Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


April 12, 1974

Corwin Consultants, Inc., Petitioner
The Interpublic Group of Companies, Inc., United States of America, Peter M. Moffitt, W. Denning Harvey, Samuel A. Culbertson, II, and Cowles Communications, Inc., Respondents

Lasker, District Judge.

The opinion of the court was delivered by: LASKER


LASKER, District Judge.

 This is an action in the nature of an interpleader to determine priority among four lienors to a fund of money accumulating under a contract between the debtor, Marion Harper, Jr., and The Interpublic Group of Companies, Inc. ("Interpublic"). *fn1" Interpublic does not make any claim to the fund except for attorney's fees. Originally brought in state court, the suit was removed to this court by motion of the Internal Revenue Service ("IRS") pursuant to 28 U.S.C. §§ 1441, 1442 and 1444. Three lienors, Corwin Consultants, Inc. ("Corwin"), Cowles Communications, Inc. ("Cowles") and the IRS, move for summary judgment, each claiming that, on the undisputed facts, it is entitled to priority in its claim to the fund. The fourth lienor, Samuel A. Culbertson, II, does not claim priority. Respondents Peter M. Moffitt and W. Denning Harvey have been paid in full and have defaulted in this proceeding.


 The following facts are undisputed. On February 1, 1968, Harper and Interpublic entered into a covenant not to compete under which Harper, Interpublic's founder, would receive certain monthly payments until 1976.

 On April 15, 1970, while Harper was a resident of Irvington, New York, in Westchester County, the IRS filed with the Westchester County Clerk a notice of tax lien for $394,692.55, which it claimed was the amount of Harper's unpaid 1968 taxes.

 On January 12, 1971, the IRS filed a second notice of tax lien with the Registrar of the City of New York for the same unpaid 1968 taxes (which, including statutory additions, *fn2" then amounted to $396,923.65). Simultaneously, Interpublic was given notice of this lien by a Notice of Levy from the IRS dated January 12, 1971.

 On February 28, 1972, Cowles, a creditor of Harper, obtained from Supreme Court, New York County, an order of attachment pursuant to N.Y.C.P.L.R. § 6201(2). The sheriff levied upon McCann, Erickson, Inc. ("McCann") a wholly-owned subsidiary of Interpublic, and upon Harper's counsel, Debevoise, Plimpton, Lyons and Gates, who as Harper's agent, had been receiving his payments under the agreement with Interpublic. However, no levy was made upon Interpublic itself and no property was turned over to the sheriff by McCann or Debevoise. On June 12, 1972, Cowles reduced its claim to judgment for $56,820.54 plus interest, but never delivered execution of the judgment to the sheriff. After February 15, 1972, Interpublic accumulated the monthly payments due Harper pending a determination of the right of Harper's creditors to the money. Some time in the first half of 1972, Harper disappeared, and none of the parties have been able to locate him since then.

 On October 3, 1972, at 10:32 A.M., the IRS delivered to the sheriff of New York County a third notice of tax lien in the amount of $168,895.90 representing Harper's unpaid taxes for 1963, 1964 and 1965 (plus statutory additions) and on the same day served Interpublic with a Notice of Levy. Two hours later, at 12:51 P.M., Corwin delivered an execution to the sheriff, in the amount of $52,346.00. On May 23, 1972, Corwin obtained a judgment against Harper in Supreme Court, New York County. In accordance with the terms of the judgment, Corwin then instituted a proceeding in state court pursuant to CPLR § 5239 for a determination of priority of lien on Harper's property. The court ordered Interpublic, the stakeholder here, to set aside a fund of $60,000 for the satisfaction of Corwin's judgment pending the outcome of the § 5239 proceeding, and the IRS removed the proceeding to this court.

 On February 5, 1973, Culbertson delivered his execution to the sheriff, in the amount of $608,180.90.


 On the facts described, Corwin contends (1) that the 1970 IRS lien which was filed prior to the accumulation of any funds under Harper's contract with Interpublic fails because as a matter of law a lien cannot attach to contingent rights in property, such as Harper's rights to payment under his contract with Interpublic; (2) that the 1971 and 1972 IRS liens fail because they were not filed in the debtor's known county of residence and (3) that the present action determines lien priority only as to the $60,000 fund established by the state court for satisfaction of Corwin's judgment against Harper.

 The IRS answers (1) that its 1970 lien is good against the sums subsequently accumulated under the contract because it is after-acquired property to which federal tax liens do attach; (2) that its 1971 and 1972 liens were properly filed and effective to establish its lien priority, and (3) that the present action should determine the disposition not only of the $60,000 fund established by the state court, but also the funds accumulated and yet to accumulate under the contract subsequent to the date of the state court judgment and subsequent to the final determination of this lawsuit.

 The IRS and Corwin argue that Cowles has no lien priority because its February 28, 1972 levy lapsed under CPLR § 6214(e). Interpublic makes no claim to the fund, but seeks attorney's ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.