Carpet Resources, Ltd. v. JP Morgan Chase Bank, N.A.

Order, Supreme Court, New York County (Marilyn B. Dershowitz, Special Ref.), entered June 11, 2010, which, after a hearing, dismissed the proceeding, unanimously affirmed, without costs. There is no basis for upsetting the determination of the Special Referee, who defined the issues, resolved matters of credibility and made findings substantially supported by the record (see Rosenbloom v Gurary, 59 AD3d 274 [2009]). Petitioner failed to establish that the garnishee owed the judgment debtor any debt that was subject to a restraining order. To the contrary, the evidence showed that, although the garnishee’s claims against the judgment debtor had not yet been reduced to a judgment and were not yet the subject of any lawsuits brought by the garnishee, the judgment debtor had defaulted on several construction contracts it had entered with the garnishee by diverting progress payments instead of paying subcontractors. Under the circumstances, the garnishee also demonstrated its entitlement to an offset pursuant to Debtor and Creditor* Law § 151, since there was no uncertainty as to whether the judgment debtor’s obligations for defaulting would arise (see Matter of Trojan Hardware Co. v Bonacquisti Constr. Corp., 141 AD2d 278, 282 [1988]). We have considered petitioner’s other contentions and find them unavailing. Concur—Tom, J.P., Saxe, DeGrasse, Freedman and Abdus-Salaam, JJ.