Court Opinion

ID: 9958698
Source: CourtListenerOpinion
Date Created: 2024-04-09 20:09:21.552634+00
Date Added: 2024-06-11T08:18:38.575912
License: Public Domain

Fuks v Rakia Assoc.
               2024 NY Slip Op 31129(U)
                      April 4, 2024
           Supreme Court, New York County
        Docket Number: Index No. 122768/1996
                 Judge: Melissa A. Crane
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
 [FILED: NEW YORK COUNTY CLERK 04/05/2024 04:58 P~                                                         INDEX NO. 122768/1996
  NYSCEF DOC. NO. 215                                                                                RECEIVED NYSCEF: 04/05/2024

                               SUPREME COURT OF THE STATE OF NEW YORK
                                         NEW YORK COUNTY
            PRESENT:         HON. MELISSA A. CRANE                                   PART                                SOM
                                                                       Justice
                                ----------------------                     ----X    INDEX NO.             122768/1996
               MALI FUKS,
                                                                                    MOTION DATE            11/09/2023
                                                     Plaintiff,
                                                                                    MOTION SEQ. NO.            033
                                            -v-
               RAKIA ASSOCIATES,                                                      DECISION + ORDER ON
                                                                                             MOTION
                                                     Defendant.
                              ------------------------------                --X

            The following e-filed documents, listed by NYSCEF document number (Motion 033) 194, 195, 196, 197,
            198,199,200,203,204,205,206,207,208,209,210
            were read on this motion to/for                                        WITHDRAW FUNDS

                     Plaintiff Mali Fuks ("Fuks") has moved to withdraw funds, dividing the assets of R&L

           Realty Associates ("R&L") between herself and her partner Ruth Shomronl ("Shomron") pursuant

           to orders and judgments entered in both this action ("Action No. 1") and a rylated action (Shomron
                                                                                                 I
           v Fuks, l 02882/2002 ["Action No. 2"]). The R&L funds are currently held in two separate escrow

           accounts: one with the law firm Brill & Meisel ("B&M") in the amount of $509,074.84 and one

           with the Department of Finance of the City of New York ("DOF") in the atnount of $6,016,835. 1

                     In particular, Fuks refers to four orders and judgments that purportedly form the basis for

           the motion to withdraw funds:

                 •   Action No. 1 - April 10, 2023 decision and order modifying and confirming the referee's
                     report (NYSCEF Doc. No. 196)
                 •   Action No. 2 - June 29, 2023 amended judgment (NYSCEF Doc. No. 197)
                 •   Action No. 1 - July 5, 2023 amended judgment (NYSCEF Doc. No. 198)
                 •   Action No. 1 - October 3, 2023 decision and order awarding attorney's fees (NYSCEF
                     Doc. No. 199).

           1
            While Fuks asserts that the exact amount that the DOF holds in escrow is $6,016,835.23, Shomron states that the
           amount as of October 11, 2023 was $6,016,835.27.
               122768/1996 FUKS, MALI vs. RAKIA ASSOCIATES                                                 Page 1 of 5
               Motion No. 033

[* 1]                                                             1 of 5
 [FILED:   NEW YORK COUNTY CLERK 04/05/2024 04: 58 PM]                                    I         INDEX NO. 1227 68/l996
  NYSCEF DOC. NO. 215                                                                         RECEIVED NYSCEF: 04/05/2024

                  After finding that particular loans to R&L that formed the basis for Shomron's eighth

           counterclaim were valid and enforceable, the court denied without prejudice Plaintiffs prior

           motion to distribute funds to allow for an inquest to determine the amounts for R&L to pay back

           related to the loans (April 12, 2023 Decision and Order, NYSCEF Doc. No. 200). Ultimately, the

           court dismissed the eighth counterclaim pursuant to a May 10, 2023 decision and order (NYSCEF
                                                                                          i
           Doc. No. 139) and entered the judgments in both actions.

                  In particular, pursuant to the amended judgment in Action No. 1, the court ordered that

           Fuks recover from Shomron the amount of $375,000.00 plus interest at 9% per annum from

           December 30, 1996 in the sum of $895,345.89, for a total sum of $1,270,345.89 (July 5, 2023

           Amended Judgment). After the entry of the amended judgment in Action No. 1, Shomron filed a

           notice of appeal of that amended judgment on November 1, 2023 (NYSCEF Doc. No. 202).

           Additionally, Shomron obtained an appeal bond in the amount of $1,587,932.65 in relation to the

           July 5, 2023 amended judgment in Action No. 1 (Appeal Bond, NYSCEF Doc. No. 201). Pursuant

           to the Appeal Bond, "if the judgment or order appealed from, or any part of it, is affirmed, or the

           appeal is dismissed, the appellant shall pay the amount directed to be paid by the judgment or

           order, or the part of it as to which the judgment or order is affirmed" (id.). i

                  Defendants make two arguments in opposition to Plaintiffs motion to distribute the assets.

           First, Defendants assert that pursuant to a November 28, 2006 interl9cutory judgment, the
                                                                                          I

           distribution of R&L' s assets was to "await and be subject to the entry of a final judgment resolving

           the remaining claims of all of the parties in Action No. 1" (November 28, 2006 Interlocutory

           Judgment, ,-i 6, NYSCEF Doc. No. 204) and that pursuant to an August 16, 2010 interlocutory

           judgment, the net proceeds of the sale of apartments owned by R&L were to be deposited with the

           Clerk of the Court "pending the resolution of [Action No. 1]" (August 16, 2010 Interlocutory

            122768/1996 FUKS, MALI vs. RAKIA ASSOCIATES                                             Page 2 of 5
            Motion No. 033

                                                           2 of 5
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 [FILED: NEW YORK COUNTY CLERK 04/05/2024 04:58 P~                                               INDEX NO. 122768/1996
  NYSCEF DOC. NO. 215                                                                      RECEIVED NYSCEF: 04/05/2024

           Judgment, p. 3, NYSCEF Doc. No. 205). According to Defendants, the court must deny the motion

           to withdraw funds because their several appeals in Action No. 1 render the action still pending.

           The court rejects this argument. Neither the November 28, 2006 interlocutory judgment nor the
                                                                                       '
                                                                                       I
           August 16, 2010 interlocutory judgment refer to exhaustion of all appeals as a prerequisite for the

           withdrawal and distribution of the funds. This court's July 5, 2023 amended judgment and October

           3, 2023 decision awarding attorney's fees (NYSCEF Doc. No. 199) have resolved all remaining

           claims in Action No. 1, and Action No. 1 is disposed.

                  However, Defendants also argue that the Appeal Bond automatically stays enforcement of

           the amended judgment in Action No. 1. Pursuant to CPLR 5519(a)(2),

                  "[s]ervice upon the adverse party of a notice of appeal ... stays all proceedings to
                  enforce the judgment or order appealed from pending the appeal ... where ... the
                  judgment or order directs the payment of a sum of money, and an undertaking in
                  that sum is given that if the judgment or order appealed from, or any part of it, is
                  affirmed, or the appeal is dismissed, the appellant or moving party shall pay the
                  amount directed to be paid by the judgment or order, or the part of it as to which
                  the judgment or order is affirmed"

           (CPLR 5519[a][2]; see also Wiederhorn v Merkin, 106 AD3d 416,416 [1st Dept 2013]; Motta v

           Ventura, 2020 WL 13137646, * 1 [Sup Ct, NY County Aug 20, 2020]).

                  The stay mechanism in CPLR 55 l 9(a) is automatic (see Karg v Kern, 125 AD3d 527, 527

           [1st Dept 2015]; Vickv Albert, 50 AD3d 438,438 [1st Dept 2008]). However, it does not apply to

           non-final orders (see Tax Equity Now NY LLC v City of New York, 173 AD3d 464, 464-465 [1st
                                                                                       I
           Dept 2019] [finding that the "filing of a notice of appeal of an order denyi~g a motion to dismiss

           does not trigger the automatic stay with respect to litigation obligations provided for in the CPLR,

           such as the obligation to answer and comply with discovery requests"]). Further, while the stay is

           automatic, a party may move the court to vacate the stay pursuant to CPLR 5519(c) (see HGCD

            122768/1996 FUKS, MALI vs. RAKIA ASSOCIATES                                          Page 3 of 5
            Motion No. 033

[* 3]                                                     3 of 5
 [FILED: NEW YORK COUNTY CLERK 04/05/2024 04:58 P~                                                INDEX NO. 122768/1996
  NYSCEF DOC. NO. 215                                                                     RECEIVED NYSCEF: 04/05/2024

           Retail Services, LLC v 44-45 Broadway Realty Co., 12 Misc3d 1166(a), *1 [Sup Ct, NY County

           Apr 17, 2006]).

                  Here, by filing the notice of appeal and obtaining the Appeal Bond with respect to the

           amended judgment in Action No. 1, enforcement of that amended judgmerit was stayed. The July

           5, 2023 amended judgment required Shomron pay Fuks a total sum of$1,270,245.89 (July 5, 2023

           Amended Judgment). Defendants made an undertaking with respect to tha{ amended judgment in

           the amount of $1,587,932.65, well in excess of the amount of the amended judgment, even

           accounting for interest at the rate of 9% per annum as set forth in the aLended judgment (see

           HGCD Retail Services, LLC, 12 Misc3d 1166(a), at *2 [finding that an undertaking "must provide

           sufficient collateral to pay the judgment, and that would require taking into consideration the

           interest on suchjudgment"]). This was sufficient for an automatic stay as to the amended judgment.

                  The court declines to order the distribution of the remainder of the R&L assets

           notwithstanding the stay in place as to the July 5, 2023 amended judgment amount. Defendants

           argue that, given the stay of the amended judgment, Shomron is entitled to a distribution of

           $4,057,723.82, which is the amount Shomron would purportedly be entitled to before needing to

           pay Fuks the amended judgment amount of$1,270,345.89 (Aff. in Opposition, NYSCEF Doc. No.

           203, 1114-15). However, the amended judgment is intertwined with the amounts each party will

           be entitled to upon the withdrawal and distribution of the R&L assets.

                  Thus, the court will not proceed with that withdrawal and distribution until either (1) the

           appeal related to the amended judgment is decided or (2) one of the parties moves pursuant to

           CPLR 5519( c) to vacate the stay of the amended judgment. CPLR 5519( c) permits "[t]he court

           from or to which an appeal is taken or the court of original instance ... may vacate, limit or modify

            122768/1996 FUKS, MALI vs. RAKIA ASSOCIATES                                           Page 4 of 5
            Motion No. 033

[* 4]                                                     4 of 5
 [FILED: NEW YORK COUNTY CLERK 04/05/2024 04:58 P~                                                         INDEX NO. 122768/1996
  NYSCEF DOC. NO. 215                                                                                RECEIVED NYSCEF: 04/05/2024

           any stay imposed by subdivision (a)." At this juncture, none of the parties moved this court, or the
                                                                                                 i
                                                                                                 i
           Appellate Division, First Department, to vacate or modify the automatic stay.

                   In addition, it appears that movant has not complied with the Department of Finance's
                                                                                                 i
           ("DOF") requirements for withdrawals. DOF requires applicants to obtain' a certificate of deposit

           before submitting a petition to withdraw funds. The certificate of deposl\ "must be attached to

           [the] petition to the court" (NYC.gov, "Withdrawing Court and Trust funds" page, available at

           https://www.nyc.gov/site/finance/sheriff-courts/courts.page [last visited 4/4/24]).              There is no

           certificate of deposit attached to these motion papers.

                   Therefore, the court denies without prejudice the motion to withdraw and distribute the

           R&L funds currently held in escrow. Plaintiff may re-file a new motion to withdraw funds once

           the stay is vacated or modified. Any new motion must comply with all DOF requirements.

                   The court has considered the parties' remaining contentions and finds them unavailing.

                   Accordingly, it is

                   ORDERED that Plaintiff Mali Fuks' motion to withdraw funds (MS 33) is denied without

           prejudice to a new motion on proper papers.

                    4/4/2024
                     DATE
                                                                                    ~
                                                                                   ' MELISSA A. CRANE, J.S.C.

                                                                         ~
            CHECK ONE:                   CASE DISPOSED                       NON-FINAL DISPOSITI .ON

            APPLICATION:

            CHECK IF APPROPRIATE:
                                    8    GRANTED

                                         SETTLE ORDER
                                                          0     DENIED

                                         INCLUDES TRANSFER/REASSIGN
                                                                             GRANTED IN PART

                                                                             SUBMIT ORDER
                                                                                                 i

                                                                                                 I
                                                                                                 i
                                                                             FIDUCIARY APPOINTMENT
                                                                                                         □ OTHER

                                                                                                         □ REFERENCE

            122768/1996 FUKS, MALI vs. RAKIA ASSOCIATES                                                    Page 5 of 5
            Motion No. 033

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