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Current Developments in the Commercial Divisions of the
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Posted: January 14, 2016

Court Recognizes Claim for Tortious Interference with Enforcement of a Judgment

On December 29, 2015, the First Department issued a decision in Priestley v. Panmedix Inc., 2015 NY Slip Op. 09623, permitting the plaintiff to amend her complaint to assert a cause of action for tortious interference with the collection of a judgment.

In Priestley, the plaintiff, who had obtained a federal money judgment against defendant Panmedix Inc., discovered that, after entry of the judgment, Panmedix granted a security interest in its assets to another group of creditors, including certain corporate insiders. She sought to amend an existing complaint in New York County, among other things, to add a claim for tortious interference with the collection of a judgment against Panmedix and the attorneys who prepared the documents that created the security interest. Justice Singh of the New York County Commercial Division denied the motion to amend, finding: “There is not such cause of action. Claims such as there are addressed in the Debtor and Creditor law.” The First Department reversed, explaining:

Under New York law, there exists a common law cause of action for tortious interference with enforcement of a judgment. We find further that, because plaintiff possessed a valid judgment at the time of the fraudulent conveyance, she was not required to also have a lien on the property to enforce this claim. Nor is the tortious interference claim preempted by the Debtor and Creditor Law, since the allegations extend beyond the defendants’ fraudulent conveyance of the security interest, and plaintiff seeks affirmative relief for defendants’ fraudulent conduct, not merely the setting aside of the conveyance.

(Citations omitted.)

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