Carrick Realty Corp. v. Flores

• Decision Date: 26 March 1993
• Citation: 598 N.Y.S.2d 903,157 Misc.2d 868
• Parties: CARRICK REALTY CORP., Plaintiff, v. Bernardo FLORES, Defendant. CARRICK REALTY CORP., Petitioner-Judgment Creditor, v. PAYCHEX, INC., Respondent. AUTOMATIC DATA PROCESSING, INC., Intervenor-Movant, v. CARRICK REALTY CORP., Respondent-Judgment Creditor.
• Court: New York City Court

Page 903

598 N.Y.S.2d 903

157 Misc.2d 868

CARRICK REALTY CORP., Plaintiff, v. Bernardo FLORES, Defendant.

CARRICK REALTY CORP., Petitioner-Judgment Creditor, v. PAYCHEX, INC., Respondent.

AUTOMATIC DATA PROCESSING, INC., Intervenor-Movant, v. CARRICK REALTY CORP., Respondent-Judgment Creditor.

Civil Court of the City of New York,

New York County, Special Term,

Part 1.

March 26, 1993.

Mark M. Altschul, Altschul & Altschul, New York City, for Carrick Realty Corp.

Baer Marks & Upham by Thomas E. Albright, New York City, for Automatic Data Processing, Inc.

Woods, Oviatt, Gilman, Sturman & Clarke by James P. McElheny, Rochester, NY, for Paychex, Inc.

LOUISE GRUNER GANS, Judge.

An unrelated third party is not required to alter its computer system or to incur inordinate expense in order to comply with an information subpoena served by a judgment creditor pursuant to CPLR 5223 and 5224(a)(3).

A judgment in favor of plaintiff/petitioner Carrick Realty for $1,738.60 was entered against defendant Flores on August 25, 1980. Respondent Paychex, Inc. ("Paychex") and movant Automatic Data Processing, Inc. ("ADP") are both national payroll processing companies. Neither of them was a party to the underlying action between Carrick Realty and Flores.

Unable to collect its judgment, on December 22, 1991, pursuant to CPLR 5223 and 5224(a)(3), plaintiff served a post-judgment information subpoena on Paychex; on February 11, 1992, plaintiff served a post-judgment information subpoena on ADP. Both subpoenas inquired whether Paychex and ADP processed judgment debtor Flores' wages, and if yes, requested the name of his employer and his last known address. The subpoena served on ADP also requested the name and address of his bank. Simultaneously with the service of these subpoenas, plaintiff's counsel served an additional 472 information subpoenas on Paychex and an additional 482 on ADP. Each one related to a particular judgment and contained the same questions as the Flores subpoenas with respect to other judgment debtors.

Paychex did not respond to the information subpoena concerning Flores, or to any of the other subpoenas. Plaintiff/petitioner Carrick Realty Corp. then moved for an order adjudging Paychex in contempt for wilfully failing to respond. Paychex opposed the motion and requested the court to vacate the information subpoena. ADP, for its part, moved pursuant to CPLR 5240 for a protective order denying the use of and vacating the information subpoena as to Flores.

With the approval of the court, ADP and plaintiff subsequently stipulated that ADP's motion would be deemed to be a motion in all 483 actions in which ADP had received information subpoenas from plaintiff's attorney and that the final determination of ADP's motion would be binding on ADP and on the plaintiff in this action as well as the plaintiffs in the 482 other actions. Without entering into a written stipulation, plaintiff and Paychex have taken a similar position with respect to the additional 472 subpoenas which had been served on Paychex.

Both Paychex and ADP contend that requiring them to comply with the information subpoenas is unreasonable, burdensome and oppressive. Each represents that it does not know whether it has the information requested by the subpoenas, and does not have a centralized computer program in place which would enable it to find out. While the records of Paychex and ADP are fully computerized, these records are organized around the names of employers for whom payrolls are prepared. According to Paychex and ADP none of the identifying characteristics of debtors provided to them would permit retrieval of the requested information even if it is in their computer files, without the creation of new computer programs, or inordinately time consuming and costly searches of their decentralized records.

Carrick Realty and the other judgment creditors, on the other hand, claim both that Paychex and ADP exaggerate the difficulty, time and expenses required to comply with the information subpoenas, and that in light of their computer capacities, requiring compliance with the information subpoenas is not unreasonable, even if the creation of new computer programs is required.

CPLR 5223 and CPLR 5224(a)(3) authorize the use of an information subpoena by a judgment creditor against "any person," including third parties with no interest in the judgment or relation to the judgment debtor. 6 Weinstein, Korn & Miller, NY Civ Prac Section 5223.03 p. 348 and Section 5223.10 p. 360-361. The only limitation is that the material sought must be "relevant" to the satisfaction of the judgment. CPLR 5223; Oates v. Oates, 33 A.D.2d 133, 306 N.Y.S.2d 108 (1st Dep't 1969). The judgment debtor's address, place of employment and bank accounts have all been held to be relevant to obtaining satisfaction of a judgment. Oates v. Oates, supra, 33 A.D.2d at 135-136; Niagara Mohawk Power Corp. v. Young, 135 A.D.2d 1139, 523 N.Y.S.2d 275 (4th Dep't 1987).

Even though CPLR 5223 and CPLR 5224 give a judgment creditor "free rein" in obtaining disclosure from third persons who may be able to provide useful information, "disclosure must not be used as a device for harassment." 6 Weinstein, Korn & Miller, op. cit., Section 5223.10 at p. 360-361. Under CPLR 5240, the court has broad power to deny, limit, condition, regulate, extend or modify the use of any Article 52 enforcement procedure, including the post-judgment disclosure devices of CPLR 5223 and CPLR 5224. Gorea v. Pinsky, 50 A.D.2d 713, 374 N.Y.S.2d 879 (4th Dep't 1975); James v. Powell, 51 Misc.2d 705, 273 N.Y.S.2d 730 (Sup.Ct., N.Y.Co.1966); Kaplan v. Supak & Sons Mfg. Co., 46 Misc.2d 574, 260 N.Y.S.2d 374 (Civ.Ct., N.Y.Co.1965).

The purpose of CPLR 5240 is to prevent "unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts," incident to enforcement of judgment procedures. Third Report to the Legislature, Advisory Comm'n on Practice & Procedure (quoted in 7B McKinney's, CPLR 5240 at 454, Legislative Studies & Reports); Guardian Loan Co. v. Early, 47 N.Y.2d 515, 519, 419 N.Y.S.2d 56, 392 N.E.2d 1240 (1979); see also Commercial Credit Development Corp. v. Bailey, 80 A.D.2d 748, 437 N.Y.S.2d 183 (4th Dep't 1981); Cook v. H.R.H. Construction Corp., 32 A.D.2d 806, 302 N.Y.S.2d 364 (2d Dep't 1969).

It is clear that compliance with even one of the 473 subpoenas served on Paychex and with one of the 483 subpoenas served on ADP would subject each to an unreasonable burden and expense. Paychex maintains 69 separate offices throughout the country and ADP has 38 geographically separate payroll processing centers, each with its own database of records. Specifically, Paychex has no centralized location for the records of all 69 offices. While ADP has the ability to access the records of its 38 payroll centers at its main office in Roseland, New Jersey, there is no centralized computer system, so that an operator in the main office would still have to "sign on" individually to the database of each of its 38 centers. The subpoenas served on Paychex and ADP are not limited to any particular locale and necessarily require a nationwide search.

Furthermore, neither Paychex nor ADP has a database or record system set up under the names or social security numbers of its clients' employees. Rather, Paychex maintains the records at each of its offices in only the names of its clients, the employers. ADP's payroll processing system is similarly designed around company codes that are assigned to its clients, the employers. Here, plaintiffs provided only employee names and in some instances social security numbers.

Paychex and ADP do not dispute that had they been provided with the employers' names, the information sought could easily be obtained. As it is, for Paychex to retrieve the requested information using its present computer and record keeping system, a computer operator in each of its offices would have to call up each employer's file and search for each judgment debtor by name, one-by-one. Paychex has 146,000 employer clients nationwide and for every subpoena the procedure would have to be repeated for each employer. Paychex estimates that the search for 473 employee names would require a total of 292,000 person hours at $18.00 an hour, for a total cost of $5,256,000 (473 names searched at 4 per minute = 120 minutes or 2 hours for each employer; 2 X 146,000 employers = 292,000 hours). For only one name the search would take more than 600 hours at the cost of $11,000.

For ADP to comply with the 483 information subpoenas using its existing computer and recordkeeping system, either a computer operator would sit at a terminal in its main office, or computer operators in each of its 38 payroll processing centers would sit at terminals and call up each employer's file to search for the judgment debtor's name. According to ADP, the operators would have to access every one of ADP's 272,615 company codes and visually check one screen at a time for each employee name. ADP estimates that this procedure would consume 53,387 person hours at a cost of $629,967. ADP's breakdown of the estimated cost was as follows: 1) 30 seconds to access each company code; 2) the average company code contains 47 employees; 15 seconds to flip each employee screen and check it against plaintiffs' list of judgment debtors; 47 employees X 15 seconds = 705 seconds or 11.75 minutes per company code; 3) 272,615 company codes X 11.75 minutes = 3,203,226 minutes or 53,387 hours at $11.80 per hour (hourly rate per computer operator) = $629,967.

Plaintiff has not made a sufficient showing in rebuttal to the showing either of Paychex or of ADP. First, as to Paychex, plaintiff merely relies on the general assertion that "in this day of computerized record keeping and centralized administrative functions, any inconvenience caused by Article 52 enforcement devices has been reduced to a minimum.... The...