New York State Court of Claims

New York State Court of Claims

Shields v. THE STATE OF NEW YORK, #2006-044-501, Claim No. 111021, Motion No. M-72060


Synopsis


Claimant’s motion for a declaration that he is entitled to proceeds from the appropriation

of property acquired by defendant is denied on the grounds that there are potentially conflicting claims to the proceeds, and claimant’s failure to utilize either a special proceeding under Court of Claims Act § 23 or to interplead all interested parties is fatal to his request.

Case Information

UID:
2006-044-501
Claimant(s):
TIMOTHY G. SHIELDS
1 1.The Court has, sua sponte, amended the caption to reflect the State of New York as the proper defendant.
Claimant short name:
Shields
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :
The Court has, sua sponte, amended the caption to reflect the State of New York as the proper defendant.
Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
111021
Motion number(s):
M-72060
Cross-motion number(s):

Judge:
CATHERINE C. SCHAEWE
Claimant’s attorney:
MEAGHER & MEAGHERBy: Frederick J. Meagher, Jr., Esq.
Defendant’s attorney:
HON. ELIOT SPITZER, ATTORNEY GENERAL
By: Donald E. Shehigian, Esq., Principal Attorney By: Joseph F. Romani, Esq., Assistant Attorney General
Third-party defendant’s attorney:

Signature date:
September 21, 2006
City:
Binghamton
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

The following papers were read on claimant’s motion to confirm ownership of real property:

(1) Claimant’s Notice of Motion, Affirmation of Frederick J. Meagher Jr., Esq. dated June 2, 2006 and annexed Exhibits A through E.

(2) Affirmation of Donald E. Shehigian, Esq. dated August 14, 2006.

(3) Letter of Frederick J. Meagher Jr., Esq. dated August 22, 2006.


Filed papers: Claim filed June 17, 2005.

Claimant moves for a declaration[2] that he is entitled to proceeds from the appropriation of property previously acquired by defendant. Defendant opposes the motion on the ground that the Attorney General's office has determined that there are potential conflicting claims to the proceeds and that this motion is not procedurally proper.

Initially, the property at issue was owned by Mark G. Wolff and was subject to various liens, including a mortgage in favor of Americas Wholesale Lender.[3] In September 2003, Countrywide commenced a foreclosure action against Wolff. On January 13, 2004, defendant appropriated a portion of the property. A judgment of foreclosure in Countrywide's action was entered on January 15, 2004 and the sale was held on March 10, 2004. Countrywide was the apparent high bidder and immediately assigned its bid to Federal National Mortgage Association (hereinafter “Fannie Mae”).[4] On or about June 28, 2004, Fannie Mae conveyed title to claimant. Claimant commenced this action to recover alleged damages resulting from the appropriation.

The Attorney General's office determined that there was a conflict of title such that certification of the person or persons legally entitled to the amount payable for the acquisition could not be made and shortly thereafter, the comptroller deposited $12,100 into an account as designated by statute (see EDPL 304 [E] [1], [2]).[5] The Attorney General's office advised claimant that there were a number of potentially interested parties, and suggested commencement of a distribution proceeding.

Defendant’s policy in an Eminent Domain proceeding is to make reasonable and expeditious efforts to compensate persons for the appropriation of their real property through negotiation and agreement (see EDPL 301). Defendant may, pursuant to EDPL 304 (E) (1) or (2), deposit the funds into “a special interest bearing account * * * to be distributed as ordered by the court of claims on application of any person claiming an interest in the amount deposited”.[6] Any person claiming an interest in the funds may apply for an order of distribution by commencing a special proceeding pursuant to Court of Claims Act § 23 (see also EDPL 304 [E] [1], [2]). Alternatively, a condemnee who does not accept defendant’s offer as payment in full may file a claim in the Court of Claims (see EDPL 304 [E] [3]) and must interplead all interested parties (see EDPL 505 [B]; Court of Claims Act § 14).

Wolff was the owner of the property at the time of the appropriation and could potentially have a claim to the proceeds. As a mortgagee, Countrywide could also have a potential claim. Further, any defect in the foreclosure proceeding might have the effect of nullifying claimant's perceived rights. The other parties who may claim an interest must have the opportunity to make that claim. In order to determine the status of claimant’s right to the proceeds of the apportionment, this Court must have jurisdiction over all parties with potential conflicting claims.[7] Claimant’s failure to utilize either a special proceeding under Court of Claims Act § 23 or interplead all interested parties is fatal to his request.

Claimant’s motion for “a decision with regard to the issue of ownership” is DENIED.



September 21, 2006
Binghamton, New York

HON. CATHERINE C. SCHAEWE
Judge of the Court of Claims




[2].To the extent that claimant is seeking a declaratory judgment, the Court does not have jurisdiction to enter such judgment under the circumstances in this action (see Court of Claims Act § 9 [9-a]).
[3].At that time, Countrywide Funding Corporation (now known as Countrywide Home Loans, Inc. and hereinafter referred to as “Countrywide”) was doing business as America’s Wholesale Lender.
[4]. Although the referee’s report of sale was filed on April 9, 2004, there is no indication that Countrywide sought or obtained a deficiency judgment.
[5]. It is unclear from the papers whether the amount offered by the defendant was accepted as payment in full, accepted as an advance payment or rejected, or even whether any offer was made. In any event, the procedure for distribution of proceeds where there is a conflict of title remains the same (see EDPL 304 [E] [1], [2]).
[6]. The amount of the deposit shall be equal to the highest approved appraisal referred to in EDPL 303 and 304 (A) (1).
[7]. Defendant’s opposition papers contain a schedule of interested parties, which was provided to claimant prior to him bringing this motion.