Corsair Special Situations Fund, L.P. v. National Resources
595 F. App'x 40
| 2d Cir. | 2014Background
- Corsair obtained a judgment against EFS Structures and served a writ of execution on National Resources, a third party that allegedly owed funds to EFS.
- After service, National Resources continued to pay the disputed funds to or for EFS rather than to Corsair.
- Corsair moved for a turnover order under Connecticut garnishment law to collect roughly $2 million paid in violation of the writ; the district court granted the turnover on Sept. 26, 2013.
- National Resources contested service of process and argued the EFS that contracted with it was a different corporate entity than Corsair’s judgment-debtor.
- National Resources also raised, belatedly, statutory and evidentiary objections to Corsair’s turnover calculation and sought reconsideration and an evidentiary hearing, which the district court denied.
- The Second Circuit affirmed, holding National Resources waived its late objections and rejecting its preserved challenges to service and the identity of EFS.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper service of writ on foreign LLC | Corsair: personal service on a managing member satisfied Connecticut LLC service rules. | National Resources: service should have been through the Secretary of State under Conn. Gen. Stat. § 52‑59b. | Affirmed: personal service on a managing member complies with Conn. Gen. Stat. § 34‑105(d); § 52‑59b is permissive, not exclusive. |
| Identity of the EFS that owed the debt | Corsair: the contracting/paying EFS was the same entity as the judgment‑debtor (same name, address, tax ID). | National Resources: the judgment debtor’s corporate status was revoked and a new EFS later incorporated, so they are different entities. | Affirmed: district court’s factual finding that entities were the same was not clearly erroneous. |
| Late statutory and evidentiary challenges to turnover amount | Corsair: turnover amount was properly calculated from its business records; National Resources had notice and could have timely objected. | National Resources: district court misread Conn. post‑judgment garnishment statute and relied on unauthenticated evidence; requested reconsideration and hearing. | Affirmed: issues were raised belatedly below and waived; district court did not abuse discretion in denying reconsideration or extra evidentiary hearing. |
| Right to additional evidentiary hearing under due process | Corsair: existing hearing opportunity satisfied due process; National Resources had chance to object. | National Resources: needed additional hearing to contest amount and evidence. | Affirmed: district court provided adequate notice and opportunity; denial of further hearing was not an abuse of discretion. |
Key Cases Cited
- Nat’l Union Fire Ins. Co. of Pittsburgh, PA. v. Stroh Cos., 265 F.3d 97 (2d Cir.) (failure to properly raise issues below forfeits appellate review)
- Official Comm. of Unsecured Creditors of Color Tile, Inc. v. Coopers & Lybrand, LLP, 322 F.3d 147 (2d Cir.) (arguments first raised in motion for reconsideration are generally not preserved)
- Silivanch v. Celebrity Cruises, Inc., 333 F.3d 355 (2d Cir.) (factors for assessing whether neglect is "excusable" under Rule 60(b))