JOSEPH J. ESPOSITO, JUSTICE
Unpublished Opinion
Motion Date May 25, 2022
JOSEPH J. ESPOSITO, JUSTICE
The following numbered papers read on this motion by movant/defendant for an order pursuant to CPLR 6301 enjoining the New York City Department of Finance from releasing post-foreclosure surplus funds to the New York State Office of the State Comptroller as abandoned funds.
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Papers Numbered |
| Order to Show Cause- Affidavits- Exhibits....... |
EF 137-142 |
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EF 144-145 |
| Answering Affidavits - Exhibits................. |
EF 147-149 |
Upon the foregoing papers it is ordered that this motion is determined as follows:
Pursuant to the Judgment of Foreclosure and Sale the mortgaged property was sold at auction on April 28, 2017. The report of sale of the Referee was duly filed on the Clerk's office on June 23, 2017. After the sale there remained a surplus in the amount of $433,852.50. This amount was paid into court to the credit of this action by the Referee and, thereafter, transferred to the New York City Department of Finance. A Notice of Claim to Surplus Money was filed by Gotham Asset Locators, Inc. pursuant to an agreement with the Estate of M.N. Ugochukwu, the alleged prior owner of the foreclosed upon property. This court subsequently appointed Robert John Aiello as referee to determine the distribution of the surplus funds. The movant/defendant asserts that it has been advised by the New York City Department of Finance that the surplus funds will be deemed abandoned and released to the New York State Office of the State Comptroller pursuant to the Abandoned Property Law. The defendant/movant has now brought a motion by order to show cause seeking an order enjoining the New York City Department of Finance from releasing the post-foreclosure surplus funds to the New York State Office of the State Comptroller as abandoned funds.
On a motion for a preliminary injunction the movant must establish the likelihood of success on the merits, irreparable injury and the balancing of the equities in its favor (see Aetna Ins. Co. v Capasso, 75 N.Y.2d 860 [1990]; Washington Deluxe Bus, Inc. v Sharmash Bus Corp., M A.D.3d 806 [2d Dept 2008]) . Here, the defendant has established its right to a preliminary injunction. Tn this case, the surplus funds at issue are not abandoned. There are multiple claimants to the surplus funds. The prior owner of the subject property was M.N. Ugochukwu, who allegedly passed away in the 1980s. The Estate of M.N. Ugochukwu has been actively seeking the surplus funds. As noted above, a notice of claim for the funds pursuant to an agreement with the prior owner has been filed. Therefore, the owner of the funds is known and the funds are being actively pursued. Inasmuch as the owner of the surplus funds are known and the funds are being actively pursued, the funds are not abandoned property as set forth in the Abandoned Property Law.
Additionally, while it has been more than three years since the surplus funds were deposited with the New York City of Department of Finance, there have been many stays imposed in foreclosure actions as a result of the COVID-19 pandemic that has delayed this action. The movant would be further harmed and forced to endure more delays if the funds are transferred to the State Comptroller.
Accordingly, the motion by defendant/movant is granted to the extent that the New York City Department of Finance is enjoined from releasing the post-foreclosure surplus funds deposited in this action to the New York State Office of the Comptroller as abandoned funds.