McKew v. Shaw

2025 NY Slip Op 30666(U)

• Court: New York Supreme Court, New York County
• Decided: February 18, 2025
• Docket: Index No. 656214/2016
• Status: Unpublished

Opinion

McKew v Shaw 2025 NY Slip Op 30666(U) February 18, 2025 Supreme Court, New York County Docket Number: Index No. 656214/2016 Judge: Emily Morales-Minerva 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 02/26/2025 04:48 P~ INDEX NO. 656214/2016 NYSCEF DOC. NO. 379 RECEIVED NYSCEF: 02/26/2025

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. EMILY MORALES-MINERVA PART 42M Justice ---------------------------------------------------------------------------------X INDEX NO. 656214/2016 MARK L. MC KEW, AS RECEIVER OF 11-15 ST. NICHOLAS AVENUE HDFC AND ITS REAL PROPERTY, MOTION DATE 11/27/2024

Plaintiff, MOTION SEQ. NO. 022

-v- ROBERT SHAW, ABC MANAGEMENT CORP., DECISION + ORDER ON JPMORGAN CHASE & CO., ANN BROOKS, MARTA BATIZ, TYRONE PATTERSON, MOTION

Defendant ---------------------------------------------------------------------------------X

The following e-filed documents, listed by NYSCEF document number (Motion 022) 355, 356, 357, 358, 359,360,361,362,363,364,365,366,367,368,369,370,378 were read on this motion to/for APPOINT - FIDUCIARY

APPEARANCES:

McKew Law Firm, PLLC, New York, New York (Mark L. McKew, Esq., of counsel) for Plaintiff.

HON. EMILY MORALES-MINERVA:

In this action to, among other things, recover money

damages for conversion of corporate assets and for declaratory

relief, plaintiff MARK L. McKEW, AS RECEIVIER OF 11-15 ST.

NICHOLAS AVENUE HDFC AND ITS REAL PROPERTY (plaintiff receiver),

moves, by motion (sequence number 022), for, among other things,

an order, pursuant to the Uniform Rules for Trial Courts (22

NYCRR) § 36.1, to appoint Adam Kalish, Esq., of Colbert Law LLC,

to serve as counsel to plaintiff receiver, and to appoint Stuart

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Mordfin, C.P.A., of Mordfin LLP, to serve as accountant to

plaintiff receiver.

Defendants appear and do not oppose the motion.

For the reasons set forth below, plaintiff receiver's

motion (seq. no. 022) is granted, in part, and denied in all

remaining parts.

BACKGROUND

The property at issue is located at 11-15 St. Nicholas

Avenue, New York, New York 10026. By order dated October 9,

2018, the court (N. Bannon, J.S.C.) appointed Mark L. McKew,

Esq., as the receiver of 11-15 St. Nicholas Avenue HDFC, the

cooperative housing development fund corporation, and the above-

mentioned property (see NYSCEF Doc. No. 153, Decision and Order,

dated October 9, 2018). In that order, the court (N. Bannon,

J.S.C.) authorized plaintiff receiver to retain the services of

a managing agent, but expressly provided that plaintiff receiver

"shall not make any secondary appointments without the prior

written approval of the courtn (id.).

Now, plaintiff receiver moves, by motion (seq. no. 022),

pursuant to the Uniform Rules for Trial Courts (22 NYCRR)

§ 36.1, for an order (a) appointing Stuart Mordfin, C.P.A., of

Mordfin LLP, as accountant to plaintiff receiver, and

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authorizing payment of an initial $3,500.00 deposit from

plaintiff receiver's accounts to be applied to future invoices;

(b) appointing Adam Kalish, Esq., of Colbert Law LLC, as counsel

to plaintiff receiver, to bring and prosecute necessary legal

proceedings against non-paying shareholders and tenants at the

property in issue, and authorizing payment of a $50,000.00 legal

retainer from plaintiff receiver's accounts to be applied to

future invoices; (c) authorizing an interim payment of $6,536.09

to Charles J. Shields, C.P.A., plaintiff receiver's existing

accountant, from receiver's accounts; and (d) authorizing an

interim payment of $23,740.46 to Robert D. Pair, of Harlem

Property Management, Inc., plaintiff receiver's property

manager, from receiver's accounts. Plaintiff receiver further

requests an order pursuant to CPLR §§ 6404 and 8004 for a 5%

commission on the rents collected from the property.

ANALYSIS

Appointment of Accountant and Counsel

Section 36.1 of the Uniform Rules for Trial Courts requires

court approval of counsel and accountants performing services

for receivers (see Uniform Rules for Trial Cts [22 NYCRR] §

3 6. 1 [a] [ 1 O] [ i] , [ii] , [v] ) . "In making appointments of persons

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or entities to perform services for guardians or receivers, the

appointing judge may consider the recommendation of the guardian

or receiver" ( 22 NYCRR § 3 6. 2 [a] ) . "All appointments pursuant

to this Part shall be made by the appointing judge from the

appropriate list of applicants established by the Chief

Administrator of the Courts pursuant to section 36.3 of this

Part" (22 NYCRR § 36. 2 [b] [1]).

Here, Stuart Mordfin, C.P.A., of Mordfin LLP, is on the

eligibility list established by the Chief Administrator of the

Courts pursuant to Section 36.3 of the Uniform Rules for Trial

Courts (see NYSCEF Doc. No. 358, Part 36 Eligibility List).

Moreover, plaintiff receiver's submissions in support of the

instant motion (seq. no. 022), which includes his own

affirmation and the biography of Stuart Mordfin, establishes

that Stuart Mordfin is qualified, experienced, and skilled, and

would provide services beneficial to HDFC (see jd., Stuart

Mordfin's Biography; ~ee also NYSCEF Doc. No. 356, Affirmation

of Plaintiff Receiver; NYSCEF Doc. No. 359, Engagement Letter).

Further, the prior appointment of Charles J. Shields (see

NYSCEF Doc. No. 164, Decision and Order [N. Bannon, J.S.C.],

dated November 13, 2018), a certified public accountant, as

accountant to plaintiff receiver, does not bar this court from

appointing Stuart Mordfin to supplement the work of Charles J.

Shields. Plaintiff receiver adequately demonstrates that

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Charles J. Shields was previously appo i nted due to his expertise

in forensic accounting and to assist HDFC in recovering its

financial history (see NYSCEF Doc. No. 356, Affirmation of

Plaintiff Receiver). Now , plaintiff receiver requires the

ass istant of a n accountant who can prepare financial statements

based on the work comp l eted by Char l es J. Shields, which Stuart

Mord f in i s certified to d o. Therefore, Stuart Mordfin, C . P.A.,

of Mordfin LLP, is appointed as the accountant to plaintiff

receiver.

Plaintif f r eceiver also seeks the appointment of Adam

Kalish , Esq., of Colbert Law LLC, who is on the eligibility list

established by the Chief Administrator of the Courts pursuant to

Section 36.3 of the Uniform Rules for Trial Courts (see NYSCEF

Doc. No. 361, Part 36 Eligibil ity Lis t ). Furthe r , Counsel

Kalish's resume demonst r ates his extensive condo and co - op

l i tigation e xperience, estab li shing that he is skilled and

qualified to serv e as counse l to plaintiff receiver (see NYSCEF

Doc . No. 361, Biography) .

Additional l y , although the court (N . Bannon , J.S . C.)

previously appointed counsel to plai nti ff receiver, prior

counsel joined a new l aw fi rm and was unable t o continue his

represen tati on of pla intiff receive r (see NYSCEF Doc. No, 356,

Affirmation of Pla i ntiff Rece i ver). Therefore, the appoi n tment

of Adam Ka l ish, Esq., of Colbert Law LLC, as counsel to

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plaintiff receiver is proper.

However, plaintiff receiver's requests for orders

authorizing payments of a $50,000.00 legal retainer to Adam

Kalish, Esq., of Colbert Law LLC, and a $3,500.00 deposit to

Stuart Mordfin, C.P.A., of Mordfin LLP, are denied. In awarding

payments to be paid from a receiver's account, the court must

consider "the time and labor required; the difficulty of the

questions involved; the proposed amount of fees; the benefit

resulting to the client from the services; the customary fee

charges for similar services; the contingency of compensation;

the results obtained; and the responsibility involved" (GS

Brooklyn Apts., LLC v Roberts, 176 AD3d 689 [2d Dept 2019); see

L2!-ffey v Laffey, 174 AD3d 582, 586 [2d Dept 2019)).

Accordingly, the court, at this juncture, can not authorize

payments of $50,000.00 and $3,500.00, respectively. However,

this decision is without prejudice to future requests for

authorizations of payments that are properly supported by the

requisite affidavits, retainer agreements, time sheets, and

invoices (see NYSCEF Doc. No. 226, Decision and Order, dated

November 1, 2019 [N. Bannon, J.S.C.] [interim payment of

attorney's fees granted based upon review of detailed invoices,

retainer agreement, and curriculum vitae).

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INTERIM PAYMENTS

The court's order, dated October 9, 2018, provides

plaintiff receiver with the discretion to pay the managing agent

with reasonable compensation. As per the Management Agreement

(see NYSCEF Doc. No. 351), Robert D. Pair, plaintiff receiver's

property manager, issued copies of invoices (see NYSCEF Doc. No.

365) totaling $23,740.46. Upon a review of the invoices, the fee

of $23,740.46 is reasonable for the services rendered.

Therefore, the sum of $23,740.46 may be paid by plaintiff

receiver from the receiver's account to Robert D. Pair.

Additionally, in accordance with the Professional Services

Agreement (see NYSCEF Doc. No. 362), Charles J. Shields, C.P.A.,

plaintiff receiver's forensic accountant, issued an invoice (see

NYSCEF Doc. No. 363) totaling $6,536.09. 1 Upon a review of the

invoice, the fee of $6,536.09 is reasonable for the services

rendered. Therefore, the sum of $6,536.09 may be paid by

plaintiff receiver from the receiver's account to the court-

appointed accountant, Charles J. Shields, C.P.A.

1 The invoice states that the total amount due is $6,272.09, but per the Professional Services Agreement, a 6% interest fee is added to any outstanding balance (~e~ NYSCEF Doc. No. 362). As per the invoice, $4,922.09 of the total amount due is more than 90 days overdue, and accrued a 6% interest, or approximately $295.00 (~~~ NYSCEF Doc. No. 363). Therefore, the total amount due equals $6,536.09, as requested by plaintiff receiver.

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COMMISSION

Plaintiff receiver's application for a 5% commission on the

rents collected from the property $2,451,574.38 from October

9, 2018, through October 31, 2024 is denied, without

prejudice to a future application at the termination of the

receivership.

CPLR 8004 (a) provides, in pertinent part, "[a] receiver,

except where otherwise prescribed by statute, is entitled to

such commissions, not exceeding five percent upon the sums

received and disbursed by him, as the court by which he is

appointed allows." "A receiver is entitled to commissions not

exceeding five percent of sums received and disbursed by him or

her" (Silvestre v Shelley, 30 AD3d 401, 402 [2d Dept 2006]; see

also New York State Mortg. Loan Enf't &~Admin. Co!E. v Milbank

Site One Houses, Inc., 151 AD2d 424, 425 [pt Dept 1989] [finding

that "a commission is due upon the total amount which passes

through the receiver's hands"]).

However, "[a]s a general rule, commissions are only to be

paid out of the funds in the receiver's hands at the termination

of the receivership" (Amusement Distributors, Inc. v Oz Forum,

Inc., 113 AD2d 855, 855 [2d Dept 1985]) . Further, the papers

submitted in support must include a proper accounting

documenting the receiver's services in adequate detail (see

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Chang v ~apson, 67 AD3d 435, 435 [1st Dept 2009] ; see also New

York State Mortg. Loan Enf't & Admin._ co:r:-P...:., 151 AD2d at 426)

Here, the receivership has not been terminated, and as

such, the application for a 5% commission on the rents collected

from the property is premature. This is consistent with the

court's (N. Bannon, J.S.C.) prior decision dated October 9,

2018, which specifically orders that "upon proper motion of the

receiver to settle his final account, the fees of the receiver

shall be paid in accordance with CPLR 8004" (emphasis

added) (NYSCEF Doc. No. 153, Decision and Order, dated October 9,

2018).

Notwithstanding the prematurity of the application, the

court is not inclined to consider an interim commission payment

based upon the inadequacy of the supporting documentation, which

consists of 2,843 pages of, among other things, various income

and bank account statements, copies of checks, and bills (see

NYSCEF Doc. No. 369, "Financial Reports"). Plaintiff receiver's

affirmation does not contain any pinpoint citations to the

supporting documentation to adequately detail the amounts

reported or the receiver's services but instead, cites to all

2,843 pages as proof thereof (see NYSCEF Doc. No. 356, Plaintiff

Receiver's Affirmation in Support). Accordingly, this

application is denied, without prejudice to a future application

at the termination of the receivership.

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Accordingly, it is

ORDERED that the motion (sequence number 022) is granted in

part, without opposition, and denied in all remaining parts; it

is further

ORDERED that Stuart Mordfin, C.P.A., of Mordfin LLP, is

appointed to serve as accountant to plaintiff receiver; it is

further

ORDERED that Adam Kalish, Esq., of Colbert Law LLC, is

appointed to serve as counsel to plaintiff receiver; it is

ORDERED that plaintiff receiver is hereby authorized to

make an interim payment of $23,740.46 to Robert D. Pair of

Harlem Property Management, Inc., from the receiver's accounts

for materials provided and professional services rendered; it is

make an interim payment of $6,536.09 to Charles J. Shields,

C.P.A., from the receiver's accounts for materials provided and

professional services rendered; it is further

ORDERED that plaintiff receiver's requests for orders

Stuart Mordfin, C.P.A., of Mordfin LLP, are denied, without

prejudice to future applications; and it is further

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ORDERED that Plaintiff receiver's application for a 5%

commission is denied, without prejudice to future applications.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.

2/18/2025 DATE CHECK ONE: CASE DISPOSED

GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

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