However, the right to appeal a Small Claims judge’s decision is often illusory. An appeal will lie only if the judge did not render substantial justice under substantive law. But there will be no reversal unless the error is clearly ‘erroneous’ and the deviation from substantive law is ‘readily apparent.’" Lockwood v. Niagara Mohawk Power Corp., 491 NYS2d 211, 213 (3d Dept. 1985). If the error concerns procedure, pleading, or evidence, moreover, the judgment will be reversed only if the judge’s error is "shocking." Blair v. Five Points Shopping Plaza Inc., 379 NYS2d 532, 535 (3d Dept. 1976).
Given the limited appellate review, counsel should consider having their case heard by one of New York City’s 1,500 volunteer arbitrator’s. Like a judge, an arbitrator will follow the rules of substantive law, but the arbitrator will try the case almost immediately after the calendar call, which begins promptly at 6:30 Monday through Thursday evenings. (In the Bronx there is no calendar on Thursdays, and in Staten Island, the Small Claims Part is open only on Thursdays).
A trial judge on the other hand, often requires an adjournment, To choose an arbitrator, counsel should simply announce "ready." To choose a judge, announce "ready by the court." To make a motion announce "application."
The Small Claims Part is user friendly. It is not designed to compete on the information super-highway. But for getting from here to there, it is probably the most effective system of practical justice ever devised.
Although the Small Claims Part is designed to work well without practitioners, those who appear lend integrity to the process and can make effective contributions on behalf of their clients.
11/08/97 2:43 PM NEWYORK LAW JOURNAL.doc
This article has been re-keyed with the consent of both authors.
In it, lay readers will find a wealth of information to help them collect the money they were awarded by the judge or arbitrator in the Small Claims Court of the City of New York
NEW YORK LAW JOURNAL
Tuesday, January 27, 1998
How to help Judgment Creditor Collect: The Effective Use of Civil Court Act Article 18
By
Gerald Lebovits and Arthur F. Engoran
Gerald Lebovits is the current president and Mark Snyder is a former president of the Association of arbitrators, Small Claims Part and Arthur Engoran the treasurer of the association and chair, Small Claims Subcommittee, City Bar Civil Court Committee.
Self-represented litigants – and even experienced attorneys – often have more difficulty collecting small-claims judgments than winning them. In New York State, according to one report, "50 percent of small claims judgments go uncollected."1 That deeply undercuts the New York City Small Claims Part’s mandate2: to provide equal, efficient, speedy and simplified justice. This article discusses devices to help judgment creditors win more than Pyrrhic victories.
Provisions designed to aid small claimants abound in NYC Civil Court Act (CCA) Article 18.3
Commercial Claims are governed by CCA Article 18-A, which tracks Article 14.4 When used effectively, the CCA’s collection provisions justify suing for modest sums.5
When small claims are filed, claimants receive the Office of Court Administration’s Guide to Small Claims Court, a 15 page blue pamphlet. Pages 8-15 describe judgment enforcement. Commercial Claimants receive a gray pamphlet that contains some collection information. Clerk’s also provide a four-page green pamphlet, Preparing for the collection of a Small Claims Judgment. Although helpful, these pamphlets do not fully explain how to collect from defiant debtors.
The Notice of Judgment the parties receive by mail after adjudication advises that failing to pay may result in garnishment, property liens, seizures and sales, license suspension or revocation and prosecution for fraud.
The Notice of Judgment also refers to suing under CCA
§§1812(a), (b) for not paying within 30 days after receiving the notice, a third or subsequent small claims arising out of a debtor’s business or repeated conduct. Unsatisfied judgments are indexed with the Small Claims Clerk chronologically and alphabetically by defendant.6 Creditors may sue7 for treble the unsatisfied judgment plus attorney’s fees, costs 8 and disbursements. 9 Debtors may assert the CCA §1812(b) defense that they could not afford to pay within 30 days of receiving the original judgment. Judges and arbitrators who award treble damages must under CCA § 1812(c), notify the Attorney General and the appropriate licensing authority. Debtors who satisfy their judgment should file with the Small Claims Clerk an Affidavit Pursuant to CCA §1812(c) Upon Payment of Judgment.The Name Game
Before suing a business, a claimant should research the County Clerk’s d/b/a (doing business as) records. A business may, however, be sued in any name under which it conducts business.11 Before trial, claimants may amend defendants’ names by filing an Affidavit Amending Defendant’s Name.12 At trial, the judge or arbitrator "shall determine the defendant’s true name," and the clerk will amend the papers.13 CCA §1813(a) directs payment whether a judgment captions the defendant's true name or any name in which it "conducts business," including "maintaining signs"; advertising; or printing or using contracts, sales slips, checks, invoices or receipts.CCA §1813(a) also allows creditors to begin a new small claim, exceeding the $3,000 limit, for the original judgment plus costs, attorney’s fees and an extra $100, if a judgment not rendered in the debtor’s true name is unpaid for 35 days after notice of entry.14 A creditor may move by order to show cause to correct a debtor’s name it the true name is discovered after judgment. A debtor seeking to vacate a default, or other relief under Civil Practice Law and Rules §5015, must disclose its true name and pseudonyms. 15
CCA §1805(a) and CPRL 5229 allow judges and arbitrators, at trial or after, to ascertain, with a claimant’s aid, a defendant’s assets and income. Under these provisions, the judge directly, or on an arbitrator’s referral, may also issue a restraining order before judgment "to the same extent as if a restraining notice had been served…after judgment."
Post-Judgment Practice
A prevailing claimant may contact the debtor to request payment, perhaps by installments. If this fails, the creditor might inform the debtor, in writing, of the steps the creditor will take, although this tips the creditor’s hand and requires that the stated intentions be followed.A creditor can obtain a Transcript of Judgment16 form the Small Claims Clerk and file it with the County clerk to make the judgment a Supreme Court judgment. This impairs the debtor’s credit rating and may bring payment. The judgment will become a lien if the debtor owns or will own real property in the county. The creditor can seek a forced sale17 or await the debtor’s attempt to mortgage or sell the property. The debt may be satisfied when the lien appears on a title report.
If not discovered before at trial, the creditor must now determine the debtor’s assets and income for use by a sheriff or marshal. Information subpoenas and assistance on their preparation and use are available from the Small Claims Clerk, who signs the subpoena. Forms also can be bought in some stationery stores. Failure to answer and information subpoena within seven days after personal or certified, return mail service constitutes contempt of court punishable by a small-claims judge by order to show cause.18 False swearing is contempt or perjury.19 Since the 1991 amendment to CCA §1812(d), information subpoenas may be served on debtors or their landlords, Con Edison an Bell Atlantic will disclose useful personal and financial records. The information subpoena may also contain a CPRL §5222(b) restraining notice 20 to prevent debtors from depleting their assets and third parties from disposing of assets they hold for debtors. Simply serving an information subpoena restraining notice may cause payment.
Bank accounts can be found by reading the back of a check a debtor negotiated. Creditors can determine whether debtors own vehicles by contacting the Department of Motor Vehicles (DMV).
CD-ROM address collections and the Internet (through "people locators") help trace debtors. For an extra 50 cents, the postal service will provide a forwarding address to anyone noting "Forwarding and Address Correction Requested" on mail to the old address. Voter-registration lists, deeds, marriage licenses and real estate transactions can be perused. Detective, collection or skip-tracing agencies blanket banks with information subpoenas/restraining notices for a fee.
Enforcing, Exempting
Judgments are enforceable under CPRL §5201 against debts owed the debtor and against assignable or transferable property, including corporate stock and interests in partnerships, decedents’ estates and negotiable instruments. Exempt are: domestic stoves; sewing machines; family pews and bibles; personal effects; domestic animals and their food for 60 days/ security deposits to rent real property; medical and dental accessions; seeing-eye dogs; death benefit accelerations 21; alimony and child support; and Social and Supplemental Security, public assistance, unemployment, disability, worker’s Compensation, veterans and pension benefits.
Primary residences are exempt to $10,000 above liens as are occupied burial grounds to one-quarter acre.22 Debtors do not escape by dying; the estate assumes liability. Bankruptcy filing stay collection proceedings.
After locating non-exempt assets, the creditor may contact an "enforcement officer": either a County Sheriff (Bronx: 718 585-1551; Kings: 718 643-5897; New York: 212 240 6715; Queens: 718 803-3091; Richmond: 718 876 5307) or a City Marshal (consult Yellow Pages under "marshal").23
The Small Claims Clerk24 or creditor’s attorney can issue property and income executions to enforcement officers.25 These forms are also available from some stationers. A property execution directs the officer to satisfy the judgment out of the debtors’ real and personal property and debts due to them. 26 It can be used to seize personal property "not capable of delivery," such as automobiles, may be levied by seizure.28 CPLR §§5235-5236 address selling real property to satisfy judgments.
Under CPLR §5231 and officer can serve a debtor with an income execution to direct payment if the debtor is receiving money form any source. If the debtor does not pay, the officer may levy on the person paying the debtor, typically the debtor’s employer. Creditors may sue non-cooperating payers. Although enticing, arrest under CPLR §5250 is disfavored and possibly unconstitutional.29 If a debtor has a joint bank account, a creditor must purchase a Turnover Order from a stationer and have a Special Term Civil Court judge sign it.
When a small Claim arises out of a defendant’s business, "the judge or arbitrator shall determine the appropriate state or local licensing or certifying authority and any business or professional association of which the defendant is a member.."30 The judge or arbitrator must also notify the Attorney General, or advise the claimant to do so, if a defendant committed business fraud.31 Notice to licensing authorities, or notification advice to claimants, is also required for licensed businesses or individuals committing fraud.32 Debtors refusing to pay small claims judgments risk license loss if they commit fraud. Or deliberately refuse to pay after 35 days of receiving the Notice of Judgment.33 Licensed businesses include: farming; alcohol and food marketing; banking; cable television; medicine dentistry and psychology; law; insurance; utilities; and vehicle servicing. Pressure may be brought against recalcitrant debtors by contacting the Attorney General’s Consumer Frauds and Protection Bureau (212 416-8345); the New York City Department of Consumer Affairs (212) 487-4398; The Departmental Discipline Committee, Superior Court, Appellate Division, 1st Department (212) 685-1000); or the Grievance Committee, 2nd and 11th Judicial Districts (718) 624-7851). Lawyers should know that disciplinary consequences attach to failing to pay small-claims.34
If the claim arose out of owning or operating a vehicle, and a judgment exceeding $1,000 is unpaid for 15 days, the creditor may ask DMV to suspend to suspend the debtor’s registration and license.35 The creditor should first contact the DMV to ascertain vehicle ownership. Then the creditor should send the DMV a Transcript of Judgment and a copy of the Statement of Claim that36 began the action, or other evidence about the claim.
The 20-year Statute of Limitations governs small-claims judgments.37 Familiarity with collection techniques should make enforcement a reality long before the time runs out.