Contempt proceedings, a useful technique in enforcing a money judgment

In 1798, Charles Wentworth was sentenced to three days in jail for failing to pay his merchant on a past due bill of $.98 for the purchase of three chickens. In 1817, Michael James was sentenced to six days in jail for failing to pay his bar tab totaling $1.89. In 1847, Ronald Henderson did not pay $2.47 for grooming services on his horse and was sent off to prison for three days. These incidents were commonly told in local papers as true stories of the day.

Flash forward to 2010. Can anyone be sentenced to jail time for failing to pay a bill or not paying a judgment? Of course not. One cannot be “thrown in jail” for failing to pay a money judgment. However, the same does not hold true when an individual fails to comply with an enforcement proceeding in an attempt to collect on a money judgment.

Lacy Katzen LLP’s Collection Department zealously represents creditors in the enforcement of their money judgments and may commence enforcement proceedings against a judgment debtor resulting in an arrest warrant. The most common method used when other avenues of enforcement prove futile is a contempt motion. Though contempt is not available to enforce a money judgment, every court in New York State in which a proceeding to enforce a money judgment may be brought is specifically granted the right to punish a judgment debtor on contempt committed in the context of an enforcement proceeding.

For example, refusal or willful neglect to obey a subpoena, a restraining notice or order granted by the court requiring the judgment debtor to pay money is punishable as a contempt. Thus, a judgment debtor cannot be punished for contempt for failing to pay a judgment, but can be held in contempt for a failure or refusal to be examined under oath when the judgment creditor is trying to enforce the judgment. The mechanism used for a debtor’s failure to comply with the subpoena is known as a civil contempt motion.

The procedure is rather simple and quick. It consists of a notice of motion advising the judgment debtor of the court date and time and the motion which consists of an attorney affirmation. The motion must be served not less than 10 days and no more than 30 days prior to the court date. The attorney affirmation must contain factual statements describing the contempt and a recital that the judgment creditor has been prejudiced, impaired and impeded in the collection of the judgment.

Generally, the motion papers are served upon the judgment debtor by ordinary mail and an affidavit of service is filed with the court.

Where the judgment debtor appears on the motion to punish for contempt, it is generally accepted practice for the judgment creditor’s attorney to offer to withdraw the motion if the judgment debtor agrees to submit to an examination. If such consent is given, the motion is withdrawn, and the examination proceeds either at the court or in creditor’s attorney’s office.

Obviously, the ultimate goal of the judgment creditor is for the judgment debtor to appear in court and be examined for possible assets. The objective is for the judgment debtor to satisfy his or her judgment. However, in many cases, the judgment debtor fails to appear at the hearing. Where there is a default on the contempt motion, the court will sign an order fining the judgment debtor the sum of $250 plus costs and expenses. The fine may be more than $250 where the judgment creditor is able to make a convincing showing that the actual damages, by reason of the contempt, are greater than that amount.

The fining order must contain a provision granting the judgment debtor leave to “purge” the contempt, typically within ten days after personal service of the order by appearing at the judgment creditor’s attorney’s office and subject himself or herself to answer questions at a deposition.

After service of the order upon the judgment debtor and after the required time passes to purge the contempt, the judgment creditor, through his or her attorney, may apply to the court for an arrest order. This may require another notice and motion to the judgment debtor or may be done without further notice depending upon the court. The court may issue a warrant directing the sheriff to arrest the judgment debtor and bring him or her before the court to be committed or for other disposition.

Normally, after the issuance of the arrest order, the judgment debtor is contacted by the sheriff, requesting the judgment debtor to voluntarily “turn himself in” at the sheriff’s office on a certain date and time. When this occurs, the attorney’s office is notified and will appear at the sheriff’s office to question the judgment debtor.

Lacy Katzen LLP’s experience has been that when the judgment debtor comes before the sheriff, he or she will usually bring in funds to satisfy the judgment, will make payments for the judgment amount or will provide sufficient information at the deposition to garnish wages or restrain a bank account. In other cases, be the judgment debtor may not have any assets to attach and is “judgment proof.”

In conclusion, a contempt motion is used as a last resort in enforcing a judgment. It ultimately provides a wealth of information leading to the payment of our clients’ judgments or confirming the judgment debtor as having no assets. Lacy Katzen LLP takes pride in representing creditors and using the law to its fullest extent in enforcing our clients rights. If you wish to discuss ways of collecting your debts, you may contact Michael Schnittman at (585) 324-5704 or Mark Stein at (585) 324-5706, who are partners in the Creditors’ Rights Department of Lacy Katzen LLP.