Opinion ID: 41378
Heading Depth: 3
Heading Rank: 3

Heading: The New York Levy

Text: 32 In New York, levy of a writ of execution upon a bank account is accomplished by the service of the proper documents upon the bank by the sheriff. N.Y.C.P.L.R. § 5232 (McKinney 1997). Once this is done, the levy is valid for ninety days. Id. 33 At the expiration of ninety days after a levy is made by service of the execution, or of such further time as the court, upon motion of the judgment creditor or support collection unit has provided, the levy shall be void except as to property or debts which have been transferred or paid to the sheriff or to the support collection unit or § as to which a proceeding under sections 5225 or 5227 has been brought. 34 Id.; see also Lennox v. Brady, 101 N.Y.S.2d 22, 24 (N.Y.Sup.Ct.1950) (stating that a levy is rendered void where the property levied upon under a warrant of attachment is not reduced to actual possession or turnover proceedings instituted, within the ninety day period). The record does not indicate that, (1) during the ninety days after levy upon the New York bank account, HLF property was transferred into the possession or control of the sheriff; or (2) the Ungars perfected the levy by commencing a turnover proceeding directed against the holder of the property. If either is not done within the ninety day period, the levy is void. See generally N.Y.C.P.L.R. §§ 5232, 5225, 5227 (McKinney 1997); Wordie v. Chase Manhattan Bank, 140 A.D.2d 435, 529 N.Y.S.2d 1,1 (N.Y.App.Div.1988). 35 The Ungars assert that service of the proper documents upon the New York banks occurred on September 2, 2004. Assuming arguendo that this is true, the record reflects no transfer of the funds from the banks to the United States Marshal or sheriff, and no acknowledgment or other indication by the banks that the United States Marshal or sheriff has control of HLF's interest in the accounts. Likewise, the record reflects no commencement of turnover proceedings. 7 Accordingly, the levy became void on or about December 2, 2004. Although it is arguable whether the New York levy divested the Texas district court of jurisdiction to enter the restraining order as to the funds in New York accounts, it is undisputed that the New York levy is void. It is well-settled that no recovery may be had for losses which the purportedly injured party might have prevented by reasonable efforts and expenditures. Wordie, 140 A.D.2d at 436, 529 N.Y.S.2d at 2 (citation omitted). The Ungars allowed the New York levy to lapse and become void by failing to pursue, within the prescribed ninety day period, the statutory mechanisms available to perfect the levy. Cf. id.; but see In re Flax, 179 B.R. 408 (Bkrtcy.E.D.N.Y.1995) (New York courts have not held the Sheriff's failure to obtain possession of the property to be seized fatal to the lienor's interest in every case, but the courts have made an exception only where the failure is caused by a third party's failure to comply with the Sheriff's directives to turn over the property.). There being no valid New York levy, we decline to grant relief to the Ungars based upon a levy allowed to become void by their inaction.