Defendants John W. Young and Stuart Realty Enterprises ^[FN1] move by order to show cause to hold plaintiff JoAnn Soghanalian and co-defendant Zaven Soghanalian in civil and criminal contempt for failing to comply with an order to show cause with temporary restraining order of this court dated June 22, 2012.

The details of the underlying action are not pertinent to the resolution of this contempt application and will not be reviewed here. The underlying facts are, however, fully set forth in this court's recent Decision & Order dated December 18, 2013 resolving various summary judgment motions. Suffice it to say for our purposes here that one of the subjects of the underlying litigation is ownership of a silver 1957 Mercedes 300SL Gull Wing motor vehicle (hereinafter sometimes "The Mercedes"), the value of which has been estimated in these proceedings to be in the range from $500,000 to $800,000.

On June 22, 2012 this court signed an order to show cause with a temporary restraining order submitted by the Young Defendants and which was made returnable on June 29, 2012 (hereinafter sometimes "The Order"). The Order contained a temporary restraining order issued [*2]against plaintiff JoAnn Soghanalian and co-defendant Zaven Soghanalian that directed as follows:

ORDERED that pending a hearing and determination of this Motion, and the entry of an Order thereon, plaintiff JoAnn Soghanalian f/k/a JoAnn Coletti and Co-Defendant Zaven Soghanalian, their agents, servants, attorneys and employees are hereby enjoined and restrained from selling, removing, transferring, encumbering, pledging, damaging, hiding, concealing, assigning or otherwise disposing of the silver 1957 Mercedes 300SL Gull Wing motor vehicle or any parts to or for said vehicle presently located in the garage at 96 Ararat Drive, Vestal, New York in the County of Broome....

The Order further directed that the manner of service would be made upon plaintiff's attorney by overnight delivery and upon plaintiff JoAnn Soghanalian and co-defendant Zaven Soghanalian by first class mail on or before June 25, 2012. Furthermore, although not required by The Order, the Young Defendants also arranged for personal delivery of The Order on plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian on June 27, 2012 (Defendants' Exhibit R). The Young Defendants submitted affidavits demonstrating compliance with the service requirements and, in her later testimony, plaintiff admitted receiving The Order by mail on June 25, 2012 and in person on June 27, 2012 for both herself and Zaven Soghanalian. Consequently, the proof conclusively establishes that both plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian received The Order containing the temporary restraining order by in-hand delivery on June 27, 2012, as well as by regular mail.

The Order was returnable on one of this court's regular motion terms on June 29, 2012. Plaintiff JoAnn Soghanalian was present in court with her attorney, David Parks, Esq. Defendant John Young was present in court with his attorney, Philip Artz, Esq. Co-defendant Zaven Soghanalian was not present in court,^[FN2] although plaintiff's counsel indicated that he was seeking separate counsel. The attorneys and parties sat in court for over one-half hour while other cases were called prior to this matter being called.

When called, plaintiff's attorney represented that The Mercedes was located in the garage at the home owned by plaintiff and co-defendant Zaven Soghanalian at 96 Ararat Drive in Vestal, New York and was and would be perfectly safe. The Young Defendants asked the court to direct that The Mercedes be placed in a secure facility. The court directed that The Mercedes could be [*3]left in the garage at 96 Ararat Drive and that counsel and their experts would be allowed to go to the residence to examine the vehicle after that morning's court appearance. There was further discussion between the court and counsel at that time to ensure that any locks on the garage would not prohibit the attorneys and/or the parties from entering the garage to view The Mercedes.

The attorneys and parties exited the courtroom but returned within 5 minutes. The court was then informed (although plaintiff had not said anything sooner) that the garage was indeed locked with a padlock and that lock cutters might be needed in order gain access. The court instructed the parties to attempt to gain access through a side garage door. Additionally, the court indicated that the attorneys and parties should return to court immediately if there was not sufficient light to identify the serial number, VIN number and certain other identifying characteristics of The Mercedes.^[FN3]

The attorneys and the parties left the courtroom for a second time. Apparently while in the courtroom hallway, plaintiff JoAnn Soghanalian, through her attorney, advised the attorney for the Young Defendants that The Mercedes was not, in fact, located in the main attached garage at the Ararat Drive residence. The attorneys and parties came back into court to advise of this "new" information.

Plaintiff was placed on the stand and testified to the above-stated facts and confirmed the above-stated scenario, particularly that The Mercedes was not located in the main attached garage at her Ararat Drive residence.

Thereafter, based upon the events on the return date, the Young Defendants submitted the instant motion by way of Order to Show Cause signed July 9, 2012 seeking to hold plaintiff JoAnn Soghanalian and co-defendant Zaven Soghanalian in civil and criminal contempt for removing The Mercedes from the Ararat Drive garage in violation of The Order. The order to show cause seeking contempt was returnable on July 27, 2012 and on that return date the court scheduled the contempt hearing to start on August 16, 2012.

The Young Defendants presented testimony of several Soghanalian neighbors including Heather Fiske, Janis Painchaud, and Normand Painchaud. These three neighbors testified that on the afternoon of Thursday, June 28, 2012, they saw an empty flatbed tow truck arrive at the Soghanalian residence on 96 Ararat Drive and then a short time later saw that same tow truck leave with a small, sports style type car on the flatbed covered with a tarp. All three witnesses stated they were not able to identify the vehicle under the tarp other than to describe it as a small vehicle, although the Painchauds both stated they saw portion of tires below the tarp. Additionally, Ms. Fiske and Ms. Painchaud both observed plaintiff Joann Soghanalian driving her own vehicle behind the tow truck with the car on the flatbed as it left the premises. More specifically, Janis Painchaud testified "[a]s the rollback was leaving, going out, a few minutes later I did see Mrs. Soghanalian following what appeared to be following the rollback, leaving going out from her house" (Transcript, p 212; Fiske testimony at T., p 179).^[FN5]

Both plaintiff JoAnn Soghanalian and co-defendant Zaven Soghanalian testified as to their version of events, namely that there was a vehicle located in their garage on Ararat Drive that was removed on June 28, 2012 using a flatbed truck, but that said vehicle was not The Mercedes that was the subject of The Order, because The Mercedes had been removed from their home nearly two weeks earlier on June 16, 2012. The court will not attempt to provide a complete summary of the testimony of either plaintiff Joann Soghanalian or defendant Zaven Soghanalian as it is nearly impossible to create a coherent time line out of the testimony presented, but will attempt to summarize their testimony as best as possible.

With respect to plaintiff JoAnn Soghanalian, she testified that the vehicle that her neighbors saw on the flatbed tow truck was a different Mercedes belonging to a family friend, General Al-Shahwani (T., 82). General Al-Shahwani is identified by the Soghanalians as a close family friend and a former Iraqi general. Plaintiff testified that General Al-Shahwani had visited their home on June 15, 2012 - although she had left town for the night - and when General Al-Shahwani left on June 16, 2012 "[h]e took the Mercedes Gullwing with him and he left behind in our garage his personal vehicle" (T., p 75). Plaintiff further testified that General Al-Shahwani's personal vehicle was also some kind of Mercedes (T., 76). Plaintiff stated that her husband never told her that General Al-Shahwani took The Mercedes until after the court appearance on June 29, 2012 (T., 77). Plaintiff further testified that her husband had given The Mercedes to General [*5]Al-Shahwani in return for a Picasso painting (T., pp 94-95).^[FN6] Plaintiff also testified that her husband owned two Gullwing vehicles (T., pp 92, 96).

Plaintiff also addressed her failure to advise the court on June 29, 2012 that The Mercedes was not in the main garage attached to her house. Plaintiff admitted that prior to coming to court on the morning of June 29, 2012 she looked under the tarp in the main attached garage and realized The Mercedes was not there. Plaintiff's explanation for not informing the court was as follows: "[b]ecause I didn't know if it [The Mercedes] was in the [other] detached garage or not yet. I was going to find that out. I was hoping that was the location and we would go up there and see it in that garage" (T., p 111).

With respect to defendant Zaven Soghanalian, he testified that General Al-Shahwani arranged for the removal of The Mercedes from his garage on June 16, 2012 prior to the execution of or his receipt of The Order. Defendant further testified that the vehicle removed from his home on June 28, 2012 was not The Mercedes, but was a different vehicle belonging to General Al-Shahwani. Defendant Soghanalian further testified that he had transferred The Mercedes to General Al-Shahwani in return for a Picasso painting (T., p 383), but had continued to store The Mercedes for his friend. To bolster this contention that General Al-Shahwani was the real owner of The Mercedes, defendant Zaven Soghanalian produced a document signed by one John Kupelian and certified on October 19, 2012 wherein a Texas corporation called "Intra Investments Corp." claims to have obtained The Mercedes from General Al-Shahwani on June 23, 2012 (Court Exhibit 1). The court notes that defendant Soghanalian testified he did not know Mr. Kupelian (T., p 423) - a representation which turned out to be false, as discussed below.

With considerable time and effort, the video deposition of John Kupelian was finally arranged to be held on August 7, 2013 and is considered a part of this record. Mr. Kupelian acknowledged that he is, in fact, a cousin of defendant Zaven Soghanalian and often speaks to him on the telephone. Thus, defendant's Zaven Soghanalian representation in his earlier testimony on October 22, 2012 that he did not know of John Kupelian was a lie.

Mr. Kupelian testified in his video deposition that he is in possession of The Mercedes in Houston, Texas. Mr. Kupelian testified that The Mercedes "belongs" to General Al-Shahwani even though the title is in the name of Zaven Soghanalian. Mr. Kupelian believed that General Al-Shahwani had removed The Mercedes from the Soghanalian residence on or about June 13, 2012 and Mr. Kupelian claims to have retrieved The Mercedes from General Al-Shahwani's home in Virginia on or about June 23, 2012. Pointedly, Mr. Kupelian refuses to produce The Mercedes for inspection to anybody involved in this litigation and claims that The Mercedes

is safe in Texas and has not been sold. More specifically, when asked about the exact location of The Mercedes, Mr. Kupelian refused to reveal the location, stating "It's a valuable car, and I don't [*6]want anybody to know where the car is. It is for sale. Give me the money, we'll show it to you" (Transcript of Kupelian Video Deposition, pp 31-32; emphasis added). In sum, Mr. Kupelian's testimony was anything but straightforward with the clear purpose of attempting to confuse the facts making it more difficult for the court and the parties to trace and locate The Mercedes. The court congratulates Mr. Kupelian on a job well-done.

A separate but equally important part of the testimony presented involved the proof that defendant Zaven Soghanalian pledged The Mercedes as collateral for a loan for his friend, Richard Prentice, now deceased, from Visions Federal Credit Union. The Young Defendants presented the testimony of Gerald Walker, an employee of Visions Federal Credit Union and two sets of loan documents (Defendants' Ex DD). Of interest here is the second loan containing a Promissory Note dated June 28, 2012 for $25,000 from Visions to Mr. Prentice and a "Commercial Security Agreement" also dated and signed on June 28, 2012 by Mr. Prentice as borrower, Visions as lender, and defendant Zaven Soghanalian as grantor. As grantor, defendant Zaven Soghanalian pledged The Mercedes as security for said loan representing his ownership interest in The Mercedes on said date. Furthermore, by said Agreement, defendant Zaven Soghanalian represented, among other things, that "Grantor agrees to keep the Collateral at Grantor's address shown above [the Ararat Drive property] or at such other locations as are acceptable to Lender" ((Defendants' Ex DD, Commercial Security Agreement, p 2).

At the conclusion of the contempt hearing on June 5, 2013, a date for the continuation of testimony was scheduled for August 8, 2013. Shortly before the adjourned date, the attorneys notified the court that they had been able to secure the video testimony of witness John Kupelian and, as such, testimony on August 8, 2013 was no longer necessary.

Thereafter, on November 19, 2013, the Young Defendants made a motion to reopen the proof, the details of which are not pertinent here. That motion was heard on December 13, 2013 and the court issued a decision from the bench reopening the proof to a limited extent. An Order memorializing said decision was signed by the court on December 19, 2013.

Finally, the parties informed the court that no more testimony was necessary on the contempt hearing but did ask for permission to submit post-hearing memorandums. The court granted that request and with the last such post-hearing memoranda was received by the court on January 17, 2014.

The Young Defendants seek to hold plaintiff JoAnn Soghanalian and co-defendant Zaven Soghanalian in both civil and criminal contempt for failing to comply with The Order. Civil contempt is governed by Judiciary Law § 753 and states, in pertinent part, "[a] court of record has power to punish, by fine and imprisonment, or either, a neglect or violation of duty, or other misconduct by which a right or remedy of a party to a civil action or special proceeding, pending in the court may be defeated, impaired, impeded, or prejudiced..." (Judiciary Law § 753 [A]). Criminal contempt is governed by Judiciary Law § 750 and, as relevant here, states in part, "[a] [*7]court of record has power to punish for a criminal contempt, a person guilty of any of the following acts, and no others....(3) Wilful disobedience to its lawful mandate" (Judiciary Law § 750 [A][3]).

The elements of both civil and criminal contempt overlap to a large extent. It is well-settled that in order to sustain a finding of either civil or criminal contempt based on an alleged violation of a court order it is necessary to establish that a lawful order of the court clearly expressing an unequivocal mandate was in effect; that the order has been disobeyed; and that the party charged had knowledge of the court's order (Matter of Department of Envtl. Protection of City of NY v Department of Envtl. Conservation of State of NY, 70 NY2d 233, 240 [1987] Town of Copake v 13 Lackawanna Props., LLC, 73 AD3d 1308, 1309 [3d Dept 2010]). With respect to civil contempt, the rights of a party to the litigation must have been prejudiced, whereas in criminal contempt, no such showing is required since the right of private parties is not controlling because the harm is an affront to the court (Matter of McCormick v Axelrod, 59 NY2d 574, 583 [1983], amended 60 NY2d 652 [1983]).

The same act may constitute both criminal and civil contempt and "the element which escalates a contempt to criminal status is the level of willfulness associated with the conduct" (McCain v Dinkins, 84 NY2d 216, 226 [1994] Judiciary Law § 750 [A] [3]).Moreover, criminal contempt must be proven beyond a reasonable doubt whereas civil contempt, in contrast, must be proven by clear and convincing evidence (McCain, 84 NY2d at 226; Judiciary Law § 753 [A] [3] Matter of People v Hooks, 64 AD3d 1075 [3d Dept 2009], lv dismissed 13 NY3d 815 [2009]).

Based on the facts as outlined above, the court does not find the conduct of either plaintiff JoAnn Soghanalian or defendant Zaven Soghanalian rises to the level of criminal contempt, although the conduct of Zaven Soghanalian comes dangerously close to such a determination. Accordingly the remaining discussion is limited to the elements of civil contempt.

With respect to civil contempt, the court issued a temporary restraining order as part of The Order which was a clear and unequivocal directive that The Mercedes not be removed or transferred from the garage at 96 Arafat Drive or pledged in any manner. The Order was served upon the plaintiff JoAnn Soghanalian and the defendant Zaven Soghanalian by mail on June 25, 2012 and by in-hand delivery on June 27, 2012 and thus the parties are charged with actual knowledge of The Order as of those dates.

Furthermore, the court finds that the proof establishes that at the time both plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian were served with the Order that The Mercedes was located in the garage at 96 Ararat Drive. The court finds that the most compelling proof supporting this conclusion is defendant Zaven Soghanalian's own representation to Visions Federal Credit Union that The Mercedes was located in his garage when he signed the Commercial Security Agreement on June 28, 2012 in connection with the Prentice loan. In this court's view, either The Mercedes was in the Soghanalian garage on June 28, 2012 or defendant [*8]Zaven Soghanalian was defrauding the bank on the date of the execution of said Agreement.^[FN7]

The court further finds that plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian deliberately and willfully participated in removal of The Mercedes on June 28, 2012 by allowing someone on General Al-Shahwani's behalf to remove The Mercedes from their premises and delivering it to him in Virginia who then spirited the vehicle to Texas to defendant Soghanalian's cousin John Kupelian. The court does not accept as credible the testimony of plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian that General Al-Shahwani removed The Mercedes earlier on June 16, 2012 as there is no credible witness or proof with respect thereto. While it would have been very simple for General Al-Shahwani to appear either in person or by video deposition on behalf of his good friend, Zaven Soghanalian, and testify as to what vehicle was removed from 96 Ararat Drive on June 28, 2012 or to arrange for identification of the mystery tow truck driver — no such testimony or evidence was ever presented. General Al-Shahwani, outside of the jurisdiction of this court, would not voluntarily appear to offer testimony or make himself available at his home in Virginia for deposition.

Additionally, with respect to plaintiff JoAnn Soghanalian, it is clear that she purposely misled the court on June 29, 2012 when she failed to inform the court or her attorneys on the return date that The Mercedes was not in the main garage located at Ararat Drive. She clearly was aware that the vehicle had been removed in violation of The Order. It was incumbent upon her to have notified her attorney who, as an officer of the court, was required to notify the court of the precise facts of the situation. This was not done and consequently, the court has no alternative but to find, based on these facts, that JoAnn Soghanalian too was a willful party to the cover-up, concealment and removal of this vehicle in civil contempt of The Order.

With respect to defendant Zaven Soghanalian, the court listened to Mr. Soghanalian as he attempted to weave a tapestry of deceit for the court. The court observed Mr. Soghanalian on the witness stand and found every hesitation on the witnesses' part before answering a question to be a moment of deliberate calibration as to the "best" answer to be provided. Between references to General Al-Shahwani's mystery vehicle and defendant Soghanalian's denial of knowing John Kupelian followed by the revelation that he was in fact his cousin, the court finds that defendant Zaven Soghanalian has engaged in a massive shell game, spiced with international intrigue, attempting to divert the court's attention from the reality of this situation, namely, his willful removal of The Mercedes in direct contravention of The Order of this court.

The court further finds that the actions of plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian have impeded, impaired and prejudiced the rights of the Young Defendants since ownership and control of The Mercedes is an important issue in this action. In view of the foregoing, the court finds both plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian to [*9]be in civil contempt of The Order.

The court also finds a separate and distinct basis for a finding of civil contempt against defendant Zaven Soghanalian, namely his pledging of The Mercedes as collateral on June 28, 2012 in relation to the bank loan obtained by Richard Prentice. By pledging The Mercedes as collateral for the bank loan defendant Soghanalian was in clear violation of The Order.

It bears stating at this juncture that the court is not passing on the merits of the underlying action, counterclaim and cross-claim. Rather, the court is simply addressing the motion to punish for contempt, and that the position and testimony of plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian are not only devoid of merit but totally lacking in credibility. Suffice it to say, from the record developed over multiple days of testimony and evidence, that the Young Defendants have satisfied this court by clear and convincing evidence, that plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian are both in civil contempt of The Order.

It is this court's observation that the disputes between these parties - the Soghanalians amongst themselves and as against John Young - are so all-consuming that the Soghanalians are more interested in one-upping one another and defendant Young and vice versa than with any final resolution of the underlying dispute in accordance with the rule of law. This is true even to the extent of playing fast and loose of the orders of this court and in going so far as to give false testimony under oath.

THE PENALTY

Judiciary Law § 773 states that in a case such as this where it is not shown that an actual loss or injury has been caused, "a fine may be imposed, not exceeding the amount of the complainant's costs and expenses, and two hundred and fifty dollars in addition thereto". Costs and expenses have been defined to include reasonable counsel fees and such other costs and expenses that are directly related to the contemptuous conduct (Hamilton v Murphy, 79 AD3d 1210 [3d Dept 2010]).

Based upon the foregoing, the court awards to the Young Defendants as against plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian, their costs and expenses including reasonable attorney's fees that are directly related to the contemptuous conduct from the return date on the contempt motion of July 27, 2012 until the date of this Decision and Order, plus a statutory fine of $250. With respect to all costs and expenses, including reasonable attorney's fees, the court finds that plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian are jointly and severally liable for said award and that said award must be paid over to the attorney for the Young Defendants at a time and place to be determined by the court upon final resolution of the amount due. That being said, the court will direct that the sum of $10,000 shall be paid by plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian to the attorneys for the Young Defendants within 60 days of the date of service of this Decision & Order, with notice of entry, as a partial payment toward the final amount due with a proper credit being given towards said sum. [*10]

The court further finds that a hearing is required on the reasonableness of the total amount attorney's fees incurred on behalf of the Young Defendants. The Young Defendants have previously submitted certain time records claiming attorney's fees of $57,827.25 and out-of-pocket expenses of $7,135.60 through July 31, 2013. There were additional proceedings after that date and thus the record regarding counsel fees incurred by the Young Defendants directly related to the contemptuous conduct is not complete. The court will schedule an attorney conference to discuss further submissions and/or proof and the scheduling of a hearing, if necessary, on the issue of reasonableness of said fee.

In addition to costs, expenses, and a fine, Judiciary Law § 753 also grants the court the power to punish civil contempt by imprisonment. On this point the court finds a distinction between plaintiff JoAnn Soghanalian and defendant Zaven Soghanalian. Although the court found plaintiff to have been in civil contempt, the court finds that she was not the mastermind behind this contempt. Plaintiff testified that when she inquired of General Al-Shahwani regarding the removal and/or return of The Mercedes he would respond "This is between me and Zaven and we will get it this sorted out" (T., pp 136-137; 162). Plaintiff further testified that between her husband's illness and lack of candor with her, she rarely was able to get a straightforward answer from him. The court found this portion of plaintiff's testimony to be credible and for this reason will not sentence plaintiff JoAnn Soghanalian to any imprisonment in connection with her civil contempt.

The court does find, however, that imprisonment is an appropriate punishment for

defendant Zaven Soghanalian. The court finds that there was a willful nature by defendant Zaven Soghanalian in his violation of The Order and a deliberate attempt on his part to mislead the parties which warrants the imposition of a sentence of thirty (30) days in the Broome County Jail.

Prior to the start of any jail time, however, the court will give defendant Zaven Soghanalian the opportunity to purge himself of this portion of the penalty for his civil contempt and attendant jail time by returning The Mercedes to the jurisdiction of this court within thirty days after personal service of this Decision & Order, with notice of entry.^[FN8] In the event that defendant Zaven Soghanalian fails to purge himself of his contempt within said time period, the attorneys for the Young Defendants are directed to make a letter application to the court with a supporting affidavit, upon notice to all counsel, regarding said non-compliance. Upon receipt of said affidavit, the court, without further notice, will issue a warrant for arrest for defendant Zaven Soghanalian.

Upon commencement of the term of imprisonment, if any, defendant Zaven Soghanalian will be immediately released upon the return of The Mercedes to the jurisdiction of this court.

The return of The Mercedes at any time to the jurisdiction of this court must be pre-arranged with the court and counsel, on 72-hours notice, to allow time for the arrangements for the proper [*11]storage thereof.

This constitutes the decision, order and judgment of the court.

Dated:April 1, 2014

Binghamton, New York

s/ Ferris D. Lebous

Hon. Ferris D. Lebous

Justice, Supreme Court