Herman v. Siegmund

69 A.D.2d 871, 415 N.Y.S.2d 681, 1979 N.Y. App. Div. LEXIS 11596

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: April 23, 1979
• Status: Published

Opinions

Appeal from an order of the Supreme Court, Suffolk County, dated June 19, 1978, which denied the motion of John Siegmund and Siegmund Enterprises, Ltd., inter alia, to set aside a Sheriff’s sale, on the ground that the application was untimely. Order reversed, without costs or disbursements, and case remitted to Special Term for a determination of the application on the merits. The instant appeal stems from the plaintiff’s efforts to enforce a money judgment entered in a breach of contract action against Siegmund Homes, Inc. In accordance with normal enforcement procedures, the Suffolk County Sheriff levied upon certain property supposedly owned by Siegmund Homes, Inc. On April 13, 1978 the levied property was duly sold at auction. Prior to the distribution of the proceeds of the sale and before the property had been moved, John Siegmund and Siegmund Enterprises, Ltd., brought an order to show cause to vacate the Sheriff’s sale on the ground that the levied property was in fact owned by Siegmund Enterprises, Ltd., and not by the judgment debtor, Siegmund Homes, Inc. At argument on the application to set aside the sale, the parties agreed, upon the court’s suggestion, that the application would be considered under CPLR 5239 and 5240. It was further agreed that the affidavit of John Siegmund in support of the order to show cause would be deemed the petition. Decision was reserved and the parties were given an opportunity to submit documentary evidence and memoranda of law. Subsequently, Special Term denied the application as untimely under CPLR 5239. No mention was made of the parties’ rights under CPLR 5240. CPLR 5239 allows any interested person to commence a special proceeding to determine rights in the property or debt if brought "Prior to the application of property or debt by a sheriff or receiver to the satisfaction of a judgment”. There is no question that Siegmund Enterprises, Ltd., as distinguished from Siegmund Homes, Inc., the judgment debtor, is an interested "person” who may commence a proceeding pursuant to CPLR 5239. To the extent that there may have been procedural defects, any such objection must be deemed to have been waived as a consequence of the parties having consented to treating the application as one pursuant to both CPLR 5239 and 5240. When parties have charted their own course, they must be so bound (Cullen v Naples, 31 NY2d 818). In the circumstances of this case, the application to set aside the Sheriff’s sale must be deemed timely and there should be a determination on the merits. The language "application of property or debt by a sheriff or receiver to the satisfaction of a judgment”, refers to the actual distribution of proceeds and not merely to the time of sale (cf. 6 Weinstein-Korn-Miller, NY Civ Prac, par 5239.07). This is particularly so in the instant situation where the property, although sold, has not been removed. This interpretation is consistent with the aim of making CPLR 5239 an all inclusive tool for the settlement of almost any problem that may arise in connection with the enforcement of money judgments (see, generally, Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR 5239:1, p 443). In addition, Special Term, having agreed to also consider the application under CPLR 5240, should have ruled on the effect of that section. The merits of the application by John Siegmund and Siegmund Enterprises, Ltd., which necessarily includes issues of whether the corporate veil should be pierced, whether the application under CPLR 5239 should be barred by laches, whether such application was fraudulent and if so, whether damages should be awarded pursuant to the statute, and whether there are special circumstances for relief under CPLR 5240, should be determined in the first instance by Special Term. Lazer, Rabin and Cohalan, JJ., concur.