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Dennis I. Wilenchik, #005350

WILENCHIK & BARTNESS PC

The Wilenchik & Bartness Building

2810 North Third Street

Phoenix, Arizona 85004

admin@wb-law.com

Leo R. Beus, #002687

BEUS GILBERT PLLC

701 North 44th Street

Phoenix, Arizona 85008

lbeus@beusgilbert.com

Attorneys for Wyo Tech Investment Group, LLC

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Wells Fargo Bank, N.A.,

Plaintiff,

v.

WYO TECH Investment Group, LLC; CWT 

Canada II Limited Partnership; Resources 

Recovery Corporation; and Jean Noelting,

Defendants.

WYO TECH Investment Group, LLC,

Cross-Claimant,

v.

CWT Canada II Limited Partnership, 

Resources Recovery Corporation, and Jean 

Noelting,

Cross-Claim Defendants.

WYO TECH Investment Group, LLC,

Third Party Plaintiff,

v.

Schlam Stone & Dolan, LLC, a New York 

Limited Liability Partnership; and Jeffrey M. 

Eilender,

Third Party Defendants.

Case No.: 2:17-CV-04140-DWL

SUPPLEMENTAL BRIEFING 

PURSUANT TO THIS COURT’S 

MARCH 5, 2019 ORDER (DOC. 109)

(Oral Argument Requested)

Case 2:17-cv-04140-DWL Document 113 Filed 03/25/19 Page 1 of 9
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Wyo Tech Investment Group, LLC (“Wyo Tech”), hereby files this Supplemental Briefing 

pursuant to this Court’s Order (Doc. 109) requesting supplemental briefs that address (1) that the 

Judgment Creditors did not comply with CPLR § 5222(b) when they issued the restraining notice 

to Wells Fargo in October 2017; (2) that the interpleading of the funds does not cure the Judgment 

Creditors’ clear violation of Wyo Tech’s due process rights and must result in this matter being 

dismissed and the money released to Wyo Tech with fees and damages left to resolution; and (3) 

that on the merits, the Judgment Creditors are limited solely to the information known to them at 

the time they issued the Restraining Notice.

I. The Judgment Creditors Did Not Comply with CPLR § 5222(b) When they

Issued the Restraining Notice to Wells Fargo in October 2017.

In “Critique of Money Judgment Part Three: Restraining Notices” the author in making

sweeping generalizations clearly misses the mark, and his conclusions are not justifiable from the

cases he cites at all. In fact, they are quite erroneous. For example, in claiming that “[a]lter ego

cases routinely uphold the restraint of the bank account merely on the allegation that the corporate

veil between the third party and the judgment debtor ought to be pierced”, he relies on the

following citation:

See Ivor B. Clark Co. v. Hogan, 296 F. Supp. 407, 410-11 (S.D.N.Y. 1969); 

Thompson v. Pollack, 873 N.Y.S.2d 173, 175 (App. Div. 2d Dep’t 2009) (refusing 

to vacate restraining notice where creditor presented prima facie evidence of alter 

ego). But see Plaza Hotel Assocs. v. Wellington Assocs., 378 N.Y.S.2d 859, 865

(Sup. Ct. New York County 1975) (indicating that prima facie evidence of alter ego 

is required to “pierce the corporate veil”).

However, this citation is as misleading as it is incorrect.

The first citation to Igor is not even a case that discusses a restraining notice premised on

a theory of alter ego—indeed, the words “alter ego” do not even appear in the opinion—to the

contrary, although not a model of clarity, Igor discusses a restraining notice where it is

uncontested that the third party owes money to the debtor. Igor at 411 – 12 (Where corporate 

judgment debtor was indebted to its president against whom judgment creditor had also obtained 

judgment, the third party in interest, which was served with notice, was required to hold rental 

Case 2:17-cv-04140-DWL Document 113 Filed 03/25/19 Page 2 of 9
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monies which came into its hands to extent of judgments against corporate and individual 

judgment debtors.)

Furthermore, the Court in Thompson did not “refus[e] to vacate [a] restraining notice where

[a] creditor presented prima facie evidence of alter ego”. It refused to vacate a restraining notice

when there was evidence that the “entity” did not even exist in any legal form. Thompson, 59

A.D.3d at 526 (“However, the plaintiff submitted evidence demonstrating that, although Ath-ens

was apparently dissolved in 1993, the defendant continued to use the corporate name and

continued to use the corporate account to write checks for his own personal expenses.

Accordingly, the matter must be remitted to the Supreme Court, Westchester County, for a hearing

to determine whether the defendant has an “interest” in the Signature One Bank account within

the meaning of CPLR article 52 and for a new determination thereafter of the motion to vacate

the restraining notice.” (internal citations omitted) (emphasis added)). This is far from the issue 

or facts presented here. 

The final citation is to Plaza Hotel as undermining the author’s position that a mere 

allegation is enough. It is not. Ironically, this is the same case that the author relies on for his

equally questionable claim that “JSC should therefore be viewed as a feeble Erie guess of New 

York law.” Despite the author’s claim that “even a casual glance at this opinion shows that it 

upheld the restraining notice on an alter ego theory” this comment actually undermines the 

author’s contention, as well as credibility as a reporter. While a “casual glance” of Plaza Hotel 

might lead one to believe it was decided on a theory of alter ego, as the alter ego allegation was 

discussed therein. In fact, the decision held that the restraining notice at issue there was valid on 

a theory of fraudulent conveyance—as was aptly recognized by the Court in JSC. The Plaza Hotel 

Court explicitly stated: “Plaintiff has submitted documentation establishing a series of 

transactions by which ownership of various properties has been shifted from one GoldmanDiLorenzo enterprise to another, all apparently without consideration.” Indeed, the Plaza Hotel 

Court went on to hold that “plaintiff has demonstrated that the assets held by Chase Manhattan 

Case 2:17-cv-04140-DWL Document 113 Filed 03/25/19 Page 3 of 9
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Bank are the assets of the judgment debtor, sufficient to warrant the continued restraint of 

disposition of those assets pending additional enforcement proceedings”. Simply put, the 

evidence discussed and holding of the Plaza Hotel Court only supports a theory of fraudulent 

conveyance, not alter ego.

Moreover, to the extent the Plaza Hotel case did hold that the restraining notice was valid 

based on a theory of alter ego (which it did not), the entity in Plaza Hotel did not substantively 

deny that it was the alter ego of the Judgment Debtor and in fact, to the contrary, had previously 

judicially admitted as much. Plaza Hotel Assocs., 84 Misc. 2d at 781 (“In opposition to all of this 

evidence, movant does not contest plaintiff’s evidence, but merely responds: ‘If plaintiff sued the 

wrong party, or omitted to sue a potential defendant, it cannot use self-help to correct its decision 

many years after the fact’”); id. at 780 – 81 (“Sol Goldman, in sworn testimony, averred that 

defendant corporation ‘is still in business under a partnership now’. And, it has shown that, in its 

most recent brief in the Court of Appeals, defendant conceded that the various changes in 

ownership of the relevant property were ‘not material to this case’.”). This begs the question, how 

does Plaza Hotel undermine the clear rule of law that a court must have previously determined 

that an entity is the “alter ego” of judgment debtor prior to a restraining notice being validly issued 

when the entity in Plaza Hotel had judicially admitted as much in previous litigation? Plainly, 

the issue here was not addressed in any way by the Plaza Hotel case. 

As is clear, David Gray Carlson’s conclusion in “Critique of Money Judgment Part Three: 

Restraining Notice” is entirely unsupported. Indeed, the additional case found by this Court 

clearly indicates that New York Court’s recognize the validity of the JSC opinion. While this 

Court has indicated that Hillwick, Inv. v. Adv. Ready Mix Supply Corp., 2017 N.Y. Misc. LEXIS 

3908 (N.Y. Sup. Ct. 2017) could be read to imply that the court rejected JSC it squarely did not. 

While the Hillwick Court’s discussion of the JSC case concluded with a sentence beginning with 

the word “however”, the sentence itself supports the contention that an allegation of “alter ego” 

is not sufficient under New York law. Rather than contradict JSC the Court in Hillwick merely 

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quoted United States v. Ceparano, 2009 WL 8690129, 2009 U.S. Dist. LEXIS 131257 (EDNY 

2009) which stated:

[JSC] stands only for the proposition that alleged “alter ego” status alone is 

insufficient to issue a restraining notice against assets of a third party without 

evidence of fraudulent conveyance or a showing that the third party is actually 

holding assets of the judgment debtor. JSC Foreign Ass’n Technostroyexport v. 

Int’l Dev. And Trade Serv., 295 F.Supp.2d 366, 392-93 (S.D.N.Y. 2003). In this 

case the appropriate test to be applied is whether the government has made a prima 

facie showing that the 1990 transfer of the Property to Dorothy was a fraudulent 

conveyance. Blue Giant Equip. Corp. v. Tec-Ser, Inc., 92 A.D.2d 530, 459 

N.Y.S.2d 948 (3d Dep’t 1983) (finding issuance of restraining notice on third party 

appropriate where plaintiff made out “a prima facie case showing that the 

assignment of [the judgment debtor’s] accounts receivable was not made in good 

faith or for adequate consideration [i.e. a fraudulent transfer].”).

Id. (final bracket modification added). The Court in Hillwick went on to ignore the allegation of 

“alter ego” as it had already recognized such an allegation was not proper in accordance with JSC 

and Ceparano finding that because the judgment creditor had not provided evidence of a 

fraudulent transfer or that the assets were in fact the owned by the judgment debtor the restraining 

notice was invalid.

Here, as stated in the Joint Case Management Plan, their theory is “alter ego”. [Joint Case 

Management Plan (Dkt. No. 62) at 3:13 – 17 (“That Danzik would use an alter-ego company to 

evade creditors is nothing new.”).] As such, as is clear under New York law, the Judgment 

Creditors did not comply with CPLR § 5222(b) when they issued the Restraining Notice to Wells 

Fargo in October 2017.

II. The Threshold Issue in this Case is Whether the Restraining Notice was Validly 

Issued.

As established above, and as stated by the JSC case, a restraining notice issued on the unadjudicated theory of alter ego—as was the case here—constitutes a grave and significant due 

process violations. JSC Foreign Economic Ass’n Technostroyexport, 295 F.Supp.2d at 393. This 

due process violation does not end merely because the money has been interplead nor can this 

violation be cured or forgiven. As this Court is aware, the constitution requires, in certain 

instances, for a hearing to occur prior to a deprivation, even if a postdeprivation hearing is 

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afforded. Here, the Court in JSC has already determined that in the context of a restraining notice 

issued on a theory of alter ego, that hearing must occur prior to the deprivation. JSC Foreign 

Econ. Ass’n Technostroyexport v. Int’l Dev. & Trade Servs., Inc., 295 F. Supp. 2d 366, 392–93 

(S.D.N.Y. 2003) (“These cases, like the others cited by the plaintiff, support the proposition that 

a judgment creditor may restrain the assets of a judgment debtor wherever those assets may be. 

They do not support the proposition that the assets of third parties may be restrained in 

anticipation of a finding that those third parties are alter egos or hold assets of alleged alter 

egos of the judgment debtor. Such a conclusion is not only unsupported by the text of N.Y. 

C.P.L.R. § 5222 or any of the cases cited by the plaintiff, but would also pose significant due 

process problems.” (emphasis added)). As is clear therefore, the constitutional threshold issue is 

whether the Restraining Notice was validly issued, if it was not—as is the case here—the matter 

must be dismissed.

Moreover, this Court cannot condone the violation of constitutional rights by rewarding 

the culprit with proceedings it is not entitled to. The fact of the matter is, had the judgment 

creditors not violated Wyo Tech’s due process rights the money would not have been interplead 

into this Court. As such, a recognition by this Court that the Restraining Notice violated Wyo 

Tech’s due process rights must result in the dismissal of this matter and the release of the funds 

to Wyo Tech.

III. The Judgment Creditors Must be Limited to the Information Known to them 

at the Time They Issued the Restraining Notice.

The Court identifies Palestine Monetary Authority v. Strachman, 62 A.D.3d 213 (N.Y. 

App. Div. 2009) as potentially supporting the Judgment Creditor’s claim that discovery is 

available here. However, Strachman involved a rare situation relating to governmental 

instrumentalities not at issue or relevant here. Specifically, due to the type of parties involved the 

normal presumptions regarding alter ego were reversed. Specifically, the issue in Strachman was 

whether the Palestine Monetary Authority, Palestine Authority, and Palestine Liberation 

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Organization are separate juridical entities. Notably, because a sovereign state was not involved, 

the burden was on the Palestine Monetary Authority to prove that it constituted a separate juridical 

entity rather than the alter ego of the Palestine Authority. Palestine Monetary Auth., 62 A.D.3d 

at 222 – 23. Because the burden was on the party restrained, not the restraining party—as is the 

case here—the Court determined that the restraining party was entitled to discover what facts the 

restrained party would come forward with to rebut the presumption that it was not a separate 

juridical entity.

Fundamentally, this is the opposite of the case at bar. Here, the burden is on the restraining 

party, not the party restrained. Moreover, that burden must have been satisfied prior to issuance 

of the restraining notice in relation to a private entity such as Wyo Tech. JSC Foreign Econ. Ass’n 

Technostroyexport v. Int’l Dev. & Trade Servs., Inc., 295 F. Supp. 2d 366, 392–93 (S.D.N.Y. 

2003) (“These cases, like the others cited by the plaintiff, support the proposition that a judgment 

creditor may restrain the assets of a judgment debtor wherever those assets may be. They do not 

support the proposition that the assets of third parties may be restrained in anticipation of a 

finding that those third parties are alter egos or hold assets of alleged alter egos of the judgment 

debtor. Such a conclusion is not only unsupported by the text of N.Y. C.P.L.R. § 5222 or any of 

the cases cited by the plaintiff, but would also pose significant due process problems.” (emphasis 

added)). As such, the judgment creditors must be limited to what they knew at the time they 

issued the Restraining Notice. As this Court has recognized, it is fundamental in law that a party 

cannot violate ones rights and then hope and pray that it can justify its actions through post hoc

discovery. Moreover, the uncontradicted case law demands this result. Id.

Nonetheless, assuming arguendo that this Court somehow concludes that it may ignore the 

fact that the issuance of a restraining notice on the theory of alter ego is a significant due process 

violation and instead decides to reward the culprits of this violation by determining that the only 

issue in this case is whether Dennis Danzik or RDX have an interest in the funds (which it should 

not), the discovery requested is still not relevant. Whether money was paid for the benefit of 

Case 2:17-cv-04140-DWL Document 113 Filed 03/25/19 Page 7 of 9
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Dennis Danzik or RDX does not establish any ownership or interest in the remaining monies in 

the account—nor does frequency or amount make it any more probable that there is such an 

interest. For example, I make payments to various charitable organizations to whom I do not owe 

a debt far more in both amount and regularity than I make payments to Walmart, this fact does 

not make it more likely that these charitable organization have an interest in the monies in my 

account than does Walmart; simply put, neither do. The only evidence that could support the 

claim that someone has an interest in monies in an account would be solely focused on the monies 

prior to entering the account, i.e. to establish their province, chain of title, or whether a fraudulent 

conveyance occurred. Wyo Tech and IEC are currently conducting audits and obtaining affidavits 

establishing where the funds came from which will once and for all dispel the entirely meritless 

claim of the judgment creditors that any of these monies are somehow the asset of a judgment 

debtor.

CONCLUSION

For the foregoing reasons this Court must find that the Judgment Creditors did not comply 

with CPLR § 5222(b) when they issued the Restraining Notice to Wells Fargo in October 2017; 

that this clear violation of Wyo Tech’s due process rights must result in the Court dismissing this 

matter and releasing the funds to Wyo Tech; and that under no circumstances are the Judgment 

Creditors entitled to discovery in attempt to create a post hoc justification for their constitutional 

violation.

RESPECTFULLY SUBMITTED March 25, 2019.

WILENCHIK & BARTNESS, P.C.

/s/ Dennis I. Wilenchik, Esq.

Dennis I. Wilenchik, Esq.

The Wilenchik & Bartness Building

2810 North Third Street

Phoenix, Arizona 85004

admin@wb-law.com

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BEUS GILBERT PLLC

Leo R. Beus, Esq.

701 North 44th Street

Phoenix, Arizona 85008

lbeus@beusgilbert.com

Attorneys for Wyo Tech Investment Group, LLC

ELECTRONICALLY FILEDMarch 25, 2019 March 25, 2019.

COPY served via CM/ECF System, which sends notification

to all parties registered therein.

/s/ Hilary J. Myers

Case 2:17-cv-04140-DWL Document 113 Filed 03/25/19 Page 9 of 9