STANLEY SUPPLY TOOL INC v. SMALLWOOD (2026)

DECISION & ORDER

In an action, inter alia, to recover damages for conversion, the defendant Robert Edward Smallwood appeals from an order of the Supreme Court, Queens County (Marguerite A. Grays, J.), dated July 11, 2025.  The order, insofar as appealed from, (1) denied that branch of that defendant's motion, made jointly with nonparty Jeff Morgenstern, which was to vacate a restraining notice dated January 2, 2024, as re-served on July 26, 2024, (2) denied, as academic, that branch of that motion which was to quash an information subpoena dated January 2, 2024, as re-served on July 26, 2024, and (3) granted the plaintiff's cross-motion pursuant to CPLR 5225 to direct nonparty Jeff Morgenstern to turn over certain monies to the plaintiff.

ORDERED that the appeal from so much of the order as denied that branch of the motion of the defendant Robert Edward Smallwood, made jointly with nonparty Jeff Morgenstern, which was to vacate the restraining notice dated January 2, 2024, as re-served on July 26, 2024, is dismissed as academic, without costs or disbursements;  and it is further,

ORDERED that the order is modified, on the law, by deleting the provision thereof granting the plaintiff's cross-motion pursuant to CPLR 5225 to direct nonparty Jeff Morgenstern to turn over certain monies to the plaintiff, and substituting therefor a provision denying the cross-motion;  as so modified, the order is affirmed insofar as reviewed, without costs or disbursements.

In 2012, the plaintiff commenced this action against the defendant Robert Edward Smallwood, among others, inter alia, to recover damages for conversion.  In April 2015, the Supreme Court entered a judgment in favor of the plaintiff and against Smallwood, among others, in the total sum of $3,402,774.23.

In July 2024, the plaintiff served upon Smallwood's attorney in this action, Jeff Morgenstern, a previously served information subpoena with restraining notice dated January 2, 2024, with regard to certain monies in Morgenstern's possession allegedly belonging to Smallwood.  In response, Smallwood moved, jointly with Morgenstern, inter alia, to quash the re-served information subpoena and to vacate the re-served restraining notice.  The plaintiff opposed the motion and cross-moved pursuant to CPLR 5225 to direct Morgenstern to turn over to the plaintiff monies in his possession allegedly belonging to Smallwood.

In an order dated July 11, 2025, the Supreme Court, among other things, (1) denied that branch of Smallwood's motion, made jointly with Morgenstern, which was to vacate the re-served restraining notice, (2) denied, as academic, that branch of that motion which was to quash the re-served information subpoena, and (3) granted the plaintiff's cross-motion pursuant to CPLR 5225 to direct Morgenstern to turn over certain monies to the plaintiff.  Smallwood appeals.

The appeal from so much of the order as denied that branch of Smallwood's motion, made jointly with Morgenstern, which was to vacate the re-served restraining notice is dismissed as academic.  Pursuant to CPLR 5222, the effective period of restraint as to a garnishee is limited to one year from the date of service (see id. § 5222[b] ).  Here, the restraining notice was re-served upon Morgenstern in July 2024, and, as such, it is no longer effective.

Pursuant to CPLR 5225, while a judgment creditor may make a motion for a turnover order with regard to property in the possession of the judgment debtor (see id. § 5225[a] ), in order to obtain a turnover of property not in the possession of the judgment debtor, the judgment creditor must commence a special proceeding (see id. § 5225[b] ).  Here, the Supreme Court should have denied the plaintiff's cross-motion pursuant to CPLR 5225 to direct Morgenstern to turn over certain monies to the plaintiff, as the court lacked jurisdiction over Morgenstern, who is not a party to this action.  Rather, the plaintiff should have commenced a special proceeding against Morgenstern pursuant to CPLR 5225(b) (see Koehler v Bank of Bermuda Ltd., 12 NY3d 533, 537–538;  York v York, 172 AD3d 1283, 1284).  Contrary to the plaintiff's contention, Morgenstern's turnover of the monies to the plaintiff's counsel in accordance with the order appealed from does not render this issue academic (see CPLR 5015[d];  5523).

The Supreme Court properly denied, as academic, that branch of Smallwood's motion, made jointly with Morgenstern, which was to quash the re-served information subpoena (see Matter of Henry St. Invs., Ltd. v Brennan, 153 AD3d 1403, 1404).

Smallwood's remaining contention is improperly raised for the first time on appeal.

DUFFY, J.P., CHRISTOPHER, WARHIT and GOLDBERG VELAZQUEZ, JJ., concur.