High-Value Undertakings and Lis Pendens in Fraudulent Real Estate Transfers:
Commentary on American Premium Realty Group, LLC v. 37-19 Realty, Inc., 2025 NY Slip Op 06301 (2d Dep’t)

I. Introduction

This Appellate Division decision sits at the intersection of real estate transactions, fraud, and New York’s lis pendens (notice of pendency) framework. The case arises from a failed deal to buy a minority interest in Brooklyn real property and an interest in an LLC that owned the remaining share. At the heart of the dispute is an allegedly forged termination of a recorded memorandum of contract, a subsequent sale of the same property interest to a new purchaser, and the plaintiff’s use of a notice of pendency to protect its claimed rights.

The opinion in American Premium Realty Group, LLC v. 37-19 Realty, Inc. addresses three core issues:

Whether the plaintiff adequately pleaded claims of fraud and conspiracy to commit fraud under the heightened particularity requirements of CPLR 3016(b), including a theory grounded in forgery.
Whether the action supports the filing and continued maintenance of a notice of pendency under former CPLR 6501, notwithstanding partial dismissal and the involvement of a subsequent purchaser (WLGT Holdings, LLC).
Whether the Supreme Court properly exercised its discretion under CPLR 6515(1) by conditioning cancellation of the notice of pendency on a very substantial undertaking of $20,500,000, and by refusing to reduce that amount at the request of the defendant and its investors.

In affirming the trial court, the Second Department clarifies—and in practice strengthens—the protection available to purchasers in real estate deals who allege that their contractual rights were defeated through a forged instrument and fraudulent conveyance. At the same time, it confirms the wide latitude granted to trial courts in fixing the amount of an undertaking required to cancel a notice of pendency, even where that amount mirrors a very large contractual “penalty.”

II. Factual and Procedural Background

A. The Parties and the Property

The dispute centers on certain real property in Brooklyn (the “subject property”) and the ownership structure behind it:

37-19 Realty, Inc. – owned a 25% direct interest in the subject property.
62-08 Realty, LLC – owned the remaining 75% interest in the subject property.
Yang168 Realty, LLC and 62-08 8Ave, LLC – together owned 27.934% of the membership interests in 62-08 Realty, LLC.
Plaintiff: American Premium Realty Group, LLC – the would-be purchaser.
Defendant/Appellant: WLGT Holdings, LLC (“WLGT”) – later purchaser of 37-19 Realty’s 25% interest.
Nonparty appellants: EA 8th Ave., LLC, AA 8th Ave., LLC, and Eight Ave. VA, LLC – investors who acquired a 5% interest in the subject property from WLGT after the dispute arose.

B. The Purchase Agreement and Protective Devices

On or about September 28, 2021, the plaintiff entered into a purchase agreement with:

37-19 Realty (direct property owner), and
Yang168 Realty and 62-08 8Ave (holders of a membership stake in 62-08 Realty).

Under this agreement (the “purchase agreement”), the plaintiff agreed to:

Purchase 37-19 Realty’s 25% interest in the subject property; and
Acquire the combined 27.934% membership interest held by Yang168 Realty and 62-08 8Ave in 62-08 Realty, LLC.

In consideration of a $500,000 deposit, the agreement required several protective measures in favor of the plaintiff:

Memorandum of Contract. The plaintiff and 37-19 Realty were to execute a memorandum of contract, to be recorded against the property at 37-19 Realty’s cost. This document was to publicly evidence the plaintiff’s contractual right to purchase the 25% interest.
Personal Guarantees. All members of the seller entities were to personally guarantee return of the deposit if, under the agreement, the deposit became refundable to the purchaser.
UCC-1 Filing. The plaintiff had the right to file a UCC-1 financing statement to secure the membership interests being sold (the Yang168 Realty and 62-08 8Ave interests in 62-08 Realty).

Crucially, the agreement contained a very strong seller-default provision:

If the sellers defaulted, entered into an agreement to sell the subject property or company membership interests to another party, or conveyed the property or membership interests to anyone other than the plaintiff, then the sellers were obligated to:

Immediately return the $500,000 deposit, and
Pay a “penalty” in the amount of $20,000,000 to the plaintiff.

Upon that payment, the plaintiff was to record a termination of the memorandum of contract and (if relevant) UCC terminations. Until that termination, the recorded memorandum would protect the plaintiff’s interest.

C. Recording of the Memorandum of Contract and Alleged Forgery

A memorandum of contract (between the plaintiff and 37-19 Realty) was in fact recorded. It specified, among other things, that:

37-19 Realty agreed to sell its 25% interest in the property to the plaintiff.
The plaintiff’s deposit was made a lien on the subject property until a termination of memorandum of contract was filed.

Subsequently, a document entitled “Termination of Memorandum of Contract,” dated November 18, 2021, was recorded on December 10, 2021. This termination recited that:

The purchase agreement and memorandum of contract had been terminated and were of no further force or effect; and
The memorandum of contract was to be discharged and expunged from the public record.

The termination purported to bear the plaintiff’s authorization, via a signature “for the plaintiff” by Elizabeth Chen. The plaintiff, however, alleges that Chen’s signature was forged.

D. Subsequent Conveyance to WLGT

By deed dated November 18, 2021—on the same date as the purported termination of the memorandum of contract—and recorded on December 10, 2021, 37-19 Realty conveyed its 25% interest in the subject property to WLGT. In other words, immediately upon (and enabled by) the apparent removal of the recorded encumbrance in favor of the plaintiff, 37-19 Realty sold the same property interest to WLGT.

E. Commencement of the Action and Notice of Pendency

The plaintiff commenced an action in Supreme Court, Kings County, asserting multiple causes of action, including:

Specific performance of the purchase agreement (against the original contracting seller entities);
Fraud, based in large part on the alleged forgery of the termination document and the subsequent conveyance to WLGT; and
Conspiracy to commit fraud, linking WLGT and others to a concerted scheme to defeat the plaintiff’s rights.

The plaintiff also sought damages and a judgment setting aside what it characterized as the “fraudulent and void” transfer of 37-19 Realty’s 25% interest to WLGT. To secure its interest in the property while litigation was pending, the plaintiff filed a notice of pendency (lis pendens) against the subject property.

F. Motions in the Supreme Court

WLGT moved, pursuant to CPLR 3211(a), to:

Dismiss the causes of action for fraud and conspiracy to commit fraud as against it; and
Cancel the notice of pendency.

In an order dated October 6, 2022, the Supreme Court:

Denied those branches of WLGT’s motion seeking dismissal of the fraud and conspiracy claims; and
Denied that branch of the motion seeking cancellation of the notice of pendency.

WLGT then sought renewal and reargument. In an order dated December 23, 2022, the court, in effect, upon renewal and reargument:

Vacated the earlier denial in part; and
Granted the motion to cancel the notice of pendency only on condition that WLGT post an undertaking in the amount of $20,500,000.

In other words, WLGT could obtain cancellation of the lis pendens only if it secured the plaintiff’s potential recovery by posting a very large bond or equivalent undertaking.

WLGT subsequently moved to reduce the undertaking to an amount “not to exceed $10,000,000.” By order dated August 24, 2023, the Supreme Court denied that request.

G. Entry of Investors and Additional Motion Practice

In November 2022, after the inception of the dispute and the filing of the notice of pendency, the nonparty investors (EA 8th Ave., LLC, AA 8th Ave., LLC, and Eight Ave. VA, LLC) acquired a 5% interest in the subject property from WLGT.

They, too, moved to reduce the required undertaking to an amount not to exceed $10,000,000. In an order dated August 17, 2023, the Supreme Court denied that branch of their motion.

H. Appeals to the Second Department

WLGT appealed from:

The October 6, 2022 order (denying dismissal of fraud and conspiracy claims and cancellation of the lis pendens);
The December 23, 2022 order (conditioning cancellation of the lis pendens upon a $20.5 million undertaking); and
The August 24, 2023 order (refusing to reduce the undertaking).

The nonparty investors appealed from the August 17, 2023 order (denying their request to reduce the undertaking).

The Appellate Division, Second Department, affirmed all orders insofar as appealed from, with one bill of costs.

III. Summary of the Appellate Division’s Decision

The Second Department’s decision can be distilled into three principal holdings:

Adequacy of Fraud and Conspiracy Pleadings.
The complaint’s allegations—including the alleged forgery of the termination document and subsequent transfer of the property interest—sufficiently pleaded fraud and conspiracy to commit fraud with the particularity required by CPLR 3016(b). The court emphasized that forgery is a species of fraud and that New York permits conspiracy allegations to connect multiple defendants to an underlying tort. Accordingly, the court affirmed the denial of WLGT’s CPLR 3211(a) motion to dismiss those claims.
Validity and Scope of the Notice of Pendency.
Applying former CPLR 6501 (as it existed prior to the December 14, 2023 amendment), the court held that the action “on its face” demanded a judgment that would affect title to, or the possession, use, or enjoyment of, real property. The presence of:
- a specific performance cause of action (still pending against non-moving defendants),
- fraud claims which could void the termination of the memorandum of contract and keep that memorandum in the chain of title, and
- the memorandum’s express provision that the deposit is a lien on the property,
all supported the filing of a notice of pendency. Thus, the court rejected any argument that the notice lacked statutory foundation.
Exercise of Discretion Under CPLR 6515(1) and the $20.5 Million Undertaking.
The Appellate Division held that the Supreme Court providently exercised its discretion in directing WLGT to post an undertaking of $20,500,000 as a condition of cancelling the notice of pendency and in refusing to reduce that amount. Under CPLR 6515(1), once the court finds that the plaintiff can be adequately protected by an undertaking, it may order cancellation of the lis pendens “upon such terms as are just,” and the fixing of the undertaking amount lies in the trial court’s sound discretion. Here, the high-dollar undertaking was upheld as an appropriate measure to secure the plaintiff’s potential interests.

IV. Detailed Legal Analysis

A. Pleading Fraud Under CPLR 3016(b)

New York law imposes heightened pleading requirements for fraud:

The classic elements of fraud are: (1) a material misrepresentation of fact, (2) knowledge of its falsity, (3) intent to induce reliance, (4) justifiable reliance, and (5) resulting damages (Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559).
CPLR 3016(b) requires that “the circumstances constituting the wrong shall be stated in detail.”

The Court of Appeals has instructed that this particularity requirement has a purpose—to inform the defendant of the complained-of incidents—but it is not to be applied so strictly as to defeat valid claims where full details are unavailable before discovery (Eurycleia; Pludeman v Northern Leasing Sys., Inc., 10 NY3d 486, 491–492).

The Second Department reiterates that § 3016(b) is satisfied where the facts alleged permit a reasonable inference of the misconduct rather than requiring exhaustive detail at the pleading stage. In this case:

The complaint alleges that a key recorded instrument (the termination of the memorandum of contract) was forged.
The alleged forgery directly enabled a subsequent sale of the same property interest to WLGT.
The plaintiff pleads damages flowing from being deprived of its bargained-for property and contractual protections, including the substantial “penalty” provision.

The court concludes that these factual allegations, on their face, give rise to a reasonable inference of fraud—sufficient to survive a CPLR 3211(a) motion.

B. Forgery as a Species of Fraud

The opinion underscores an important conceptual point: forgery is subsumed within the broader category of fraud. Citing Matter of Hersh, 198 AD3d 763, and Piedra v Vanover, 174 AD2d 191, the court restates the classic definition:

“Forgery is the fraudulent making of a writing to the prejudice of another’s rights…or the making malo animo of any written instrument for the purpose of fraud and deceit.”

The decision then adopts the formulation from Jay Novelty, Inc. v S.K. Newsstand, LLC, 212 AD3d 603, that:

“[F]orgery is simply one species under the broader genus of fraud.”

This is doctrinally significant: rather than treating forgery as some separate or exotic claim, the court anchors it directly in the law of fraud. In practice, it means:

A plaintiff alleging forgery of an instrument affecting property rights can proceed under ordinary fraud principles.
The heightened pleading standard of CPLR 3016(b) applies, but so does the more flexible approach endorsed in Eurycleia and Pludeman.

In this case, alleging that the plaintiff’s signature (through Elizabeth Chen) on the termination of memorandum of contract was forged allowed the plaintiff to fit its claim squarely within fraud doctrine. That, in turn, supported its effort to unwind the subsequent transfer to WLGT.

C. Civil Conspiracy: Not a Stand-Alone Tort, but a Connecting Theory

The Second Department reiterates settled New York law:

There is no independent cause of action for civil conspiracy in New York.
However, conspiracy may be alleged “to connect the actions of the individual defendants with an actionable, underlying tort and establish that those actions were part of a common scheme” (B & H Flooring, LLC v Folger, 228 AD3d 809, 812; Faulkner v City of Yonkers, 105 AD3d 899, 900).

To properly plead conspiracy to commit a tort, a plaintiff must allege:

A cognizable, underlying tort (here, fraud);
An agreement between the conspirators regarding that tort; and
An overt act in furtherance of the agreement (B & H Flooring; Blanco v Polanco, 116 AD3d 892, 896).

The court holds that the complaint’s allegations support a reasonable inference not only of underlying fraud but also of concerted action among the defendants—sufficient to let the conspiracy allegations stand at the pleading stage. Importantly, this does not create a separate conspiracy tort; rather, it allows WLGT and others allegedly involved in the forged termination and subsequent conveyance to be held jointly responsible, if the underlying fraud is proven.

D. The Notice of Pendency: Action “Affecting” Real Property Under Former CPLR 6501

1. Statutory Framework and Timing

The decision applies the version of CPLR 6501 in effect before December 14, 2023. Under that former provision, a notice of pendency could be filed only when:

“the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property.”

The court cites Whelan v Busiello, 219 AD3d 778, and Delidimitropoulos v Karantinidis, 142 AD3d 1038, for this language. It also invokes:

5303 Realty Corp. v O & Y Equity Corp., 64 NY2d 313, 321 – emphasizing that, given the potentially harsh consequences of a lis pendens and its ease of filing, the statute must be narrowly construed.
Mallek v Felmine, 227 AD3d 977, 978 – confirming that, when deciding a motion to cancel for non-compliance with CPLR 6501, the court must look only to the face of the pleading, not to the merits or extrinsic evidence.

2. The Action’s Effect on Title, Possession, Use or Enjoyment

On its face, the plaintiff’s complaint clearly sought relief that would “affect the title to, or the possession, use or enjoyment of, real property.” The Second Department identifies several independent bases for that conclusion:

Specific Performance of a Contract to Convey Land.
A cause of action for specific performance of an agreement to convey real property is the paradigmatic example of an action affecting title or possession. The court cites Malekan v 701–709 Chester St, LLC, 139 AD3d 913, 914, and Re-Poly Mfg. Corp. v Dragonides, 109 AD3d 532, 535, both of which recognize that specific performance claims squarely fall within CPLR 6501.

Here, the plaintiff asserted a specific performance cause of action seeking conveyance of the 25% property interest. That alone justified maintaining a notice of pendency.
Continuing Existence of the Specific Performance Claim Against Non-Moving Defendants.
WLGT’s motion to dismiss did not—in law, could not—extinguish the specific performance claim against the original seller entities who had not moved for dismissal. The Second Department carefully notes that:
- Although the Supreme Court’s order “purportedly” dismissed the first cause of action (specific performance) in the course of deciding WLGT’s motion,
- That cause of action had not been asserted against WLGT at all, but only against its co-defendants (the original sellers).
Under cases such as F & T Mgt. & Parking Corp. v Flushing Plumbing Supply Co., Inc., 68 AD3d 920, 924, and St. Patrick's Home for Aged and Infirm v Laticrete Intl., 264 AD2d 652, 658, a court cannot dismiss causes of action against non-moving defendants in the absence of an appropriate motion. Thus, the specific performance claim remained pending and continued to support the notice of pendency.
Fraud Claims Potentially Restoring the Memorandum of Contract to the Chain of Title.
The fraud causes of action, if successful, could result in:
- the termination of the memorandum of contract being declared void as a forgery; and
- the original memorandum of contract remaining in, or being restored to, the chain of title.
Because such a result plainly affects title—by reinstating an encumbrance on record—it also brings the action squarely within the scope of CPLR 6501.
Contractual Lien Created by the Memorandum of Contract.
The memorandum of contract explicitly provided that the plaintiff’s deposit would constitute a lien on the property until a termination of memorandum of contract was filed. The Second Department cites Carpio v Morris, 223 AD3d 781, 783–784, confirming that rights arising from such a contractually created lien can support a notice of pendency.

These multiple, independent grounds made it relatively straightforward for the court to hold that the notice of pendency was properly filed under CPLR 6501 as it existed at the time.

E. Cancellation of the Notice of Pendency on Undertaking: CPLR 6515(1)

1. The Statute and Judicial Discretion

Even when an action qualifies for a notice of pendency under CPLR 6501, CPLR 6515(1) gives a court discretionary power to cancel the notice on terms:

The court may direct cancellation “upon such terms as are just,” if:

the defendant posts an undertaking in an amount fixed by the court; and
the court finds that the plaintiff can be adequately protected by that undertaking.

The decision emphasizes that the size of the undertaking is a matter committed to the Supreme Court’s sound discretion, citing Brooklyn Restorations, LLC v South 1st St. Dev., LLC, 129 AD3d 1010, 1011.

2. Justification for the $20.5 Million Undertaking

Here, the Supreme Court chose to condition cancellation of the lis pendens on WLGT’s posting of an undertaking in the sum of $20,500,000. Though the opinion does not explicitly break down this number, it plainly tracks the plaintiff’s key contractual and property-related interests:

The $500,000 deposit, expressly made a lien on the property; and
The $20,000,000 contractual “penalty” that the sellers agreed to pay in the event of a default or unauthorized sale to anyone other than the plaintiff.

By affirming this amount, the Second Department implicitly recognizes that:

An undertaking under CPLR 6515(1) may be set at a level that fully secures the plaintiff’s claimed contractually based monetary interest (here, deposit plus penalty amount), not merely the traditional “equity” in the real property or some lesser figure.
The court is not, at this stage, adjudicating the doctrinal validity of the $20 million “penalty” clause (for instance, as enforceable liquidated damages versus an unenforceable penalty). Rather, the question is whether adequate relief could be secured by a bond in that amount, assuming the plaintiff ultimately prevails.

In short, the trial court determined—and the Second Department agreed—that to protect the plaintiff’s position while removing the cloud of lis pendens from the property, WLGT would need to put up security in the full amount reflective of the plaintiff’s claimed contractual entitlement.

3. Refusal to Reduce the Undertaking

WLGT later moved to reduce the undertaking to a maximum of $10,000,000, and the nonparty investors similarly sought a reduction. The Supreme Court declined to reduce the amount, and the Appellate Division held that this refusal, too, was a proper exercise of discretion.

By citing Hakmon v 244 E. 48th St. Dev., LLC, 188 AD3d 460, 461, and Brooklyn Restorations, the Second Department situates this case within a line of authority that:

Gives trial courts broad authority to calibrate bond amounts to the plaintiff’s potential recovery;
Respects their fact-based judgment on what level of security is “adequate” and “just” under CPLR 6515(1); and
Is reluctant to disturb such determinations absent clear abuse of discretion—something not found here.

For WLGT and its investors, the practical consequence is stark: if they wish to free the property from the lis pendens while the action remains pending, they must either satisfy—or find a way around—the $20.5 million undertaking requirement. Their request to reduce that financial burden was rejected at both the trial and appellate levels.

V. Precedents Cited and Their Influence

The opinion leans on a series of earlier decisions, each reinforcing a specific doctrinal point:

A. Fraud and Particularity

Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553 (2009) – Defines the elements of fraud and explains that CPLR 3016(b) aims to give defendants fair notice without barring valid claims where full details are uniquely within the defendant’s knowledge.
Pludeman v Northern Leasing Sys., Inc., 10 NY3d 486 (2008) – Clarifies that CPLR 3016(b) is satisfied where the complaint’s factual allegations permit a reasonable inference of fraud, even if some specifics are unknown pre-discovery.
City of Long Beach v Agostisi, 221 AD3d 776 (2d Dep’t) – Reaffirms the application of CPLR 3016(b) in fraud-based municipal litigation, showing the Second Department’s continued adherence to Eurycleia/Pludeman standards.

B. Forgery as Fraud

Matter of Hersh, 198 AD3d 763 (2d Dep’t) – Supplies the traditional definition of forgery as fraudulent making of a writing to another’s prejudice.
Piedra v Vanover, 174 AD2d 191 (2d Dep’t 1992) – Earlier articulation of forgery as a fraud-based wrong affecting property and contractual rights.
Jay Novelty, Inc. v S.K. Newsstand, LLC, 212 AD3d 603 (2d Dep’t) – Explicitly characterizes forgery as “one species under the broader genus of fraud,” a line directly quoted in the present decision.

C. Civil Conspiracy

B & H Flooring, LLC v Folger, 228 AD3d 809 (2d Dep’t) – Confirms that New York does not recognize conspiracy as an independent tort, but allows conspiracy allegations to connect multiple actors to an underlying tort and outlines the elements of conspiracy.
Faulkner v City of Yonkers, 105 AD3d 899 (2d Dep’t) – Similar holding, reinforcing that conspiracy is derivative of a substantive tort.
Blanco v Polanco, 116 AD3d 892 (2d Dep’t) – Restates the requirement of an underlying tort, agreement, and overt act for a conspiracy claim.

D. Notice of Pendency and Scope of CPLR 6501

5303 Realty Corp. v O & Y Equity Corp., 64 NY2d 313 (1984) – Foundational Court of Appeals case on lis pendens, highlighting its powerful (and potentially abusive) character and the need for strict statutory compliance.
Whelan v Busiello, 219 AD3d 778 (2d Dep’t) – Reaffirms the CPLR 6501 standard and the need for narrow construction of actions that “affect” real property.
Delidimitropoulos v Karantinidis, 142 AD3d 1038 (2d Dep’t) – Applies the “affects title or possession” test and clarifies when claims concerning ownership interests in entities that own property suffice to support a notice of pendency.
Mallek v Felmine, 227 AD3d 977 (2d Dep’t) – Emphasizes that on a motion to cancel a notice of pendency, the court must confine its analysis to the face of the pleading (no weighing of evidence or merits).
Malekan v 701–709 Chester St, LLC, 139 AD3d 913 (2d Dep’t) – Confirms that specific performance claims to compel conveyance of real property justify a notice of pendency.
Re-Poly Mfg. Corp. v Dragonides, 109 AD3d 532 (2d Dep’t) – Similar holding; a contract-to-convey-land specific performance claim affects title.
Carpio v Morris, 223 AD3d 781 (2d Dep’t) – Recognizes that contract-based liens (such as a deposit made a lien by agreement and memorandum) can underpin a lis pendens.

E. Effect of Motions by Some, but Not All, Defendants

F & T Mgt. & Parking Corp. v Flushing Plumbing Supply Co., Inc., 68 AD3d 920 (2d Dep’t) – Holds that a motion by one defendant does not empower the court to dismiss claims against non-moving defendants absent a proper motion directed to them.
St. Patrick’s Home for Aged and Infirm v Laticrete Intl., 264 AD2d 652 (1st Dep’t) – Similar principle: partial motion practice does not automatically eliminate claims against other parties.

F. Undertakings to Cancel Notice of Pendency: CPLR 6515

Brooklyn Restorations, LLC v South 1st St. Dev., LLC, 129 AD3d 1010 (2d Dep’t) – Establishes that the amount of an undertaking under CPLR 6515 lies within the trial court’s sound discretion and will not be disturbed absent abuse.
Hakmon v 244 E. 48th St. Dev., LLC, 188 AD3d 460 (1st Dep’t) – Upholds substantial undertaking conditions and affirms wide judicial discretion in balancing the parties’ competing interests when a lis pendens is to be cancelled.

VI. Clarification of Complex Concepts

A. What is a “Memorandum of Contract” in Real Estate Transactions?

A memorandum of contract (sometimes called a “memorandum of agreement”) is a short document, suitable for recording in the land records, that:

Refers to a detailed, private purchase agreement;
Identifies the parties, the property, and the key fact that a contract of sale exists; and
Is recorded to put the world on notice of the purchaser’s rights.

Here, the memorandum between the plaintiff and 37-19 Realty was recorded, and it also provided that the plaintiff’s deposit was a lien on the property until a termination of memorandum of contract was filed.

B. Notice of Pendency (Lis Pendens)

A notice of pendency, often called a “lis pendens” (Latin for “pending suit”), is a statutory device by which a plaintiff in an action affecting real property gives public notice of the lawsuit in the land records. Its effects include:

Clouding title, thereby making it difficult or impossible to sell or refinance the property while litigation is pending;
Protecting the plaintiff’s potential right to enforce a judgment against the property even if it is later transferred to a third party; and
Serving as a powerful leverage tool, which is why courts construe CPLR 6501 narrowly and provide cancellation mechanisms under CPLR 6514 and 6515.

Because of its strength and ease of filing, the law imposes limits: the action must be one in which the judgment sought truly affects title or possession, and fraudulent or abusive filings can lead to cancellation and sanctions.

C. Undertaking

An undertaking is a form of security—often a bond—that a party deposits or posts to guarantee payment of a potential judgment or to secure the opposing party against harm. In the lis pendens context:

Under CPLR 6515(1), a defendant can ask the court to cancel a valid notice of pendency if it posts an undertaking “in an amount to be fixed by the court.”
This is a trade-off: the plaintiff loses the direct security of the lis pendens against the property, but gains a financial security interest in the undertaking.

In this case, the undertaking was set at $20.5 million, reflecting the magnitude of the plaintiff’s claimed interests under the contract.

D. Specific Performance

Specific performance is an equitable remedy by which a court orders a party to perform its contractual obligations rather than merely paying money damages. In real estate:

Courts often grant specific performance of real property contracts on the theory that “each parcel of land is unique.”
A claim for specific performance of a contract to convey land directly affects title and possession, which is why it is a classic foundation for a notice of pendency.

E. Civil Conspiracy

In New York:

Civil conspiracy is not recognized as a stand-alone tort.
It is a theory by which a plaintiff can link multiple defendants to an underlying tort (such as fraud), by alleging an agreement and coordinated action to commit that tort.
If the underlying tort claim fails, the conspiracy claim fails with it.

F. Forgery and Chain of Title

When a document recorded in the land records is forged:

It is typically void and confers no valid rights.
If a forged instrument purports to terminate a prior encumbrance (as here, a memorandum of contract), the prior encumbrance may still be considered valid in law, despite its apparent removal from the record.
The chain of title can become contested, and subsequent purchasers may face exposure if they participated in or had notice of the forgery.

The present case squarely presupposes these principles: if the termination of the memorandum of contract is indeed forged, the plaintiff may still hold a valid interest or lien affecting title—precisely the type of interest a notice of pendency is designed to protect.

VII. Practical and Doctrinal Impact

A. For Real Estate Litigators

Strengthened Pleading of Fraud in Property Transactions.
Plaintiffs can confidently challenge forged or fraudulent documents in the chain of title under standard fraud doctrine, invoking forgery as a subset of fraud and relying on Eurycleia/Pludeman for a reasonably flexible pleading standard.
Robust Use of Lis Pendens in Mixed Contract/Fraud Actions.
Even where some claims are dismissed or are not asserted against all defendants, as long as at least one pending claim (e.g., specific performance, or fraud aimed at restoring an encumbrance) would affect title, the notice of pendency can remain in place.

B. For Transactional Attorneys and Investors

Importance of Contractual Protections and Recordation.
This case demonstrates the power of:
- A well-drafted purchase agreement with clear default and penalty provisions; and
- An accurately recorded memorandum of contract, including express references to deposit liens.
Those tools allowed the plaintiff to secure both a lis pendens and, later, a large undertaking to protect its position.
High-Value Contractual “Penalties” as a Measure of Security.
While New York courts often scrutinize large liquidated damages or penalty provisions, American Premium Realty shows that, at the interim relief stage, such contractual sums can serve as a benchmark for setting an undertaking. This underscores the practical bite of aggressive default clauses in high-value real estate deals.
Risk to Subsequent Purchasers and Investors.
WLGT and its later investors acquired their interests subject to the plaintiff’s existing claims and notice of pendency. The decision reflects a broader principle: subsequent purchasers and investors cannot easily escape pre-existing litigation burdens, and courts will not necessarily reduce security requirements to accommodate their later entry into the ownership structure.

C. For the Development of Lis Pendens Law

Reaffirmation of Narrow Construction with Practical Flexibility.
The court reiterates the “narrow construction” doctrine from 5303 Realty and Whelan, but then applies it in a practically generous way to a complaint whose allegations clearly implicate title and encumbrances. This balances protection of property owners from frivolous lis pendens with protection of bona fide contractual purchasers from fraudulent conveyances.
Robust Discretion in Setting Undertakings.
By approving a $20.5 million undertaking, the decision signals that appellate courts will generally defer to trial judges’ calibrated assessments of how to secure plaintiffs’ rights when cancelling notices of pendency. This reinforces CPLR 6515 as a flexible tool for tailoring interim relief to the realities of a given transaction.

D. Intersection with the December 14, 2023 Amendment to CPLR 6501

The court’s explicit reference to “former” CPLR 6501 underscores that this case concerns a notice of pendency filed before that amendment took effect. Even under the amended statute, however, the core inquiry—whether the judgment demanded would affect interests in real property—remains central, and the decision will continue to be relevant as a guidepost in:

Determining when actions involving partial interests and entity membership stakes sufficiently “affect” real property; and
Understanding how fraud-based challenges to recorded instruments can sustain a notice of pendency.

VIII. Conclusion

American Premium Realty Group, LLC v. 37-19 Realty, Inc. is an instructive decision on multiple fronts. It reinforces familiar principles—such as the non-independence of civil conspiracy, the genus-species relationship between fraud and forgery, and the narrow but potent nature of the lis pendens device—while giving them concrete application in a modern, high-value real estate dispute.

The case stands for several key propositions:

A well-pleaded fraud claim grounded in an allegedly forged termination of a recorded memorandum of contract can survive a CPLR 3211(a) motion, even when full details are known primarily to the defendants.
Where an action includes a specific performance claim and fraud allegations that may restore an encumbrance to the chain of title, it plainly “affects the title to, or the possession, use or enjoyment of, real property” within the meaning of CPLR 6501, justifying a notice of pendency.
Trial courts have broad discretion under CPLR 6515 to condition cancellation of a notice of pendency on a substantial undertaking, and appellate courts will uphold high-dollar undertakings when they reasonably secure the plaintiff’s contractually stated interests.
Subsequent purchasers and investors who enter a property’s ownership structure after such disputes arise do so at considerable risk: they may inherit both the cloud on title and the financial security obligations associated with clearing it.

In the broader legal landscape, the decision underscores a critical message: New York courts will not lightly allow parties to sidestep recorded contractual protections through forged instruments and subsequent transfers. When a purchaser has taken care to document and record its rights, the courts are prepared both to preserve those rights via a notice of pendency and, where equities so require, to convert that protection into a substantial financial undertaking that meaningfully secures the plaintiff’s potential recovery.

High-Value Undertakings and Lis Pendens in Fraudulent Real Estate Transfers: Commentary on American Premium Realty Group, LLC v. 37-19 Realty, Inc., 2025 NY Slip Op 06301 (2d Dep’t)