What is a Protective Order against Judgment Enforcement? New York

Judgment debtors may turn to CPLR § 5240 to seek relief against the harsh effects of aggressive judgment enforcement.

Located in a "centralized location" in Article 52, CPLR § 5240 may grant a debtor a protective order or other help[1] against a creditor's collection tools. The law's broad purpose is to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts.[2]

While this section is used a lot in real-estate foreclosure matters, our office includes this section as a backup in our motions to vacate judgments. We include sufficient factual detail to support arguments against judgment enforcement from many angles.

Some examples for use:

• Relief against concurrent wage garnishments and bank restraints
  • Imagine two creditors are garnishing your wages back-to-back, causing significant financial hardship. You can seek a protective order under CPLR § 5240 to limit the amounts withheld from your paycheck.
  • Similarly, if both your bank accounts are frozen due to separate judgments, a protective order could allow access to one account while negotiations or legal proceedings are ongoing.
• Sudden financial hardship
  • Perhaps you've faced a recent medical emergency or job loss that significantly impacts your ability to meet your financial obligations. A protective order could temporarily halt or adjust the collection process to accommodate your hardship.
• Venue (courthouse location) inconveniences
  • Traveling for hearings and court appearances can be burdensome and expensive if you live far from the courthouse where the judgment was entered. A protective order could request a change of venue to a more convenient location.
• Mistaken or merged identity
  • You might be mistakenly identified as the judgment debtor, facing collection attempts for someone else's debt. A protective order could provide immediate relief while your identity is clarified.
  • Similarly, a protective order could help disentangle your financial records and prevent unfair collection actions if your name has been merged with another person due to credit reporting errors.
• Judgment fully paid
  • If you've already paid the judgment in full but the creditor is still pursuing collection efforts, a protective order can stop the harassment and ensure the judgment is properly marked as satisfied.
• Payment by co-defendant
  • One party might have already fulfilled the entire judgment obligation in cases with multiple defendants. A protective order can prevent further action against other defendants who aren't responsible for the outstanding debt.
• Inconvenience to co-tenants or other persons
  • If you share property or financial accounts with others who are not involved in the judgment, a protective order can protect them from unnecessary disruptions caused by collection efforts.
• Exempt nature of funds
  • Certain types of income or assets are protected from debt collection under New York law. A protective order can prevent the seizure of exempt funds, such as Social Security benefits or retirement accounts.
• Creditor misconduct
  • If the creditor has engaged in unfair or abusive collection practices, such as threats, harassment, or illegal tactics, a protective order can provide immediate relief and potentially lead to sanctions against the creditor.

• Additional Scenarios:

  • You are facing multiple judgments from different creditors, making it difficult to manage your finances effectively.
  • The creditor is employing unreasonable collection methods, such as contacting you excessively or at inconvenient times.
  • You are negotiating a settlement with the creditor and need temporary relief from collection activities to finalize the agreement.

Summaries of the Purpose of CPLR § 5240: Protective Orders and Judgment Enforcement

1. Paz v. Long Island R.R.: CPLR § 5240 safeguards against undue harm in judgment enforcement (241 A.D.2d 486, 661 N.Y.S.2d 20).

2. Kolortron Systems, Inc. v. Casey: CPLR 5240 doesn't allow vacating default judgments, only aids against harsh enforcement (118 A.D.2d 687, 500 N.Y.S.2d 36).

3. Cook v. H. R. H. Const. Corp.: CPLR § 5240 aims to prevent abuse in enforcing judgments, not to prioritize creditors (32 A.D.2d 806, 302 N.Y.S.2d 364).

4. Murphy v. Grid Realty Corp.: The court lacks the power to vacate an execution sale under CPLR § 5240 without explicit legislative provision (73 Misc.2d 1071, 343 N.Y.S.2d 670).

5. Seyfarth v. Bi-County Elec. Corp.: CPLR § 5240 protects from harsh legal procedure use in judgment enforcement (73 Misc.2d 363, 341 N.Y.S.2d 533).

Case: NY Court of Appeals Rules CPLR Article 52 Is Exclusive Remedy for Improper Judgment Execution Claims

A Michigan corporation sought to bring tort claims against judgment creditors and a city marshal for allegedly improper seizure of its bank accounts pursuant to valid NY judgments. The Court of Appeals held that a judgment debtor's exclusive avenue for relief against improper execution procedures is through CPLR Article 52, not through separate tort actions, even when the execution allegedly violated procedural requirements.

Key Legal Principles:

1. A judgment debtor must seek relief from improper execution procedures exclusively through CPLR Article 52 rather than through separate tort claims
2. CPLR Article 52's enforcement mechanisms are designed to address all violations of judgment execution procedures
3. Relief under CPLR 5240 is available even after assets have been transferred to judgment creditors

Conclusion: The Court established that CPLR Article 52 provides the exclusive mechanism for challenging improper execution procedures, rejecting attempts to pursue separate tort remedies even when execution procedures allegedly violated statutory requirements.

Citation: Plymouth Venture Partners, II, LP v GTR Source, LLC, 37 NY3d 591 (2021).

Contact us right away if you need help beating back a creditor.