Phoenix Bulk Carriers (BVI) LTD. v. Triorient LLC
DECISION AND ORDER ON MOTIONS TO QUASH AND TO COMPEL denying 29 Motion to Quash; granting 32 Motion to Compel; denying 22 Motion to Quash; denying 26 Motion to Quash. Accordingly, for the foregoing reasons, and subject to the limi tations set forth above, Triorient's motions to quash are DENIED, and Phoenix's cross-motion to compel is GRANTED. The Clerk of Court is respectfully requested to terminate the motions at Dkts. 22-39. SO ORDERED.. (Signed by Magistrate Judge Robert W. Lehrburger on 2/17/2021) (ks)
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
PHOENIX BULK CARRIERS (BVI), LTD.,
- against :
20-CV-0936 (JGK) (RWL)
DECISION AND ORDER
ON MOTIONS TO QUASH
AND TO COMPEL
ROBERT W. LEHRBURGER, United States Magistrate Judge.
This action began when Plaintiff Phoenix Bulk Carriers (BVI), Ltd. (“Phoenix”) filed
for confirmation of, and entry of judgment on, an arbitration award obtained against
Defendant Triorient, LLC (“Triorient”).
To collect on the judgment, Phoenix issued
subpoenas to several non-party individuals and entities (the “Subpoenas”). The nonparties (collectively referred to as the “Non-Parties”) include Triorient’s sole members
Albert Winslow and Juan Facundo Santucci (sometimes referred to as the “Triorient
Members”); and Triorient Coal, LLC and Darien Land Management (“DLM”), both
companies related to Triorient and similarly owned and controlled by Santucci and Wilson
(the “Triorient Related Companies”).
Phoenix also issued subpoenas to Triorient’s
Financial Director, Ines Jamie (“Jamie”); financial entities Citibank, N.A. (“Citibank”),
American Express (“Amex”), and Charles Schwab & Co., Inc. (“Schwab”) (collectively, the
“Financial Entities”); as well as Brooklawn Country Club, of which Winslow is a member,
and Manursing Island Club, of which Santucci is a member (collectively, the “Country
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None of the Financial Entities or Country Clubs have moved to quash the
Subpoenas issued to them. Nonetheless, the Non-Parties – Winslow, Santucci, and the
Triorient Related Companies – have moved to quash those Subpoenas. Phoenix has
cross-moved to compel compliance with the Subpoenas served on individuals Winslow,
Santucci, and Jamie. For the reasons set forth below, subject to certain limitations,
Triorient’s motions to quash are DENIED, and Phoenix’s cross-motion to compel is
Phoenix and Triorient entered into a charter contract for transportation of cargo.
In 2017, Phoenix filed arbitration against Triorient for breach of the contract (the
“Arbitration”). The arbitration panel issued an award in Phoenix’s favor on September 27,
2019. Phoenix then filed a petition to confirm the arbitration award on February 4, 2020
(Dkt. 1), and on June 28, 2020, the Court granted Phoenix’s petition and entered judgment
in favor of Phoenix and against Triorient in the amount of $538,442.03 (the “Judgment”).
(Dkt. 14.) Triorient has not paid any of the Judgment owed to Phoenix. The Triorient
Related Companies were not parties to the Arbitration or Judgment, but Santucci and
Wilson are the only members of both those entities as well as Triorient.
The Subpoenas seek financial information pertaining to Triorient as well as
financial information pertaining to the Non-Parties. With respect to Triorient directly, the
Subpoenas seek, for instance, account statements, correspondence, and other
documents concerning accounts that are or were in Triorient’s name; Triorient loan
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documents; and collection instruments served on Triorient (i.e., notices of liens,
garnishments, or attachments of property directed to Triorient assets or property). The
Non-Parties do not object to the Subpoenas insofar as they seek that information.
Rather, they object to the Subpoenas insofar as they seek information about or
from the Non-Parties. Information of that type sought from the Financial Entities includes,
for example, correspondence with the Triorient Members and bank records for any
accounts maintained by the Triorient Members or the Triorient Related Companies. From
the Country Clubs, Phoenix has asked for the Triorient Members’ account statements and
From Santucci, Winslow, and Jamie, documents sought by Phoenix include bank
records, insurance policies paid for by Triorient, records of transfers of funds between
Triorient, the Triorient Related Companies, Santucci, and Winslow; records of transfers
in and out of Schwab and Citibank; Amex charges; and the like. From the Triorient
Related Companies, Phoenix has requested documents concerning matters such as a
lease between Triorient and DLM (the two companies share the same address); transfers
of funds between Triorient, the Triorient Related Companies, and the Members; tax
returns; capital records; and audited financial statements.
Information on Which the Subpoenas are Based
The documents sought by Phoenix are grounded in certain limited information of
which Phoenix already is aware. For instance, Phoenix has identified specific transfers
of funds between a Triorient account at Citibank and other Triorient or Triorient-related
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accounts at Citibank.
(Gutowski Aff. Ex. 6-7. 1)
Similarly, Phoenix has presented
evidence of a relatively recent transfer of funds from Triorient to Schwab. (Gutowski Aff.
Ex. 20.) There is also evidence of a $2.15 million debt owed by Trident Coal to Triorient;
$260,000 in payments from Triorient to DLM; a $68,000 loan from DLM to Triorient; and
Triorient’s receipt of a Paycheck Protection Program loan, followed by immediate
transfers to DLM and then transfers back to Triorient. (Gutowski Aff. Ex. 9-10.)
In addition to evidence of multiple transfers back and forth between Triorient and
the Triorient Related Companies Phoenix has identified records of transactions in which
Triorient paid hundreds of thousands of dollars for Amex credit card charges, life
insurance premiums, country club expenses, cash (through ATM withdrawals and
otherwise), and even a Costco membership directly connected to Santucci and Wilson.
(Gutowski Aff. Ex. 13-16.) While many or all of these could be legitimate company
expenses, it is plausible that some or many of them could have been a means for Santucci
and Wilson to siphon funds from Triorient.
Legal Standards for Post-Judgment Discovery From Non-Parties
Post-judgment discovery is governed by Rule 69 of the Federal Rules of Civil
Procedure. D’Avenza S.p.A. v. Garrick & Co., No. 96-CV-166, 1998 WL 13844, at *2
(S.D.N.Y. Jan. 15, 1998). Under that rule, a judgment creditor, such as Phoenix, may
obtain discovery in aid of enforcement of the judgment “from any person – including the
judgment debtor – as provided in these rules or by the procedure of the state where the
court is located.” Fed. R. Civ. P. 69(a)(2). As the rule expressly recognizes, discovery in
“Gutowski Aff.” refers to the Affirmation of Peter J. Gutowski dated December 11, 2020
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aid of enforcement may be sought against “any person,” including non-parties. The
comparable New York rule similarly provides that a “judgment creditor may compel
disclosure of all matter relevant to the satisfaction of the judgment, by serving upon any
person a subpoena.” N.Y. C.P.L.R. 5223.
Precisely because discovery to enforce a judgment is employed to discover assets
of a recalcitrant judgment debtor, judgment creditors “must be given the freedom to make
a broad inquiry to discover hidden or concealed assets of the judgment debtor.” GMA
Accessories, Inc. v. Electric. Wonderland, Inc., No. 07-CV-3219, 2012 WL 1933558, at *4
(S.D.N.Y. May 22, 2012) (internal quotation marks omitted); accord EM Ltd. v. Republic
of Argentina, 695 F.3d 201, 207 (2d Cir. 2012) (“broad post-judgment discovery in aid of
execution is the norm in federal and New York state courts”); Pegaso Development Inc.
v. Moriah Education Management LP, No. 19-CV-7787, 2020 WL 6323639, at *4
(S.D.N.Y. Oct. 28, 2020) (quoting EM Ltd. and recognizing that judgment creditors are
allowed “broad post-judgment discovery,” including from non-parties, such as banks, that
possess information pertaining to the judgment debtor’s assets (internal alteration
Discovery to enforce judgments often focuses on transfers of assets, such as when
a judgment debtor transfers funds to another entity in an effort to deplete assets and
evade payment. Judgment creditors thus are permitted discovery of non-party assets
“where the relationship between the judgment debtor and the non-party is sufficient to
raise a reasonable doubt as to the bona fides of the transfer of assets between them.”
GMA Accessories, 2012 WL 1933558 at *5 (internal quotation marks omitted); see also
D’Avenza, 1998 WL 13844 at *3 (“Plaintiff is entitled to examine third parties to determine
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if a judgment debtor has concealed or transferred assets applicable to satisfying its
Although discovery in aid of enforcement is “broad,” the rules do not provide
judgment creditors with unfettered license to go on a “fishing expedition,” subpoenaing
non-parties just to see what might turn up. See D’Avenza, 1998 WL 13844 at *3. Instead,
“post-judgment discovery must be ‘calculated to assist in collecting on a judgment.’”
Allstate Insurance Co. v. Mirvis, No. 08-CV-4405, 2017 WL 10398552, at *1 (E.D.N.Y.
Jan. 25, 2017) (quoting EM Ltd., 695 F.3d at 207). Accordingly, post-judgment discovery
of non-parties is “limited to a search for the judgment debtor’s hidden assets.” GMA
Accessories, 2012 WL 1933558 at *4 (internal quotation marks and brackets omitted).
The burden to demonstrate the relevance of the requested material lies with the
party issuing the subpoena; the burden to show that the request is impermissible lies with
the non-party opposing the subpoena. Id. at *5 (citing Kingsway Financial Services v.
Pricewaterhouse-Coopers, LLP, No. 03-CV-5560, 2008 WL 4452134, at *4 (S.D.N.Y. Oct.
2, 2008). Ultimately, “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
Triorient cites to Uniden Corporation of America v. Duce Trading Co., Ltd., No. 89-CV878, 1993 WL 286102 (W.D.N.Y. July 19, 1993) for the proposition that asset discovery
against a non-party requires “a somewhat heightened showing of necessity and relevance
– i.e., at least some demonstration of concealed or fraudulent transfers or alterego
relationship with the judgment debtor.” Id. at *1. In Uniden, the judgment creditor moved
to compel deposition testimony from the judgment-debtor’s principal concerning a
company established by his wife shortly after the judgment-debtor became defunct. The
court disposed of the matter without getting to the merits of the issue. Instead, the court
denied the motion without prejudice because the judgment creditor failed to comply with
local district court rules in filing the motion. Id. In any event, the Court does not deem
Uniden’s articulation of the standard to be materially different from the principles set forth
above, and arrives at the same conclusion regardless of which formulation is applied.
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Procedure 26(b)(2).” Allstate Insurance, 2017 WL 10398552 at *1 (citing EM Ltd., 695
F.3d at 207).
Triorient’s Motions to Quash 3
Phoenix has provided evidence of transfers of funds between Triorient, the
Triorient Related Companies, and Wilson and Santucci, who are the only Members of
each entity. Phoenix also has presented evidence raising questions about the propriety
of those transfers, including payments made to and by the Triorient Related Companies,
Wilson and Santucci. The Court agrees that “the relationship between [Triorient] and
the [Non-Parties] is sufficient to raise a reasonable doubt as to the bona fides of the
transfer of assets between them.” GMA Accessories, 2012 WL 1933558 at *5 (internal
quotation marks omitted). The discovery Phoenix seeks from and about the Non-Parties
generally is “calculated to assist in collecting on” the judgment against Triorient., EM
Ltd., 695 F.3d at 207, and comfortably falls within the “broad post-judgment discovery”
permitted under Fed. R. Civ. P. 69. Id.
The Non-Parties contend that the only material Phoenix needs is material that
can and should be requested from Triorient, and that the Non-Parties should only be
subject to discovery in the event that Phoenix does not obtain what it needs from
Triorient. That is disingenuous. Following issuance of the arbitration award, Phoenix,
through Winslow, indicated that Triorient intended to pay off amounts due to Phoenix
In their moving papers, the Non-Parties argue that they have standing to move to quash
the Subpoenas and that they timely filed their motions. Phoenix does not contest either
point, and the Court deems those issues undisputed. Accordingly, the Court will not
address them further. The Non-Parties do suggest that the motions are improper as being
supported by sworn statements from only the Non-Parties’ lawyers, not the Non-Parties
themselves. That argument has no merit as the lawyers, of course, represent the NonParties; no declaration or affidavit is required of the clients as opposed to their lawyers.
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but needed more time, and would provide whatever financial documents Phoenix
requested. (Second Gutowski Aff. ¶¶ 5-6. 4) But Triorient never paid anything, provided
only limited information, and “stonewalled all of Phoenix’s requests for specific
documentation and information on their business activity, receivables, contracts, etc.”
(Second Gutowski Aff. ¶¶ 7-8.) Meanwhile, as more time has passed, multiple creditors
have filed lawsuits and, in some instances, obtained judgments against Triorient. 5
Constraining Phoenix to start with discovery only from Triorient could further jeopardize
its ability to collect on its judgment. Phoenix is entitled now to pursue post-judgment
discovery with latitude to follow the proverbial money trail.
No more persuasive is the Non-Parties’ argument that Phoenix already has
sufficient documentation as reflected in the evidence it presents to support the requests
currently at issue.
Just because Phoenix has some information about some
transactions reflecting some transfers or depletion of some funds does not mean they
are not entitled to seek more fulsome discovery to gain a fuller picture.
The Non-Parties also raise concern about the personal and confidential nature
of some of the information sought. That concern, however, is readily addressed by use
of a protective order limiting the use and disclosure of materials produced by both the
“Second Gutowski Aff.” refers to the Second Affirmation of Peter J. Gutowski dated
Dec. 28, 2020 (Dkt. 39).
See, e.g., Wells Fargo Bank, N.A. v. Triorient, LLC, No. FST-CV20-6049259-S (Conn.
Super. Ct. commenced Nov. 16, 2020) (alleging Triorient breached $20 million credit
facility); M2M Panamax Pool Ltd. v. Triorient LLC, No. FST-CV20-6049258-S (Conn.
Super. Ct. commenced Nov. 16, 2020) (seeking confirmation of a $66,677.29 arbitration
award); CLDN Cobelfret Pte Ltd. v. Triorient LLC, No. 20-CV-9926 (S.D.N.Y. commenced
Nov. 25, 2020) (seeking confirmation of two partial final arbitration awards); Cargill Inc.,
Ocean Transportation v. Triorient LLC, No. 20-CV-10058 (S.D.N.Y. commenced Dec. 1,
2020) (seeking confirmation of $1,482,717.47 final arbitration award).
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parties and non-parties.
The Court now turns to briefly addressing the scope of the Subpoenas issued to
the Financial Entities and Country Clubs. All requests are appropriately limited in time
to January 1, 2018 (after commencement of the Arbitration) to the time of production.
Citibank: The Citibank Subpoena requests at issue essentially ask for all
account information and correspondence for accounts maintained by Winslow,
Santucci, DLM, and Triorient Coal, and a specific account, designated as the ‘399
account, for which a transfer was made to Triorient’s account from DLM. Given the
evidence obtained so far reflecting transfers among Triorient, the Triorient Related
Companies, Santucci, and Winslow, these requests, with one exception described
below, are appropriate.
The Non-Parties argue that transfers of funds into Triorient’s account do not
justify discovery of the other accounts, because money flowing in is favorable to Phoenix
and augments, rather than depletes, the judgment debtor’s assets. The Court agrees
with Phoenix, however, that transfers in can be, and most often are, also accompanied
by transfers out. Indeed, Phoenix has presented financial records indicating outflow of
funds. Although Phoenix has not presented evidence of transfers in, out, and between
every combination of those individuals and entities, enough has been presented to
make the requests reasonably calculated to lead to discovery of Triorient’s assets.
To be sure, there may be transactions to and from the various accounts that are
proper or even have nothing to do with Triorient. But production of documents that
contain both information that is relevant and responsive as well as information that is
not relevant or responsive is commonplace. Were it otherwise, the fact that a document
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includes both relevant and irrelevant information would preclude production of the
document at all. That is not the law.
While most of the Citibank requests are appropriate, the Court finds request
number 6 to be overly intrusive and unjustified. That request seeks all correspondence
between Citibank on the one hand and Winslow, Santucci, or Triorient on the other.
Correspondence between the bank and its individual customers may include a variety
of subject matter, and not all correspondence necessarily sheds light on where assets
came or went. Accordingly, the request from Citibank of correspondence with Winslow
or Santucci need not be produced, unless such correspondence is in their capacity as
an agent of Triorient. The Citibank Subpoena may be enforced subject to that limitation.
Amex: The Subpoena directed to Amex makes three requests, one each for the
account statements and associated documents for the Amex accounts of Triorient,
Santucci, and Winslow. The documents sought are those “showing the source and
manner of each payment received,” thus focusing on transfers into the Amex accounts.
Those requests are reasonably calculated to locate Triorient assets.
Subpoena may be enforced.
Schwab: Like the Amex Subpoena, the Schwab Subpoena requests account
statements and related documents for Triorient, the Triorient Related Companies, and
the two Triorient Members. The Schwab requests similarly are tailored to obtaining
documents “showing the source and manner of each payment received” and are
reasonably calculated to locate Triorient assets. The Schwab Subpoena may be
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Country Clubs: As explained above, Phoenix issued subpoenas to the Country
Clubs to follow up on evidence of Triorient payments to the Country Clubs on behalf of
Winslow and Santucci. The Country Club Subpoenas seek all club statements and
other documents for Winslow, Santucci, and Triorient “showing the course and manner
of each payment received.” As with the other Subpoenas, this request is appropriate,
but only as to payments received by the Country Clubs. The second request asks for
all correspondence between the Country Clubs and Winslow, Santucci, and Triorient.
That request is overbroad as such correspondence could well include matters having
nothing to do with financial transactions or source of funds. Accordingly, the second of
the Country Club requests shall be limited to correspondence concerning payments
made by, for, or on behalf of Winslow, Santucci, and Triorient to the Country Clubs. The
Country Club Subpoenas may be enforced subject to that limitation.
The documents requested of Santucci, Wilson, and Jamie will be discussed next,
in the context of Phoenix’s motion to compel their compliance with the Subpoenas
served on those individuals.
Phoenix’s Motion to Compel
The Subpoenas directed to Santucci, Wilson, and Jamie, which the Court refers to
here collectively as the “Individual Subpoenas,” are directed to each individual in respect
to their relationship to Triorient and the Triorient Related Companies. 6 The Subpoena to
Winslow thus is addressed to him as “Albert Winslow (Owner of Triorient LLC, Triorient
For purposes of the Individual Subpoenas, the Triorient Related Companies include not
only Triorient Coal and DLM, but also Triorient Trading LLC, another company for which
Santucci and Winslow appear to be the sole members or owners. (See Gutowski Aff. Ex.
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Coal LLC, Triorient Trading LLC and Darien Land Management LLC).” The Subpoena to
Santucci bears the same designation. The Subpoena to Jamie is directed to “Ines Jamie
(Financial Director of Triorient LLC).” The three Individual Subpoenas each contain the
same seventeen requests.
The issues raised with respect to the Individual Subpoenas are largely the same
as those raised with respect to the Subpoenas discussed in the previous section – the
extent to which Phoenix may obtain post-judgment discovery from the Triorient Related
Companies, Wilson, and Santucci. The Court already has determined that financial
discovery of Triorient assets flowing to or from the individual Members and the Triorient
Related Companies is proper.
The Individual Non-Parties raise three particular objections with respect to the
Subpoenas directed to them. First, Triorient asserts that the three subpoenas are “keeper
of record subpoenas seeking the production of documents in Triorient’s custody,
possession, and control” and that Triorient cannot broaden the scope of the subpoenas
issued to Santucci and Winslow by directing the subpoenas to them in their capacity as
owners and managing directors of Triorient and also the Triorient Related Companies.
Accordingly, Triorient argues, the subpoenas should be limited solely to documents in
Triorient’s possession, custody, and control, which do not include documents held by or
on behalf of the Triorient Related Companies.
That argument is just another way of saying that discovery should not be permitted
about or from anyone other than Triorient. Triorient does not cite any authority to support
its argument, and the objection does not stand up to scrutiny. The Individual Subpoenas
seek documents in the three individuals’ possession, custody, and control in their
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personal capacity, which, for Santucci and Winslow, includes their being sole members
or owners of Triorient and the Triorient Related Companies. As long as the documents
are in Santucci and Winslow’s possession, custody, or control, they are proper fodder for
production even if the documents concern the Triorient Related Companies or Santucci
The second objection advanced by the Individual Non-Parties is that the Individual
Subpoenas include requests for personal financial information of Santucci and Winslow.
As Triorient explains, its objection is premised on the same grounds on which it moved to
quash the Subpoenas to non-parties such as the Financial Entities and Country Clubs.
Accordingly, the objection is overruled to the same extent it is overruled in connection
with the Subpoenas at issue on the motions to quash.
Lastly, Triorient contends that the motion to compel should be denied because
Phoenix failed to accept Triorient’s offer to meet and confer regarding Triorient’s
objections. Like its contention that Phoenix should conduct its discovery in stages, this
protest is hardly meaningful. Triorient objected to the requests in their entirety, and,
although offering to meet and confer, did not identify any documents that it would produce.
The Federal Rules of Civil Procedure do not permit such blunderbuss objections, and
instead require parties to state whether any responsive materials are being withheld on
the basis of the objection and to produce the rest. Fed. R. Civ. P. 34(b)(2)(C). Moreover,
Triorient suggested that Phoenix withdraw the subpoenas and serve requests only to
Triorient. That, of course, is precisely what the parties dispute – the extent to which
Phoenix should be able to obtain production of documents from, and concerning, entities
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other than Triorient. While parties certainly must engage in good faith meet and confer,
Triorient had already drawn a line in the sand with its communications to Phoenix.
The Court has reviewed the seventeen requests set forth in the Individual
Subpoenas and deems them to be appropriate, 7 subject to the following limitations.
Requests 7 and 8 (documents reflecting transfer of funds to, respectively, Winslow
and Santucci): These requests are limited to transfers from Triorient or the Triorient
Request 14 (records of all meetings of the owners of Triorient and the Triorient
Related Companies): This request is limited to official meeting minutes from January 1,
Request 16 (all records reflecting capital from inception): This request is limited to
documents sufficient to show capital from January 1, 2018 forward.
Accordingly, for the foregoing reasons, and subject to the limitations set forth
above, Triorient’s motions to quash are DENIED, and Phoenix’s cross-motion to compel
is GRANTED. The Clerk of Court is respectfully requested to terminate the motions at
Request 13 requests tax returns of Triorient and the Triorient Related Companies.
Although tax returns often are shielded from discovery, their production is appropriate
here as they may shed light on the extent to which various payments and transfers were
paid out as income, treated as business expenses, or simply used as a means of
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ROBERT W. LEHRBURGER
UNITED STATES MAGISTRATE JUDGE
Dated: February 17, 2021
New York, New York
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