Opinion
032738/2018
09-11-2018
NEW PLANET ENERGY DEVELOPMENT, LLC, NPE Holdings, LLC, and New Planet Stony Point Land LLC, Plaintiffs, v. MBC CONTRACTORS, INC., MBC Holding, LLC, LLS Holding LLS, KBT Properties, Ltd., Patrick Magee, Sr., and Patrick Magee, Jr., Defendants. New Planet Energy Development, LLC, NPE Holdings, LLC, and New Planet Stony Point Land LLC, Plaintiffs, v. MBC Contractors, Inc., MBC Holding, LLC, LLS Holding LLS, KBT Properties, Ltd., Patrick Magee, Sr., and Patrick Magee, Jr., Defendants.
Cole Schotz, P.C., New York City (Brian L. Gardner and Nolan E. Shanahan of counsel), for defendants. Zarin & Steinmetz, White Plains (David S. Steinmetz and Zachary R. Mintz of counsel), for plaintiffs.
Cole Schotz, P.C., New York City (Brian L. Gardner and Nolan E. Shanahan of counsel), for defendants.
Zarin & Steinmetz, White Plains (David S. Steinmetz and Zachary R. Mintz of counsel), for plaintiffs.
Paul I. Marx, J.
It is ORDERED that Defendants' motions in both actions, which are consolidated for decision and order, are disposed as follows.
BACKGROUND
The instant matter, which does not involve the filing of an action in this Court, begins with a lawsuit filed by New Planet Energy Development, LLC, NPE Holdings, LLC and New Planet Stony Point Land LLC (collectively referred to herein as "Plaintiffs") in Sangamon County, Springfield, Illinois (the "Illinois Action") against MBC, MBC Holding, LLS, KBT, Parick Magee, Sr. and Partick Magee, Jr. (collectively referred to herein as "Defendants"). Plaintiffs are limited liability companies with their principal place of business in Springfield, Illinois. Defendants are individual residents of New York and business entities organized under the laws of New York State with their principal place of business in New York. The Illinois Action arose out of a business transaction between the parties to redevelop five parcels of land located in Stony Point, New York for the purpose of building a waste treatment facility at the site. The subject parcels are known by the street addresses: (i) 25 & 27 Holt Drive, (ii) 25-41 Holt Drive, (iii) 30 Holt Drive, (iv) 45 Holt Drive, and (v) 50 Holt Drive (collectively, the "Stony Point Property").
The parcels are identified on the Town of Stony Point Tax Map as: (i) Section 20.02, Block 11, Lot 27 (25 & 27 Holt Drive), (ii) Section 20.02, Block 11, Lot 26 (25-41 Holt Drive), (iii) Section 20.02, Block 11, Lot 28 (30 Holt Drive), (iv) Section 20.04, Block 11, Lot 3 (45 Holt Drive), and (v) Section 20.02, Block 11, Lot 25 (50 Holt Drive).
On May 14, 2018, Plaintiffs, seeking to put all persons in New York on notice of their interest in the Stony Point Property, e-filed Notices of Pendency against each parcel in this Court. Ostensibly attempting to comply with CPLR § 6511(a), Plaintiffs e-filed the complaint in the Illinois Action along with the Notices of Pendency and obtained Index number 032738/2018.
On June 26, 2018, Plaintiffs again e-filed Notices of Pendency against each parcel in this Court, along with the complaint in the Illinois Action and obtained a second Index number, 033631/2018.
Plaintiffs do not explain why they refiled the Notices of Pendency under a second Index Number.
DISCUSSION
Defendants separately move to dismiss both actions pursuant to CPLR § 3211(a)(4), based upon the earlier filed Illinois Action involving the same parties, causes of action and substantially the same relief as the Rockland County "actions".
CPLR § 3211 provides, in relevant part, that "[a] party may move for judgment dismissing one or more causes of action asserted against him on the ground that: there is another action pending between the same parties for the same cause of action in a court of any state or the United States". CPLR § 3211(a)(4) (emphasis added).
"Pursuant to CPLR 3211(a)(4), a court has broad discretion in determining whether an action should be dismissed based upon another pending action where there is a substantial identity of the parties, the two actions are sufficiently similar, and the relief sought is substantially the same. It is not necessary that the precise legal theories presented in the first action also be presented in the second action so long as the relief is the same or substantially the same". Dec v. BFM Realty, LLC , 153 A.D.3d 497, 497, 59 N.Y.S.3d 453 [2nd Dept. 2017] (quoting Swartz v. Swartz , 145 A.D.3d 818, 822, 44 N.Y.S.3d 452 [2nd Dept. 2016] (internal citations omitted) and citing Whitney v. Whitney , 57 N.Y.2d 731, 732, 454 N.Y.S.2d 977, 440 N.E.2d 1324 [1982] ).
Plaintiffs contend that CPLR § 3211(a)(4) does not apply here because they have not commenced an action in this Court. As stated in their Memorandum of Law in Opposition, "none of the filings submitted by Plaintiffs represent an attempt by Plaintiffs to file a second lawsuit stating causes of action and seeking relief in addition to the Illinois Action." Plaintiffs' Memorandum of Law in Opposition to Motion to Dismiss at 5. Plaintiffs assert that they have merely filed Notices of Pendency and, in compliance with CPLR § 6511(a), which states that "[u]nless it has already been filed in that county, the complaint shall be filed with the notice of pendency", they attached a copy of their complaint in the Illinois Action. In fact, Plaintiffs have not sought to file a second action in this Court based upon the same claims asserted in the Illinois Action. It is apparent that their only purpose in attaching the Illinois complaint was to comply with CPLR § 6511(a). That being the case, there is no basis for dismissing either "action" based upon CPLR § 3211(a)(4).
Accordingly, Defendants' motions to dismiss are denied.
Notices of Pendency
Defendants seek to vacate the Notices of Pendency filed in this Court, contending that CPLR § 6501 does not authorize the filing of a notice of pendency in connection with an action that is pending in a court of a state other than New York.
Plaintiffs claim that they have satisfied the requirements of CPLR § 6501. They contend that Defendants have cited no legal authority to support their request to vacate the Notices of Pendency. Plaintiffs assert that Defendants have not identified any language in support of their contention that CPLR § 6501 does not apply where the action upon which the notices of pendency are predicated is pending in another state.
In response to Plaintiffs' argument, Defendants cite New York Practice, which states that the "action can be pending in a New York court or in a federal court in New York. The lis pendens can be used in connection with either." Siegel, NY Prac. § 334 (6th ed.). In addition, Defendants maintain that "the plain language of the statute limits the availability of this powerful provisional remedy to actions pending in New York State Court only or Federal court." Reply Memorandum of Law at 2.
The pertinent issue here is whether Plaintiffs can avail themselves of the procedure provided by CPLR § 6501 for putting would-be buyers of the Stony Point Property on notice of their interest in the property, where, by their own admission, they do not have an action pending in either a New York state court or a United States court.
The answer lies in the statutory language. CPLR § 6501 provides as follows:
A notice of pendency may be filed in any action in a court of the state or of the United States in which the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property, except in a summary proceeding brought to recover the possession of real property. The pendency of
such an action is constructive notice, from the time of filing of the notice only, to a purchaser from, or incumbrancer against, any defendant named in a notice of pendency indexed in a block index against a block in which property affected is situated or any defendant against whose name a notice of pendency is indexed. A person whose conveyance or incumbrance is recorded after the filing of the notice is bound by all proceedings taken in the action after such filing to the same extent as a party. (emphasis added).
Defendants argue that "a court of the state", as used in Section 6501, refers only to New York courts. They point to various provisions of the CPLR to illustrate the point that the CPLR uses the term "the state" or "of the state" consistently throughout to refer only to New York. Defendants begin with the very first section of the CPLR, CPLR § 101, which defines the application of the rules and procedures set forth therein. Section 101 reads as follows:
This chapter shall be known as the civil practice law and rules, and may be cited as "CPLR". The civil practice law and rules shall govern the procedure in civil judicial proceedings in all courts of the
state and before all judges, except where the procedure is regulated by inconsistent statute. The civil practice law and rules shall succeed the civil practice act and rules of civil practice and shall be deemed substituted therefor throughout the statutes and rules of the state . Reference to a provision in the civil practice law and rules may, except when such provision is being enacted or amended, be made without indicating whether it is a rule or section.
CPLR § 101 (emphasis added). The same language in Section 101, "the state" and "courts of the state" is mirrored in the later provision in Section 6501 which designates where a notice of pendency may be filed.
Defendants move next to CPLR § 202, which governs the accrual of causes of action in places other than New York, to demonstrate the consistent use of the phrase "of the state" to refer to New York and the use of other phrases, such as "without the state", to refer to places other than New York. This is plainly obvious in the language used by the Legislature in Section 202, which reads as follows:
An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply.
CPLR § 202 (emphasis added). In distinguishing between New York and other places outside of New York, the Legislature used "the state" to refer to New York and the phrase "without the state" to refer to places other than New York. At the end of that section, where the Legislature provides that the laws of New York shall govern accrual of causes of action belonging to New York residents, it again used the phrase "the state" to designate New York as the source of the limitations period. McKinney's NY CPLR § 202 Practice Commentaries C202:2 ("The last phrase of CPLR 202 provides that an out-of-state claim that accrues in favor of a New York resident will be governed by the New York statute of limitations regardless of whether the other state's statute of limitations is shorter than that of New York.").
Defendants also reference other CPLR provisions, such as § 307 ("Personal service upon the state") and § 328(a) ("Assistance to tribunals and litigants outside the state") to further illustrate the point.
Notably, CPLR § 3211(a)(4), which Defendants did not reference though it was the basis of their motion to dismiss, provides another ready example of the Legislature's use of language that clearly designates when an action pending in a state other than New York comes within the scope of the CPLR: "[a] party may move for judgment dismissing one or more causes of action asserted against him on the ground that: there is another action pending between the same parties for the same cause of action in a court of any state or the United States". CPLR § 3211(a)(4) (emphasis added). As this section demonstrates, when a provision references another state or the courts of other states, it does not use the term or phrase "the state" or "of the state" because that language only refers to New York.
Thus, in construing the language "courts of the state" in CPLR § 6501, no other meaning can be ascribed to the term "the state" than the one Defendants advance here. The reference is obviously to New York courts and the plain language of CPLR § 6501 limits the availability of notices of pendency to actions pending in New York state court or Federal Court.
A search has revealed no New York court decisions establishing this self-evident proposition. A California court, however, did address the issue in The Formula Inc. v. Superior Court , 168 Cal.App.4th 1455, 86 Cal.Rptr.3d 341 [2008], regarding its own lis pendens statutes and whether they applied to an action pending in another state. The court held that litigation in courts of another state did not come within the ambit of California's lis pendens statutes. Id. at 1460, 86 Cal.Rptr.3d 341 ("Nothing in the text or history of the statutes indicates legislative intent to include litigation in the courts of another state within their reach. Moreover, there is no assurance that construing the statutes to include such litigation will preserve the balance of the statutory scheme between protection of third party claimants and abuse of lis pendens.")
As noted by the Appellate Division, "[a] litigant's ability to file a notice of pendency is an ‘extraordinary privilege because of the relative ease by which it can be obtained’ ( Matter of Sakow , 97 N.Y.2d 436, 441 [741 N.Y.S.2d 175, 767 N.E.2d 666] ) and because it permits a party ‘to effectively retard the alienability of real property without any prior judicial review’ ( 5303 Realty Corp. v. O & Y Equity Corp. , 64 N.Y.2d [313] at 320 [486 N.Y.S.2d 877, 476 N.E.2d 276] )." Delidimitropoulos v. Karantinidis , 142 A.D.3d 1038, 1040, 38 N.Y.S.3d 36 [2nd Dept. 2016].
A party seeking to obtain a notice of pendency need do nothing more than file the notice stating the names of the parties to the action, the object of the action and a description of the relevant property ( CPLR § 6511(b) ), accompanied by a copy of the complaint ( CPLR § 6511(a) ). The notice can be filed at any time before a judgment is issued and can even occur before or after service of process (though CPLR § 6512 imposes a requirement that process be served within 30 days of filing the notice). CPLR § 6511(a). Once a notice of pendency is filed, it is effective for three years and can be extended for additional three-year periods if made prior to the expiration of the existing notice and upon showing good cause. CPLR § 6513.
Unlike other provisional remedies such as attachment, preliminary injunction and seizure of a chattel, a notice of pendency does not require the party to bring a motion or obtain prior judicial approval. The party filing the notice need not show that it has a likelihood of success on its claims or, unless challenged, that the action upon which it is predicated does indeed affect title to, possession, use or enjoyment of the real property to which the notice is applied. Further, the party is not required to submit an affidavit when filing the notice or a verified complaint. Nor is the party required to post an undertaking as security for the defendant against an unwarranted incursion on his or her property interest.
Defendants also contend that the Notices of Pendency must be vacated because the Illinois Action is primarily for money damages based upon breach of contract, fraud and unjust enrichment. Defendants recognize that the Illinois Action contains a cause of action for specific performance of a purported lease, but they assert that it is only an alternative cause of action. The Court need not address this argument because the procedure is simply not available under the circumstances present here.
The Court of Appeals imposes strict compliance with the procedural requirements of CPLR Article 65 as a counterweight or countercheck to the ease with which a party may impede another party's right to transfer its property, including restricting the type of action available for its use. 5303 Realty Corp., supra at 320-21, 486 N.Y.S.2d 877, 476 N.E.2d 276 ; see also Khanal v. Sheldon , 55 A.D.3d 684, 867 N.Y.S.2d 460 [2nd Dept. 2008] (seeking money damages); Savasta v. Duffy , 257 A.D.2d 435, 683 N.Y.S.2d 511 [1st Dept. 1999] (involving personal property). Even so, judicial review to determine strict compliance and the propriety of the type of action upon which the notice has been filed comes after the filing has occurred and awaits a challenge by the affected party. The remedy available to a party aggrieved by an improper filing, which must be made upon motion to the court, pursuant to CPLR § 6514(c), is for an order directing the party filing the notice to pay the costs and expenses related to filing the notice as well as any costs of the action, upon the court's cancellation of the notice.
Given these circumstances and the lack of any language in the applicable CPLR provisions, this Court finds no basis to extend such an extraordinary privilege to actions which have been commenced in a court outside of New York.
Plaintiffs have improperly invoked a provisional remedy that is not available to them because they do not have any actions pending in any court in New York. Accordingly, the Notices of Pendency filed under Index Nos. 032738/2018 and 033631/2018 must be vacated.
SUMMARY
It is ORDERED that Defendants' motions under Index Nos. 032738/2018 and 033631/2018 are consolidated for decision and order. It is further
ORDERED that Defendants' motions to dismiss are denied because there are no "actions" pending under Index Nos. 032738/2018 and 033631/2018. It is further
ORDERED that Defendants' motion to vacate the Notices of Pendency improperly filed by Plaintiffs is granted. The Clerk of the Court is hereby directed to vacate the Notices of Pendency filed under Index Nos. 032738/2018 and 033631/2018 against the parcels identified on the Town of Stony Point Tax Map as: (i) Section 20.02, Block 11, Lot 27 (25 & 27 Holt Drive), (ii) Section 20.02, Block 11, Lot 26 (25-41 Holt Drive), (iii) Section 20.02, Block 11, Lot 28 (30 Holt Drive), (iv) Section 20.04, Block 11, Lot 3 (45 Holt Drive), and (v) Section 20.02, Block 11, Lot 25 (50 Holt Drive) by New Planet Energy Development, LLC, NPE Holdings, LLC and New Planet Stony Point Land LLC and is hereby directed to enter upon the margin of the record of same a notice of cancellation referring to this Decision and Order.