STATE OF NEW YORK
SUPREME COURT : COUNTY OF CHAUTAUQUA
ITT COMMERCIAL FINANCE CORP.
8251 Maryland Avenue
Clayton, Missouri 63106
-vs- Index No.:
ARTHUR N. BAILEY
444 Hunt Road
Jamestown, New York 14701
THOMAS I. FLOWERS, ESQ.
Attorney for Plaintiff
ARTHUR N. BAILEY, ESQ.
Attorney for Defendant
Plaintiff, holder of an unsatisfied judgment against
defendant, seeks an order prohibiting defendant judgment
debtor from carrying out his expressed intent to be present at
post judgment third party examinations of witnesses plaintiff
intends to schedule pursuant to CPLR 5223 and 5224.
The judgment creditor also seeks an order confirming Supreme
Court orders granted 8 years ago by the late Hon. Joseph J.
Ricotta, Supreme Court Justice, denying defendant-debtor the
right to "intervene and participate" in such proceedings,
to represent, as attorney, a witness at the examination.
Those orders excepted proceedings under CPLR 5225 where the
creditor pursues third parties or the debtor for the "Payment
or Delivery of Property of Judgment Debtor"; that section
specifically requires notice to the judgment debtor.
Notice to the judgment debtor is also required on motions for
installment payment orders (CPLR 5226) and special proceedings
in which the judgment creditor seeks payment of debts owned to
the debtor by third parties through CPLR 5227.
In JAMES v. ADAM CLAYTON POWELL, Jr., 52 Misc.2d 1048,
277 N.Y.S.2d 955 (Sup.Ct.,N.Y.Co. 1966), the court held that
a judge should not ordinarily reconsider, disturb or overrule
an order in the same action of another court of coordinate jurisdiction.
However, addressing the question of the debtor's right
to be present at examinations of third party witnesses
requires another look at the right of a judgment debtor to
intervene or participate in such examinations.
CPLR 5223 and 5224 provide for post judgment disclosure, but,
neither section authorizes or directs that notice be given to
the judgment creditor except for his own
Plaintiff says defendant is not entitled to notice, and
therefore, is not entitled to be present.
The debtor argues that the Constitution and the CPLR
give him the right to intervene or participate, but all that
he seeks now is the right to be "present" at examinations
third parties should he somehow learn of them, nothing more,
There is nothing in the CPLR, the history of transition
from the CPA to the CPLR, the current case law, DAVID D.
SIEGEL's NEW YORK PRACTICE, or WEINSTEIN-KORN-MILLER's NEW
YORK CIVIL PRACTICE, that suggests the judgment debtor has
a right to intervene, or participate, or merely be present
during post judgment discovery proceedings of third parties.
The former statute provided that the judge might in his
discretion require notice of the proceeding for the
examination of a third party subsequent to the granting of
the order for examination to be given to the judgment debtor
in such manner as he deemed wise. That provision was omitted
from the amended statute. CARMODY-WAIT, VOL. 8, SECTION 40,
Earlier cases held that a debtor had an interest in a
supplementary proceeding against a third party, and so, had a
right to intervene and move in the proceeding even if he had no
right to notice. See Re GAGNON 32 AD 22, 52 NYS 309;
SINNOTT V FIRST NAT BANK, 34 AD 161, 54 NYS 417.
Those cases relied heavily on pre CPA and pre CPLR practice
codes and cases which are no longer applicable.
In a more recent case, JAMES v. ADAM CLAYTON POWELL, Jr.,
51 Misc.2d 705, 273 N.Y.S.2d 730 (Sup.Ct.,N.Y.Co.1966), the
court sustained the objection of a third party witness to the
presence of newsmen and others at an examination scheduled at
Noting that the judgment creditor's attorney could have
scheduled the examination in a law office or "some other
non-court location", the Court held that the examination
of a witness by a judgment creditor as to the financial relations
with the judgment debtor as to aid in discovery of the assets
of the judgment debtor was not a "sitting of the court"
within the statutory requirements that such sittings be public,
even though the examination might be in a courthouse, and a protective
order directing that the examination be private could be issued
at the witness' request. Judiciary Law, Section 4; CPLR 2302;
Rules 3110, 3113, subd. (a), 5224 and subd. (d).
The court in POWELL, supra, at 733 stated, "[s]ince the
judgment creditor has no right to insist that the examination
itself be public, the application of the witness that it be conducted
in private is granted."
The rationale of POWELL, supra, should be extended to bar a
judgment debtor from attending an examination of a witness
should the judgment creditor object.
The proceeding is not a court proceeding; it does not affect the
debtor's assets; the debtor is not entitled to notice;
the proceeding is separate from an examination of the debtor
himself. Even under the old cases and the CPA, supplementary
proceedings against a judgment debtor and proceedings against
a third party were considered separate, distinct and wholly independent
of each other. GIBSON V. HAGGERTY, 37 NY 555.
Then, as now, a supplementary proceeding against a third
party could taken without any proceeding against the judgment
debtor, or the two proceedings could be taken simultaneously.
CPA 774, GIBSON V HAGGERTY, supra. See SMITH V CUTTER, 64 AD 412.
Likewise, the examination of third parties, and, efforts to obtain
payment or delivery of property identified in the examination,
are separate, distinct and wholly independent proceedings.
The judgment debtor's rights regarding assets in the hands of
third parties are fully protected by the notices required by CPLR
5225, 5226, 5227 and 5239.
Plaintiff is concerned that if defendant is present, he will
not only intimidate witnesses, but, will use information
learned by plaintiff on discovery to alert other judgment
creditors who may beat plaintiff to the property by levy of
execution. At the argument on the motion, plaintiff claims
this has already occurred on one occasion. Both are reasonable
CPLR 5240 provides that the Court may issue a protective order.
The purpose of CPLR 5240 is to prevent "unreasonable annoyance,
expense, embarrassment, disadvantage, or other prejudice to any
person or the courts," incident to enforcement of judgment
procedures." Third Report to the Legislature, Advisory Comm'n
on Practice & Procedure (quoted in 7b McKinney's, CPLR 5240
at 454, Legislative Studies & Reports)".
This Court holds that a judgment creditor is entitled to a
protective order to preclude the judgment debtor from
intervening, participating in, attending or sending a
representative to post judgment proceedings to examine third
party witnesses for the purpose of locating assets of the
The motion of plaintiff to confirm the orders of Hon. Joseph
J. Ricotta barring the debtor from participation and
intervention is granted; its motion for an order denying
defendant the right to be present at third party examinations
is also granted.
The Judge Ricotta orders are confirmed not only as the law
of the case, but as law applicable to any judgment debtor.
Submit Order. No costs to either party.
Dated: July 12, 1995
Mayville, New York
HON. JOSEPH GERACE
Supreme Court Justice