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Verizon New England Inc. v. IDT Domestic Telecom, Inc.
Citations: 98 A.D.3d 838; 950 N.Y.S.2d 375
Court: Appellate Division of the Supreme Court of the State of New York; September 4, 2012; New York; State Appellate Court
The Supreme Court of New York County affirmed a judgment dismissing Verizon New England Inc.'s petition to compel IDT Domestic Telecom, Inc. to turn over payments made to Global Naps Networks, Inc. after April 2, 2009. Verizon, as a judgment creditor, sought to enforce a restraining notice against IDT for $992,000 allegedly paid to Global, which had a judgment against it for over $57 million. Verizon claimed IDT's payments constituted property subject to levy under CPLR 5201. However, the court found that the arrangement between IDT and Global was an "at will" agreement with no binding contract, allowing either party to terminate without notice. This relationship, deemed similar to a prior case (Verizon New England Inc. v. Transcom Enhanced Services Inc.), established that such prepaid arrangements do not create attachable property rights. The court concluded that IDT did not owe a debt to Global at the time of the restraining notice, as Global's right to payment depended on the fulfillment of its service obligations, which had not occurred. Therefore, the payments were not subject to the restraining notice, and Verizon's arguments were deemed unpersuasive. The court did not need to address Verizon’s entitlement to enforcement proceedings under CPLR article 52.