Opinion ID: 4235595
Heading Depth: 2
Heading Rank: 1

Heading: Procedure for Enforcing Money Judgments

Text: First, we agree with the district court that CSX was permitted to seek relief from Garnishees by motion under Rule 69(a), rather than by instituting a special proceeding pursuant to New York law. See Fed. R. Civ. P. 69(a).
A motion to enforce a money judgment is governed by Rule 69(a), which provides that ʺproceedings supplementary to and in aid of judgment or execution . . . must accord with the procedure of the state where the court is located.ʺ Id. In New York, C.P.L.R. article 52 governs the enforcement and collection of money judgments. See N.Y. C.P.L.R. §§ 5201‐5252. Section 5225(b) enables a judgment creditor to commence a ʺspecial proceedingʺ against a third party who ʺis in possession or custody of money or other personal propertyʺ in which the judgment debtor has an interest. Id. § 5225(b).5 Section 5227 allows a judgment creditor to commence a special proceeding against a third party ʺwho 5 Section 5225(b) provides in pertinent part: Upon a special proceeding commenced by the judgment creditor, against a person in possession or custody of money or other personal property in which the judgment debtor has an interest, or against a person who is a transferee of money or other personal property from the judgment debtor, where it is shown that the judgment debtor is entitled to the possession of such property or that the judgment creditorʹs rights to the property are superior to those of the transferee, the court shall require such person to pay the money . . . . ‐ 11 ‐ it is shown is or will become indebted to the judgment debtor.ʺ Id. § 5227.6 Violation of a restraining notice subjects a garnishee to personal liability in a special proceeding under C.P.L.R. article 52 or a separate plenary action. Cruz v. TD Bank, N.A., 22 N.Y.3d 61, 77‐78 (2013). C.P.L.R. article 4 sets forth the procedure for special proceedings. See N.Y. C.P.L.R. §§ 401‐411.
Although we have assumed in prior cases that parties may seek turnover orders by motion, we have not squarely addressed the issue. See, e.g., Vera v. Republic of Cuba, 802 F.3d 242, 244 n.3 (2d Cir. 2015); HBE Leasing Corp. v. Frank, 48 F.3d 623, 633 & n.7 (2d Cir. 1995).7 We now hold that a party seeking a 6 Section 5227 provides in pertinent part: Upon a special proceeding commenced by the judgment creditor, against any person who it is shown is or will become indebted to the judgment debtor, the court may require such person to pay to the judgment creditor the debt upon maturity, or so much of it as is sufficient to satisfy the judgment, and to execute and deliver any document necessary to effect payment; or it may direct that a judgment be entered against such person in favor of the judgment creditor. 7 District courts in this circuit have also consistently allowed parties to request turnover orders by motion rather than by special proceeding. See, e.g., Bernard v. Lombardo, 2016 WL 7377240, at  (S.D.N.Y. Nov. 23, 2016); Gen. Elec. Capital Corp. v. E. Bus. Sys., 2016 WL 3582061, at  (E.D.N.Y. June 28, 2016); State Farm Mut. Auto. Ins. Co. v. Grafman, 2015 WL 9460131, at  (E.D.N.Y. Dec. 23, 2015); Universitas Educ., LLC v. Nova Grp., Inc., 2014 WL 3883371, at  (S.D.N.Y. Aug. 7, 2014); SEC v. Vuono, 2013 WL 6837568, at  (E.D.N.Y. Dec. 26, 2013); N. Mariana Islands v. Millard, 845 F. Supp. 2d 579, 581‐82 (S.D.N.Y. 2012); JW Oilfield Equip., LLC v. Commerzbank, AG, 764 F. Supp. 2d 587, 591 (S.D.N.Y. 2011); Mitchell v. Lyons Profʹl Servs., Inc., 727 F. Supp. 2d 120, 122‐23 (E.D.N.Y. 2010). But see Wasserman Media Grp., LLC v. Bender, 2012 WL 1506181, at  ‐ 12 ‐ money judgment against a non‐party garnishee may proceed by motion and need not commence a special proceeding, as long as the court has personal jurisdiction over the garnishee. We reach this conclusion for three reasons. First, a special proceeding is a procedural vehicle under New York law with no equivalent under the Federal Rules of Civil Procedure, which recognize only ʺone form of action ‐‐ the civil action.ʺ Fed. R. Civ. P. 2; see Mitchell v. Garrison Prot. Servs., Inc., 819 F.3d 636, 640 (2d Cir. 2016) (per curiam). It is therefore ʺunclearʺ how a party in a federal district court in New York could comply with the special proceeding requirements, Mitchell, 819 F.3d at 640, which we have indicated ʺneed not be strictly adhered to as long as there is no prejudice to the opposing party in giving notice of the claims and framing the issues,ʺ Vera, 802 F.3d at 244 n.3. Second, a special proceeding is more akin to motion practice than a plenary action. See HBE Leasing Corp., 48 F.3d at 633 (summary relief available in a special proceeding under C.P.L.R. article 52); OʹBrien‐Kreitzberg & Assocs. v. K.P., Inc., 630 N.Y.S.2d 76, 76 (1st Depʹt 1995) (action seeking to enforce a money (S.D.N.Y. 2012) (ʺ[P]etitionerʹs motion for a turnover order in the instant action is procedurally defective . . . . If petitioner seeks a turnover order, it must bring a separate action . . . .ʺ); Runaway Dev. Grp. v. Pentagen Techs. Intʹl Ltd., 396 F. Supp. 2d 471, 473‐74 (S.D.N.Y. 2005) (same). ‐ 13 ‐ judgment is ʺmore appropriately obtained in a supplementary special proceeding pursuant to [C.P.L.R.] article 52 rather than a plenary actionʺ (citation omitted)). See generally C.P.L.R. § 401, cmt. 401:1 (practice commentary) (ʺLike an action, [a special proceeding] ends in a judgment [], but the procedure is similar to that on a motion []. Speed, economy and efficiency are the hallmarks of this procedure.ʺ); David D. Siegel, New York Practice § 547 (5th ed. 2017) (ʺA special proceeding is . . . . as plenary as an action, culminating in a judgment, but is brought on with the ease, speed, and economy of a mere motion.ʺ). Third, New York law explicitly contemplates that proceedings brought as motions may, if necessary, be converted to special proceedings by the court. Under C.P.L.R. § 103(c), ʺ[i]f a court has obtained jurisdiction over the parties, a civil judicial proceeding shall not be dismissed solely because it is not brought in the proper form . . . . If the court finds it appropriate in the interests of justice, it may convert a motion into a special proceeding . . . .ʺ See also Jackson v. Bank of Am., N.A., 53 N.Y.S.3d 71, 74‐75 (2d Depʹt 2017) (citing C.P.L.R. § 103(c) and refusing to dismiss an action for failure to commence a special proceeding under article 52, even where that provision provided the exclusive remedy). The court must, however, have personal jurisdiction over the parties. See N.Y. ‐ 14 ‐ C.P.L.R. § 103(c); Commonwealth of N. Mariana Islands v. Canadian Imperial Bank of Commerce, 21 N.Y.3d 55, 64 (2013) (ʺ[P]ersonal jurisdiction is the linchpin of authority under section 5225(b).ʺ). Accordingly, we conclude that CSX was not required to institute a separate proceeding against Garnishees and could proceed by motion under Rule 69(a), so long as the district court otherwise had personal jurisdiction over Garnishees. Here, personal jurisdiction is clear: Garnishees do not contest that they are New York corporations with their principal places of business in the Eastern District of New York. Although Garnishees contend that no summons was served, the record reflects that CSX complied with Rule 4 of the Federal Rules of Civil Procedure by serving the summons on Cathy McByrne, a person authorized to accept service on behalf of Vincent Maggio, Jr., Chief Executive Officer for Garnishees. We therefore conclude that the district court properly allowed CSX to proceed by motion.