Case of the Day: Prumyslovy v. Kozeny

The case of the day is Harvardsky Prumyslovy Holding, A.S. v. Kozeny (N.Y. App. Div. 2018). I like the terse style of New York appellate division decisions, but it makes the facts hard to decipher. Prumyslovy had a Czech judgment against Kozeny, and Kozeny moved the dismiss when Prumyslovy sought recognition and enforcement. The court held that Kozeny had waived the defense of lack of jurisdiction for procedural reasons, but its alternative holding was more interesting.

The court noted that the complaint alleged that Kozeny had $22 million on deposit with a New York bank, and it held that it therefore had jurisdiction in rem. This may be New York-specific, but I think the better term is jurisdiction quasi in rem, i.e., jurisdiction over Kozeny to the extent of his property in New York. After all, the case isn’t about this specific $22 million, and the court is not adjudicating the rights of the whole world as to that particular sum.

A rule like this is important, so that judgment debtors cannot simply stash assets in jurisdictions where they are not subject to ordinary jurisdiction in personam. Personal jurisdiction as a defense has more oomph now than it had in the past, and so whether the New York approach succeeds in the future is not assured. But without a rule like this, it seems to me that judgment debtors have too much ability to escape the obligations of a judgment through creative asset planning without even having to rely on exemption statutes.

4 thoughts on “Case of the Day: Prumyslovy v. Kozeny”

  1. I think a New Zealand/English court would struggle with the concept of quasi in rem jurisdiction—the courts usually approach subject-matter jurisdiction as a cumulative requirement rather than an alternative basis of jurisdiction—but I suspect that they would get to the same result via long-arm personal jurisdiction.

    Under NZ’s High Court Rule 6.27(2)(m), a plaintiff can serve proceedings out of the jurisdiction without leave “when it is sought to enforce any judgment or arbitral award” (see also CPR Practice Direction 6B). Where the defendant has assets in New Zealand amenable to enforcement, then the court would ordinarily find that NZ is the appropriate forum for an enforcement action. This is a relatively new provision, but has already been used: in Korea Deposit Insurance Corp v Park [2016] NZHC 602, the proceedings were served on the defendant’s jailer in South Korea, and the Court was even prepared to give judgment including 25% penalty interest.

    1. Thanks, Jack, for the insight on New Zealand practice. This is a point on which I would expect jurisdictions to find a way to agree despite constitutional or doctrinal issues.

      Quasi in rem jurisdiction, in US practice, is a term used to describe a kind of personal jurisdiction substitute, not to describe subject-matter jurisdiction. This stuff gets a bit confusing!

    1. Thanks! Even though most of us, myself included, aren’t literal descendants of the Pilgrims, we can all see ourselves as the inheritors of their devotion to hard work, self-government, and religious liberty. Should historians also study the historical record in all of its complexity? Sure. But knowing that there is a more complicated story to the Pilgrims than the simple story of our civic mythology is no more reason to abandon the civic mythology than study of the “historical Jesus” is, for Christians, to abandon faith in the Gospels, or study of the historicity of the Exodus is, for Jews, to stop staying, “We were slaves to Pharaoh in the land of Egypt, and God freed us with a mighty hand.” Life with no civic myths but super-accurate history textbooks is pretty grim.

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