Opinion
15956/05.
Decided September 26, 2007.
David Perlman, James K Noonan Prose, Plaintiff's Atty.
Miller, Rosado Algios, LLP, Caurso, Caurso Branda, Defendant's Atty.
Defendant Enterprise Bay Ridge LLC (Enterprise) moves for an order 1) pursuant to CPLR 6401, appointing a receiver for the subject property at 459 Bay Ridge Avenue, 2) pursuant to CPLR 6201, attaching the rental income of the subject property, and 3) pursuant to CPLR 6301, granting a preliminary injunction enjoining plaintiff James K. Noonan (Noonan), his agents, corporations or other entities from directly or indirectly interfering with the collection of rent or interfering in any manner with the subject property or its possession and from transferring, renting, removing or in any way disturbing any of the tenants or occupants, and that all tenants, occupants, employees and licensees of the premises and all other persons liable for rents be enjoined from paying any rent or license fee or other charges to Noonan, his agents, corporations or other entities and ordering them to pay rent only as directed by the court. By separate application, Enterprise moves for an order 1) pursuant to CPLR 3212, granting summary judgment dismissing the complaint, 2) pursuant to CPLR 3215, granting Enterprise a default judgment against plaintiffs Sycamore Realty Corp. (Sycamore), 461 Bay Ridge Avenue Realty Corp. (461 BRARC) and Noonan, defendants John Matone and Kathleen Matone (the Matones) and additional counterclaim defendants Siegrich Realty Corp. (Siegrich), Maria Noonan and Sergio Morales (Morales), on its first, second and third counterclaims and cross claims and on its fourth counterclaim with respect to liability with a hearing to be held on damages, and 3) cancelling the notice of pendency filed by plaintiffs against the subject property. Siegrich and Morales cross-move for an order dismissing the counterclaims of Enterprise. Plaintiffs move for this court to recuse itself from handling this matter and all matters related to this case currently pending.
This action was commenced to quiet title to the subject property at 459 Bay Ridge Avenue in Brooklyn. The property was at one time owned by 461 BRARC, a corporation which over the course of this litigation was argued to be under the control of either Noonan or the Matones. By deed dated August 9, 1999 and recorded August 10, 1999, the property was purportedly transferred from 461 BRARC to Sycamore. This deed was signed on behalf of 461 BRARC by Noonan as "president" of the corporation. On or about June 10, 2003, the Matones, who claimed to be the recipients of the property by a 1995 referee's deed and the sole shareholders and officers of 461 BRARC, commenced an action to set aside the deed, arguing that Noonan had no interest in 461 BRARC and had no authority to execute a deed on behalf of the corporation. Ultimately, by decision and order dated January 9, 2007, this court granted the Matones' motion for a default judgment. In the decision, this court noted:
"Although the defendant's (Mr. Noonan's) affidavit of merit provides support by one with personal knowledge of the facts herein concerned, and would ordinarily be enough to raise issues of fact to rebut the plaintiffs' position vis-a-vis Sycamore's lack of a meritorious defense, the problem here is that the defendant (Mr. Noonan) now contradicts his earlier sworn representations, as contained in his answer to the plaintiffs' complaint; to wit, that he has never been a shareholder or officer of [461 BRARC], and wherein he never denied the allegation that the Matones were the sole shareholders of said corporation. This change in position is critical and appears to this court to be nothing short of a feigned attempt to create false issues of fact with regard to matters of corporate ownership, shareholder and officer stati, and therefore fails to adequately give rise to the existence of any credible material questions of fact sufficient to rebut the plaintiffs' prima facie showing with regards thereto."
Previously, on or about August 2, 2004, Sycamore, Noonan and 461 BRARC as plaintiffs filed an action against the Matones to quiet title to the property, claiming that Noonan was the sole shareholder of 461 BRARC since its inception and that the Matones were never shareholders in the corporation. The Matones moved to dismiss this action pursuant to CPLR 3211 (a)(1), (3), (4) and (5). The Matones' motion was granted on said grounds by order of this court dated December 10, 2004, and the action was dismissed. In the mean time, Noonan signed a deed dated August 27, 2004 purporting to transfer the subject property from 461 BRARC to Siegrich.
On May 18, 2005, John Matone, as "president," executed a deed on behalf of 461 BRARC to Enterprise in conjunction with the sale of the property for $2,260,000.00. Several days later, on May 24, 2005, the deed from 461 BRARC to Siegrich that had been executed by Noonan was recorded. The deed to Enterprise was subsequently recorded on June 7, 2005.
On May 24, 2005, the instant action was commenced by Sycamore, Noonan and 461 BRARC against the Matones and Enterprise seeking, inter alia, to void the deed to Enterprise and restore title to 461 BRARC and/or Sycamore. In its answer, Enterprise interposed counterclaims/cross claims against Siegrich, Maria Noonan and Morales (alleged to be an officer of Siegrich) to quiet title to the property in favor of Enterprise, and for damages and injunctive relief. A reply to Enterprise's counterclaims/cross claims was served on behalf of Siegrich and Morales, but was rejected by Enterprise as not properly verified.Enterprise's motion for a default judgment as against Siegrich and Morales is denied. Enterprise waived its objection by failing with due diligence to treat the reply as a nullity ( see CPLR 3022; Able Breaking Corp. v Consolidated Edison Co. of NY, 88 AD2d 649; Matter of Houghwot v Town of Kiantone, 69 AD2d 1011). As it appears that Siegrich and Morales were the only parties to submit a reply to the counterclaims/cross claims of Enterprise, however, the motion for a default judgment is granted with respect to the other non-replying parties.
The cross motion of Siegrich and Morales to dismiss Enterprise's counterclaims/cross claims on the ground that Enterprise did not pay an additional filing fee when Siegrich and Morales were joined by supplemental summons is denied. Siegrich and Morales have not shown that failure to pay an additional filing fee under these circumstances is fatal to the maintenance of the counterclaims/cross claims.
That part of Enterprise's motion for summary judgment dismissing the complaint is granted. The identical claims asserted by plaintiffs in their complaint have been resolved by the January 9, 2007 order of this court. Under New York's transactional analysis approach to res judicata, "once a claim is brought to a final conclusion, all other claims . . . are barred, even if based upon different theories or if seeking a different remedy" ( O'Brien v City of Syracuse, 54 NY2d 353, 357; see New Horizons Invs. v Marine Midland Bank, 248 AD2d 449). A judgment by default which has not been vacated is conclusive for res judicata purposes ( see Rosendale v Citibank, 262 AD2d 628; Silverman v Leucadia, Inc., 156 AD2d 442; Rizzo v Ippolito, 137 AD2d 511). Further, "[t]he equitable doctrine of collateral estoppel is grounded in the facts and realities of a particular litigation, rather than rigid rules. Collateral estoppel precludes a party from relitigating in a subsequent action or proceeding an issue raised in a prior action or proceeding and decided against that party or those in privity" ( Buechel v Bain, 97 NY2d 295, 303). The issue must have been actually litigated in the prior action; that is, it must have been "properly raised by the pleadings or otherwise placed in issue and actually determined in the prior proceeding" ( Matter of Halyalkar v Bd. of Regents, 72 NY2d 261, 268).
While this court's decision of January 9, 2007 granted the Matones' a judgment on default, the issue with respect to whether Sycamore had a meritorious defense, or more specifically whether Noonan had the authority to transfer property on behalf of 461 BRARC, was considered on the merits and subsequently resolved in the order. Accordingly, the January 9, 2007 order has preclusive effect with respect to this issue. As it has been determined that Noonan was without authority to execute deeds on behalf of 461 BRARC, Siegrich is also estopped from claiming ownership of the property, despite the fact that it was not a party to the prior action, as the alleged title asserted by Siegrich was obtained from a deed executed solely by Noonan. "Generally, a nonparty to a prior litigation may be collaterally estopped by a determination in that litigation by having a relationship with a party to the prior litigation such that his own rights or obligations in the subsequent proceeding are conditioned in one way or another on, or derivative of the rights of the party to the prior litigation" ( D'Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 664).
However, while the issues surrounding the control and ownership of 461 BRARC had been resolved in the January 9, 2007 order, since there is no summary judgment motion on this application by any party, and Siegrich and Morales had not charted a summary judgment course in their reply, this court may not sua sponte grant summary judgment in favor of Enterprise on this motion ( see Warren v Mikle , 40 AD3d 974). As the quiet title claims against these parties are extant, that part of Enterprise's motion to cancel the notice of pendency is denied.
With regard to Enterprise's Motion to Appoint a Receiver, for Attachment and for a Preliminary Injunction, Enterprise maintains that its efforts to assert control over the subject property, including attempts to collect rent and evict tenants for nonpayment, have been stymied by the actions of Noonan. Since Noonan has claimed to have no present interest in Siegrich, the only other alleged current title holder aside from Enterprise, there should be no obligation on his part to actively participate in the maintenance of or the collection of rent from the property. Accordingly, that part of Enterprise's motion for attachment and a preliminary injunction is granted to the extent that all rental income from the building shall, pending further direction from the court, continue to be paid into the escrow account established by Enterprise, and Noonan or any other person or entity controlled by him or acting on his behalf is enjoined from interfering with the collection of rent or the maintenance of the property by Enterprise ( Ruiz v Meloney , 26 AD3d 485 , 486 ["(t)he purpose of a preliminary injunction is to maintain the status quo and prevent the dissipation of property that could render a judgment ineffectual"]).
The appointment of a receiver is a drastic and intrusive remedy which may only be invoked in cases where the moving party has made a clear evidentiary showing of the necessity of conserving the property and protecting the interests of the movant ( Secured Capital Corp. of NY v Dansker, 263 AD2d 503, 504). This court finds that the papers submitted to this court by Enterprise, which consist mainly of attorneys' affirmations and documents relating to certain incidents involving Noonan which occurred in or before 2006, prior to the issuance of the default judgment against Noonan and Sycamore, are not adequate to establish entitlement to a receiver. However, this court reserves final decision with respect to the appointment of a receiver pending a hearing on Enterprise's application, whereat more specific evidence with respect to the current situation surrounding the operation of the property shall be presented by the interested parties.
Plaintiffs are also seeking this Court's recusal. Absent a legal disqualification under Judiciary Law § 14, a trial judge is the sole arbiter on the issue of recusal ( see Ficalora v Town Bd. Government of East Hampton,
276 AD2d 666; Berman v Herbert Color Lithographers Corp., 222 AD2d 640). Judiciary Law § 14 clearly states that "[a] judge shall not sit as such in, or take any part in the decision of, an action, claim, matter, motion or proceeding to which he is a party, or in which he has been attorney or counsel, or in which he is interested, or if he is related by consanguinity or affinity to any party to the controversy within the sixth degree." None of the above statutory factors are relevant here. Further, plaintiffs have failed to show any sufficient reason for this court to voluntarily recuse itself from this matter. Plaintiffs' dissatisfaction with this court's decisions, standing alone, is insufficient to provide a basis for recusal ( see Ficalora, 276 AD2d at 666; Petkovsek v Snyder, 251 AD2d 1086). As a result, plaintiffs' motion requesting that this court recuse itself from this matter and all related matters is denied.
This matter shall be set down for a hearing with regard to the appointment of a receiver.
Settle order.