Collecting from a debtor who does not reside within New York State and who may not otherwise be subject to the “long-arm” jurisdiction of New York courts (especially after the U.S. Supreme Court’s decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014)) can be made much easier if the creditor can identify a specific asset in New York, such as a bank account. Under Article 62 of New York’s Civil Practice Law and Rules (“CPLR”), a creditor-plaintiff can simultaneously file a summons and complaint to collect from the debtor-defendant and move the court for what is known as an order of attachment, which allows the plaintiff to have a Sheriff seize the asset pending the outcome of the law suit. The attachment procedure can be a very effective tool for preserving a debtor’s asset as security throughout the law suit and to prevent the asset’s disappearance once the debtor becomes aware of the law suit. Also, under the proper circumstance, the asset itself provides a means to obtain jurisdiction over a foreign defendant, commonly referred to as in rem jurisdiction.
CPLR Section 6201 sets forth the basis upon which an order of attachment can be obtained:
An order of attachment may be granted in any action, except a matrimonial action, where the plaintiff has demanded and would be entitled, in whole or in part, or in the alternative, to a money judgment against one or more defendants, when:
1. the defendant is a nondomiciliary residing without the state, or is a foreign corporation not qualified to do business in the state….
In order to obtain a pre-judgment order of attachment, in its moving papers, the creditor-plaintiff must establish the following elements under CPLR 6212 (a):
a. That there is a cause of action and that the action is one in which plaintiff would be entitled to a money judgment;
b. That it is probable that plaintiff will succeed on the merits;
c. That one or more of the grounds for the attachment set forth in CPLR 6201 exist; and
d. That the amount demanded from the defendant exceeds all counterclaims known to plaintiff. Continue reading