner declared that since North Jersey could not raise these funds the real property should be sold.
61. Bezner refused to release funds even for a $10,000.00 commitment fee to finance North Jersey’s plan of reorganization, and declared in her June 17, 1994 objections as follows:
"I steadfastly refuse to release the sum of $10,000.000 from this estate, unless ordered to do so by the Court."
62. At the same time on July 1, 1994, Bezner as attorney for herself as trustee, promptly submitted her first petition for fees for $41,000.00 covering a period of less than eight months. Bezner also retained professionals i.e. the accountants Bederson & Co. with whom she communicated regularly as trustee and as attorney for trustee, creating multiple billings.
63. North Jersey’s initial plan of reorganization supported with a commitment of $850,000.00 was attacked by Bezner as insufficient. The Herskowitzes then secured a commit-ment for North Jersey in the sum of $1.1 million dollars from Argo Corporation a sum shown to be sufficient for payment of claims and for repairs. Bezner then attacked Argo Corporation and its officers the Moscowitzes, serving them with subpoenas demanding that they produce documents not only of their corporate finances, but of their personal finances as well. The Moscowitzes took the position that since Argo had sufficient funds, their personal finances had no bearing on Argo’s ability to make the loan and so they withdrew their commitment.
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64. Bezner then immediately, gleefully moved at the August 3, 1994 hearing to confirm termination of financing and to reassert her scheme to liquidate the North Jersey property. At that same hearing Charney moved for further relief from automatic stay on the derivative suit. Judge Stripp again refused to hear Judith Herskowitz that there was no basis for Charney’s claim because, the New York orders declaring Charney a 40% shareholder of North Jersey and her four million dollar derivative judgment were void for lack of personal jurisdiction ab initio and that Bezner’s appointment as trustee rested on these void proceedings.
65. Judge Stripp threatened Judith Herskowitz, an interested party as a shareholder, with removal from court, Judge Stripp declaring that any argument on these issues was useless because he had already decided not to hear it, and that his main concern was that,
"Now, we get to the most interesting part of today’s proceedings, Ms. Bezner’s cross motion for leave to renew her efforts to sell."
66. Bruce Levitt, attorney for North Jersey stated at that August 3, 1994 hearing that Bezner made it impossible to proceed with a plan of reorganization. Acting in concert and in aid of Bezner’s objectives to liquidate the North Jersey real property Judge Stripp steadfastly maintained that the Herskowitzes "will not get back into the building". Bezner then eagerly relied on the void New York orders to bar the Herskowitzes from the building because, as she said "there is a warrant of arrest if they show up in mid-town Manhattan".
67. Bezner continued to insist on keeping the over twenty apartments vacant, because as she said if they were rented they would "ruin the marketability of the building".
68. Although, North Jersey did not recognize Charney’s void New York judgments, the Herskowitzes attempted to settle with Delibert to eliminate the obstacles put in by Charney with her false claims. Delibert demanded an immediate payment of $350,000.00 in cash.
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69. Judge Stripp, declined to hear and to consider the new financing raised by the Herskowitzes for 1.6 million dollars or more, sufficient to fund the plan of reorganization and to meet Delibert’s demands. Judge Stripp also declined to hear the expert witnesses who appeared on behalf of North Jersey to testify on their professional estimates for the cost of repairs showing that it was well within North Jersey’s ability to obtain financing.
70. Without a prior appraisal of the North Jersey real property, Judge Stripp simply decided that the purchaser would have to meet an "upset price in excess of $2,100.000"11 which he arrived at by a rough estimate of the funds to pay claims of creditors, the New York City Transfer Tax, capitol gains taxes and the administrative expenses. Judge Stripp disregarded the argument of Levitt the attorney for North Jersey, that for every dollar of the 2.1 million upset price 50 to 60 cents would go for taxes and administrative expenses and that this would not be the case if North Jersey were allowed to reorganize and its property were not sold.
71. To oppress, to demean and to oust the Herskowitzes Judge Stripp and Bezner repeatedly relied on the false presumption that even if the Herskowitzes had an interest in the North Jersey property, it would be wiped
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11 Unlike the typical single asset real estate case where the property is over encumbered the North Jersey property had a value far in excess of the liens and claims of the secured and unsecured creditors. Judge Stripp with his most generous calculation came up with the estimated sum of $1,065.000 as payment dollar for dollar of all claims, liens, taxes and fees. Judge Stripp then calculated $750,000 for capitol gain taxes and the N.Y. State Cuomo tax, $114,000 for real estate broker’s commission, $57,000 for Bezner as trustee’s commission, $35,000 for Bezner’s fees as attorney, $13,000 for the attorney retained by Bezner for the sale; $51, 000 for the attorney of North Jersey and additional fees for Bezner. (A sum well in excess of a million dollars which would not have been incurred except for Bezner’s sale, for unjust personal enrichment.) It is noteworthy that when Charney purported to commence her lawsuit in 1988 the North Jersey real property was encumbered with a mortgage of about $200,000.
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out with the four million dollar New York judgments. To Judith Herskowitz’s plea that the judgments in the least should be settled with Charney and the property should not be sold, Judge Stripp retaliated by forcing Judith Herskowitz to leave the courtroom.
72. Following that Judge Stripp set down the financial arrangement on the sale without requiring any proof of the ability of the purchaser to pay saying as follows:
"Anybody who’s willing to put 10 percent in cash, at the risk of losing it, unless they close on very strict terms, seems to me has demonstrated prima facie, their financial ability to go forward."
73. After Judith Herskowitz was ejected from the hearing, she went to the clerk’s office to review court files. She requested help from a deputy clerk to find cases in which Bezner was acting as attorney and/or trustee. Then Bezner happened to come into the clerk’s office. Upon realizing that it was the files in which she was involved in, that Judith Herskowitz was looking at, Bezner became visibly upset, and instructed the clerk not to give her the files.
74. By order entered on August 5, 1994 Judge Stripp granted Charney Additional Relief from Automatic Stay. The New York derivative judgments were deemed to be an asset of North Jersey under control of Bezner as trustee. Judge Stripp authorized Charney to proceed with collection and enforcement of the New York derivative judgments in the State of Florida and in other jurisdiction as agent of trustee Bezner and directed that any proceeds collected by Charney "shall be forthwith delivered to the Trustee [Bezner] named and appointed herein". Charney then continued with the domestication of the New York judgments in the Dade County Circuit Court, which was previously stayed because of the automatic bankruptcy court stay.
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75. On August 12, 1994 Judge Stripp entered an "Order Authorizing Trustee To Renew Motion For Leave To Sell Real Property" setting it down for hearing on August 31, 1994. Although, the August 31, 1994 hearing was noticed only to renew Bezner’s Motion to Sell and not for the sale of the real property, Judge Stripp was determined to proceed with the sale and refused to hear any alternative to the sale suggested by Bruce Levitt attorney for North Jersey. Judge Stripp again failed and refused to hear that North Jersey was able and ready to proceed with a plan of reorganization, with a commitment for refinancing of 1.6 million dollars, or more secured from a reputable New York investment banker.
76. Judge Stripp again failed and refused to hear Judith Herskowitz on the issue that Bezner’s appointment as trustee based on Charney’s proceedings in her New York derivative suit, could not be valid inasmuch as, the New York court failed to acquire personal jurisdiction over the Herskowitzes. Judge Stripp responded that he made his decision without allowing any argument on these issues and he again threatened to oust Judith Herskowitz,
"Mrs. Herskowitz, when you were here last, you had to leave the courtroom. That possibility looms very large once again today."
77. Judge Stripp also denied North Jersey’s request for a stay of the sale pending appeal. The sale proceeded in face of North Jersey’s unrebutted ability to procure financing for its plan of reorganization. Charney and Delibert supported trustee’s sale and Ms. Bezner was in agreement with them that the surplus funds would be transferred to the New York receiver.
78. Ms. Bezner commenced the sale, by announcing that there were six parties to bid for the North Jersey property. Each of these parties was anxious to purchase the North Jersey real property. While Judith Herskowitz sat there silently in shock, Judge Stripp attacked and rebuked her, " I am not going to have you sitting there weeping through this, Mrs. Herskowitz, I’m sorry". Thereupon, to assure that the sale would go smoothly as planned, Judge Stripp arrogantly dictated, "I want you out in the hallway." Judge Stripp then instructed his bailiffs to remove Judith Herskowitz from the courtroom.
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79. Pursuant to the transcript of the August 31, 1994 hearing, when Robert Herskowitz objected to the sale, Judge Stripp also threatened him with removal from the courtroom. The real property of North Jersey was sold to Sam Domb and Ulo Barad as the highest bidders for $2,925,000.00. The condition laid down by Judge Stripp was that if the purchasers did not make full payment within 10 days of the sale their deposit of $300,000.00 would be forfeited.
80. An argument ensued that the 10th day falls on a Saturday, which was not acceptable to Levinson, attorney for Dumb and Barad. Bezner requested that the purchasers be given till Monday the 12th of September. So, Judge Stripp set down the 12th as the deadline in his August 31, 1994 Order Authorizing Sale of Real Property by Trustee to Sam Domb and Ulo Barad.
81. North Jersey appealed the August 31, 1994 order and sought an immediate stay from the District Court. The Order to Show Cause seeking a stay was set down for September 9, 1994 at 11:30 A.M. before Judge Clarkson S. Fisher. At the commencement of that hearing, Bezner surprised the Herskowitzes by serving a letter, in which she claimed that she had closed on the North Jersey real property at 2:00 A.M. in morning of that September 9th. Without producing any of the alleged closing papers, Bezner then asserted that the appeal was mooted because the closing on the sale was completed and the stay should be denied.
82. By permission of Judge Fisher North Jersey conducted discovery. Bruce Levitt attorney for North Jersey uncovered that Bezner’s closing by burning the midnight oil, was deceptive. Dumb and Barad never delivered the balance of the purchase price to Bezner, yet their $300,000.00 deposit was not forfeited as directed in the August 31, 1994 order. Although Dumb and Barad never paid the balance of the purchase price Bezner gave to Tomer Realty (assignee of Dumb and Barad) a deed dated September 8, 1994 for the North Jersey property.
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83. Without any further notice of the sale, the real property of North Jersey was then sold to J.D. Realty who reimbursed Tomer Realty for the $300,000.00 and paid the balance of the purchase price in the sum of $2,625,000.00 with a check dated September 9, 1994 payable directly to Bezner as trustee. A deed dated September 9, 1994 was then given by Tomer Realty to J.D. Realty. By failing to renotice the sale, Bezner again intentionally deprived North Jersey of the opportunity to proceed with its plan of reorganization, and once more frustrated the objectives of Chapter 11.
84. By order dated September 29, 1994 Judge Stripp rewarded Bezner on her first fee application with $31,000.00 in counsel fees and $5,718.03 in expenses covering a period of less than eight month, from November 1993 to June 26, 1994. Judge Stripp awarded an additional fee of $13,330.00 to Rothman & Stein, the attorneys retained by Bezner for the closing. Bezner’s so-called legal services consisted of make work at $200.00 an hour, for defeating opposition to the sale, for reading letters and papers, talking to lawyers and the professionals she retained. For a double dipping Bezner also noted trustee’s fees for herself to be applied for at a future date. The objections to Bezner’s counsel fees was overruled by Judge Stripp.
85. Bruce Levitt, the attorney for North Jersey, was awarded a fee of $7,194.08 and expenses of $2,805.92 to be paid from the $10,000.00 plus $1,000.00 for expenses, advanced to North Jersey from funds borrowed by Judith Herskowitz from third parties to retain counsel for North Jersey. In retaliation for objecting to the sale of the North Jersey real property, Judge Stripp denied reimbursement of the retainer fee to Judith Herskowitz.
86. By order dated November 7, 1994 Judge Fisher denied the appeal in the New Jersey District Court on the ground, that the appeal was mooted by the completion of the sale prior to the September 9, 1994 hearing,
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based on the fictionalized view that "in exchange for the full purchase price, the Trustee delivered the deed to Tomer Realty" the assignee of Domb, Barad, when as supported by the record, the deed was delivered to them before payment of the full purchase price, which they never paid. North Jersey filed an appeal to the United States Court of Appeals for the Third Circuit.
87. In a motion dated January 4, 1995 Delibert sought fees on the basis that Charney was an interested party, having been "adjudicated to own 40% of the outstanding stock by final judgment of the Supreme Court of the State of New York". Delibert claimed he was entitled to fees because, of a "substantial contribution" to the estate of North Jersey because, it was on "Charney’s successful original motion" that the trustee was appointed on the "misconduct" of the Herskowitzes in Charney’s New York derivative suit. Delibert claimed his fee in the bankruptcy case was $60,000.00 but, acknowledged that much of it was for the personal benefit of Charney and so he was seeking "only" $21,597.20 in fees and $3,096.95 in expenses.12
88. Judge Stripp continued to prohibit any questioning and any attack on Charney’s New York judgments for lack of jurisdiction. At the January 17, 1995 hearing Judge Stripp again rebuked Judith Herskowitz saying:
"I don’t want to hear anything about the validity of that judgment".
89. To further intimidate and terrorize the Herskowitzes Bezner jubilantly reiterated, that there was a
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12 Delibert noted the extensive litigation he pursued against the Herskowitzes generating fees for himself and others, which he claimed he billed to Charney. He stated that he "excluded" any services and disbursements of other litigation he conducted between Charney and the Herskowitzes in three states for the past six of years, from 1988 to 1994 (at the time), for which he has
"recorded over 3250 hours of attorney’s time....even at the reduced rate of
$170.00 per hour which I agreed to charge Charney at the outset hereof,
that aggregates more than $550,000.00 in attorney’s fees and I have incurred
$54,734.69 in expenses".
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9; warrant outstanding against the Herskowitzes in Charney’s New York case. Not to be left out, Delibert assured the court that a warrant was issued by "Justice Tompkins of the Supreme Court of New York in our shareholder’s derivative action for contempt of court" and " it remains outstanding". Although Judge Stripp had no jurisdiction to enforce in New Jersey a New York State Court arrest warrant effective only in New York, he threatened Robert Herskowitz,
"If, in fact there is an arrest warrant outstanding for Mr. Herskowitz it will be executed at the very latest the next time he shows his face in this courtroom."
90. When Judith Herskowitz protested that this arrest warrant was from the New York case which was void for lack of personal jurisdiction, Judge Stripp directed his bailiffs,
"Would you Officers, please excuse, escort Ms. Herskowitz from the courtroom. Ms. Herskowitz is to be escorted out of the building. She can wait somewhere else for - - whoever she’s waiting for in connection with this."
In the hallway Judith Herskowitz was shoved and beaten by these officers because she was not walking fast enough, leaving her black and blue and was forced to leave the courthouse.
91. By order entered on January 18, 1995 Judge Stripp denied reimbursement of the $11,000.00 Judith Herskowitz, paid to Mr. Levitt, attorney for North Jersey, as a retainer fee and for expenses.
92. To bar Judith Herskowitz from hearings and from the courthouse, on February 1, 1995 Judge Stripp entered an order "sua sponte" holding Judith Herskowitz in contempt of court, for alleged acts committed by Judith Herskowitz "in presence of the court". Judge Stripp considered Judith Herskowitz’s objections to the void New York judgments and to the liquidation of the North Jersey real property to be "disruptive behavior and [a] refusal to abide by instructions of the court". Judith Herskowitz was prohibited from appearing personally in the courtroom, was restricted to partake in hearings only via telephone and to file and receive papers by mail. Judge Stripp further ordered that,
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"Ms. Herskowitz shall not be permitted to remain anywhere in the courthouse in connection with any hearings in this court in this case...Therefore, the United States Marshal shall not permit Ms. Herskowitz access to this courthouse."
So that Judith Herskowitz was also barred from examining public records in the Clerk’s Office of the Bankruptcy Court.
93. Judge Stripp granted generous fees to the real estate broker, to the attorneys and others to be paid from the funds of North Jersey. By order dated March 20, 1995 Delibert was also rewarded with $19,692.20 in fees and $3,096.93 in expenses.
94. On May 25, 1995 the Herskowitzes filed a Motion for Summary Judgment in the Florida case, in the Dade County Circuit Court, seeking to deny full faith and credit on the New York judgments of Susan Charney individually and Susan Charney purportedly on behalf of North Jersey Trading Corporation for lack of personal jurisdiction.
95. Among the Herskowitzes’ numerous documents in support of the motion, was the excerpt of the transcript from the December 29, 1993 Florida bankruptcy hearing, wherein Delibert conceded in sworn testimony, that Justice Tompkins’ October 2, 1991 order ruling that the Herskowitzes withdrew their objections to jurisdiction was unsupported by the record.
96. Charney responded with a Cross-Motion For Summary Judgment supported with an "Affidavit in Opposition to Motion for Summary Judgment and in Support of Charney’s Cross Motion for Summary Judgment" sworn to on June 6, 1995, by Delibert and filed by Charney on June 15, 1995. The facts stated in the Herskowitzes’ affidavit that they have not withdrawn their objections to jurisdiction were undisputed.
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97. However, Delibert fabricated a new set of false facts in his affidavit, never before raised in the Supreme Court of New York or in any other court. Delibert claimed that the New York court affirmatively determined its own jurisdiction on Charney’s Motion for Default, in the April 9, 1991 decision embodied in the May 21, 1991 order of Justice Tompkins ordering the Herskowitzes to answer the amended complaint. Delibert knowingly and willfully falsely misrepresented that this was an independent determination on personal jurisdiction.
98. On June 28 1995, the Motion for Summary Judgment came on for hearing. By agreement of the parties it was heard by General Master John R. Farrell. Because Charney refused to submit to discovery, Charney’s Cross Motion for Summary Judgment was not heard and so Delibert’s affidavit was not in issue.
99. The court then considered only the Herskowitzes' affidavit and Delibert’s sworn ad-mission that the Herskowitzes have not withdrawn their objections to jurisdiction. The General Master made the finding in his September 6, 1995 Report based on the undisputed fact, that on Charney’s December 1988 service, the Herskowitzes were served only with a motion, which was insufficient to commence an action under New York law and moreover that
"The Herskowitzes' alleged "withdrawal" of their objections to personal jurisdiction is unsupported by the record. It seems clear that the order of Justice Tompkins reciting that the objection to jurisdiction had been "withdrawn" is unsupported by the record."
The General Master further noted that,
"Notwithstanding that the defendants Herskowitzes repeatedly raised the issue of jurisdiction over their person in each of the various lawsuits, all courts denied relief to the Herskowitzes yet none are shown by the record to have ever addressed the personal jurisdictional issue on the merits."
The General Master recommended that judgment be entered in favor of the Herskowitzes.
100. Charney declared in her Exceptions to the General Master’s Report filed on September 5, 1995 that
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the New York court’s determination on personal jurisdiction
"was not reached in the October 2, 1991 decision" on that "earlier permitted withdrawal of their jurisdictional objections. Rather, jurisdiction was clearly determined in the April 9, 1991 decision and resulting May 21, order."
Charney conceded that Justice Tompkins was fully aware in his April 9, 1991 decision that pursuant to the May 8, 1990 order the Herskowitzes have not withdrawn their jurisdictional defenses but, only "a motion to reargue Justice Silbermann’s [prior] order setting the jurisdictional issue down for a factual hearing."
101. Charney’s Exceptions were overruled by Judge Rosemary Usher Jones and on November 2, 1995 Judge Jones entered a Final Judgment among others holding that,
"the documents CHARNEY sought to have served upon the HERSKOWITZES were legally insufficient to commence an action in the Supreme Court of New of the State of New York. Accordingly, all proceedings in the New York State courts (trial and appellate) were null and void ab initio;
The judgments and order that CHARNEY seeks to domesticate are thus not entitled to full faith and credit for lack of in personam jurisdiction."
Charney appealed the Final Judgment to the Third District Court of Appeal.
102. During pendency of the above proceedings, the U.S. Court of Appeals for the Third Circuit to avoid a review on the merits, in a September 6, 1995 decision affirmed the order of District Court denying the appeal on the ground that it was mooted by the completion of the sale. Delibert’s Motion for Second Allowance of Attorney Fees for having "actively assisted and cooperated with the Trustee" to sell the North Jersey property and to uphold the New York derivative judgments was granted by Judge Stripp in a September 11, 1995 order for fees of $24,310.00 and expenses of $2,860.72 for the period of January 1, 1995 to July 31, 1995,
103. The Herskowitzes secured from the Florida court an injunction enjoining Charney from collection
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activities on the void New York judgments. To avoid the effect of that injunction, Charney rushed into the Supreme Court of New York and by order dated November 20, 1995 secured the appointment of attorney Paul Windels III as post-judgment receiver to collect and receive funds on the New York derivative judgments.
104. By motion dated January 12, 1996 Charney also moved in the New Jersey Bankruptcy Court to hold the Herskowitzes and their Florida counsel Ira Dubitsky in contempt of court for having procured the Florida injunction. Charney claimed it enjoined
"even Trustee from exercising control over any property of Debtor [North Jersey] or its estate, even including the assets held by the Trustee in consequence of the sale of Debtor’s real estate ordered by this Court".
Charney’s concern was that there should be no impediment to Bezner handing over the North Jersey surplus funds to the New York receiver.
105. The matter came up for hearing before Judge Stripp on February 25, 1996. Mark and Robert Herskowitz and Dubitsky appeared through counsel and Judith Herskowitz appeared pro se via telephone from Florida. The phone conference was arranged by Delibert, who participated in that February 25, 1996 hearing as well as Bezner.
106. Judge Stripp denied Charney’s motion upon reluctantly conceding that there was no willful violation to constitute contempt; that the Herskowitzes were within their right to secure the injunction; and the injunction would have no effect on the funds in the hands of Bezner because it was under the jurisdiction of the Bankruptcy Court.
107. By motion dated May 9, 1996 the Herskowitzes moved in the Bankruptcy Court for full faith and credit on the Florida Final Judgment, which judgment together with the General Master’s Report they previously served and filed in the Bankruptcy Court on November 2, 1995. The matter came on for hearing on October 24, 1996. Judith Herskowitz was again allowed to appear only through a telephone conference from Florida, after having been contacted by the Bankruptcy Court. Both Delibert and Bezner participated in the hearing.
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108. Again Charney’s concern was that Bezner as trustee should proceed to terminate the Bankruptcy Court case and to transfer the North Jersey surplus funds to the New York receiver. However, it has become clear that under the Last in Time Judgement rule, the Florida Final Judgment would have to be given full faith and credit in all jurisdictions. By order entered on November 13, 1996, the Herskowitzes’ Motion for Full Faith and credit was adjourned pending determination on Charney’s appeal in the Florida court.
109. In a motion dated July 18, 1996 Bezner made a Second Application for Fees in the Bankruptcy Court seeking fees for the sale of the building; for opposing the appeal on the sale; for securing fees for the professionals she retained in connection with the sale; for sup-porting the New York derivative judgments; and for opposing Judith Herskowitz’s application for reimbursement of the $10,000.00 fee paid to retain counsel for North Jersey. Bezner’s make work at $200.00 an hour, again consisted of endless phone calls, writing of letters and reading of papers of others. Judge Stripp overruled the objections to Bezner’s fees and by order dated November 14, 1996 approved fees of $55,260.00 and expenses of $8, 207.58.
110. In July 1996, Charney filed her brief in the Third District Court of Appeal in Florida. She reiterated almost verbatim Delibert’s June 6, 1995 perjured "Affidavit in Opposition to Motion for Summary Judgment and in Support of Charney’s Cross Motion for Summary Judgment" and complained that,
"In the original underlying shareholder’s derivative action, Charney v. North Jersey Trading Corp., et al., Supreme Court, New York County No. 24517/88, the court affirmatively determined its own jurisdiction, on a motion by Susan Charney in which the Herskowitzes actively participated, and lost.
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"The Herskowitzes apparently convinced the master in the court below, entirely incorrectly, that there was no decision on personal jurisdiction by the New York courts, because the Herskowitzes own dismissal motions were not decided on the merits but, the Court apparently overlooked entirely, -- that the Decision of Justice Tompkins of the Supreme Court, New York County, dated April 9, 1991 (submitted with the Herskowitzes moving papers below), embodied in an order entered in New York on May 21, 1991 (Herskowitz Exhibit 15 below), which ordered the Herskowitzes to answer the complaint, was rendered:
a. On a motion by plaintiff Charney for default judgment for the defendants' failure to answer;
b. After full briefing and argument in which the Herskowitzes actively participated; and
c. After personal service was made for a second time, on all of the Herskowitz defendants......."
"That decision of New York Supreme Court may be correct, as Charney claims; it may be incorrect as the Herskowitzes claim -- but it is a decision by the trial court on the issue of its own personal jurisdiction, after a motion, on which defendants participated at length".
111. The appeal came up for oral argument on January 22, 1997. Judge Alan Schwartz listened attentively to Charney’s Florida attorney Eric Christu espousing Delibert’s version of the May 21, 1991order which he knew to be false. Judge Schwartz failed and refused to listen to the Herskowitzes’ counsel Ira Dubitsky pointing out the fact,that the New York court never determined personal jurisdiction on the merits and the only purported order on jurisdiction was Justice Tompkins’ October 2, 1991 order, ruling that the Herskowitzes withdrew their objections to jurisdiction, which conceded by Delibert was unsupported by the record.
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13 On May 10, 2000 Judge Alan R. Schwartz was publicly reprimanded by the FloridaSupreme Court, for "his rude, impatient, and discourteous remarks on the bench addressed to counsel and their clients".
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112. Judge Schwartz, became impatient, raised his voice and cut off Dubitsky.13 What was by an obvious prearrangement, Judge Schwartz pointed to a paper in the record before him and firmly asserted that "the May 21, 1991 order determined personal jurisdiction over the Herskowitzes". Judge Schwartz proclaimed that the lower court was without authority "to hear and determine that the New York court had no jurisdiction over the Herskowitzes" and questioned "Who was that little Master to reverse the New York court". Whereupon, Judge Schwartz declared "I will not reverse the New York court" and vowed to uphold the New York judgments. Judge Schwartz then abruptly terminated oral argument and left the courtroom followed by Judges Green and Goderich who sat by silently.
113. In an opinion dated February 5, 1997 Judge Schwartz, joined with Judges Green and Goderich reversed the Final Judgment. Acting in concert with the New York court to uphold its judgments, the panel of Judges relied on Delibert’s affidavit, used by Charney in support of her appeal, the Judges saying in their opinion that "we agree with Charney"
"that the New York Supreme Court had already determined the issue of personal jurisdiction and therefore, the Herskowitzes were barred from relitigating the issue of personal jurisdiction based on the doctrine of res judicata."
The Court stated that it arrived at its decision based on the review of the record before them.
114. The Petition for Discretionary Review was denied by the Florida Supreme Court on September 11, 1997. However, the issue was limited to Charney’s argument of res judicata based on Delibert’s version of the May 21, 1991 order. That Delibert’s affidavit was false was not before the Third District nor before the Florida Supreme Court, because Charney’s Motion for Summary Judgment was never heard by the lower court due to her discovery violations.
115. Therefore, the complete New York record evidencing that no determination on personal jurisdiction was made in that April 9, 1991 decision settled by the May 21, 1991 order, was not before the court and so, the Third District’s decision based on Charney’s arguments was without any evidentiary basis.
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116. Following remand the Herskowitzes repeatedly sought an opportunity to be heard in the lower court on Delibert’s affidavit, that it was false on its face, because the Herskowitzes did not lose on the Motion for Default as he claimed but, it was denied in that May 21, 1991 order; N.Y. CPLR 2219 mandates that a judge state his determination in his order in detail but, there is no recitation in that April 9 decision and May 21order, of any determination on personal jurisdiction; under N.Y. CPLR, 3018 a party may plead defenses in a responsive pleading; under N.Y. CPLR 3211(e) defenses may be raised by motion; and Delibert agreed in that June 26, 1991 stipulation that the Herskowitzes may "move" in lieu of an answer.
117. The Herskowitzes sought an evidentiary hearing on the numerous documents from the New York court not previously before the court showing that for more than four months after that April 9, 1991 decision and May 21, 1991 order, the issue of personal jurisdiction was still undecided, and was actively litigated by Charney on the Herskowitzes' Motion To Dismiss the amended complaint filed on July 2, 1991 in the New York Supreme Court.
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14 This action was commenced in 1992 by the Herskowitzes in the U.S. District Court for the Southern District of Florida seeking injunctive relief to enjoin the enforcement of the void New York judgments. On Charney’s motion it was transferred to the Southern District of New York. Delibert then scheduled the Herskowitzes’ deposition in New York City at his office only about three blocks from the courtroom of New York State Court Justice Tompkins where the Herskowitzes were directed to be taken on the outstanding warrants of arrest to force them to hand over all their North Jersey stock certificates. When the Herskowitzes declined to appear in New York City without some form of protective order from the District Court, by order dated August 18, 1994 Judge Miriam Goldman Cederbaum dismissed the case with prejudice. When the Herskowitzes appealed to the 2nd Circuit they were sanctioned in the sum of $2,500.00 and U.S. Marshals were looking for them in their Florida homes terrorizing them with warrants of arrest which finally ceased upon payment of the sanctions.
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118. Among those were documents i.e. in the U.S. District Court for the Southern District of New York14 signed by Delibert, which firmly establish that prior to Delibert’s June 6, 1995 affidavit, Charney relied only on that alleged withdrawal of objections in the October 2, 1991 order i.e. in her Answer to Plaintiff's Request For Admissions sworn to by Charney on January 6, 1993, repeated verbatim in her Answer filed on September 22, 1993 as follows:
"it has been expressly held and determined by Justice Tompkins of the Supreme Court, New York County, adhered to by him on application for reargument, and affirmed by the New York Supreme Court Appellate Division, First Department, from which no further appeal has been taken, that the said reference in Justice Silbermann's order was to service of the Orders to Show Cause; that in permitting withdrawal of the Herskowitz defendants motion to reargue, Justice Silbermann was determining that jurisdiction existed; and that no issues of personal jurisdiction remained in the action."(Emphasis added)
119. The Herskowitzes were repeatedly stonewalled. They were denied any meaningful opportunity to be heard on the fraud perpetuated by Charney with Delibert’s perjured affidavit.
That newly minted false claim of an independent determination on personal jurisdiction in that April 9 1991 decision and May 21, 1991 order, raised for the first time in the Florida case.
120. On October 1, 1997 the Herskowitzes filed a Notice of Trial in the Dade County Circuit Court. A Pre-trial conference was held on February 3, 1998 before Judge Murray Goldman. By order dated February 10, 1991 Judge Goldman denied a trial on the fraud perpetuated by Charney, simply by relying on the position taken by Judge Schwartz, articulated in Charney v. Herskowitz, 689 So.2d 1101 (Fla. 3d DCA 1997).
121. However, Judge Goldman did recognize that the appeal was pursued by Charney only individually. Judge Goldman entered an order on the same day of February 10, 1998 holding that
"Charney’s appeal in her individual capacity does not serve as an appeal by her on behalf of North Jersey Trading Corporation or an appeal by North Jersey Trading Corporation" and therefore "the final judgment of November 2, 1995 remains in full force and stands unreversed as to North Jersey Trading Corporation."
122. Charney then proceeded with an untimely Motion for Re-hearing and a Motion to Vacate both of
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9; which were denied by Judge Goldman. On June 25, 1998 Charney filed in the Third District Court of Appeal a Motion to Enforce Mandate And/Or Petition for Writ of Certiorari. The Herskowitzes opposed the Motion and Writ on the ground that, Charney was seeking to modify the mandate to add Charney on behalf of North Jersey as appellant regardless, that the motion was untimely because the term of the court in which mandate issued expired and the Writ of Certiorari filed on June 25, 1998 was also untimely because, it was filed more than thirty days after entry of the February 10, 1998 order.
123. The matter was fully briefed by Daniel Pearson, counsel for the Herskowitzes and was set for oral argument for September 17, 1998. But, the day before on September 16, 1998 the hearing was cancelled. By order dated September 16, 1998 the same panel of judges led by Judge Alan Schwartz who sat on the prior appeal, granted Charney’s Motion to Enforce Mandate and quashed the February 10, 1998 order of the lower court. The Court ruled without any supporting authorities and statement of the facts, that the "Court clearly reversed the final judgment in its entirety".
124. Thereafter, the attorneys for the Herskowitzes declined to take further steps. On September 11, 1998 Judith Herskowitz filed in proper person in the Dade County Circuit Court a Motion to Strike Delibert’s Perjured Affidavit accompanied with the additional New York record and with a Memorandum of Law replete with citation of authorities supporting that matters not previously before the court on the Motion for Summary Judgment were not barred by the Third District’s 1997 decision. The motion was unopposed by Charney. At a September 29, 1998 hearing a Request for Evidentiary Hearing was denied by Judge Goldman asserting "At this point I am not having an evidentiary hearing" and he declined to rule on the motion.
125. On October 27, 1998 the Herskowitzes filed and served a Motion to Hold Charney in Contempt for
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Her Bad Faith and Perjured Affidavit. The Motion for Contempt was set for a hearing for November 12, 1998. When on November 12th Judith Herskowitz attempted to enter the courtroom of Judge Goldman, his bailiff John stood in front of the door and barred Judith Herskowitz from entering the public court room, informing her that Judge Goldman will not hear the motion.
126. By obstructing the Herskowitzes from proving the falsity of Delibert’s affidavit and Charney’s claims, Delibert, Charney and Bezner were given free reign to pursue and harass the Herskowitzes, to coerce them to settle, in attempts to eliminate them from sharing in the surplus funds of North Jersey and to extort additional moneys from them. In a turnover proceeding in the New York court, Charney through Delibert took possession of the subscription agreement to the right to purchase that certain New York City apartment as a co-op. Charney threatened to sell the subscription agreement at a sheriff‘s sale and to oust its occupants, who at the time was Robert Herskowitz with his wife and three young children.
127. Robert and Mark Herskowitz eventually entered into a Settlement Agreement dated December 1988. Pursuant to the terms of the agreement Robert and Mark were required to pay the sum of $150,000.00 and to give up their claim to the surplus funds of North Jersey, estimated in the sum of $700,000.00. The $150,000.00 was in "full payment" for all of Charney’s New York judgments individually and on behalf of North Jersey against Robert and Mark Herskowitz, for which "they were provided" "full and absolute satisfaction or vacatur" of the judgments. The "vacatur" was agreed to be the "preferred alternative".
128. Charney’s Motion for Approval of Settlement came up for hearing before the Bankruptcy Court on April 19, 1999. Judith Herskowitz was again relegated to appear only by telephone conference from Florida, after she was called by the Bankruptcy Court. Judge Stripp made clear that he took the position to approve the settlement on the pretext that,
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"the settlement resolves the dispute between Susan Charney and Robert and Mark Herskowitz removes Robert and Mark Herskowitz from the case, and thereby removes the case as a whole, moves the bankruptcy case as a whole, further along toward conclusion."
Judge Stripp overruled all objections of Judith Herskowitz including on her subsequent Motion for Rehearing of the April 19, 1999 Order Approving Settlement Agreement.
129. Judge Stripp and the parties acknowledged that New York law applied to the judgments and to the Settlement Agreement and the specific laws cited by Judith Herskowitz were undisputed. But, Judge Stripp failed and refused to apply the New York law which prohibits the vacatur of judgments by agreement of the parties as condition of settlement, either by the filing of a vacatur with the clerk of court,15 or by application to the court; which is the same in federal court; N.Y. CPLR 5020 which requires the recipient of the satisfaction of judgment file in the proper court a satisfaction piece and to serve same on all judgment debtors; and that where the judgments were jointly and severally against all the Herskowitzes16
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15 Paramount Communications v . Gibraltar Casualty Co., 212 A. D.2d 490, 623 N.Y.S.2d 850 (1st Dep't 1995) cited under Siegal, Practice Commentary to McKinney's CPRL C5015:11, 1995. The Paramount court adopted its ruling from Bancorp Mtge. Co. v. Bonner Mall Partnership, 513 U.S. 18, 115 S.Ct. 386, 392 (1994) in accord Clarendon Ltd. V. NuWest Industries, Inc. 936 F.2d 127 (3rd Cir. 1991)
16
Valazquez v. Water Taxi, Inc., 426 N.Y.S.2d 467, 468; 403 N.E.2d 172 (1980) and Vincent C. Alexander, Practice Commentary to McKinney's CPRL C1401:1, 1996. In Rock v. Reed-Prentice Division of Package Machinery Co., 382 N.Y.S. 720, 723; 346 N.E.2d 520 (1976) the Court of Appeals made clear that, in a compromise after judgment with one of the joint tortfeasors, even if the plaintiff accepted less than the full amount of the judgment, but the settlement amount was paid as full satisfaction of the judgment "the plaintiff's judgment has been completely discharged". (Emph. supplied) This applies even where there are two judgments but, are based on the same injury. Gallivan v. Pucello, 329 N.Y.S.2d 211 (4th Dep't 1972) in accord, Blanco v. J & B Associates, 576 N.Y.S. 2d 124 (1st Dep't 1991).39
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"the satisfaction of a judgment rendered against one tort-feasor discharges all joint tort- feasors
from liability to the plaintiff."
130. Concurrently, while the proceedings on the Settlement Agreement were pending in the Bankruptcy Court, Judith Herskowitz continued on with her attempts to be heard by Judge Goldman in the Florida cases. On April 6, 1999 she filed and served a Motion for Summary Judgment and on June 10, 1999 she filed a Motion to Deem Admission Admitted Alternatively to Compel Answers. The Request for Admissions was served on Charney previously on September 23, 1998. The motion was set for a June 17, 1999 hearing, but was cancelled by Judge Goldman, claiming in a letter dated June 10, 1999, that the case was concluded although, Judge Goldman never entered a final judgment following the Third District’s reversal of the 1995 Final Judgment.
131. On June 25, 1999 Judith Herskowitz filed and served a Motion for Disqualification of Judge Goldman, for his failure and refusal to hold a hearing on Judith Herskowitz’s motions. A hearing on the Motion for Disqualification was set for June 30, 1999. However, prior to that hearing Judith Herskowitz was informed by Gamma Stafford an assistant to Judge Goldman that he recused himself from the case and so the June 30, 1999 hearing was cancelled.
132. Following that, on July 6, 1999 two orders vacating the New York judgments were procured by Charney from Judge Goldman. The orders were submitted by Charney’s attorney Eric Christu in ex parte communication with Judge Goldman without any notice and hearing to Judith Herskowitz. The July 6, 1999 orders were entered ex parte and dismissed all the Florida cases with prejudice and all the New York judgments were
"vacated in their entirety and set aside in their entirety solely as against Robert Herskowitz and Mar k Herskowitz."
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133. The July 6, 1999 ex parte orders were never served on Judith Herskowitz. She discovered the July 6th orders only at a later date when she was looking through the court files in the Miami-Dade County Circuit Court. Judith Herskowitz pursued an appeal in the Third District Court of Florida from the July 6, 1999 orders.
134. At the August 30, 1999 hearing successor Judge Paul Siegel prohibited Judith Herskowitz to conduct any form of discovery and simply "denied" her Motion to Deem Admissions Admitted. Judge Siegel refused to set down for hearing Judith Herskowitz’s Motion for Summary Judgment. On September 16, 1999, she then filed and served a Motion to Dismiss and to Strike Charney’s domestication cases and to strike her pleadings based on the fraud perpetuated on the court with Delibert’s perjured affidavit. The motion was supported with numerous New York documents not previously before the Florida court, also with an affidavit and a Memorandum of Law demonstrating with well settled authorities that the Third District’s reversal constituted no bar to the motion. Charney filed no papers in opposition.
135. The Motion to Strike came up for hearing on November 23, 1999. Although all the additional New York documents and Judith Herskowitz’s affidavit and her other papers were filed previously in the court and on September 16, 1999 Judith Herskowitz personally had seen to it that those papers were taken to the chambers of Judge Siegel, all these papers mysteriously disappeared and could not be located. Judge Siegel informed the parties at the hearing "They just told me they do not have it". Judge Siegel conceded that he has not seen any of these papers prior to the hearing.
136. When Judith Herskowitz asked to be sworn in, Judge Siegel refused to do so, saying:
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This is not an evidentiary hearing. This is a hearing for me to consider argument on the documents that have been filed." (Emphasis supplied)
Judge Siegel then turned the hearing into an oral argument whether he should even consider the additional New York documents. The authenticity of the New York documents was conceded by Eric Christu attorney for Charney. The facts stated in the affidavit, that Delibert’s affidavit was false, because no determination on personal jurisdiction was made in that April 9, 1991 decision and May 21, 1991 order were undisputed. Judge Siegel acknowledged that Charney "doesn’t have a Florida judgment yet. She has a New York default judgment".
137. Judith Herskowitz was allowed only a brief oral argument. To avoid a response, Charney’s attorney Eric Christu engaged in a long colloquy of history of the case, which even Judge Siegel acknowledged was irrelevant. Christu then rested on the prior reversal by Judge Schwartz in Charney v. Herskowitz, 689 So.2d 1101 (Fla. 3d DCA 1997) to buttress the covenant that the New York judgments could not be challenged.
138. Concurrently, in the New Jersey Bankruptcy Court, on November 24, 1999 Bezner filed a Motion to Complete Administration and to Dismiss Case claiming that, the estate of North Jersey was in the process of being fully administered; the shareholder dispute between Charney and Robert and Mark Herskowitz was resolved with the Settlement Agreement; the remaining shareholder dispute between Charney and Judith Herskowitz was pending in the New York and Florida State courts; and so Bezner asked to dismiss the case and to transfer the surplus funds to the New York receiver.
139. In her December 10, 1999 response Charney through Delibert readily joined in support of the motion asserting that
"there remain bitterly contested issues between Susan Charney and Judith Herskowitz, as to who is entitled to the surplus remaining on behalf of the debtor."
