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WORLDWIDE CARRIERS LTD. v. ARIS S.S. CO.

April 24, 1970

WORLDWIDE CARRIERS LTD., Plaintiff,
v.
ARIS STEAMSHIP CO. Ltd., Adrian Maritime Co. Ltd., Aaron Maritime Co. Ltd., Arger Navigation Co. Ltd., Intercontinental Maritime Ltd., Evie Navigation Co. Ltd., Defendants


Frederick van Pelt Bryan, District Judge.


The opinion of the court was delivered by: BRYAN

FREDERICK van PELT BRYAN, District Judge:

The controversy now before me concerns a Warrant of Attachment issued in this action against the assets of the six defendants abovenamed under which levy was made upon five garnishees. Defendants have moved to vacate the levy and to discharge the attachment upon several grounds. Plaintiff, in turn, has brought on by order to show cause a proceeding directing turnover to the United States Marshal of monies and assets of defendant Aris alleged to be in the hands of the garnishees or in the possession of the other defendants which had been levied upon under the warrant. An evidentiary hearing has been held before me on the turnover proceeding.

 The action in admiralty in which this provisional remedy was invoked is by plaintiff Worldwide as the charterer of the vessel, EVIE W, against defendant Aris as owner of that vessel and against the other five corporate defendants on the theory that they were in fact an integral part of the same corporate entity as Aris. The complaint was filed in this Court on August 8, 1968. On August 9, 1968, an Order of Attachment was granted. On August 12, 1968, pursuant to that order, the United States Marshal for this District levied upon the assets of all of the defendants in the possession or custody of five garnishees - Israel Discount Bank Ltd. (IDB), Affiliated Shipping Agency, Inc., Mark Madias, John F. Curry Agency, Inc. and Oceanic Adjustors, Ltd. by serving each with a copy of the Order of Attachment.

 On August 29, 1968, a motion by all the defendants but Aris to vacate the attachment primarily upon the ground that they were not proper defendants in the action was denied 301 F. Supp. 64. On September 26, 1968, a motion by all the defendants but Aris for the discharge of the attachment as against them by posting a $500,000 bond, and for the release of their property upon which levy had been made, was granted. The $500,000 bond was duly filed on behalf of the defendants who had so moved. There has been no discharge of the attachment or levy as to the assets of Aris. None of the garnishees have turned over any of the property levied upon to the Marshal nor has there been any attornment by the garnishees to the Marshal.

 On November 4, 1968, less than ninety days after the levy had been made, plaintiff filed in this Court a paper bearing the legend "Petition in Proceeding to Compel Payment of Debt and/or Delivery of Property Levied Upon under Order of Attachment." The paper bore the title and the file number of this action by Worldwide against Aris and the other five corporate defendants. The petition sought judgment directing that the garnishees deliver to the Marshal all property and debts of Aris in their custody and possession then or in the future.

 On November 7, 1968, within ninety days after levy, a copy of this paper was served on garnishee IDB. On November 15, 1968, after the expiration of the ninety-day period from the date of levy, it was served on the other four garnishees. No notice of petition or order to show cause specifying the time and place of a hearing was filed or served.

 On December 19, 1968, all the defendants except Aris moved to implement the order of September 26, 1968 discharging the attachment as against them upon the filing of their $500,000 bond and to vacate the levy on the ground that it was void because of plaintiff's failure to commence the turnover proceeding required by N.Y. CPLR § 6214(d), (e) within ninety days after levy. At the same time, Aris moved to vacate the levy on the same grounds.

 On January 15, 1969, the day after the return date of defendants' motions to vacate, plaintiff obtained an order to show cause bringing on for hearing its so-called petition for turnover which had been filed on November 4, 1968. Defendants' motions to discharge the attachment and vacate the levy, and the order to show cause on the so-called turnover petition eventually were heard together before me.

 Before reaching any of the questions as to ownership of assets in the hands of the garnishees raised by plaintiff's so-called turnover petition, and those raised by motion of defendants other than Aris for the discharge of their assets from attachment, it is necessary to determine whether the levy should be vacated on the ground it is void. For if the levy is void, as defendants contend, it is unnecessary to reach the other questions raised by the proceedings before me.

 Under Rule 64, Fed. R. Civ. P., the plaintiff in an action in the United States District Court may avail itself of provisional remedies, including attachment, "under the circumstances and in the manner provided by the law of the state in which the District Court is held." In this case, since the plaintiff, under that rule, invoked the New York attachment remedy, N.Y. CPLR §§ 6201-6226, that provisional remedy is available to the plaintiff only under the circumstances and in the manner provided by the law of New York. Glaser v. North American Uranium and Oil Corp., 222 F.2d 552 (2d Cir. 1955); Carroll v. Manufacturers Trust Company, 14 F.R.D. 84 (S.D.N.Y. 1952), aff'd 202 F.2d 714 (2d Cir. 1953). See J. Moore, Federal Practice P64.07[1]-[4] (2d ed. 1969). Cf. Preveza Shipping Co. v. Sucrest Corp., 297 F. Supp. 954 (S.D.N.Y. 1969). *fn1"

 N.Y. CPLR § 6214(d) provides that where property or debts have been levied upon under a warrant of attachment, plaintiff may commence a "special proceeding against the garnishee" to compel the payment, delivery or transfer of such property or debts to the sheriff or to secure a judgment against the garnishee. *fn2"

 N.Y. CPLR § 6214(e) provides that "at the expiration of ninety days after a levy is made * * * or of such further time as the court, upon motion of the plaintiff, has provided, the levy shall be void except as to property or debts which the sheriff has taken into his actual custody, collected or received or as to which a proceeding under subdivision (d) has been commenced." *fn3"

 Special proceedings under the CPLR are governed by §§ 401-411. Section 401 provides that "[the] party commencing a special proceeding shall be styled the petitioner and any adverse party the respondent." There shall be a petition complying with the requirements of a complaint and an appropriate answer. CPLR § 402. A notice of petition specifying the time and place of a hearing on the petition or an order to show cause in lieu thereof is required. CPLR § 403. The notice of petition is to be served in the same manner as a summons in an action. N.Y. CPLR § 403(c); Application of Gillespie, 190 Misc. 334, 72 N.Y.S. 2d 773 (Sup. Ct. 1947); Matter of Selwyn Realty Corp., 184 App. Div. 355, 170 N.Y.S. 491 (1st Dep't), aff'd, 224 N.Y. 559, 120 N.E. 876 (1918). *fn4"

 In the case at bar, since the garnishees did not attorn to the Marshal, and since the Marshal failed to obtain possession of the property, the levy made on the garnishees by the Marshal became void under the provisions of CPLR § 6214(e) unless the plaintiff commenced a special proceeding to compel delivery or transfer to the Marshal of the property or debts levied upon within ninety days after the date of levy. 7A Weinstein, Korn and Miller, New York Civil Practice P6214.15 (1969) (hereinafter Weinstein, Korn & Miller); H. Peterfreund and J. ...


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