The opinion
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
__________________________________________x
MARICULTURA DEL NORTE, S. DE R.L. DE
C.V. and SERVAX BLEU, S. DE R.L. DE C.V.,
Plaintiffs,
-against- No. 14 Civ. 10143 (CM)
WORLDBUSINESS CAPITAL, INC.; UMAMI
SUSTAINABLE SEAFOOD, INC.; CRAIG A.
TASHJIAN; and AMERRA CAPITAL
MANAGEMENT, LLC,
Defendants.
__________________________________________
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT UMAMI’S
MOTION TO REOPEN AND REDUCE THE AMENDED JUDGMENT, DENYING
PLAINTIFF SERVAX’S MOTION TO REOPEN AND INCREASE THE AMENDED
JUDGMENT, AND GRANTING PLAINTIFF SERVAX’S MOTION FOR A WRIT OF
EXECUTION
McMahon, C.J.:
Pending before this Court is the latest round of post-trial motions arising out of the
August 24, 2017 judgment for Plaintiffs Maricultura del Norte, S. de R.L. de C.V. (“Marnor”)
and Servax Bleu, S. de R.L. de C.V. (“Servax”). (Dkt. No. 251; hereinafter, the “Amended
Judgment” or “AJ”.) The parties cross-appealed from this Court’s award of $3,094,447.16 to
Plaintiffs, and the Second Circuit affirmed. Maricultura del Norte, S. de. R.L. de C.V., et al. v.
Umami Sustainable Seafood, 769 Fed. Appx. 44 (2d Cir. 2019). Both parties have submitted
motions to reopen and revise the Amended Judgment in light of post-judgment events.
First, Servax, on its own behalf and as the assignee of Marnor’s interest in the Amended
Judgment (see Dkt. No. 254), moves for a turnover order and a writ of execution in the amount
of $2,409,481.42 against Defendant Umami Sustainable Seafood, Inc. (“Umami”) and the surety
of Umami’s supersedeas bond, Atlantic Specialty Insurance Company (“Atlantic”). (Dkt. No.
273; the “Writ Motion” or “WM”.) The new total reflects Servax’s calculation of additional
interest that has accrued since the Amended Judgment, as well as a reduction of $750,000
representing a settlement agreement between Servax and WorldBusiness Capital, Inc. (“WBC”;
the “WBC Settlement”), Umami’s codefendant.
For its part, Umami moves under Federal Rule of Civil Procedure 60(b) to reopen and
reduce the Amended Judgment by $2,762,535.08, which is the sum of the following: (i) the
WBC Settlement; (ii) a $1,087,755.09 interest judgment entered in Umami’s favor (the
“Mexican Interest Judgment”) in the related foreclosure proceeding brought against Marnor in
the Tenth District Court in the State of Baja California in Ensenada (the “Mexican Court”); (iii) a
$750,000 tax assessment owed by Marnor to the Mexican Tax Authority (the “Customs Fee”),
which Marnor has yet to pay, and which a Mexican Administrative Court nullified on June 28,
2019, as well as $174,759.99 in associated prejudgment interest. (Dkt. No. 277; “Umami’s Rule
60 Motion”.) Umami also asks that this Court make corresponding and proportional reductions
to the supersedeas bond offered by Atlantic to secure the judgment while the parties appealed.
In response, Servax makes a Rule 60 motion of its own (Dkt. No. 286; “Servax’s Rule 60
Motion”), seeking to increase the Amended Judgment by $1,638,833.32 to account for an award
of attorneys’ fees and costs that Umami obtained from the Mexican Court against Marnor (the
“Mexican Fee Award”), after this Court ruled that Marnor was entitled to any “legal fees and
costs incurred from and after November 9, 2012, in the Mexican foreclosure proceeding,” (AJ ¶
3), which Marnor would not have incurred but for the Defendants’ conduct.
The motions are disposed of below.
BACKGROUND
A. Facts
The Court assumes familiarity with the underlying facts, as set forth in its Findings of
Fact, Conclusions of Law, and Verdict on Liability, dated July 28, 2017. (Dkt. No. 237.)
To summarize, this dispute arises out of a 2005 Credit Agreement between Marnor and
WBC, under which Marnor received a loan for $9.9 million, and WBC received a first preferred
mortgage and second preferred mortgage on Marnor’s fleet of fishing boats. (Findings of Fact,
at 2, 4 ¶¶ 5, 12.) After Marnor defaulted on the loan in March of 2011, it worked with WBC to
explore several options to restructure, repay, or refinance its obligations under the Credit
Agreement, but none were successful. (Id. ¶¶ 18-21.)
Eventually, Marnor found the funds to get itself out of arrears by partnering with Grupo
Altex (“Altex”) to form the joint venture Servax over the summer of 2012. (Id. ¶ 34-35.) But
WBC wanted out of the Credit Agreement. On August 23, 2012, WBC commenced the
foreclosure proceedings in the Mexican Court. (Id. ¶ 51.) The next day, the Mexican Court
ordered the seizure Marnor’s fishing vessels, effectively shuttering Marnor’s fishing business.
(Id. ¶ 55.) That seizure led to the Mexican authorities imposing the Customs Fee for taxes owed
in connection with the repatriation of Marnor’s fleet. (Dkt. No. 237, Findings of Fact on
Liaibility, at 68 ¶ 35.)
On November 7, 2012, Marnor and Servax informed WBC they had assembled the funds
necessary to cure Marnor’s default – by that point, $6.01 million – as was their right under the
Credit Agreement. (Findings of Fact, at 27–28 ¶¶ 82, 86.) Had WBC accepted the payment, it
would have mooted the foreclosure action. Yet, despite Servax’s willingness and ability to repay
Marnor’s debts, WBC refused to provide an accounting of the precise amount owed, and refused
to accept the $6.01 million offered. (Dkt. No 237, Findings of Fact on Liability, at 52 ¶ 1.)
That denial was due to plans WBC had made in the midst of Marnor’s struggles.
Unbeknownst to Marnor, while Marnor’s debts were piling up, and before it commenced the
foreclosure action, WBC began negotiating an option agreement with Umami that would allow
Umami to purchase WBC’s rights under the Credit Agreement for $500,000, and to purchase
Marnor’s fleet in foreclosure for $3 million. (Id., Findings of Fact, at 8–9 ¶¶ 26-28.)
Showing utter disregard for its obligations under the Credit Agreement, WBC ignored
Plaintiffs’ attempts to cure, and refused to provide an accounting to Marnor so that Marnor could
furnish the precise amount owed. (Id., Findings of Fact on Liability, at 46, 48 ¶¶ 136, 146–47.)
And, once WBC and Umami had executed the option agreement, Umami substituted itself for
WBC as the party in interest before the Mexican Court, refused further out-of-court entreaties
from Marnor and Servax to pay the debt, and ultimately obtained assignment of Marnor’s vessels
in November of 2016 by order of the Mexican Court. (Id. ¶¶ 158–59.)
B. Relevant Procedural History
Before the foreclosure proceedings concluded, Plaintiffs commenced this action. (See
generally Dkt. No. 1.)
Following a bench trial, on July 28, 2017, this Court found WBC and Umami liable for
breach of contract, citing WBC’s November 2012 refusal to allow Marnor to redeem its loan
outside of court and Umami’s April 2013 refusal to accept the $ 7.9 million payoff from Servax
in satisfaction of Marnor’s debt.
The subsequent Amended Judgment awarded Marnor $ 3.1 million in damages,
comprising: (1) the $ 1.55 million “interest-differential” award, representing the difference
between the judgment awarded to Umami in the Mexican foreclosure proceeding and the $ 6.01
million that Marnor would have paid to WBC had allowed it been allowed to cure in November
2012; (2) $210,000 in legal fees and costs incurred in the Mexican foreclosure action after
Marnor’s attempt to cure;1 (3) the $750,000 Customs Fee caused by WBC’s decision to foreclose
on Marnor’s fleet; and (4) prejudgment interest on the above sums in the amount of $ 585,000
pursuant to N.Y. C.P.L.R. § 5001. WBC posted a supersedeas bond in the amount of
$3,147,850, representing 111% of the Amended Judgment. (See Dkt. No 247.)
Both parties took appeals from the judgment. (See Dkt. Nos. 245, 247, 252, 253.)
In April 2018, while those appeals were pending, Marnor assigned its interest in the
Amended Judgment to Servax. (See Dkt. No. 254, Notice of Assignment.) Marnor and Servax
then entered into a settlement agreement for $750,000 with WBC, and withdrew their appeal as
to WBC on June 6, 2018. (Dkt. No. 255.) Upon WBC’s dismissal from the case, Umami posted
a new supersedeas bond in the amount of $3,434,836.35 (reflecting the accrual of prejudgment
interest since WBC posted its initial bond), with Atlantic as its surety. (Dkt. No. 256.)
Even though this Court awarded Marnor all of its “legal fees and costs incurred from and
after November 9, 2012, in the Mexican foreclosure action,” Umami continued to press its
claims before the Mexican Court. On July 20, 2018, Umami obtained the Mexican Interest
Judgment, for $1,087,755.09 that Marnor owed in interest under the Credit Agreement. (See
Dkt. No. 280, Zamora Decl. ¶¶ 14-15 & Ex. B.) In addition, on October 23, 2018, the Mexican
Court awarded Umami the Mexican Fee Award to compensate Umami for its attorneys’ fees and
costs in the foreclosure action.
While Umami’s appeal of the Amended Judgment was still pending before the Second
Circuit, it moved this Court to reopen and reduce the Amended Judgment by the amounts of the
WBC Settlement and the Mexican Interest Judgment. (See Dkt. No. 261.) This Court denied the
1 The Court found WBC and Umami jointly and severally liable for all damages after January 28, 2013, when
Umami first breached the Credit Agreement. (Dkt. No. 237, Conclusions of Law, at 71 ¶ 45.) Prior to that date, the
Court found the WBC, and WBC alone, responsible for the fees.
motion for lack of jurisdiction. Maricultura del Norte, S. de. R.L. de C.V., et al. v.
WorldBusiness Capital, Inc., No. 14-cv-10143, 2019 WL 2117645 (S.D.N.Y. Apr. 26, 2019)
(Dkt. No. 269).
Shortly after Umami filed that first attempt to reopen and reduce the judgment, the
Northwest Administrative Court I of the Administrative Justice Federal Court vacated the
Customs Fee. (See Dkt. No. 278, Padilla Decl. ¶¶ 5-9 & Exs. B & C; the “Tax Decision”.) The
administrative court concluded that the tax authority had failed to provide an intelligible basis for
its assessment, or cite to relevant legal authority in support of its ruling. (Id.) That order vacating
the Customs Fee was affirmed on appeal. (Id. Exs. D & E.)
On May 7, 2019, the Second Circuit affirmed all four components of the Amended
Judgment now challenged by Umami. Maricultura del Norte, S. de. R.L. de C.V., et al. v.
Umami Sustainable Seafood, 769 Fed. Appx. 44 (2d Cir. 2019). The court rejected Umami’s
claims that the Amended Judgment violated principles of international comity, concluding that
this Court’s “interest-differential” and attorneys’ fees award, which flowed from the Defendants’
breaches of the Credit Agreement, did not interfere with the parallel Mexican action, since there
were no breach of contract claims before the Mexican Court. Id. at 50-51. The Second Circuit
further held that Umami’s challenge to Amended Judgment based on the Administrative Court
decision vacating the Customs Fee was “better addressed via a motion to reopen the judgment in
the district court” under Rule 60. Id. at 51.
This Court regained jurisdiction once the Second Circuit issued its mandate. (Dkt. No.
272.)
DISCUSSION
It is first necessary to address each Rule 60 motion in turn before deciding the proper
value of the turnover order and the writ of execution requested in the Writ Motion.
I. Umami’s Rule 60 Motion is Granted in Part and Denied in Part.
A. Rule 60 Standard
Motions under the Rule 60(b) ask this court to tap into a “grand reservoir of equitable
power to do justice in a particular case.” Stevens v. Miller, 676 F.3d 62, 67 (2d Cir. 2012)
(internal quotation marks and citations omitted). Accordingly, they “are generally granted only
upon a showing of exceptional circumstances,” Mendell In Behalf of Viacom, Inc. v. Gollust, 909
F.2d 724, 731 (2d Cir. 1990) (citing Nemaizer v. Baker, 793 F.2d 58, 6162 (2d Cir. 1986)), or
“when the judgment may work an extreme and undue hardship,” Mendes Junior Intern. Co. v.
Banco Do Brasil S.A., 394 Fed. Appx. 787, 788 (2d Cir. 2010) (quoting Nemaizer, 793 F.2d at
63). The burden is on the moving party to demonstrate that it is entitled to relief, and courts
“Generally . . . require that the evidence in support of the motion to vacate a final judgment be
highly convincing.” Thai-Lao Lignite (Thailand) Co., Ltd. V. Gov. of Lao People’s Dem.
Republ., 864 F.3d 172, 182 (2d Cir. 2017) (internal quotation marks omitted). Lastly, all
motions under Rule 60(b) must be made within a reasonable time – one year for motions brought
under subsections (1), (2), or (3), which cover instances of excusable neglect, newly discovered
evidence, or fraud. See Stevens, 676 F.3d at 67; FED. R. CIV. P. 60(c)(1). The decision whether
to grant relief under Rule 60 “is addressed to the sound discretion of the district court.” Thai-
Lao, 864 F.3d at 182.
B. Umami’s Rule 60 Motion is timely.
Servax contends that Umami’s motion is actually a motion to alter or amend a judgment
made pursuant to Fed. R. Civ. P. 59(a) and so argues that it is untimely. I reject this contention.
Under Rule 59, a party must move “no later than 28 days after the entry of the judgment.”
FED. R. CIV. P. 59 (emphasis added). Servax contends that Umami was required to make any
motion to alter or amend the judgment within 28 days of the issuance of the mandate by which
the judgment was affirmed and returned to this court, which occurred on May 28, 2019. (Dkt.
No., 2722) Umami’s motion was filed three months after the issuance of the mandate, on DATE.
(Dkt. No . 287, Servax’s Rule 60 Mot. Br. at 6-7.)
Not so. Umami’s Rule 60 motion seeks inherently equitable relief that it contends is
necessary in light of postjudgment developments. The motion is not seeking to revisit this
Court’s original ruling (which has been affirmed on appeal), but to update the Amended
Judgment in light of changed circumstances. The 28-day time limit under Rule 59 is
inapplicable to such a request. See, e.g., Ass’n of Retarded Citizens of Conn., Inc. v. Thorne, 68
F.3d 547, 553 (2d Cir. 1995).
Furthermore, both this Court and the Second Circuit directed Umami to bring these
matters up on a Rule 60 Motion once this Court regained jurisdiction. See, e.g., Maricultura,
769 Fed. Appx. at 51. It would hardly be appropriate to penalize Umami for following the
court’s orders.
Umami’s motion is brought under subsections (5) and (6) of Rule 60. Such a motion must
be made within “a reasonable time” after entry of the judgment. Whether a party has moved
within a reasonable time depends on a variety of case-specific factors, including “the reason for
any delay, the possible prejudice to the non-moving party, and the interests of finality.” Thai-
2 The court lacked jurisdiction to revisit the judgment during the pendency of the appeal, so the
date when the judgment was originally entered – August 24, 2017 – is irrelevant to the
discussion of when the motion had to be filed.
Lao, 864 F.3d at 182. Three months after the issuance of the mandate is a reasonable time for
making the motion. Servax’s effort to have the motion denied as untimely is denied.
C. Umami’s Motion to Reduce the Amended Judgment by the amount of the
WBC Settlement is granted.
A court may amend its prior judgment to the extent it “has been satisfied, released, or
discharged.” FED. R. CIV. P. 60(b)(5). When one defendant in a multi-defendant action settles,
the non-settling defendants are entitled to credit the amount of the settlement against any
remaining judgment. See, e.g., Gerber v. MTC Elec. Techs. Co., Ltd., 329 F.3d 297, 303 (2d Cir.
2003) (citing Singer v. Olympia Brewing Co., 878 F.2d 596, 600 (2d Cir. 1989)).
Here, Umami and Servax agree that a $750,000 reduction in the Amended Judgment is
necessary in light of the WBC Settlement. (See Dkt. No. 274, WM Br. at 3.) Therefore, the
Amended Judgment and is reduced by $750,000. The supersedeas bond must be reduced
accordingly.
D. Umami is not entitled to set off the Mexican Interest Judgment Against This
Court’s Amended Judgment.
Umami invokes New York Debtor & Creditor Law § 151, as well as New York common
law, to argue that it can set off the Mexican Interest Judgment from its total debt owed to Servax
under the Amended Judgment. (Umami’s Rule 60 Mot. Br. at 15-20.) Under DCL § 151, a
debtor enjoys a, “Right of set off against unmatured debts” in the event “of a subpoena or order,
in supplementary proceedings, against or with respect to any of the property of a creditor,” e.g.,
Servax. DCL § 151(e). Umami argues that the Mexican Interest Judgment is an order against
Servax’s property that must be deducted from Umami’s debts to Servax in the Amended
Judgment, because this Court must recognize the Mexican judgment under the New York
Uniform Foreign Money-Judgments Recognition Act (the “Recognition Act”), N.Y. C.P.L.R. §§
5301–5309.
Unfortunately for Umami, a judgment creditor may only invoke the Recognition Act in
one of three circumstances. “A foreign judgment is enforceable by an action on the judgment, a
motion for summary judgment in lieu of a complaint, or in a pending action by counterclaim,
cross-claim or affirmative defense.” CPLR § 5303; see, e.g., Yi Feng Leather Intern. Ltd v.
Tribeca Design Showroom, LLC, No. 17-cv-5195, 2019 WL 4744620 (S.D.N.Y. Sept. 30, 2019)
(complaint filed to enforce foreign judgment); Diaz v. Galopy Corp. Int'l, N.V., 61 Misc. 3d 429,
79 N.Y.S.3d 494 (N.Y. Sup. Ct. 2018) (creditor moved for summary judgment in lieu of
complaint to enforce foreign judgment). But a motion under Fed. R. Civ. P. 60(b) is not one of
the three types of proceedings in which the Recognition Act may be invoked. Moreover, no
authority cited by Umami allows this Court to recognize and enforce a foreign judgment ordering
Party A to pay Party B in the context of a motion for relief from judgment ordering Party B to
pay Party C. That procedural defect would be fatal to Umami’s motion, even if Servax were the
judgment debtor in the Mexican foreclosure action – which it is not and never was.
Moreover, were this a procedurally proper application, this court would not be inclined to
set off the post-judgment Mexican Interest Judgment against the award made by this court.
Umami obtained the Mexican Interest Judgment long after this court concluded that the Mexican
foreclosure proceedings were undertaken in bad faith and in violation of the Credit Agreement. I
had already made it quite clear that Umami should not be allowed to profit from the bad faith
foreclosure proceedings. That is why this Court awarded Marnor the $1.55 million “interest-
differential,” representing difference between the interest awarded to Umami in the Mexican
foreclosure proceedings as of the date of the Amended Judgment and the $6.01 million in interest
that Marnor would have paid WBC, “Had WBC satisfied its contractual obligation[s] . . . and
permitted Marnor to pay off the loan on November 9, 2012.” (Findings of Fact and Conclusions
of Law, at 65 ¶ 21.)
The interest-differential award was justified because, absent WBC’s (and later Umami’s)
breaches of contract, WBC would not have initiated the foreclosure proceedings, and Umami
would not have obtained the interest awards from the Mexican Court that pre-dated the entry of
judgment in this case. The Second Circuit affirmed this Court’s award of the “interest
differential.” Maricultura, 769 Fed. Appx. at 51. Having concluded that previous awards of
interest by the Mexican court were obtained in bad faith, this court would be hypocritical to
offset the judgment already entered by yet another interest award obtained in bad faith. To the
contrary: this court’s Findings of Fact and Conclusions of Law made clear that WBC and Umami
would have to pay Marnor for its “legal fees and costs incurred from and after November 9,
2012,” (AJ ¶ 3), as well as “any additional sums,” (Findings of Fact on Liability, 65 ¶ 21)
associated with the foreclosure action.
Accordingly, Umami’s application to set off the Mexican Interest Judgment against this
Court’s Amended Judgment is denied.
E. Umami’s motion to Reduce the Amended Judgment by the Amount of the
Customs Fee is Held in Abeyance Pending Receipt of Further Information.
Finally, Umami asks this Court to reduce the Amended Judgment by $750,000, plus
associated interest, as a result of the Administrative Court’s order vacatur of the Customs Fee –
an element of the Amended Judgment -- which was affirmed on review by the Mexican Superior
Court. (Dkt. No. 281 at 20-22.) This portion of Umami’s Rule 60 Motion is made under Rule
60(b)(5), which permits a court to grant relief from a final judgment where “the judgment . . . is
based on an earlier judgment that has been reversed or vacated.” FED. R. CIV. P. 60(b)(5).
Umami argues that, once the Administrative Court vacated the Mexican tax authority’s
decision, “Marnor no longer ha[d] any tax liability,” thus depriving this Court of its basis for
including the Customs Fee as compensatory damages. (Dkt. No. 281 at 21.) As a result, Umami
concludes that it should not be required to pay the portion of the Amended Judgment based on
the Customs Fee. (See Findings of Fact on Liability, at 68, ¶¶ 32–35.)
Umami also claims, albeit without providing any documentary support, that it has paid
the customs fees and taxes associated with repatriating the vessels in question, which negates any
prospect of another audit by the Mexican tax authority and the reimposition of any customs tax
against Marnor. (Dkt. No. 293, Padilla Decl. ¶ 10.)
If Marnor has no obligation to pay the $750,000 in customs taxes, there would seem to be
no reason not to reduce the judgment by that amount. But Servax argues that the tax was vacated
due to a “procedural violation” and can be reimposed. Whether that is true or not is unclear. The
judgment vacating the tax does indeed indicate that the Mexican taxing authority can “pronounce
a new decision or resolution….[to] remedy the omission.” (Padilla Decl. Ex. C at 35) But
Servax’s witness, Eduardo Diaz Gavito (a Mexican attorney with expertise in trade and customs
law), testified that the taxing authority had just four months after the tax was vacated and the
notice of remand issued to reinitiate assessment of the customs fee against Marnor. (Dkt. No.
289, Gavito Decl. ¶ 24.) That four month window closed long ago; no one has advised the Court
that the Mexican taxing authority has taken any steps to reimpose the tax.
If the tax can no longer be reimposed, there is no reason not to amend the judgment. I
will give the parties ten business days to provide me with evidence either that the tax is being
reimposed or that is has been permanently vacated and cannot be reimposed under Mexican law.
Umami’s Rule 60 Motion is held in abeyance with respect to the Customs Fee until I
receive this additional information.
II. SERVAX’S RULE 60 MOTION IS DENIED.
This Court’s Findings of Fact and Conclusions of Law determined that all of the awards
against Marnor in the Mexican foreclosure proceeding, as well as Marnor’s fees and costs “from
and after November 9, 2012,” were caused by and flowed directly from WBC’s and Umami’s
breaches of contract. (AJ ¶ 3.) This Court reasoned that the Mexican Court “never would have
awarded Umami any additional sums” in the foreclosure proceeding had WBC honored its
contractual obligations. (Findings of Fact on Liability, at 65 ¶ 21.) For that reason, the Second
Circuit affirmed this Court’s damages awards, and held that Amended Judgment had no effect on
the Mexican foreclosure proceeding or the Mexican Court’s judgments, but only used the awards
in that case as a “benchmark” for assessing the breach of contract damages. Maricultura, 769
Fed. Appx. at 51.
Nonetheless, following the entry of the Amended Judgment, Umami applied to the
Mexican Court for $1,638,833.32 in attorneys’ fees and costs, and obtained yet another award
against Marnor in the same litigation that this Court deemed to “constitute bad faith frustration of
Marnor’s contract rights.” (Id. at 60 ¶ 12.)
I question whether Rule 60 is the appropriate vehicle through which either Marnor or
Servax could recover this fee award from Umami, not least because Servax cites no case where a
court increased a prior judgment for breach of contract damages due to new, postjudgment
breaches of the same agreement. The Mexican court’s judgment imposing liability on Marnor for
Umami’s attorneys’ fees was entered after the entry of the Amended Judgment in 2017. It was
not the subject of litigation in this court. It could not have been the subject of litigation in this
court. As subsequent breaches of contract often have to be the subject of entirely new actions,
any challenge by Marnor to the payment of these attorneys’ fees is not properly taken up in the
context of a motion for relief from the Amended Judgment.
Servax’s Rule 60 Motion is, therefore, denied.
III. THE WRIT MOTION IS GRANTED IN PART.
Federal Rule of Civil Procedure 69(a) allows federal courts to enforce money judgments
by an action that comports with the procedures of the state where the court is located. See FED.
R. CIV. P. 69(a). Servax moves for turnover orders and writs of execution against Umami and
Atlantic pursuant to New York Civil Practice Law and Rules (“CPLR”) sections 5225(b) and
5230. The court considers each of those sections in turn.
A. Servax is entitled to a turnover order in the amount of the Partial Judgment
under CPLR § 5225(b).
A turnover order under CPLR § 5225(b) allows a judgment creditor to execute upon
property that belongs to a judgment debtor but is in the possession of a third party.
See N. Mariana Islands v. Canadian Imperial Bank of Commerce, 717 F.3d 266, 267 (2d Cir.
2013). When there is a sufficient showing to conclude that the third party actually possesses the
property in question, Courts undertake a “two-step analysis” to determine whether the third party
must turn over the property to the creditor. See Beauvais v. Allegiance Sec., Inc., 942 F.2d 838,
840 (2d Cir. 1991). First, the court must first find that the debtor “has an interest” in the property
the creditor seeks to obtain. Id. If the debtor has such an interest, the court must then find
either that the debtor is entitled to possess the property, or that the creditor’s rights to the
property are superior to those of the third party. Id. If the court makes an appropriate finding
under both steps may it order the third party to turn over property to the creditor. Id. at 840-41;
see also Ladjevardian v. The Republic of Argentina, No. 04-CV-2710 (TPG), 2016 WL 3039189,
at *2 (S.D.N.Y. May 26, 2016), aff'd sub nom. Mohammad Ladjevardian, Laina Corp. v.
Republic of Argentina, 663 F. App'x 77 (2d Cir. 2016).
The July 2, 2018 supersedeas bond notice both establishes the threshold requirement that
Atlantic possesses the bond and satisfied the two-part test. (See Dkt. No. 256.) There can be no
dispute that Umami has an interest in the bond by which it is “held and firmly bound . . . in
furtherance of the judgment.” (Id.) Furthermore, the bond memorialized Atlantic’s promise to
satisfy the judgment “to be paid to Maricultura . . . if . . . the Judgment is affirmed,” thus
establishing that Servax’s interest as Maricultura’s assignee is superior to that of Atlantic – with
the exception of the WBC settlement. (Id.)
Servax therefore has rights to the Partial Judgment, to be deducted from the bond under §
5225(b), and may obtain relief in the form of a turnover order against the bond , with the exact
amount to be determined after the Court rules on Umami’s motion to deduct the Customs Fee
from the Amended Judgment.
B. Servax is entitled to a writ of execution under CPLR § 5230.
Servax seeks a writ of execution under CPLR § 5230, which allows courts to authorize
“an execution” on property to satisfy a judgment. An execution is an instrument “delivered to
the court’s enforcement officer, usually the sheriff, directing the sheriff to levy against any
nonexempt property that can be found belonging to the judgment debtor.” CPLR Commentaries
5230:1. Like § 5225(b), § 5230 requires a creditor to show that the debtor “has an interest” in the
property. CPLR § 5230(a). For the reasons outlined above, Servax has an interest in a portion of
the bond yet to be determine (see Section III.A, supra), and, accordingly, Servax is entitled to a
writ of execution under CPLR § 5230 for that amount.
CONCLUSION
Umami’s Rule 60 Motion (Dkt. No. 277) is GRANTED in part with respect to the WBC
Settlement, DENIED with respect to the Mexican Interest Judgment, and held in abeyance for
ten days with respect to the Customs Fee.
Servax’s Rule 60 Motion (Docket 286) is DENIED.
Servax’s Writ Motion (Docket 273) is GRANTED, WITH THE EXACT AMOUNT TO
BE DERERMINED IN TEN DAYS.
Umami’s motion to strike (Dkt. No. 299) is DENIED.
The Clerk of Court is respectfully directed to close Dkt. Nos. 273, 277, 286, and 299.
This constitutes the written decision and order of the Court.
Dated: February 14, 2020
[ ¢tleMe
Chiefudge
BY ECF TO ALL COUNSEL
16