United States District Court, D. Arizona
Dominic W. Lanza, United States District Judge
of non-party subpoena recipients (“the Subpoenaed
Individuals”) has filed a motion for recusal. (Doc.
204.) For the following reasons, the motion will be denied.
a civil interpleader action in which two sets of
adversaries-(1) Wyo Tech Investment Group LLC (“Wyo
Tech”) and (2) CWT Canada II Limited Partnership,
Resource Recovery Corporation, and Jean Noelting
(collectively, the “Judgment Creditors”)-are
fighting over $546, 282.55. The procedural and factual
background is summarized in earlier orders (Docs. 94, 119),
so only a brief recap is necessary here.
2016, the Judgment Creditors obtained a $7 million judgment
against Dennis Danzik in New York state court.
October 2017, the Judgment Creditors attempted to collect on
a portion of the outstanding judgment by freezing a bank
account at Wells Fargo, which had a balance of $546, 282.55.
Notably, this account wasn't held in Danzik's name.
Instead, it was held in the name of Wyo Tech. To freeze the
account, the Judgment Creditors' attorneys utilized an
unusual procedural tool known as a “restraining notice,
” which is governed by section 5222 of the New York
Civil Practice Law and Rules.
Tech protested when it learned its account had been frozen,
arguing that it had no connection with Danzik and that Wells
Fargo should immediately release the frozen funds. In
response, Wells Fargo filed an interpleader action in this
court. Functionally, this meant that Wells Fargo deposited
the disputed funds into the Court's bank account so the
Court could referee the fight between Wyo Tech and the
Judgment Creditors over who has the superior entitlement to
interpleader action was filed in November 2017 and initially
assigned to a different judge. (Doc. 1.) In October 2018, it
was reassigned to the undersigned judge. (Doc. 93.) This
reassignment was part of the initial wave of case
reassignments triggered by the undersigned judge's
appointment to the bench.
the key disputed issues in this case has been whether the
Judgment Creditors should be entitled to conduct discovery
concerning their theory that Danzik secretly controls Wyo
Tech or otherwise has an interest in Wyo Tech's funds. In
a lengthy order issued in April 2019, the Court concluded
that the Judgment Creditors should be entitled to pursue such
discovery. (Doc. 119.)
litigation since this discovery ruling has been quite
contentious. For example:
▪ On May 15, 2019, the Judgment Creditors filed an
amended motion to hold Wyo Tech's counsel in civil
contempt for, inter alia, failing to respond to
certain subpoenas. (Doc. 135.) On May 29, 2019, following a
hearing, the Court declined to make a contempt finding. (Doc.
▪ On June 19, 2019, the Judgment Creditors filed
another motion seeking civil contempt sanctions. (Doc. 159.)
This motion was directed at a group of seven non-party
subpoena recipients (different from the Subpoenaed
Individuals) who had failed to respond to subpoenas
requesting financial and other records. (Id.) On
June 27, 2019, the Court held a hearing on this motion, which
none of the subpoena recipients chose to attend. (Doc. 166.)
Accordingly, the Court issued an order holding the seven
non-parties in civil contempt and imposing daily fines until
the documents were produced. (Doc. 167.)
▪ On August 2, 2019, the Judgment Creditors filed a
motion in which they acknowledged that six of the seven
non-parties had produced the subpoenaed documents following
the issuance of the contempt order but nevertheless requested
that the Court issue an order compelling those
non-parties' immediate imprisonment. (Doc. 183.) On
August 6, 2019, the Court denied this motion in relevant part
and refused to order anybody's imprisonment. (Doc. 186.)
The Court did, however, set a further show-cause hearing
concerning one of the non-parties-a company called Danzik
Applied Sciences, LLC (“DAS”), whose only member
is Danzik's wife, Elizabeth Danzik-that had ...