Court Orders Referee To Determine Whether Party Has Sufficient Cash To Comply With Order Requiring Deposit Into Escrow Or Should Be Held In Contempt

Posted: September 5, 2025 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Category Contempt

Court Orders Referee To Determine Whether Party Has Sufficient Cash To Comply With Order Requiring Deposit Into Escrow Or Should Be Held In Contempt

On July 10, 2025, Justice Andrea Masley ordered a referee to conduct hearings into whether a party who had been ordered to deliver $54,205.53 to his attorney to be held in escrow during post-judgment proceedings could be held in contempt despite allegedly lacking the funds to comply. In Raza Khan v. Vishal Garg, et al., Index No. 65233/2013, a judgment had been entered against Khan but it needed to be corrected to reflect the amount that would be paid to each Defendant. Until that issue was decided, the Court ordered Khan to deliver the judgment amount to his attorney to be held in escrow. Khan failed to do so and claimed he did not have sufficient funds.

In response to the judgment-creditors’ motion for contempt, the Court concluded that a hearing was needed to determine whether Khan truly could not comply. The Court explained:

“Once the movant establishes a knowing failure to comply with a clear and unequivocal mandate, the burden shifts to the alleged contemnor to refute the movant’s showing, or to offer evidence of a defense, such as an inability to comply with the order.” . . . Here, plaintiff’s May 15, 2024 eight-page affidavit raises an issue of fact that plaintiff had no liquid funds to deliver the judgment amount to his attorney. . . . Accordingly, a hearing is required.

The attorneys at Schlam Stone & Dolan frequently advise clients post-judgment proceedings and hearings. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.