PPX Enterprises, Inc. v. Chalpin

209 A.D.2d 353, 619 N.Y.S.2d 19

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: November 29, 1994
• Status: Published

Opinion

—Order and judgment of the Supreme Court, New York County (Stuart Cohen, J.), entered January 26, 1994, which, inter alia, directed that the respondent-appellant escrow agent pay $55,835.27 from escrow funds to respondent Bernabe Gonzalez, is unanimously reversed, on the law, without costs, the escrow agent directed to pay the escrow funds into court, and the matter is remanded for trial.

We hold that questions of fact are presented as to the ownership of the escrow funds (CPLR 5239). It was error for the motion court to award payment to Gonzalez out of the escrow fund. Gonzalez is a judgment creditor of Edward Chalpin, individually in the amount of $55,835. Gonzalez’s claim is unrelated to either PPX Enterprises, or Rhythm Method, Inc., a now dissolved corporation formerly owned in part by Edward Chalpin, the assets of which comprise the escrow fund. Edward Chalpin’s interest in the escrow fund, aside from amounts claimed as charging liens, was allegedly assigned by Edward Chalpin to petitioner-appellant PPX Enterprises, of which Simon Chalpin, respondent’s brother, is the sole shareholder. Edward Chalpin transferred his equity interest in PPX to his brother in 1987. The motion court did not state the legal basis for awarding the payment to Gonzalez out of the escrow fund. On this record, there appears to be no basis to pierce the corporate veil of PPX Enterprises. Whether the assignment of the escrow proceeds by Edward Chalpin is a fraudulent conveyance is a question of fact that cannot be determined on this record without a trial (see, Matter of American Pride Constr. v Freeman Excavating, 182 AD2d 940, 941). On remand, the court may consider the record in the Nassau Supreme Court proceedings, but on this record neither law of the case nor judicial estoppel are appropriate. It would be inappropriate to enforce the Gonzalez judgment against funds that are not clearly the property of Edward Chalpin. Concur—Murphy, P. J., Sullivan, Rosenberger, Nardelli and Tom, JJ.