Opinion
Index No. 809868/2023E
07-20-2023
2047 Ryer Development LLC, Plaintiff, v. 2047 Ryer Avenue LLC, Defendants.
Plaintiff 2047 Ryer Development LLC Dov Medinets, Esq. Gutman Weiss, P.C. Defendant 2047 Ryer Avenue LLC Ranadeb Mukherjee Ran Mukherjee, P.C.
Plaintiff 2047 Ryer Development LLC
Dov Medinets, Esq.
Gutman Weiss, P.C.
Defendant 2047 Ryer Avenue LLC
Ranadeb Mukherjee
Ran Mukherjee, P.C.
VERONICA G. HUMMEL, J.
In accordance with CPLR 2219(a), the decision herein is made upon consideration of all papers filed by the parties in NYSCEF in connection with defendant 2047 RYER AVENUE LLC's (" Defendant ") motion (Seq. No. 1), brought by Order to Show Cause, seeking an order, pursuant to CPLR § 6501, vacating the Notice of Pendency filed by plaintiff 2047 RYER DEVELOPMENT LLC (" Plaintiff ") on June 26, 2023. Oral argument on the motion was held before the Court virtually via Microsoft Teams on July 18, 2023. For the reasons discussed below, the motion is DENIED.
This action arises from a contract of sale for real property located at 2047 Ryer Avenue, Bronx, New York (the" Property "). The parties entered into a Purchase and Sale Agreement (the" PSA ") on March 20, 2023, and Plaintiff made a $427,500 down payment toward the purchase as required under the PSA. There is no dispute that the full amount of the down payment is currently being held in escrow by Defendant's attorneys.
Soon after the PSA was executed, a dispute arose among the parties. Specifically, on June 20, 2023, Plaintiff's attorney wrote a letter to Defendant asserting that the adjoining property encroached onto the Property in such a manner as to render title to the Property uninsurable. Plaintiff's letter further asserted that the encroachment did not fall into a permissible exception under § 2.1 of the PSA.
Defendant responded to Plaintiff's letter the following day, June 21, 2023. In Defendant's responsive letter, Defendant's attorney asserted that Plaintiff was in default under the PSA by failing to close on the sale by the time-of-essence closing date of June 20, 2023. Defendant's attorney disputed Plaintiff's contention that the encroachment was not a qualifying exception under § 2.1 of the PSA and that Defendant's title insurance company had declined to issue a title insurance policy for the Property. As a consequence of Plaintiff's alleged default, Defendant demanded the Plaintiff's down payment be immediately released to Defendant, pursuant to § 10.1 of the PSA.
Plaintiff initiated this action on June 26, 2023, by filing a Summons and Complaint. In its Complaint, Plaintiff alleges that Defendant was unable to convey insurable fee-simple title to the Property; that, as a result, Plaintiff was required, under § 10.1 of the PSA, to refund the down payment; and that Defendant refuses to refund the down payment despite due demand. Based on these alleged facts, the Complaint asserts two causes of action: (1) foreclosure of Plaintiff's common-law vendee lien arising from its down payment toward the purchase of real property; and (2) breach of contract. Simultaneously with the filing of its Complaint, Plaintiff also filed a Notice of Pendency based on its alleged vendee lien.
Defendant filed the instant motion by "emergency" Order to Show Cause on July 5, 2023. In its supporting affidavit, Defendant asserts that, shortly after Plaintiff "canceled" the PSA, Defendant and a different buyer entered into a new contract for sale of the Property that sets July 24, 2023, as the closing date and provides that time is of the essence. Defendant now requests that Plaintiff's Notice of Pendency be immediately vacated so as not to interfere with this subsequent sale.
On July 17, 2023, before the instant motion was set to be heard by the Court, Plaintiff filed an Amended Complaint. In addition to the two causes of action asserted in the original Complaint, the Amended Complaint asserts several new causes of action including one for specific performance. Plaintiff also filed an Amended Notice of Pendency, which is based not only on the cause of action for foreclosure on the alleged vendee's lien but also on the new specific performance cause of action.
CPLR § 6501 provides, in relevant part, that a "notice of pendency may be filed in any action in a court of the state... in which the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property." In deciding a motion to vacate or cancel a notice of pendency, a "court essentially is limited to reviewing the pleading to ascertain whether the action falls within the scope of CPLR 6501." 5303 Realty Corp. v. O & Y Equity Corp., 64 N.Y.2d 313, 320 (1984) (citing Interboro Op. Corp. v. Com. Sec. & Mortg. Corp., 269 NY 56 (1935)). "A court is not to investigate the underlying transaction in determining whether a complaint comes within the scope of CPLR 6501. Instead, in accordance with historical practice, the court's analysis is to be limited to the pleading's face." Id. at 321.
Here, the filing of the Amended Complaint and Amended Notice of Pendency moots the instant motion. See Pinci v. Monaco, 61 Misc.3d 1225 (A), at *3 (NY Sup. Ct. NY Cty. 2018) ("[Defendant's] motion to cancel the [notice of pendency] was mooted by filing of the amended [notice of pendency]."). The Amended Complaint was filed prior to Defendant's submission of an Answer to the original Complaint. Thus, the Amended Complaint was filed as of right pursuant to CPLR 3025(a) and is now, by operation of law, the operative pleading in this action. See Nimkoff Rosenfeld & Schechter, LLP v. O'Flaherty, 71 A.D.3d 533 (1st Dep't 2010) ("It is well settled that an amended complaint supersedes the original complaint, thus rendering without legal effect the defective earlier pleading."). "When a complaint is amended, the plaintiff may be permitted to file a new notice of pendency to cover any additional realty or additional causes of action not previously pleaded in the original complaint which fall within the ambit of CPLR 6501." Pinci, 61 Misc.3d at *3. The Amended Notice of Pendency is based on the Amended Complaint's new cause of action for specific performance of the PSA, as well as the previously pleaded cause of action for foreclosure of Plaintiff's alleged vendee's lien. The instant motion, however, is directed only to the original Notice of Pendency, which is based solely on the original Complaint's cause of action for foreclosure. Defendant's motion makes no arguments concerning the viability of the Amended Notice of Pendency in the context of the new specific-performance claim. Of course, this omission is unavoidable, given the sequence of the parties' filings. Yet, it is precisely the sequence of the filings and their creation of a new set of circumstances that renders the motion moot.
In a letter filed to the docket shortly after Plaintiff filed its Amended Complaint and Amended Notice of Pendency, and again during oral argument on the motion, Defendant argued that specific performance was not a remedy available to Plaintiff under the PSA. But the merits of Plaintiff's causes of action are not now before the Court-nor would they be before the Court on any freestanding motion to vacate a notice of pendency. As the Court of Appeals has commanded, the Court is to review only the face of the pleading to determine whether it states a cause of action warranting the filing of a notice of pendency under CPLR § 6501. Regardless of whether Plaintiff's specific cause of action for foreclosure on an alleged vendee's lien is such a cause of action, it is indisputable that Plaintiff's cause of action for specific performance of the PSA qualifies. See Weiss v. Alard, L.L.C., 150 F.Supp.2d 577, 581 (S.D.NY 2001) ("'The well-known realty actions, such as mortgage, foreclosure, specific performance , partition, etc., easily fall within [CPLR § 6501].'" (quoting David D. Siegel, New York Practice § 334, at 509 (3d ed. 1999))); Malekan v. 701-709 Chester St., LLC, 139 A.D.3d 913, 914 (2d Dep't 2016) ("Since a judgment in the plaintiffs' favor on their cause of action for specific performance would affect the title to, or possession, use, or enjoyment of, real property, under the circumstances of this case, the plaintiffs are entitled to reinstatement of their notice of pendency."); Nina Penina, Inc. v. Njoku, 30 A.D.3d 193 (1st Dep't 2006). That Defendant may have grounds to seek dismissal of the specific-performance cause of action, and that Defendant may ultimately be successful on any such future attempt, is simply irrelevant to the determination of whether the Amended Notice of Pendency should be vacated. See Interboro Op. Corp., 269 NY at 59 ("[T]he notice of pendency may not be canceled for the reason that a court, looking into the future, may conclude that plaintiff will not on the merits finally prevail. So long as this action is pending, the notice may not be canceled."); Carmanco Holding Corp. v. Byre Assocs., 38 A.D.2d 809, 810 (1st Dep't 1972) ("Special Term granted a motion to vacate the liens, holding plaintiffs to have been in default under the contract. Not only did Special Term decide the ultimate question in the action, the merits not being then before the court, but, in this preliminary proceeding, vitiated the lien in derogation of CPLR 3002(f)"); Werner v. Jackson, 115 A.D. 176, 176 (1st Dep't 1906) ("It has been determined in this department that the right of the plaintiff to retain the notice of pendency of action in an action for a decree for specific performance of the contract for a conveyance of real property must be determined upon the allegations of the complaint, or facts clearly established, and that upon such a motion, as in the case at bar, we are not authorized to look into the facts as upon a trial nor to search the complaint as upon a demurrer.").
This action appears appropriate for court mediation under the OCA ADR program. Should the parties agree, a letter should be promptly uploaded to NYSCEF stating the same. The program provides for prompt outside mediation at no cost to the parties.
Accordingly, it is hereby:
ORDERED that defendant 2047 RYER AVENUE LLC's motion (Seq. No. 1), brought by Order to Show Cause, seeking an order, pursuant to CPLR § 6501, vacating the Notice of Pendency filed by plaintiff 2047 RYER DEVELOPMENT LLC on June 26, 2023, is DENIED; and it is further
ORDERED that the Clerk shall mark the motion (Seq. No. 1) decided in all Court records.
This constitutes the Decision and Order of the Court.