Silva v. Silva

27 Misc. 3d 526
CourtNew York Supreme Court
DecidedFebruary 19, 2010
StatusPublished

This text of 27 Misc. 3d 526 (Silva v. Silva) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Silva v. Silva, 27 Misc. 3d 526 (N.Y. Super. Ct. 2010).

Opinion

OPINION OF THE COURT

Robert A. Bruno, J.

On January 25, 2010, plaintiff submitted a postjudgment order to show cause, directing that the defendant produce certain documents and records with respect to the pending sale of commercial property known as 750-790 Park Place, Long Beach, [528]*528New York (property). Counsel for plaintiff, Mr. Mitchell, states in his affirmation that since the property is scheduled to be sold on February 22, 2010, this court must entertain this application prior to the sale date because “it is difficult, if not impossible, to understand the arm’s length financial benefit to selling the building.”1

On February 3, 2010, plaintiff submitted a second postjudgment order to show cause (emergency OSC), along with an emergency affirmation, from plaintiffs counsel, Mr. Mitchell, alleging virtually the same set of facts contained in his prior order to show cause, but this time requesting a temporary restraining order and a preliminary injunction enjoining the sale of the property. This court heard oral argument on the same day and at the conclusion of oral argument denied plaintiffs temporary restraining order for the reasons set forth herein. Plaintiff thereafter requested an opportunity to submit additional briefs regarding the preliminary injunction on the return date of plaintiffs original order to show cause for February 16, 2010 which this court granted. On February 16, 2010, the court heard oral argument regarding plaintiffs application for a preliminary injunction. During oral argument, counsel for plaintiff decided not to submit any additional briefs, withdrew their application for a preliminary injunction and made a new oral application to this court, to restrain the defendant’s assumed proceeds of sale from the property to securitize the plaintiffs unperfected security interest in the defendant’s unsecured potential share of the rental income from the property that will no longer exist after the sale. Counsel for plaintiff acknowledged that he informed counsel for defendant of this new argument on Saturday, February 13, 2010, although no additional papers were submitted. At the conclusion of oral argument, counsel for defendant requested until February 18, 2010 to submit opposition papers in response to plaintiffs new oral argument and counsel for plaintiff also requested to submit their reply, if any, on the same day. The court agreed and advised it would deem the balance of the motion submitted on February 18, 2010. On February 18, 2010, at approximately 4:00 p.m., this court received the defendant’s opposition papers and a memorandum of law from plaintiff. For the reasons set forth herein this court denied plaintiffs oral application to restrain the defendant’s assumed share of the proceeds from the sale of the property as well as its request for attorney fees.

[529]*529Facts

According to plaintiffs emergency OSC, the plaintiff wife and defendant husband entered into a stipulation on or about March 29, 2009 (stipulation).2 The stipulation provides, in relevant part, at article XVII (2), as follows:

“2. The Husband shall pay to the Wife the non-taxable sum of Two Million Two Hundred Thousand ($2,200,000.00) Dollars, which sum shall be payable in equal monthly installments in the amount of Sixty-One Thousand One Hundred Eleven and 11/ 100) ($61,111.11) Dollars, and which payments shall commence on the fifteenth (15th) day of the month following the execution of this Stipulation and continuing on the fifteenth (15th) day of each month thereafter for a period of thirty-six (36) months until satisfied, which sum shall be directly deposited to the bank account of the Wife and she shall provide all necessary information to the Husband to effectuate same. The Husband’s obligation to pay the Two Million Two Hundred Thousand ($2,200,000.00) Dollars shall be secured as follows:
“a) by his rental income paid to 750 Park Place, LLC (i.e., the Husband’s share of the monthly rental income) which payment shall be paid directly to the Wife by direct deposit to the bank account of Wife;
“b) in the event of default in the payment of any of the monthly installments when due as herein provided, and in the event that the Husband fails to cure said default within 30 days of written notice (sent by certified mail to the Husband’s Merrick address or any other address he so designated and by e-mail) by the Wife to the Husband, the Wife may declare the entire balance of Two Million Two Hundred Thousand ($2,200,000.00) Dollar distributive award then unpaid immediately due and payable and she shall be entitled to enter a money judgment in favor against the Husband upon notice to the Husband.”

The parties acknowledge that the property is owned by 750 Park Place Realty Co., LLC (LLC), an entity that is not a party [530]*530to this action or stipulation. It is also undisputed that the plaintiff and defendant each own a 35% interest in the LLC. The parties further acknowledge that the property and the defendant’s 35% ownership interest in the LLC are not marital property, but separate property.

Arguments

Collateral for Distributive Award First, plaintiff claims that since the collateral for the payment of a $2,200,000 distributive award is secured by the defendant’s share of the rental income generated by the property, if the property is sold, plaintiff will be denied her collateral3 and she will no longer receive her payments.

Security Interest in Rents

Second, plaintiff claims she has a security interest in the defendant’s collateral, in that the defendant pledged his share of rental income from the property as security for his distributive award payment to plaintiff.

Market Value and Arm’s Length Transaction Third, plaintiff claims that the LLC is selling the property below market value and the sale is not an arm’s length transaction because the LLC is selling the property to an individual known as Avery Eisenreich and a recent Google Internet search had revealed that Mr. Eisenreich is an officer of 13 nursing homes and the defendant’s business, Chem RX, provides pharmaceuticals to nursing homes.

Uniform Commercial Code § 9-315 Finally, on February 13, 2010, the plaintiff, without submitting any additional papers, argued that the sale of the property by the LLC represents the proceeds of sale of plaintiffs collateral, namely, the defendant’s future interests, if any, in a portion of the rent received from the LLC.

Conclusions of Law Temporary Restraining Order

It is well settled that in order for the court to grant a temporary restraining order and preliminary injunction, pursu[531]*531ant to CPLR 6301 the movant must show (1) she was likely to succeed on the merits, (2) she would suffer irreparable harm absent interim injunctive relief, and (3) the balance of the equities were in her favor.

Generally, an injunction in a breach of contract action to recover money only is improper. In Credit Agricole Indosuez v Rossiyskiy Kredit Bank (94 NY2d 541 [2000]), the Court of Appeals held that preliminary injunctive relief was improper. Under the substantive law, an unsecured general creditor has no cognizable interest in the debtor’s property until the creditor obtains a judgment.

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Cite This Page — Counsel Stack

Bluebook (online)
27 Misc. 3d 526, Counsel Stack Legal Research, https://law.counselstack.com/opinion/silva-v-silva-nysupct-2010.