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PETITIONER JUDGMENT-CREDITOR WAS ENTITLED TO THE TURNOVER OF CERTAIN REAL PROPERTY WHICH HAD BEEN FRAUDULENTLY TRANSFERRED TO A TRUST BY THE RESPONDENT JUDGMENT-DEBTORS, AS WELL AS THE CONTENTS OF RESPONDENTS’ SAFETY DEPOSIT BOX (SECOND DEPT).

The Second Department, reversing Supreme Court, determined petitioner was entitled to real property which was fraudulently transferred by respondents to a trust, as well as to the contents of respondents’ safety deposit box, to satisfy a judgment against respondents in the approximate amount of $338,000:

… [P]etitioner commenced this proceeding pursuant to CPLR article 52, seeking … the turnover of a safety deposit box maintained by the respondents Zakhar Brener and Ninel Krepkina and of certain residential real property owned by the respondent B and K Trust. * * *

… [P]etitioner established her prima facie entitlement to judgment as a matter of law on the cause of action seeking relief pursuant to Debtor and Creditor Law former § 273 by submitting evidence that Brener was insolvent at the time of the conveyance of the property, which was made without fair consideration … .  * * *

… [P]etitioner established her prima facie entitlement to judgment as a matter of law on the cause of action seeking relief pursuant to Debtor and Creditor Law former § 276. “Pursuant to Debtor and Creditor Law former § 276, every conveyance made with actual intent to hinder, delay, or defraud either present or future creditors is fraudulent. The requisite intent required by this section need not be proven by direct evidence, but may be inferred from the circumstances surrounding the allegedly fraudulent transfer” … . “In determining whether a conveyance was fraudulent, the courts consider the existence of certain common ‘badges of fraud,’ which include ‘a close relationship between the parties to the alleged fraudulent transaction; a questionable transfer not in the usual course of business; inadequacy of the consideration; the transferor’s knowledge of the creditor’s claim and the inability to pay it; and retention of control of the property by the transferor after the conveyance'” … . “A prime example of this type of fraud is where a debtor transfers his property to another while retaining the use thereof so as to continue . . . free from the claims of creditors” … . Here, the petitioner submitted, among other things, the Brener respondents’ answer, wherein they admitted that Brener continued to occupy and use the property with Krepkina. …

… [P]etitioner established her prima facie entitlement to judgment as a matter of law on the cause of action to direct Chase Bank to turn over of the contents of the safe deposit box maintained by Brener and Krepkina by submitting a letter establishing that Brener and Krepkina jointly held a safe deposit box at one of Chase Bank’s branches in Brooklyn … . Matter of Schiffman v Affordable Shoes, Ltd., 2025 NY Slip Op 02786, Second Dept 5-7-25

Practice Point: Consult this decision for a concise description of a CPLR Article 52 turnover proceeding by a judgment creditor against judgment debtors based in part upon respondents’ fraudulent transfer of real property to avoid creditors (Debtor and Creditor Law sections 273 and 276).

 

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THE PLAINTIFF DID NOT DEMONSTRATE HIS DECEASED BROTHER MADE AN INTER VIVOS GIFT OF THE COOPERATIVE APARTMENT TO PLAINTIFF; THE STATUTE OF FRAUDS APPLIES AND THERE WAS NO WRITING; AND THE FAILURE TO FOLLOW THE TRANSFER PROVISIONS OF THE PROPRIETARY LEASE NEGATED A FINDING OF DONATIVE INTENT (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff did not demonstrate his deceased brother made an inter vivos gift of a cooperative apartment to plaintiff. The alleged transfer of the property was subject to the Statute of Frauds and there was no writing memorializing the alleged gift:

Defendant established that there was no valid inter vivos gift to plaintiff of the shares and proprietary lease for the apartment, as the statute of frauds applies to the sale of stock in a housing cooperative and there was no writing to effect the transfer … . …

Plaintiff’s claim further fails as a matter of law, as the decedent — his brother — failed to follow the transfer provisions of the proprietary lease, which required, among other things, a written assignment of shares signed by the shareholder and the approval of defendant’s board of directors to make a valid transfer of the shares to the apartment within the decedent’s lifetime … .

… [E]ven if the decedent had not been required to abide by the terms of the proprietary lease to make a valid inter vivos gift of the apartment, the lack of a writing also militates against establishing the decedent’s donative intent, which is a necessary element of a valid inter vivos gift … . Not only does the decedent’s failure to follow the procedures in the proprietary lease contradict any donative intent, but plaintiff also acknowledges that the delivery of the share certificate and proprietary lease were not made by the decedent himself, and the conflicting affidavits of the decedent’s girlfriend fail to establish that she was acting as decedent’s agent for that purpose. Rivera v 98-100 Ave. C Hous. Dev. Fund Corp., 2022 NY Slip Op 06074, First Dept 10-27-22

Practice Point: Plaintiff did not demonstrate his deceased brother made an inter vivos gift of a cooperative apartment. The Statute of Frauds applies and there was no writing. In addition the failure to follow the transfer provisions in the proprietary lease negated donative intent.

 

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DEFENDANTS’ OWN SUBMISSIONS DEMONSTRATED (1) PLAINTIFF OWNED THE PROPERTY LEFT IN THE HOUSE PURCHASED BY DEFENDANTS, (2) PLAINTIFF HAD REMOVED SOME OF THE PROPERTY, AND (3) PLAINTIFF ASKED FOR MORE TIME TO REMOVE MORE PROPERTY; THOSE FACTS NEGATED DEFENDANTS’ ALLEGATION PLAINTIFF HAD ABANDONDED THE PROPERTY; DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT DISMISSING THE CONVERSION CAUSE OF ACTION SHOULD NOT HAVE BEEN GRANTED (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined defendants’ motion for summary judgment dismissing the conversion cause of action should not have been granted. Defendants’ own submissions demonstrated plaintiff’s ownership of the property, his removal of some of the property, and his request for more time to remove the rest. The property was in a house where plaintiff used to live, but which was purchased by the defendants. Defendants disposed of the remaining property, arguing plaintiff had abandoned it. Plaintiff then sued for conversion:

If the property can be deemed abandoned, then plaintiff’s possessory interest was forfeited and defendants’ actions were authorized, i.e., there can be no cause of action for conversion … . “The abandonment of property is the relinquishing of all title, possession or claim to or of it—a virtual intentional throwing away of it. It is not presumed. Proof supporting it must be direct or affirmative or reasonably beget the exclusive inference of the throwing away” … . …

… [D]efendants’ … own submissions establish that plaintiff was the owner of the personal property left on the premises, that he attempted to remove some of the property during the 30-day period, and that he made requests for additional time to retrieve his property…. . Cretaro v Huntington, 2022 NY Slip Op 01935, Fourth Dept 3-18-22

Practice Point: Here defendants purchased a house formerly owned by plaintiff and gave plaintiff 30 days to remove plaintiff’s personal property from the house. Defendants’ disposed of the property, arguing that plaintiff had abandoned it. Defendants’ own submissions demonstrated plaintiff owned the property, removed some of the property and asked for time to remove more. Defendants’ own submissions, therefore, demonstrated plaintiff had not abandoned the property. Defendants’ motion to dismiss plaintiff’s conversion cause of action should not have been granted.

 

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IN THIS DEFICIENCY JUDGMENT ACTION, THE PLAINTIFF DID NOT PRESENT SUFFICIENT PROOF OF THE AMOUNT OWED BY THE DEFENDANT OR THE REASONABLENESS OF THE SALE OF THE COLLATERAL (FOURTH DEPT).

The Fourth Department, vacating the damages award in this action on a motor vehicle retail installment contract, determined the plaintiff did not present evidence sufficient to determine the correct amount of the deficiency judgment or the reasonableness of the sale of the collateral:

… [T]he court should have denied plaintiff’s motion insofar as it sought summary judgment on the amount of damages. Plaintiff did not meet its initial burden of establishing the amount of the alleged deficiency as a matter of law … . We note in particular that plaintiff failed to provide evidence of defendant’s payment history, and failed to establish whether it applied certain applicable credits, including an unearned credit service charge pursuant to Personal Property Law §§ 305 and 315.

Moreover, plaintiff’s moving papers failed to establish that the vehicle was sold in a commercially reasonable manner … . A “secured party seeking a deficiency judgment from the debtor after sale of the collateral bears the burden of showing that the sale was made in a commercially reasonable manner” ( … see generally UCC 9-627 [b]). We conclude that, “[h]aving failed to set forth any of the facts and circumstances surrounding the sale, plaintiff failed to satisfy a prerequisite to obtaining a deficiency judgment and is not entitled to summary judgment” with respect to damages … . Ally Fin. Inc. v Jonathan, 2020 NY Slip Op 05630, Fourth Dept 10-9-20

 

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PLAINTIFF ENTITLED TO RETURN OF ENGAGEMENT RING AFTER THE ENGAGEMENT AND MARRIAGE WERE CALLED OFF (SECOND DEPT).

The Second Department determined plaintiff was entitled to summary judgment in an action for the return of an engagement ring after the engagement and marriage were called off:

As a general matter, a party not under any impediment to marry may maintain an action to recover property, such as an engagement ring, given in contemplation of marriage where the contemplated marriage does not come to pass (see Civil Rights Law § 80-b …). Here, the plaintiff established his prima facie entitlement to summary judgment on the cause of action for the return of the ring by establishing that he gave the ring to the defendant in contemplation of their marriage, and thus, he was entitled to its return at the time of the termination of their engagement … .

In opposition, the defendant failed to raise a triable issue of fact. Although the defendant maintained that the plaintiff made an inter vivos gift of the ring to her after the termination of their engagement, the evidence she submitted failed to support this assertion. A valid inter vivos gift requires proof, by clear and convincing evidence, of “the intent on the part of the donor to make a present transfer; delivery of the gift, either actual or constructive to the donee; and acceptance by the donee” … . Here, the text messages upon which the defendant relied did not clearly demonstrate a donative intent on the part of the plaintiff with respect to the ring, nor did they establish an acceptance of the ring as a gift by the defendant. Rambod v Tazeh, 2020 NY Slip Op 03382, Second Dept 6-17-20

 

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Once an Amended Complaint is Served the Action Must Proceed As if the Original Complaint Never Existed—A Summary Judgment Motion Based Upon an Affirmative Defense Asserted for the First Time in the Answer to the Amended Complaint Was Properly Brought, Even Though a Prior Summary Judgment Motion on the Same Ground Had Been Denied/Medical Billing Software, i.e., Intellectual Property, Is “Personal Property” Covered by General Obligations Law 5-903—The Automatic Renewal Provision of the Medical Billing Contract Was Therefore Void

The First Department, in a full-fledged opinion by Justice Gische, determined that an amended complaint supersedes the original complaint and an affirmative defense asserted in the answer to the amended complaint could be the basis of a summary judgment motion, even though the same ground was asserted in a prior, unsuccessful summary judgment motion. The substantive issue was whether billing software licensed to a doctor was “service … to or for … personal property” within the meaning of General Obligations Law 5-903 (2).  The court determined the billing software was covered by the General Obligations Law and, therefore, the automatic renewal provision in the contract between the software company and the doctor could not be enforced.  The “General Obligations Law” affirmative defense was not asserted in the original answer and a summary judgment motion based on the unpled affirmative defense had previously been denied:

We find that the second summary judgment motion, brought after the pleadings were amended on a substantive issue not previously decided by the court, was procedurally proper. “Once plaintiff served the amended complaint, the original complaint was superseded, and the amended complaint became the only complaint in the action. The action was then required to proceed as though the original pleading had never been served” … . Thus, defendant’s appeal from the prior order denying summary judgment became moot …, and “sufficient cause . . . exist[ed]” for his motion for summary judgment dismissing the amended complaint … . …

General Obligations Law § 5-903 does not define “personal property,” although it broadly defines “person” as “an individual, firm, company, partnership or corporation” and also states that its restrictions apply unless “the person receiving the service” is served with advanced notice calling its attention to the renewal clause in the contract (General Obligations Law § 5-903[2]). The statute does not require that the person own the “personal property” being serviced, and section 5-903 has been analyzed by courts in a variety of circumstances to determine its applicability. Personal property has been interpreted to include intellectual property as well as tangible personal property … . The purpose of the notice provision is to protect service recipients from the harm of unintended automatic renewals of contracts for consecutive periods … . Since § 5-903 is remedial in nature it is construed broadly … .

We find that the parties’ agreement was “for service . . . to or for . . . personal property” within the meaning of the General Obligations Law. The services provided were directly and inextricably related to the billing and medical records of the practice, which are personal property. Healthcare IQ LLC v Tsai Chung Chao, 2014 NY Slip Op 03216, 1st Dept 5-6-14

 

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