Saadeh v. Kagan

Background

After a judgment was entered against Joshua Kagan on December 27, 2023, Rafic Saadeh served Joshua Kagan with an information subpoena. Joshua Kagan challenged questions about his wife, Marni Kagan’s, finances and their children. Judge Paul A. Engelmayer allowed questions about Marni Kagan’s finances, explaining that trial evidence showed Joshua and Marni Kagan’s finances were closely connected.

Saadeh later served Marni Kagan, a non-party, with an information subpoena and restraining notice. The subpoena questionnaire contained 131 questions covering her residential history, finances, insurance, real estate, furniture, will, transfers, living expenses, and taxes. Marni Kagan objected to the subpoena and restraining notice and later stated that she no longer shared bank accounts or a business account with Joshua Kagan and was being removed as a shareholder of JMK Consultants.

Saadeh moved to compel Marni Kagan to answer the subpoena and comply with the restraining notice.

Information subpoena

Federal Rule of Civil Procedure 69 allows a judgment creditor to obtain discovery from any person, including a non-party, to help enforce a judgment. The court explained that this discovery may be broad enough to investigate hidden or concealed assets, but a non-party subpoena must remain limited to determining whether the judgment debtor transferred or concealed assets through that person.

The court held that Saadeh’s 131-question questionnaire was overbroad. Saadeh and Marni Kagan both acknowledged that the proper scope of the subpoena concerned possible transfers or concealment involving Joshua Kagan. The court stated that Questions 130 and 131 would be permissible examples of questions within that scope.

The court therefore allowed Saadeh to serve Marni Kagan with a revised information subpoena limited to determining whether Joshua Kagan had transferred assets to her or concealed assets through her.

Restraining notice

A restraining notice under New York law can restrict transfers of property in which a judgment debtor has a direct interest. It may be served on a non-party, but it is effective only when the non-party possesses property belonging to the judgment debtor or owes a debt to the judgment debtor.

The court found that Saadeh had not shown that Marni Kagan possessed concealed or fraudulently transferred assets from Joshua Kagan. Because Saadeh had not identified with sufficient specificity an asset in Marni Kagan’s possession in which Joshua Kagan had a direct interest, the court vacated the restraining notice.

Disposition

Judge Sarah Netburn denied Saadeh’s motion to compel Marni Kagan’s response to and compliance with the information subpoena and restraining notice. The court permitted Saadeh to serve a revised information subpoena and questionnaire, and the Clerk was directed to terminate the motion.