FOLEY, CHERYL v. WEST-HERR FORD, INC. ( 2013 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
1040
CA 12-01806
PRESENT: SCUDDER, P.J., CENTRA, CARNI, AND LINDLEY, JJ.
CHERYL FOLEY AND WILLIAM FOLEY,
PLAINTIFFS-RESPONDENTS,
V MEMORANDUM AND ORDER
WEST-HERR FORD, INC., ET AL., DEFENDANTS.
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TIMOTHY B. HOWARD, SHERIFF, COUNTY OF ERIE,
APPELLANT.
MICHAEL A. SIRAGUSA, COUNTY ATTORNEY, BUFFALO (KENNETH R. KIRBY OF
COUNSEL), FOR APPELLANT.
PAUL WILLIAM BELTZ, P.C., BUFFALO (DEBRA A. NORTON OF COUNSEL), FOR
PLAINTIFFS-RESPONDENTS.
Appeal from an order of the Supreme Court, Erie County (Kevin M.
Dillon, J.), entered January 27, 2012. The order denied the motion of
Timothy B. Howard, Sheriff, County of Erie, for an award of poundage.
It is hereby ORDERED that the order so appealed from is
unanimously reversed on the law without costs, the motion is granted
and plaintiffs are directed to pay Timothy B. Howard, Sheriff, County
of Erie, $24,500 as poundage pursuant to CPLR 8012 (b) (1), (2).
Memorandum: Timothy B. Howard, Sheriff of the County of Erie
(Sheriff), appeals from an order that denied his motion for an award
of poundage (see generally CPLR 8012 [b]). Plaintiffs commenced the
underlying negligence and products liability action seeking damages
for injuries sustained by plaintiff Cheryl Foley in a motor vehicle
accident. By agreement dated September 30, 2009 (2009 Agreement),
plaintiffs and defendants “agree[d] to settle the . . . case on or
before December 15, 2009” in accordance with three enunciated terms:
defendant Ford Motor Company would pay plaintiffs $650,000 on behalf
of all defendants; plaintiffs agreed to accept that sum in full
satisfaction of all claims against defendants; and plaintiffs agreed
to execute a general release and a stipulation of discontinuance and
defendants would make payment in accordance with CPLR 5003-a (emphasis
added).
Despite the 2009 Agreement, the parties had unresolved issues
concerning potential liens and the language of the general release.
In March 2010, the attorney for defendants requested “a pretrial
conference for purposes of finalizing the settlement” of the
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underlying action (emphasis added). Plaintiffs sent proof that any
potential liens had been resolved, but the parties continued to
disagree on the language of the release. Supreme Court scheduled a
conference for June 2011, noting that, “if the parties [could not]
reach an agreement as to the language of the release,” the matter
would be restored to the trial calendar. Despite the continued
disagreement on the terms of the release, plaintiffs’ attorney filed a
judgment for $726,611 on July 5, 2011 pursuant to CPLR 5003-a.
Plaintiffs’ attorney thereafter enlisted the services of the Erie
County Sheriff’s Office (Sheriff’s Office) to serve executions and
notices of levy on two banks as garnishees of defendants, West-Herr
Ford, Inc. and Ford Motor Company. Those documents were served upon
the garnishees on July 12, 2011. On July 21, 2011, the Sheriff’s
Office was allegedly informed by plaintiffs’ attorney “that the
executions had achieved their desired effect, and that the defendants
had agreed to settle the matter.” Plaintiffs’ attorney was then
informed that the Sheriff’s Office would nevertheless be seeking
poundage in the amount of $24,500 pursuant to CPLR 8012 (b) (1). The
next day, a stipulated order was entered upon the “joint application”
of plaintiffs and defendants, pursuant to which “the instant action
remain[ed] settled pursuant to the terms of the [2009 Agreement]”; the
judgment filed July 5, 2011 was “deemed invalid from its inception”
and “deemed null and void”; and the executions and notices served by
the Sheriff were “deemed to be null and void.” On July 25, 2011, the
Sheriff’s Office received a copy of that stipulated order from one of
the garnishees.
The Sheriff thereafter moved for an order awarding the payment of
poundage pursuant to CPLR 8012. We conclude that the court erred in
denying that motion. “ ‘Poundage is a fee awarded to the Sheriff in
the nature of a percentage commission upon moneys recovered pursuant
to a levy or [an] execution of attachment’ . . . The Sheriff’s right
to receive poundage fees is wholly statutory . . . , and the statute
must be strictly construed . . . Under the statute, the Sheriff is
entitled to poundage fees ‘for collecting money by virtue of an
execution’ (CPLR 8012 [b] [1])” (Famous Pizza v Metss Kosher Pizza,
119 AD2d 721, 721). Although it is undisputed that the Sheriff did
not actually collect any money, an award of poundage may still be made
where, inter alia, “a settlement is made after a levy by virtue of an
execution” (id.; see CPLR 8012 [b] [2]; Solow Mgt. Corp. v Tanger, 10
NY3d 326, 330; Personeni v Aquino, 6 NY2d 35, 38).
Based on the references to the 2009 Agreement in letters to the
court and between the attorneys for the parties, we conclude that the
2009 Agreement did not constitute a final settlement but, rather, “was
merely an agreement to agree sometime in the future” (Sterling Fifth
Assoc. v Carpentille Corp., Inc., 10 AD3d 282, 284). Even assuming,
arguendo, that the 2009 Agreement constituted an actual settlement, we
nevertheless conclude that the Sheriff is entitled to poundage
because, after plaintiffs filed the judgment and served the executions
and notices of levy, the parties entered into a subsequent agreement
to apply jointly to the court to have the judgment vacated. Moreover,
where, as here, “payment by the debtor is made directly to the
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creditor after a sheriff levies, the payment constitutes a settlement,
and the sheriff will be entitled to poundage” (Kurtzman v Bergstol, 62
AD3d 757, 758; see Cabrera v Hirth, 87 AD3d 844, 847; cf. Alvarez v
Brooklyn Hosp.-Caledonian Hosp., 255 AD2d 278, 279-280). Pursuant to
the unambiguous language of the statute, the Sheriff is entitled to
$24,500 in poundage based on the settlement amount of $650,000 (see
CPLR 8012 [b] [1], [2]).
We reject the contention of plaintiffs that an award of poundage
to the Sheriff is inequitable. The legislative intent in enacting the
statute was that, “when a party has made use of the services of the
Sheriff’s office in the pursuit of a claim, and he [or she] later
satisfies that claim by means of a settlement, the Sheriff is entitled
to his [or her] poundage whether he [or she] has actually made any
collections or not” (Matter of Pearson, 72 Misc 2d 995, 997-998).
“ ‘[T]o permit plaintiffs to succeed [in opposing the Sheriff’s
motion] would create a dangerous precedent whereby a party might avoid
poundage fees’ ” by stipulating that the judgment that was the subject
of the execution was void but the underlying action remained settled,
“ ‘after using the process of our courts and the services of the
Sheriff’s office. This was not the intent of the Legislature. Such
an interpretation would do violence to the letter and spirit of the
statutory provisions here in question’ ” (id. at 998).
We likewise reject the further contention of plaintiffs that they
should not be liable for the payment of poundage. Although “CPLR 8012
(b) is silent on th[e] question” concerning who is liable to pay
poundage where, as here, a settlement has occurred after levy
(Cabrera, 87 AD3d at 847-848), “[i]t has long been customary that
where a sheriff levies against a defendant’s property and the matter
is thereafter settled, the judgment creditor is liable to the sheriff
for the payment of poundage fees as the party who invoked the
sheriff’s services” (id. at 849). We see no basis to deviate from the
customary practice, and we thus conclude that plaintiffs are liable to
pay the award of poundage to the Sheriff.
Based on our resolution, we see no need to address the Sheriff’s
remaining contentions.
Entered: November 8, 2013 Frances E. Cafarell
Clerk of the Court