SR Holdings I LLC v. Cannavo

• Decision Date: 30 June 2017
• Docket Number: 2017-33371,Index 54202/2016
• Court: New York Supreme Court
• Parties: SR HOLDINGS I, LLC Plaintiff, v. JOSEPH CANNAVO, LEONARD CANNAVO, CARMELA CANNAVO, IRVING PLACE PROPERTIES, LLC, ONE WAY PROPERTIES LLC, PUTNAM PARK PROPERTIES LLC, REGENT STREET PROPERTIES LLC, WASHINGTON PARK PROPERTIES LLC, BLUE MOUNTAIN PARTNERS LLC, CROWN ROYAL LLC, HASECO PROPERTIES LLC, WHITETAIL REATY GROUP LLC, CAPTIAL REATY PARTNERS LLC, ALL NY HOLDINGS LLC, M&T BANK, PROVIDENT BANK n/k/a STERLING NATIONAL BANK, RED SOX FUNDING LLC, BRANCA REATY LLC, CASTLE TITLE INSURANCE AGENCY INC., BLACK DIAMOND GROUP LLC, RANDOM PROPERTY GROUP LLC, 82-84 HAMILTON MANOR LLC, DEREK WASHNGGTON, RANCA CONSULTING SERVICES LLC, CREATIVE SCAPES MANAGEMENT LLC, SINGER ENERGY GROUP LLC, SHANA SIMMONS, NEW YORK STATE DEPARTMENT OF TAXATION & FINANCE, JOHN DOE #1 through JOHN DOE #15 INCLUSIVE, Defendant.

SR HOLDINGS I, LLC Plaintiff,
v.
JOSEPH CANNAVO, LEONARD CANNAVO, CARMELA CANNAVO, IRVING PLACE PROPERTIES, LLC, ONE WAY PROPERTIES LLC, PUTNAM PARK PROPERTIES LLC, REGENT STREET PROPERTIES LLC, WASHINGTON PARK PROPERTIES LLC, BLUE MOUNTAIN PARTNERS LLC, CROWN ROYAL LLC, HASECO PROPERTIES LLC, WHITETAIL REATY GROUP LLC, CAPTIAL REATY PARTNERS LLC, ALL NY HOLDINGS LLC, M&T BANK, PROVIDENT BANK n/k/a STERLING NATIONAL BANK, RED SOX FUNDING LLC, BRANCA REATY LLC, CASTLE TITLE INSURANCE AGENCY INC., BLACK DIAMOND GROUP LLC, RANDOM PROPERTY GROUP LLC, 82-84 HAMILTON MANOR LLC, DEREK WASHNGGTON, RANCA CONSULTING SERVICES LLC, CREATIVE SCAPES MANAGEMENT LLC, SINGER ENERGY GROUP LLC, SHANA SIMMONS, NEW YORK STATE DEPARTMENT OF TAXATION & FINANCE, JOHN DOE #1 through JOHN DOE #15 INCLUSIVE, Defendant.

No. 2017-33371

Index No. 54202/2016

Supreme Court, Westchester County

June 30, 2017

Unpublished Opinion

PRESENT: HON. SAM D. WALKER, J.S.C.

DECISION & ORDER

HON. SAM D. WALKER, J.S.C.

The following papers were considered on the motion seeking dismissal of the complaint and all cross-claims against Castle Title Insurance Agency, Inc.:

PAPERS NUMBERED

Notice of Motion/Affirmation/Exhibits A-H 1-10

Memorandum of Law in Support 11

Affirmation/Affidavit in Opposition/Exhibits A-M 12-26

1

Memorandum of Law in Opposition 27

Amended Affidavit in Opposition 28

Memorandum of Law in Reply 29

Based upon the foregoing the motion is GRANTED in part and DENIED in part.

The plaintiff commenced this action to recover on deficiency judgments against the named defendants from two previously filed actions ("Action 1 and Action 2"). The plaintiff states that on or about September 24, 2012, a judgment was entered in Action 1 in favor of SR Holdings I, LLC ("SR Holdings") against Fox Island Properties, LLC, Joseph Cannavo, Leonard Cannavo, Bridgeport Realty Group, LLC, GreatAmerican Development, Building & Remodeling, Inc., Haseco Properties LLC, Irving Place Properties LLC, One Way Properties LLC, Putnam Park Properties LLC, Regent Street Properties LLC, Washington Park Properties LLC and Western Greenwich Holdings LLC, in the amount of $2, 836, 459.42 ("Judgment 1").

The plaintiff further states that on or about January 7, 2013, a judgment was entered in Action 2 in favor of SR Holdings against Fox Island Properties LLC, Joseph Cannavo, Leonard Cannavo, Irving Place Properties LLC, One Way Properties LLC, Putnam Park Properties LLC, Regent Street Properties LLC, Washington Park Properties LLC, and Western Greenwich Holdings, LLC in the amount of $1, 618, 929.82 ("Judgment 2").

The plaintiff alleges that Judgment 1 and Judgment 2 remain wholly unsatisfied and this action seeks, inter alia, to set aside the alleged fraudulent conveyances of fifty six properties from Joseph Cannavo, Leonard Cannavo, Irving Place Properties LLC, One Way Properties LLC, Putnam Park Properties LLC, Regent Street Properties LLC, Washington Park Properties LLC, and Haseco Properties LLC (collectively "the transferor defendants") to the defendants Black Diamond Group LLC, Blue Mountain Partners LLC,

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Crown Royal LLC, Whitetail Realty Group LLC, Capital Realty Partners LLC, Random Property Group LLC, and 82-84 Hamilton Manor LLC (collectively "the transferee defendants"), in violation of Debtor and Creditor Law 273, 273-a, 275 and 276. The action also seeks to set aside twelve mortgage encumbrance..

With respect to Castle Title Insurance Agency, Inc. ("Castle"), the Amended Verified Complaint alleges that Castle negligently and/or fraudulently delayed in recording the fifty six deeds and ten of the mortgage documents on behalf of the transferor defendants and the transferee defendants to aid in them avoiding payment of Judgment 1 and Judgment 2. The amended complaint also alleged conspiracy to defraud creditors and civil RICO violations against Castle.

Castle now files this motion seeking dismissal of the claims against it, pursuant to CPLR 3211 (a)(7). Castle argues that the plaintiff's amended complaint fails to satisfy basic statutory pleading requirements as set forth in CPLR 3014 and 3013. It does not allege that Castle is a judgment debtor, nor does it allege that Castle had any connection with the plaintiff, the judgment debtors, or the other co-defendants. Castle argues that it does not specify the properties for which the property transfer or financial transaction filings were delayed and it does not specify which alleged delays were for the purpose of avoiding payment. Castle argues that the plaintiff does not allege that Castle performed title services on any party's behalf, nor does it allege that Castle deviated from accepted standards and practices in filing documents. Castle asserts that any answer would require it to speculate as to the specifics of the plaintiff's claims.

Castle also asserts that SR Holdings fails to plead a proper claim for negligence because the plaintiff does not allege a relationship between Castle and SR Holdings that

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would trigger a duty on the part of Castle and without a duty the claims cannot survive. Castle further asserts that the plaintiff's amended complaint fails to plead a proper claim of fraud or civil RICO and that the plaintiff does not have a claim for civil conspiracy to commit fraud.

In support of the motion, Castle relies upon an attorney's affirmation, a memorandum of law and a copy of the pleadings. SR Holdings opposes the motion, relying on an affidavit, an attorney's affirmation, affidavits, transcripts and a decision and order from a previous action and copies of checks. The transferor defendants and the transferee defendants also opposes the motion, by submitting affirmations in opposition to Castle's motion to dismiss, requesting that the cross...