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Sharestates Investments, LLC v. Hercules

Supreme Court of New York, Second Department

December 24, 2019

Sharestates Investments, LLC, respondent,
v.
Anyekache Hercules, et al., defendants; James Julius, nonparty-appellant. Index No. 70745/15

          Argued - September 12, 2019

         D61625 Y/afa

          DLA Piper LLP (US), Albany, NY (Jeffrey D. Kuhn of counsel), for nonparty-appellant.

          Butler, Fitzgerald, Fiveson & McCarthy, A Professional Corporation, New York, NY (David K. Fiveson and Claudia G. Jaffe of counsel), for respondent.

          REINALDO E. RIVERA, J.P. LEONARD B. AUSTIN JOHN M. LEVENTHAL ANGELA G. IANNACCI, JJ.

          DECISION & ORDER

         In an action to impose an equitable lien upon real property, nonparty James Julius appeals from an order of the Supreme Court, Westchester County (Mary H. Smith, J.), dated January 20, 2017. The order, insofar as appealed from, denied those branches of the motion of nonparty James Julius which were pursuant to CPLR 1012(a)(3) and/or 1013 for leave to intervene in the action and, thereupon, to vacate a default judgment dated May 9, 2016, awarding the plaintiff an equitable lien upon the subject property in the principal sum of $1, 500, 000.

         ORDERED that the order is affirmed insofar as appealed from, with costs.

         On November 24, 2015, Kurt Jones and Anyekache Hercules (hereinafter together the Jones defendants), as husband and wife, executed a mortgage on certain real property in Westchester County (hereinafter the Westchester property) in favor of James Julius. Thereafter, on December 18, 2015, Sharestates Investments, LLC (hereinafter the plaintiff), commenced this action against the Jones defendants pursuant to RPAPL article 15, seeking to impose an equitable lien upon the Westchester property in the principal sum of $1, 500, 000. The plaintiff alleged in the complaint that the loan proceeds from a mortgage on a property in Brooklyn were deposited in the IOLA account of Hercules, an attorney who purported to represent the seller in that transaction; that the Jones defendants then used the loan proceeds to purchase the Westchester property; and that Hercules was not authorized to use the loan proceeds to purchase the Westchester property. Also on December 18, 2015, the plaintiff filed a notice of pendency against the Westchester property. On January 12, 2016, Julius recorded the mortgage given to him by the Jones defendants in the Office of the Westchester County Clerk.

         In an order dated April 14, 2016, the Supreme Court, inter alia, granted the plaintiff's motion for leave to enter a default judgment against the Jones defendants. On May 9, 2016, the court issued a judgment awarding the plaintiff an equitable lien upon the Westchester property in the principal sum of $1, 500, 000 as of December 18, 2015, the date of the filing of the notice of pendency. In December 2016, Julius moved, inter alia, pursuant to CPLR 1012(a)(3) and/or 1013 for leave to intervene in the action and, thereupon, to vacate the default judgment. In an order dated January 20, 2017, the court denied those branches of Julius's motion. Julius appeals.

         Upon a timely motion, a person is permitted to intervene in an action as of right, among other things, "when the action involves the disposition or distribution of, or the title or a claim for damages for injury to, property and the person may be affected adversely by the judgment" (CPLR 1012[a][3]; see Matter of Sclafani Petroleum, Inc., 173 A.D.3d 1042; Global Team Vernon, LLC v Vernon Realty Holding, LLC, 93 A.D.3d 819, 820). Additionally, the court, in its discretion, may permit a person to intervene, among other things, "when the person's claim or defense and the main action have a common question of law or fact" (CPLR 1013; see Roman Catholic Diocese of Brooklyn, N.Y. v Christ the King Regional High Sch., 164 A.D.3d 1394, 1396; Trent v Jackson, 129 A.D.3d 1062).

         Here, Julius's motion for leave to intervene was untimely, as he made the motion approximately one year after the plaintiff filed its notice of pendency, approximately eight months after the Supreme Court granted the plaintiff's motion for leave to enter a default judgment, and approximately seven months after the court issued the default judgment (see T & V Constr. Corp. v Pratti, 72 A.D.3d 1065, 1066; Vacco v Herrera, 247 A.D.2d 608, 608-609; cf. ABM Resources Corp. v Doraben, Inc., 89 A.D.3d 773, 774).

         Accordingly, we agree with the Supreme Court's determination to deny those branches of Julius's motion which were for leave to intervene in the action ...


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