Corsair Special Situations Fund, L.P. v. Pesiri
2017 U.S. App. LEXIS 12512
| 2d Cir. | 2017Background
- Corsair obtained a multi-million dollar federal judgment against several defendants (including EFS Structures) and registered it in D. Conn.; a writ of execution issued to enforce collection.
- Corsair learned a third party (National Resources) owed money to its judgment debtor and had Marshal Mark Pesiri serve a writ of execution on National Resources.
- National Resources ignored the writ and later paid $2,308,504 to the judgment debtor and another creditor; Corsair then obtained a court turnover order requiring National Resources to turn over $2,308,504 to Corsair.
- Pesiri intervened seeking a 15% commission under Conn. Gen. Stat. § 52-261(a)(F) (15% of the amount of the execution) for “the levy of an execution,” claiming his service of the writ constituted the levy.
- The district court awarded Pesiri the 15% fee ($346,275.60); Corsair appealed, arguing that mere service of a writ that was ignored (and where the creditor, not the officer, secured the monies via court action) does not qualify as a levy for the 15% fee.
- The Second Circuit found the statutory meaning ambiguous and certified two questions to the Connecticut Supreme Court about whether Pesiri was entitled to the 15% fee and whether it matters that the writ was ignored and that the creditor (not the marshal) procured the monies.
Issues
| Issue | Plaintiff's Argument (Corsair) | Defendant's Argument (Pesiri) | Held |
|---|---|---|---|
| Whether service of a writ on a third party constitutes the “levy of an execution” under § 52-261(a)(F) | A levy requires seizure/possession; Pesiri neither seized nor possessed the funds, so service alone is insufficient | Service on the third party satisfied Connecticut levy procedure under § 52-356a and thus constituted a levy | Question certified to the Connecticut Supreme Court as unresolved under Connecticut law |
| Whether the 15% fee requires the officer to be the person who actually collects or secures the money/debt | The statute requires the officer to have collected or secured the debt to earn the 15% fee; here Corsair (via court proceedings), not Pesiri, procured the funds | The statute can be read to permit the fee when the levy is made and the money is ultimately collected, regardless of who effectuates the collection | Question certified to the Connecticut Supreme Court due to textual ambiguity |
| Interpretation of § 52-356a interplay with § 52-261(a)(F) (does subsection (5) treat service as levy?) | Service is not a completed levy unless third party turns over funds | § 52-356a(a)(5) treats levy on a third party as occurring upon service; protection for third parties indicates levy occurs on service | Certified for state court resolution because reasonable arguments exist on both sides |
| Whether awarding 15% for mere service raises policy concerns (risk of minimal effort rewarded) | Large fee for mere service would reward minimal action and incentivize officers to do little | Statutory scheme can reasonably compensate officers for levies on third-party held property | Policy considerations noted but not resolved; certification requested |
Key Cases Cited
- Preston v. Bacon, 4 Conn. 471 (Conn. 1823) (interpreting early sheriff fee statute; officer must procure satisfaction or secure debt to earn commission)
- Nemeth v. Gun Rack, Ltd., 659 A.2d 722 (Conn. App. Ct.) (1995) (defined “levy” as an actual or constructive seizure in a different statutory context)
- Lockhart v. United States, 136 S. Ct. 958 (2016) (discussed rule of the last antecedent and contextual interpretation of modifiers)
- KLC, Inc. v. Trayner, 426 F.3d 172 (2d Cir. 2005) (standard: federal courts interpret state statutes de novo)