In Re: Mosdos Chofetz Chaim Inc.

District Court, S.D. New York·Decided September 22, 2022·No. 7:22-cv-03807·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK RABBI MAYER ZAKS, et al., MEMORANDUM OPINION Appellants, AND ORDER

-against- 22-CV-03807 (PMH) CONGREGATION RADIN DEVELOPMENT, INC., et al., Respondents. PHILIP M. HALPERN, United States District Judge: The instant appeal, like the many that preceded it,1 is yet another “part of a long-running quarrel between two rabbis—brothers, no less—regarding the transfer of real property located at 1-[5]0 Kiryas Radin Drive, Spring Valley, New York 10977.”2 Zaks v. Mosdos Chofetz Chaim Inc., No. 21-CV-02872, 2021 WL 5854030, at *1 (S.D.N.Y. Dec. 7, 2021). This appeal concerns the April 14, 2022 Order and Judgment (the “Order”) entered by Judge Drain of the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) in the underlying adversary proceeding captioned Congregants of Mosdos Chofetz Chaim Inc. v. Mosdos

1 See, e.g., In re Mosdos Chofetz Chaim, Inc., No. 22-CV-06201 (S.D.N.Y. 2022); In re Mosdos Chofetz Chaim, Inc., No. 22-CV-06191 (S.D.N.Y. 2022); In re Mosdos Chofetz Chaim, Inc., No. 22-CV-02450 (S.D.N.Y. 2022); In re Mosdos Chofetz Chaim, Inc., No. 21-CV-10441 (S.D.N.Y. 2021); In re Mosdos Chofetz Chaim Inc., No. 21-CV-09256 (S.D.N.Y. 2021); In re Mosdos Chofetz Chaim Inc., No. 21-CV- 09186 (S.D.N.Y. 2021); In re Mosdos Chofetz Chaim Inc., No. 21-CV-08691 (S.D.N.Y. 2021); In re Mosdos Chofetz Chaim, Inc., No. 21-CV-05679 (S.D.N.Y. 2021); In re Mosdos Chofetz Chaim, Inc., No. 21-CV-05654 (S.D.N.Y. 2021); In re Mosdos Chofetz Chaim, Inc., No. 21-CV-02872 (S.D.N.Y. 2021).

2 The Court will refer to the real property at 1-50 Kiryas Radin Drive, Spring Valley, New York 10977 as the “Property.” Chofetz Chaim, Inc., et al., No. 21-07023 (Bankr. S.D.N.Y. 2021). (Br. Doc. 198, “Order”).3 The Order partially granted a motion filed by certain defendants in the adversary proceeding—Rabbi Aryeh Zaks (“Rabbi Aryeh”), Chofetz Chaim Inc. (“CCI”), and Congregation Radin Development Inc. (“CRDI,” and together, “Respondents”)—for the imposition of contempt

sanctions against Rabbi Mayer Zaks (“Rabbi Mayer”), Sima Weintraub Zaks (“Sima”), Shimon Zaks (“Shimon”), Nochum Z. Brody (“Brody”), Yisroel Hochman, and Faige Hochman (“Appellants”).4 (Id. at 9). Appellants took an appeal from the Order on May 10, 2022. (Doc. 1). Appellants sought emergency relief in connection with their appeal, but Judge Seibel, before whom this case proceeded prior to its reassignment to this Court as related to In re Mosdos Chofetz Chaim, Inc., No. 21-CV-04633 (S.D.N.Y. 2021), declined to grant such relief and directed Appellants to instead seek a stay pending appeal from the Bankruptcy Court. (Doc. 16).5 Appellants, in compliance with an expedited briefing schedule set by this Court, filed their opening brief on June 17, 2022 (Doc. 20, “App. Br.”), Respondents filed their opposition on July

3 Citations to “Br. Doc.” refer to docket entries in the underlying adversary proceeding whereas citations to “Doc.” refer to docket entries in this matter. “The Court may take judicial notice of the bankruptcy docket, and documents on the docket not included in Appellant's designation of the record on appeal, including hearing transcripts.” Morillo v. Wells Fargo Bank, N.A., No. 19-CV-08183, 2020 WL 2539068, at *1 n.2 (S.D.N.Y. May 19, 2020) (citing Fed. R. Evid. 201).

4 The Notice of Appeal at Doc. 1 lists these six individuals as the Appellants. However, in the preliminary statement of Appellants’ brief, they identify a list of “[n]onparty appellants,” which includes Aron Zaks, Henoch Zaks, Yosef Tzvi Zaks, and Leah Brody but omits Shimon. (App. Br. at 1). Nevertheless, the Court will consider the six people who the Bankruptcy Court issued contempt sanctions against in the Order, which are the same six as those listed in the Notice of Appeal, as the “Appellants.”

5 The Bankruptcy Court granted, on June 3, 2022, a conditional stay of the Order pending appeal through August 1, 2022. (Br. Doc. 246). The underlying bankruptcy proceeding was reassigned to Judge Sean H. Lane on July 1, 2022, who scheduled a hearing on Appellants’ pending motion to extend the conditional stay for September 9, 2022. (Br. Doc. 277). The Bankruptcy Court has not yet taken any action on the Order. 11, 2022 (Doc. 21, “Opp. Br.”), and Appellants replied on July 18, 2022 (Doc. 22, “Reply”). For the reasons set forth below, the Order is AFFIRMED. BACKGROUND

As this Court has previously noted, “Appellant’s buckshot approach to appeals from Bankruptcy Court orders has produced a murky procedural history.” Congregants of Mosdos Chofetz Chaim Inc. v. Mosdos Chofetz Chaim Inc., No. 21-CV-05654, 2021 WL 5359663, at *1 n.2 (S.D.N.Y. Nov. 17, 2021). No doubt the parties are intimately familiar with the underlying facts and extensive procedural history of their dispute and, as such, the Court provides only a brief recitation of the background necessary to decide this appeal. The Bankruptcy Court: (i) on May 25, 2021, issued a modified Order enjoining Appellants and others in concert with them from entering onto or remaining on the Property (Br. Doc. 24, the “Injunction”); (ii) on June 14, 2021, clarified that the Injunction does not bar any person with a valid lease or property right to the Property from occupying their lease or exercising their rights (Br. Doc. 49); (iii) on June 15, 2021, held certain Appellants in contempt for violating the

Injunction and awarded monetary sanctions against them for future violations (Br. Doc. 54, “Contempt Order”); and (iv) on September 8, 2021, found that Appellants continued to violate the Injunction, declined to impose monetary sanctions because of Appellants’ belief that they were entitled to enter the Property under purported First Amendment rights. The September 8, 2021 Order further clarified that Appellants “have no right under the United States Constitution, the New York State Constitution, or any applicable law, to enter onto the CRDI Property or into the CCI Building, or to remain thereupon” and that the Injunction remained fully extant and enforceable (Br. Doc. 122, “Enforcement Order” at 7-8). This Court denied Appellants’ applications for a stay of the Enforcement Order and “emergency conference” thereto on September 13, 2021. (In re Mosdos Chofetz Chaim, Inc., No. 21-CV-05654 (S.D.N.Y. 2021) (Doc. 20)). Respondents moved for a second time to enforce the Bankruptcy Court’s prior Orders on November 19, 2021, alleging that Appellants continued to enter onto and remain on the Property

since the Bankruptcy Court issued the Enforcement Order. Respondents sought monetary judgments against Appellants as well as a writ of attachment directing the United States Marshal’s Service to remove Appellants from the Property. (Br. Doc. 134). The Bankruptcy Court held an evidentiary hearing on Respondents’ second enforcement motion on December 2, 2021, finding “clear and convincing proof” that Appellants continued to violate the Injunction, but holding that Appellants had the right to establish the “impossibility defense to contempt.” (Br. Doc. 162 at 204:25; 207:17-18). The Bankruptcy Court then held a continued hearing on Respondents’ second enforcement motion on March 4, 2022, which had to be adjourned based on “unruly, disorderly, argumentative, and improper conduct” at the hearing by Rabbi Mayer.6 (Order at 6). The Bankruptcy Court continued the hearing on April 4 and 5, 2022 and, at the conclusion, recited its

findings of fact and conclusions of law on the record. (Doc. 220 at 53:13-100:04).

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