Supreme Court, Kings County, April 11, 2018

Law Office of Amos Weinberg, Great Neck, for plaintiff.

Law Office of Richard A. Klass, Esq., Brooklyn, for defendant.

The decision/order on this motion and cross motion is as follows:

Bam Bam Entertainment LLC, a Florida limited liability company (the plaintiff), moves for (i) summary judgment on its claim for $10,668.25, and (ii) continuance and severance on its claim for punitive damages, arguing that New York City Marshal Richard J. Pagnotta should be liable for levying on plaintiff's bank account located outside the City of New York to partially satisfy a debt which plaintiff does not dispute it owes. The Marshal cross-moves for [*2]summary judgment requesting dismissal.

At issue is whether a New York City Marshal can be liable for levying on plaintiff's bank account located outside of New York City to satisfy a valid confession of judgment entered into against plaintiff. We find that it can not. Accordingly, the plaintiff's motion is denied in its entirety, the Marshal's motion is granted and the action is dismissed.

The relevant facts before the court are straightforward and not in dispute.

In consideration of a debt in the principal amount of $22,350 plus interest owed by plaintiff doing business as CYN Night Club and personally guaranteed by Louis Nassif Atallah (the judgment debtor) to Unique Funding Solutions LLC (the judgment creditor) per a certain merchant agreement, the judgment debtor signed an affidavit of confession of judgment, dated January 10, 2017 (the confession of judgment), both personally and on behalf of the plaintiff. A judgment was entered on January 31, 2017 (the judgment), in favor of the{**59 Misc 3d at 908} judgment creditor in the amount of $25,679.15 in the Supreme Court of the State of New York, Erie County.

Pursuant to the judgment, on February 1, 2017, the Marshal sent a levy to Fifth Third Bank, Attn: Custodian of Records, 1MOC2Q5050 Kingley Drive, Cincinnati, OH (the Bank). On February 6, 2017, the Bank honored the levy and issued a check in the amount of $10,668.25 (i.e., approximately 50% of the amount of the confession of judgment) to the Marshal.

Significantly, in the matter before this court, the plaintiff does not dispute the validity of the debt. Rather, the plaintiff argues that the Marshal should be personally liable for executing on property located outside of New York to satisfy the plaintiff's valid debt because the plaintiff asserts that the Marshal's levy authority is limited to New York City.

Summary judgment should be granted when the movant presents evidentiary proof in admissible form that there are no triable issues of material fact and that there is either no defense to the cause of action or that the cause of action or defense has no merit. (CPLR 3212 [b].) The burden is initially on the movant to make a prima facie showing of entitlement to judgment as a matter of law tendering sufficient evidence in admissible form to demonstrate the absence of any material fact. (Tessier v New York City Health & Hosps. Corp., 177 AD2d 626 [2d Dept 1991], citing Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986].) Failure to make such a prima facie showing requires denial of the motion. (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986], citing Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985].) Once the showing has been made, the burden shifts to the opposing party to produce evidence in admissible form sufficient to establish the existence of a material issue of fact which requires a trial. (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986], citing Zuckerman v City of New York, 49 NY2d 557, 562 [1980].) In this action, the plaintiff argues that he is entitled to summary judgment because the Marshal did not have authority to levy on the plaintiff's bank account located outside of New York City to satisfy the plaintiff's otherwise valid debt.

Relying on Silberstein v Presbyterian Hosp. in City of N.Y. (96 AD2d 1096 [1983]), the plaintiff argues that the Marshal should be personally liable for wrongful execution. The plaintiff's reliance on Silberstein is however misplaced.{**59 Misc 3d at 909}

In Silberstein, the Court held that a law firm and hospital can be held liable where the hospital knew or should have known that execution on a default judgment based on its own otherwise unverified account receivable was improper. In that case, Presbyterian Hospital (the Hospital) obtained a default judgment in the amount of $2,005 against Stanley Silberstein and served an execution on Mr. Silberstein's bank account. Thereafter, Mr. Silberstein had the default judgment vacated for lack of personal jurisdiction and the money was returned. Nonetheless, Mr. Silberstein sued for wrongful execution arguing that the Hospital and its law firm knew or should have known that the default judgment was void and that as a result he suffered embarrassment and financial hardship. The Hospital and the law firm failed to timely answer because, they indicated, that notwithstanding the fact that they had executed on the default judgment they had obtained in respect of Mr. Silberstein's "debt" (i.e., their own account receivable), they needed to check their own records in order to file an answer and counterclaim. The court denied Mr. Silberstein's motion for default judgment against the Hospital based on the alleged law office failure and did not dismiss the case because the Hospital and defendant law firm could be liable for the irregular process (re: lack of jurisdiction) which occasioned loss to Mr. Silberstein.

This is simply not that case. The case at bar does not involve a private entity or its law firm. It involves a New York City Marshal, and, unlike in Silberstein, there is simply no factual basis to find that the Marshal knew or should have known that the debt owed by the judgment debtor and the plaintiff is invalid.^[FN1] In fact, in this case, the judgment debtor and plaintiff executed the confession of judgment in favor of a third party: to wit, the judgment creditor. Although the judgment [*3]debtor and plaintiff may have suffered embarrassment and financial hardship as a result of the execution, it is occasioned solely by their own failure to pay their bill rather than by an improper execution by the Marshal. In other words, the claim in the case{**59 Misc 3d at 910} at nisi prius, is that the Marshal lacked the authority to perform this execution, not that execution pursuant to the judgment itself is improper (i.e., a wrongful execution) or that the judgment debtor and the plaintiff do not in fact owe the monies levied. Put another way, in a blatant attempt to avoid having to pay its bill (i.e., having the Marshal pay the money that plaintiff owes the judgment creditor) and under the transparent guise of this action against the Marshal (which would in effect amount to a sanction of the Marshal),^[FN2] plaintiff conflates an action for wrongful execution, which this is not,^[FN3] with a complaint that the Marshal did not faithfully execute the duties of his office by exceeding the reach of his levy authority.

For the avoidance of doubt, wrongful execution has long been recognized as a cause of action where the underlying debt was either discharged or was otherwise invalid. This is even the case if the debt appears valid at the time of the levy if later the debt is discharged or invalidated as the debt is deemed void ab initio. (See e.g. Era Realty Co. v RBS Props., 185 AD2d 871 [2d Dept 1992].) The rationale being that when a party levies on a debt, the party levying levies at the risk that the debt is not a proper debt.

In the seminal case of Ruckman v Cowell (1 NY 505, 506-507 [1848]), the Court held that following discharge of a debt in bankruptcy in respect of a judgment entered on two promissory notes, the judgment creditor who levied on certain goods owed by the judgment debtor was liable in conversion, but the officer who made the levy could not be held liable:

"As the execution was regular upon its face, and issued from a court of competent jurisdiction, it was a protection to the officer who made the levy; but it could not justify the party at whose instance it was issued. He acted at his peril. It is true that he may have been ignorant of the discharge; but that was his misfortune. Having seized the goods without authority, it was a trespass for which he must answer, however innocent he may have been of any intention to do an illegal act."

{**59 Misc 3d at 911}The fundamental principle of caveat creditor has been reaffirmed in the Second Department. For example, in ERA Realty Co. v RBS Props. (185 AD2d 871 [2d Dept 1992]), the Court held that the judgment creditor (RBS Properties) could be held liable for levying on the judgment debtor's bank account. ERA involved an assignment of a lease from ERA Realty Co. to RBS. The owner-landlord brought a summary proceeding against both RBS and ERA and RBS cross-claimed against ERA. A default judgment was obtained in the amount of $50,000 in favor of RBS on its cross claim against ERA, and RBS levied on ERA's bank account. Subsequently, ERA successfully moved to vacate the default judgment and sued RBS for improper conversion. RBS moved to dismiss and the lower court granted the motion. The Second Department reversed holding that RBS could be liable for executing judgment on the judgment debtor's bank account as the judgment was void ab initio. (See ERA at 873.)

New York City Marshals are neutral government officers free of any conflict of interests. They act under the direction of the court and may rely on the presumption of regularity that attaches to a court order. (See Korsinsky v Rose, 120 AD3d 1307, 1308-1309 [2d Dept 2014], citing Cla-Mil E. Holding Corp. v Medallion Funding Corp., 6 NY3d 375, 378-379 [2006]; see also NY City Civ Ct Act §§ 1601, 1601-a; Ruckman v Cowell.)

Indeed, article 16 of the New York City Civil Court Act provides for and governs New York City Marshals. Notably, section 1604 (a) requires that no Marshal shall be permitted to enter into the duties of her office until she has given a bond in accordance with the statute which, among other things, requires two sureties who shall be residents of the City of New York and each of whom shall be the owner of real estate with double the value of the penalty of the bond and for such bond to be approved by the court. The bond shall provide that the Marshal and the sureties shall jointly and severally answer to the City of New York and any persons that may complain, for the true and faithful execution by such Marshal of the duties of her office (e.g., failing to comply with the terms of the regulations, exceeding the Marshal's authority to levy, etc.).^[FN4] [*5]The Appellate Division may reprimand, censure, temporarily suspend{**59 Misc 3d at 912} or permanently remove any Marshal for cause provided that certain due process requirements are met. (NY City Civ Ct Act § 1610.) Section 1612 of the New York City Civil Court Act provides that the Appellate Division may delegate its authority except its authority to permanently remove a Marshal.

In Joint Administrative Order 453, dated November 12, 1975 (22 NYCRR 635.9), and Joint Administrative Order 456, dated February 27, 1976, the Appellate Division of the Supreme Court, First Judicial Department and the Appellate Division of the Supreme Court, Second Judicial Department established detailed procedures for the oversight and discipline of New York City Marshals for failure to comply with the mandate of their office.

Order 453 provides that the Department of Investigations or its designees may take complaints, make inquiries, conduct investigations and hearings in all aspects of the Marshal's activities and may promulgate regulations subject to the approval of the Appellate Divisions.^[FN5] Order 453 further provides that the Commissioner of Investigations may refer charges and evidence to the Appellate Division for disciplinary action or removal proceedings. Order 456 provides, among other things, that charges brought by the Commissioner of Investigations shall be in writing and filed with both Appellate Divisions in accordance with section 1610 of the Civil Court Act.

To be clear, a Marshal may be held liable for damages caused by negligently executing a valid order of seizure or warrant of eviction. (See Korsinsky v Rose, 120 AD3d 1307, 1309 [2d Dept 2014]; Marcado v Weinheim, 108 Misc 2d 81 [Civ Ct, Bronx County 1981]; Slepoy v Kliger, 26 Misc 3d 126[A], 2009 NY Slip Op 52603[U] [2009].) To establish a cause of action for negligence, however, the plaintiff must establish the existence of a duty on defendant's part to plaintiff, breach of duty and damages. (Korsinsky v Rose, 120 AD3d 1307, 1309 [2d Dept 2014].) In this case, among other deficiencies in the plaintiff's pleadings, the plaintiff can not establish any damages as there simply is no dispute that the judgment debtor and the plaintiff{**59 Misc 3d at 913} owe the [*6]money that was levied upon to pay the monies owed the judgment creditor.^[FN6]

In other words, the legislature enacted the New York City Civil Court Act vesting authority in the Appellate Divisions for the oversight and appropriate sanction and removal of New York City Marshals. Pursuant to New York City Civil Court Act § 1604, Marshals are required to furnish certain security (i.e., a court approved bond with two sureties) for the faithful performance of the Marshal's duties. Although a Marshal may be held liable for negligence where a prima facie case for negligence can be established by the plaintiff, there can be no basis for any such action where there are no damages. Holding the Marshal liable in an action where, as here, the plaintiff was not damaged by a levy which pays a portion of its debt would amount to (i) with respect to the plaintiff, having the Marshal pay the plaintiff's debt and (ii) with respect to the Marshal, amount to a sanction of the Marshal. Both are inappropriate. It is simply not for this court to create a private remedy where one was never intended by the legislature, where both a forum and a mechanism for addressing alleged abuse of authority already exists and certainly not in a case where the Marshal has executed on a facially valid confession of judgment.{**59 Misc 3d at 914}

Accordingly, the plaintiff's motion for summary judgment is denied.

II. Plaintiff's Motion for Severance and Continuance and Punitive Damages

Because we find that the plaintiff is not entitled to summary judgment as to its claim for actual damages, the branch of plaintiff's motion requesting severance and continuance on its claim for punitive damages is moot.

III. Defendant's Cross Motion for Summary Judgment

Inasmuch as the plaintiff's claim is without merit for the reasons set forth above, the Marshal's cross motion for summary judgment is granted. (CPLR 3212 [b].)^[FN7]

IV. Conclusion

For the reasons set forth above, the plaintiff's motion for summary judgment is denied in its entirety and the Marshal's cross motion for summary judgment is granted. Accordingly, the case is dismissed.