DE AZEVEDO V. ANGEL
Justice Emily Jane Goodman
Decided: June 21, 2010,
Attorney for Plaintiff De Azevedo is McCarthy Fingar LLP, By Paul S. Aufrichtig
Defendant Susan Angel is pro se,
This Order To Show Cause (motion seq 011), made by plaintiff/buyers (buyers) for appointment of a receiver to transfer ownership of cooperative unit 2A at 530 East 86th Street, from pro se defendant/seller (seller) to buyers, in order to effectuate the Court's Decision and Order, dated 7/13/09 (which granted specific performance based on the parties' mutual desire to close), is granted, and the Cross Motion/Opposition[FN1] by seller to stay 'foreclosure‘ (and if not stayed, to prevent plaintiff buyer from 'bidding upon the unit in foreclosure‘), to vacate restraints on re-marketing, to reargue the Court's Decision and Order, dated 7/13/09, to vacate the closing date of June 24, 2010 set by the Special Referee, to refer the issue of seller's alleged damages to a Special Referee, and to award sanctions and punitive damages, is denied, except as to vacature of the June 24, 2010 closing date.
In the Decision and Order, dated 7/13/09, the Court granted specic performance and ordered that a closing take place on or before 8/31/09. Since that time, this Court, as well as Special Referee Leslie S. Lowenstein, has sought, by multiple orders, to enforce that order to close, including, most recently, a closing date ordered by the Court to take place on or before 12/07/09, which order this Court found was 'fl outed‘ by seller, and which involved Justice Drager's restraint on a portion of the proceeds of the anticipated sale here, in connection with seller's matrimonial action (where, currently, 86 motions have been filed) (see Decision and Order dated March 8, 2010[FN2]).
CPLR 5106 provides that a 'court, by or after judgment, may appoint a receiver of property which is the subject of the action, to carry the judgment into effect or dispose of the property according to its directions.‘ This provision includes both real and personal property. Receivers have been appointed to effectuate the sale of a cooperative in several other contexts (see, e.g., Fundex Capital Corp. v. Reichard, 172 AD2d 420 [1st Dept 1991] [secured party had right to foreclose on shares of cooperative under the UCC and a receiver to sell was appointed to effectuate the transfer]; Aetna Ins. Co. v. Capasso, 75 NY2d 860  [a receiver may be appointed in a divorce action to sell a cooperative apartment]). Such appointment is warranted here.
In her Cross Motion/Opposition, seller complains that she was not timely served with the Order To Show Cause and, even though the Court allowed her additional time to submit her papers, she was not able to do 'as good a job as I would have been had I had 12 days.‘ However, even assuming that the Order To Show Cause was not timely served, the Court granted seller more than one week to oppose the motion and therefore, no prejudice resulted. Seller also argues that this motion should have been served on the City of New York, because public assistance awarded her 'one shot‘ assistance and paid February and March 2010 maintenance. She further argues that the motion should have been served on Eugene Tifn (who is described as a secured judgment creditor) and on a 'Mr Philip.‘ However, seller has no standing to raise this, and in any event, those entitled to notice will be notied and no surplus monies will be released, until ordered by the Court.
Seller further maintains that the Court erred in nding in the Decision and Order, dated March 8, 2010, that she fl outed the Court's prior order, which directed a closing on or before 12/07/09. Even though seller admitted that she did not close on or before 12/7/09 because of 'the restraint of proceeds issued by Judge Drager‘ and did not dispute that she directed her attorney to stop preparing for the closing despite this Court's order (see Decision and Order, dated March 8, 2010), seller advances a new excuse, that she was before Judge Drager on 12/7/09 and that she offered to close on later dates. However, the closing date was an on or before date and the appearance before Judge Drager was not the entire day. Regardless of the proffered reason, seller has not demonstrated that the Court's nding was incorrect.
Seller also maintains that she was preparing for the closing date set, by the Special Referee, on the consent of the parties, but that buyers' attorney did not adequately prepare, and that she was damaged as a result of his incompetence.
The Court will not revisit the entire past history of this transaction, as seller desires, and will not grant seller's belated request to vacate the Decision and Order, dated 7/13/09, granting specic performance, which in any event, was granted based on the parties' mutual desire to close. Further, although the seller maintains that buyers defaulted on the most recent closing date of 5/17/10, which was agreed to by the parties, the evidence proffered by seller herself indicates that the closing did not occur on May 17, 2010 because her attorney resigned, by letter dated April 28, 2010, as a result of a fee dispute, and because of statements in seller's letter to the Special Referee, which led seller's own attorney 'to believe that I will not have your cooperation in facilitating a 'title and possession‘ Closing for May 17, 2010. ‘ Seller, who lacks the ability or neutrality to close without an attorney, complains that she cannot pay her attorney; however, she previously received $100,000 from buyers, pursuant to an unusual agreement in the contract of sale. Further, although seller expresses her desire to close, her statements, even now, reveal that the closing will never occur unless a receiver is appointed. Seller states 'I am stating under oath here that I would close with these Buyers-provided damages are paid to me, and there is a post occupancy period in case Buyers again do not close.‘ These open end demands are based on the seller's whims, at the moment, and evidence why a Receiver must be appointed.[FN3] Seller is correct however that it was improper for the Special Referee to adjourn the closing date, absent consent of the parties, as this was outside the scope of the reference (pursuant to the Decision and Order, dated 7/13/09, the Referee was to report on damages). Accordingly, the order of the Special Referee dated May 21, 2010 is vacated.[FN4]
It is hereby
ORDERED that the motion by Plaintiffs for appointment of a receiver to transfer ownership of cooperative unit 2A at 530 East 86th Street from Defendant to Plaintiffs, in order to effectuate the Court's Decision and Order, dated 7/13/09 (which granted specic performance based on the parties' mutual desire to close), is granted; and it is further
ORDERED that Defendant's Cross Motion to stay foreclosure (and if not stayed, to prevent plaintiff buyer from 'bidding upon the unit in foreclosure ‘), to vacate restraints on re-marketing, to reargue the Court's Decision and Order, dated 7/13/09, to vacate the order of the Special Referee, dated 5/21/ 10 and to refer the issue of seller's alleged damages to a Special Referee, and to award sanctions and punitive damages, is denied, except as to vacature of order of the Special Referee dated May 21, 2010, which order is hereby vacated; and it is further
ORDERED that Robert Michael Brill, law Ofces of Michael M. Brill, 880 Third Avenue, 13th Floor NY NY 10022, is appointed as Receiver chosen by plaintiffs to transfer ownership of cooperative unit 2A at 530 East 86th Street from Defendant to Plaintiffs, and he is directed to le all relevant UCS forms forthwith; and it is further
ORDERED that the Receiver is empowered to take any actions, that Defendant would have taken, or sign any documents, that Defendant would have signed, in connection with the transfer ownership of cooperative unit 2A at 530 East 86th Street from Defendant to Plaintiffs; and it is further
ORDERED that if the Receiver wishes to hire counsel, he must do so by separate motion; and it is further
ORDERED that the closing is adjourned to any date set by the Receiver; and it is further
ORDERED that Receiver shall provide notice of the closing date to all lienholders and anyone entitled to notice; and it is further
ORDERED that the Receiver shall provide Defendant with at least 20 days notice of the closing date so that Defendant may make appropriate arrangements to move out of the apartment on a timely basis; and it is further
ORDERED that Receiver shall deposit all monies that would normally be paid to Defendant at the closing into an interest bearing account in his name, as Receiver, indicating the name of this case, at a New York bank of Receiver's choosing; and it is further
ORDERED that said monies shall not be released, absent order of the Court; and it is further
ORDERED that the damages hearing before the Special Referee shall continue; and it is further
ORDERED that Plaintiffs serve a copy of this Decision and Order, with Notice of Entry, on Defendant forthwith.
This constitutes the Decision and the Order of the Court.
FN1. Pursuant to the order of June 4, 2010, the Court declined to sign seller's Order to Show Cause, which was entirely based on a duplicate set of papers served in opposition to this motion. However, the Court indicated that it would treat the seller's opposition as a cross motion, as well as opposition.
FN2. The Decision is incorrectly dated March 8, 2009.
FN3. The remedy of contempt is not an appropriate alternative remedy, as the Court is convinced that the seller will not voluntarily close, and imprisonment of a mother, with two small children, serves no purpose.
FN4. Although seller alleges that the incompetence of buyers' attorney resulted in increased legal fees, the issue of damages is before the Special Referee, and he may reduce the amount of legal fees, which are recoverable as damages, as appropriate.
7/7/2010 NYLJ 26, (col. 1)