05-2378-cv
Koehler v. Bank of Bermuda Ltd.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
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August Term, 2007
(Argued: February 29, 2008 Decided: August 20, 2009)
Docket No. 05-2378-cv
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LEE N. KOEHLER,
Petitioner-Appellant,
v.
THE BANK OF BERMUDA LIMITED,
Respondent-Appellee.
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Before: CABRANES, POOLER, and KATZMANN, Circuit Judges.
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Lee N. Koehler appeals from two orders of the United States District Court for the
Southern District of New York (Charles S. Haight, Jr., Judge): a March 9, 2005 memorandum
opinion and order and an August 10, 2005 memorandum opinion and order, insofar as those
orders vacated an October 29, 1993 order for payment or delivery of property of the judgment
debtor by The Bank of Bermuda Limited (“BBL”), and denied reconsideration of those issues. In
a prior opinion, we certified the following question to the New York Court of Appeals: May a
court sitting in New York order a bank over which it has personal jurisdiction to deliver stock
certificates owned by a judgment debtor (or cash equal to their value) to a judgment creditor,
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pursuant to N.Y. C.P.L.R. Article 52, when those stock certificates are located outside New
York? The New York Court of Appeals answered the question in the affirmative. We therefore
conclude that the district court had the authority to issue the October 29, 1993 turnover order.
VACATED and REMANDED.
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BRIAN G. WEST, Towson, MD (Paul F. Newhouse, on the brief) for
Petitioner-Appellant,
DANIEL B. RAPPORT, Friedman Kaplan Seiler & Adelman LLP, New York,
NY (Robert J. Lack, Vanessa Richards, on the brief) for Respondent-Appellee.
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PER CURIAM:
The facts of this case are set forth in detail in our earlier opinion in this case with which
we assume the parties’ familiarity. See Koehler v. Bank of Bermuda Ltd., 544 F.3d 78, 80-82
(2d Cir. 2008). We recite here only those facts pertinent to this opinion.
On June 4, 1993, the United States District Court for the District of Maryland awarded
Lee N. Koehler a default judgment against A. David Dodwell in the amount of $2,096,343. On
July 23, 1993, Koehler registered the judgment in the United States District Court for the
Southern District of New York pursuant to 28 U.S.C. § 1963. Koehler believed that The Bank of
Bermuda Limited (“BBL”) was in possession of stock certificates owned by Dodwell.
Accordingly, Koehler initiated garnishment proceedings to collect on the default judgment.
Koehler filed a petition for a writ of execution against BBL, seeking an order, pursuant to N.Y.
C.P.L.R. Article 52, that BBL turn over any stock certificates owned by Dodwell that were in its
possession or pay any debt owed to Dodwell, up to the sum of $2,096,343. Id. at 80.
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On October 29, 1993, the United States District Court for the Southern District of New
York (Ward, J.) signed a turnover order requiring BBL to deliver to Koehler any stock
certificates owned by Dodwell or to pay to Koehler any debt owed to Dodwell up to the sum of
$2,096,343. However, BBL contested the court’s personal jurisdiction over it. In October 2003,
BBL consented to the personal jurisdiction of the Southern District of New York as of the
commencement of these proceedings in 1993. But BBL later informed Koehler and the court that
– notwithstanding Judge Ward’s earlier turnover order – it had transferred the stock certificates
in July 1994, to a Bermudian company that existed for Dodwell’s benefit. Id. at 81.
In March 2005, the United States District Court for the Southern District of New York
(Haight, J.), denied Koehler’s petition for a writ of execution and his request to amend the
petition to include additional claims against BBL. The district court ruled that a settlement
between Koehler and Dodwell, entered into as part of separate garnishment proceedings in the
District of Maryland, extinguished any claims Koehler might have against BBL. The district
court also held that it lacked in rem jurisdiction over Dodwell’s stock certificates that were
always located in Bermuda, and therefore, lacked the authority to order that BBL turn over the
certificates. See id. at 82. As we recognized in our earlier opinion, the district court “effectively
vacated the October 29, 1993 turnover order.” Id.
In our earlier opinion, we determined that the settlement between Koehler and Dodwell in
the District of Maryland action reserved Koehler’s rights to continue litigation against BBL, and
“that the district court erred in ruling that the Maryland settlement extinguished Koehler’s action
against BBL.” Id. at 84. With respect to the district court’s finding that it lacked in rem
jurisdiction over the stock certificates, we certified the following question to the New York Court
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of Appeals:
May a court sitting in New York order a bank over which it has personal
jurisdiction to deliver stock certificates owned by a judgment debtor (or cash
equal to their value) to a judgment creditor, pursuant to N.Y. C.P.L.R. Article 52,
when those stock certificates are located outside New York?
Id. at 88.
On June 4, 2009, the New York Court of Appeals answered the question in the
affirmative. Koehler v. Bank of Bermuda Ltd., 12 N.Y.3d 533, 536 (2009). The Court of
Appeals explained that “CPLR article 52 contains no express territorial limitation barring the
entry of a turnover order that requires a garnishee to transfer money or property into New York
from another state or country.” Id. at 539. It further explained that “the key to the reach of the
turnover order is personal jurisdiction over a particular defendant,” id. at 540, and that in rem
jurisdiction over the property is not required if there is personal jurisdiction over the defendant.
Id. The Court of Appeals held “that a New York court with personal jurisdiction over a
defendant may order him to turn over out-of-state property regardless of whether the defendant is
a judgment debtor or a garnishee.” Id. at 541.
The Court of Appeals’ holding resolves the issue of whether Judge Ward had the
authority to require BBL to turn over Dodwell’s assets. Because BBL consented to the personal
jurisdiction of the Southern District of New York as of the commencement of the proceedings in
1993, Judge Ward had the authority to issue the 1993 turnover order against BBL. In light of the
Court of Appeals’ holding, the district court’s decision to vacate the 1993 turnover order cannot
stand.
For the foregoing reasons, the orders of the district court are VACATED and the case is
REMANDED for further proceedings consistent with our opinions.
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