DECISION AND ORDER Pursuant to the Order of this Court dated May 13, 2024, a hearing was held on July 18, 2024 (1) to determine the amount and nature of the funds that have been levied, garnished and/or withdrawn from Defendants salary and bank account and Certificates of Deposit and (2) whether the percentage of interest on the judgment was properly calculated. All parties were Ordered to appear for a hearing on July 18, 2024, at 9:30 a.m. “with their witnesses and proof.” On July 18, 2024, Plaintiff Empire Portfolios, Inc. (Empire) appeared by counsel, Eric Canals, Esq., and defendant Grace Ogldi, appeared pro-se. Plaintiff did not call any witnesses. However, plaintiff’s counsel argued that on November 13, 2001, Empire obtained a judgment of $7,915.66 against defendant and assigned it to Accounts Retrievable on August 15, 2006. Defendant signed a Stipulation of Settlement (so-ordered) with plaintiff on July 8, 2011, where she agreed to make monthly payments of $50. until the $6,453.66 was paid in full. Failure to pay entitled plaintiff to take a judgment on the full amount of the debt outstanding. Defendant made a single payment of $50 then defaulted. From January 3, 2012, to February 5, 2018, Plaintiff recovered $4,899.84 from income execution. On May 27, 2022, Plaintiff recovered $1,576.49 pursuant to a marshal’s levy. Plaintiffs’ counsel argues that the Judgment amount including interest for a total of $17,361.56 remained due and owing as of November 14, 2023, and plaintiff properly calculated post judgment interest at nine (9 percent) from 2001 until April 29, 2022. From April 30, 2022, to the date of levy, interest was calculated at two (2 percent) in compliance with CPLR 5004(b) as amended on April 29, 2022. Pursuant to CPLR 5004(b) post judgment interest has been reduced from 9 percent to 2 percent as of April 29, 2022, and is not retroactive as to unpaid judgments. However, no witness with personal knowledge of the calculation, nor evidence of calculation was submitted. In sum, from an initial debt of $6,453.65 became a judgment of $7,915.36. After interest calculated on this judgment, plaintiff has collected over 2 ½ times the initial amount of this debt. Defendant testified that she first learned that her bank account was frozen in September 2023 and was told by Bank of America that it was due to the subject judgment and levy. Thereafter, funds in the amount of $14,296.23 were levied and seized by the marshal from her bank accounts. On October 4, 2023, she filed her first OSC to vacate the judgment and attached a copy of the information subpoena dated September 25, 2023. On October 30, 2023, Judge Ashlee Crawford denied defendant’s OSC. There was no appeal or motion for reargument of Judge Crawford’s order. Thereafter defendant obtained assistance from NYLAG. On December 7, 2023, defendant learned about the exemption claim form, completed and signed it. Plaintiff admits receiving the exemption claim form late and incomplete, as defendant did not check off any box on the form. There was no request for additional information by plaintiff. Nature of funds seized Defendant testified that the majority of the funds seized from both her accounts, were not her funds. Defendant testified that her son Kelechi Ogldi received a settlement check resulting from a personal injury lawsuit while he was incarcerated at Riker’s Island. The settlement check dated July 6, 2023 was issued in the name of her son from his attorney’s account. Due to her son’s incarceration and inability to open a bank account, on July 8, 2023, she deposited the check into her account at Bank of America with the intention that she would pay his bills and hold the funds for his use. From those funds, she withdrew cash and paid expenses and debts owed by her son for rental arrears, car repairs and garage fees estimated at $8,000. She also deposited cash into his commissary account at Rikers for his personal use and purchased items for her son. She withdrew these funds in cash and paid in cash, and she did not have receipts. On August 31, 2023, she opened a Certificate of Deposit (CD) in the amount of $10,000 with funds transferred from her son’s check proceeds so he could have money when he got out of jail. The CD account was opened in her name, as a convenience, as she intended to separate the funds solely for her son and she has not touched it. The bank account ledger shows that from July 3, 2023, through November 27, 2023, defendant’s account #2260 contained $122.61. After the deposit, of the son’s settlement check, on July 6, 2023, defendant’s account had $33,056.30. These funds are traceable to the son’s check. A copy of the subpoena was not produced. However, the BOA subpoena response of Kyle Dudlek sworn to on October 4, 2023, indicates defendant Grace Brown had two accounts: 1) Grace Ogldi Brown, account #8730, opened 8/31/23 contained $9,687.19 (no joint owner) and 2) Grace Ogldi Brown, account #2260, opened 12/4/17 contained $1,745.84 (no joint owner). On January 6, 2024, $14,296.73 was seized from both of these accounts in defendant’s name. On May 27, 2022, $1,576.49 was seized for a total of $15,873.22. CPLR §5240, grants the courts broad discretionary power to control and regulate the enforcement of a money judgment under CPLR article 52 to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the court” (Matter of Sanders v. Manufacturers Hanover Trust Co., 229 AD2d 544, 644 NYS2d 1017 [2d Dept 1996]; see Guardian Loan Co. v. Early, 47 NY2d 515, 519, 419 NYS2d 56, 392 NE2d 1240 [1979]. CPLR §5222 (a) stands for the proposition that a debtor does not lose the right to claim a valid exemption by failing to timely return an exemption claim form. Thus, when the creditor later takes action to obtain delivery of the restrained funds through some means, such as a sheriff’s execution of the levy or a turnover proceeding, the debtor remains free to assert that the funds are exempt, despite a prior failure to timely submit an exemption form. (Cruz v. TD Bank, N.A., 22 NY3d 61 [2013]). As to the exemption claim form, this Court finds that while defendant filed the form late, it was notice to the plaintiff and it could have objected or rejected it as untimely and as incomplete. In fact, plaintiff’s remedy was to request a hearing pursuant to CPLR 5222 (a). However, there is no evidence here that plaintiff did either. As to the origin and nature of the funds, once defendant deposited the check into her personal account, she exercised control over those funds. (CPLR §5225(a); New York Community Bank v. Bank of America, N.A., 169 AD3d 35 [1st Dept 2019]). However, Defendant testified credibly that she opened a separate CD account with the intention of separating those funds to be available for her son when he completes his jail time. Although the CD account is not named as a custodian account, it is considered a convenience account as the funds in the account were separated to be held for the son’s use and benefit. (See Viggiano v. Viggiano, 136 AD 2d 630 [2nd Dept. 1988]; Also see Olshan v. East New York Sav. Bank. 28 F.Supp. 727 [EDNY 1939]). Here, the funds in the CD are traceable to the son’s settlement check proceeds. The check was deposited on July 6, 2023 and the CD was opened on August 31, 2023. Here, the defendant, judgment debtor, had no interest in these funds and they should not be subject to levy. Defendant testified she is suffering from financial hardship as evidenced by her salary and funds in her account. Defendant has not attempted to circumvent the law and evade payment of this judgment. Had this been the case, she would not have deposited her son’s check into her personal account. It is unfortunate that due to funds obtained from her son’s injuries and misery, her financial obligations are at risk. However, a creditor is entitled to the repayment of debt provided it complies with the Fair debt collection practices act. Based on the credible evidence and testimony, it appears that plaintiff properly calculated the interest at 9 percent from the date November 13, 2001 to 4/29/22 and then 2 percent from 4/30/22 to current. Here, plaintiff is entitled to the collection of funds in defendant, judgment debtor’s account #2260 in the amount of $4,609.55. However, the CD account is not subject to the levy and the full amount of the funds in the amount of $9,687.18 seized from the CD account should be returned to defendant. Marshalls poundage fees should be adjusted accordingly. CPLR §5240. Accordingly, it is hereby ORDERED, that defendant’s motion for return of the statutorily protected exempt funds that Plaintiff levied from the Bank of America Advantage Plus account ending in “2260 is hereby Granted; and plaintiff is directed to return to defendant $1,418.84 (funds seized on 5/27/22) from defendant’s account ending in 2260 plus interest from 5/27/22; and it is further ORDERED, that defendant’s motion pursuant to CPLR §5240 releasing the Bank of America Certificate of Deposit (CD account) account ending in “8370″ is Granted; and it is further ORDERED, that plaintiff is directed to return to defendant $9,687.18 from funds seized on 1/6/24 from defendant’s CD account ending in 8370 plus interest from 1/6/24; and it is further ORDERED, upon return of the funds as directed above, Plaintiff shall file proof of its compliance with this Order with the Clerk of the court within thirty (30) days from receipt of this Order; and it is further ORDERED, Plaintiff shall serve a copy of this Order with Notice of entry on defendant and the Marshall’s office within thirty (30) days and file proof of service with the Court. This constitutes the Decision and Order of the Court. Dated: July 30, 2024
