Opinion
10444-03.
Decided January 12, 2005.
Fred P. Bennett, Esq. Melville, New York, COUNSEL FOR Plaintiff.
Sunrise Feinstein, LLP Garden City, New York, COUNSEL FOR Defendant.
Plaintiffs bring this motion to vacate and discharge the notice of pendency filed against their real property on January 6, 2004.
BACKGROUND
This action was commenced by service of the summons and complaint on July 3, 2003. In it, Plaintiffs allege various causes of action including breach of contract, violation of Article 3A of the Lien Law, rescission of the contract, fraud, breach of warranty, negligence, unjust enrichment and the failure to comply with applicable town building code.
When this motion was submitted, Defendants' motion seeking the dismissal of various of these causes of action was then sub judice. Thus, Defendants answered the complaint to the extent of answering the first and seventh causes of action. In so doing, Defendants denied the essential allegations of the complaint and interposed various affirmative defenses and counterclaims on the theories of wrongful termination, breach of contract and constructive trust.
The dismissal motion was decided by Order granted on September 30, 2004. The second, third, fourth, fifth, sixth, seventh and eighth causes of action were dismissed. The first cause of action was dismissed as to Defendants Laura Foscolo and Theodore Foscolo III.
Prior to the commencement of this action, a mechanic's lien was filed by Defendant Hampton Design and Construction Group, Inc. ("Hampton Design") in the sum of $326,048.91. That mechanic's lien was filed in the office of the Suffolk County Clerk on May 29, 2003. However, shortly after the commencement of this action, on July 3, 2003, the mechanic's lien was released and discharged on August 20, 2003. The verified answer and counterclaims were served on January 4, 2004. The notice of pendency or lis pendens was dated and filed two days later.
DISCUSSION
In addressing the question as to whether a notice of pendency should be cancelled, the reviewing court must determine whether the pleading on which it is based falls within the scope of the governing statute CPLR 6501. 5303 Realty Corp. v. O Y Equity Corp., 64 NY2d 313, 320 (1984).
The scope of that inquiry was dramatically narrowed upon the amendment of CPLR 6501 in 1983. Prior to that time, the grounds and circumstances for placement of a notice of pendency on real property was much broader. Thus, claims by contractors for their labor and materials affixed to the real property constituted valid claims "affecting realty" so as to come under the ambit of the predecessor of CPLR 6501 justifying the filing of a lis pendens. See, e.g., Andrews v. Hancock, 128 Misc. 800 (Sup. Ct. Broome Co. 1927).
The counterclaims interposed by Hampton Design seek money damages on the wrongful termination and breach of contract theories and to impress a constructive trust. None of those theories of recovery address or "affect the title to, or the possession, use or enjoyment of, real property" as required in CPLR 6501. Hampton Design's theories of recovery demands for relief cannot suffice to justify the filing of a lis pendens. Distinctive Custom Homes Bldg. Corp. v. Esteves, AD3d, 785 NYS2d 476 (2nd Dept. 2004). See also, 5303 Realty Corp. v. O Y Equity Corp., supra.
Even were the counterclaims interposed by Hampton Design sufficient to satisfy CPLR 6501, the lis pendens must be vacated pursuant to CPLR 6512. Hampton Design never affirmatively brought an action against Plaintiffs seeking to pursue its claim to the title, possession use or enjoyment of the real property in question here. The failure to satisfy the affirmative commencement requirement under CPLR 6512 negates the notice of pendency. There must be strict compliance with the statutory provision which authorizes the filing of a notice of pendency. Israelson v. Bradley, 308 NY 511, 516 (1955). See also, Weiner v. MKVII-Westchester, LLC, 292 AD2d 597 (2nd Dept. 2002). No summons was served by Hampton Design although it was under an obligation to do so under CPLR 6512.
Even were this Court to find that the interposition of a counterclaim in a pending action satisfied CPLR 6512. ( Cf. Estate of Sakow, 137 Misc2d 548 [Sur. Ct. Bronx Co. 1987]), the other reasons set forth in this decision would bar the vitality of the notice of pendency and require its vacatur.
A third reason to vacate the notice of pendency exists. With the prior mechanic's lien having been filed and then released and discharged, Hampton Design is attempting to take a second bite of the same apple. While no case has equated a mechanic's lien with a notice of pendency, public policy is clear that once a lien against real property in the nature of a notice of pendency has been vacated or cancelled, such device may not be used again. See, e.g., Mastronardi v. Countrywide Construction Corp., 2 AD3d 416 (2nd Dept. 2003). Indeed, Hampton Design argues that its mechanic's lien is the equivalent of a notice of pendency. It is difficult to discern the difference between a mechanic's lien filed by a contractor and a notice of pendency generally since their effect, as a cloud on title, is identical. For the purposes of this case, and as a matter of public policy, it seems clear to this Court that the two should be ruled the same. Accordingly, Hampton Design is estopped from filing and maintaining a notice of pendency after a mechanic's lien has been discharged.
Accordingly, it is clear to this Court that both a mandatory cancellation under CPLR 6514 (a) is appropriate inasmuch as no service of a summons on Plaintiffs has been had in this matter. In addition, a discretionary cancellation is appropriate inasmuch as the claim to maintain the notice of pendency has not been maintained in good faith. Although no application for the relief was made in the moving papers, Plaintiffs seek sanctions pursuant to 22 NYCRR 130-1.1. While the Court is inclined to agree that the basis for the notice of pendency may be lacking, this Court declines to grant sanctions. CPLR 2214 (a) requires that a notice of motion provide for and give notice of the relief demanded. The failure to give such notice mandates denial of the application. See, Kantor v. Pavelchak, 134 AD2d 352 (2nd Dept. 1987). However, CPLR 6514 (c) does allow this Court, upon the cancellation of the notice of pendency, to assess costs and expenses occasioned by the filing and cancellation thereof.
At the trial of this matter, Plaintiffs shall have leave to prove, as an element of damages, the costs and expenses of not being able to convert their construction loan to a mortgage due to the improper pendency of the lis pendens including but not limited to reasonable counsel fees on this motion, additional interest and costs incurred in the delay in the conversion of the loan.
Accordingly, it is,
ORDERED, that Plaintiffs' motion to vacate and discharge the notice of pendency dated January 6, 2004 is granted; and it is further,
ORDERED, that the Count Clerk of Suffolk County is hereby directed, upon service of a copy of this Order, to vacate and discharge of record, the notice of pendency filed on January 6, 2004 with regard to the property known as 30 Laurel Hill Lane, Amagansett, New York 11930 and recorded in District 0300, Section 120.00, Lot 02.00, Block 002.010; and it is further,
ORDERED, that counsel for the parties shall appear for a conference of this matter on February 25, 2005 at 9:30 a.m.
This constitutes the decision and Order of the Court.