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Diamond v. Pataki

February 14, 2007

JEHED DIAMOND, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
GEORGE E. PATAKI, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS GOVERNOR OF THE STATE OF NEW YORK; ELIOT SPITZER, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS ATTORNEY GENERAL OF THE STATE OF NEW YORK; ALAN G. HEVESI, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS COMPTROLLER OF THE STATE OF NEW YORK; GARY L. CADY, IN HIS OFFICIAL CAPACITY AS CLERK OF DELAWARE COUNTY, AND ON BEHALF OF A DEFENDANT CLASS OF NEW YORK COUNTY CLERKS, CHRISTOPHER JONES, DEFENDANTS.
JOSEPH BETESH, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
GEORGE E. PATAKI, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS GOVERNOR OF THE STATE OF NEW YORK, ELIOT SPITZER, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS ATTORNEY GENERAL OF THE STATE OF NEW YORK, ALAN HEVESI, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS COMPTROLLER OF THE STATE OF NEW YORK, GLORIA D'AMICO, INDIVIDUALLY AND IN HER OFFICIAL CAPACITY AS CLERK OF THE COUNTY OF QUEENS, AND ON BEHALF OF A DEFENDANT CLASS OF NEW YORK COUNTY CLERKS, AND ABRAHAM BETESH, DEFENDANTS.



The opinion of the court was delivered by: Sidney H. Stein, U.S. District Judge

OPINION & ORDER

The named plaintiffs in these consolidated actions -- Jehed Diamond and Joseph Betesh -- allege violations of the Fifth and Fourteenth Amendments to the United States Constitution pursuant to 42 U.S.C. § 1983. They each contend that New York State's lis pendens statute, N.Y. C.P.L.R. §§ 6501-6515, violates their constitutional right to due process, both on its face and as applied to each plaintiff. In addition, Diamond contends that the lis pendens statute violates both her equal protection rights as a married person and her New York state constitutional rights to due process and equal protection pursuant to the New York State Constitution.

Diamond and Betesh originally brought their claims against the then New York State Governor George E. Pataki, Attorney General Elliot Spitzer, and Comptroller Alan Hevesi.*fn1

Diamond also brings her claims against Gary L. Cady -- the Delaware County Clerk -- and Christopher Jones -- the individual who filed the notice of pendency with the Delaware County Clerk's office. Similarly, Betesh also brings his claims against Gloria D'Amico -- the Queens County Clerk -- and Abraham Betesh -- the individual who filed the notice of pendency with the Queens County Clerk's office. All defendants except Christopher Jones and Abraham Betesh are referred to collectively as "the State Defendants."

In Diaz v. Pataki, 368 F. Supp. 2d 265 (S.D.N.Y. 2005), this Court upheld the constitutionality of the same statute at issue here in the face of essentially the same claims. The New York State defendants in these consolidated actions have now moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss the complaints for failure to state a claim. Because nothing about Diamond and Betesh's due process claims justifies a result different than that in Diaz, defendants' motions are granted with respect to all due process claims. Because Diamond does not bring valid equal protection or state constitutional claims, the defendants' motion is also granted with respect to those remaining claims.

I. Background

The following facts are taken from the complaints and are assumed to be true for the purposes of this motion. See McKenna v. Wright, 386 F.3d 432, 434 (2d Cir. 2004) (citing Johnson v. Newburgh Enlarged Sch. Dist., 239 F.3d 246, 250 (2d Cir. 2001)); Diaz, 368 F. Supp. 2d at 269.

A. Facts Alleged in the Diamond Complaint

In 1987, plaintiff Diamond and her husband, Michael Mendelson, jointly purchased real property on Ridge Road in Delaware County, New York. (Diamond Compl. ¶ 30.) Although the title to the property was in Mendelson's name, the property was purchased with joint assets, and the couple's intent was to hold it as joint property pursuant to New York's domestic relations laws. (Id. ¶ 31.) At some unspecified point after the property was purchased, Diamond and Mendelson legally separated. (Id. ¶ 30.)

On May 17, 2002, Mendelson conveyed the title and deed of the Ridge Road property to Diamond, who was a bona fide purchaser for fair consideration. (Id. ¶ 32.) This transfer of title took place almost immediately after Diamond learned for the first time that her husband had, four days earlier, secretly dissipated all the marital assets including assets from their joint law practice. (Id. ¶ 33.) Diamond later learned that Mendleson had secretly obtained a $75,000 mortgage on the property (id. ¶ 34), and had additionally obtained a series of personal loans from several individuals, including defendant Christopher Jones. (Id. ¶¶ 41-42.) Unable to afford to keep the Ridge Road property, Diamond arranged to sell the property and scheduled a closing for November 13, 2002. (Id. ¶ 44.) However, two weeks prior to the scheduled closing, Jones filed a state lawsuit against both Mendelson and Diamond, as well as a notice of pendency with the Delaware County Clerk's office. (Id. ¶ 45.) Jones alleged in that state litigation that he loaned $90,000 to Mendelson in reliance upon Mendelson's promise to repay the loan out of the proceeds from the prospective sale of the Ridge Road property, and that Mendelson had signed a promissory note specifying the terms of the loan. (Diamond Compl. at Ex. B.)

In order to be able to sell the property, Diamond signed an escrow agreement with Jones one week prior to the scheduled closing in which she agreed to forgo state court remedies against Jones and also placed $100,000 from the sale of the property in escrow pending the outcome of Jones' lawsuit against Mendelson and Diamond. (Id. ¶ 52.) Diamond asserts that the lis pendens on the Ridge Road property "continues to date through the successor escrow agreement," thereby continuing to deprive her of substantial assets. (Id. ¶ 59.) In June 2003, plaintiff Diamond filed one of these consolidated actions in federal court challenging the constitutionality of the New York lis pendens statute.

B. Facts Alleged in the Betesh Complaint

Plaintiff Joseph Betesh owns a two-family home located in East Elmhurst, New York. (Betesh Compl. ¶ 33.) Betesh's home had originally been owned by his mother, who purchased it for the benefit of Betesh with the intention of gifting it to him. (Id. ¶ 34). After the initial purchase, Betesh resided in the second floor apartment of the home, and rented out the first floor apartment to a tenant. (Id. ¶ 33.) On December 23, 1996, Betesh's mother transferred the home to Betesh, and that transfer was effectuated by him with the consent of his mother using a power of attorney that had been executed by his mother. (Id. ¶ 35.) At some unspecified point in time after the transfer, Betesh's mother passed away. (See id. ¶ 42.)

On June 16, 2004, a fire in the house caused approximately $87,000 in damages. (Id. ¶ 36.) Because the house was uninsured, Betesh was unable to make the necessary repairs. (Id. ¶ 37.) As a result, the tenant in the first floor apartment discontinued paying rent in July 2004. (Id.) In August 2004, Betesh signed a loan commitment offered by a housing program affiliated with the New York City Department of ...


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