Commonwealth of N. Mariana Islands v. Canadian Imperial Bank of Commerce

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The Commonwealth of the Northern Marina Islands obtained two tax judgments in the U.S. district court against the Millars for unpaid taxes. The Millards, who previously resided in the Commonwealth, relocated before the Commonwealth was able to obtain the judgments. The Commonwealth commenced proceedings as a judgment creditor asseking a turnover order against garnishees holding assets of the Millars. The Commonwealth named a Canadian bank (Bank) headquartered in Toronto, with a branch in New York, as a garnishee under the theory that the Millards maintained accounts in a foreign subsidiary of Bank. The district court denied the Commonwealth's motion for a turnover order against Bank. The Court of Appeals accepted certification to answer questions of law, holding (1) for a court to issue a post-judgment turnover order pursuant to N.Y. C.P.L.R. 5225(b) against a banking entity, the entity itself must have actual, not merely constructive, possession or custody of the assets sought; and (2) therefore, it is not enough that the banking entity's subsidiary might have possession or custody of a judgment debtor's assets. View "Commonwealth of N. Mariana Islands v. Canadian Imperial Bank of Commerce" on Justia Law