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A Legal Case Study: Innovative Judgment Collection Efforts for Client

Posted by Arnold A. Arpino | Oct 29, 2018 | 0 Comments

For this case study I will discuss how we recently helped a client collect a years old landlord tenant judgment entered by a housing court.

For this case study, the names of the parties have been changed and dates have been altered.

The Problem: 

Our client, Patty Plaintiff—a landlord, obtained a housing court judgment against former tenants for a significant sum of money.  Patty did not have any luck collecting this judgment for approximately two years.  Patty did not know where her tenants were employed to secure a wage garnishment, she also did not have any information on assets the tenants might have.

What Happened Next:

The tenant, Daisy Defendant brought a personal injury action against Patty because Daisy alleged she was hurt on Patty's premises and that Patty's negligence was the cause of her injuries.  This lawsuit went on for some time until Patty's insurance carrier agreed to settle the claim.  Daisy would be getting a check for damages 15 times the amount of Patty's judgment.

Patty knew she had to act fast, but how?  What were her next steps?  She knew Daisy would soon have assets sufficient to satisfy the judgment but she did not know how to enforce the judgment.

The Solution: 

Patty was referred to our office by a colleague.  We immediately got to work.  Our office looked up the underlying personal injury action on the New York Court's e-filing system and located the attorney information for Daisy. Patty knew that the settlement check in the personal injury lawsuit was going to be sent to Daisy's attorney in the next 21 days.

My office mailed what is called a “restraining notice” under Article 52 of the Civil Practice Laws and Rules to Daisy's personal injury attorney.  This restraining notice prohibited the attorney from transferring any money to Daisy; the money was essentially "frozen." Daisy's attorney was required to hold two times the amount of the judgment in his escrow account. As a result, when Daisy's attorney received the settlement funds from the personal injury lawsuit, the attorney was prohibited from transferring a portion of the proceeds to Daisy.

Daisy's attorney contacted our office. After some back and forth negotiations, our client Patty P reached a favorable settlement with Daisy D to satisfy the judgment.

The Takeaway:

You may be asking, what was so innovative about this process?  It does seem straight forward.  Traditionally, the restraining notice under Article 52 of the CPLR is a device used mainly to restrain bank accounts. Even so, this enforcement device can be used to restrain anyone (with limited exceptions) who possesses property or money belonging to a judgment debtor.

It is also important to remember, winning a judgment does not mean the other side automatically pays it.  It is imperative for landlords, or any potential judgment creditor, to receive sufficient information from a judgment debtor early in the process (i.e., lease signing) to assist with the collection process at a future date.

Note: A third year law student currently employed by the firm prepared this case study.

About the Author

Arnold A. Arpino

Managing Shareholder focusing on Creditor's Rights, Real Estate, & Non-Taxable Estate Planning.


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Arnold A. Arpino & Associates, P.C., is a full service law firm that represents individuals and businesses in a variety of different practice areas. Our firm regularly appears in the Courts throughout Long Island, New York City, and the Hudson Valley.