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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: October 17, 2018

Levy Can Be Extended if Motion to Extend is Made Before its Original Expiration Date

On September 28, 2018, Justice Sherwood of the New York County Commercial Division issued a decision in Medallion Bank v. Mama of 5 Hacking Corp., 2018 NY Slip Op. 32461(U), holding that a levy can be extended if a motion to extend is made before the levy’s original expiration date, explaining:

CPLR 5232 (a) provides, in relevant part,

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.

The First and Second Departments have taken two different approaches to interpreting CPLR 5232(a). In Bank of New York, the First Department found that CPLR 5232(a) is facially unambiguous – a levy becomes void 90 days after service is made unless a special proceeding specified by the particular provision has been commenced or an order of extension has been obtained. The court then held that a second levy could be issued where the first had expired. Whereas the First Department requires that the party seeking to enforce the money judgment do so within the ninety-day period provided, the Second Department has held that there is no provision in the CPLR prohibiting an extension after the levy has expired; thus, the correct process is not to serve a second levy but to move to extend the time to perfect the original levy, even if the ninety day period has expired. But because Medallion filed their motion within the ninety-day period, this conflict is of no consequence, and because this court is situated within the First Department, Bank of New York applies.

In two decisions on similar proceedings recently resolved by the New York County Supreme Court, Commercial Division, the court read Bank of New York and CPLR 5232 (a) to provide for flexibility as to the means of enforcing a money judgment where a party makes a timely application. Specifically, the court found that although Medallion moved pursuant to CPLR 5232(a), instead of commencing a special proceeding pursuant to CPLR 5225 or 5227, all three of these statutes provide similar means to enforce money judgments, and it is reasonable to permit an extension where a motion for such relief was brought in a timely manner instead of a special proceeding. Therefore, because Medallion made its motion to extend within the ninety-day period, the levies are preserved and may be extended by court order.

The court notes a third similar proceeding, Medallion Financial Corp., et al. v Jeffery Hacking Corp., et al. The Supreme Court in that action held that under Bank of New York, because Medallion did not receive an extension order or commence a special proceeding under CLPR 5225 or CPLR 5227, its levy is void as a matter of law, and its motion for an extension of the 90-day period is denied. The court declines to adopt this reading of the statute for the reasons stated above.

(Internal quotations and citations omitted).

We have substantial experience in helping judgment creditors collect on judgments and search for and attach assets worldwide. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client need help collecting on a judgment.

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