Nachum v Ezagui

[*1] Nachum v Ezagui 2009 NY Slip Op 51960(U) [25 Misc 3d 1203(A)] Decided on September 21, 2009 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 September 21, 2009
Supreme Court, Kings County

Haim Nachum and Ezra Nagar, Plaintiff,

against

Freha Ezagui; Reina Baruch a/k/a Reina Ezagui; Eliyahu Ezagui; Lefferts Homes, Inc., Chaishom, Inc.,; Olympia Mortgage Corp., Mortgage Electronic Registration Systems, Inc., and Fairmont Funding, Ltd., Defendants.



996/07



Plaintiff was represented by Jaroslawicz & Jaros, LLC, 225 Broadway, NY, NY 10007. Defendants were represented by Michael J. Petersen, Esq., 231 67th St., Brooklyn, NY 11220.

Herbert Kramer, J.

Is a defendant precluded from litigating issues previously determined against him by a Beth Din —an arbitration proceeding involving the same issues raised by another claimant? This Court's research did not disclose any case in this State that squarely addressed this issue. [FN1]

The defendant, Eliyahu Ezagui was a developer who pre-sold apartments in a large co-op building in the Crown Heights section of Brooklyn to various individuals, but did not convey the deeds to them.[FN2].

The purchase agreements recite that any controversies between the defendant and the purchaser are to be settled by a recognized Beth Din Tribunal. Several of the purchasers did in fact summon the defendant to the Beth Din of Crown Heights. This Tribunal ruled in favor of [*2]the purchasers in a series of decisions.[FN3] One such proceeding, involving purchaser Tova Eilenberg has been previously confirmed by this Court. The Beth Din ruled in favor of plaintiff, Ezra Nagar upon the same factual grounds. This Court subsequently denied the defendant's motion for summary judgment dismissing the instant complaint and granted reverse summary judgment to the plaintiff based upon the Beth Din's determination and ruled that even had the Beth Din not made a determination in this case, it would have given collateral estoppel effect to its determination in the Eilenberg arbitration. This Court then gave the parties the opportunity to submit memos of law on this issue as well as relevant documents.

The Eilenberg Beth Din Proceeding

In the Eilenberg proceeding, the defendant was present and submitted to the jurisdiction of the Beth Din. The Beth Din determined that Tova Eilenberg had acquired two apartments from the defendant by virtue of having paid the agreed upon sum and that she had acquired the keys to those apartments. The Beth Din found that Tova Eilenberg satisfactorily established that she had in her possession a document proving the purchase of the apartments and was in possession of the apartments and concluded that the apartments belong to the purchaser according to Jewish law. The Beth Din found that he defendant had transferred the apartments to his mother's name [FN4] to obtain a bank loan and in so doing he acted contrary to Jewish law. The Beth Din directed the defendant to convey the deeds to the apartments to the purchaser and pay off the mortgages encumbering the premises. This Court confirmed that determination.

The Nagar Proceeding

The defendant did not appear in this proceeding. However, the Nagar Beth Din noted that in a prior related proceeding between the defendant and another purchaser, Sharon Ben Shushan, in which the defendant did appear, the Beth Din directed the defendant to issue deeds not only to the Ben Shushan family but also to "all the other individuals from whom he had taken money for an apartment but failed to deliver a deed." It found that Ezra Nagar was one of the beneficiaries of this directive and thus assumed jurisdiction over the defendant. [FN5] Thus the Beth Din previewed the result herein.

The Beth Din found: There is a contract in effect between plaintiff and defendant. In 1996, the plaintiff had given the defendant a certain sum for the purchase of an apartment. Pursuant to the contract, the defendant was required to deliver a deed for the apartment and never did. Instead, he conveyed the deed either to himself or to a close family member and mortgaged the unit. [*3]

The Beth Din found that the above series of events constituted a fraud upon the plaintiff creating a situation where the plaintiff would not be able to recover their apartment from him. The Tribunal found that the defendant had systematically done this same thing to numerous individuals. These individuals gave him money in exchange for a promised deed only to have him transfer the deed to a nominee, mortgage the property and use the proceeds for his own purposes.

The Beth Din then concluded saying, that under Jewish law the apartment belongs to the plaintiff because "a)there was a transfer of money, b) there was a document signed by both parties; and c) the claimant inhabited the apartment for more than five years as owner." The Tribunal directed the defendant to immediately deliver a deed to the claimant that is free and clear of encumbrances and liens.

Defendant moves to renew his motion to dismiss the complaint on the ground that the the defendant Ezagui was not present during the Beth Din proceeding conducted in the instant case [FN6] and that the determination of the Eilenberg Beth Din should not be given preclusive effect. The defendant argues that the doctrine of collateral estoppel should not be applied to a Rabbinical Court ruling because the Rabbinical courts do not acknowledge such a concept. However, this is not the standard by which the application of the doctrine is to be tested.

"From a policy perspective, collateral estoppel conserves the time and resources of the court and the litigants, furthering society's interest in the peaceful, orderly and impartial resolution of disputes by enjoining repetitious litigation and the consequent potential for inconsistent results. Collateral estoppel is a long recognized equitable reaction against allowing a party to relitigate issues which have already been decided against him ." People v. Roselle, 84 NY2d 350, 356 [1994].

"It is fundamental that the doctrines of res judicata and collateral estoppel apply to issues resolved in an earlier arbitration proceeding. The res judicata effect of a prior arbitration award and the collateral estoppel effect of the determination of the issues decided therein are properly decided by the court. " Dimacopoulos v. Consort Development Corp., 158 AD2d 658, 659 [2d Dept. 1990].

"New York courts have demanded that two conditions must be met before collateral estoppel will apply to any prior determination. First, the identical issue necessarily must have been decided in the prior action and be decisive of the present action, and, second, the party to be [*4]precluded from relitigating the issue must have had a full and fair opportunity to contest the prior determination. The party seeking the benefit of collateral estoppel has the burden of demonstrating [that the issues in the present litigation and the prior determination are identical], where the party attempting to defeat its application has the burden of demonstrating the absence of a full and fair opportunity to litigate the issue in the prior action." Melendez v. Budget Rent-A-Car, 7 Misc 3d 585, 588-589 [Sup Court, Bronx Co, 2005].

Here, the issues before the Eilenberg Tribunal were whether Eilenberg purchased an apartment from the defendant and if so whether she is entitled to demand a deed from the defendant that is free and clear of liens and encumbrances. The Beth Din, finding that she had paid the agreed upon sum for the apartments, showed documents establishing her purchase of the apartments and established that she occupied and possessed the apartments, ruled that she was indeed entitled to such deed. The plaintiff has demonstrated to this court's satisfaction that these are the very issues in question here and that the same set of underlying facts obtains. Indeed, both parties rely on the same documents, the difference between them lies in the significance and interpretation given the documents. The Eilenberg Beth Din made its interpretation of these documents in a manner adverse to the defendant and the defendant has not demonstrated that he lacked a full and fair opportunity to be heard in that proceeding.

Accordingly, the defendant's motion to renew is granted and upon reconsideration this court adheres to its original determination granting summary judgment to the plaintiffs..

This constitutes the decision and order of the Court.

J.S.C. Footnotes

Footnote 1: One Court was asked to give preclusive effect to a prior Judge's ruling which gave preclusive effect to a Beth Din determination. The factors supporting the prior Judge's ruling were not enumerated and the Court instead relied upon the law of the case doctrine in sustaining the determination. H.R.Neumann Associates v. New Eagle Inc., 6 Misc 3d 1027(A) [Civ. Court, New York City, 2005].

Footnote 2:All the cases that devolved from this set of circumstances have been assigned to this Court.

Footnote 3: There were only two early decisions where the purchasers sought to close title and where the Beth Din, in essence, directed the parties to proceed in accordance with their agreement.

Footnote 4: The defendant's mother, Freha Ezagui did not appear in the Beth Din proceedings and did not appear herein. The Beth Din considered her to have acted as a mere nominee in these dealings.

Footnote 5: The Beth Din assumed jurisdiction over the defendant on the ground that the purchase agreement called for disputes to be settled by a recognized Beth Din and that the defendant had previously appeared and submitted himself to the jurisdiction of the court on three previous occasions regarding the series of transactions at issue.

Footnote 6: Citing to Rabbinic Law, the defendant argues that the Beth Din determination is procedurally and jurisdictionally defective. This Court declines to rule on this argument as "review is proscribed by the First Amendment entanglement doctrine as an infringement upon a religious community's independence from secular control or manipulation'." Sieger v. Union of Orthodox Rabbis of United States and Canada, Inc., 1 A.D..3d 180, 181[lst Dept. 2003]. The propriety of the Beth Din's assumption of jurisdiction over the defendant cannot be determined using neutral principles of law [and indeed in making his argument defendant relied upon the opinion of a Rabbi] but would require an examination of religious doctrine or practice.

In any event this Court is not relying upon the determination of the Nagar Beth Din, but rather is precluding the defendant from relitigating that which was determined against him in the Eilenberg arbitration.