Stathakis v Gerasimou

[*1] Stathakis v Gerasimou 2008 NY Slip Op 50459(U) [18 Misc 3d 1147(A)] Decided on February 29, 2008 Supreme Court, Queens County Hart, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 February 29, 2008
Supreme Court, Queens County

Larry Stathakis and Allied Builders and Construction Corp., Plaintiff(s),

against

Evangelos Gerasimou, ANNAMARIA GERASIMOU, AM HOLDING OF NY CORP. AND 41-98 FORLEY ST. LLC., Defendant(s).



19593/06

Duane A. Hart, J.

The motion is brought on by defendants, collectively referred to as Evangelos, who seeks an order vacating a Notice of Pendency, which has been filed by plaintiffs, collectively referred to as Stathakis, against three properties with which Evangelos is associated:

Property No. 1: 41-01 23 Street, Astoria, currently owned by AM Holdings;

Property No. 2 - 8-29 Astoria Blvd., Astoria;

Property No. 3 - 57-25 East Hampton Blvd., Bayside, owned by Defendant AnnaMaria Gerasimou, the wife of Evangelos Gerasimou.

All three properties are in Queens County.

The motion is an outgrowth of the underlying action in which Stathakis alleges that he and Evangelos were the only members of Dodeka Realty, LLC (Dodeka), which owned premises [*2]located at 41-98 Forley Street, Elmhurst, until June 11, 2004. Prior to that day, says Stathakis, he and Evangelos were equal owners of Allied Builders and Construction Corp., (Allied), which was the owner of property located at 88-34/40 161 Street, Jamaica. Stathakis says that all the members of Allied agreed to the sale of that property.

In each instance, says Stathakis, Evangelos appeared at the closing on his behalf, signed all the transfer documents and received the net proceeds of the sale, $2,000,000.00 and $2,720.000.00, respectively. In each instance, says Stathakis, Evangelos failed to give him his half of the net proceeds.

Stathakis further alleges that Evangelos used the net proceeds from the sale of both the Dodeka and the Allied sales to purchase property No. 1 in the name of Defendant AM Holding, which now uses the property for its own purposes.

Stathakis, claiming a breach of "fiduciary obligation... by reason of the trust and confidence..." he placed in Evangelos, seeks to have AM Holding declared a trustee of Property No. 1 for his benefit and be directed to turn the property over to him.

Additionally, Stathakis asserts that Evangelos fraudently and without the consent of the shareholders of Allied transferred Property No. 2 to Defendant Forley without consideration. The property was owned by Allied, which, says Stathakis and was "rendered insolvent" by Evangelos.

Continuing, Stathakis states that in early to mid 2004, Evangelos encumbered Property No. 3 with a number of mortgages and later transferred the premises to his wife, AnnaMaria, without consideration. Stathakis charges that after the sale of the properties at 41-98 Forley Street and 88-34 161 Street, Evangelos used the proceeds from those sales to satisfy the mortgages on Property No. 2. Stathakis, alleging fraud, seeks to have AnnaMaria Gerasimou declared the sole owner of Property No. 3 and the imposition of a $700,000.00 lien, in his favor, on the premises.

Evangelos, in moving to vacate the Lis Pendens, argues that the Lis Pendens are defective. He further argues that the action is being brought because of animosity between the parties; that Stathakis cannot show that any of the funds used in connection with the purchase, transfer or satisfaction of mortgages came from the sale of the properties owned by either Dodeka or Allied and that Stathakis is being urged on by a third party, whose only motive is to make money.

Further, Evangelos argues that Stathakis has no claim to Allied's assets because he "withdrew" from the corporation by fleeing the U.S.A. to avoid prosecution by the Federal Government, and, in so doing, gave a Power of Attorney to his wife, who had knowledge of and [*3]consented to the sales.

Evangelos further contends that no constructive trust was created when the various transfers were made, adding that each Lis Pendens should be vacated because the action does not affect title to, possession or use and enjoyment of any of the properties.

Stathakis opposes the motion. He argues that a constructive trust was created because his funds from the proceeds of the sale were used in all of Evangelos' transactions involving the transfer of the Dodeka and Allied properties. Further, says Stathakis, an equitable lien was created as to Property No. 2. He concludes that there is a constructive trust and a fraudulent conveyance, all of which affect title to, possession of and use and enjoyment of real property.

A Notice of Pendency "may be filed in any" court action where the "judgment demanded" affects "title to, or the possession, use or enjoyment of, real property...." CPLR, Section 6501. The statute is strictly construed because of the effect it has on the alienability of property. 5303 Realty Corp. v O & Y Equity Corp., 64 NY2d 313.

The question here is whether, under the circumstances, the judgment demanded by Stathakis affects title/possession/use or enjoyment of the premises on which the lis pendens have been filed.

Stathakis claims that a constructive trust should be imposed because of a fiduciary relationship between him and Evangelos through the corporations that they controlled.

With respect to Stathakis' claim that a fiduciary relationship exists between them based on the corporation, courts have held that a cooperate board has a fiduciary duty to deal fairly and evenly with each other and with the shareholders. See Alpert v. 8 Williams Street Corp., 63 NY2d 557 rearg. denied 64 NY2d 1041; Goldberg v. Goldberg 139 AD2d 695; Blank v. Blank 256 AD2d 688. This is particularly true in a closed corporation, which, from all accounts, Dodeka and Allied were.

A constructive trust exists where there is a showing that: (a) there is a confidential or fiduciary relationship; (b) a promise, expressed or implied; (c) transfer in reliance on the promise and (d) unjust enrichment. See, Gaentner et al. V. Benkovich, 18 AD3d 424.

Here, there was a fiduciary relationship; a promise based on the fiduciary relationship that Evangelos would give Stathakis his share of the proceeds of the sales. There was a reliance on the promise in that Stathakis allowed Evangelos to appear at the closings, as the representative of the parties, sign the transfer documents and collect the proceeds. If believed, there was unjust [*4]enrichment in that Stathakis asserts that he did not receive his portion of the proceeds.

That Stathakis may have had legal problems with the Federal Government is not probative. That there was animosity between the parties and the negative efforts of a third-party are not relevant.

Stathakis cannot claim, on the one hand, that plaintiff "withdrew" from the corporation, yet, on the other hand, gave his wife Power of Attorney to represent his interest. The giving of the Power of Attorney does not suggest a withdrawal. Further, there is no showing that Stathakis turned over his interest to Evangelos. Nor has Evangelos sustained his claim that none of the proceeds of the sale of Allied and Dodeka properties did not go into the three properties in question. He has also not shown that even if his portion of the proceeds were used in the three transactions, none of Stathakis' was used. Nor has Evangelos claimed that Stathakis received his share of the proceeds.

Therefore, defendants' motion to vacate the three Lis Pendens is denied.

Notwithstanding the foregoing decision, the court would be inclined to consider, after a hearing on the source of the funding, the posting of a bond in the amount demanded by plaintiff, pending the resolution of the action. In such an instance, the court would be inclined to vacate the Lis Pendens, if satisfied with the validity and strength of the bond.

Dated: February 29, 2008

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J.S.C.