Cite as: Cashel v. Cashel, 21537/05, NYLJ 1202581890706, at *1 (Sup., SUF, Decided December 10, 2012)

Justice Andrew A. Crecca

Decided: December 10, 2012

Additional Defendants

Elite Abstract and Settlement Corp., Expo Abstract, Inc., Stewart Title Insurance Co., Mortgage Electronic Registration Systems, Inc., Fremont Investment & Loan and Chicago Title Insurance Co., Defendants and 84 Terry Street Corporation, Non-Party (added by Order of Appellate Division)

ATTORNEYS

Pltf., Thomas P. Cashel's Attorney: William Saltzman, Esq., Saltzman, Chetkof & Rosenberg, LLP, Garden City, NY.

Deft.-Appellant, Fremont Investment & Loan's Attorney: Michael J. Siris, Esq., Solomon & Siris, P.C., Garden City, NY.

Deft., Stewart Title Insurance Co.'s Attorney: Thomas Sherwood, Esq., Garden City, NY.

Attorney For 84 Terry Street Corp.: Stephen McGiff, Esq., Patchogue, NY.

Upon the following papers numbered 1 to 47 read on this CPLR 5523 motion for restitution;

Notice of Motion and supporting papers 1 to 16;

Affidavit in Opposition and supporting papers 17 to 35;

Affirmation in Opposition and supporting papers 36 to 37;

Reply Affirmation and supporting papers 38 to 43;

Affirmation in support 44;

Sur-Reply Affirmation and supporting papers 45 to 47; it is

 

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ORDERED that the defendant, Fremont's CPLR 5523 motion for restitution directing that 84 Terry Street Corp. transfer, convey and return title to the premises 4976 Expressway Drive South, Lake Ronkonkoma, New York to the defendant, Francine Cashel or in the alternative, directing the plaintiff, Thomas Cashel to deposit into court the sum of $250,000 (representing the value of the property) is granted to the extent that the plaintiff, Thomas Cashel shall deposit into court the sum of $189,000 by delivering to the Suffolk County Treasurer, the sum of $189,000 in accordance with CPLR 2601 within forty-five (45) days of the date of this order.

 

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The defendant, Fremont moves pursuant to CPLR 5523 for restitution, directing that 84 Terry Street Corp. transfer, convey and return title to the premises 4976 Expressway Drive South, Lake Ronkonkoma, New York to the defendant, Francine Cashel or in the alternative, directing the plaintiff, Thomas Cashel to deposit into court the sum of $250,000 (representing the value of the property).

By order dated March 4, 2011 this Court declared the June 6, 2002 Deed which conveyed title of the 4976 Expressway Drive South property from Thomas Cashel to Francine Cashel to be null and void; cancelled all mortgages made on or after June 6, 2002 as a lien against the property, and directed the Clerk of the County of Suffolk to accept a correction deed confirming ownership of the subject real property in Thomas Cashel. A Correction Deed was filed with the Clerk of the County of Suffolk on March 11, 2011. Also, on March 11th Thomas Cashel entered into a Contract of Sale with 84 Terry Street Corp. for the sale of the subject property in the amount of $150,000. A Quitclaim Deed dated March 15, 2011 was executed by the parties and recorded by the Clerk of the County of Suffolk on March 22, 2011. By Order to Show Cause dated March 16, 2011 signed by a Justice of the Appellate Division, Thomas Cashel was restrained from transferring the subject property pending hearing and determination of the motion. The issue of when Thomas Cashel had notice of the restraint and his actions thereafter is the subject of a separate proceeding.

On April 3, 2012 the Appellate Division, Second Department issued a decision finding that the trial court improperly found that the June 6, 2002 deed was null and void thereby cancelling the mortgages on the property, and permitting the filing of a Correction Deed confirming ownership to Thomas Cashel.

A CPLR 5523 motion, similar to the motion before this Court, was made to the Appellate Division, Second Department. On June 25, 2012 the motion was denied without prejudice to seeking relief in the Supreme Court, Suffolk County.

CPLR 5523 provides:

A court reversing or modifying a final judgment or order or affirming such a reversal or modification may order restitution of property or rights lost by the judgment or order, except that where the title of a purchaser in good faith and for value would be affected, the court may order the value or the purchase price restored or deposited in court.

(McKinney's Cons. Laws of NY, Book 7B CPLR 5523).

A motion for restitution is addressed to the sound discretion of the court (see Dinizio and Cook, Inc. v. Duck Creek Marina at Three Mile Harbor, Ltd., 32 AD3d 989, 821 NYS2d 649 [2006]; Gagan v. Kipany Prods., 6 AD3d 963, 775 NS2d 202 [2004]; Horvath v. Grid Realty Corp., 64 AD2d 691, 407 NYS2d 576 [1978] [concur opin]). The remedy of

 

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restitution is equitable in nature and a court in exercising its discretion is to be guided by the broad principles of equity and justice (see Paramount Film Distr. Corp. v. State of New York, 30 NY2d 415, 334 NYS2d 388 [1972], Village of Johnson City v. Glenville, 108 Misc 2d 531, 437 NYS2d 499 [1981]; Rae v. Rosenberg, 67 Misc. 2d 881, 324 NYS2d 898[1971]). A court is not to award restitution where the justice of the case does not call for it or where the retention by the party of that which is sought to be recovered is not shown to be contrary to equity and good conscience (see Paramount Film Distr. Corp. v. State of New York, 30 NY2d 415 supra; Village of Johnson City v. Glenville, 108 Misc. 2d 531, supra; Rae v. Rosenberg, 67 Misc. 2d 881, supra).

In the matter at bar, 84 Terry Street Corp. has owned the subject property for twenty months, has paid the real property taxes and has leased the property. It would be inequitable to affect title to the property by returning title to Francine Cashel, who may not be retaining title. Inasmuch as this Court has found that it would be inequitable to restore property rights to Francine Cashel, the Court need not determine if 84 Terry Street Corp. was a good faith purchaser for value.

In its April 3, 2012 decision, the Appellate Division, Second Department wrote:

However, it is undisputed that Thomas authorized Francine, as his agent, to encumber the property by obtaining the Flagstar mortgage loan, and that Thomas received a portion of the proceeds from the loan, If Thomas ultimately prevails in voiding the deed and cancelling the Fremont mortgage, he would be the record owner of the property free and clear of the Flagstar mortgage loan, which he authorized and from which he received some of the proceeds. Therefore, under these circumstances, in order to prevent Thomas from becoming unjustly enriched, Fremont would be entitled to a lien in the sum of $196,028, representing the portion of the proceeds of the Fremont mortgage loan which were used to satisfy the Flagstar mortgage loan.

(Cashel v. Cashel, et al., 94 AD3d 684, 688, 941 NYS2d 236, 240 [2012]). In light of the Appellate Division's ruling as to an equitable lien and unjust enrichment, it would be equally inequitable to deprive Fremont of securing such sum of money, equivalent or substantially equivalent to the lien which is no longer available to Fremont because Thomas Cashel has previously conveyed the subject property to 84 Terry Street Corp.

The statute provides that the court may order the value or the purchase price returned or deposited in court. Although it is disputed by Fremont that the contract price was actually paid by 84 Terry Street Corp. to Thomas Cashel, the Contract of Sale set forth a purchase price of $150,000. Fremont has submitted an affidavit dated May 19, 2011 from James M. Carney, a licensed appraiser placing a value on the premises of at least

 

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$250,000. The affidavit references evaluation of comparable sales but does not furnish such comparables. The affidavit references "my observations of the premises" but does not indicate whether the observations included the inside of the premises. The affidavit, therefore, is of little probative value.

Thomas Cashel challenges the $250,000 valuation as unsupported. Thomas Cashel argues that the $150,000 purchase price was set by the sale of a property next door at $189,000 after being listed for approximately one year and the customary practice of discounting the price for an all cash deal. The Court notes that market forces were not at play in this sale. On this record, the Court finds that the best measure of value is the $189,000 purchase price for the adjoining property and is the proper amount to be deposited in court by Thomas Cashel. This would be consistent with the spirit and intent of the ruling of the Appellate Division, Second Department as to unjust enrichment. Within forty-five (45) days of the date of this order the plaintiff, Thomas Cashel shall deliver the sum of $189,000 to the Suffolk County Treasurer in accordance with CPLR 2601.

In concluding, the Court will address Thomas Cashel's argument that Fremont has been made whole by a judgment against Francine Cashel in the amount of $514,590.22. In its decision dated April 16, 2012, this Court wrote "[t]he defendant, Fremont may enter judgment against the defendant, Francine Cashel on the third and fourth cross claims with the County Clerk of Suffolk County in the amount of $514,590.22…" This Court did not direct the County Clerk to enter judgment as Thomas Cashel suggests. Fremont did not pursue the entry of judgment because of the April 3, 2012 decision of the Appellate Division, Second Department. No judgment has been entered. Fremont has not been made whole, and there is, therefore, no impediment to the Court's determination herein.