Court Opinion

ID: 9958767
Source: CourtListenerOpinion
Date Created: 2024-04-09 20:11:21.100693+00
Date Added: 2024-06-11T08:15:50.385301
License: Public Domain

TGT, LLC v Advance Entertainment, LLC
               2024 NY Slip Op 31048(U)
                     March 28, 2024
           Supreme Court, New York County
        Docket Number: Index No. 159007/2022
                  Judge: Andrea Masley
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                                                                                                                     INDEX NO. 159007/2022
NYSCEF DOC. NO. 83                                                                                             RECEIVED NYSCEF: 03/28/2024

          SUPREME COURT OF THE STATE OF NEW YORK
          COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 48
          -----------------------------------------------------------------------------------X
           TGT, LLC,                                                                             INDEX NO.         159007/2022

                                                       Petitioner,
                                                                                                 MOTION DATE
                                              -v-
                                                                                                 MOTION SEQ. NO.    001 002 003
           ADVANCE ENTERTAINMENT, LLC, RICHARD MELI,
           JESSICA MELI, JACKSON MELI, and PILIERO &
           ASSOCIATES PLLC,                                                                       DECISION + ORDER ON
                                                                                                        MOTION
                                                       Respondent.
          -----------------------------------------------------------------------------------X

          HON. ANDREA MASLEY:

          The following e-filed documents, listed by NYSCEF document number (Motion 001) 2, 23, 25, 26, 27,
          28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 40, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 66, 67, 68, 69, 70,
          71, 74, 76, 79, 80
          were read on this motion to/for                            TURNOVER PROCEEDING                              .

          The following e-filed documents, listed by NYSCEF document number (Motion 002) 41, 42, 43, 44, 45,
          46, 64, 65, 72, 77, 78
          were read on this motion to/for                              RENEWAL                               .

          The following e-filed documents, listed by NYSCEF document number (Motion 003) 61, 62, 63, 73
          were read on this motion to/for                                STAY                                                      .

          Upon the foregoing documents, it is

                    Petitioner TGT, LLC brings this special proceeding pursuant to CPLR 5225 and

          5227 for the turnover of: (1) $171,000.00 in proceeds from the sale of Chicken Soup for

          the Soul, LLC stock that judgment debtor and respondent Advance Entertainment, LLC

          (“Advance”) owned, which proceeds were allegedly fraudulently conveyed/and

          dissipated by respondent Richard Meli (Richard) for the benefit of his daughter-in-law

          and grandchildren, respondents Jessica Meli, Jackson Meli and three unnamed minors;

           159007/2022 TGT, LLC vs. ADVANCE ENTERTAINMENT, LLC ET AL                                                 Page 1 of 6
           Motion No. 001 002 003

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NYSCEF DOC. NO. 83                                                                 RECEIVED NYSCEF: 03/28/2024

          and (2) $50,000 held by respondent Piliero & Associates PLLC (Piliero), allegedly on

          behalf of and for the benefit of judgment debtor Joseph Meli, Richard’s son.

                  The court determined that the $50,000 held in Piliero’s escrow account was for

          the benefit of judgment debtor Joseph Meli. (NYSCEF 75, 3/09/2023 tr at 31:6-34.)

          Accordingly, by interim judgment and order, dated April 1, 2023, it directed Piliero to

          turn over the $50,000. (NYSCEF 59, Judgment.)

                  As concerns the $171,000 in stock proceeds, there was no dispute that the

          transfer of the proceeds for the benefit of Meli family members constituted a fraudulent

          conveyance. (NYSCEF 75, March 9, 2023 tr 21:7-13.) However, the court held in

          abeyance the determination of this claim, pending the submission of supplemental

          briefing on the issue remedy. Specifically, whether it is significant that the money was

          used to provide food and shelter for the children. (Id. at 24:6-23; NYSCEF 59,

          Judgment.)

                  In their supplemental brief, respondent offer no legal authority in support of their

          assertion that equity must intervene to limit the remedy available to the creditor when

          the fraudulently conveyed property is used for the benefit of children. (See generally

          NYSCEF 50, Respondent’s Memo of Law.) Additionally, respondents “do no contest

          the finding” that Richard’s transfer of “some” of the stock proceeds constitutes a

          fraudulent conveyance. (Id. at 2.) Nor do they dispute that Richard dissipated the

          entirety of the stock proceeds. (See id. at 4 [admitting that Richard liquidated the stock,

          transferred the funds into an account held by Advance and then spent the entirety of the

          funds]). They merely argue that, because some of the funds were paid on “antecedent

          debts” (i.e. “$107,000 paid to landlord in back rent owed by Jessica Meli and children”

           159007/2022 TGT, LLC vs. ADVANCE ENTERTAINMENT, LLC ET AL                      Page 2 of 6
           Motion No. 001 002 003

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NYSCEF DOC. NO. 83                                                                  RECEIVED NYSCEF: 03/28/2024

          and “$15,000 in legal fees”), the “judgment against Richard Meli should not exceed

          $59,000.” (Id. at 4, 9.)1 However, respondents fail to offer any evidence of the debts

          paid. Instead, they provide “approximate numbers” in a memorandum of law, without

          any supporting documents. (Id. at 4). Moreover, respondents do not claim that these

          debts belonged to either of the judgment debtors. As respondents offer no evidence of

          “reasonably equivalent value” given in exchange for the transfers of proceeds, they fail

          to meet their burden of establishing the defense. (See Debtor and Creditor Law §§ 277

          [a], [g] [1], 272 [a]; Matter of CIT Group/Commercial Servs., Inc. v 160-09 Jamaica Ave.

          Ltd. Partnership, 25 AD3d 301, 302 [1st Dept 2006] [rejecting the judgment debtor’s

          claim that a payment to its landlord was for back rent and not a fraudulent conveyance,

          where the judgement debtor “fail(ed) to demonstrate a bona fide debt, antecedent or

          otherwise”].)

                      As there is no dispute that Jessica Meli received and spent $16,000 of the

          proceeds (see NYSCEF 36, August 19, 2020 Ameritrade Wire Request; NYSCEF 30,

          Jessica Meli aff, ¶ 3; see also NYSCEF 50, Respondent’s Memo of Law at 2) and that

          Richard Meli spent the remainder (see NYSCEF 28, Richard Meli aff, ¶¶ 8, 9; NYSCEF

          50 at 3-4), TGT is entitled to judgment against them for those respective amounts.

          (Debtor and Creditor Law §§ 276 [a] [1], 277 [b] [1]; Federal Deposit Ins. Corp. v

          Heilbrun, 167 AD2d 294, 294 [1st Dept 1990] [internal citation omitted] [“(a) personal

          judgment against the transferee of a fraudulent conveyance may be obtained where the

          transferee has made it impossible to return the property to the creditor by, for example,

          1
           It is not entirely clear how respondents arrived at $59,000, although it appears to be a
          typographical error. The difference between $171,000 (in proceeds) and $122,000
          (purportedly the antecedent debt) being $49,000.
              159007/2022 TGT, LLC vs. ADVANCE ENTERTAINMENT, LLC ET AL                    Page 3 of 6
              Motion No. 001 002 003

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NYSCEF DOC. NO. 83                                                                 RECEIVED NYSCEF: 03/28/2024

          disposing of wrongfully conveyed property or depreciating it”]). However, there is no

          evidence of transfers made to the Meli children. Accordingly, to the extent the petition

          seeks judgment against them, the petition is denied. TGT is also entitled to attorneys’

          fees (Debtor and Creditor Law § 276-a), for which respondents Jessica and Richard

          Meli shall be jointly and severally liable. (See CPLR 5240; Guardian Loan Co., Inc. v

          Early, 47 NY2d 515, 519 [1979] [“CPLR 5240 grants the courts broad discretionary

          power to control and regulate the enforcement of a money judgment under article 52”]).

                 In motion sequence number 002, respondent Piliero moves to renew, pursuant to

          CPLR 2221 (e), arguing that the $50,000 in its escrow account belongs to Deborah

          Vitale (Vitale), a previously unidentified friend of the Meli family, who purportedly placed

          the money into the account contingent on Joseph Meli’s ability to raise the full $150,00

          needed to effectual a settlement agreement with TGT. Piliero argues that upon the

          failure to raise the necessary funds and the dissolution of settlement talks, the

          ownership of the $50,000 reverted to Vitale. (See NYSCEF 42, Piliero Memo of Law at

          4-5; NYSCEF 43, Vitale aff, ¶ 6.) However, these are not “new facts not offered on the

          prior motion.” (CPLR 2221 [e] [2].) Piliero made the identical argument on the initial

          motion (see NYSCEF 75, March 9, 2023 tr 15:15-16), at that time, without providing any

          legal authority or admissible evidence in support. (See id. at 15:16-23; at 18:3-24.)

          Now, Piliero, for the first time, offers the affidavit of Deborah Vitale. (NYSCEF 43, Vitale

          March 30, 2023 aff.)

                 In an attempt to offer a “reasonable justification for the failure to present” any

          evidence of Vitale’s purported ownership on the prior motion (CPLR 2221 [e] [3]), Vitale

          explains that she “did not realize that it would be necessary” (NYSCEF 43, Vitale aff, ¶

           159007/2022 TGT, LLC vs. ADVANCE ENTERTAINMENT, LLC ET AL                       Page 4 of 6
           Motion No. 001 002 003

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          10) and that she wished to “maintain [her] privacy and not get involved in judicial

          proceedings.” (Id., ¶ 11). These statements indicate that she was aware of the

          turnover proceeding and that her interest in the $50,000 was at risk. However, in the

          same statement, she claims to have only “learned that the settlement did not go

          through” “in the past two weeks” and “last week” that her “money had been frozen by

          the Court and was to be turned over to TGT.” (Id., ¶ 10.) Despite these

          inconsistencies, during oral arguments on the motion, so as “not to defeat substantive

          fairness” (Tishman Constr. Corp. of N.Y. v City of New York, 280 AD2d 374, 377 [1st

          Dept 2001] [internal quotation marks and citation omitted] [explaining that “even if the

          vigorous requirements for renewal are not met, such relief may be properly granted”]),

          the court adjourned the motion for two weeks to give Deborah Vitale an opportunity to

          intervene in the proceeding and to seek a hearing as to her entitlement to the $50,000.

          (NYSCEF 77, August 10,2023 tr at 18:1-14; see CPLR 5225, 5239). She has not done

          so. Accordingly, the motion to renew is denied.

                 In motion sequence 003, Piliero seeks a stay of the April 1, 2023 order, pending

          the resolution of motion sequence number 002. Considering the above and the fact that

          respondent has, in the interim, turned over the escrow funds to TGT (see NYSCEF 78),

          the motion is denied as moot.

                 Accordingly, it is hereby

                 ADJUDGED that the petitioner’s motion for judgment on the first cause of action

          (motion sequence number 001) is granted as against respondents Richard Meli and

          Jessica Meli only; and it is further

           159007/2022 TGT, LLC vs. ADVANCE ENTERTAINMENT, LLC ET AL                    Page 5 of 6
           Motion No. 001 002 003

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NYSCEF DOC. NO. 83                                                                             RECEIVED NYSCEF: 03/28/2024

                  ORDERED that the Clerk of the Court is directed to enter judgment in favor of

          petitioner and against respondent Richard Meli in the amount of $ 155,000 together with

          interest at the rate of 9% per annum from the date of July 1, 2020 until the date of the

          decision and order on this motion, and thereafter at the statutory rate, as calculated by

          the Clerk, together with costs and disbursements to be taxed by the Clerk upon

          submission of an appropriate bill of costs; and it is further

                  ORDERED that the Clerk of the Court is directed to enter judgment in favor of

          petitioner and against against respondent Jessica Meli in the amount of $16,000,

          together with interest at the rate of 9% per annum from the date of August 19, 2020

          until the date of the decision and order on this motion, and thereafter at the statutory

          rate, as calculated by the Clerk, together with costs and disbursements to be taxed by

          the Clerk upon submission of an appropriate bill of costs; and it is further

                  ORDERED that within 10 days of the date of this order, petitioner shall submit an

          affidavit of services, including resumes or firm bios of attorneys and staff involved in

          case. Otherwise waived; and it is further

                  ORDERED that respondent Piliero & Associates PLLC’s motion to renew (motion

          sequence number 002) is denied; and it is further

                  ORDERED that respondent Piliero & Associates PLLC’s motion for a stay

          (motion sequence number 003) is denied as moot.

                  3/28/2024
                    DATE                                                          ANDREA MASLEY, J.S.C.
           CHECK ONE:               X   CASE DISPOSED                      NON-FINAL DISPOSITION

                                        GRANTED             DENIED     X   GRANTED IN PART             OTHER

           APPLICATION:                 SETTLE ORDER                       SUBMIT ORDER

           CHECK IF APPROPRIATE:        INCLUDES TRANSFER/REASSIGN         FIDUCIARY APPOINTMENT       REFERENCE

           159007/2022 TGT, LLC vs. ADVANCE ENTERTAINMENT, LLC ET AL                                 Page 6 of 6
           Motion No. 001 002 003

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