Court Opinion

ID: 5862285
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:22:27.277364+00
Date Added: 2024-06-11T08:44:28.234302
License: Public Domain

Milonas, J.,
dissents in a memorandum as follows: In my opinion, the order of Special Term should be affirmed. Plaintiff is the owner of 100% of the capital shares of Second 40th Street Corporation, a New York corporation whose sole asset is real property located at 244-250 East 40th Street in Manhattan. As security for loans totaling $607,400, plaintiff pledged the stock to certain of the defendants. According to defendants, the proceeds of the loan were used to purchase the shares from the prior stockholders. Plaintiff subsequently defaulted, and the shares were sold at a foreclosure sale to defendant Raymond Navarro. Thereafter, plaintiff commenced the instant action, alleging, in part, that the loans are usurious, that the foreclosure sale was fraudulent, and that she is entitled to redemption of the mortgage on the property and of the collateral. In this connection, plaintiff filed a notice of pendency against the real estate in question. (CPLR 6501.) Defendants then moved to cancel the notice, contending that the judgment demanded does not affect title to, or the possession, use or enjoyment of, real property but merely the ownership of stock. Special Term denied the motion on the ground that since the plaintiff is a 100% shareholder of the corporation, “in this instance the shares of stock, for the purpose of sale or other disposition of the real property, equate with the real property itself.” I agree with this assessment of the situation. Although the majority believes that the existence of a corporate entity warrants the cancellation of the notice of pendency, such a highly technical construction of CPLR 6501 ignores the reality of what is actually involved here. The subject property is the sole asset of the corporation. The plaintiff owns 100% of the shares of the corporation. Under these circumstances, it is difficult to perceive how 'the majority can conclude that the judgment demanded would not affect the title to, or the possession, use or enjoyment of, real property. In none of the cases cited by the defendants are the facts comparable to those present in the matter before us.