COUNTY OF WESTCHESTER v. RIECHERS (2004)

Currently before the Court by way of this Court's Decision & Order filed and entered on June 2, 2004 and by virtue of plaintiff's later motion for summary judgment in its favor and against defendant Mary Riechers and the cross-motion of Mary Riechers for summary judgment in her favor dismissing the complaint, are the parties' respective motions for summary judgment on the causes of action contained in the complaint as they now exist following said Decision & Order.

The Commissioner/Sheriff of Westchester County (“Sheriff County”) commenced this action against defendants Mary Riechers (“Mary”), defendant Roger Riechers (“Roger”), Marilyn S. Faust, Esq. (“Faust”), and Ronald J. Bavero, Esq. (for whom the firm of Berman, Bavero, Frucco, & Gouz, P.C. [“Berman, Bavero”] has since been substituted), jointly and severally, for payment of poundage fees of $65,528.00 (computed upon the amount of $2,017.600.00 in the event the Court finds the underlying “SO ORDERED” Stipulation to be a settlement), or alternatively, the sum of $84,620.22 (computed upon the amount of $3,052,853.20 in the event the Court finds the “SO ORDERED” Stipulation to be a vacatur of the Income Execution), together with interest, costs, and disbursements.

Mary was represented by defendant Faust in a divorce action against her former husband, Roger, who was represented by Berman, Bavero.   The parties were divorced by judgment dated September 29, 1998.   On May 5, 1999, a money judgment was entered in favor of Mary and against Roger in the amount of $3,052,853.20 in connection therewith.

Following the entry of the $3,052,853.20 judgment, executions were issued by Faust, as counsel to Mary, commanding the Sheriff to satisfy the above referenced judgment, with interest from May 5, 1999, out of Roger's real and personal property.   Faust, as counsel to defendant Mary, also issued an income execution directing the Sheriff to satisfy the judgment with interest, together with fees and expenses, “out of all monies now and hereafter due and owing to the Judgment Debtor” (the “Income Execution”).

In response, on August 3, 1999, the Sheriff served the Income Execution upon defendant Roger pursuant to CPLR § 5231(d).  Upon Roger's failure to pay required installments, the Sheriff “lev[ied] upon the money that the judgment debtor is receiving or will receive by serving a copy of the income execution ․ upon the person from whom the judgment debtor [Roger] is receiving or will receive money” (CPLR § 5231[e] ), here Roger's accrued and future income from the Mt. Kisco Medical Group.

Thereafter, the Sheriff received a check in the sum of $199,460.00 towards the Judgment amount which, at that time and with accrued interest, amounted to $3,351,431.45.   Poundage in the amount of $9,498.09 was deducted from the $199,460.00, thus, leaving a balance of $189,961.91 which was disbursed to defendant Faust as counsel to Mary to be applied towards the Judgment.   The Judgment balance due then stood at $3,111,301.54, inclusive of legal interest.

The Sheriff received payments from the Mt. Kisco Medical Group from about May 9, 2000 through January 25, 2001 for a total of approximately $62,249.00 from which amount $2,925.37 was deducted for poundage and $43,178.68 was disbursed to defendant Faust for application towards the Judgment balance.   Thus, the balance then due on the Judgment was $3,278,558.16, inclusive of legal interest.   The Sheriff is still in possession of $16,144.95 which amount was to be applied towards poundage fees.

On or about January 30, 2001, defendant Berman, Bavero contacted the Sheriff to advise him that the Judgment had been “vacated” pursuant to a SO ORDERED stipulation.

In part, the Stipulation of Settlement indicates that defendants Mary and Roger “now wish to resolve, by this Stipulation and Order, all issues currently outstanding between them, including, but not limited to, all claims asserted by them” in the underlying matrimonial action, and that they wished to vacate the underlying money judgment and executions conditioned upon Roger's payment of $2,017,600.00 to defendant Mary.

CONCLUSIONS OF LAW

At the outset, the Court concludes that the Stipulation of Settlement constitutes a settlement within the meaning of the first sentence of CPLR § 8012(b)(2), even though the stipulation calls for the “vacatur” of money judgments and any executions.

CPLR § 8012(b)(2) provides:

Where a settlement is made after a levy by virtue of an execution, the sheriff is entitled to poundage upon the value of property levied upon, not exceeding the sum at which the settlement is made.   Where an execution is vacated or set aside, the sheriff is entitled to poundage upon the value of the property levied upon, not exceeding the amount specified in the execution and the court may order the party liable therefore to pay same to the sheriff.

“To vacate or set aside an execution means to determine that the execution had been illegally or improperly issued and that the Sheriff had no right to the property upon which he had levied” (Seymour Manufacturing Co. v. Tarnopol, 20 Misc.2d 210, 212, 187 N.Y.S.2d 494 [Sup.Ct. Kings Co., 1959] ).   Such is not the case here.   The use of the term “vacatur” in the Stipulation of Settlement does not convert an otherwise properly issued execution into an improperly or illegally issued one.

Therefore, pursuant to the first sentence of CPLR § 8012(b)(2), “the [S]heriff is entitled to poundage upon the value of property levied upon, not exceeding the sum at which the settlement is made”, here $2,017.600.00;  thus, poundage amounts to $65,528.00.

 The Court finds, as a matter of law, that Mary and Faust, the judgment creditor and her attorney, are liable to the Sheriff for poundage fees of $65,528.00 (see, Adams v. Hopkins, 5 Johns. 252 [Sup.Ct., New York Co., 1810][party liable to the Sheriff is the one who hired the Sheriff and Sheriff may look to attorney];  Flack v. State of New York, 95 N.Y. 461, 466 [1884];  Campbell v. Cothran, 56 N.Y. 279 [1874];  Judson v. Gray, 11 N.Y. 408 [1854];  Matter of International Distributing Export Co., 219 F.Supp. 412 [S.D.N.Y., 1963][settlement after levy of an income execution;  plaintiff held liable for poundage due to affirmative act of the plaintiff in settling his claim against the judgment debtor];  see, also, Zimmerman v. Engel, 114 N.Y.S.2d 293 [Sup.Ct., Kings Co., 1952][“[P]laintiff and his attorney, who filed the process, are both liable to the Sheriff for poundage”];  Sorge v. Honigsbaum, 137 Misc. 824, 245 N.Y.S. 34 [Sup.Ct., Greene Co., 1930][Sheriff represents the interests of the judgment creditors to which services are rendered];  Ruhloff v. Catts, 174 N.Y.S. 159 [City Court, City of New York, Special Term, 1919][attorney who issues an execution is personally liable for the Sheriffs fees];  Seymour Manufacturing Company v. Tarnopol, 20 Misc.2d 210, 187 N.Y.S.2d 494 [Sup.Ct., Kings Co., 1959][where settlement was made after levy, Sheriff could look to the plaintiff and plaintiff's attorney for poundage] ).

Contrary to the Court's ruling with respect to the judgment creditor and her attorney, the Court concludes that neither the judgment debtor, Roger, nor his attorney, Berman, Bavero, are liable to the County of Westchester for poundage.

At the outset, the Court notes that in settlement situations, such as exist here, the first sentence of CPLR § 8012(b)(2), supra, applies.   In contrast to the second sentence, which pertains to situations where an execution is “vacated or set aside”, there is no statutory authority permitting the Court to “order the party liable ․ to pay [poundage] to the sheriff.”

However, even assuming without so finding, that such similar authority exists, the Court still finds that neither Roger nor his attorney are liable for poundage.

 While “party” (CPLR § 8012[b][2] ) whom the Court may order liable for poundage fees to the sheriff does not exclude counsel representing the judgment creditor or debtor (compare, CPLR § 6212[b][attorneys expressly relieved of liability for allowable sheriffs fees in an attachment] ), liability cannot be imposed upon the judgment debtor's attorney where, as here, the principal grounds upon which fees are sought against such attorney are his or her mere representation and counseling of a client to sign a Stipulation of Settlement which results in the satisfaction of the underlying debt.

Similarly unpersuasive, is the assertion that liability should be imposed upon a judgment debtor under circumstances where, as here, the only affirmative act of the debtor is his participation in the negotiation and execution of a settlement agreement (compare, Martin v. Consolidated Edison Co. of New York, Inc., 146 Misc.2d 756, 552 N.Y.S.2d 827 [Sup.Ct., Kings Co., 1990][judgment debtor liable where judgment debtor successfully moved to vacate the execution] affd. 177 A.D.2d 548, 576 N.Y.S.2d 290 [2d Dept., 1991];  Red Cheek, Inc. v. Crown Confections, Inc., 129 A.D.2d 787, 514 N.Y.S.2d 777 [2d Dept., 1987][judgment debtor liable where judgment debtor moved for and obtained a vacatur of default judgment];  Thornton v. Montefiore Hosp., 117 A.D.2d 552, 498 N.Y.S.2d 828 [1st Dept., 1986][judgment debtor interfered with collection process by promising to post an appeal bond if its accounts were released the same day, thus “creating a fund as an undertaking from which the judgment could be satisfied” and independently promising to pay the poundage in exchange for the parties' acquiescence to its importunings] ).

Based upon the foregoing, it is hereby

ORDERED, that summary judgment be and is hereby granted in favor of plaintiff County of Westchester and against defendant Mary Riechers and Marilyn S. Faust, Esq., jointly and severally, in the amount of $65,528.00, the entry of such judgment being stayed pending the disposition of the counter-claims;  and, it is further

ORDERED, that summary judgment be and is hereby granted in favor of defendant Roger Riechers and Berman, Bavero, Frucco, & Gouz, P.C. dismissing the complaint as against them;  and, it is further

ORDERED, that, to any further extent, the motions are denied;  and, it is further

ORDERED, that any defendants who have not yet answered will be given until December 3, 2004 to interpose cross-claims and/or counter-claims;  and, it is further

ORDERED, that, counsel on all active aspects of the case as it now exists shall appear before this part, Room 1615, for a Preliminary Conference on December 10, 2004 at 9:30 a.m.

The foregoing constitutes the Opinion, Decision, and Order of the Court.

JOHN R. LaCAVA, J.