Third-party garnishees appeal from a judgment of the district court (Seybert, /.) directing them to turn over $1,056,444.15 to a judgment creditor to satisfy a judgment against a judgment debtor. The district court awarded the sum as damages for the garnishees’ violation of certain restraining notices. The garnishees also appeal from the district court’s post-judgment order denying their motion to alter the judgment.
We affirm in part and vacate and remand in part.
BACKGROUND
Plaintiff-counter-defendant-appellee CSX Transportation, Inc. (“CSX”) is an interstate rail carrier. Defendant-counter-claimant Emjay Environmental Recycling, Ltd. (“Emjay”) operates a waste transfer station. In 2012, appellant Island Rail Terminal, Inc. (“Island Rail”) purchased “substantially all” of Emjay’s assets for $3,572,011.52 pursuant to an Asset Purchase Agreement and Amended Promissory Note. Appellants Maggio Sanitation Services, Inc. (“Maggio”) and Eastern Resource Recycling, Inc. (“Eastern Resource”) guaranteed Island Rail’s payment and perfоrmance obligations.
On September 25, 2014, the district court entered an amended judgment for CSX and against Emjay in this breach of contract suit for $1,056,444.15. We affirmed the judgment. CSX Transp., Inc. v. Emjay Envtl. Recycling, Ltd.,
On November 12, 2014, CSX served third-party garnishees Island Rail, Mag-gio, and Eastern Resource (collectively, “Garnishees”) with restraining notices (the “Restraining Notices”) to aid its judgment entered in this case below.
On June 12,2015, CSX filed, a motion for a turnover order to.compel Garnishees to satisfy CSX’s September 25, 2014 amended judgment against Emjay, as entered by the district court in this case. In its motion, CSX also argued, alternatively, that Garnishees were liable to CSX for damages because entering into the state settlement violated the Restraining- Nоtices. While the motion was pending, on June 24, 2015, Garnishees issued 'a check to CSX for $8,015.03—the “remainder of the proceeds of the settlement of the [Garnishees’] debt to Emjay pursuant to the” State Settlement Order. App. 230-31. The remaining settlement payments to ELS, Sullivan Gardner and Crescimanni were paid out before this cheek was issued, but the dates of these payments do not appear to be included in the record. On or about July 9, 2015, CSX served writs of execution for its judgment.
On February 25, 2016, the district court granted CSX’s motion for a turnover order and directed Garnishees to turn over $1,066,444.15 to CSX. The district court also held that “to the extent-that the Garnishees already made disbursements under the [State] Settlement Order, CSX is entitled to damages in the amount of the Judgment: $1,056,444.15.” Sp. App. 12. As to damages, the court explained that the Garnishees “acted negligently by ignoring the Restraining Notices because only an order from this Court could alter the Garnishees’ obligations.” Sp. App. 13. If Garnishees had not violated the Restraining Notices by paying out the $2.2 million state settlement, the district court concluded, the Garnishees would still have had $1,056,444.15 available, the amount of CSX’s unsatisfied judgment.
On March 2, 2016, CSX moved the court to enter judgment against Garnishees on the ground that Garnishees- already disbursed funds pursuant to .the state settlement. . On March 10, 2016, Garnishees mоved for reconsideration of the district court’s February 25, 2016 turnover order. In their motion, Garnishees objected to the district court’s failure to hold a hearing and also requested oral argument on their motion.
On November 2, 2016, without holding oral argument or providing a hearing, the district - court denied Garnishees’ motion for reconsideration and granted CSX’s motion to enter judgment against Garnishees, reaffirming .that Garnishees would have been able to satisfy CSX’s judgment of $1,056,444.15 ij: Garnishees had not violated the Restraining Notices by distributing funds pursuant to the $2.2 million state
On November 4, 2016, Garnishees moved by letter to alter the judgment on two grounds, which they contended would reduce the judgment to $201,945.11. On December 1, 2016, the district court issued an order electronically denying Garnishees’ motion. First, the district court declined to consider new evidence demonstrating that ELS served its property execution several months earlier—thereby granting it priority before the State Settlement Order—because Garnishees failed to show that they were “justifiably ignorant” of thе evidence “despite due diligence.” Elec. Order Den. Mot. to Alter J., CSX Transp. v. Island Rail Terminal, Inc., No. 12-cv-1866 (E.D.N.Y. Dec. 1, 2016) (quoting Becnel v. Deutsche Bank AG,
This appeal followed.
DISCUSSION
We review a district court’s ruling on a request for an order of attachment for abuse of discretion, Exp.-Imp. Bank of the Republic of China v. Grenada,
Because the district court indicated-that its “ultimate conclusion rested' on a damages analysis,” Sp. App. 25, not a turnover analysis, we confine the scope of our review to the damages theory. Three principal issues áre presented. First, Garnishees argue that CSX improperly proceeded by motion under Rule 69(a) of the Federal Rules of Civil Procedure and that, instead, CSX should have instituted a special proceeding against Garnishees pursuant to C.P.L.R. article 52 for the district court to obtain personal jurisdiction. Second, Garnishees argue that they did not violate the Restraining Notices because they transferred funds pursuant to an order of the state court, and C.P.L.R. § 5222(b) permits
I. Procedure for Enforcing Money Judgments
First, we agree with the district court that CSX was permitted to seek relief from Garnishees by motion under Rule 69(a), rather than by instituting a special proceeding pursuant to New York law. See Fed. R. Civ. P. 69(a).
A. Applicable Law
A motion to enforce a money judgment is governed by Rule 69(a), which provides that “proceedings supplementary to and in aid of judgment or execution .... must accord with the procedure of the state where the court is located.” Id. In New York, C.P.L.R. article 62 governs the enforcement and collection of money judgments. See N.Y. C.P.L.R. §§ 5201-5252. Section 5225(b) enables a judgment creditor to commence a “special proceeding” against a third party who “is in possession or custody of money or other personal property” in which the judgment debtor has an interest,. Id. § 5225(b).
B. Application
Although we have assumed in prior cases that parties may seek turnover orders by motion, we have not squarely addressed the issue. See, e.g., Vera v. Republic of Cuba,
First, a special proceeding is a procedural vehicle under New York law with no equivalent under the Federal Rules of Civil Procedure, which recognize only “one form of action—the civil action.” Fed. R. Civ. P. 2; see Mitchell v. Garrison Prot. Servs., Inc.,
Second, a special proceeding is more akin to motion practice than a plenary action. See HBE Leasing Corp.,
Third, New York law explicitly contemplates that proceedings brought as motions may, if necessary, be converted to special proceedings by the court. Under C.P.L.R. § 103(c), “[i]f a court has obtained jurisdiction over the parties, a civil judicial proceeding shall not be dismissed solely because it is not brought in the proper form .... If the court finds it appropriate in the interests of justice, it may convert a motion into a special proceeding .... ” See also Jackson v. Bank of Am., N.A.,
Accordingly, we conclude that CSX was not required to institute a separate proceeding, against Garnishees and could proceed by motion under Rule 69(a), so long as the district court otherwise had personal jurisdiction over Garnishees. Here, personal jurisdiction is clear: Garnishees do not contest that they 'arе New York corporations with their principal places of business in the Eastern District of New York. Although Garnishees contend that no summons was served, the record reflects that CSX complied with Rule 4 of the Federal Rules of Civil Procedure by serving the summons' on Cathy McByrne, a person authorized to accept service on behalf of Vincent Maggio, Jr., Chief Executive Officer for Garnishees. We therefore conclude that the district court properly allowed CSX to proceed by motion.
II. Statutory Construction of C.P.L.R. § 5222
Second, Garnishees argue that they did not violate the Restraining Notices because they transferred the restrained funds pursuant to the state court’s settlement order, and C.P.L.R. § 5222(b) authorizes disbursements “pursuant to an order of the court.” We agree with the district court that the plain meaning of the statute does not support Garnishees’ interpretation.
A. Applicable Law
Under C.P.L.R. §. 5222, an attorney for the judgment creditor may, as an officer of the court, serve a restraining notice on a third party who “owes a debt to the judgment debtor or ... is in the possession or custody of property in which he or she knows or has- reason to believe the judgment debtor. ... has an interest.” N.Y. C.P.L.R. § 5222(a)-(b). A party subject to a restraining notice is “forbidden to make or suffer any sale, assignment or transfer of, • or any interference with, any such property, or pay over or otherwise dispose of any such debt ... except upon direction of the sheriff or pursuant to an order of the court ....” Id. § 5222(b) (emphasis added). A court has broad authority to regulate the use of enforcement devices. Id. § 5240 (“The court may at any time, on its own initiative or the motion of any interested person, and upon such notice as it may require, make an order denying, limiting, conditioning, regulating, extending or modifying the use of any enforcement procedure.”).
B. Application
“In.determining the law of the State of New York, ‘we will consider not only state statutes but also' state decisional law.’ ” Elliott Assocs., L.P. v. Banco de la Nacion,
Here, the plain and unambiguous meaning of C.P.L.R. § 5222(b) is that “the” court refers to the court out of which the restraining notice issued. The use of the definite article “the” indicates a singular court, whereas the indefinite article “any” or “a” denotes multiple courts. See Nat’l Foods, Inc. v. Rubin,
In addition, as the district court explained, permitting a second court to dissolve a restraining notice issued out of the first court would injure the rights of creditors and threaten, the first court’s injunc-tive power. See Nardone v. Long Island Tr. Co.,
We’ also agree with the district court that Garnishees negligently violated the Restraining Notices. The Restraining Notices “serve[d] as a type of injunction prohibiting the transfer of the judgment debtor’s property.” Aspen Indus., Inc. v. Marine Midland Bank,
III. Damages
Third, Garnishees argue that even if they did violate the Restraining Notices, CSX is not entitled to recover because CSX sustained no damages as the creditor “last in line” under New York law on priority of judgments. Appellants’ Br. 29. Relatedly, Garnishees contend that the district court erred by failing to hold a hearing, entertain testimony, or receive admissible evidence before holding them liable for CSX’s unpaid judgment. For the reasons set forth below, we conclude that the district court abused its discretion by failing to hold a hearing to resolve factual issues concerning the relative priorities of judgment creditors—a necessary predicate to determining the proper amount of damages, if any, sustained by CSX.
A. Applicable Law
A garnishee that violates a restraining notice may be liable to an aggrieved judgment creditor if the creditor establishes that “it sustained damages as a result of the garnishee’s disobedience of the [restraining] notice.” Aspen Indus.,
New York has a comprehensive statutory scheme establishing priorities for directing the assets of a judgment debtor to competing judgment creditors. Under C.P.L.R, § 5234, “the order of priority аmong judgments is to be determined strictly in accordance with the chronological service of execution levies and the filing of orders for turnover.” City of New York v. Panzirer,
A court “may grant summary relief where there are no questions of fait, but ‘it must conduct a trial on disputed issues of fact on adverse claims in a turnover matter.’” HBE Leasing Corp. v. Frank,
B. Application
To recover damages for Garnishees’ violation of the Restraining Notices, CSX had to demonstrаte that the “property of the judgment debtor [Emjay] was available to satisfy the judgment at the time the restraining notice was in effect.” Aspen Indus.,
Here, the district court recognized that the Restraining Notices did not confer priority and that priority creditors were entitled to be paid first. After reviewing the timеline of judgments and executions, the district court concluded that only Cresci-manni served an execution before the state court’s February 26, 2015 settlement order that “grant[ed] him a superior right.” Sp. App. 28. Therefore, the district court found, “even if the Court preserved the $2.2 million settlement figure and offset Crescimanni’s $402,013.83 judgment, the Garnishees would have had $1,797,986.17 left over to satisfy CSX’s $1,056,444.15 judgment.” Sp. App. 27. The district court concluded that “Garnishees have not raised any issues of fact” and that it “need not hold a hearing to determine the proper judgment amount.” Sp. App. 33. The district court subsequently declined in its discretion to recognize new evidence from Garnishеes demonstrating that ELS had
We conclude that, at a minimum, the parties’ submissions and the record demonstrate a lack of clarity as to the order of priority of judgment creditors, precluding the district court’s grant of summary relief to GSX.
' At the time of judgment, the order of priority was unclear. The record shows that, during state court proceedings on February 24, 2015, the participating judgment creditors—including Crescimanni, ELS and Sullivan Gardner-indicated that they believed, “[without fixing the priorities in any way between us, we all had a higher priority than CSX.” App.- 190. CSX’s counsel was informed of the сompeting judgment creditors’ views as to priority. Id. at 191. On June 26, 2015, Garnishees alleged in their opposition to CSX’s turnover motion that “other than serving its Restraining Notices, CSX did nothing to enforce its judgment and, unlike Emjay’s other creditors whose claims have a priority position, took no steps whatsoever to create or perfect an enforceable lien.” Id. at 125. On the other hand, CSX never asserted that it had a higher priority , than any of the other creditors, and in fact even now suggests that priority is not relevant to. damages. We reject CSX’s argument because, as noted above, damages cannot be assessed without delineating the relative priority of judgment-creditors,,-
The district court did not consider priorities when it invited CSX to apply for a judgment for damages in its initial turn-, over order. It did correctly recognize the-importance of priority in its subsequent order denying Garnishees’ motion for reconsideration. But the district court’s final reasoning suggests that, had it possessed a complete picture of the relevant players and priorities before judgment, it might have reached a different outcome. Arid while the district court rejected as untimely Garnishees’ submission regarding the correct date of ELS’s execution, a hearing would have given Garnishees the opportunity to prеsent this evidence.
¡Failure to resolve these factual issues before summarily awarding damages to CSX was an 'abuse of discretion. Therefore, we vacate that portion of the district court’s judgment and orders holding CSX liable for $1,056,444.15 in damages, and remand with instructions for the district court to hold a hearing to resolve factual issues concerning damages including, but not limited to, the order of priority of judgment creditors. During the hearing, the district court should, at minimum, revisit the two factual issues that Garnishees raised in-their letter motion to alter the judgment.
CONCLUSION
For the reasons set forth above, we AFFIRM IN PART, VACATE IN PART, and REMAND the case for further proceedings consistent with this opinion;
Notes
. "A ‘gаrnishee’ is a person who owes a debt to a judgment debtor, or a person other than the judgment debtor who has property in his possession or custody in which a judgment debtor has an interest.” N.Y. C.P.L.R. § 105(i). A restraining notice is an enforcement device used in aid of an existing judgment that bears the caption of the underlying action. N.Y. C.P.L.R. § 5222, cmt. 5222:1 (practice commentary). It may be issued by the judgment creditor’s attorney against the judgment debtor or a third party. Id. A restraining notice served upon a garnishee "serves as a type of injunction prohibiting the transfer of the judgment debtor’s property.” Aspen Indus., Inc. v. Marine Midland Bank,
. Garnishees belatedly corrected the date of ELS’s writ of execution from March 10, 2015 to November 5, 2014 in a letter motion to alter the judgment. Letter Mot. to Alter J. 1, CSX Transp. v. Island Rail Terminal, Inc., No. 12-cv-1865 (E.D.N.Y. Nov. 4, 2016), ECF No. 100. As discussed further below, the district court declined in its discretion to consider the new fаct. Elec. Order Den. Letter Mot. to Alter J., CSX Transp. v. Island Rail Terminal, Inc., No. 12-CV-1865 (E.D.N.Y. Dec. 1, 2016).
. In the first of those actions, Emjay sued Garnishees to recover the $3.5 million purchase price from the asset sale, and Garnishees raised various counter-claims, In the second, ELS, Sullivan Gardner, and Crescimanni sued Emjay for unpaid judgments.
. CSX suggests that Garnishees’ appeal is limited to the denial of the motion for reconsideration. But Garnishees’ Amended Notice of Appeal identifies the initial turnover order, the order denying their motion for reconsideration, the Second Amended Judgment, as well as the district court’s post-judgment order denying their motion to alter the judgmеnt. CSX offers no argument for limiting the scope of our review to the single order denying the motion for reconsideration. We therefore consider and resolve Garnishees' appeal of all relevant orders in this dispute.
. Section 5225(b) provides in pertinent part: Upon a special proceeding commenced by the judgment creditor, against a person in possession or custody of money or other personal property in which the judgment debtor has an interest, or against a person who is a transferee of money or other personal property from the judgment debtor, where it is shown that the judgment debtor is entitlеd to the possession of such property or that the judgment creditor’s rights to the property are superior to those of the transferee, the court shall require such person to pay the money ....
. Section 5227 provides in pertinent part:
Upon a special proceeding commenced by the judgment creditor, against any person who it is shown is or will become indebted to the judgment debtor, the court may require such person to pay to the judgment creditor the debt upon maturity, or so much of it as is sufficient to satisfy the judgment, and to execute and deliver any document necessary to effect payment; or it may direct that a judgment be entered against such рerson in favor of the judgment creditor.
. District courts in this circuit have also consistently allowed parties to request turnover orders by motion rather than by special proceeding. See, e.g., Bernard v. Lombardo,