DE NUNEZ v. VALENCIA BARTELS
| Decision Date | 02 September 1999 |
| Citation | 695 N.Y.S.2d 31,264 A.D.2d 565 |
| Court | New York Supreme Court — Appellate Division |
| Parties | NORMA V. B. DE NUNEZ, Respondent,<BR>v.<BR>EDUARDO F. VALENCIA BARTELS et al., Appellants.<BR>MICHAEL MILLER, as Receiver, Nonparty Respondent. |
Respondent obtained a final judgment in a Louisiana action against appellant and brought this enforcement proceeding pursuant to CPLR article 54. Appellant moved for appointment of a temporary receiver after respondent obtained an order to liquidate certain accounts. When appointed by the court, the receiver promptly collected almost $5 million, deposited those funds in an investment account, reviewed briefs submitted by the parties on whether Louisiana or New York law should provide the rate of interest on the judgment, issued a report recommending that the New York rate should apply and rendered an interim account. The receiver then moved for an order fixing his commission at $243,996.94, representing 5% of the monies he had collected, and fixing the judgment interest at the New York rate.
The court awarded the receiver the maximum fee allowable based upon the expeditious and successful performance of his duties. The court then allocated the entire commission and necessary expenses against appellant's share of the proceeds since it had been appellant who had applied for the appointment of the receiver.
The propriety of the appointment of the receiver was not appealed and was not briefed. The receiver and the court correctly determined that the New York rate of interest applied to the judgment (Wells, Fargo & Co. v Davis, 105 NY 670).
In view of the straightforward nature of the receiver's duties, the absence of any documentation of extraordinary efforts or difficulties in liquidating the accounts and the lack of any time records detailing the exact hours expended by the receiver, it was an improvident exercise of discretion for the court to award the maximum 5% commission for limited and undocumented services without a hearing. The authority for the receiver's commission, CPLR 8004 (a), provides that 5% is a maximum allowable fee but the receiver must earn his fee and it is his burden to demonstrate that he has in fact earned it (Key Bank v Anton, 241 AD2d 482). Furthermore, although appellant requested appointment of the receiver, it was an abuse of discretion to require him to pay for all of the fees and other necessary expenses. On remand, while the court may take into account the fact that appellant resisted the enforcement of respondent's judgment, allocation of fees and expenses should also be based upon whether appellant had a good-faith basis for seeking this appointment and, if so, respondent should be equitably charged for the fees and expenses incurred.
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