Court Opinion

ID: 5848329
Source: CourtListenerOpinion
Date Created: 2022-01-12 23:52:54.663552+00
Date Added: 2024-06-11T08:44:00.086657
License: Public Domain

Mikoll, J. (concurring in part and dissenting in part).
Mikoll, J., concurs in part and dissents in part in the following memorandum. I concur with the majority’s affirmance of Special Term’s denial of defendants’ motion to dismiss the third and fourth causes of action in plaintiff’s amended complaint. I would also affirm Special Term’s denial of defendants’ motion to dismiss the fifth cause of action which seeks to impress a constructive trust on the subject realty on the grounds that the conveyance of title was gratuitous and made with an intent to defraud creditors. Plaintiff’s right to this relief is grounded on sections 276 and 278 (subd 1, par a) of the Debtor and Creditor Law and is available to plaintiff in addition to any right plaintiff may have to a mechanic’s lien (cf. Merrihew v Parrott, 168 App Div 704). The facts alleged in support of plaintiff’s claim of fraud and fraudulent intent to defeat the rights of creditors are sufficient to withstand the motion to dismiss. The underlying facts also justify the invoking of the broad powers of equity to correct a fraudulent wrong such as is averred in the pleadings (see Simonds v Simonds, 45 NY2d 233; Beatty v Guggenheim Exploration Co., 225 NY 380). Since an equitable lien or trust is sought to be imposed on the realty and it is alleged that the realty, is now mismanaged or in danger of being lost, Special Term properly refused to strike the demand for receivership. Plaintiff, however, does not have the right to sue on behalf of other creditors and, accordingly, so much of the complaint as seeks a declaration that defendants’ property constitutes a trust for the benefit of other creditors should be stricken.