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Koehler v. Bank of Bermuda Ltd.

Koehler v. Bank of Bermuda Ltd.

Court of Appeals of New York

April 28, 2009, Argued; June 4, 2009, Decided

No. 82

Opinion

 [*536]  [**827]  [***765]   Pigott, J.

The United States Court of Appeals for the Second Circuit, by certified question, asks us to decide whether a court sitting in New York may order a bank over which it has personal jurisdiction to deliver stock certificates owned by a judgment debtor (or cash equal to their value) to a judgment creditor, pursuant to CPLR article 52, when those stock certificates are located outside New York. We answer the certified question in the affirmative.

  I.

Sixteen  [****2] years ago, on June 4, 1993, the United States District Court for the District of Maryland awarded Lee N. Koehler, a citizen of Pennsylvania, a default judgment in the sum of $ 2,096,343 against his former business partner, A. David Dodwell. Koehler duly registered the Maryland judgment in the United States District Court for the Southern District of New York. At that time, Dodwell, a resident of Bermuda, owned stock in a Bermuda corporation, of which he and Koehler had been shareholders, and certificates representing Dodwell's shares were in the possession of the Bank of Bermuda Limited (BBL), and located in that country. Dodwell had pledged the shares to BBL as collateral for a loan.

On October 27, 1993, Koehler filed a petition against BBL in the United States District Court for the Southern District of New York, seeking "payment or delivery of property of judgment debtor," and citing CPLR article 52. Koehler served the petition upon an officer of the Bank of Bermuda (New York) Limited, which he claimed to be a New York subsidiary and agent of BBL. On October 29, 1993, the District Court ordered BBL to deliver the stock certificates, or monies sufficient to pay the judgment, to Koehler.  [****3] It is this turnover order that is the subject of the certified question before us.

BBL argued before the District Court that service upon the New York bank did not subject BBL to the personal jurisdiction of the court. Although this jurisdictional issue was the subject of litigation in federal court for some 10 years, BBL eventually consented, by letter dated October 9, 2003, to the personal jurisdiction of the court as of the time that Koehler had commenced the proceeding.

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12 N.Y.3d 533 *; 911 N.E.2d 825 **; 883 N.Y.S.2d 763 ***; 2009 N.Y. LEXIS 1751 ****; 2009 NY Slip Op 4297

 [1]  Lee N. Koehler, Appellant, v The Bank of Bermuda Limited, Respondent.

Prior History: Proceeding, pursuant to NY Constitution, article VI, § 3 (b) (9) and Rules of the Court of Appeals (22 NYCRR) § 500.27, to review a question certified to the New York State Court of Appeals by the United States Court of Appeals for the Second Circuit. The following question was certified by the United States Court of Appeals and accepted by the New York State Court of Appeals: "May a court sitting in New York order a bank over which it has personal jurisdiction to deliver stock certificates owned by a judgment debtor (or cash equal to their value) to a judgment creditor, pursuant to N.Y. C.P.L.R. Article 52, when those stock certificates are located outside New York?"

Koehler v. Bank of Berm., Ltd., 544 F3d 78, 2008 U.S. App. LEXIS 20095 (2d Cir. N.Y., 2008)

Disposition:  [****1] Following certification of a question by the United States Court of Appeals for the Second Circuit and acceptance of the question by this Court pursuant to section 500.27 of the Rules of Practice of the New York State Court of Appeals, and after hearing argument by counsel for the parties and consideration of the briefs and the record submitted, certified question answered in the affirmative.

CORE TERMS

judgment debtor, judgment creditor, garnishee, personal jurisdiction, attachment, garnishment, certified question, proceedings, turnover order, rem, postjudgment, prejudgment, personam, deliver, stock certificate, out-of-state

Civil Procedure, Remedies, Judgment Liens, Enforcement of Liens, Writs, Ancillary Writs, Writs of Attachment, In Rem & Personal Jurisdiction, In Personam Actions, General Overview, Subject Matter Jurisdiction, Jurisdiction Over Actions, Judgments, Enforcement & Execution, Garnishment, Sanctions, Contempt, Civil Contempt, Pleadings, Interpleader, Parties, Joinder of Parties, Constitutional Law, Fundamental Rights, Procedural Due Process, Scope of Protection, Jurisdiction, In Rem Actions, Quasi in Rem Actions, Governments, Courts, Authority to Adjudicate, Discovery & Disclosure, Discovery, Subpoenas