Opinion
No. 25882/10.
2012-11-27
MEW EQUITY LLC, Martin Wydra, and Edward Wydra, Plaintiffs, v. SUTTON LAND SERVICES, L.L.C. d/b/a Sutton Land Title, Sutton Alliance, LLC d/b/a Sutton Land Title, Mendel Brach, Moshe Roth a/k/a Mozes Roth, 222 Skillman LLC, 652 Park, LLC, 519 Marcy LLC a/k/a 519 Marcy Avenue, LLC, B & R Partners LLC, Shlomo USA LLC, Raizy Moskovits, Martin Silverstein, Marcy Towers LLC, JP Morgan Chase Bank National Association, as successor in interest to Washington Mutual Bank, Defendants. Mendel Brach and Moshe Roth, Counterclaim Plaintiffs, v. Dahill LLC and Hewes LLC, Counterclaim Defendants.
Kenneth J. Pagliughi, Esq. of Scott A. Rosenberg, P.C., and Perry Belagur, Esq., for Plaintiffs, Mew Equity LLC, Martin Wydra, and Edward Wydra, and counterclaim defendants Dahill LLC and Hewes LLC. J. Michael Gottesman, Esq., for Defendants/counterclaim plaintiffs, Moshe Roth and Mendel Brach.
Kenneth J. Pagliughi, Esq. of Scott A. Rosenberg, P.C., and Perry Belagur, Esq., for Plaintiffs, Mew Equity LLC, Martin Wydra, and Edward Wydra, and counterclaim defendants Dahill LLC and Hewes LLC. J. Michael Gottesman, Esq., for Defendants/counterclaim plaintiffs, Moshe Roth and Mendel Brach.
JACK M. BATTAGLIA, J.
Recitation in accordance with CPLR 2219(a) of the papers submitted on the motion, by order to show cause, of plaintiffs Mew Equity LLC, Martin Wydra, and Edward Wydra and counterclaim defendants Dahill LLC and Hewes LLC for an order amending this Court's prior order dated February 14, 2012 to allow them “to proceed with their motion for the relief set forth therein”; for an order, pursuant to CPLR 3211(a)(5) and (7) and 3016 dismissing the Counterclaim Complaint in its entirety; for an order, pursuant to CPLR §§ 6501 and 6514, canceling or vacating the Notices of Pendency filed by Counterclaim Plaintiffs on December 21, 2010 against real property located at 886–894 Dahill Road (Block 5457, Lot 5–6) and 426–432 South 5th Street and 332 Hewes Street (Block 2465, Lots 1–5, 105); and for an order, pursuant to CPLR 6515(c) and 22 NYCRR 130.1–1, awarding costs and sanctions against Counterclaim Plaintiffs:
—Order to Show Cause
Affirmation of Kenneth J. Pagliughi in Support of Motion to Dismiss Counterclaims and Cancel and Vacate Notices of Pendency
Exhibit 1 (Affirmation)
Exhibits A–H
—Defendant and Counterclaim Plaintiff Moshe Roth's Affirmation in Opposition to Order to Show Cause
—Exhibits A–D
—Exhibits E–Q
In their Verified Complaint, plaintiffs Mew Equity LLC, Martin Wydra, and Edward Wydra allege eight causes of action against 13 named defendants, including Mendel Brach, Moshe Roth a/k/a Mozes Roth, Sutton Land Services, L.L.C. d/b/a Sutton Land Title, and Sutton Alliance, LLC d/b/a Sutton Land Title. As alleged, “[t]his action arises from a sophisticated fraud upon Plaintiff [ sic ] orchestrated by Brach, Roth and their title company of choice, Sutton.” (Verified Complaint ¶ 18.)
Plaintiffs Edward Wydra and Martin Wydra, and defendants Mendel Brach and Moshe Roth a/k/a Mozes Roth, together with some number of juridical entities controlled by at least one of them, were parties to an arbitration before The Beth Din Kollel HaRabbonim Rabbinical Court (“the Rabbinical Court”), commenced prior to this action. The arbitration yielded a Decision of the Rabbinical Court “dated as of September 22, 2010” (the “First Award”) that was the subject of a special proceeding pursuant to CPLR Article 75 commenced by Plaintiffs and 10 juridical entities, against defendants Brach, Roth and 21 juridical entities, including defendants 519 Marcy LLC a/k/a 519 Marcy Avenue, LLC, 222 Skillman LLC, and 652 Park, LLC.
With a Decision, Order and Judgment dated September 21, 2011, this Court vacated the First Award, and remitted the matter to the Rabbinical Court for rehearing on issues, including clarification as to which disputes and juridical entities were subject to the Rabbinical Court's determinations. ( See Matter of Wydra [Brach], 34 Misc.3d 1241[A], 2011 N.Y. Slip Op 51664[U] [Sup Ct, Kings County 2011].)
By Decision and Order dated February 14, 2012, this Court denied, pending final resolution of the arbitration proceeding before the Rabbinical Court, a motion of Plaintiffs seeking, among other things, dismissal of defendants/counterclaim plaintiffs Mendel Brach's and Moshe Roth's counterclaims as against them, and stayed any resolution of Brach's and Roth's counterclaims, as well as Martin and Edward Wydra's First, Second, Seventh, and Eighth Causes of Action, pending final resolution of the arbitration proceedings before the Rabbinical Court and further order of this Court. ( SeeCPLR 2201.)
In August 2012, the Rabbinical Court issued a Decision, Ruling and Award (the “Second Award”), which sets forth in 13 pages all of its findings. Unlike the First Award, the Rabbinical Court specified the disputes and juridical entities subject to its determinations. Among these findings, the Rabbinical Court determined that, among other entities, plaintiffs Edward and Martin Wydra, counterclaim defendants Dahill LLC and Hewes LLC, defendants/counterclaim plaintiffs Mendel Brach and Moshe Roth a/k/a Mozes Roth, and defendant entities 222 Skillman LLC, 652 Park LLC, and 519 Marcy LLC a/k/a 519 Marcy Avenue, LLC, were parties to the Master Agreement, and therefore subject to the arbitration agreement. Notably, the Rabbinical Court did not list plaintiff Mew Equity LLC, nor any of the other defendants, as parties to the arbitration.
Initially, because the Rabbinical Court has issued the Second Award, the stay that was imposed by this Court's Decision and Order dated February 14, 2012 expired. As such, Brach's and Roth's contention that the instant motion is stayed is without merit.
In their motion, plaintiffs Mew Equity LLC, Martin Wydra, and Edward Wydra, as well as counterclaim defendants Dahill LLC and Hewes LLC, seek dismissal of defendants/ counterclaim plaintiffs Mendel Brach's and Moshe Roth's Counterclaim Complaint and of the counterclaims asserted by Brach and Roth in their Verified Answer on grounds that, among other things, all of the counterclaims are barred by the doctrines of res judicata and collateral estoppel since the issues were addressed and resolved against Mendel Brach and Moshe Roth in the Second Award.
Plaintiffs have not commenced a proceeding to confirm the Second Award ( seeCPLR 7510), and Defendants/Counterclaim Plaintiffs have not commenced a proceeding to vacate the Second Award ( seeCPLR 7511). An application to confirm an award may be made by a party “within one year after its delivery to him” ( seeCPLR 7510), but an application to vacate or modify an award must be made by a party “within 90 days after its delivery to him” ( seeCPLR 7511 [a].)
“Res judicata serves to preclude the renewal of issues actually litigated and resolved in a prior proceeding as well as claims for different relief which arise out of the same factual grouping' or transaction', and which should have or could have been resolved in the prior proceeding”. (Braunstein v. Braunstein, 114 A.D.2d 46, 53 [2d Dept 1985]; see also Breslin Realty Development Corp. v. Shaw, 72 AD3d 258, 263 [2d Dept 2010].)
“The doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in the prior action or proceeding, and decided against that party or those in privity, whether or not the tribunals or causes of action are the same.” (Breslin Realty Development Corp. v. Shaw, 72 AD3d at 263.) For collateral estoppel to apply, “three criteria must be met: (1) the issue must actually have been litigated and determined by a valid and final judgment in a separate action, (2) that determination must have been essential to the judgment and (3) either the party to be precluded had a full and fair opportunity to litigate the issue in the prior proceeding or other circumstances do not justify affording him an opportunity to relitigate it”. ( See Cudar v. Cudar, 98 AD3d 27, 31 [2d Dept 2012] [quoting Braunstein v. Braunstein, 114 A.D.2d at 52–53];Ippolito v. TJC Development, LLC, 83 AD3d 57, 71 [2d Dept 2011].)
“The doctrines of res judicata and collateral estoppel apply to arbitration awards with the same force and effect as they apply to judgments of a court.” ( Id. at 72 [quoting Mahler v. Campagna, 60 AD3d 1009, 1011 [2d Dept 2009]; see also Matter of Falzone [New York Cent. Mut. Fire Ins. Co.], 15 NY3d 530, 534–535 [2010].) “Where there has been a final determination on the merits, an arbitration award, even one never confirmed, may serve as the basis for the defense of collateral estoppel in a subsequent action.” (Acevedo v. Holton, 239 A.D.2d 194, 195 [1st Dept 1997]; see also Pinnacle Environment Systems, Inc. v. Cannon Building of Troy Associates, 305 A.D.2d 897, 898 [3d Dept 2003]; McMenemy v. Goord, 273 A.D.2d 665, 667 fn. * [3d Dept 2000]; County of Rockland v. Aetna Casualty & Surety Company, 129 A.D.2d 606, 607 [2d Dept 1987] [“The fact that the prior determination was an unconfirmed arbitration award and not a judicial determination does not lessen its collateral estoppel effect”].)
“Where, however, an issue not passed upon by the arbitrators is the subject of a later action, obviously the award is not a bar to that action.” (Rembrandt Industries, Inc. v. Hodges International, Inc., 38 N.Y.2d 502, 504 [1976].) “The scope of the award and, therefore, its res judicata effect, is an issue properly determinable by the court and not the arbitrators.” ( Id .) “The burden of establishing the identity of the issue or issues is upon the proponent of collateral estoppel, whereas the burden of establishing the absence of a full and fair opportunity to litigate the issue or issues in the prior proceeding is upon the opponent.” (Dimacopoulos v. Consort Development Corp., 158 A.D.2d 658, 659 [2d Dept 1990]; see also QDR Consultants & Development Corp., 251 A.D.2d 641, 643 [2d Dept 1998].)
A determination of a beth din is “in the nature of a common-law award in arbitration ... and acts as a bar to relitigating the same issue that was decided thereby.” ( See Berman v. Shatnes Laboratory, 43 A.D.2d 736, 736 [2d Dept 1973]; see also Nachum v. Ezagui, 25 Misc.3d 1203[A], 2009 N.Y. Slip Op 51960[U] [Sup Ct, Kings County 2009].)
Here, in support of their motion, Plaintiffs and Counterclaim Defendants sufficiently demonstrate that the Second Award resolves in their favor all of the counterclaims. ( See e.g. Wallenstein v. Cohen, 45 AD3d 674, 675 [2d Dept 2007] [“all of the allegations in the complaint were reasonably and plainly comprehended to be within the scope of the dispute submitted to arbitration” (internal quotation marks and citations omitted) ].) As such, they establish prima facie that they are entitled to dismissal of the counterclaims pursuant to CPLR 3211(a)(5).
In opposition, Mendel Brach and Moshe Roth do not dispute that the determinations of the Second Award resolve as against them all of their counterclaims against Plaintiffs and Counterclaim Defendants. Rather, Brach and Roth contend, among other things, that they did not have a full and fair opportunity to litigate before the Rabbinical Court.
To support their claim that they were not afforded a full and fair opportunity to litigate, Moshe Roth submits an affirmation to the effect that the Rabbinical Court scheduled three days for evidentiary hearings that were to begin on Thursday morning, February 23, 2012 in Monsey, New York; that his house in Brooklyn was scheduled for foreclosure at 3 p.m. on that day; that he “wanted to attend the foreclosure”; that the Rabbinical Court rejected his request for an adjournment; that he hoped to leave the session by 2 p.m. in order to attend the foreclosure; that the Rabbinical Court delayed the hearing until 1 p.m., “which meant [he] could not attend for any meaningful period of time and also return in time for the foreclosure”; that he requested an adjournment to the following day, but Rabbi Kaufman rejected the request, but “suggested that [he] come up at 5 p.m., which was what [he] intended to do until [he] learned that the Rabbinic Court had terminated the hearing.”
Moshe Roth further affirms that no evidentiary hearing was held, and that he was “deprived” of the right to confront and cross-examine the Wydras and their employees, and subpoena third parties”; and that on February 28, 2012, the Rabbinical Court issued a notice to the effect that there would be no further live hearings. Roth and Brach submit a copy of a notice from the Rabbinical Court, which states:
“In light of what transpired at the 2/23/12 hearing, please be advised that there will be no further live hearings. However, the Rabbinical Court, in its desire to allow full presentation of claims, counterclaims and summations, grants the parties and/or their civil or Rabbinic attorneys ten (10) business days from today for written submission of arguments, documents, affidavits etc. to the Rabbinical Court and to each other. Each Party will then have ten (10) days in which to respond. The Rabbinical Court will carefully examine all presentations and issue a ruling.”
Moshe Roth affirms that neither he nor Brach submitted an initial written brief on the date set for simultaneous submissions, but that, instead, they submitted a written response to the Wydras' initial submission. Since Brach and Roth did not submit an initial brief, the Rabbinical Court did not accept Brach's and Roth's written response. In this regard, Roth contends that the notice from the Rabbinical Court does not expressly state that “if a party did not make an initial submission, it would not be able to make a subsequent responsive submission.”
Mendel Brach also proffers his own affirmation to the effect that on the morning of February 23, he was informed by Rabbi Kaufman, a member of the Rabbinical Court, that the session would be delayed until approximately 1 p.m.; that even so, he was “delayed as a result of the rescheduling and traffic was heavily congested”; that he arrived at 2:15 p.m.; that he “made repeated phone calls to the Rabbinic Court” to advise them of his delay; that when he arrived, he was told that he would not be permitted to record the proceedings, but that he could use a court reporter; that he had not hired a court reporter and so did not have one present with him; that his Rabbinic Advocate had advised him the day before that he would not be present at the hearing; that “[b]ased on my unwillingness to give the Rabbinic Court the agreement which they asked for [which was to go forward with the hearing without a recording], [the Rabbinic Court] closed the session and advised that they notify us as to subsequent proceedings”.
The Second Award notes that the Rabbinical Court “met and heard testimony and received documentary evidence from the Parties at no fewer than fifteen (15) separate occasions beginning on February 26, 2009”; that “[b]ased upon obstreperous and contumacious conduct in contravention of the Arbitration Agreement and the procedural rules and law governing the Arbitration at a February 2012 hearing by certain participants, the Rabbinical Court ruled on about February 23, 2012 that it would consider such further evidence and arguments as the Parties might wish to make only upon written submission, pursuant to a set of neutral instructions and guidelines”; that the guidelines included a requirement of simultaneous submission of papers by all parties; that Defendants objected to this procedure; that the Rabbinical Court “did not, and was not required to, defer” to Defendants' objection; that Defendants did not submit any papers by the date set for simultaneous submission; that “pursuant to its neutral guidelines, the Rabbinical Court did not consider any papers transmitted after the date set for simultaneous submissions”; and that the parties had “ample opportunity to present evidence, including by way of documentation and testimony; to cross-examine witnesses, to make the legal arguments.”
In determining whether a party has been given a full and fair opportunity, the Court considers “the nature of the forum and the importance of the claim in the prior litigation, the incentive and initiative to litigate and the actual extent of litigation, the competence and expertise of counsel, the availability of new evidence, the difference in the applicable law and the foreseeability of future litigation.” ( See Clemens v. Apple, 65 N.Y.2d 746, 748–49 [1985] [quoting Ryan v. New York Tel. Co., 62 N.Y.2d 494, 501 (1984) ].) “Where a [party] has freely elected to proceed to arbitration with the assistance of counsel despite the availability of an alternate judicial forum and has had the opportunity to employ procedures substantially similar to those utilized in a court of law, it may be found that the [party] has had a full and fair opportunity to litigate the issue determined in the arbitration proceeding.” ( See Uptodate Medical Service v. State Farm Auto. Mut. Ins. Co., 22 Misc.3d 128[A], 2009 N.Y. Slip Op 50046[U], *2 [App Term, 2d, 11th and 13th Jud Dists, 2009].)
Based upon the above criteria, there can be no serious dispute that the issues raised by the counterclaims were important to the Rabbinical Court's determination in the Second Award; that defendants Brach and Roth had incentive to litigate those counterclaims in the Rabbinical Court, especially since this Court vacated the First Award and remitted these matters back to the same Rabbinical Court for consideration; that during the course of the arbitration proceedings before the Rabbinical Court, Brach and Roth were given an opportunity to be represented by counsel and a rabbinic advocate; and that the purpose of the litigation before the Rabbinic Court was to finally resolve all of the disputes that it had before it, including those addressed in Brach's and Roth's counterclaims.
In opposition to the motion, Brach and Roth suggest that they were not afforded an opportunity “to be heard, to present evidence, and to cross-examine witnesses” ( seeCPLR 7506[c] ) because, among other things, the Rabbinical Court refused to adjourn the date of the hearing on February 23, 2012.
Caselaw concerning the collateral estoppel effect of unconfirmed arbitration awards does not expressly state that arbitration proceedings that do not comply with CPLR 7506 require a finding that a party was not afforded a full and fair opportunity to litigate so as to preclude application of collateral estoppel. Nonetheless, in enacting CPLR article 75, “the Legislature has established procedural requirements to safeguard the integrity of the arbitration process”, including the right to be heard, present evidence, cross-examine witnesses, and be represented by counsel. ( See Marracino v. Alexander, 73 AD3d 22, 26 [4th Dept 2010].) Even so, the failure of an arbitrator to follow procedures set forth in CPLR 7506 may be waived either by written consent or by continuing with the arbitration without objection. ( See id.;CPLR 7506[f]; see alsoCPLR 7511[b][iv].)
Although Brach and Roth have not applied to vacate the Second Award, their contention that the Rabbinical Court failed to follow the minimal procedures specified in Article 75 is made within the time during which an application to vacate could be made ( seeCPLR 7511[a].) Since any alleged ground for vacating or modifying an arbitration award may be interposed in a respondent's answer to a petition to confirm the award ( see David D. Siegal, New York Practice, § 601 at 1094 [5th Ed]; Lyden v. Bell, 232 A.D.2d 562, 563 [2d Dept 1996] ), there seems to be no reason why such ground may not be asserted to resist proposed collateral estoppel effect of the award where the proponent, for its own reasons, has not sought confirmation. Indeed, “[a]n arbitration award which is not capable of confirmation and, therefore, finalization ... cannot serve as a foundation for a defense of arbitration and award pursuant to CPLR 3211(a)(5).” (Sartiano v. Becker, 119 A.D.2d 656, 656–657 [2d Dept 1986]; see also Marracino v. Alexander, 73 AD3d at 27.)
“Adjournments generally fall within the sound exercise of an arbitrator's discretion pursuant to CPLR 7506(b) ..., the exercise of which will only be disturbed when abused.” (Matter of Bevona [Superior Maintenance Co.], 204 A.D.2d 136, 139 [1st Dept 1994]; see also Motor Vehicle Accident Indemnification Corp. v. NYC East–West Acupuncture, P.C., 77 AD3d 412, 415 [1st Dept 2010].) “However, where refusal to grant adjournment forecloses the presentation of evidence and results in the effective exclusion of an entire issue, such ruling constitutes misconduct' within the meaning of CPLR 7511(b)(1)(i).” (Matter of Bevona, 204 A.D.2d at 139.) “The burden falls to the party seeking to avoid an arbitration award to demonstrate by clear and convincing proof that the arbitrator has abused his discretion in such a manner so as to constitute misconduct sufficient to vacate or modify an arbitration award”. (Motor Vehicle Accident Indemnification Corp. v. NYC East–West Acupuncture, P.C., 77 AD3d at 415 [quoting Matter of Disston Co. (Aktiebolag), 176 A.D.2d 679, 679 (1st Dept 1991) ].) “Arbitral misconduct is established not by the refusal of an adjournment, but where the refusal forecloses the presentation of material and pertinent evidence to the movant's prejudice.” (Motor Vehicle Accident Indemnification Corp. v. NYC East–West Acupuncture, P.C., 77 AD3d at 415 [internal quotation marks, citations, and brackets omitted].)
Here, Brach and Roth fail to show with clear and convincing proof that the Rabbinical Court abused its discretion by not adjourning the hearing. Brach and Roth fail to present any evidence demonstrating how the date for the hearing was selected, for how long the hearing was scheduled prior to the request for the adjournment, and fail to explain why they did not request an adjournment at any time prior to the date of the hearing. Indeed, upon remitting this case back to the Rabbinical Court, this Court noted that scheduling the date for rehearing was an issue of concern since one of the arbitrators resided in Israel. ( See Matter of Wydra [Brach], 2011 N.Y. Slip Op 51664[U], at *19.)
Moshe Roth's expectation that he would be able to attend both the hearing before the Rabbinical Court in Monsey, New York and a foreclosure proceeding in Brooklyn on the same day was unreasonable. Since both events were scheduled in advance, and there is no contention that the statutorily-specified time and manner for notice were not met ( seeCPLR 7506[b] ), he has no reasonable excuse for not requesting an adjournment prior to the hearing date. Similarly, that the Rabbinical Court moved the hearing from 11 a.m. to 1 p.m. does not provide an excuse for Mendel Brach to have been late to the hearing, but rather would have provided an explanation for why he should have been present earlier. Also, Brach's refusal to participate in the hearing on February 23 was also unreasonable. He does not explain why he did not inquire about recording the proceedings at any time prior to the date of the hearing. Since there is no evidence that any of the other proceedings had been recorded, Brach had no basis to assume that a recording would be permitted. Notably, neither Brach nor Roth submit an affirmation of their counsel or of their rabbinic advocate addressing any of these issues.
Perhaps more importantly, Brach and Roth fail to set forth how the denial of the adjournment foreclosed the presentation of material and pertinent evidence to their prejudice ( seeCPLR 7511[b][1] ), particularly since the Rabbinical Court provided for written submissions. Their papers fail to address the Rabbinical Court's statement that it met and heard testimony and received documentary evidence from the Parties “at no fewer than fifteen (15) separate occasions beginning on February 26, 2009”, and do not set forth any evidence that during those other evidentiary proceedings they were denied an opportunity to present their evidence. ( See e.g. Altamore v. Friedman, 193 A.D.2d 240, 246 [2d Dept 1993].)
Indeed, after the First Award, this Court expressly determined that the matter should be remitted to the same arbitrators since “there [was] no indication that a transcript or other complete record is available that any new panel might review”. As such, it was expected that, upon remittance, the arbitrators would take into account all of the proceedings that had already taken place before them. Upon remittance, this Court did not require the Rabbinical Court to conduct a specific type of hearing, but rather to proceed as would be necessary to issue an award that is “final and definite” ( seeCPLR 7514[a]; Matter of Wydra [Brach], 2011 N.Y. Slip Op 51664[U], at *19 [“the matter is remitted to the (Rabbinical Court) for rehearing as to the issues raised in this Decision, Order and Judgment, and any other issues the (Rabbinical Court) may deem appropriately addressed within the scope of agreed-upon arbitration”].)
Finally, Brach and Roth fail to show that the Rabbinical Court abused its discretion in not considering their written response to the brief submitted by Plaintiffs. Based upon the notice that the Rabbinical Court issued to the parties on February 28, 2012, it was reasonable for the Rabbinical Court to refuse to consider Brach's and Roth's written response since they did not submit an initial brief on the date set for simultaneous submission. Had the Rabbinical Court considered their response, Plaintiffs would have been deprived of an opportunity to respond to the only papers submitted by Roth and Brach, and Roth and Brach could not fairly and reasonably have understood the February 28 notice as allowing that result.
The Court has not ignored the extensive additional contentions of Brach and Roth with respect to the proceedings before the Rabbinical Court in support of their position that they did not have a full and fair opportunity to address the disputes placed before the beth din, but their complaints can be traced for the most part to their own decisions on whether or how to proceed before the Rabbinical Court, apparently exacerbated by their own failure to advise themselves as to how the beth din would or might proceed on particular questions. As this Court noted in its Decision, Order and Judgment dated September 12, 2011, ten separate written agreements, executed over a period of seven years, provide for arbitration before this Rabbinical Court. ( See Matter of Wydra [Brach] 2011 N.Y. Slip Op 51664[U] at *19.)
Nor does the Court find in any way persuasive the contention that the Rabbinical Court violated any order of this Court in the Decision, Order and Judgment ( see Defendant and Counterclaim Plaintiff Moshe Roth's Affirmation in Opposition to Order to Show Cause ¶ 11.) The Court's remand to the Rabbinical Court for a “rehearing” could not be fairly and reasonably understood as a direction to the Rabbinical Court as to the manner in which it might proceed. As with the Rabbinical Court itself, if any of the parties had any serious questions about the manner of the proceedings, he could have asked. The Court explicitly retained jurisdiction “as to any issue related to the rehearing” ( see2011 N.Y. Slip Op 51664[U] at *19–*20.) After all, at the least, the parties' disputes involved a monetary award of approximately $16 million.
Mendel Brach and Moshe Roth fail to establish prima facie that they were not afforded a full and fair opportunity to litigate before the Rabbinical Court. Indeed, to the contrary, their affirmations demonstrate that they did not utilize the opportunity that they were afforded.
Accordingly, the branch of plaintiffs Mew Equity LLC's, Martin Wydra's, and Edward Wydra's, and counterclaim defendants Dahill LLC's and Hewes LLC's motion seeking an order, pursuant to CPLR 3211(a)(5), dismissing defendants/counterclaim plaintiffs Mendel Brach's and Moshe Roth's counterclaims asserted in their Answer with Counterclaims and Counterclaim Complaint is GRANTED.
In light of this Court's determination to dismiss the counterclaims, the branch of plaintiffs Mew Equity LLC's, Martin Wydra's, and Edward Wydra's, and counterclaim defendants Dahill LLC's and Hewes LLC's motion for an order, pursuant to CPLR §§ 6501 and 6514, canceling the Notices of Pendency filed by Counterclaim Plaintiffs on December 21, 2010 against real property located at 886–894 Dahill Road (Block 5457, Lot 5–6) and 426–432 South 5th Street and 332 Hewes Street (Block 2465, Lots 1–5, 105) is GRANTED. ( SeeCPLR 6514[a].)
Pursuant to CPLR 6501, a notice of pendency may appropriately be filed only where “the judgment demanded would affect title to, or the possession, use or enjoyment of, real property” ( seeCPLR 6501.) “Cancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where the filing of the notice fails to comply with CPLR 6501.” (Ewart v. Ewart, 78 AD3d 992, 992 [2d Dept 2010]; see also 5303 Realty Corp. v. O & Y Equity Corp., 64 N.Y.2d 313, 320–323 [1984];De Caro v. East of East, LLC, 95 AD3d 1163, 1164 [2d Dept 2012]; Downs v. Yuen, 297 A.D.2d 251 [1st Dept 2002].)
Defendants/counterclaim plaintiffs Brach and Roth concede, “It is correct that a notice of pendency cannot be filed where the claim involves breach of a contract to convey stock in a corporation or a membership interest in a limited liability company” ( see Defendant and Counterclaim Plaintiff Moshe Roth's Affirmation in Opposition to Order to Show Cause ¶ 77); but they contend that Plaintiffs promised them a “profit interest” in the real property owned by counterclaim defendants Dahill LLC and Hewes LLC ( see id. ¶¶ 78–81.) No authority is cited for the proposition that such a “profit interest” might be deemed to “affect title to, or the possession, use or enjoyment of, real property” for purposes of CPLR 6501.
In light of the Court's rulings with respect to CPLR 3211(a)(5) and CPLR 6501, the Counterclaim Complaint must be dismissed and the notice of pendency cancelled, and it is unnecessary for the Court to consider movants' contentions with respect to CPLR §§ 3016(b), 3019(a) and (d), and 6514(b).
In sum, the branch of plaintiffs Mew Equity LLC's, Martin Wydra's, and Edward Wydra's, and counterclaim defendants Dahill LLC's and Hewes LLC's motion to dismiss all of Mendel Brach's and Moshe Roth's counterclaims is GRANTED. The County Clerk of Kings County shall cancel and discharge the Notices of Pendency filed by Mendel Brach and Moshe Roth on December 21, 2010 against real property located at 886–894 Dahill Road (Block 5457, Lot 5–6) and 426–432 South 5th Street and 332 Hewes Street (Block 2465, Lots 1–5, 105), and said Clerk is hereby directed to enter upon the margin of the record of the same a Notice of Cancellation referring to this order; and Plaintiffs shall serve upon the Clerk a copy of this order with notice of entry. The remaining branches of the motion are denied, without prejudice to renewal at final judgment as to costs pursuant to CPLR 6514(a).