Key Bank of New York v. Anton

• Decision Date: 14 July 1997
• Citation: 659 N.Y.S.2d 895,241 A.D.2d 482
• Parties: , 1997 N.Y. Slip Op. 6755 KEY BANK OF NEW YORK, etc., Appellant, v. Karl V. ANTON, Jr., et al., Defendants, Peter Bodkin, etc., et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 895

659 N.Y.S.2d 895

241 A.D.2d 482, 1997 N.Y. Slip Op. 6755

KEY BANK OF NEW YORK, etc., Appellant, v. Karl V. ANTON, Jr., et al., Defendants Peter Bodkin, etc., et al., Respondents.

Supreme Court, Appellate Division Second Department.

July 14, 1997.

Gandin, Schotsky, Rappaport, Glass & Greene, LLP, Melville (Kenneth J. Lauri, of counsel), for appellant.

Patrick F. Adams, P.C., Bay Shore (Joseph M. Buderwitz, of counsel), respondent pro se and for other respondents.

Before SULLIVAN, J.P., and PIZZUTO, FRIEDMANN and KRAUSMAN, JJ.

MEMORANDUM BY THE COURT.

In a commercial mortgage foreclosure action, the plaintiff Key Bank of New York appeals from a judgment of the Supreme Court, Suffolk County (Underwood, J.), entered April 17, 1996, which directed it to pay $48,175.04 to the receiver, Peter Bodkin; $27,117.50 to Patrick F. Adams, Esq.; $4,768l.75 to Donald J. Werner, Esq.; $5,147.45 to the receiver as reimbursement for a bond; $2,000 to accountants Conlon and Turkenitz; and $5,835 to accountants Bender Ciccotto & Co.

ORDERED that the judgment is reversed, on the law, with costs, and the matter is remitted to the Supreme Court, Suffolk County, for a hearing in accordance herewith.

The respondent Peter Bodkin was appointed the receiver of certain foreclosed property containing a restaurant, and was granted authority to operate the restaurant as an ongoing concern. Over the course of the receiver's tenure, the restaurant ceased to take in sufficient funds to pay vendors who supplied goods to it. The receiver accepted goods from these vendors on credit, promising that the plaintiff bank would ultimately pay. By order of the court, after the restaurant closed, the bank was directed to and did pay these vendors over $100,000. The restaurant was ultimately closed after the Long Island Lighting Company shut off the electricity for nonpayment of bills, and the property was, thereafter, sold at public auction. The receiver then sought and was granted a 5% commission (see, CPLR 8004[a] ) on the cash flow handled by the restaurant while in his hands, as well as attorneys' and accountants' fees. These payments were opposed by the plaintiff bank.

The statutory commission of 5% represents the maximum amount which may be paid to a receiver for his services (CPLR 8004[a]; see also, Independent Properties Co. v. Mast Property Investors, 148 A.D.2d 849, 850, 539 N.Y.S.2d 121). A receiver is not entitled to the statutory maximum as of right; the court has discretion to award a lower percentage (see, Coronet Capital Co. v. Spodek, 202 A.D.2d 20, 27, 615 N.Y.S.2d 351). "It is [also] fundamental law that a receiver is required to render services in order to earn his commissions [and][i]t is the receiver's burden to justify his account" (Independent Properties Co. v. Mast Property Investors, supra, at 849-50, 539 N.Y.S.2d 121; see also, East Chatham Corp. v. Iacovone, 26 A.D.2d 433, 275 N.Y.S.2d 53). Thus, upon fixing a final commission, the receiver is required to render a full accounting and...