Amid the hustle and bustle of the holiday season, and gearing up for the new year, the Commercial Division Advisory Council (the “Advisory Council”) was hard at work in proposing new rule changes. On December 26, 2024, the New York State Office of Court Administration issued a request seeking public commentary on a proposal, recommended by the Advisory Council, to amend Commercial Division Rules Section 22 NYCRR §202.70 (c) concerning non-commercial cases.
Section 22 NYCRR §202.70 (c)(5), in particular, provides that courts within the Commercial Division are not permitted to hear proceedings to enforce judgments, even where the required monetary threshold is met. Some Commercial Division judges have interpreted this rule as a bar to the enforcement of judgments, even if such judgments were obtained in the Commercial Division (see e.g., Gibson, Dunn & Crutcher LLP v World Class Capital Group LLC, Index No. 650318/2020 [Sup Ct, NY County Nov. 20, 2020]; J. Remora Maintenance LLC v Efromovich, 2018 WL 4963419, at *2 [Sup Ct, NY County Oct. 15, 2018]).
Section 22 NYCRR §202.70(c)(5) provides that:
(c) Non-commercial cases. The following will not be heard in the Commercial Division even if the monetary threshold is met:
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(5) Proceedings to enforce a judgment regardless of the nature of the underlying case.
The proposed amendment seeks to clarify that the enforcement of judgments arising from cases decided in the Commercial Division are eligible to be enforced within the Commercial Division. The Advisory Council’s proposal seeks to amend the language of this rule to add the following:
(c) Non-commercial cases. The following will not be heard in the Commercial Division even if the monetary threshold is met:
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(5) Except where the judgment in the underlying action or proceeding was obtained in the Commercial Division, proceedings to enforce a judgment regardless of the nature of the underlying case;
The Advisory Council also notes that its recommendation is consistent with existing case law (see e.g., Gibson, Dunn & Crutcher LLP v World Class Capital Group LLC, 194 AD 3d 567, 569 [1st Dept. 2021] [holding that 22 NYCRR §202.70(c)(5) “does not compel a finding that the Justices of the Commercial Division lack the authority to enforce their own judgments”]). In World Class Capital Group LLC, the First Department held that a petitioner seeking to enforce an order confirming an arbitration award entered by the Commercial Division does not need to commence a separate proceeding to enforce the judgment. Instead, the petitioner can file a motion in the underlying proceeding to enforce the judgment. The First Department held that it was reversible error to require the petitioner to commence a special proceeding to enforce a judgment that the same Commercial Division Court had already entered.
Presumably, this proposal will streamline the process for enforcing judgments decided by the Commercial Division. Moreover, this proposal will avoid the reassignment of commercial cases that require the business-law expertise of Commercial Division judges. If the proposal is enacted, litigants will be relieved of the burden and associated legal costs of initiating a separate proceeding to enforce such judgments, thereby promoting judicial efficiency and reducing potential for delays.
Public comments to the proposal are due no later than Friday, February 14, 2025, by email to rulecomments@nycourts.gov or by a written submission to David Nocenti, Esq., Counsel, Office of Court Administration, 25 Beaver Street, 10th FL, New York, New York, 10004.