Poundage CPLR § 8012

CPLR § 8012  Mileage fees, poundage fees, additional compensation, and limitation on compensation of sheriffs.

Cabrera v Hirth, 2011 NY Slip Op 06394 (1st Dept., 2011)

A sheriff is entitled to poundage, which is a percentage commission awarded for the collection of money pursuant to a levy or execution of attachment, computed on the monies collected (CPLR 8012[b][1]; see Kurtzman v Bergstol, 62 AD3d757, 757 [2009])[FN1].

Where the collection process has been commenced but has not been completed, a sheriff may still be entitled to a poundage fee under three circumstances: (1) where "a settlement is made after a levy by virtue of an execution" (CPLR 8012[b][2]); (2) where the "execution is vacated or set aside" (CPLR 8012[b][2]); (3) where there has been an affirmative interference with the collection process, thus preventing a sheriff from actually collecting the assets (Solow Mgt. Corp. v Tanger, 10 NY3d 326, 330-331 [2008]; see also Thornton v Montefiore Hosp., 117 AD2d 552, 553 [1986]).

In this action, where enforcement of the underlying judgment was settled with payment by the debtor defendants' insurance carriers directly to the creditor plaintiff after the Marshal had levied certain accounts, the Marshal is entitled to poundage (see Kurtzman at 758).

Traditionally, the amount of poundage is based on the value of the property levied upon (see Considine v Pichler, 72 AD2d 103, 104 [1979], lv denied 49 NY2d 701 [1980]). However, in this case, the poundage fee cannot be determined by reference to the value of the property levied. The settlement cut off the Marshal's ability to prove the value of the accounts levied upon. The motion court therefore properly exercised its discretion in using the settlement amount as a substitute for the unknown actual value of the levied accounts.[FN2]

We turn now to the question of which party is responsible for payment of the poundage fee. In a situation such as this, where a settlement is made after a levy, CPLR 8012(b) is silent on this question. The cases which have addressed this issue turn on which of the three circumstances noted above are present in each particular case (see generally Weinstein-Korn-Miller, NY Civ Prac ¶ 8012.05, et seq. [2d ed]).

In the circumstance where a settlement is made after a levy and the order of attachment is vacated (CPLR 8012[b][3]), the courts have interpreted this to cover the situations where "the attachment was invalid at the outset or the action was dismissed in defendant's favor." In those cases, the party responsible for payment of the poundage is usually the plaintiff (see Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C8012:1). Where, as here, the order of attachment is "otherwise discharged" (CPLR 8012 [b][3]), "the party liable for poundage is the one who obtains the discharge – usually the defendant." (id.; see Liquifin Aktiengesellschaft v Brennan, 446 F Supp 914, 922 [SD NY 1978]). 

There is a judicially created exception to this latter rule of thumb in cases where a party affirmatively interferes with collection of the money (see Weinstein-Korn-Miller, NY Civ Prac ¶ 8012.04 [2d ed]). In those situations, the party who actively interferes with the collection process may be held responsible for payment of poundage fees.

***

Initially, the fact that plaintiff agreed to take payment directly from the debtor "is an affirmative act interfering with collection by the [Marshal]" (Greenfield v Tripp, 23 Misc 2d 1088, 1089 [1960]). It is uncontroverted that the matter was settled when the defendants' insurers paid the full amount of the judgment to plaintiff's counsel after the Marshal had levied and collected funds from defendants' bank accounts. There is no question that plaintiff's counsel, rather than adhering to the terms of the judgment and waiting the stated 30 days for defendants' insurance carriers to post undertakings, called upon the Marshal's assistance to levy upon defendants' bank accounts or other assets within four days of the entry of the judgment and some five months prior to serving the judgment with notice of entry on defendants. It has long been customary that where a sheriff levies against defendant's property and the matter is thereafter settled, the judgment creditor is liable to the sheriff for the payment of poundage fees as the party who invoked the Sheriff's services (see County of Westchester v Riechers, 6 Misc 3d 584 [2004]; Matter of Associated Food Stores v Farmer's Bazaar of Long Is., 126 Misc 2d 541, 542 [1984]; Matter of Intl. Distrib. Export Co., Inc., 219 F Supp 412 [SD NY 1963]; Seymour Mfg. Co. v Tarnopol, 20 Misc 2d 210 [1959]; Zimmerman v Engel, 114 NYS2d 293 [1952]; Flack v State of New York, 95 N.Y. 461, 466 [1884]; Campbell v Cothran, 56 NY 279 [1874]; Adams v Hopkins, 5 Johns 252 [Sup Ct, NY County 1810]). That is especially appropriate here as plaintiff, as early as November 11, 2004, knew that the entire amount of the judgment was insured, and that defendants' carriers had posted undertakings for the full amount of the judgment. Plaintiff had the opportunity on November 19 to terminate the Marshal's efforts to collect this judgment by declining to sign the 60 day extension as requested by the Marshal. Plaintiff ultimately settled directly with the defendants' insurance carriers rather than follow the court-ordered payment schedule as provided for in the judgment. The record does not show any attempt to advise the Marshal that the carriers posted security or that plaintiff's counsel made his own demand upon those carriers for payment.

As a result, the motion court properly determined that plaintiff and counsel "thwarted" the efforts of the Marshal to collect on this judgment, thus rendering them responsible for payment of the Marshal's poundage fee.

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