WHEN A SAFETY DEPOSIT BOX IS NOT THAT SAFE...FROM A CREDITOR

Creating a joint tenancy may affect a creditor's right to enforce a judgment.

Matter of New York Community Bank v. Bank of Am. N.A., NYLJ 1/29/19, Date filed: 2019-01-24, Court: Appellate Division, First Department, Case Number: 158084/17:

"This appeal requires us to consider whether a presumption of joint tenancy with rights of survivorship in a safety deposit box also extends to its contents where only one of the persons who rented the box is a judgment debtor. Most of the jurisprudence concerning the statutory presumption of joint tenancy (Banking Law §675[b]), relates to cash deposits in bank accounts, not deposits of property into safe deposit boxes. We find the safety deposit box rental agreement controlling on the issue of ownership and that the judgment creditor, New York petitioner (NYCB) established that the notice respondents are joint tenants of the contents of the box, with rights of survivorship.

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CPLR 5225(b) provides for an expedited special proceeding by which a judgment creditor can recover “money or other personal property” belonging to a judgment debtor “against a person in possession or custody of money or other personal property in which the judgment debtor has an interest” in order to satisfy a judgment (Matter of Signature Bank v. HSBC Bank USA, N.A., 67 AD3d 917, 918 [2d Dept [2009]). When two or more persons open a bank account, making a deposit of cash, securities, or other property, a presumption of joint tenancy with right of survivorship arises (Banking Law §675[b]; Matter of Friedman, 104 AD2d 366 [1984], affd 64 NY2d 743 [1984]). The presumption extends to safe deposit boxes held jointly (Matter of First Am. Tit. Ins. Co. v. Kenderian, 157 AD3d 891, 892 [2d Dept 2018]). If the presumption is applied, each named tenant “is possessed of the whole of the account so as to make the account vulnerable to the levy of a money judgment by the judgment creditor of one of the joint tenants” Viggiano v. Viggiano, 136 AD2d 630, 630 [2d Dept 1988]; Banking Law §675[b])."

NOTE: In this case, the non-judgment debtor did not identify what contents were not the property of the judgment debtor. Even where a joint account is vulnerable to the levy of a money judgment as against one joint tenant, such a levy is effective only as to the actual interest of that judgment debtor in the account (Olshan v East N. Y. Sav. Bank, 28 F.Supp. 727 [US Dist Ct., ED NY 1939]; Annotation, Attachment-Joint Bank Account, 11 ALR3d 1465, 1473).