Opinion
Index No. TS-300510-22/RI
07-26-2022
Diane Keane, Plaintiff, v. Joseph Denora, Individually and as Executor of the Estate of Palma V. Denora and Santander Bank, N.A., Defendants.
Plaintiff's Counsel Law Offices of Gary R. DeFilippo, PC Defendant's Counsel Joseph Denora Levine Law Group, PLLC
Unpublished Opinion
Plaintiff's Counsel Law Offices of Gary R. DeFilippo, PC
Defendant's Counsel Joseph Denora Levine Law Group, PLLC
Santander Bank, N.A. - no appearance
Brendan T. Lantry, J.
Recitation, as required by CPLR 2219 (a), of the papers considered in the review of this application:
Papers Numbered
Plaintiff's Notice of Motion and Affirmation/Exhibits annexed 1-2
Defendant's Notice of Cross-Motion and Affirmation/Exhibits annexed 3-4
Upon the foregoing cited papers, the decision on Plaintiff's Motion for an Order seeking to permit counsel to withhold funds from the Defendant's proceeds from the Partition Sale of the Property involved in this Action and Defendant's Cross-Motion to Dismiss are decided as follows:
Plaintiff Diane Keane ("Plaintiff") commenced this action in Supreme Court, Richmond County, against Defendant Joseph Denora, Individually and as Executor of the Estate of Palma v. Denora ("Defendant") and Santander Bank, N.A. ("Santander") on July 7, 2020. This matter concerns the release of funds in connection with the sale of the Property located at 94 West Terrace, Staten Island, New York (the "Property").
After Plaintiff filed a Note of Issue on May 11, 2020, the Supreme Court certified the matter for trial. On August 11, 2021, Defendant filed a motion to adjourn the trial on the grounds that there was a pending probate proceeding in Tennessee that would allegedly resolve many of the issues of the upcoming trial related to the Estate of Palma Denora. Defendant subsequently retained his current counsel, the Levin Law Group. Plaintiff's counsel, Gary R. DeFilippo, Esq. represents that on October 4, 2021, he filed a Petition to Release Escrow Funds "in that after the sale of the subject property your affiant, being the only attorney at the closing of the sale of the subject property received the proceeds from the sale into my IOLTA account."
On December 9, 2021, Hon. Ralph J. Porzio of the Supreme Court granted Plaintiff's Petitions and ordered distribution from the Escrow Account of Law Offices of Gary R. DeFilippo, PC. ("December 2021 Order"). In the December 2021 Order, Justice Porzio held, in part, that
the proceeds of the sale of 94 West Terrace, Staten Island, New York, in the amount of $305,775.76, currently held in the Attorney Escrow Account of Plaintiff's attorney, Gary R. DeFilippo, Esq., which represents the total net proceeds of the sale, after the outstanding mortgage, closing costs... were deducted from the total sale proceeds of $430,000.00, will be distributed according to the interests each has in the property. All deductions, except for the outstanding mortgage in the amount of $94,026.04 which was the sole responsibility of Joseph D. Denora, were deducted from each parties share according to their ownership interests of 2/3 for Joseph D. Denora and 1/3 for Diane Keane.
Pursuant to the Order, Plaintiff's counsel was directed to distribute $172,308.50 to the Defendant's attorney, Levin Law Group, for distribution to Defendant. Plaintiff's counsel states that on December 20, 2021, he received notice from Defendant's prior counsel, Joseph Giaramita, Esq. that he was filing a Charging Lien against the Defendant for refusing to pay outstanding attorney's fees. Mr. DeFilippo further represents that on December 22, 2021, in accordance with the December 2021 Order, he had a cashier's check issued in the amount of $172,308.50 made to the Levin Law Group and Joseph D. Denora. According to Plaintiff's counsel, Defendant's attorney complained that the cashier's check was not properly issued since Defendant is a Tennessee resident and they could not get him to endorse the check. Despite Defendant's counsel's representation that it sent the cashier's check back to him to be reissued to the Levin Law Group, Plaintiff's counsel affirms that he did not receive the envelope allegedly containing the cashier's check and reported the check as lost.
On May 12, 2022, the matter was transferred pursuant to CPLR §325(d) to the Civil Court of the City of New York by the Hon. Wayne M. Ozzi, J.S.C.
Plaintiff currently moves this Court for an Order (1) permitting counsel to withhold $40,000.00 from Defendant's portion of the proceeds of the Partition Sale of the Property, as security against the loss of proceeds due to Plaintiff as proceeds of the sale and other damages, including but not limited to attorney's fees and expenses incurred in this litigation, or (2) for an order that Defendant, as an out-of-state resident residing in Tennessee be required to post a $40,000.00 bond or (3) in the alternative for a temporary restraining order and preliminary injunction against Defendant and its attorney Levin Law Group to prevent Defendant's attorneys from distributing Defendant's portion of the proceeds to the Defendant until the Court determines the extent of damages due to Plaintiff from Defendant.
In addition to opposing Plaintiff's motion, Defendant cross-moved to dismiss for failure to state a cause of action pursuant to CPLR §3211(a)(7) on May 31, 2022. According to Defendant, Plaintiff's counsel "disregarded a court order that explicitly provided that $172,308.50 were to be made payable to Levin Law Group." Defendant's counsel represents that it sent back the certified check back to Plaintiff's counsel so that it could be reissued pursuant to the December 2021 Order.
Defendant's counsel further alleges that in his affirmation in support, Mr. DeFilippo mischaracterized Justice Wayne Ozzi's Order dated May 12, 2022 by stating that the Court held that "Defendant Joseph Denora refused to sell the subject property to a bona fide buyer who offered to purchase the property, with all violations and other damages included, for the sum of $500,000.00, all cash." Defendant's counsel also maintains that Mr. DeFilippo mischaracterized the Court's ruling, stating that the Court "found defendant's refusal to sell at that price resulted in a $70,000.00 loss in proceeds when the Court (Porzio, J.S.C.) order the partition sale of the property at $430,000.00." According to Defendant's counsel, the Court did not make such a finding and this issue remains in controversy.
According to Defendant, Plaintiff's current application lies outside the Civil Court's jurisdiction since the motion involves $40,000.00 in funds, which is in excess of this Court's jurisdictional cap. Defendant argues that Plaintiff has also failed to demonstrate the requisite elements necessary to continue her remaining cause of action, which Defendant argues is based on a theory of unjust enrichment. Namely, Defendant maintains that Plaintiff has failed to demonstrate that (1) the other party was enriched (2) at that party's expense and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered. Based upon Plaintiff's failure to state a cause of action, Defendant requests that the Court deny Plaintiff's motion and grant Defendant's cross-motion to dismiss.
Discussion
CPLR §325(d) provides that a "court in which an action is pending may, in its discretion, remove such action without consent to such lower court where it appears that the amount of damages sustained may be less than demanded, and the lower court would have had jurisdiction but for the amount of damages demanded" (emphasis added). The act of transferring a case from Supreme Court to the Civil Court does not "automatically confer the subject matter jurisdiction of the Supreme Court upon the Civil Court (See Priel ex rel. Priel v Linarello, 7 Misc.3d 64, 66 [App Term 2005], affd sub nom. Priel v Linarello, 44 A.D.3d 835 [2d Dept 2007]). The Civil Court must still have proper subject matter jurisdiction over the case, except for the monetary damages demanded.
The Civil Court of the City of New York is a court of limited jurisdiction. Following a constitutional amendment in 2021, the monetary jurisdictional limit of the Civil Court increased from $25,000.00 to $50,000.00. However, as this Court noted in the matter of Azzat v Abudayyeh, the Civil Court Act §230 "has not been amended to increase the jurisdiction of this Court in accordance with the legislative intent underlying the amendment recently made to Article 6, Section 15 of the New York State Constitution." (Azzat v Abudayyeh, 2022 NY Slip Op 22204 [Civ Ct July 6, 2022]). Therefore, as of now, this Court's jurisdiction pursuant to Civil Court Act §230 remains restricted to the jurisdictional cap of $25,000.
However, even if this Court's jurisdiction were expanded to adjudicate matters contained under the $50,000 cap provided for in the New York State Constitution, the Court finds that it still would not have jurisdiction to rule upon the Plaintiff's motion and Defendant's cross-motion due to the injunctive relief that is at the center of Plaintiff's motion.
As discussed by this Court in the matter of Orozco v Stromfeld, 75 Misc.3d 1217 (A) [Civ Ct 2022], the Civil Court lacks jurisdiction to grant equitable and injunctive relief. In A.B. Med. Services, PLLC v. Motor Veh. Acc. Indem. Corp., the Supreme Court, Appellate Term, Second Department held that the Civil Court lacked authority to direct a provider to place the amount of a judgment in escrow pending the determination of motions in the case. Specifically, the Appellate Term held that
As a general rule, "[e]xcept for proceedings for the enforcement of housing standards (CCA 110 [a] [4]; 203 [ o ]) and applications for certain provisional remedies (CCA 209 [b]), the New York City Civil Court may not grant injunctive relief" (Topaz Realty Corp. v Morales, 9 Misc.3d 27, 28 [App Term, 2d Dept, 2d & 11th Jud Dists 2005] [internal quotation marks omitted]; see also Tobin v Beaaro, Inc., 31 Misc.3d 127 [A], 2011 NY Slip Op 50446[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]; Green v Lakeside Manor Home for Adults, Inc., 30 Misc.3d 16 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; Jiskra v Canesper, 21 Misc.3d 129 [A], 2008 NY Slip Op 51968[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2008]; cf. 952 Assoc., LLC v Palmer, 52 A.D.3d 236 [2008]). (A.B. Med. Services, PLLC v Motor Veh. Acc. Indem. Corp., 41 Misc.3d 32, 35 [App Term 2013]).
In Topaz Realty Corp. v. Morales, the Supreme Court, Appellate Term reversed the order of the Civil Court in which the court granted an occupant's motion seeking, in effect, to direct the landlord's attorney to release $7,600 being held in escrow to the occupant pursuant to a stipulation of settlement under which the landlord put the funds in escrow. (See Topaz Realty Corp. v. Morales, 9 Misc.3d 27, 28-29 [App Term 2005]). Citing the same statutes discussed by the Court in A.B. Med. Services, PLLC v. Motor Veh. Acc. Indem. Corp, the Court held "inasmuch as the order directing landlord's attorney to release the funds being held in escrow was equitable and injunctive in nature and not within the limited equitable and injunctive powers of the Civil Court the order was not within the jurisdiction of the court to make." (Topaz Realty Corp. v. Morales, 9 Misc.3d 27, 28-29 [App Term 2005] (internal citations omitted). See also Jiskra v. Canesper, 21 Misc.3d 129 (A) [App Term 2008]; Yaakov v Kupershalayak, 17 Misc.3d 129 (A) [App Term 2007]). The Court found that the occupant "is therefore limited to seeking to enforce the stipulation in the Supreme Court, which has equitable jurisdiction, or instituting an action in Civil Court or Supreme Court seeking money damages for breach of the stipulation." (Topaz Realty Corp. v Morales, 9 Misc.3d 27, 29 [App Term 2005]).
In the case of World Realty Corp v. Consumer Sales, Inc., the Supreme Court, Appellate Term, Second Department, examined whether a district court in Suffolk County erred in declaring that a landlord was entitled to a return of its $6,800 check that was held by its attorney in escrow. The Court noted that pursuant to the New York State Constitution, the jurisdiction of the district court could not be greater than that of the New York City Civil Court. Citing the same statutes discussed by the Court in A.B. Med. Services, PLLC v. Motor Veh. Acc. Indem. Corpo, the Court found that "inasmuch as an order directing landlord's attorney to release the funds being held in escrow would have been equitableand injunctive in nature and not within the limited equitable and injunctive powers of the Civil Court the order would not have been within the jurisdiction of the District Court to make." World Realty Corp. v Consumer Sales, Inc., 9 Misc.3d 136 (A) [App Term 2005]. See also Aldrich Mgt. Co., LLC v Hanson, 56 Misc.3d 1, 3 [App Term 2017]. The Appellate Division, Second Department held that the tenant "is limited to seeking to enforce the stipulation in a court that has equitable jurisdiction or seeking money damages for breach of stipulation."
Based upon such precedent, this Court finds that it does not have jurisdiction to determine Plaintiff's motion and Defendant's cross-motion. Plaintiff's counsel requests that the Court issue an Order (1) permitting counsel to withhold funds from the Defendant's portions of the partition sale of the Property; (2) requiring Defendant to post a bond or (3) granting a temporary restraining order against Defendant and its counsel to prevent Defendant's counsel from distributing Defendant's portion of the proceeds until the Court determines damages that are owed to the Plaintiff.
Since the relief sought is both equitable and injunctive in nature, the Court finds that it lacks jurisdiction to adjudicate over the Plaintiff's motion. The Court further finds that it similarly lacks jurisdiction over Defendant's cross-motion, since it concerns the equitable relief sought by the Plaintiff and includes opposition to Plaintiff's motion.
Accordingly, it is hereby
ORDERED that Plaintiff's motion is denied with leave to renew before the Supreme Court; and it is further
ORDERED that Defendant's motion is denied with leave to renew before the Supreme Court; and it is further
ORDERED that a copy of this Order be transmitted by the Clerk's Office to the Administrative Judge of Supreme Court, Richmond County to facilitate the transfer of the matter back to Supreme Court; and it is
ORDERED that a copy of this Order be transmitted by the Clerk's Office to the Richmond County Clerk to allow for e-filing under Supreme Court Index Number 151048/2020.
The foregoing constitutes the decision and order of the Court.