Corsair Special Situations Fund, L.P. v. Engineered Framing Systems, Inc.
174 A.3d 791
| Conn. | 2018Background
- Corsair obtained a >$5 million federal judgment and learned a judgment debtor (D) was owed >$3 million by a Connecticut third party (National Resources).
- Corsair registered the judgment in the D. Conn. and obtained a writ of execution requiring the third party to deliver the debt to the levying officer (state marshal Pesiri).
- Pesiri properly served the writ on National Resources; National Resources ignored it and paid $2,308,504 to D and another creditor.
- Corsair obtained a district court turnover order (affirmed on appeal) compelling National Resources to pay $2,308,504 to Corsair.
- Pesiri intervened claiming a statutory 15% commission under Conn. Gen. Stat. §52-261(a)(F) on the amount of the execution; Corsair insisted Pesiri was only owed the flat service fee.
- District Court awarded Pesiri the 15% fee; Second Circuit certified two questions to the Connecticut Supreme Court about entitlement to the fee and whether it matters that Pesiri did not personally collect the funds and the writ was ignored.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether marshal is entitled to 15% fee under §52-261(a)(F) for levy on debt in possession of third party | Corsair: fee applies only if officer actually collects and pays over the money; here marshal did not collect | Pesiri: levy occurred by proper service on third party; marshal entitled to 15% because service effectuated constructive seizure | Yes — marshal entitled to 15% where writ was properly served and constructive seizure occurred, and funds later paid to creditor via turnover order |
| Whether it matters that the writ was ignored and creditor procured funds only after further court enforcement | Corsair: marshal’s lack of further action and plaintiff’s additional enforcement mean marshal didn’t ‘‘collect’’ funds and should not get 15% | Pesiri: marshal’s proper service was essential predicate to recovery; subsequent court enforcement doesn’t negate levy | No — it does not matter; proper service/demand on third party effectuates levy even if creditor later obtains funds by turnover order |
Key Cases Cited
- Nemeth v. Gun Rack, Ltd., 38 Conn. App. 44 (Conn. App. 1995) (recognizes levy may be satisfied by constructive seizure)
- Fair Cadillac Oldsmobile Corp. v. Allard, 41 Conn. App. 659 (Conn. App. 1996) (discusses bank execution where bank paid creditor directly after levy)
- Miller v. Egan, 265 Conn. 301 (Conn. 2003) (discusses marshal liability and insurance indicating personal exposure)
- Preston v. Bacon, 4 Conn. 471 (Conn. 1823) (applies common-sense construction when officer substantially performed levy duties)
- Corsair Special Situations Fund, L.P. v. Engineered Framing Sys., Inc., 863 F.3d 176 (2d Cir. 2017) (Second Circuit certified ambiguity in §52-261 to Connecticut Supreme Court)