Zaharatos v. Zaharatos, Index No. 500153/2011, 5/21/2015 (Demarest, J.)

Summary judgment; preliminary injunction; temporary receiver; undertaking; contempt

By Kush Parikh | Staff Writer

Plaintiff and Defendant had twice been married and divorced from each other. The terms of both divorces were governed by a separation agreement with two main provisions. First, all items of personal property not mentioned in the agreement were to become the sole property of the party who purchased or received the relevant property as a gift. Second, Defendant was to transfer 200 shares of corporation, which translates into one hundred percent of its ownership, to Plaintiff.

There are thirteen properties at issue, all of which have an extensive history of transfers between Plaintiff and Defendant, as well as other corporations that are owned by the parties. The deed that was provided to the Court shows the chain of title of each property. Although there is no issue as to the current owner of a couple of these properties, there is however a dispute as to who holds the present ownership of the remaining properties – Plaintiff or Defendant.

Plaintiff moved for a preliminary injunction enjoining Defendant from holding himself out as an agent or certified representative of the properties at issue, collecting rent from the properties at issue, taking any actions on behalf of being a representative or owner of Alimos and Chrysa, convincing Defendant to show detailed financing documents of the properties of issues, declaring that Plaintiff is the sole owner of the properties, and vacating the Court’s previous order that appointed a temporary receiver to manage the properties while the cost of the receiver is endured by Defendant. The Court granted Plaintiff’s motion for preliminary injunction. The likelihood of success on the merits claim is proven, as there is a viable cause of action for conversion of the rents collected by Defendant. It was also determined that there was a need for a temporary receiver since there was a diversion of the income of Defendant’s personal use. Additionally, there is irreparable harm without the injunction because there is a threat of goodwill and creditworthiness, which balances the equities, due to the fact that there is a loss of rental income as well as mismanagement of the properties. However, Plaintiff was required to post an undertaking, pursuant to CPLR 6312(b), in the amount of $100,000.

Defendant soon after moved for summary judgment declaring him the sole owner of the properties based on deeds indicating that Defendant originally purchased these properties before his first marriage to Plaintiff. Assessing Plaintiff’s cause of actions, the court denied Defendant’s motion for summary judgment, as there was no prima facie showing that eliminated any material issues as a matter of law. In particular, the separation agreement used the term “personal property,” which does not include real property. This causes a conflict that must be addressed because neither party provided documentation supporting their claims in relation to the properties at issue.

Plaintiff also moved for a motion for contempt. However, the court found there to be no clear violation of its Order since Defendant had successfully collected rents and managed the relevant properties by paying the expenses. Plaintiff’s lack of documentation supporting the claim leads to a lack of reasonable certainty. As a result, Plaintiff’s motion for contempt is denied.

Zaharatos v. Zaharatos, Index No. 500153/2011, 5/21/2015 (Demarest, J.).

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