Cynthia McCahey v. L.P. Investors, Allen M. Rosenthal, Affiliated Credit Adjusters, Sheriff of Suffolk County, Suffolk County Clerk

MESKILL, Before KEARSE and WIN- TER, Judges. Circuit WINTER, Judge: Circuit plaintiff, Cynthia McCahey, appeals Judge Platt’s dismissal of her com plaint claim, for failure to state a Fed.R. 12(b)(6). McCahey injunctive, Civ.P. seeks declaratory, monetary relief on the grounds post-judgment that New York’s deprived her of without process. We affirm.

Background Underlying Dispute 1. The complaint Because the was dismissed for claim, accept failure to state a we its alle- gations as true. Gardener v. Toilet Goods Association, 167, 172, 1526, 1529, 18 L.Ed.2d McCahey a complaint, underly- and information about According ing judgment. children. single three She informed the mother of It also dependent support on family are her debtor that of the debtor Dependent Chil- taken, the Aid to Families proper- has been that some forms (“AFDC”). On October program dren (one ty exempt example are from seizure obtained a default L.P. Investors AFDC), given is welfare such as that the McCahey for rent against unpaid person sending "the contact $1,979.61. McCahey had in the amount of Aid, lawyer Legal this notice” or a and appear. did proceeding but notice of the get procedure that there validity the She does not contest exempt. if the property back judgment. form, suggested by As McCahey the con- judgment, To L.P. Investors collect sending notice,” tacted “the this i.e. agency, Affiliated Credit hired a collection Rosenthal, him that the and informed mon- attorney, hired Adjusters, in turn ey in money the account was welfare 14, 1983, Rosen- Allen Rosenthal. On June exempt thus seizure. from Rosenthal McCahey and telephoned asked her thal her him copy asked to send of her wel- McCahey refused, ex- pay judgment. McCahey’s fare check. next check arrived did not have sufficient plaining that she August 15, and she then sent Rosenthal wholly dependent funds on AFDC. and was copy.1 status, dependent her she As evidence of August On at the direction Rosen- public her case told Rosenthal assistance thal, County the Sheriff of Suffolk number. an execution on the bank. Three la- McCahey that had ascertained Rosenthal ter, another Sheriff sent Notice to checking the Island State account Judgment McCahey, Debtor to but McCa- Bank. The sole source funds for hey August 30, did not receive it. On July AFDC. On the bank account was turned to the Sheriff. On bank over $35.13 restraining notice received a from Rosen- September turned over the the Sheriff stop payments directing thal it to all on the money to Rosenthal Rosenthal. received July 12, Shortly McCahey after account. only fees. because of sheriff’s When $11 informing the bank received a letter from why he called the to determine he had bank her account had been restrained. that her $11, again only received the bank informed charged The her this notice. $10 bank money him in the account was thereafter, McCahey called the Soon bank 4, 1983, Nonetheless, exempt. on October employee and informed a bank that her paid the entire balance the bank the Sheriff entirely of mon- account consisted welfare account, $406.82. McCahey told ey. employee bank exempt money seizure welfare was from date, plaintiff At some contact- later promised contact Rosenthal. About Legal Society, as the ed the Aid Notice July employee informed McCa- the bank Judgment had recommended. Debtor hey did not the ac- that Rosenthal believe provid- Rather than invoke money. count welfare contained recover ed statute to levied employee McCahey informed that the also however, Legal Aid property, lawyer no longer bank nevertheless honor would attempted litigation pending to intervene restraining notice. Lasker, Deary v. Judge Guardian Co., (S.D.N.Y.1982). F.Supp. 1178 Loan 18, McCahey July Also on received case, Lasker had Judge In that declared Judgment formal Notice to Debtor predecessor statutes law unconstitutional requires New York Rosenthal. in the instant case and of the ones at issue sent to such a debtors jurisdiction over issue of property is The had retained whenever their restrained. were constitu- instant statutes the name whether the Notice disclosed copy of the claims that he never check. Rosenthal received in Deary to intervene was In supplied tional.2 Leave addition to the information Nevertheless, notice, McCahey. restraining denied to Rosen- the notice sent to must McCahey’s money as a conse- state: thal returned quence attempted intervention.3 NOTICE TO JUDGMENT DEBTOR

McCahey instituted the then ac- for the loss of tion to recover the use of Money property belonging you money and one-half her for four months.4 may have been taken or held order to during period She claims that she fell satisfy which has been en- utility payments, rent behind her against you. tered carefully. Read this skimped clothing, on food and was MAY BE YOU ABLE TO GET YOUR her account. afraid to use bank MONEY BACK prevent

State arid federal laws certain Post-Judgment 2. New York’s Current money property being or from taken to Remedies satisfy judgments. money prop- Such erty “exempt”. is said to be The follow- Deary, Judge In Lasker found that New ing partial is a money list of post-judgment York’s earlier remedies vio- exempt: be process they pro- lated due because did not Supplemental 1. security income (i) property vide notice to the debtor that: (SSI); seized, (ii) property might had been security; 2. Social seizure, exempt (iii) there were 3. Public assistance (welfare); procedures available to contest the seizure. Alimony support; 4. or child F.Supp. Judge 1187-88. After Lask- decision, legislature Unemployment benefits; er’s 5. New York en- acted the revisions at issue this case. Disability benefits; 6. statutory

The revised scheme is set out in compensation benefits; 7. Workers’ appendices opinion. to this private pensions; 8. Public or process The current enforcing money 9. Veterans benefits.

judgments begins when the attorney for you If think that your money judgment restraining issues a that has exempt, been taken or held is to the holder of the debt- you promptly must act because the mon- (APPENDIX property. A) or’s The re- ey may applied judgment. to the If straining notice includes information about you your claim money that has underlying action and informs the re- exempt, you may been taken or held is cipient that property by transfer of person sending contact this notice. punishable contempt debtor is of court. Also, YOU MAY AT- CONSULT AN restraining If the notice is sent to someone TORNEY, INCLUDING LEGAL AID IF judgment debtor, other than the copy QUALIFY. (New YOU The law York it must also be mailed to the practice rules, civil law and article four days within four of service of the fifty-two thirty- and sections hundred notice. fifty-two forty) pro- nine and hundred settled, eventually 2. The frequently case was property without a tor returns the debtor’s be- ruling by Judge constitutionality Lasker on the fore is rendered the constitu- of the statutes at issue in the instant case. tionality legislation question. That has However, occurred in this case as well. McCa- money Rosenthal claims that he returned the hey’s claim is not moot because she continues to McCahey attempted Deary when to intervene in compensatory punitive damages demand because that was the first time that he had temporary Memphis for her loss of funds. claiming exemp- received a sworn document 1, 8, Light, Craft, Gas & Div. v. Water 436 U.S. tion. 1554, 1559, (1978). L.Ed.2d 30 4. The issue of mootness arises in cases similar one, to the because the credi- ever, aof the court that time for determination shorten procedure vides cause shown. exemption. claim to an of the re- possession obtain In order to Discussion attorney issues an property, the strained Analytic 1. The Framework B) (APPENDIX to the sheriff. execution analytic We first discuss the framework essentially the same states The execution McCahey’s challenge to the New in which restraining notice. The as the information post-judgment ad- remedies must be property by on serv- then levies sheriff dressed. We of course assume that McCa- posses- on the ing the execution hey’s exempt account was from sei- bank (APPENDIX C) person must That sion. zure, (McKinney N.Y.Soc.Serv.L. § sheriff turn over 1983), and constituted a interest If the execution does “forthwith.” deprived, of which she could not even has Judgment a Notice to Debtor state temporarily, process. without due Fuentes by the prior year sent within the Shevin, 67, 84-85, 407 U.S. v. yet must send attorney, then the sheriff 32 L.Ed.2d 556 levy. days of Notice within four another Supreme addressing due Court decisions property for at must hold the The sheriff post-judgment limits turning it over to least fifteen Corp. are so scant Endicott-Johnson D) (APPENDIX judgment creditor. Inc., Press, Encyclopedia two 61, (1924), still 45 S.Ct. 69 L.Ed. 288 E) (APPENDIX disputing seizures. frequently cited. The Court held there First, by serving on the not constitution- debtor is prior applica- to the and the sheriff hearing prior ally entitled to and a debt, property wage garnishment. The Court viewed tion of underlying judgment proceed- the existence of “special can ment debtor start “notice will follow.” as sufficient of what ing” adjudicate rights property. in the 288, 62, at quoting Ayres at 45 S.Ct. v. Id. Second, time, motion or on its own 213, Campbell, 9 Iowa 216 party, of the court on that interested (APPENDIX protective can issue orders. Notwithstanding Endicott, post-judg- F) adjudi- If motion to the debtor makes a repeatedly chal- have ment remedies rights property, his the creditor in the lenged process cate the due clause under decade,5 largely grounds eight days response. has file a How- last See, (1st (E.D.Mich. al); Regan, e.g., Bouley, F.Supp. Dionne v. F.2d Jahn v. 584 399 757 1344 Cir.1985) (Rhode 1984) (IRS program partially intercept remedies held unconsti refund Island Wallace, unconstitutional); tutional); F.Supp. Bailey, v. 574 Duranceau v. 743 F.2d 709 Harris (9th Cir.1984) (W.D.Va.1983) (Virginia (Washington support remedies unconsti child collec 966 tutional); constitutional); Regan, Deary Company, remedy v. Nelson v. Guardian Loan tion — (2d denied, (S.D.N.Y.1982) (New Cir.), F.Supp. F.2d 105 1178 731 cert. 534 175, —, (1984) (IRS unconstitutional); Community 105 S.Ct. 83 110 held L.Ed.2d remedies unconstitutional); Club, Corp., intercept program Acceptance Inc. v. Dearborn refund Thrift Sullivan, (3d Cir.1980) (N.D.Ill.1980) (Illinois wage Finberg F.Supp. v. F.2d 50 487 877 634 (en Tom, banc) unconstitutional); (Pennsylvania garnishment Betts v. remedies unconstitu tional); (D.Hawaii 1977) (Hawaii F.Supp. Liberty Corp., F.2d rem Brown v. Loan 539 431 1369 denied, 949, (5th Cir.1976), unconstitutional); Huggins v. Dein 430 U.S. edies held 1355 cert. 1588, 98, (Arizona (Florida hard, (1982) wage Ariz. 51 L.Ed.2d 797 134 654 P.2d 32 97 constitutional); constitutional); Marriage garnishment Neeley remedies v. In Re remedies Co., 384, (D.Ariz. Cal.App.3d F.Supp. Wyshak, Cal.Rptr. Century 70 811 Finance 606 1453 138 constitutional); 1985) (Arizona unconstitutional); (1977) (California remedies remedies 943, Madigan, Corp., F.Supp. Taylor Cal.App.3d 126 Cal. v. General 471 v. 53 Haines Motors 603 1984) (1976) (California (S.D.Ohio (Kentucky Rptr. remedies constitu remedies constitu 376 (Colo. tional); Gedeon, tional); Reigh Schleigh, F.Supp. v. Gedeon v. 630 P.2d 579 constitutional); 1981) (Colorado (D.Md.1984) (Maryland Cour remedies held unconsti remedies 729, (1976) tutional); Fisher, (S.D. Clay F.Supp. Harper, 236 Ga. 225 S.E.2d 428 v. sin v. 1984) (Ohio unconstitutional); City (Georgia Fi remedies Ohio remedies held unconstitution Corp., 337, Finance 1820, Endicott never considered existence 395 U.S. 89 S.Ct. exempt (1969), under state exe- law from 23 L.Ed.2d 349 has also led to a by might scrutiny post-judgment nevertheless be seized closer cution that opportunity partial an analogy creditor if notice and because of the between the debtor. Endi- ambiguity exists, heard are not accorded two. While some it is generally that the cott’s ex pre-judgment rationale assumed believed that parte outstanding resolved all issues between attachments are constitutional if is- creditor, being judicial and the collection sued neutral officer on the However, representations regarding ministerial act. basis of factual plaintiffs whether certain does not resolve the merits of the claim and im- Sullivan, exempt, Finberg v. mediately 634 F.2d followed notice to the defend- (3d Cir.1980) (en banc), opportunity 56-57 sub- ant and to contest sequent Supreme Court decisions have im- Savings See Jonnet v. Dollar seizure. Bank, that Endicott plied (3d Cir.1976); is not the last word on 530 F.2d 1129-30 Scott, Regulation Constitutional subject. Provi- sional Creditor Remedies: The Cost of Griffin, 327 U.S. 66 S.Ct. Griffin Process, Procedural Due 61 Va.L.Rev. (1946), 90 L.Ed. 635 involved the collec- (1975).7 course, 832-33 Of law past-due alimony payments arising tion of pre-judgment remedies, suggestive, while out of a divorce decree. The Court held automatically govern post-judg- does not judgment directing that a issuance exe- remedies, which are available unpaid alimony cution collection liability after all doubt as has been process violated due because it had been erased. parte obtained ex had cut off defenses Although available to the husband. majority recently of courts that have Endicott, opinion majority did not refer to process aspects post- considered the due debate arisen over the effect of adopted remedies have a bal- Griffin vitality precedent.6 on Endicott’s as a ancing analysis derived from Mathews v. Eldridge, 319, 334, expansion of the due limita- 902, 47 L.Ed.2d 18 As Justice Pow- prejudgment remedies, tions on see North explained: ell Georgia Di-Chem, Inc., Finishing, Inc. v. 601, 719, proce 419 U.S. 42 95 S.Ct. L.Ed.2d 751 ... whether ... [Resolution Co., (1975); Mitchell v. W.T. Grant provided constitutionally dures are 416 ... 600, 1895, requires 94 analysis gov 40 L.Ed.2d 406 sufficient of the (1974); Fuentes, 67, 1983, private 407 U.S. 92 S.Ct. ernmental and interests that are (1972); 32 L.Ed.2d 556 Family Sniadach v. precisely, prior affected. More our deci Winston, 10, nance (1976) (Griffin completely Co. v. 238 Ga. 231 S.E.2d 45 539 F.2d at 1364 does not unconstitutional); (Georgia Endicott); Haines, F.Supp. remedies An undercut (Endicott 603 at 476 Antico, 294, (1978) Indeed, Griffin). tico v. (Georgia 241 Ga. 244 S.E.2d 820 was basis for mem constitutional); expressed revised remedies Wa bers of the Court have since some Bank, Md.App. continuing nex v. Provident vitality State 53 doubt about the of Endicott. (1983) DeBaca, (Maryland Moya 454 A.2d 381 remedies consti See 395 U.S. 89 S.Ct. tutional); Delaney, (1969) dismissed, (Har appeal Warren v. 98 A.D.2d 469 23 L.Ed.2d 740 (1983) (New lan, Brennan, JJ., N.Y.S.2d stitutional); dissenting light 975 York remedies uncon in of Snia Goldberger, ); DeMarcus, 736, 742, Cole v. Pedersen & Ho dach Hanner v. chron, 1437, 1441, (1978) (1967) 95 Misc.2d 410 N.Y.S.2d 950 20 L.Ed.2d 270 cert. (New unconstitutional); J., York improvidently granted (Douglas, remedies Mullins dismissed as dissenting) Trust, (Tex.Civ. ("Is v. Main Bank & accept 592 S.W.2d 24 there more reason to (Texas constitutional). App.1979) in this case the Endicott fiction of constructive knowledge underlying notice because of (Endi Compare Neeley, F.Supp. ?”). 6. 606 at 1461-62 than there was in Griffin assets, governs longer cott still applies business but no personal exemp interpreted pre-judg- assets because of Some courts have 7. tions); Reigh, F.Supp. (Griffin prior requiring 595 at 1549-52 ment cases as ing notice and hear- Warren, Endicott); See, Brown, wages garnished. e.g., undermined 469 N.Y.S.2d at when are (Endicott law); Brown, 1366; longer Neeley, F.Supp. no at 539 F.2d at 1461. exemptions; knowledge debtor of identification that sions indicate (iii) generally Judgment process of due the New York Notice specific dictates distinct explain pro- three adequately consideration of Debtor does not requires First, private claim; interest exemption pressing factors: cedure for action; by the official (iv) will affected by recommending that the debtor con- depriva second, of an notice,” the risk erroneous person sending this tact “the through interest tion of such Judgment New York Notice to Debtor mis- value, if ed, the probable and us thinking the debtor leads into “the procedur additional substitute any, of person,” usually attorney who will finally, and the Govern safeguards; al creditor, protect for the will debtor’s interest, function including the ment’s (v) rights; procedure and for and administra fiscal involved exemption adjudicating pro- does not claims or substi additional tive burdens sufficiently prompt opportunity vide a requirement en would procedural tute levy, contest the tail. (citations 334-35, 96 S.Ct. at 902-03 Id. at Requirements Due Process balancing omitted). agree that We Post-Judgment Seizure applicable. analysis is Property Debtor’s straightfor- interests are The creditor’s The district court concluded that swift, inexpensive mecha- sure ward: satisfy post-judgment remedies inter- collecting judgments. This nism for (i) requirements they provide: allowing directly est most their judgment debtors that had and other to reach bank accounts creditors seized, (ii) notice to debtors keen liquid assets, of those as- because seizure exemptions they to which 0f enti satisfying sets the lowest-cost method of (iii) tied; opportunity a prompt judgments. challenge the judgment debtors to seizure preserving interest non- Deary, exemptions. debtor’s their and assert for his her own use is exempt property F.Supp. majority 1187-88. The at courts creditor’s conclusions, see, of course subservient e.g., have reached similar However, clearly has a 59-62; ment. F.2d Finberg, 634 Dionne v. exempt legitimate protecting interest (1st Cir.1985), F.2d Bouley, 757 property from seizure. requirements also and we believe these compet a fair balance strike between has several interests The state ing interests. First, an interest matters at hand. it has inexpensive rapid providing methods certainly it is clear that debt- collecting judgments, part of its more protec- much are entitled at least this 0rs general compliance in ensuring interest Providing post-seizure notice of the tion. Second, in with its laws. it has an interest require- the seizure an elemental fact of is resources, judicial use of so efficient process, v. ment of due see Mullane Cen- they proceedings little are not wasted Co., 339 Bank Trust tral Hanover & Finally, the state interest in value. has an 652, (1950), 306, and, 94 L.Ed. 865 seeing exempting property that laws thereafter the assets cannot be because evaded. seizure are not by the debtor or hidden with- transferred post-seizure authority, court out challenges pro- New York McCahey to the cost of collection. Provid- adds little grounds, rooted due cedures on five all exemptions possible (i) ing notice of judgment debtors process. She claims: on opportunity to heard claims prompt be hearing are notice and a before entitled to add the collection of exemption costs to (ii) pre-seizure if property; their seizure of but also enhance likelihood required, may judgments oc- are not seizure exemptions provided under state judicial cur the order of a neutral that recognized. by disclaimer officer after law will argues pro McCahey regard that additional to an issue peculiarly lie in the protections must be accorded debt knowledge cedural party, party that has the specifically notice and a ors before seizure: proving issue”); burden of Fed.R.Civ.P. hearing. disagree. pro That level of We 8(c) (burden prove on defendant pay is protection cedural for debtors not consti ment, discharge bankruptcy, li required pre even in the case of tutionally cense). We thus conclude that New York’s attachments, liability when statutory provides scheme sufficient notice fortiori, A determined. it can and otherwise meets due standards hardly required where the creditor’s as far as the initial seizure is concerned. finally confirmed claim has been court, the risk that the debtor and where Adequacy New York’s Re- stronger conceal assets is than will quired Judgment Notice to Debtor reasons, prejudgment context. For those agree great majority we with the of courts We McCahey’s turn now to more rejected sug that have considered and specific objections to proce the New York See, Dionne, gestion. e.g., 757 F.2d at argues dures. She statutorily re 1352; Liberty Corp., Brown v. Loan Debtors, quired Judgment Notice to is con 1355, (5th Cir.1976); Huggins F.2d stitutionally inadequate because it does not Deinhard, 134 Ariz. 654 P.2d 37 apprise specific debtor of the (1982); Goldberger, Cole v. Pedersen & steps to be adjudicate taken in order to Hochron, 95 Misc.2d 410 N.Y.S.2d exemption claims. (1978); 955-56 but Harper, see Coursin v. (New The Notice states: “The law 236 Ga. 225 S.E.2d hundred, fifty-two thirty-nine sections McCahey suggests also ex fifty-two forty) provides hundred proce- parte permitted, they orders are must be dure for determination a claim to an only by judicial issued neutral officers on exemption.” McCahey argues that instead by judg the basis of affidavits submitted referring the debtor to the relevant stat- disclaiming knowledge creditors of utes, provide specific the notice should in- any exemptions existence of the debtor time, place, formation about or method may assert. We step believe neither making perfect exemp- motion to required by process, because their cost protective tion claim and obtain a order. outweighed by they might benefits Appellant Brief of at 23. produce. involving The need for a neutral persuaded We are not even this ad- judicial officer is minimal because of the helpful, ditional information would be much existence of the underlying judgment, constitutionally required. less that it is which, default, even if rendered in explanation Elaborate point volved a court at process. some asserting exemption an so confuse 62; Finberg, Brown, 634 F.2d at 539 F.2d layman put that he or she off 1369; Scott, see 61 Va.L.Rev. at 853-56. complexities simply allow the sei- requirement A that the creditor swear to Indeed, McCahey zure. states in ignorance her brief any possible exemptions like very challenges being that the notice she wise adds little but cost. Even if the debt- sparse too was “too difficult for her exemption asserts to the creditor seizure, Appellant understand.” Brief of at 20. A right creditor still has a to fuller recitation of York adjudicated. See, prac- have that assertion motions e.g., Finberg, 62; Cole, hardly clarify 634 tice would F.2d at matters. The rec- 410 Moreover, capital N.Y.S.2d at 956. ommendation in debtor is in letters that position provide Aid, attorney Legal best to debtor contact an evidence of the exemption legitimately be re combination with notice of the existence of quired carry proving procedures burden of exemption, its to test claims of is a See, e.g., existence. McCormick on Evi sufficient and efficient notice to (3d 1984) (“where 950 dence ed. rights. the facts of their debtors terrupted continuity is essential might rewrite of which true that New It is simplifying it hope safety, of health and should be informed in the legislation their own counsel. might clearly availability opportunity act as laymen of the of an so of in a number attempted essence, This has been present complaint. their In re- provides rela- states,8 itself New York cipients of a cutoff notice should be told contesting pre- for simple procedures tively where, during day, which hours judgment attachments.9 appropriately disputed bills before whom Id. at 15 n. considered.” of course could provide sim- New York at n. 15. hearing these claims. S.Ct. procedures for plified asser- However, support for the we find no Memphis Gas We do not believe provide such New York must tion that analysis case. alters our pro- of due requirement a procedures as First, that a new the Court also stated laudatory goal, how No matter cess. developed by Memphis “may be Gas pro litigants se of- experience with judicial Id. at 15 adequate.” n. entirely 98 S.Ct. proce- simplified a guarantee that fers no at 1563 n. 16. That notice “lists ‘methods a by laymen is better than use dure for part contact’ and states in trained by lawyers. procedure used complex more up are available to clear ‘Credit Counselors requirements guarantee, such a Absent any questions, disputed discuss or to bills use of one process do not dictate of due adjustments. needed There are make than another. method rather management person- supervisors and other claim for a more elabo- support In of her you nel are not satisfied with available notice, McCahey heavily relies rate given by or solutions the Cred- the answers Division Memphis Light, Gas & Water ” Id. at 15 n. 98 S.Ct. at it Counselors.’ 1554, 56 L.Ed.2d Craft, 98 S.Ct. McCahey 1563 n. 16. We believe the notice case, ruled (1978). In the Court functionally equivalent received is company provided power a that the notice in Memphis Gas. second it off their service turned customers addition, between In there is a difference pro- purposes for of due was insufficient proving exemption an complexity made no mention “of cess. The notice complexity disputing and the claim disputed disposition of a procedure for the single company providing a utility A bill. Id. at 1562. claim.” single procedure for a dispute resolution given that “notice is went on to state Court develop type dispute is more able to of customers of various levels to thousands disputes simple resolving those education, methods experience, and resources. service, providing procedures is a state the unin- than Lay consumers electric simple days, returned to the debtor. A provides procedure for the account is 8. Connecticut days persons hearing are natural held not more than 20 debtors must be who exemptions hearing. bank accounts are when their claim files his motion for a after the creditor 703.020, 703.520, 703.550, When a bank receives an execution seized. §§ Cal.Civ.Proc.Code account, required the bank is to forward an (1985). 703.570 exemption simple form claim execution and provided have sim A number of other states days owner. The debtor has 15 to the account claiming exemptions. plified bank. If the form is to return the form to the returned, See, (1984); e.g., 571-41 Ohio Rev. § Minn.Stat. the claim to the the bank forwards 1984); (Page tit. 2716.06 Okla.Stat. § Code.Ann. court, hearing on who schedules a clerk of the 1985). (West 12 1174 § calendar, usually for the fol- the short motion lowing Monday. 52-367b § Conn.Gen.Stat. pre-judgment obtaining parte at- an ex 9. After tachment, plaintiff move within five must law, the creditor sends Under California levy days to have the order confirmed. after exemption and the claim form to execution lapse to do so results in Failure claim The debtor has 10 debtor. exemption, by plaintiff not has to make attachment. sending court the form to the confirmation, also bears the but the motion so, the creditor has 10 If the debtor does clerk. days hearing. proof §§ at the CPLR burden hearing. for a If the to file motion hearing request fails to within 10 against sorts this second recommendation eliminates various judgments its enforce implications prior statement property. harmful indicating by clearly an alternative course Regan, relies on McCahey also Nelson of action satisfaction is not achieved. (D.Conn.1983), F.Supp. 1101 aff'd — denied, (2d Cir.), cert. F.2d 105 McCahey Rosen- stresses that she called —, L.Ed.2d 110 thal, recommended, as the form and was taxpayers joint who involved That case by him led to believe that he would resolve refunds where one of entitled to tax were This, claims, dispute. proof she delinquent support in child them was also the no- the constitutional defectiveness of successfully They claimed that payments. However, the rec- tice. she also followed the Internal they received from the notice ommendation that debtor informing them that their Revenue Service attorney Legal an Her contact Aid. own being support seized for the refunds were case, therefore, hardly demonstrates that because, inter payments was insufficient poorly the form is so drafted as to lead alia, dispute explain it did not how complete into reliance on the credi- debtors however, Nelson, In there were seizure. attorney. tor’s asserting regularized procedures for de no recommending We further note that con- given. fenses which notice could be Id. attorney tact the creditor’s is not bad case, procedures In at 1106. practical many judgment advice debt- exemption claiming an exist. More ors, who be able avoid most over, program support intercept child painful consequences by working out taxpayer, not affected the second who was agreeable method of satisfaction. We add subject and who became observation, only joint return. this not out of belief in involved because of procedures generosity agencies, Notice that exist to assert ex of collection but emptions recommendation to seek and a recognition legal processes out of have legal counsel thus meet constitutional costs for them also which reduced post-judgment standards for remedies. negotiation through with debtors. McCahey argues Judg- next the Notice to

ment Debtors violates due because Requirement Prompt 4. The aof its recommendation that Hearing person sending debtor “contact the misleading. argues McCahey argues notice” is She that this finally that recommendation leads the into post-judgment be- York’s are defec lieving person sending that “the this no- they guarantee tive because do not tice,” usually attorney for the prompt post-seizure hearing. agree We creditor, protect the debtor’s will process requires that a rights. She also claims that the notice be afforded an opportunity for a must state that mere contact with the send- hearing exemption on an claim within a necessarily protect exempt er does not days. matter of Finberg, 59; 634 F.2d at property from seizure. Dionne, McCahey 757 F.2d at 1353. failed to demonstrate that New York does

Although McCahey’s we view assertions provide her with opportunity. responses as to the behavioral degree skepticism, debtors with we statutory It is true that the scheme in misleading also believe that the Notice is question provide mandatory does not out- only if the initial recommendation is viewed according hearing side time limit on on an in isolation. That recommendation does exemption claim. It is also true that the immediately not stand alone but is followed majority squarely of courts that have ad- type recommending bold that the debtor lawyer Legal dressed the issue has contact a Aid. We stated that believe

553 mandatory period debtor was able to can withstand constitu- obtain order scrutiny.10 to show tional cause a return date however, cases, with the of these days In each 10 levy after the was served on Neeley,11 exceptions of Dionne garnishee, period a of time consistent resorted the state judgment debtors had with most of the caselaw. regain their before procedures to McCahey heavily relies on v. Barry Bar challenge in brought a they constitutional chi, 55, 443 U.S. 61 L.Ed.2d case, moreover, In federal court. each (1979), 365 which involved a trainer horse elapsed exceeded what court time that whose horse was discovered to have constitutionally permissi- decided was drugged during a race and whose license McCahey, the other on ble maximum. suspended was for days pursuant 15 hand, proper- her no effort recover made New York law. The Court invalidated the using procedures. ty by New York’s We statute it specified because no time limit with a concrete are therefore faced within a hearing must be held and action, York statute example thirty allowed the board to days wait until unwilling to invalidate a statute and we are hearing after the issue a final order. not, applied might, need because it but be Given destroyed that loss of the license manner. in an unconstitutional livelihood, trainer’s the Court held that pro- face York statute on its The New hearings had to be held and concluded hearing. opportunity prompt for a vides an appreciable delay.” “without Id. at 99 pro- only specific special time limit on S.Ct. at 2650. motions, ceedings, CPLR § Barchi, Unlike is there no basis this 5240, requires respondent CPLR § case to hold that New York post-judgment petition pa- with the or motion be served prevent judgment debtors from pers eight days hearing. before the at least having their claims heard appreci- “without 403(b), 2214(b). periods, CPLR Both §§ able delay.” CPLR 5239 or § CPLR however, may be shortened cause. 5240 do not specify § a period time 403(b),2214(d). CPLR §§ ruling exemption on claims, but neither do hardly It would strain the bounds stat- they explicitly give the thirty days courts

utory construction for New York courts to to delay ruling. Barchi is therefore not exemption hold be claims must heard controlling. expeditiously under the New York statutes. controlled, might presenting Such case at claims be treated as is least process require- informed, by Carey Sugar, “cause” because of due v.

ments, (1976) (per then 96 47 587 debtors would L.Ed.2d curiam). have their claims within matter of That case involved an heard attack Indeed, days. pre Leef, constitutionality in Banks 120 the of New York’s (1983), plain Misc.2d 467 N.Y.S.2d 156 attachment statute. The See, Dionne, ("one e.g., statutory 757 F.2d at 1353 because is limit on [t]here ... no time 10. might expect Harris, days be setting hearing”; long); it would fortuitous whether too 38 hearing judge sought ("a time, the state before whom a is period F.Supp. 574 at 971 mandated requiring treated the matter as tion, atten immediate help exemption will will ensure that the issue any provision specifying absent law results”; any hardship decided few rights”); procedural Finberg, debtor's 634 F.2d days may long). be too (15 days long); F.Supp. Neeley, at 59 too 606 at ("the hearing 1467 must commenced between Dionne, 11. In observed court that "Rhode day request 14th after ... and the any right law is silent as to of a Island request”); Reigh, F.Supp. after the at 1556 debtor heard after an attachment ("all examining question the courts have Neeley, made." 757 F.2d at In the court concluded, prompt hearing judicial on this would, question, noted that the statutes in question in these circumstances is one which terms, their own not afford the place will take two less within weeks or hearing for more than month after filed"); exemption Clay, claim time the F.Supp. requested it. 606 at 1467. New ("an F.Supp. pro ad hoc method distinguishable. clearly York’s statutes are hearings viding satisfy does not manner as a hearing sonally in the same sum- provided that the contended tiffs registered mail, by or certified mons or attachment was vacate the on motion to a receipt requested. specify It return shall hearing be the would inadequate because action, the the parties all of the to date question the whether only with concerned “ entered, judgment was the court that the unnecessary the se is to the 'attachment entered, in it was the amount of which would plaintiff,’ and curity of the § then judgment the and the amount due litigate the plaintiff to require the thereon, parties in the names all that likelihood it would question of the against the whose favor whom Id. at prevail on the merits.” ultimately entered, it shall set forth was statutory lan 1210. The S.Ct. at (b) that and shall state dis- subdivision plain superficially supported the guage contempt punishable is obedience “If, the stating: in after argument tiffs’ court____ action, in the the appeared has defendant (b) restraint; prohibition is the attachment court determines Effect transfer; judgment A duration. debtor security plaintiff, unnecessary restraining served with a notice is forbid- of attachment.” the order it shall vacate sale, assign- or 1980). any den to make suffer (McKinney Neverthe CPLR 6223 § ment, any transfer or interference less, because two the case remanded was interest, in property which he has an held that the York trial courts had New except upon of the sheriff or direction narrowly con should not be so statute court, pursuant to an order of the until The Court stated: would strued. “[i]t is A judgment satisfied or vacated. consti for this Court to address the unwise person restraining upon served notice tutionality of the New York attachment judgment other than a debtor is effective statutes, may be on that issue decision service, only if, at the time of he owes a unnecessary by a decision of the rendered he in judgment debt to the debtor or is as a of state law.” New York courts matter custody possession property or in S.Ct. at 1210. We think knows which he or has reason believe just hold it would be as unwise to interest, has judgment or debtor facially CPLR unconstitution §§ in judgment creditor stated mandatory time al of a lack of a because specified notice is owed debt a con limit. We therefore choose to await person judgment served to the example application crete of its judgment or debtor has an inter- that the judgment courts to a debtor. posses- specified property in the est other McCahey’s We have examined custody person served. All sion or claims and determined them to be have judgment debtor is property which without merit. known to have an interest or believed Affirmed. coming into the then in and thereafter person, possession custody or such APPENDIX A notice, specified in including any restraining governs CPLR § including any person, of such a all debts notices, provides: notice, specified in then (a) Issuance; served; form; on whom coming judgment due to the thereafter restraining service. A be is- debtor, subject shall be to the notice. sued the clerk of the court or the person forbidden to make or Such a is attorney sale, creditor as assignment any or transfer suffer of, with, officer of court. any It be served any or interference such upon person, except employer of or property, pay over otherwise dis- debt, property any person pose where sought wages sheriff, upon except di- restrained consists of other than the salary pursuant due or to .the sheriff or to an become due rection of per- court, expiration of debtor. It order of the until the shall served the restraining included (The notice. content of the year reproduced one after the notice text of opinion.) him, or until the is satisfied or vacated, event first occurs. A whichever APPENDIX B specified per- who has executions, CPLR which governs § restraining sonal or debt provides: notice shall be liable the owner of the (a) An specify Form. execution shall or the whom debt the judgment entered, date that the was owed, if judgment is other than the debt- the in entered, court which it was the or, any damages by sustained reason judgment amount the of and the amount garnishee If of the restraint. a served due thereon and it specify shall the restraining with a notice withholds the parties names of the in whose favor and money payment belonging of or owed to against the judgment whom was entered. judgment in equal the debtor an amount An execution shall direct only that the judg- to twice the amount due on the property in which judgment a named ment, restraining the notice is not effec- debtor is not who deceased has an inter- property money. tive to other or est, him, or the debts owed be levied (c) Subsequent notice. Leave of court upon or specify sold thereunder and shall required is to serve more than one re- the known of judgment last address that straining upon person notice the same judgment debtor. Where the was en- respect judgment. with to the same tered in court supreme, a other than the (d) judgment Notice to debtor. If a county court, a family or the execution prescribed in the form in subdivi- specify shall date also the a which (e) given judg- sion has not the been transcript of judgment the was filed with year ment debtor within a before service county the clerk of the in the which notice, restraining copy of a judgment was jurisdic- entered. Where restraining together with the no- tion in action upon levy the was based to judgment tice debtor shall be mailed upon property pursuant or debt to an by first or personally class mail delivered attachment, order of the execution shall judgment to each debtor who ais natural fact, also state that property describe all person days within four of the service of upon, and debts levied and direct restraining the notice. Such notice shall such and sold debts be be mailed to the defendant at his resi- judgment thereunder. Where the was address, in dence or such event mail- for all part mortgage recovered or of a ing is returned as undeliverable debt, the execution also shall describe office, post or if the residence address of mortgaged property, specify the book unknown, the defendant is then to the page mortgage where is record- place defendant in of employ- care of ed, and part direct no of the mort- known, ment defendant in an gaged property be or sold levied envelope bearing legend “personal thereunder. and confidential” and not indicating on (b) At time Issuance. before a thereof, by the outside the return ad- judgment vacated, is satisfied or an exe- otherwise, or dress that the communica- may cution be issued supreme from the tion is from attorney or concerns a court, court, county family court or in judgment, or if neither the residence ad- county judgment in which the was place dress nor the of employment of the docketed, by first the clerk of the court defendant is then to known the defend- attorney or the judgment for the creditor ant at other known address. court, as officer to the sheriffs of (e) state, Content notice. The notice re- one or more counties direct- (d) quired ing shall satisfy subdivision sub- each of them to judgment stantially following form personal out of the real and

55 est, creditor has stat- if the debts due debtor in a served with ed notice which shall be him. specified the execution debt re- shall be An execution (c) Return. person owed served the court the clerk turned to or that the days sixty within it was issued specified property not has an interest the execution unless after issuance delivery possession or capable section in accordance custody prop- All served. (a) of section or subdivision delivery in which the erty capable not writing for extended time or believed to judgment debtor known sixty additional than of more period in or thereafter have an interest then attorney for the by coming possession custody of into the may be like extensions Further creditor. debts of such a person, all attorney for the given by the including any specified the no- person, against another execution unless tice, coming due due or thereafter then de- judgment debtor has been the same debtor, subject judgment to the shall be officer the enforcement livered to same person the levy. the served with to not been returned. has and all execution shall forthwith transfer sher- Each (d) the Records all such property, pay such and debts sheriff. of of executions keep record the a upon maturity, shall to sheriff execute the iff showing of the names to him any necessary delivered to effect the document debtor; the judgment and the parties payment.

the transfer After such trans- or return; date and property coming issue and the the payment, dates of fer or into garnishee, shall endorsed delivery, custody which of the possession time of or execution; him, by the due at shall amount or debt incurred not be upon the to subject levy. was such the execution delivered to the Until transfer the time made, judgment payment expira- of until the him; the the or is or amount days unpaid, any, ninety of after the service of sheriffs fees tion of the him, upon or of fur- the execution such of the return. at the time provided by any as is order of ther time APPENDIX C him, upon whichever the court served levies, governs pro- CPLR which occurs, § garnishee for- the is event first vides: any sale, or as- to make suffer bidden (a) by execution. Levy service of, any signment transfer or interfer- or of levy upon any interest of sheriff shall with, any property, pay such or over ence personal property judgment the debtor debt, dispose any such to or of otherwise delivery, upon any of or debt capable not sheriff, except any person other than the debtor, by serving judgment to the owed pursuant or upon of the sheriff direction gar- copy upon a of the execution the expira- At the to an order of the court. nishee, in the manner as a sum- same levy ninety days made tion of after mons, except shall not execution, service or by of the of such service by person delivery made to a authoriz- court, upon the motion of further time as solely of ed to receive service summons provided, has judgment pro- designation pursuant filed to a by property levy except void as to shall be 318____ A vision of law other than rule havé or or debts which been transferred by pro- is effec- levy paid service of execution sheriff or as to which a service, if, ceeding time of or 5227 has at the under sections 5225 tive person judg- brought. judgment A creditor who served owes debt to exemption possession specified personal or or debt debtor or he is ment upon a notice served with custody property capable of of deliv- to be levied shall be liable the owner or an execution ery in which he knows has reason to or to whom property inter- of the judgment believe the debtor has an (a) proceeds per- Distribution of owed, if other than debt property. sonal After deduction for and damages debtor, sustained any payment fees, expenses taxes levy. of the by reason upon sale, delivery, levied or transfer shall (b) The sheriff Levy by seizure. payment, proceeds personal prop- judgment of the upon any interest levy erty acquired by or debt receiver personal capable sheriff or other officer authorized en- property into his delivery by taking the shall force be distributed interfering law- custody with the without creditor and excess pledgees and lessees. possession ful be made shall over debt- copy serve a shall forthwith The sheriff proceeds or. No shall distribution pre- execution in the manner paid days until fifteen after service of (a) per- upon subdivision scribed except upon the execution order custody possession or son from whose court. property was taken. (c) Notice debtor. that a an execution does not state Where E APPENDIX presented the form subdivi- governs CPLR proceed- § (c) fifty-two hundred sion section [sic] ings claims, determine provides: adverse chapter duly

twenty-two of this has been Prior to application within debt a sheriff or receiver to the satis- shall, year, the not later than sheriff of a judgment, any faction interested of the execution four after service person may special commence a proceed- any bymail upon garnishee, first class against ing judgment the creditor or oth- deliver, personally mail or to each person dispute er with whom exists to person, debtor a natural who is rights debt, property determine in the dr together such copy the execution with of by serving petition upon of a notice the specify shall the notice. The sheriff on receiver, respondent, the or judgment the and sheriff and notice debtor name person directs, judgment of the the such other as the in address creditor or court attorney. judgment creditor’s The notice the same manner as a notice of motion. judgment shall mailed to the at proceeding may debtor in The commenced address; his and in the event county residence the where the was levied mailing such is returned undeliverable in upon, county specified or or in court office, by post or if the residence (a) of section The subdivision of the is un-- address debtor may order, court vacate the execution or known, then in debtor levy, disposition void direct the of the place employment care of the of of the debt, damages or direct that known, envelope if in an appear be awarded. Where there to be bearing legend “personal confi- and fact, disputed questions of the court shall indicating on dential” and not the outside trial, separate per- indicating order thereof, by the return other- address or possession son who shall have of the wise, that the communication is from a property pending a decision the un- and judgment; or if sheriff concerns dertaking, any, person if which such neither the residence address nor give. If court shall determines place employment of of the fraudulent, any claim asserted was it known, is then to the defendant require pay any claimant any other known address. party adversely thereby affected rea- D APPENDIX expenses party sonable incurred such proceeding, including in governs reasonable CPLR which the distri- § attorneys’ fees, any damages proper- bution sheriff of seized other ty, provides part: suffered reason of the claim.

558 notifying notice used New York for any may permit court interested property has that their debtors proceeding.

to intervene in the they may contest the been seized and that F APPENDIX exempt property improve- of seizure is an held postjudgment ment over the empowers courts 5240, which CPLR § remedy pro- constitutionally Deary deficient post-judgment intervene motion, provides: Co., F.Supp. 1178 Loan on their own Guardian cess (S.D.N.Y.1982),I time, its own do believe the New may at The court interested legislature of has cured consti- motion all of the or the initiative as it such notice prior of the person, and tutional infirmities notice. limiting, denying, an order require, make “ stated, ‘An Supreme As the Court has extending or regulating, conditioning, elementary requirement and fundamental any enforcement of modifying the use any proceeding which procedure____ reasonably finality to be accorded is notice institu- governs the CPLR § calculated, circumstances, under all provides: special proceedings, tion apprise parties pendency interested A notice (a) petition. Notice of opportuni- of the action afford them place ” the time specify petition shall ty objections.’ Memphis their petition and hearing on the Light, Craft, Gas & Division v. Water affidavits,- accompany- if any, supporting 1, 13, 1554, 1562, U.S. 56 L.Ed.2d petition. ing the (1978) (quoting Mullane v. Central peti- (b) service Time 306, 314, Co., Hanover Trust petition, A tion and answer. 652, 657, (1950)). In 94 L.Ed. 865 petition and affidavits together Memphis Light, the Court that a utili- held notice, served on shall be specified in the utility ty's notification termination eight party at least any adverse service did not meet this because standard petition the time at which the before it failed to advise the customer of the avail- An answer noticed to be heard. ability procedure protesting of a affidavits, shall be any, supporting proposed termination. held Court time. day at least one customers, utility who were “of various affida- reply supporting together A education, experience, of re- levels vits, any, be served at before shall sources,” constitutionally were entitled to time. An answer shall be clearly availability of the “be informed if a time days least five before such opportunity present complaint.” an to their ten petition served at least notice of Id., n. 436 U.S. at 15 n. at 1563 whereup- demands; so before such time specified 15. The Court the minimum no- one served at least reply on an shall be required tice due follows: as time. day before such essence, recipients “In notice a cutoff (c) A notice service. Manner of where, during should be told which hours man- served in the same petition shall be day, disputed and before whom bills in an as a summons action. ner appropriately may be considered.” Id. The court (d) cause. Order to show to cause to may grant order show agree I the Deary with the court that served, at a petition in a notice of lieu of Memphis in are principles Light stated specified therein. manner time in a equally applicable determining in notice the KEARSE, Judge, dissenting: to which a debtor is Circuit Here, constitutionally entitled. as Mem- respectfully majority’s I from dissent the are of phis Light, the affected individuals statutorily holding required that “No- the education, experience and various levels of Judgment (“Notice”) Debtor” sent tice resources, given notice of due and should be plaintiff Cynthia McCahey satisfies they may the process. exemptions While the current form of the to which both procedures asserting disregard entitled and the advice even from disinterested exemptions. parties officials, those third such as bank promised refuse wait for evidence legislature, amending The New York from the debtor ques- that the statutory light prior the scheme tion is in fact exempt. although And Deary, in the form of notice included has. majority McCahey states that did rely only statutory section nu.mbers part but Notice contacted provisions govern objections to the Legal well, Aid as the record indicates that exempt property seizure of includ- apparently she Legal did not contact Aid ed no of what those disclosure until some 2% months after she received my view, thereby are. In the information Debtor, to Judgment the Notice and then given debtor does not meet paid her after bank had the Suffolk requirements. the minimum constitutional County Sheriff the entire balance in her find, I do not majority, as does the that the Thus, McCahey may account. well have present substantially equiva- Notice misled believing Notice into developed lent of a form of revised that the first course of action listed—con- Memphis Light utility which tacting person who sent it—identified Supreme thought “may entirely Court person disputed whom the claim adequate.” Memphis Light, 436 at 15 exemption might appropriately be re- n. 98 S.Ct. at 1563 n. 16. The new solved. Light notice in Memphis actually described sum, I In would hold that the require- “methods of and stated that contact” process, ments set out in Mem- trained credit counselors were available “to phis require that, Light, minimum, aat up any disputed clear questions, discuss Judgment Notice Debtor should tell bills or to adjustments.” make needed judgment debtors they to what court Thus, apparently Id. satis- new togo seizure, should seek from relief requirement fied the Court’s that custom- and that statement ers disputed ap- be told before whom bills contact who sent propriately might By be resolved. con- the notice should be modified make clear trast, the clearly New York Notice does not route, practical is a that this not a sure one. tell agency debtors the they likely get are most relief— i.e., the I state courts. think it an unrea- assumption

sonable that all judgment debt-

ors, of whatever level education and

experience, will understand the mere refer-

ence to two sections of the New York Civil Practice Law and Rules as an instruction Stephen GOLDBERG, M. they may go to court and obtain a Plaintiff-Appellant, prompt hearing on their claim. Nor do I it view as sufficient that NATIONAL LIFE INSURANCE Notice indicates that debtors VERMONT, COMPANY OF may talk to person sending Defendant-Appellee. or to attorney of their own. While in No. Docket 85-7099. contacting attorney some cases who Appeals, sent the well be easiest United States Court practical solution, and while Second we have no Circuit. multiply proceedings desire to unnecessar- Argued May 1985. ily, I believe that a debtor who sees Decided Oct.

the first action course of recommended the Notice materially well be misled. very

The facts of this case show that the attorney creditor’s simply may

Case Details

Case Name: Cynthia McCahey v. L.P. Investors, Allen M. Rosenthal, Affiliated Credit Adjusters, Sheriff of Suffolk County, Suffolk County Clerk

Court Name: Court of Appeals for the Second Circuit

Date Published: Sep 30, 1985

Citation: 774 F.2d 543

Docket Number: 1126, Docket 85-7111

Court Abbreviation: 2d Cir.