Bank of America, N.A. v. City View Blinds of N.Y. Inc.

Background

Bank of America, N.A. moved for appointment of a post-judgment receiver to pursue satisfaction of a judgment against City View Blinds of N.Y. Inc. and the other judgment debtors. A receiver is a person appointed by a court to control, manage, collect, or sell specified property. The judgment debtors opposed the motion.

The court applied New York law under Federal Rule of Civil Procedure 69(a). The court considered three factors: whether the creditor had other remedies, whether a receivership would increase the likelihood of collecting the judgment, and whether failing to appoint a receiver created a risk of fraud or insolvency.

Reasons for Denial

The court assumed, for purposes of its analysis, that appointing a receiver might increase the likelihood of satisfying the judgment. It nevertheless found that Bank of America had not established the other required factors.

First, the court found that alternative remedies were available. Bank of America had filed a separate case seeking turnover of some judgment debtors’ assets, and summary-judgment motions were pending in that proceeding. The court noted that success there could provide more than 20 percent of the judgment. Bank of America had also served restraining notices and subpoenas concerning property in which the judgment debtors had an interest. Although Bank of America had taken the depositions of two judgment debtors, the court noted that it had not subsequently met and conferred with opposing counsel or sought court assistance regarding allegedly inadequate asset-information responses.

Second, the court found that Bank of America had not shown a sufficient risk of fraud or insolvency if a receiver was not appointed. The court recognized Bank of America’s frustration that the judgment remained unpaid and that the judgment debtors had not been fully forthcoming in post-judgment discovery, but found insufficient evidence of fraud and no stated reason to doubt the judgment debtors’ solvency.

Third, the court found the proposed order facially defective under New York law because it did not specify the property to be placed under the receiver’s control. Bank of America’s proposal covered any non-exempt real or personal property in which the judgment debtors had any interest and would have given the receiver control over all of their tangible and intangible assets, wherever located. The court found that scope too broad.

Disposition and Further Directions

The court denied Bank of America’s motion. The opinion does not state that the denial was with or without prejudice. The court ordered the parties to file a joint letter by June 20, 2025, addressing the status of the separate turnover proceeding and whether they had engaged a private mediator or wanted a referral to the court-annexed Mediation Program. The parties were also ordered to obtain a transcript of the telephone conference.

Judge Sarah L. Cave issued the order.