Motion for Writ of Attachment in New York

What Is a Motion for Writ of Attachment?

Background

By means of attachment, a creditor effects the prejudgment seizure of a debtor's property, to be held by the sheriff, so as to apply the property to the creditor's judgment if the creditor should prevail in court. (Koehler v. Bank of Bermuda (2009) 12 N.Y.3d 533, 538.) Attachment simply keeps the debtor away from his property or, at least, the free use thereof; it does not transfer the property to the creditor. (Id.)

Attachment is frequently used when the creditor suspects that the debtor is secreting property or removing it from New York and/or when the creditor is unable to serve the debtor, despite diligent efforts, even though the debtor would be within the personal jurisdiction of a New York court (Id., citing CPLR 6201). Attachment has also been used to confer jurisdiction. When a debtor is neither a domiciliary nor a resident of New York — so that the creditor cannot obtain personal jurisdiction of the debtor — but owns assets in New York, courts have exercised jurisdiction over the debtor. This quasi in rem jurisdiction is subject to the due process restrictions outlined by the United States Supreme Court in Shaffer v. Heitner (1977) 433 US 186. (Id., citing generally Siegel, NY Prac §§ 104, 313, 314 [4th ed].)

How to Structure the Motion

Prejudgment attachment is a provisional remedy to secure a debt by preliminary levy upon the property of the debtor in order to conserve that property for eventual execution. Because attachment is a harsh remedy, the statute must be strictly construed in favor of those against whom it may be applied. The granting of prejudgment attachment is discretionary. Even when the statutory requisites are met, it may be denied. (See Sylmark Holdings Ltd. v Silicone Zone Intl. Ltd. (2004) 5 Misc 3d 285, 300-301 [and cases cited therein].)

Standard for Motion

In order to obtain an order of pre-judgment attachment the plaintiff must demonstrate:

  1. that the defendant has concealed or is about to conceal property in one or more of several enumerated ways, and has acted or will act with the intent to defraud creditors, or frustrate the enforcement of a judgment that might be rendered in favor of the plaintiff;
  2. the moving papers must contain evidentiary facts, as opposed to conclusions, proving the fraud (Benedict v. Browne (2001) 289 A.D.2d 433); and
  3. “[t]he intent must be proven, not simply alleged or inferred, and the facts relied upon to prove it must be fully set forth in the moving affidavits,” (Abacus Federal Savings Bank v. Lim (2004) 8 A.D.3d 12, 13.) the mere removal, assignment or other disposition of property is not grounds for attachment.(Corsi v. Vronman (2007) 37 A.D.3d 397.)

The plaintiff seeking an order of attachment under CPLR 6201(3) [concerning creditors and judgment creditors] must demonstrate:

  1. that the defendants have assigned disposed of, encumbered, or secreted its property, removed it from the state, or are about to do any of these acts, and
  2. that the defendants have acted or will act with the intent to defraud the plaintiff's creditors or to frustrate the enforcement of a judgment that might be rendered in the plaintiff's favor.

Fraud is not lightly inferred, and the moving papers must contain evidentiary facts, as opposed to conclusions, proving the fraud. Affidavits containing allegations raising a mere suspicion of an intent to defraud are insufficient. It must appear that such fraudulent intent really exists in the defendant's mind. The mere removal, assignment, or other disposition of property is not grounds for an order of attachment (Id. at 301-302, [and cases cited therein]).

Affidavits

CPLR 6212 (a) provides that:

"On a motion for an order of attachment, or for an order to confirm an order of attachment, the plaintiff shall show, by affidavit and such other written evidence as may be submitted:

  1. that there is a cause of action,
  2. that it is probable that the plaintiff will succeed on the merits,
  3. that one or more grounds for attachment provided in section 6201 exist, and
  4. that the amount demanded from the defendant exceeds all counterclaims known to the plaintiff.

(Id.)

The Court’s Decision

The mere removal or assignment of property does not constitute grounds for ordering an attachment. Fraudulent intent cannot be presumed by a mere showing of the liquidation of assets. (Rosenthal v. Rochester Button Company, Inc. (1989) 148 A.D.2d 375, 376; Computer Strategies, Inc. v. Commodore Business Machines, Inc. (1984) 105 A.D.2d 167, 173.) Likewise, affidavits submitted in support of an attachment, which contain allegations raising a “suspicion” of intent to defraud, are insufficient (Mitchell v. Fidelity Borrowing, LLC (2006) 34 A.D.3d 366; Rosenthal, supra; Computer Strategies, Inc., supra.).

Proof of Fraud

Recognizing that fraud is not generally proven by direct evidence, courts examine transfers of property for what have been referred to as “badges of fraud.” (DLJ Mortgage Capial, Inc. v. Kontogiannis, et. al. (2009) 594 F.Supp.2d 308, 319, 320; see also Wall Street Associates v. Brodsky (1999) 257 A.D.2d 526.)

“Among the badges courts consider are:

  1. gross inadequacy of consideration;
  2. a close relationship between transferor and transferee;
  3. the transferor's insolvency as a result of the conveyance;
  4. a questionable transfer not in the ordinary course of business;
  5. secrecy in the transfer; and
  6. retention of control of the property by the transferor after the conveyance.”

(DLJ Mortgage Capital, Inc., supra at 320.)

Fraud and Secreting Assets

Petitioner produced sufficient evidentiary facts to warrant the issuance of an order of attachment under CPLR 6201(3) against defendants.... where: co-defendant drew the check in issue on defendant's behalf, admittedly with the knowledge that there were insufficient funds in defendant's Bank account to satisfy payment. This conduct in and of itself constitutes actionable fraud. (Societe Generale Alsacienne De Banque, Zurich v. Flemingdon Development Corp. (1986) 118 A.D.2d 769, 772.) In addition, co-defendant's conduct after passing the bad check demonstrated an intent to secrete defendant's assets in order to frustrate Petitioner's collection on the check. (Id.) Such conduct included co-defendant's statement to Petitioner that the check bore an incorrect account number and should be re-presented to its Bank for payment even though co-defendant knew or should have known that all of defendant's accounts at that bank had been closed. (Id.) In addition, co-defendant's refusal to respond to Petitioner's subsequent telephone and mail inquiries concerning its inability to collect on the check, as well as his alleged attempts to remove the funds in defendant's account at BNY following the service of the Federal ex parte order of attachment, evidences an intent to defraud Petitioner. In view of these facts, an order of attachment should have been issued under CPLR 6201 (3) the defendant and co-defendant. (Id.)

Documents

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County

Cattaraugus County, NY

Filed Date

Jul 19, 2022

Judge

Emilio Colaiacovo

Case Filed

Jan 19, 2022

Case Status

Active

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Filed Date

Jun 23, 2022

Judge Hon. Verna L. Saunders Trellis Spinner 👉 Discover key insights by exploring more analytics for Verna L. Saunders
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Mar 08, 2022

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Mar 08, 2022

Judge Hon. Shlomo S. Hagler Trellis Spinner 👉 Discover key insights by exploring more analytics for Shlomo S. Hagler
County

Steuben County, NY

Filed Date

Nov 24, 2021

Type

Commercial - Contract

Judge

Jscott Odorisi

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Nov 17, 2021

Judge Hon. Leon Ruchelsman Trellis Spinner 👉 Discover key insights by exploring more analytics for Leon Ruchelsman
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Filed Date

Sep 04, 2021

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Saratoga County, NY

Filed Date

Jul 14, 2021

Judge

James E Walsh

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