Opinion
20939/13
09-04-2018
Albert BARAVARIAN, Plaintiff, v. MULTIVIZ HEALTH MANAGEMENT CORP., Multiviz Health Services, Cin. Abiola Familusi a/k/a Abida Familusi, Rhonda Bair, Polina Khanina, Olu Ogunfowaora and John Does I-III, Defendants.
Creedon & Gill P.C., Northport, for plaintiff. Archibong, Archibong P.C., Jericho, for defendants.
Creedon & Gill P.C., Northport, for plaintiff.
Archibong, Archibong P.C., Jericho, for defendants.
Allan B. Weiss, J.
Motion by plaintiff Albert Baravarian, M.D., for an order permitting his attorney to disburse funds held in escrow and motion by the defendants for an order directing the plaintiff and his agents to turn over to the defendants certain funds held by the plaintiff’s attorney. It is ordered that the plaintiff ’s motion is granted to the extent that attorney Peter J. Creedon may transfer to the plaintiff the sum of $66,503.72 plus additional interest until the Marshal’s execution. The defendants’ motion is granted to the extent that attorney Creedon is directed to turn over to the defendants the sum, if any, in excess of $66,503.72 plus additional interest until the Marshal’s execution.
I. The Facts
Plaintiff Albert Baravarian MD began this action for breach of contract against the defendants, alleging that they had tried to force him to work as a physician twenty to forty hours more than required. Baravarian further alleged that the defendants failed to pay him for the last two pay periods that he did work, failed to pay the premiums on his medical malpractice insurance as required by his contract, and had failed to respond to inquiries from his new employer which caused a delay in the start of his new job.
The defendants did not answer the complaint or make an appearance, and the plaintiff brought a motion for a default judgment which the defendants did not oppose. By an order dated July 14, 2015, the Honorable Rudolph E, Greco granted the motion and set the matter down for an inquest. On September 17, 2015, the defendants submitted a motion for an order vacating their default, but Judge Greco denied the motion by decision and order dated February 22, 2016 (one paper) upon finding that the defendants had not offered a reasonable excuse for their repeated defaults.
This court held an inquest on March 14, 2016 and found that plaintiff Baravarian was entitled to recover the sum of $47,320 plus interest from August 31, 2012. On January 23, 2017, the Clerk of Queens County entered a judgment in the amount of $66,503.72. The defendants did not satisfy the judgment, and the plaintiff served restraining notices and information subpoenas on several banks including the Bank of America which froze a checking account maintained by defendant Abiola Familusi. At this point, defendant Familusi, who was represented by Archibong Archibong, Esq., expressed an interest in reaching a settlement, and on or about September 9, 2017, plaintiff Baravarian gave a general release and satisfaction of judgment to attorney Archibong to be held in escrow until the defendant paid $41,000 to the plaintiff's attorney, Peter J, Creedon, Esq.
After defendant Familusi failed to make the payment required of him, attorney Creedon reissued the restraining notice on the Bank of America, and on or about April 18, 2018 he resorted to the Marshal of the City of New York for the enforcement of the full amount of the judgment. The attorneys for the parties conferred by telephone, and Creedon informed Archibong that he was seeking to enforce the full value of the judgment (then allegedly $77,670.63) because defendant Familusi had abandoned the agreement settling this case for $41,000.
On April 23, 2018, the Marshal took possession of $77,670.73 and, after deducting his fees, he sent a check to attorney Creedon in the amount of $73,912.07,
On or about April 27, 2018, attorney Archibong sent to attorney Creedon a check in the amount of $41,000 from his escrow account and a letter stating that he had filed a satisfaction of judgment in that amount. Creedon responded that defendant Familusi had abandoned the agreement settling the case for $41,000, that he would distribute the undisputed $41,000 to plaintiff Bavarian from the money turned over to him by the Marshal, and that he would seek instructions from the court concerning the balance of the sum sent to him by the Marshal. Creedon returned the $41,000 check to Archibong.
These motions ensued.
II. Discussion
Although the court agrees with the plaintiff's attorney that CPLR 5003-a does not apply to this case, the court will look at the statute for the purpose of adequately discussing the issues posed by this case.
CPLR 5003-a, "Prompt payment following settlement," provides in relevant part: "(a) When an action to recover damages has been settled, any settling defendant, except those defendants to whom subdivisions (b) and (c) of this section apply, shall pay all sums due to any settling plaintiff within twenty-one days of tender, by the settling plaintiff to the settling defendant, of a duly executed release and a stipulation discontinuing action executed on behalf of the settling plaintiff." (See , Klee v. Americas Best Bottling Co. , 76 A.D.3d 544, 907 N.Y.S.2d 260 ; Cunha v. Shapiro , 42 A.D.3d 95, 837 N.Y.S.2d 160,)
CPLR 5003-a further provides in relevant part:
"(e) In the event that a settling defendant fails to promptly pay all sums as required by subdivisions (a), (b), and (c) of this section, any unpaid plaintiff may enter judgment, without further notice, against such settling defendant who has not paid. The judgment shall be for the amount set forth in the release, together with costs and lawful disbursements, and interest on the amount set forth in the release from the date that the release and stipulation discontinuing action were tendered."
(See, Klee v. Americas Best Bottling Co. , supra . )
In the case at bar, "the amount set forth in the release" is $41,000. If CPLR 5003-a applied to this case, the plaintiff would be entitled to add to the sum of $41,000 "costs and lawful disbursements." (See , Batista v. Elite Ambulette Serv., Inc. , 281 A.D.2d 196, 721 N.Y.S.2d 355.) "[T]he phrase ‘costs and lawful disbursements’ means costs and disbursements in the action being settled incurred before and after the settlement," ( O'Meara v. A & P, Inc. , 169 Misc. 2d 697, 700, 647 N.Y.S.2d 424.) The phrase "[c]osts and lawful disbursements" as used in CPLR 5003—a(e) does not include attorney's fees, (See, Liss v. Brigham Park Coop. Apartments Sec. No. 3, Inc. , 264 A.D.2d 717, 694 N.Y.S.2d 742,) The plaintiff would also be entitled to add to the $41,000 "interest on the amount set forth in the release.’ (See , Cunha v. Shapiro , supra . )
On January 23, 2017 the Clerk of Queens County entered a judgment for plaintiff Baravarian in the amount of $66,503.72., and the plaintiff subsequently sought to enforce the judgment, which according to Creedon, then had a value of $77,670.63. This figure exceeds the "amount set forth in the release" with the statutory additions.
But the court finds that CPLR 5003-a does not apply to this case. The statute applies to a situation where the parties reach a settlement before the entry of judgment. The statute requires a settling defendant to pay all sums due to any settling plaintiff "within twenty-one days of tender, by the settling plaintiff to the settling defendant, of a duly executed release and a stipulation discontinuing action executed on behalf of the settling plaintiff." In the case at bar, the parties did not sign a stipulation discontinuing the action, and it reached the point where the plaintiff had already entered judgment before a settlement was reached. CPLR 5003-a(e) allows a plaintiff to enter judgment after the defendant defaults on the payment due under the release, but in the case at bar the plaintiff had already entered judgment against the defendants.
Since CPLR 5003-a does not apply to this case and the parties have not invoked any other statute, the court will resort to common law principles to reach its decision.
There was a compromise or accord on the amount acceptable in satisfaction of the judgment. "A judgment creditor and debtor can agree to compromise and settle a judgment for less than the full amount of an award* * *.* * *A judgment debtor cannot require its creditor to accept a lesser or alternative performance than that to which it is entitled; if the debtor fails to perform as required, the creditor can enforce judgment as entered." ( 47 Am. Jur. 2d, "Judgments," § 784.)
"An agreement to accept a definite sum in full satisfaction of a judgment is an executory accord * * * ( 73 NYJur 2d," Judgments," § 319 ), and an executory accord can be "an agreement embodying a promise express or implied to accept at some future time a stipulated performance in satisfaction or discharge in whole or in part of any present claim, cause of action, contract, obligation * * *." (. GOL § 15-501[a].) Where one party has breached an accord, the other party may sue on the accord or on the underlying claim. (See , Bryer v. CVFF Dev. Corp. , 97 A.D.3d 774, 949 N.Y.S.2d 110.)
"An accord is a contract under which an obligee promises to accept a stated performance in satisfaction of the obligor's existing duty. Performance of the accord discharges the original duty." ( Restatement [Second] of Contracts § 281 [1] [1979]; Black's Law Dictionary [10th ed. 2014].) "When a claim is released for a promised consideration that is not given, the claimant may treat the release as rescinded and recover on the claim." ( 19A NY Jur. 2d, "Compromise, Accord, and Release," § 63.)
In view of the foregoing, the court finds that the dispositive issue becomes whether the defendants materially breached the executory accord, a contract between the parties, entitling the plaintiff to rescind it and to enforce the original judgment debt. Ordinary principles of contract law apply. "[A] contract which, other than one for the payment of money, is silent as to the time of performance, is, by implication of law, to be performed within a reasonable time, but when no time of payment is specified in a simple contract for the payment of money, it is payable immediately." ( Pine v. Okoniewski , 256 App. Div. 519, 521, 11 N.Y.S.2d 13 ; see , Castlestone Mgmt. LLC v. Diamond , 140 A.D.3d 551, 32 N.Y.S.3d 502 ; Lake Steel Erection, Inc. v. Egan, 61 A.D.2d 1125, 403 N.Y.S.2d 387.) In the case at bar, the defendants materially breached the executory accord by failing to pay the sum due within a reasonable time, if not immediately. On or about September 9, 2017, plaintiff Baravarian gave a general release and satisfaction of judgment to attorney Archibong, and his clients had not paid the sum owed under the accord by the time that the plaintiff began his effort to collect on the original judgment in or about April 2018. The plaintiff had a right to rescind the accord for a material breach and to enforce the underlying judgment. (See, 19A NY Jur. 2d, "Compromise, Accord, and Release," § 63.)
The plaintiff's attorney seeks an order from this court allowing him to distribute to his client the balance of the money retained by him from the amount turned over to him by the Marshal or alternatively an order allowing him to retain the balance for the purpose of defraying expenses incurred in enforcing the judgment, including attorney's fees. While the court finds that the plaintiff is entitled to the amount of the judgment as entered plus additional interest until the Marshal's execution, the plaintiff did not show that there is some basis for recovering collection costs post-judgment, nor did he adequately show what these costs are. Moreover, attorney's fees are deemed incidental to litigation and may not be recovered unless authorized by statute, court rule or written agreement of the parties. ( Flemming v. Barnwell Nursing Home & Health Facilities, Inc. , 15 N.Y.3d 375, 379, 912 N.Y.S.2d 504, 938 N.E.2d 937 ; Degregorio v. Richmond Italian Pavillion, Inc. , 90 A.D.3d 807, 935 N.Y.S.2d 70.) The plaintiff did not show that there is a basis for the recovery of attorney's fees in this case.
The court finds that attorney Creedon may transfer to the plaintiff $66,503.72 plus additional interest until the Marshal's execution. The court notes that interest on a money judgment accrues until the judgment is paid. (See, Matra Bldg. Corp. v. Kucker , 19 A.D.3d 496, 796 N.Y.S.2d 709.)