Allstate Insurance Company et al v. Mirvis et al

Filing 513

ORDER denying 409 Motion to Quash; denying 410 Motion to Quash, pursuant to the annexed order. The parties are ordered to file by October 2, 2017 a joint proposed Protective Order for the Court to so-order. Ordered by Magistrate Judge Peggy Kuo on 9/22/2017. (Feldman, Shira)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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ALLSTATE INSURANCE COMPANY, et al.,
:
:
Plaintiffs,
:
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-against:
:
MARK MIRVIS, et al.,
:
Defendants.
:
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Peggy Kuo, United States Magistrate Judge:

MEMORANDUM AND ORDER
08-CV-4405 (SLT)(PK)

Before the Court are Motions by third-party Movants Central Pharmacy Boston, Inc.
(“Central”) and Century Pharmacy, Inc. (“Century”) (together, “the Pharmacies”) to Quash or Limit
third-party subpoenas served by Plaintiffs upon three banks: Bank of America (“BOA”), seeking
records regarding Central (“the Subject BOA Account”), TD Bank (“TD”), seeking records
regarding Century (“the Subject TD Account”), and Salem Five Bancorp (“Salem 5”), seeking
records regarding Century (“the Subject Salem 5 Account”) (collectively, “the Subject Accounts”).
(See Central Mot. to Quash, Dkt. 409; Century Mot. to Quash, Dkt. 410.) The subpoenas are part
of Plaintiffs’ post-judgment discovery, pursuant to Rule 69 of the Federal Rules of Civil Procedure
(see Pls.’ Mem. in Opp’n at 9-10, Dkt. 412), seeking to locate the assets of Mark Mirvis (“Mark
Mirvis” or the “Judgment Debtor”) (id.). Mark Mirvis’s daughter, Tatyana Mirvis (“Tatyana”) is one
of four owners 1 of Central and Century. (Id. at 1.)
For the reasons discussed below, the Pharmacies’ motions are denied.
DISCUSSION
Rule 69(a)(2) provides:
In aid of [a money] judgment or execution, the judgment creditor or a successor in interest
whose interest appears of record may obtain discovery from any person – including the
The Pharmacies describe Tatyana as a “shareholder” (Bespalko Decl. re Century ¶ 15, Dkt. 410-2), but the corporate
structure of the Pharmacies is not clear.

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judgment debtor – as provided in these rules or by the procedure of the state where the
court is located.
F. R. Civ. P. 69(a)(2). This post-judgment discovery must be “calculated to assist in collecting on a
judgment.” EM Ltd. v. Republic of Argentina, 695 F.3d 201, 207 (2d Cir. 2012). Discovery sought
pursuant to Rule 69, therefore, must relate to the existence or transfer of a judgment debtor’s assets.
See id.; see also GMA Accessories, Inc. v. Electric Wonderland, Inc., No. 07-CV-3219 (PKC)(DF), 2012 WL
1933558, at *4 (S.D.N.Y. May 22, 2012); Costomar Shipping Co., Ltd. v. Kim-Sail, Ltd., No. 95-CV-3349
(KTD)(JCF), 1995 WL 736907, at *3 (S.D.N.Y. Dec. 12, 1995); Magnaleasing, Inc. v. Staten Island Mall,
76 F.R.D. 559, 561 (S.D.N.Y. 1977).
However, post-judgment discovery is broad. EM Ltd., 695 F.3d at 207, and “[p]laintiff is
entitled to examine third parties to determine if a judgment debtor has concealed or transferred
assets applicable to satisfying its judgment.” D’Avenza S.p.A. in Bankr. v. Garrick & Co., No. 96-CV166 (DLC)(KNF), 1998 WL 13844, at *3 (S.D.N.Y. Jan. 15, 1998). “It is not uncommon to seek
asset discovery from third parties…that possess information pertaining to the judgment debtor’s
assets.” EM Ltd., 695 F.3d at 207. Such discovery is permitted when the non-party and the
judgment debtor have a relationship “sufficient to raise a reasonable doubt about the bona fides of
the transfer of assets between them,” Costomar, 1995 WL 736907, at *3 (internal citations omitted),
or when the non-party and the judgment debtor’s relationship “is such that the non-party may
possess concealed or fraudulently transferred assets of the judgment debtor,” Vazquez v. Ranieri
Cheese Corp., No. 07-CV-464 (ENV)(VVP), 2013 WL 101579, at *2 (citations omitted). Whether to
limit Rule 69 post-judgment discovery remains within the discretion of the district court pursuant to
its powers under Federal Rule of Civil Procedure 26(b)(2). EM Ltd., 695 F.3d at 207.
Central purports to be a “community retail pharmacy operating in and servicing the
prescription needs of the population of Greater Boston, Massachusetts.” (Central Mem. of Law at
1, Dkt. 409-1.) Century purports to be a “community retail pharmacy operating in and servicing the
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prescription needs of the population of Lowell, Massachusetts.” (Century Mem. of Law at 1, Dkt.
410-1.) Neither is a party to the suit giving rise to the judgment Plaintiffs seek to enforce.
The Pharmacies insist that they have “absolutely no connection with this case or the
underlying events or transactions.” (Central Mem. of Law at 1, Dkt. 409-1; Century Mem. of Law at
1, Dkt. 410-1.) They add that “none of the judgment debtors in this case is or has ever been an
owner, manager, director, employee, contractor or agent of” Central or Century (Central Mem. of
Law at 2, Dkt. 409-1; Century Mem. of Law at 2, Dkt. 410-2). The Pharmacies also suggest that
Plaintiffs’ inquiry should be limited to transactions involving Mark Mirvis, arguing that the
subpoenas in their current form are too broad in asking for “any and all” records, and would result
in the Pharmacies’ disclosing trade secrets. (Central Mem. of Law at 7-8, Dkt. 409-1; Century Mem.
of Law at 7-8, Dkt. 410-1.)
The Pharmacies do not dispute, however, that Mark Mirvis’s daughter Tatyana has a
significant ownership interest in Central and in Century. They also do not dispute that, after the
litigation against the Judgment Debtor was commenced in 2008, the Pharmacies issued checks to
Tatyana that she deposited into two HSBC Accounts (the “Mirvis Accounts”) which, despite bearing
Tatyana’s name, are likely controlled by Mark Mirvis. 2 (See generally Reply Mem., Dkts. 415, 435;
Bespalko Decls., Dkts. 409-2, 410-2.) Specifically, after 2008, Century issued checks to Tatyana for
at least $105,750.00 from the Subject Salem 5 Account that were deposited into the Mirvis Accounts
(see Pls.’ Sur-Reply at 5 n.9, Dkt. 424); Central issued checks to Tatyana for at least $586,135.00
from the Subject BOA Account that were deposited into the Mirvis Accounts (see Marvin Decl. ¶ 4,
Dkt. 412-1); and Century issued checks to Tatyana for at least $244,464.20 from the Subject TD

By Court Order dated December 8, 2016, the undersigned found the evidence that the Mirvis Accounts were actually
controlled by Mark Mirvis sufficient to grant a preliminary injunction enjoining transfers into and out of the accounts.
(Pls.’ Mem. in Opp’n at 2, Dkt. 412; see Order Granting Prelim. Injs., Dkt. 456.)

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Account that were deposited into the Mirvis Accounts (see id.). In addition, Central issued a check
from the Subject BOA Account to the Judgment Debtor’s wife (Tatyana’s mother), Lyubov Mirvis,
for $28,800.00. Century issued checks from the Subject TD Account to the Judgment Debtor
himself that total $11,155.19. (Id.) All these transfers, together with Mark Mirvis’s likely control of
the Mirvis Accounts, raise questions about the bona fides of the transfers and the identity of their
recipient. See Costomar, 1995 WL 736907, at *3.
Defendants argue that if the subpoenas are not quashed, they should be limited to payments
from the Subject Accounts, rather than including transfers to the Subject Accounts, or they should be
limited to transactions involving Mark Mirvis. However, because large sums of money were going
from the Pharmacies, without explanation, to accounts likely controlled by the Judgment Debtor,
Plaintiffs are entitled to discover whether the money going into the Subject Accounts actually
constitutes assets of the Judgment Debtor that are subject to collection. The Judgment Debtor also
has a history of using intermediaries, as when he fraudulently transferred his house to Tatyana, see
Allstate Ins. Co. v. Mirvis, No. 08-CV-4405 (SLT)(PK), Dkt. 505 (E.D.N.Y. July 31, 2017), R&R
adopted, 2017 WL 3981297 (E.D.N.Y. Sept. 8, 2017), so payments issued to names other than his
may nonetheless be his assets. When default judgment was entered in this case, Mark Mirvis was
found to be a principal defendant responsible for having “created a criminal enterprise…that
included, among other things, illegally owned and fraudulently licensed medical professional
corporations which were used to fraudulently bill insurance companies.” Allstate Ins. Co. v. Mirvis,
No. 08-CV-4405 (SLT)(VVP), 2015 WL 1247103, at *4 (E.D.N.Y. Mar. 2, 2015), R&R adopted, 2015
WL 1539671 (E.D.N.Y. Mar. 31, 2015). He was found liable for committing mail fraud, laundering
money, and violating the Racketeer Influenced and Corrupt Organizations Act. Id., at *8.
Based on Mark Mirvis’s activities as described in the default judgment, and the deposit of
checks from the Subject Accounts into accounts he likely controls, the undersigned finds that the
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Subject Accounts may be holding assets of the Judgment Debtor, or may have been used as a
conduit for money that is subject to judgment collection. Plaintiffs are entitled to obtain the
discovery sought by the subpoenas.
The Pharmacies ask that, if the Court denies their motions, a protective order between
Plaintiffs and the Pharmacies be ordered. (See Dkts. 409-1, 410-1.) Plaintiffs do not object. The
Court therefore orders Plaintiffs and the Pharmacies to file by October 2, 2017 a joint proposed
Protective Order for the Court to so-order.
CONCLUSION
The Motions to Quash Plaintiffs’ subpoenas served on Bank of America, TD Bank, and
Salem Five Bancorp, seeking records of the Pharmacies, are denied. The documents are to be
produced once the Protective Order is so-ordered.

Dated: Brooklyn, New York
September 22, 2017
SO ORDERED:

Peggy Kuo

PEGGY KUO
United States Magistrate Judge

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