Laufer v Skillman Estates, LLC

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Download PDF Laufer v Skillman Estates, LLC 2014 NY Slip Op 31357(U) May 23, 2014 Sup Ct, Kings County Docket Number: 503414/2013 Judge: Ann T. Pfau Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. j [*FILED: KINGS COUNTY CLERK 05/23/2014 1] INDEX NO. 503414/2013 I NYSCEF DOC. NO. 78 RECEIVED NYSCEF: 05/23/2014 !I At an lAS Term, Part Commercial 3 of tire Supreme Court of the State of New York, held in and for the County of Kings, at t'he Courthouse, at Civic Center, Brooklxj11n, New York, on the 22nd day of May, 2014.1 !I PRESENT: HON. ANN T. PFAU, Justice. -----------------------------------------------------------J( 'i MOSHE C. LAUFER, SYNAGOGUE, CONGREGATION ZICHRON YEHUDA, Plaintiffs, r DECISION and ORDER Index No. 503414/2013 -against- II II II SKILLMAN ESTATES, LLC, EASTERN CAPITAL GROUP LLC, MOSHE JUNGER, MOSES ROSNER, MENDY ROSNDER, SEYFARTH SHAW LLP, John Doe Attorneys 1 - 10, and John Does 1 - 10, II II I II Defendants. , II -----------------------------------------------------------J( II II The following papers were read on motion 03, 04 and 05: II I The notices of motion and notice of cross-motion, supporting Mfidavits (Mfirmations) and Exhibits Annexed, opposing Affidavits (Affirmations) and Exhibits Annexed, Re~ly Affidavits (Mfirmations) and Exhibits Annexed were electronically filed with the New York State Courts Electronic Filing (NYSCEF) system in connection with these motionst III . ~ . In motion sequence 03, defendants Mendy Rosner and Moshe Rosner (Ros~er I' .,1 Defendants) move to dismiss for lack of personal pursuant to CPLR 3211(a)(8). In motion . r II sequence 04, defendants Eastern Capital Group LLC and Seyfarth Shaw LLP (ECG 'i . 1 :1 [* 2] Defendants) move to dismiss on the grounds of res judicata and collateral estoppel I .. I .1 pur~mant to CPLR 3211(a)(5), and for failure to state a cause of action pursuant to CPL' 3211(a)(7). In motion sequence 05, the Rosner Defendants and defendant Skillman Estates, LLC cross-move to dismiss on the grounds of res judicata and collateral estoppll. The motions are decided as follows.. I j I Facts -- Defendants Moshe Junger and Moses Rosner were members of defendant Skillman Estates LLC (Skillman). Skillman owned real property in the Williamsburg 'I !I neighborhood of Brooklyn, and was the sponsor of a proposed condominium project on th'~ II 'property. PlaintiffMoshe C. Laufer (Laufer) alleges that, on August 17, 2004, he entere~ . Ii . 'I' an agreement with Skillman to purchase a 1/12 interest in Skillman's property (Verifiedll Complaint, ~ 13), and simultaneously Skillman eritered into a contract to sell plaintiffs In II interest in condominium units in the building (id., ~ 14).1 Laufer complained that I II Skillman, Rosner and Jnnger breached the agreements, and commenced a Beth Din arbitration proceeding, which in time resulted in an award in Laufer's favor in the amortnt iI of $1,551,000 and specific performance, which award was confirmed by this court, , resulting in a judgment on default in the amount of $1,551,000, entered on November 2\ . 2009 under index number 25173/2008. . II I! ! 'I i 1 1 For a more detailed description of the facts, see the Decision and Order dated Ii September 30,2013, in Eastern Capital Group, LLC v Skillman Estates, LLC, et al., index no. 3217/2008, armexed to the Montag Mf., Ex. F. . . . II II 2 II II [* 3] ii I Defendant Eastern Capital Group LLC (ECG) was the mortgagee on the property, and upon Skillman's default, it commenced a 'mortgage foreclosure proceeding (Foreclosure Action, index number 3217/2008) in August 2008 (Aff.of Jerry A. Montag, II Esq. In Support of Motion to Dismiss, ,-r 8) . Laufer appeared by counsel in the Foreclosu}e II Action, with cross-claims and counterclaims asserting a vendee's lien arising from his II November2, 2009 judgment against Skillma~ (id.). ECG moved for summaryjudgmentll . ~ !' II and the appointment of a referee to compute, which was granted over Laufer's oppositi04 (id., at ,-r 9, and Decision, dated December 16th, 2010, Ex. A to Montag Aff.). ! In early 2012, ECG entered into a forbearance agreement with Rosner, II " II Junger and Skillman, which was so-ordered by Justice Hinds-Radix of this court on April 1 I: . II 27,,2012, and filed on May 18, 2012 (Forbearance Agreement, Montag Aff., Ex. C). Among . Iii . other things, the Forbearance Agreement provided that Junger transferred his interest in ~ . , Skillman to Rosner; that Skillman and Rosner waived any objection to the entry by ECd of a judgment of foreclosure and sale; ECG discontinued ~he action as against Junger, a!d waived any deficiency claim against Junger, Rosner or Skillman if they complied with tJe , " III terms of the Forbearance Agreement; and ECG agreed that, in the event the property was successfully converted to a condominium, Rosner's son, defendant Mendy Rosner, could purchase Unit 4B for $300,000. ECG then moved for an order confirming the referee's report and for a ,3 I [* 4] I I. 1 I I J I I j t I 1-2). Justice Hinds-Radix granted ECG's motion and denied Laufer's cross-motion, findibg ~ 1 . II , . I' , "no merit to Laufer's claim that he possesses a vendee's lien which is superior to plaintiffs . mortgages" (id., at 5). She further found that Laufer~s November 2,2009 judgment II , declaring that he had a vendee's lien was not binding o~ ECG, which was not a party to II that action (id., at 4). A judgment of foreclosure and sale was issued' on December 28, II I: 2012 (Montag Aff., Ex. E). By an order to show cause dated May 29, 2013, Laufer moved to'renew and reargue the decision granting ECG a judgment, and upon renewal and re-I! . "d' argument, vacatmg t h'e JU dodo gment an permIttmg . 't' II Iscovery. In part, p l'amtl'ff:s mam am~ d 0 'II that t];1e Judgment should be vacated because Rosner misrepresented his ownership I I interest in Skillman in the Forbearance Agreement, and that Rosner and Junger lacked Ii I authority to bind Skillman with respect to that agreement or the mortgage documents . Ii . II upon which ECG brought suit. That motion was denied for reasons explained in the )1 decision and order dated September 13,2013 (Montag Afr., Ex. F). As part of that orderl . I the court noted that Laufer's cross-claims against Rosner and Junger were not resolved,i ¢ 0 and a conference was scheduled to address them (id., ~). . Ii ". I Plaintiffs then commenced this action, with four causes of action (see Verifiibd Complaint). Plaintiffs contend that the Forbearance Agreement w~~ made with the intlnt to render Skillman. without assets and to hinder, delay or defraud Laufer's ability to Ii I collect onhis judgment against Skillman (id., at ~ 66). The first ca~se of action asks foJ a judgment against all defendants for the $1,551,000 ow~d under the November 2,20091 judgment. The second and third causes of action seek to enjoin the mnveyance of Unit fB to Mendy Rosner, and seeks to have the unit transferred to plaintiffs herein. The fourt~ .11 cause of action, which is the only claim directed against defendant Seyfarth Shaw, seej1s 4 Ii I . i II ~ [* 5] i I ,I treble damages under Judiciary Law ~ 487 under the theory that the Forbearance , ,, Agreeme~t was intended to shield Skillman's assets from Laufer, and also was intended Ito , I deceive the'court. II :1 I Rosner Defendants' Motion to Dismiss for Lack of Pers~nal Jurisdiction ' I, [II . f The Rosner Defendants argue that substitute service allegedly made upon "Ms. Rosner" as a person of suitable age and discretion is inadequate. ' When the motion if I was made, however, counsel for the Rosner Defendants was not aware that plaintiff hadl filed affidavits by a process server of "nail and mail" service pursuant to CPLR 308(4) Ii I' upon the Rosner Defendants. The plaintiff has the burden of proving that jurisdiction . " II was obtained over defendants by proper service (Spangenberg v Chaloupka, 229 AD2d 482 [2d Dept 1996]). Generally, a proc~ss server's' affidavit of service constitutes prima facJ , I, II - proof of service (Rox River 83 Partners v Ettinger, 276 AD2d 782 [2d Dept 2000]), and " gives rise to a presumption of proper service (Household Fin. Realty Corp. v Brown, 13 ADSd 340, 341 [2d Dept 2004]). Here, plaintiffs have met their prima facie burden of showing proper service with the process server's affidavits of service. However, the , . II ' II Rosner Defendants offered affidavits in reply that rebllt the presumption of proper servil~e with specific facts to rebut the statements in the process server's affidavits (Scarano v. II Scarano, 63AD3d 716 [2d Dept 2009)). Accordingly, an evidentiary hearing is reqUiredlto determine if service was properly made. " II II Ii II I' ,I II 5 II I , I [* 6] Ii )1 Motions to Dismiss On Theories of Res Judicata and Collateral Estoppel, and the Judiciary Law ~ 487 Claim, . . ,I II a- Generally, the plaintiffs allegations in the complaint are presumed true in II motion todismiss under CPLR 3211(Williams v Williams, 23 Y2d 592, 595-596 [1969]), ,Ii' but bare conclusions of law as well as factual claims flatly contradicted by documentaryil I c evidence are not entitled to any such consideration (Gertler v Goodgold, 107AD2d 481, 485 [1at Dept 1985], aff'd, 66 NY2d 946 [1985]). In Yerg v Bd of Educ. Of Nyack Union Free School Dist., the Appellate II Division, Second Department, stated the following: Ii II New York has adopted the transactional analysis approach in deciding res judicata issues (see, O'Brien v City of Syracuse, 54 NY2d 353; Smith v Russell Sage Coll., 54 NY2d 185, rearg denied 55 NY2d 878; Matter of Reilly v Reid, 45 NY2d 24). Under this doctrine, "once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy" ( a 'Brien v City of Syracuse, supra, at 357). "When alternative theories are available to recover what is essentially the same relief for harm arising out of the same or related facts such as would constitute a single 'factual grouping' * * * the circumstance that the theories involve materially different elements of proof will not justify presenting the claim by two different actions" (O'Brien v City of Syracuse, at 357-358). Ii ,i 'I I , I I " Ii II II " II II 141 AD2d 537, 538 (2d Dept 1985). . II Here, the claims alleged inthe Verijied Complaint against the ECG I Defendants arise from the Forbearance Agreement, which was known to plaintiffs befor, ECG moved for judgment of foreclosure and sale. Plaintiffs were Ii party to the foreclosure action, and Laufer opposed and cross"moved against ECG's motion for a judgment of I foreclosure and sale. There are no facts alleged in the Verified Complaint to explain or II Ii 'justify why the claims against the ECG Defendants are raised now, rath~r than when the, ," " 6 I II ~ [* 7] Ii I; II parties litigated the significance of the' vendee's lien and the Forbearance Agreement in . Iii '. ,i the Foreclosure Action. To the extent that plaintiffs did raise these issues, they were ,I!! litigated to a final conclusion. Indeed, Laufer argued repeatedly, and without success, . that his vendee's lien took precedence. . Ii ~ , II Even though the legal theory raised in thi'~proceeding is not identical to th!t set forth in the mortgage proceeding, the claims again~t the ECG are barred under the Iii j doctrine of res judicata. Moreover, the claims against Seyfarth Shaw and the John Doe I II I attorneys, presumably meant to include S~yfarth Shaw attorneys, are barred under the II doctrine of collateral estoppelbecause they are entirely derivative of the attorneys' . 11 representatIOn of ECG m the pnor actIon, and of ,ts roje m presentmg the Forbearance I Agreement to the court. II As relevant, Judiciary Law~ 487provides that an attorney is "guilty of anyll,i , ,I ,I deceit or collusion, or consents to any deceit or collusion, with intent to de"ceivethe court!: ", I " or any party" is "guilty of a misdemeanor, and in addition to the punishment prescribed! " , i i therefor by the penal law, he forfeits to the party injured treble damages, to be recoverer "in a"civil action". The Verified Complaint alleges, among other things, that the transferl,of '" ,,' ," , II Unit 4B to Mendy Rosner was substantially beIO'w-market,that Rosner misrepresented I j his ownership interest in Skillman, and that the Forbearance Agreement was executed , I "' with the intent to shield Skillman from Laufer and to deceive the court so it would issuel',1 a , I judgment of foreclosure and sale. If, as plaintiffs contend, the Forbearance Agreement . II ~ , was material to the court's decision in that respect, the issue could and should have been , '. I] raised with the court when Laufer opposed ECG's motion and he cr~ss-moved against i~I' II 'I 7 Ii II II ;, [* 8] ! I The ECG Defendants also correctly argue that the Verified Complaint is silent as to who was deceived by the Forbearance Agreement, so it fails to state a claim under Judiciary Law ~ 487 (see F:lsky v KM Ins. Ii 1 Brokers, 139 AD2d 691 [2d Dept 1988J I I ["While itis axiomatic that a court must assume the truth of the complaint's allegations, such an assumption must fail where there areeohclus<;>ryallegations lacking factual support]). Ii Finally, the Rosner Defendants a~somove to dismiss under a resjudicata aJd , II I' collateral estoppel theory. That motion is granted in part to the extent that the fourth II cause of action under Judiciary Law ~.487 is dismissed as against them. Not only is theJe ~ .' no allegation of who was deceived by the -Forbearance Agreement, there is no allegation Ii that the Rosner Defendants are attorneys subject tcithat statute. I .' The m'otion is deniedJ however, with respect to the claim that Skillman and Rosner entered into the Forbearan!ce ~ . Agreement with the intent to hinder or d~layLaufer's ability to coll~ct his judgment. TJis '. . _'.' II claim was not conclusively litigated in the prior action. Indeed, the Decision and Order II dated September 30, 2013, specifically states that the claims involving Skillman and )i Ii Rosner were not concluded. Mendy Rosner also should remain in the action as an III interested party based upon the allegation that he'retai~s a contingent interest in Unit)1 Ii Ii 4B. Accordingly, it hereby is Ii ORDERED that the motion by the Rosner Defendants to dismiss under CPLR - -. '.- II 3211(a)(5) for lack of personal jurisdiction (motion sequence 03) is granted to the extentil that a traverse hearing is directed; and it further is II II II Ii I 8 I II II ¢ I -, [* 9] . I Ii :V~\- Ii ORDERED"the hearing on the i~sue of whether plaintiffs properly and timely " [I served the summons and complaint on the moving defendants is referred to a Special Ii' Referee to hear and report with recommendations; and "it is further Ii 'Ii ORDERED that a copy hereof be sent by my staff to the Kings County . i Administrative Judge for Civil Matters with a request that this matter be referred to the l Special Referee clerk in Part 82 to arrange a date for the reference to a Special Referee; I: and it further is ORDERED a final i . I decision on this issue shall abide the report and ' Ii . I recommendations of the Special Referee and a motion pursuant to CPLR 4403, unless t~e parties consent to a determination by the Special Referee, in which case the Special I Referee may hear and determine the issues; and it further is II J: ORDERED that the motion by the ECG Defendants to dismiss under CPLR I , Ii 3211(a)(5) and (7) (motion sequence 04) is granted, and the complaint hereby is severed and dismissed as against defendants Eastern Capital Group LLC and Seyfarth Shaw LEI.I.P, , I I, and John Doe Attorneys 1 - 10, and the Clerk shall enter judgment accordingly, with co~ts I and disbursement to the ECG Defendants as taxed; arid it further is / . ' . J ORDERED that the cross-motion by the Rosner Defendants and Skillman I! . (motion sequence 05) is granted to the extent that the fourth cause of action alleging a ¢ . claim under Judiciary Law ~ 487 is dismissed, and the motion is otherwise denied. II! I, I .11 I' .~ .