Question. I am trying to enforce a judgment I obtained in 2010. I have located the debtors assets in a German Bank. The Bank does business in New York systematically and continuously through a New York branch that is not incorporated and is not a separate entity. Can the Court direct the bank to turn over funds, up to amount of judgment, held in a German bank account?
Answer. YES. A court in New York had general personal jurisdiction over a foreign bank that did business in New York systematically and continuously through a New York branch that was not incorporated and was not a separate entity. Thus, pursuant to a New York statute, the court could issue a turnover order that directed the bank to turn over the account funds of a judgment debtor, up to the amount of the judgment, regardless of whether the accounts were held in Germany or New York.
Section 5225(b) of the N.Y. CPLR provides the process by which a judgment creditor may compel "a person in possession or custody of money or other personal property in which the judgment debtor has an interest ... to pay the money, or so much of it as is sufficient to satisfy the judgment, to the judgment creditor...." N.Y. CPLR 5225(b). Section 5225(b) requires the judgment debtor to proceed by way of special proceeding. Id. A special proceeding is a civil judicial proceeding in which a right can be established or an obligation enforced in summary fashion. Like an action, it ends in a judgment, but the procedure is similar to that on a motion. Speed, economy and efficiency are the hallmarks of this procedure." Alexander, Comment C401:1 (McKinney's N.Y. CPLR, 2010) (internal citations omitted).
The Bank contends that it should not be required to turn over any funds it holds in the name of Debtor, because the funds at issue are on deposit in a German bank at a branch in Germany. The New York Court of Appeals in Koehler v. Bank of Bermuda Ltd., 12 N.Y.3d 533, 883 N.Y.S.2d 763, 911 N.E.2d 825 (2009) concluded that "a New York court with personal jurisdiction over a defendant may order [that defendant] to turn over out-of-state property regardless of whether the defendant is a judgment debtor or a garnishee." Id. at 541.
In this case, the Court has personal jurisdiction over the Bank. Under N.Y. CPLR Sec. 301, New York courts may exercise general jurisdiction over a foreign corporation where that corporation is engaged in such a continuous and systematic course of doing business in NY as to warrant a finding of its presence in this jurisdiction. Bank admits that it does business in New York systematically and continuously through its New York branch, which is not incorporated and is not an entity separate from the German bank. This Court has general personal jurisdiction over Bank, and thus under Koehler, this Court may issue a turnover order under N.Y. CPLR Sec. 5225(b) directing Bank to turn over funds up to the amount of the judgment, regardless of whether those accounts are held in Germany or New York.