Craig v Craig

[*1] Craig v Craig 2007 NY Slip Op 52345(U) [17 Misc 3d 1139(A)] Decided on December 11, 2007 Supreme Court, Kings County Sunshine, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 11, 2007
Supreme Court, Kings County

Angela Craig, Plaintiff,

against

Theophilus Craig, Defendant.



11843/07



LOIS M. VITTI

Attorney for Plaintiff

12 Perry Street, 2C

New York, NY 10014

(646) 621-8579

THE EDELSTEINS, FAEGENBURG & BROWN

By: Adam Edelstein, Esq.

Attorney for Defendant

61 Broadway, Suite 2210

New York, NY 10006

(212) 425-1999

Jeffrey S. Sunshine, J.

The instant application made during a matrimonial proceeding brings before the court the question of (1) whether a lis pendens (notice of pendency) and/or a temporary restraining order is appropriate where the property in question is separate property, and the movant is seeking an equitable interest in any appreciation of said property; and (2) whether the wife whom is the [*2]non-biological legal guardian of a child of the husband has the right to seek exclusive occupancy of that separate property in order to provide for her ward.[FN1]

Facts

Defendant husband and plaintiff wife were married on December 20, 1995, and remarried on March 12, 1997, allegedly due to the uncertainty of the death of plaintiff's prior husband. Defendant husband was deported to the Country of Jamaica in February of 2003 as an illegal immigrant. Plaintiff wife presently resides in the pre-marital residence owned by defendant husband prior to the marriage which was purchased on July 20, 1994. She resides in this home with the husband's first wife and a child of that first marriage.

Plaintiff wife herein has obtained Letters of Guardianship in the Family Court, Kings County on February 19, 2004, on behalf of defendant husband's children which were born to husband and his first wife. These children are not her biological children. One child is now over 21 years of age and, therefore, is not the subject of the instant application, and the second child is almost 14 years of age. At oral argument it was conceded by plaintiff's counsel that the purpose of obtaining these Letters of Guardianship was so that the child could obtain benefits from the government because the first wife, like the children's father, was an illegal immigrant. Defendant husband states, through counsel, that he was not properly served with the application for Letters of Guardianship in Family Court and intends on challenging same. The court notes that more than three years have transpired since the Letters of Guardianship were issued and no challenge was ever made.

Plaintiff wife now states that she wishes to have the lis pendens remain on the husband's separate property because she has been maintaining that property and rehabilitating that property and it is in the best interest of this non-biological child (who is now her ward) to remain in that residence during the course of the litigation and after trial until he is 18 years of age. Plaintiff avers that she is receiving disability benefits and cannot work, however she purchased a restaurant for $80,000.00.

Defendant husband appears by an attorney in fact because he is not allowed to enter into the United States. Said attorney in fact has retained counsel. Defendant husband opposes the application claiming inter alia that this residence is his separate property, that because the tenants are not paying rent and the mortgage is not being paid, the house is about to be the subject of a foreclosure action. Defendant's counsel avers that he has a buyer for the property and at oral argument stated defendant is willing to place a sufficient portion of the proceeds in escrow to satisfy any financial award a court might make in support of her claim. Defendant husband avers that even at trial the wife will not have the economic ability to buy out defendant husband's interest in this property. There appears to be a separate plenary action over a parcel of marital property where defendant husband alleges plaintiff wife, using a forged power of attorney, defeated his interest in this property and cashed out approximately $80,000.00 and purchased an interest in a restaurant. Plaintiff wife does not deny that she mortgaged that property utilizing a power of attorney which she claimed she did not know was forged.

Defendant husband, claims he has no means of support, and it is conceded that he presently lives in Jamaica with plaintiff wife's parents. He alleges that plaintiff comes to court [*3]with unclean hands and should not be able to defeat defendant husband's right to dispose of his separate property and that he should have the right to sell his property.

Plaintiff wife in opposing the application states that she is seeking the assistance of the City of New York and attempting to prevent the foreclosure, and her only goal is to protect the stability of her ward, defendant husband's 14 year old child.

A notice of pendency (lis pendens) is governed by CPLR 6501 which provides:

A notice of pendency may be filed in any action in a court of the state or of the United States in which the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property, except in a summary proceeding brought to recover the possession of real property. The pendency of such an action is constructive notice, from the time of filing of the notice only, to a purchaser from, or incumbrancer against, any defendant named in a notice of pendency indexed in a block index against a block in which property affected is situated or any defendant against whose name a notice of pendency is indexed. A person whose conveyance or incumbrance is recorded after the filing of a notice is bound by all proceedings taken in the action after such filing to the same extent as a party.

In the matrimonial context, it has been established in Fakiris v. Fakiris, 177 AD2d 540 (2nd Dept., 1991)

The filing of a notice of pendency is available only if the judgment demanded would affect title to, or the possession, use or enjoyment of real property (see, Gross v Gross, 114 AD2d 1002). The plaintiff is not entitled to such relief simply because the residence may be subject to equitable distribution (Gross v Gross, supra ). The plaintiff's remedy to prevent any alleged fraudulent transfers was to seek an injunction against any further transfers of the property (Gross v Gross, supra ).

According to the New York State Court of Appeals in 5303 Realty Corp. v. O & Y Equity Corp, 64 NY2d 313, 486 NYS2d 877 (1984):

A notice of pendency, commonly known as a "lis pendens," can be a potent shield to protect litigants claiming an interest in real property. The powerful impact that this device has on the alienability of property, when conjoined with the facility with which it may be obtained, calls for its narrow application to only those lawsuits directly affecting title to, or the possession, use or enjoyment of, real property.

In the case at bar, the property in question is clearly separate as defined by DRL 236 [B] [1] [d] [1] [(property acquired before the marriage is clearly separate property)]. It is well established that if plaintiff is able to establish that said property has appreciated in value or that she has actively participated in the property, she may be entitled to a share in that active appreciation (see Xikis v Xikis, 43 AD3d 1040, 841 NYS2d 692 [2nd Dept., 2007] [wife was not entitled to an award of any appreciation in value in husband's separate property where there was no nexus between her activities and the property's appreciation]). CPLR 6501 (notice of pendency) provides that the action need not only affect title but clearly provides "...or the possession, use or enjoyment of the real property". [*4]

Thus, by establishing her claim to exclusive occupancy, plaintiff attempts to legitimize her claim to a lis pendens, claiming that her right to exclusive occupancy vests in protecting the interests of her 14 year old ward, the defendant husband's child. It is her position that a sale would jeopardize her ward's right to possession and enjoyment of the property even though she may never be entitled to actual title.

It is well settled that a party to a matrimonial action is entitled to a restraint on the transfer of marital property far broader than a restraint as would be required pursuant to any other type of action (see DRL 234). Notwithstanding same, by filing the notice of pendency plaintiff bypassed the newly enacted Rule 22 NYCRR 202.7 which provides as follows:

Upon an application for an order to show cause or motion for a preliminary injunction seeking a temporary restraining order, the application shall contain, in addition to the other information required by this section, an affirmation demonstrating there will be significant prejudice to the party seeking the restraining order by the giving of notice. In the absence of a showing of significant prejudice, the affirmation must demonstrate that a good faith effort has been made to notify the party against whom the temporary restraining order is sought of the time, date and place that the application will be made in a manner sufficient to permit the party an opportunity to appear in response to the application. This subdivision shall not be application to orders to show cause or motions in special proceedings brought under Article 7 of the Real Property Actions and Proceedings Law nor to orders to show cause or motions requesting an order of protection under section 240 of the Domestic Relations Law, unless otherwise ordered by the court.

and therefore by filing a lis pendens no notice of the request was required to the adverse party.

The Second Department in Gross v Gross (114 AD2d 1002, 495 NYS2d 441 [1985]) stated:

The notice of pendency filed against defendant's residence was properly vacated. The filing of a notice of pendency is an extraordinary privilege available only if the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property (Chambi v. Navarro, Vives & Cia, 95 AD2d 667; Doar v. Kozick, 87 AD2d 603; CPLR 6501; see, 5303 Realty Corp. v. O & Y Equity Corp., 64 NY2d 313). The fact that plaintiff may be entitled to an equitable distribution with regard to the residence does not give rise to such a privilege. Plaintiff's remedy to prevent any alleged fraudulent transfers was to seek an injunction against any further transfers of the disputed property (see, Chachkes v. Chachkes, 107 AD2d 786, 787, supra .; Domestic Relations Law §234). In fact, such an injunction was granted.

(see also Sehgal v Sehgal, 631 NYS2d 360 {220 AD2d 201} [1st Dept., 1995]).

If equitable distribution of marital property does not give rise to a notice of pendency, certainly an equitable distribution claim to appreciation of separate property is tenuous at best.

This is especially significant in that DRL 236 B 1(d) defines separate property as property acquired before the marriage and DRL 236 B 5(b) provides that separate property must remain as such (see Shenkmans Practice Commentary DRL 234:3 ["...[w]here the residence is separate property, such as where one spouse acquired the property prior to the marriage or by inheritance. [*5]See DRL § 236, Part B, subd. 1 (d). Separate property must remain such. DRL § 236, Part B, subd. 5 (b)."]). Thus, it is clear that plaintiff wife can never be entitled to title of said property.

The court must next determine if plaintiff wife's claim of "exclusive possession" in order to maintain stability for her 14 year old ward who is defendant husband's child, would give rise to a notice of pendency. This appears to be an issue of first impression.

At the outset, the court must at this time reject defendant husband's claim that the Letters of Guardianship were granted without notice to him. Defendant husband has not formally asserted, by way of application to the Family Court or any other court, vacatur of those letters and at present they are valid.

The court notes that plaintiff, by memorandum of law, asserts that she is not asking to live in the 42 Street property, however she is asking for the property to be titled to her, or at least to remain unsold until her ward is 18 years of age. The property is not marital property nor does she necessary want to live there. She wants her ward to live there apparently with his biological mother. Accordingly, this court rejects plaintiff's request for the property to be titled to her.

While it has been held in certain instances that a party is entitled to exclusive occupancy of separate property pendente lite, those applications are based upon domestic violence or destruction of propertyor where a party has absented themselves from the property (see Weiglhofer v Wieglhofer, 1 AD3d 786, 766 NYS2d 727 (3rd Dept., 2003). There are those extraordinary instances where exclusive possession of separate property post trial is granted.

In Mitzner v Mitzner (209 AD2d 487, 619 NYS2d 51 [2nd Dept., 1994]) the court awarded exclusive use and occupancy of marital residence to the wife until the parties youngest child reached 18 years of age. However, this case can be distinguished from the facts at bar in that the property herein was not the marital residence of a child of this marriage.

Plaintiff's claim that while she may never be entitled to title but she does have a claim through her ward to possession, is misplaced. The reliance on Forbush v. Forbush (115 AD2d 335, 4th Dept., 1985) ignores that a party's right to possession rests in DRL 236 B (5) (f). DRL 236 B (5) (f) specifically refers to "the use and occupancy of the marital home... without regard to the form of ownership of that property". The property in question was not the "marital home" of this child with these two parties.

The claim of "possession by proxy" extending to exclusive occupancy of a non-biological ward which would in affect after trial leave defendant's two ex-wives and his child from the first marriage in possession of his separate property, does not give rise to the "extraordinary" remedy of a lis pendens or a temporary restraining order. Especially, in light of the fact that courts are reluctant to grant possession to a party who has no ownership interest (see Wood v Wood, 139 AD2d 506, 526 NYS2d 608 [2nd Dept., 1988]). Thus, the lis pendens is vacated.

As to defendant's request to allow the property in question to be sold pendente lite, a denial of a requested temporary restraining order, that application is granted to the extent indicated.

It has been established that the general rule that a property which is the subject of a claim in equitable distribution should not be sold pendente lite (see Naane v Maslavi, 21 AD3d 1069, 803 NYS2d 639 [2nd Dept., 2005] [the right to determine property rights is dependent on the dissolution of the marriage]) . Here, whether the marriage is dissolved or not, the property is clearly separate and plaintiff has no basis at law to claim exclusive possession. Once defendant [*6]agreed to have plaintiff's share of any appreciation held in escrow, he removed any obstacles to sale.

Under the unique facts presented, the court will not allow the property to be foreclosed upon if there is a bonafide purchaser. As such, the court will issue a limited restraining order allowing the property to be placed on the market for sale, subject to court approval, and if there can be no agreement as to the value of the appreciation, the court will hold an expedited bifurcated hearing to determine the amount of any proceeds to be held in escrow, representing plaintiff's alleged equitable interest in the separate property.

While DRL 234 gives the court broad jurisdiction to enjoin the sale pendente lite (see Shenkman DRL 234 (2), there still needs to be some basis to allow for the extraordinary remedy of preventing the sale of clearly separate property.

Counsel and parties shall appear for a final compliance conference on December21, 2007, at 9:30 a.m., and a note of issue shall be filed.

This shall constitute the decision and order of the court.

E N T E R

HON. JEFFREY S. SUNSHINE

J. S. C. Footnotes

Footnote 1:At oral argument, defendant's counsel withdrew any claim to improper service of the instant application.