Solow Management Corp. v. Tanger, 9 N.Y.3d 326 (2007)

The posting of an appeal bond by a judgment debtor, which stays enforcement of a judgment, does not constitute affirmative interference with a marshal’s collection process sufficient to justify an award of poundage fees when the marshal has not actually collected any money.

Summary

This case concerns a dispute over poundage fees claimed by a New York City Marshal after he levied on assets of judgment debtors who then filed an appeal bond, staying enforcement of the judgment. The New York Court of Appeals held that the mere posting of an appeal bond does not constitute affirmative interference with the marshal’s collection efforts, and therefore, the marshal was not entitled to poundage fees because he never actually collected any money. The Court emphasized that statutory exceptions to the requirement of actual collection must be strictly construed.

Facts

Solow Management Corp. obtained a judgment for attorneys’ fees against tenants Debra and Steve Tanger. The landlord then requested that a New York City marshal levy on the Tangers’ assets held at Merrill Lynch. The marshal served an execution on Merrill Lynch, levying against the Tangers’ accounts. The next day, the Tangers filed an appeal bond, staying all proceedings to enforce the judgment. The Appellate Division later reversed the attorney fee award. The marshal released the assets but withheld an amount equal to his claimed poundage fees.

Procedural History

The marshal moved for an order awarding him poundage fees. The Supreme Court held that the marshal was entitled to poundage fees and that the Tangers were liable for this amount, reasoning that filing the appeal bond constituted affirmative interference. The Appellate Division reversed, holding that obtaining a bond for appeal did not amount to affirmative interference. The Court of Appeals granted leave to appeal.

Issue(s)

Whether the posting of an appeal bond by a judgment debtor after a marshal has levied on the judgment debtor’s assets constitutes affirmative interference with the marshal’s collection process, entitling the marshal to poundage fees, even though no monies were collected.

Holding

No, because the posting of an appeal bond by a judgment debtor is not affirmative interference with a marshal’s collection process.

Court’s Reasoning

The Court of Appeals stated that CPLR 8012(b)(1) dictates that a sheriff (or marshal) is entitled to poundage for collecting money by virtue of an execution. Because the marshal did not collect any money, he had to demonstrate that he fell within a statutory exception. The statutory exceptions authorizing poundage despite non-collection of assets apply when: (1) “a settlement is made after a levy by virtue of an execution” or (2) when the “execution is vacated or set aside” (CPLR 8012 [b] [2], [3]). Since neither exception applied, the marshal relied on the judicially created exception for affirmative interference. The court stated that affirmative interference prevents a marshal from actually collecting the levied assets through some affirmative action.

The Court distinguished the act of posting an appeal bond from affirmative interference. The Court reasoned that by posting a bond the Tangers were availing themselves of their right to appeal. “To bring the claim of a sheriff within the provisions of the statute, it is essential that he [or she] show either the collection of the moneys called for, or some interference by the plaintiff [judgment creditor] with his execution of the process that is equivalent thereto.” Flack v State of New York, 95 NY 461, 466 (1884). The Court further noted that the appeal bond only stayed the enforcement action temporarily; should the Tangers lose their appeal, the levy would remain in place, and the marshal could complete the collection process. Holding otherwise would discourage litigants from seeking judicial review. The Court emphasized that statutory exceptions must be strictly construed, citing Personeni v Aquino, 6 NY2d 35, 37-38 (1959).