S T A T E O F N E W Y O R K
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7440
2017-2018 Regular Sessions
I N A S S E M B L Y
April 25, 2017
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Introduced by M. of A. ABINANTI -- (at request of the Office of Court
Administration) -- read once and referred to the Committee on Codes
AN ACT to amend the civil practice law and rules, in relation to making
service upon a financial institution of orders of attachment and
notices and orders in aid of enforcement of judgments effective upon
any account as to which the institution is a garnishee
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision (a) of section 5222 of the civil practice law
and rules, as amended by chapter 409 of the laws of 2000, is amended to
read as follows:
(a) Issuance; on whom served; form; service. A restraining notice may
be issued by the clerk of the court or the attorney for the judgment
creditor as officer of the court, or by the support collection unit
designated by the appropriate social services district. It may be served
upon any person, except the employer of a judgment debtor or obligor
where the property sought to be restrained consists of wages or salary
due or to become due to the judgment debtor or obligor. It shall be
served personally in the same manner as a summons or by registered or
certified mail, return receipt requested or if issued by the support
collection unit, by regular mail, or by electronic means as set forth in
subdivision (g) of this section. It shall specify all of the parties to
the action, the date that the judgment or order was entered, the court
in which it was entered, the amount of the judgment or order and the
amount then due thereon, the names of all parties in whose favor and
against whom the judgment or order was entered, it shall set forth
subdivision (b) and shall state that disobedience is punishable as a
contempt of court, and it shall contain an original signature or copy of
the original signature of the clerk of the court or attorney or the name
of the support collection unit which issued it. Service of a restraining
notice upon a department or agency of the state or upon an institution
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06880-01-7
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under its direction shall be made by serving a copy upon the head of the
department, or the person designated by him or her and upon the state
department of audit and control at its office in Albany; a restraining
notice served upon a state board, commission, body or agency which is
not within any department of the state shall be made by serving the
restraining notice upon the state department of audit and control at its
office in Albany. Service at the office of a department of the state in
Albany may be made by the sheriff of any county by registered or certi-
fied mail, return receipt requested, or if issued by the support
collection unit, by regular mail. SERVICE OF A RESTRAINING NOTICE UPON
A FINANCIAL INSTITUTION SHALL BE MADE BY SERVING THE INSTITUTION'S MAIN
OFFICE OR ANY OFFICE OF THE FINANCIAL INSTITUTION.
§ 2. Subdivision (b) of section 5225 of the civil practice law and
rules, as amended by chapter 388 of the laws of 1964, is amended to read
as follows:
(b) Property not in the possession of judgment debtor. Upon a special
proceeding commenced by the judgment creditor, against a person in
possession or custody of money or other personal property in which the
judgment debtor has an interest, or against a person who is a transferee
of money or other personal property from the judgment debtor, where it
is shown that the judgment debtor is entitled to the possession of such
property or that the judgment creditor's rights to the property are
superior to those of the transferee, the court shall require such person
to pay the money, or so much of it as is sufficient to satisfy the judg-
ment, to the judgment creditor and, if the amount to be so paid is
insufficient to satisfy the judgment, to deliver any other personal
property, or so much of it as is of sufficient value to satisfy the
judgment, to a designated sheriff. Costs of the proceeding shall not be
awarded against a person who did not dispute the judgment debtor's
interest or right to possession. Notice of the proceeding shall also be
served upon the judgment debtor in the same manner as a summons or by
registered or certified mail, return receipt requested. The court may
permit the judgment debtor to intervene in the proceeding. The court may
permit any adverse claimant to intervene in the proceeding and may
determine his OR HER rights in accordance with section 5239. SERVICE OF
AN ORDER TO SHOW CAUSE AND PETITION OR NOTICE OF PETITION AND PETITION
COMMENCING A SPECIAL PROCEEDING PURSUANT TO THIS SUBDIVISION UPON A
FINANCIAL INSTITUTION SHALL BE MADE BY SERVING THE INSTITUTION'S MAIN
OFFICE OR ANY OFFICE OF THE FINANCIAL INSTITUTION.
§ 3. Section 5227 of the civil practice law and rules, as amended by
chapter 532 of the laws of 1963, is amended to read as follows:
§ 5227. Payment of debts owed to judgment debtor. Upon a special
proceeding commenced by the judgment creditor, against any person who it
is shown is or will become indebted to the judgment debtor, the court
may require such person to pay to the judgment creditor the debt upon
maturity, or so much of it as is sufficient to satisfy the judgment, and
to execute and deliver any document necessary to effect payment; or it
may direct that a judgment be entered against such person in favor of
the judgment creditor. Costs of the proceeding shall not be awarded
against a person who did not dispute the indebtedness. Notice of the
proceeding shall also be served upon the judgment debtor in the same
manner as a summons or by registered or certified mail, return receipt
requested. The court may permit the judgment debtor to intervene in the
proceeding. The court may permit any adverse claimant to intervene in
the proceeding and may determine his OR HER rights in accordance with
section 5239. SERVICE OF AN ORDER TO SHOW CAUSE AND PETITION OR NOTICE
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OF PETITION AND PETITION COMMENCING A SPECIAL PROCEEDING PURSUANT TO
THIS SECTION UPON A FINANCIAL INSTITUTION SHALL BE MADE BY SERVING THE
INSTITUTION'S MAIN OFFICE OR ANY OFFICE OF THE FINANCIAL INSTITUTION.
§ 4. Subdivision (a) of section 5232 of the civil practice law and
rules, as amended by chapter 59 of the laws of 1993, is amended to read
as follows:
(a) Levy by service of execution. The sheriff or support collection
unit designated by the appropriate social services district shall levy
upon any interest of the judgment debtor or obligor in personal property
not capable of delivery, or upon any debt owed to the judgment debtor or
obligor, by serving a copy of the execution upon the garnishee, in the
same manner as a summons, except that such service shall not be made by
delivery to a person authorized to receive service of summons solely by
a designation filed pursuant to a provision of law other than rule 318.
SERVICE UPON A FINANCIAL INSTITUTION SHALL BE MADE BY SERVING THE INSTI-
TUTION'S MAIN OFFICE OR ANY OFFICE OF THE FINANCIAL INSTITUTION. In the
event the garnishee is the state of New York, such levy shall be made in
the same manner as an income execution pursuant to section 5231 of this
article. A levy by service of the execution is effective only if, at
the time of service, the person served owes a debt to the judgment
debtor or obligor or he or she is in the possession or custody of prop-
erty not capable of delivery in which he or she knows or has reason to
believe the judgment debtor or obligor has an interest, or if the judg-
ment creditor or support collection unit has stated in a notice which
shall be served with the execution that a specified debt is owed by the
person served to the judgment debtor or obligor or that the judgment
debtor or obligor has an interest in specified property not capable of
delivery in the possession or custody of the person served. All property
not capable of delivery in which the judgment debtor or obligor is known
or believed to have an interest then in or thereafter coming into the
possession or custody of such a person, including any specified in the
notice, and all debts of such a person, including any specified in the
notice, then due or thereafter coming due to the judgment debtor or
obligor, shall be subject to the levy. The person served with the
execution shall forthwith transfer all such property, and pay all such
debts upon maturity, to the sheriff or to the support collection unit
and execute any document necessary to effect the transfer or payment.
After such transfer or payment, property coming into the possession or
custody of the garnishee, or debt incurred by him, or her shall not be
subject to the levy. Until such transfer or payment is made, or until
the expiration of ninety days after the service of the execution upon
him or her, or of such further time as is provided by any order of the
court served upon him or her, whichever event first occurs, the garnish-
ee is forbidden to make or suffer any sale, assignment or transfer of,
or any interference with, any such property, or pay over or otherwise
dispose of any such debt, to any person other than the sheriff or the
support collection unit, except upon direction of the sheriff or the
support collection unit or pursuant to an order of the court. 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. A judgment
creditor who, or support collection unit which, has specified personal
property or debt to be levied upon in a notice served with an execution
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shall be liable to the owner of the property or the person to whom the
debt is owed, if other than the judgment debtor or obligor, for any
damages sustained by reason of the levy.
§ 5. Subdivision (a) of section 6214 of the civil practice law and
rules, as amended by chapter 860 of the laws of 1977, is amended to read
as follows:
(a) Method of levy. The sheriff shall levy upon any interest of the
defendant in personal property, or upon any debt owed to the defendant,
by serving a copy of the order of attachment upon the garnishee, or upon
the defendant if property to be levied upon is in the defendant's
possession or custody, in the same manner as a summons except that such
service shall not be made by delivery of a copy to a person authorized
to receive service of summons solely by a designation filed pursuant to
a provision of law other than rule 318. SERVICE UPON A FINANCIAL INSTI-
TUTION SHALL BE MADE BY SERVING THE INSTITUTION'S MAIN OFFICE OR ANY
OFFICE OF THE FINANCIAL INSTITUTION.
§ 6. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.