Phillip v Zanani

[*1] Phillip v Zanani 2008 NY Slip Op 52285(U) [21 Misc 3d 1130(A)] Decided on November 10, 2008 Supreme Court, Kings County Kramer, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 10, 2008
Supreme Court, Kings County

Robert Phillip, Plaintiff,

against

Doron Zanani, Defendant, - and - Casey White, Additional Defendant



12267/07

Herbert Kramer, J.

Upon the foregoing papers, plaintiff Robert Phillip moves for an order, pursuant to CPLR 6514, canceling Notice of Pendency filed by defendant Doron Zanani (Zanani) on December 5, 2007 (the Notice of Pendency), together with costs and expenses pursuant to CPLR 6514 (c).

Factual and Procedural Background

The Prior Action

On December 22, 2000, Robert Phillip (Phillip) and Casey White (White), who are unrelated to each other, acquired real property located at 267 Kosciusko Street in Brooklyn (the property) as tenants in common. On December 30, 2000, Phillip and White entered into the Owners' Agreement, which provided for a buy-out by each party in the event the other no longer wished to own the property. On October 10, 2002, Phillip commenced an action against White in this court (Index No. 42318/02) (the prior action), seeking specific performance of the option to purchase and an accounting. On December 6, 2002, Phillip and White, through their respective counsel, entered into a stipulation of settlement, which provided for White's purchase of Phillip's one-half interest in the property. On December 19, 2002, White retained Zanani as his new counsel and discharged the attorney who negotiated the stipulation of settlement. Between December 19, 2002 and January 22, 2004, the parties litigated the buy-out price to be paid by White for Phillip's share. On January 22, 2004, White discharged Zanani as attorney and hired different counsel. The prior action continued [*2]without Zanani's participation. On June 18, 2004, a Judicial Hearing Officer determined the issue of an accounting between the parties. On December 15, 2004, the court entered an order providing for the sale of the property (the sale order), which granted White the first option to purchase the property within a specified period of time and, if White did not exercise his option, Phillip would then have the second option to purchase the property. Thereafter, White failed to timely exercise his buy-out option under the sale order, and Phillip moved to effect the transfer of the property to him under the auspices of the Sheriff of the City of New York and to deposit into the court's registry the balance of the purchase price he owed to White for White's share of the property, or approximately $4,100. On September 29, 2005, the court entered an order confirming the sale of the property and approving the distribution of the sale proceeds to White, all in furtherance of the sale order (the implementation order). Because White was unavailable and had no attorney at that time, the implementation order directed the Sheriff of the City of New York to execute a quitclaim deed in the name of White with respect to White's share in the property and deliver it to Phillip, subject to Phillip depositing approximately $4,100 with the Clerk of the Court. The implementation order stated that "the said deed shall bind Casey White and all persons claiming under him or through him with the same force and effect as if the deed had been executed by Casey White." On October 31, 2005, the Sheriff executed and delivered a quitclaim deed to Phillip, thereby terminating White's interest in the property.

Zanani's Charging Lien

White failed to pay Zanani for his legal services in the prior action. On March 19, 2004, Zanani filed a notice of charging lien in the prior action in the amount of $27,476.53, "which lien attache[d] to any verdict, report, determination, decision, judgment or final order in the defendant's favor and the proceeds therein in whatever hands they may come." On the same day, Zanani filed an action against White in the Civil Court of the City of New York, New York County, for unpaid fees and disbursements in the sum of $24,950. On October 12, 2004, the Civil Court granted judgment in favor of Zanani against White (the Zanani judgment) in the amount of $24,950. On February 7, 2005, Zanani filed a transcript of the Zanani judgment in the sum $26,577.28. The Zanani judgment remains unpaid and unsatisfied to date.

The Instant Action

On April 12, 2007, Phillip commenced the instant action against Zanani, seeking a declaratory judgment that the Zanani judgment lien against the property is invalid. Phillip alleged that he recently refinanced the property and was unable to receive the full amount of his loan because of the Zanani judgment lien against White. On July 20, 2007, Zanani filed an answer in the instant action and asserted, in several counterclaims, that the sale of the property pursuant to the sale order and the implementation order was a fraudulent conveyance under Debtor and Creditor Law §§ 273, 273-a, and 276 and that Zanani was entitled to attorneys' fees for enforcing his claim pursuant to Debtor and Creditor Law § 276-a. On December 5, 2007, Zanani filed with the Kings County Clerk's Office a Notice of Pendency against the property.

On December 19, 2007, Zanani filed the motion for summary judgment seeking an order: 1) pursuant to CPLR 3212, dismissing Phillip's complaint against Zanani as a matter of law and granting summary judgment in favor of Zanani on his counterclaims under Debtor and Creditor Law §§ 273 and 273-a, and 2) pursuant to CPLR 5015 (a), vacating or modifying the sale order and the [*3]implementation order. On January 17, 2008, Phillip filed a cross motion for an order granting summary judgment in his favor and dismissing all of the counterclaims asserted by Zanani.

By decision and order dated April 21, 2008 (the April 21st order), the court denied Zanani's motion in its entirety, granted Phillip's motion to the extent of dismissing all of Zanani's counterclaims, and denied Phillip's motion for summary judgment, with leave to renew, to the extent he sought a declaration that he held title to the property free and clear of the Zanani judgment. The court was concerned that Phillip did not demonstrate that the Zanani judgment was recorded in the Kings County Clerk's Office so as to constitute a lien on the property. Rather than renew his motion for summary judgment, however, Phillip now seeks by the instant motion to cancel the Notice of Pendency. Phillip is not seeking to discharge the lien imposed by the Zanani judgment.

Zanani appealed the April 21st order to the Appellate Division, Second Department (Appeal No. 2008-08931). Zanani anticipated perfection of his appeal by October 31, 2008.

Parties' Contentions

Phillip

Phillip contends that, in accordance with the court's April 21st order, there is no longer an action pending against Philip "in which the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property" (CPLR 6501), and that the Notice of Pendency is based on allegations which the court ruled are not viable. Phillip requests cancellation of the Notice of Pendency.

Zanani

Zanani contends that none of the grounds for which the Notice of Pendency may be canceled pursuant to CPLR 6514 are applicable. Zanani further argues that he would be severely prejudiced and irreparably harmed if the court canceled the Notice of Pendency before his appeal is determined.

Discussion

Notice of Pendency vs. Judgment Lien

Phillip's motion fails to distinguish between two separate documents which potentially cloud the title to the property. The first document is the Notice of Pendency which Phillip seeks to cancel by the instant motion. The second document is the Zanani judgment lien which Phillip previously sought to cancel in his motion for summary judgment decided by the court's April 21st order. Inasmuch as Philip seeks by the instant motion to cancel the Notice of Pendency only, the court will address the Notice of Pendency. If Phillip is so advised, he may separately move for summary judgment to cancel the Zanani judgment lien, which motion shall address the parties' compliance, if any, with RPAPL §§ 913 and 933 with respect to the Zanani judgment lien.

Validity of Notice of Pendency

The authority and requirements for securing a valid notice of pendency against real estate are set forth in CPLR article 65. CPLR 6501 provides: "A notice of pendency may be filed in any action in a court of the state . . . in which the judgement demanded would affect the title to, or the possession, use or enjoyment of, real property." Once properly indexed, the notice acts as constructive notice to all subsequent purchasers or lienors.

"The statutory bases for relief from the filing of a notice of pendency (CPLR 6514) presume that filing was valid in the first instance. It is axiomatic that a court possesses the inherent power to grant relief to an aggrieved party from any action taken in violation of the procedural rules" (see Rose v Montt Assets, Inc., 250 AD2d 451, 451-452 [1998]). As resort to filing of the notice requires no application before the court, this remedy is considered an "extraordinary privilege" and the [*4]litigant must strictly comply with the statutory requirements (see Rose, 250 AD2d at 452). Thus, it is axiomatic that a notice of pendency may only be properly filed when the relief requested in the complaint is "directly related to" the title to, or the possession, use, or enjoyment of real property (see 5303 Realty Corp. v O & Y Equity Corp., 64 NY2d 313, 321 [1984] [emphasis added]). The usual object of filing a notice of pendency is to protect some right, title, or interest claimed by a plaintiff in the real property of defendant which might be lost under the recording acts in the event of a transfer of the subject property by the defendant to a purchaser for value and without notice of the claim (Id. at 322). On a motion to vacate, the court will look to the allegations set forth in pleadings (Id. at 320-321).

A notice of pendency may not be properly filed in an action to recover a down payment under a contract for the sale of real property because such an action does not directly "affect the title to, or the possession, use or enjoyment of, real property" under CPLR 6501 (see Rajic v Sarokin, 214 AD2d 663, 664 [1995]). Likewise, a notice of pendency is inappropriate in tort and contract actions seeking recovery of money damages (see Braunston v Anchorage Woods, 10 NY2d 302, 305 [1961]; Distinctive Custom Homes Bldg. Corp. v Esteves, 12 AD3d 559, 559 [2004]; Interior Design Force Inc. v Dorfman, 151 AD2d 461, 462 [1989]).

In this case, the interest in real property claimed by Zanani is founded upon the attorney's charging lien. Judiciary Law § 475 provides that an attorney who appears for a party in an action has a lien upon his or her client's claim which attaches to a determination in the client's favor and to the resulting proceeds wherever they are (see Oppenheim v Pemberton, 164 AD2d 430, 433 [1990]).

Zanani's answer with counterclaims in the instant action is the basis for his filing of the Notice of Pendency. His answer alleges that he filed a Notice of Lien under Judiciary Law § 475 in the prior action. He further alleges that the Notice of Lien gave notice of: 1) Zanani's claim for a charging lien for legal services rendered to White and for disbursements incurred on his behalf, "which lien attached to inter alia, any proceeds therein in whatever hands they may come," and 2) "Zanani's claim for a charging lien on any proceeds received by or on behalf of White, whether by recovery or settlement of said action." The proceeds of the sale of White's interest in real property to Phillip are cash of approximately $4,100, but not real estate. Therefore, the instant action does not directly affect the title, use, possession, or enjoyment of real property (see Oppenheim, 164 AD2d at 433-434 [no basis for filing notice of pendency in an action to enforce attorney's charging lien where there was no allegation in complaint that plaintiffs' clients received any interest in the real property as the "proceeds" of the settlement]; see also Lunney & Crocco v Wolfe, 180 AD2d 472, 472 [1992] [a notice of pendency was properly cancelled in a special proceeding which was brought to enforce an attorney's charging lien against a portion of the proceeds of the sale of the husband's one-half interest in the marital real property]).

Furthermore, Zanani's counterclaims are essentially for money damages. Zanani sought in this action to have White declared the one-half owner of the subject property in order to best protect Zanani's interests as a judgment creditor. This was not an appropriate action for the filing of a notice of pendency (see Long Is. City Sav. & Loan Assn. v Gottlieb, 90 AD2d 766, 766 [1982], modified on other grounds, 58 NY2d 931 [1983]). Accordingly, the remedy of a notice of pendency pursuant to CPLR 6501 is not available and consequently must be cancelled. Zanani would not be irreparably harmed by the cancellation of the Notice of Pendency because it was improperly filed ab initio. [*5]

Plaintiff in his motion also requests that an award be made pursuant to CPLR 6514 (c), which provides that "[t]he court, in an order cancelling a notice of pendency . . . may direct the plaintiff to pay any costs and expenses occasioned by the filing and cancellation, in addition to any costs of the action"(emphasis added). Under the totality of the circumstances presented herein, the court, in its discretion, finds that an award of costs and expenses pursuant to CPLR 6514 (c) is not warranted (see Rabinowitz v Larkfield Bldg. Corp., 231 AD2d 703, 704 [1996]; Praver v. Remsen Assocs., 181 AD2d 723, 723 [1992]; Ricca v Ricca, 15 Misc 3d 1115 [A], 2007 NY Slip Op 50700, *3 [U] [2007]).

Conclusion

In summary, the court rules as follows:

The Notice of Pendency dated December 4, 2007 and filed by Zanani on December 5, 2007 is canceled. A copy of this order with notice of entry shall be served upon all parties and upon the Clerk within thirty (30) days of entry.

If Phillip is so advised, he may move for summary judgment seeking a declaration that the Zanani judgment lien, recorded in Kings County, is invalid, which motion shall address the parties' compliance, if any, with RPAPL §§ 913 and 933 with respect to the Zanani judgment lien.

The foregoing constitutes the decision and order of the court.

E N T E R,

J.S.C.