N.Y. Civil Practice Law & Rules § 1320: Levy upon personal property by service of order

§ 1320. Levy upon personal property by service of order. 1. Method of

levy. The claiming agent shall levy upon any interest of the defendant

in personal property, or upon any debt owed to the defendant, by serving

a copy of the order of attachment upon the garnishee, or upon the

defendant if property to be levied upon is in the defendant's possession

or custody, in the same manner as a summons except that such service

shall not be made by delivery of a copy to a person authorized to

receive service of summons solely by a designation filed pursuant to a

provision of law other than rule three hundred eighteen of this chapter.

2. Effect of levy; prohibition of transfer. A levy by service of an

order of attachment upon a person other than the defendant is effective

only if, at the time of service, such person owes a debt to the

defendant or such person is in the possession or custody of property in

which such person knows or has reason to believe the defendant has an

interest, or if the claiming authority has stated in a notice which

shall be served with the order that a specified debt is owed by the

person served to the defendant or that the defendant has an interest in

specified property in the possession or custody of the person served.

All property in which the defendant is known or believed to have an

interest then in and thereafter coming into the possession or custody of

such a person, including any specified in the notice, and all debts of

such person, including any specified in the notice, then due and

thereafter coming due to the defendant, shall be subject to the levy.

Unless the court orders otherwise, the person served with the order

shall forthwith transfer or deliver all such property, and pay all such

debts upon maturity, up to the amount specified in order of attachment,

to the claiming agent and execute any document necessary to effect the

payment, transfer or delivery. After such payment, transfer or

delivery, property coming into the possession or custody of the

garnishee, or debt incurred by him or her, shall not be subject to the

levy. Until such payment, transfer or delivery is made, or until the

expiration of ninety days after the service of the order of attachment

upon him or her, or of such further time as is provided by any

subsequent order of the court served upon him or her, whichever event

first occurs, the garnishee is prohibited to make or suffer any sale,

assignment or transfer of, or any interference with any such property,

or pay over or otherwise dispose of any such debt, to any person other

than the claiming agent except upon direction of the claiming agent or

pursuant to an order of the court. A garnishee, however, may collect or

redeem an instrument received by him or her for such purpose and he or

she may sell or transfer in good faith property held as collateral or

otherwise pursuant to pledge thereof or at the direction of any person

other than the defendant authorized to direct sale or transfer, provided

that the proceeds in which the defendant has an interest be retained

subject to the levy. A claiming authority who has specified personal

property or debt to be levied upon in a notice served with an order of

attachment shall be liable to the owner of the property or the person to

whom the debt is owed, if other than the defendant, for any damages

sustained by reason of the levy. In order to establish the claiming

authority's liability, the owner of the property of the person to whom

the debt is owed must prove by a preponderance of the evidence that, in

causing the levy to occur, the claiming authority acted without

reasonable cause and not in good faith.

3. Seizure by claiming agent; notice of satisfaction. Where property

or debts have been levied upon by service of an order of attachment, the

claiming agent shall take into his or her actual custody all such

property capable of delivery and shall collect and receive all such

debts. When the claiming agent has taken into his or her actual custody

property or debts having value sufficient to satisfy the amount

specified in the order of attachment, the claiming agent shall notify

the defendant and each person upon whom the order of attachment was

served that the order of attachment has been fully executed.

4. Proceeding to compel payment or delivery. Where property or debts

have been levied upon by service of an order of attachment, the claiming

authority may commence a special proceeding against the garnishee served

with the order to compel the payment, delivery or transfer to the

claiming agent of such property or debts, or to secure a judgment

against the garnishee. Notice of petition shall also be served upon the

parties to the action and the claiming agent. A garnishee may assert any

defense or counterclaim which he or she may have asserted against the

defendant. The court may permit any adverse claimant to intervene in the

proceeding and may determine his or her rights in accordance with

section one thousand three hundred twenty-seven of this article.

5. Failure to proceed. At the expiration of ninety days after a levy

is made by service of the order of attachment, or of such further time

as the court, upon motion of the claiming authority on notice to the

parties to the action, has provided, the levy shall be void except as to

property or debts which the claiming agent has taken into his or her

actual custody, collected or received or as to which a proceeding under

subdivision four hereof has been commenced.