Tire Eng'g & Distrib, L.L.C. v. Bank of China Ltd., Motorola
2014 U.S. App. LEXIS 687
| 2d Cir. | 2014Background
- Appeals challenge district court orders denying relief under CPLR Article 52 against a garnishee bank with New York branches for assets held in foreign branches.
- Plaintiffs contend Koehler v. Bank of Bermuda Ltd. endorses extraterritorial post-judgment relief based on personal jurisdiction over the garnishee.
- Garnishee banks argue Koehler did not overrule the separate entity rule as applied to foreign-branch assets.
- District court held the separate entity rule precludes turnover and restraints in Tire Engineering v. Bank of China and Motorola-related proceedings.
- Court certified questions to the New York Court of Appeals due to unsettled, important New York law questions and potential wider banking-industry impact.
- Panel retains jurisdiction and reserved decision on the certified questions until the Court of Appeals weighs in.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the separate entity rule preclude turnover orders? | Koehler supports extraterritorial reach via personal jurisdiction. | Separate entity rule remains controlling for post-judgment turnover. | Unresolved; court certifies to NY Court of Appeals. |
| Does the separate entity rule preclude restraining orders? | Rule does not apply to restraining orders addressing foreign assets. | Rule applies to both turnover and restraints. | Unresolved; court certifies to NY Court of Appeals. |
Key Cases Cited
- Koehler v. Bank of Bermuda Ltd., 12 N.Y.3d 533 (N.Y. 2009) (holds CPLR Article 52 may reach extraterritorial property when personal jurisdiction exists, but does not decide post-judgment separate-entity issue)
- NMI v. Canadian Imperial Bank of Commerce, 21 N.Y.3d 55 (N.Y. 2013) (recognizes starting point of CPLR §5225(b) and discusses legislature vs. judicial-created doctrine)
- Cronan v. Schilling, 100 N.Y.S.2d 474 (Sup. Ct. N.Y. Cnty. 1950) (early rationale for each bank branch as separate entity)
- In re Nat'l Union Fire Ins. Co. of Pittsburgh Pa. v. Advanced Employment Concepts, 703 N.Y.S.2d 3 (1st Dep't 2000) (applies separate entity concept to reach assets in different jurisdictions)
- Motorola Credit Corp. v. Uzan, 561 F.3d 123 (2d Cir. 2009) (discusses post-judgment collection and ongoing efforts)