The following papers numbered 1 to 5 were read on this motion:

Although this matter was settled back in 2020, defendants are still accusing plaintiffs of wrongdoing. Defendants' motion seeks an Order (1) directing plaintiff Steven Milohnic ("plaintiff") immediately to pay the taxes on the property located at 10 1st Street, Hopewell Junction, New York 12533 (the "Property"); (2) directing plaintiff immediately to sign the listing agreement for the Property located at 10 1st Street, Hopewell Junction, New York 12533; (3) directing plaintiffs immediately to pay the forensic accountant; (4) directing plaintiffs immediately to provide their personal bank statements to the forensic accountant; (5) directing that 37-54 Perry Street, Jefferson Valley, New York and the Cherry Valley, New York properties (the "Other Properties") be listed for sale within 21 days; (6) holding plaintiffs in contempt, awarding defendants damages, attorneys' fees, and costs associated with plaintiffs' breach of the Court's January 11, 2023, Decision and Order (the "January 2023 Decision"); (7) holding plaintiffs in contempt, awarding defendants damages, attorneys' fees, and costs associated with their breach of the Court's March 29, 2023 directive (the "March 2023 Directive") for plaintiffs to pay the forensic accountant; (8) holding plaintiffs in contempt, awarding defendants damages, attorneys' fees, and costs associated with plaintiffs' breach of the Court's April 21, 2025, Decision and Order (the "April 2025 Decision"); (9) holding plaintiff in contempt, awarding defendants damages, attorneys' fees and costs associated with his breach of the April 2025 Decision for failing to pay the taxes at the Property; and (10) holding plaintiffs in contempt, awarding defendants damages, attorneys' fees, and costs associated with plaintiffs' breach of the So-Ordered Settlement Agreement dated November 19, 2020.

In the January 2023 Decision the Court held that "The parties are directed to comply with each and every provision in the Settlement Agreement, whether it serves their own purposes or not." In the April 2025 Decision, the Court held that "It remains the case that under the Settlement Agreement, MCI Interiors must pay Mr. DeFeo all of his costs, to be reimbursed from his share of that company." The Court also held that with respect to the Property, "plaintiff must continue to pay the taxes for the premises, subject to reallocation when the parties finally buy each other out or sell the premises."

Yet despite the multiple Orders of the Court, it appears that plaintiffs have failed to comply with the Settlement Agreement and this Court's Orders — at least until this motion for contempt was nearly ripe for adjudication. This is unacceptable.

The Court begins by examining the issue of the outstanding taxes for the Property. Defendants submit to the Court evidence showing that the taxes on the Property are outstanding, and have been for 2023 and 2024. In their opposition papers on this motion, plaintiffs allege that they have now paid these taxes, and that the only sums due and owing are for interest and penalties, which plaintiff states in his affidavit that he is "in the process of negotiating" downward. He provides no evidence of this "negotiation." In their reply papers, defendants submit to the Court evidence that this is not the case. They submit to the Court an email from a Dutchess County tax office employee, who states, in relevant part, that "The taxpayer sent payments to our office which were insufficient to pay the balance of taxes due with penalty and interest, rather sent the totals due to the town for each fiscal year. We applied what we were able towards the most current tax, as required by NYS law. We have a remaining balance of $12,918.81 in a holding account, which can be used in conjunction with another payment, but tax bills are required to be paid in full. The total due as of today is $34,412.96, less the balance [*2]of $12,918.81 if paid today is $21,494.15. Interest on delinquent tax bills changes daily."

Defendants also submit to the Court a chain of emails from this same employee in which it was made clear to plaintiff that there are no payment plans; the most recent year's taxes (including interest and penalties) are paid first; and that as of February 2025, both 2024 and 2023 were delinquent. There is no evidence that plaintiff is negotiating with the taxing authorities, nor is there any evidence that that is even an option. The Court thus directs plaintiff to pay all of the outstanding taxes, including interest and penalties, for the Property. This shall be done in full within 30 days of receipt of this Decision and Order. There is no avoiding these payments, but plaintiff should pay as promptly as possible to avoid increasing the interest and penalties.

As for the motion for contempt regarding the taxes, the Second Department recently explained that "A motion to punish a party for civil contempt is addressed to the sound discretion of the court, and the movant bears the burden of proving the contempt by clear and convincing evidence." The Court further explained that "The movant must establish (1) that a lawful order of the court, clearly expressing an unequivocal mandate, was in effect, (2) that the party against whom contempt is sought disobeyed the order, (3) that the party who disobeyed the order had knowledge of its terms, and (4) that the movant was prejudiced by the offending conduct. Once such a showing is made, the burden shifts to the alleged contemnor to refute that showing or to offer evidence of a defense such as an inability to comply with the order." The penalties for civil contempt include "a fine in an amount sufficient to indemnify the aggrieved party for an actual loss, including counsel fees." Tankleff v. Tankleff, 239 AD3d 685, 686—87, 236 N.Y.S.3d 256, 259 (2d Dept. 2025). "Prejudice is shown where the party's actions were calculated to or actually did defeat, impair, impede, or prejudice the rights or remedies of a party." Mendoza-Pautrat v. Razdan, 160 AD3d 963, 964, 74 N.Y.S.3d 626, 628 (2d Dept. 2018).

There is no dispute that in the April 2025 Decision, the Court directed plaintiff to pay all of the taxes on the Property, "subject to reallocation when the parties finally buy each other out or sell the premises." This is a clear directive of the Court, "expressing an unequivocal mandate," and of which plaintiffs were well aware. There is no dispute that plaintiffs disobeyed the order, only making a partial payment in late July 2025, after defendants had filed this motion. Defendants have been prejudiced by this behavior in that (1) they were forced to make this motion in order to have plaintiffs make any payments at all, while interest and penalties are accruing; and (2) the Property is potentially in jeopardy of a tax lien. For the failure to comply with the Court's Order to pay the taxes, the Court finds plaintiffs in civil contempt. "Pursuant to Judiciary Law § 773, the amount of a contempt fine should be sufficient to indemnify the aggrieved party for actual loss or injury caused by reason of the misconduct. Unlike criminal contempt sanctions which are intended to punish, civil contempt fines are intended to compensate victims for their losses. The party seeking a contempt order must prove actual loss, failing which the court may only impose a fine which does not exceed the complainant's costs and expenses, plus an additional $250. Legal fees and disbursements are also recoverable." Barclays Bank v. Hughes, 306 AD2d 406, 407, 761 N.Y.S.2d 278, 279, as amended (Oct. 15, 2003), aff'd as modified sub nom. Barclays Bank, PLC v. Hughes, 761 N.Y.S.2d 493 (2d Dept. 2003).

With respect to plaintiffs' failure to pay the taxes on the Property, movants have not proven any actual loss. The Court thus awards defendants $250, plus their legal fees and disbursements incurred on this issue, as determined by the Court below.

With respect to the failure to pay Mr. DeFeo, the Settlement Agreement made it clear that it was the responsibility of MCI Interiors to do so. This was reiterated multiple times over the years, with the Court plainly ordering in the January 2023 Decision that "MCI Interiors must pay Mr. DeFeo all of his costs, to be reimbursed from his share of that company." The Court again repeated this directive in the April 2025 Decision. Yet MCI Interiors only made sporadic payments to Mr. DeFeo, usually only once defendants had filed a motion. It appears that as of now, plaintiffs have paid Mr. DeFeo's outstanding bill, again only after this motion was filed. This has prejudiced defendants greatly by delaying the resolution of this matter for years. If plaintiffs had paid Mr. DeFeo timely (and provided the requisite documents when he asked for them without requiring the Court's intervention), Mr. DeFeo could have issued his report years ago, and this matter could have been concluded. Instead, five years have passed, tens of thousands of dollars in counsel fees have been incurred, and the real estate market has changed time and again. ("Mr. DeFeo has been unable to complete the forensic accounting that is necessary to the parties' financial disentanglement," which has "delayed resolution, increased costs, and materially prejudiced Defendants' rights under the Settlement Agreement."). The Court thus finds that defendants have made the prima facie showing, by clear and convincing evidence, that plaintiffs are in contempt of the directive to pay Mr. DeFeo. Plaintiffs did not rebut this showing.

Defendants do not quantify the prejudice, however. Before the Court addresses the damages for this contempt, the Court must first address the third request for relief that pertains to Mr. DeFeo. The third request addresses plaintiffs' failure to turn over to Mr. DeFeo their personal bank statements. With respect to that request for relief, plaintiff states that "the Court should deny request [sic] that Plaintiffs be compelled to provide documents to Mr. DeFeo is not ripe [sic] and should, respectfully, be denied. Mr. DeFeo has not made any formal request for specific documentation. Instead, Mr. DeFeo to date merely suggested potential categories of documents he may or may not require for his report, depending on the parties' willingness to fund his further analysis and how in depth the parties want him to proceed with his report." This is not how the Court reads Mr. DeFeo's email of July 28, 2025. In it he estimates the remaining billing for him to clean up his findings, prepare additional schedules and write the report. But then he writes that there is "unknown additional time" (billing) because he does not know whether he will be getting "Stephen personal bank records" [sic] or the back up for property payments and other categories of documents. This is not a tentative suggestion, but a commentary that Mr. DeFeo does not know how long it will take for him to get these additional documents based on his previous difficulties in obtaining documents. The Court directs the parties to turn over to Mr. DeFeo the categories of documents listed in the July 28th email, within ten days of receipt of this Decision and Order.

With respect to the damages for the requests pertaining to Mr. DeFeo, the Court awards defendants $250 for each issue, plus their legal fees and disbursements incurred on this issue, as set forth below.

The Court next addresses the issues of listing the Property and the Other Properties for sale. Although defendants feel very frustrated by how long it has taken to address these properties, a review of the Settlement Agreement shows that it plainly provides for a method for disposing of these properties. Forcing plaintiffs to sign a listing agreement is not one of the options. The parties are directed to review the Settlement Agreement. The Court thus denies the requests for relief concerning listing either the Property or the Other Properties.

As for the requests to hold plaintiffs in contempt for their failures to comply with the Settlement Agreement and the Court's various Decisions and Orders, the Court finds that it has already addressed the specific instances of contempt above. The Court declines to double-count the contempt findings.

Accordingly, the Court finds that plaintiffs must pay defendants reasonable counsel fees, calculated as follows. The Court finds that the costs of the successful parts of this motion, plus the efforts that counsel made to try to have plaintiff pay the taxes on the Property after the April 2025 Decision should amount to 20 hours of legal work. The Court considers the reasonable value of this legal work to be $400 per hour. Accordingly, the Court grants defendants $8,000 in legal fees, plus $250 per issue, for a total of $8,750. Plaintiff shall make this payment to defendants within 20 business days of receipt of this Decision and Order.

All other requests for relief are denied.

The foregoing constitutes the decision and order of the Court.^[FN1]