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Matter of Dontzin Nagy & Fleissig LLP v. HC2 Holdings, Inc.
Citation: 2023 NY Slip Op 00234Docket: Index No. 156889/20 452635/20 Appeal No. 16672-16673-16674-16675 Case No. 2021-01474, 2021-04127, 2021-01499, 2021-01500, 2021-01501
Court: Appellate Division of the Supreme Court of the State of New York; January 18, 2023; New York; State Appellate Court
Original Court Document: View Document
The Appellate Division, First Department, affirmed several orders related to the enforcement of judgments against HC2 Holdings, Inc. and property interests of nonparty Philip Falcone, a former CEO of HC2. The orders, originating from the Supreme Court, New York County, involved the City of New York and petitioner-appellant Dontzin Nagy. Fleissig LLP (DNF) contested the priority of the City’s execution over its own regarding shares and interests held by Falcone. The court confirmed that both the City and DNF were judgment creditors of Falcone and that DNF had standing to appeal due to its rights being affected. The court addressed the appealability of certain orders, noting that while some were not directly appealable, they allowed the appeal for judicial efficiency. It emphasized that under CPLR 5234(b), priority among execution creditors is determined by the order of filing and service. The City was granted priority as it filed its execution first and secured extensions, as provided under CPLR 5232(a), which mandates that executions expire after 90 days unless extended by the court. The court affirmed all contested orders without costs. DNF's reliance on the dormancy doctrine and case law predating CPLR article 52 is ineffective, as article 52 introduced significant changes to the enforcement of money judgments. This article established a statutory ranking of creditor priorities, eliminating variations and simplifying the process. The legislative history indicates that the fixed enforcement timeframes prevent creditors from delaying action to the detriment of others. DNF's motion to renew its request for an order compelling HC2 to deliver property in which Falcone has an interest was denied, as the dormancy doctrine is no longer applicable under article 52. Although the dormancy doctrine has been replaced by statutory criteria for extensions, considerations of diligence and prejudice remain relevant for evaluating extension applications under CPLR 5232(a). The court granted the City’s extension request in Index No. 452635/2020, citing justified reasons including delays due to the pandemic and necessary motion practice. There was no evidence that this extension harmed Falcone or defrauded other creditors. DNF's additional arguments were also found unpersuasive. This decision was issued by the Supreme Court, Appellate Division, First Department on January 19, 2023.