Udel v. Udel

• Decision Date: 25 June 1975
• Citation: 82 Misc.2d 882,370 N.Y.S.2d 426
• Parties: Jane M. UDEL, Plaintiff, v. Melvin UDEL, Defendant.
• Court: New York City Court

Page 426

370 N.Y.S.2d 426

82 Misc.2d 882

Jane M. UDEL, Plaintiff, v. Melvin UDEL, Defendant.

Civil Court of the City of New York.

June 25, 1975.

Shepherd I. Raimi, New York City, for plaintiff.

Lotwin, Goldman, Rosen & Greene, New York City (Ralph C. Goldman, New York City, of counsel), for defendant.

BURTON S. SHERMAN, Judge.

A judgment creditor moves pursuant to Section 5225(a) CPLR for an order directing the judgment debtor to turn over to the sheriff stock certificates in his professional corporation to satisfy an unpaid judgment. This is of course a traditional remedy and would present no problem except for the question of whether stock certificates in a professional corporation because of their unique character are subject to turn over and if so, whether such a direction would achieve the desired result of satisfaction of the judgment.

The judgment of $9,931.40 was obtained for alimony arrears. The judgment debtor is a psychiatrist who is incorporated as a professional corporation. It is alleged that in the 1973--1974 fiscal year the corporation earned $82,599 and in the first 11 months of the 1974 calendar year earned $63,000. During this period the corporation paid rent on the judgment debtors residence and office of $8400, paid over $3000 for travel and entertainment and paid $1460 for motor vehicles. It also paid $6,464 in medical expenses for the judgment debtor and his present wife. He states that partial payments of current alimony leaves him with but $90 a week.

Article 15 of the Business Corporation Law (Professional Service Corporation) is of recent enactment. (Added Laws 1970, chapter 974). In approving the bill the governor's memorandum stated its purpose to be that '. . . professionals will be able for the first time to utilize the corporate form of business to permit them to organize their activities more efficiently and to make available to them and to their employees Federal tax benefits now accorded to executives and employees in all other business endeavors.' (McKinney's 1970 Session Laws of New York, Vol. 2, p. 3135; N.Y. State Legislative Annual 1970, p. 529). The law provides economic advantages but at the same time continues to safeguard the traditional concept of individual responsibility of the professional to his patient or client and inferentially continues state regulation of professional conduct. For this reason it prevents alienation of stock except to another professional. (Memorandum of Senator Anthony B. Gioffre, N.Y. State Legislative Annual 1970, p. 126). However, Section 1511 of Business Corporation Law in restricting the transfer of shares in a professional corporation states: 'Nothing herein contained shall be construed to prohibit the transfer of shares by operation of law or by court decree. No transferee of shares by operation of law or court decree may vote the shares for any purpose whatsoever except with...