NYCTL 1999-1 Trust v. NY Pride Holdings, Inc.

Appellate Division of the Supreme Court of New York

NYCTL 1999-1 Trust v. NY Pride Holdings, Inc.

68 A.D.3d 952, 892 N.Y.2d 418

CourtAppellate Division of the Supreme Court of the State of New York

DecidedDecember 15, 2009

StatusPublished

Cited by8 cases

This text of 68 A.D.3d 952 (NYCTL 1999-1 Trust v. NY Pride Holdings, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

NYCTL 1999-1 Trust v. NY Pride Holdings, Inc., 68 A.D.3d 952, 892 N.Y.2d 418 (N.Y. Ct. App. 2009).

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Opinion

The surplus funds of a foreclosure sale stand in the place of the land for all purposes of distribution among persons having vested interests or liens upon the land (see Chase Manhattan Mtge. Corp. v Hall, 18 AD3d 413 [2005]; Shankman v Horoshko, 291 AD2d 441, 442 [2002]). RPAPL 1361 (2) provides that the court shall ascertain the amount due to any claimants and the priority of any liens for purposes of the distribution of surplus moneys.

[953]*953A property formerly co-owned, in equal shares, by the defendant Union Street Management Group, Ltd. (hereinafter Union Street), and the defendant NY Pride Holdings, Inc. (hereinafter NY Pride), was sold in a foreclosure sale, and a court-appointed referee filed a report indicating that the amount of surplus funds from the foreclosure sale, after accounting for the various liens, fees, and encumbrances, was $1,714,042. Union Street moved, inter alia, to direct the receiver to release to it 85.3% of the surplus funds, rather than 50%, which would correspond to its ownership interest in the subject property. Union Street relied on an agreement between it and NY Pride, or the corporations’ owners, which included a provision whereby the parties would be reimbursed, from the surplus funds, for their respective expenses related to said property. However, an agreement, either by parol or in writing, to pay a debt out of a designated fund does not operate to create an equitable lien upon the fund, or operate as an equitable assignment of it (see Teichman v Community Hosp. of W. Suffolk, 87 NY2d 514, 520 [1996]; Datlof v Turetsky, 111 AD2d 364, 365 [1985]). Therefore, the Supreme Court correctly determined that Union Street did not have a lien on the subject property for more than 50% of the surplus funds.

In light of our determination, we need not reach the parties’ remaining contentions. Fisher, J.P., Angiolillo, Eng and Lott, JJ., concur.

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The surplus funds of a foreclosure sale stand in the place of the land for all purposes of distribution among persons having vested interests or liens upon the land (see Chase Manhattan Mtge. Corp. v Hall, 18 AD3d 413 [2005]; Shankman v Horoshko, 291 AD2d 441, 442 [2002]). RPAPL 1361 (2) provides that the court shall ascertain the amount due to any claimants and the priority of any liens for purposes of the distribution of surplus moneys.

[953]*953A property formerly co-owned, in equal shares, by the defendant Union Street Management Group, Ltd. (hereinafter Union Street), and the defendant NY Pride Holdings, Inc. (hereinafter NY Pride), was sold in a foreclosure sale, and a court-appointed referee filed a report indicating that the amount of surplus funds from the foreclosure sale, after accounting for the various liens, fees, and encumbrances, was $1,714,042. Union Street moved, inter alia, to direct the receiver to release to it 85.3% of the surplus funds, rather than 50%, which would correspond to its ownership interest in the subject property. Union Street relied on an agreement between it and NY Pride, or the corporations’ owners, which included a provision whereby the parties would be reimbursed, from the surplus funds, for their respective expenses related to said property. However, an agreement, either by parol or in writing, to pay a debt out of a designated fund does not operate to create an equitable lien upon the fund, or operate as an equitable assignment of it (see Teichman v Community Hosp. of W. Suffolk, 87 NY2d 514, 520 [1996]; Datlof v Turetsky, 111 AD2d 364, 365 [1985]). Therefore, the Supreme Court correctly determined that Union Street did not have a lien on the subject property for more than 50% of the surplus funds.

In light of our determination, we need not reach the parties’ remaining contentions. Fisher, J.P., Angiolillo, Eng and Lott, JJ., concur.

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Bluebook (online)

68 A.D.3d 952, 892 N.Y.2d 418, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nyctl-1999-1-trust-v-ny-pride-holdings-inc-nyappdiv-2009.

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