Vink & Gold, PLLC, White Plains (Elie B. Gold of counsel), for appellant.

Lebedin Kofman, LLP, Garden City (Michael S. Leinoff of counsel), for respondent.

Order, Supreme Court, New York County (Verna L. Saunders, J.), entered on or about April 24, 2024, which granted defendant judgment debtor Stephanie Schulman's motion to reargue her opposition to plaintiff judgment creditor AC Penguin Prestige Corp.'s motion for turnover of her interest in a separation agreement and, upon reargument, vacated a prior decision of the same court and Justice, entered on or about December 19, 2023, denied the relief sought, and ordered that AC Penguin bring a separate turnover proceeding under CPLR 5225(b) against the nonparty garnishees to bring them within the court's jurisdiction, unanimously affirmed, without costs.

CPLR 5225(a) provides that a judgment creditor may make a motion in a pending action where a judgment was entered "where it is shown that the judgment debtor is in the possession or custody of money or other personal property in which he has an interest." CPLR 5225(a) also provides that the court shall order the judgment debtor to "pay the money, or so much of it as is sufficient to satisfy the judgment, to the judgment creditor." By contrast, CPLR 5225(b) provides that when the property sought is not in the possession of the judgment debtor, the judgment creditor is to commence a separate special proceeding "against a person in possession or custody of money or other personal property in which the judgment debtor has an interest . . . where it is shown that the judgment debtor is entitled to the possession of such property or that the judgment creditor's rights to the property are superior to those of the transferee." The "most significant difference between the subdivisions is that CPLR 5225(a) is invoked by a motion made by the judgment creditor, whereas CPLR 5225(b) requires a special proceeding brought by the judgment creditor against the garnishee" (Koehler v Bank of Bermuda Ltd., 12 NY3d 533, 541 [2009]). This procedural distinction exists because the garnishee, "not being a party to the main action, has to be independently subjected to the court's jurisdiction" (id.).

The plain terms of the relevant CPLR provisions are dispositive. CPLR 5201 provides that "[a] money judgment may be enforced against any property which could be assigned or transferred, whether it consists of a present or future right or interest and whether or not it is vested" (CPLR 5201[a]). However, when the "property" of a judgment debtor is physically held by a third party, the applicable provision is CPLR 5225(b), and a special proceeding is required. It is only when the "property" is held by the judgment debtor herself that the judgment creditor may proceed by motion pursuant to CPLR 5225(a).

We reject AC Penguin's contention that it is not seeking to collect on the money in the garnishees' possession, but rather is seeking to collect on the contractual interest in those funds — interest that is in the judgment debtor's possession. AC Penguin cites no authority where a judgment creditor was permitted to access a debtor's [*2]funds held by a third party without first obtaining personal jurisdiction over that third party. Indeed, no court appears to have ordered a nonparty to turn over money subject to a supposed contractual interest, unless the money ordered to be turned over was actually in the debtor's own bank account (see e.g. Gryphon Dom. VI, LLC v APP Intl. Fin. Co., B.V., 41 AD3d 25, 31 [1st Dept 2007]). An entirely different situation is presented here.

We have considered AC Penguin's remaining contentions and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: December 24, 2024