KEESHA MITCHELL, THERESA CAMPBELL, SEANNETTE CAMPBELL, TANISHA SELBY, Plaintiffs- Appellees,
GARRISON PROTECTIVE SERVICES, INC., Interested Party-Appellant, LYONS PROFESSIONAL SERVICES, INC., RICHARD TRIM, TERRY TATUM, CHRISTOPHER M. LYONS, Defendants
April 4, 2016.
Appeal from the United States District Court for the Eastern
District of New York. This case primarily involves a
challenge by interested party-appellant Garrison Protective
Services, Inc. (" Garrison" ) to various factual
determinations made by the District Court (Brian M. Cogan,
Judge) in the course of granting a motion to enforce a
judgment. We conclude that the District Court did not err,
much less clearly err, in those determinations, and therefore
AFFIRM the June 16, 2015 judgment of the District Court. We
also conclude that the District Court properly construed
plaintiffs' motion pursuant to New York Civil Practice
Law and Rules (" CPLR" ) § 5225 as a plenary
action pursuant to New York's substantive law of
A. Eze, Brooklyn, NY, for Plaintiffs-Appellees.
A. Giusto, Law Offices of Raymond A. Giusto, P.C., West Bay
Shore, NY, for Interested Party-Appellant.
KEARSE, CABRANES, and CHIN, Circuit Judges.
party-appellant Garrison Protective Services, Inc. ("
Garrison" ) appeals from a June 16, 2015 judgment of the
District Court, which followed a decision of June 8, 2015,
granting a motion by plaintiffs-appellants Keesha Mitchell,
Theresa Campbell, Seannette Campbell, and Tanisha Selby
(" plaintiffs" ) to enforce a judgment.
case originated in a sex-discrimination lawsuit by plaintiffs
against their former employer, Lyons Professional Services,
Inc. (" LPS" ), a security guard company. We
described the underlying action in Mitchell v. Lyons
Professional Services, Inc., 708 F.3d 463, 465-66 (2d
Cir. 2013) (" Mitchell I " ). Plaintiffs
obtained a default judgment of $266,590, and then sought to
enforce it pursuant to Rule 69(a) of the Federal Rules of
Civil Procedure. Rule 69(a)(1) provides, in relevant part,
that the " procedure on execution" in federal court
upon a money judgment " must accord with the procedure
of the state where the court is located." Accordingly,
because plaintiffs sought to enforce a judgment in the
Eastern District of New York, they made their motion pursuant
to New York state law--specifically, New York Civil Practice
Law and Rules (" CPLR" ) § 5225.
relevant here, plaintiffs alleged that LPS, acting through
its sole shareholder, Christopher Lyons (" Lyons"
), fraudulently transferred its assets to Garrison, another
security guard company, in violation of New York Debtor and
Creditor Law (" DCL" ) § 273-a. Following a
bench trial, the District Court found that Lyons had entered
into a " Consulting Agreement" with Garrison seven
weeks after entry of the default judgment. Mitchell v.
Lyons Prof'l Servs., Inc., No. 09-Civ.-1587 (BMC),
2013 WL 4710431, at *1 (E.D.N.Y. Sept. 1, 2013) ("
Mitchell II " ). The District Court further
found that " [a]s part of that contract, Lyons agreed to
attempt to steer accounts and clients then serviced by LPS to
Garrison, in exchange for a consulting fee based on the
annual revenues that they generated." Mitchell v.
Garrison Protective Servs., Inc., 579 Fed.Appx. 18, 20 (2d
Cir. 2014) (" Mitchell III " ). " LPS
received nothing under the agreement," and after "
Garrison took over the LPS accounts, LPS was essentially shut
down." Id. (internal quotation marks omitted).
on these and other findings, the District Court determined
that the customer accounts in question--also known as
LPS's " book of business" --were assets that
LPS had fraudulently transferred to Garrison, and that the
value of those assets exceeded the value of plaintiffs'
default judgment. Accordingly, the District Court granted
plaintiffs' motion and entered a judgment against Lyons
and Garrison, jointly and severally, for $266,590.
appealed. As relevant here, Garrison argued that LPS's
book of business was not subject to enforcement pursuant to
CPLR § 5225(b). That section authorizes execution only
against the assets specified in CPLR § 5201(b), which
provides in relevant part that " [a] money judgment may
be enforced against any property which could be assigned or
transferred." LPS's book of business was not
assignable or transferrable, Garrison argued, because it
consisted only of contracts that were terminable on thirty
determined that the record was insufficient to rule
conclusively on Garrison's argument, and we remanded the
cause to the District Court for further clarification.
Mitchell III, 579 Fed.Appx. at 23. In particular, we
asked the District Court to consider whether the book of
business was assignable or transferrable: " If the book
of business was, in fact, transferred from LPS to Garrison,
then it is property for the purposes of § 5201(b). If,
however, the LPS clients simply took their business
elsewhere, it is not." Id. We also asked the
District Court to consider whether the book of business
" contained other property, such as customer lists or
other proprietary information," that might have been
transferrable. Id. 
remand, the District Court reframed our question. Because
plaintiffs brought their motion pursuant to CPLR §
5225(b), we had treated this case as turning on whether
LPS's book of business was transferrable property under
CPLR § 5201(b). See Mitchell III, 579
Fed.Appx. at 21. But as the District Court rightly points out,
and as we recognized in Mitchell III, § 5225(b)
creates a procedural mechanism by which judgment
creditors can enforce a money judgment, rather than a new
substantive right. See N. Mariana
Islands v. Canadian Imperial Bank of Commerce, 717 F.3d
266, 267 (2d Cir. 2013).
mechanism, known as a " special proceeding," has no
equivalent under the Federal Rules of Civil Procedure, which
" recognize only 'one form of action--the civil
action.'" SeeVera v. Republic of
Cuba, 802 F.3d 242, 244 n.3 (2d Cir. 2015) (quoting
Fed.R.Civ.P. 2). It is unclear, therefore, " how a party
in federal court in New York satisfies the 'special
proceeding' requirements of" § 5225(b).
SeeVera, 802 ...