PRESENT: SCUDDER, P.J., MARTOCHE, SMITH, CENTRA, AND FAHEY, JJ.

DOCKET NO. CA 10-02056
DOCKET NO. CA 10-02057

COLONIAL SURETY COMPANY, PETITIONER-APPELLANT-RESPONDENT, V LAKEVIEW ADVISORS, LLC, RESPONDENT-RESPONDENT-APPELLANT, RESOLUTION MANAGEMENT, LLC, RESPONDENT-RESPONDENT, AND NATIONAL CREDIT ADJUSTERS, LLC., RESPONDENT. (APPEAL NO. 1.) COLONIAL SURETY COMPANY, PETITIONER-APPELLANT, V LAKEVIEW ADVISORS, LLC AND RESOLUTION MANAGEMENT, LLC, RESPONDENTS-RESPONDENTS, AND NATIONAL CREDIT ADJUSTERS, LLC., RESPONDENT. (APPEAL NO. 2.)

Petitioner-appellant Colonial Surety Company (Colonial) having moved, upon the return of an order to show cause granted by the Honorable Eugene M. Fahey on September 23, 2010, for a preliminary injunction (denominated "Temporary Restraining Order") pursuant to CPLR 5518, for consolidation of the appeals taken herein from the orders and judgment of the Supreme Court entered in the Office of the Clerk of the County of Erie on July 13, 2010 (Appeal No. 1), and September 16, 2010 (Appeal No. 2), for a stay of enforcement of the order and judgment entered September 16, 2010, pursuant to CPLR 5519 (c), and for other relief,

Now, upon reading and filing the affidavit of Edward P. Yankelunas, Esq. sworn to September 16, 2010 (the Yankelunas Affidavit), said order to show cause with proof of service thereof, the affirmation of Dennis C. Vacco, Esq. dated September 20, 2010, the affirmation of Joseph Makowski, Esq. received September 20, 2010, the affidavit of Edward P. Yankelunas, Esq. sworn to October 6, 2010, the affirmation of Joseph G. Makowski dated October 13, 2010, the affirmation of Dennis C. Vacco, Esq. dated October 13, 2010, the affidavit of Edward P. Yankelunas, Esq. sworn to October 14, 2010, the affirmation of Joseph G. Makowski, Esq. dated October 15, 2010, and the affirmation of Thomas J. Gaffney, Esq. dated October 15, 2010, and due deliberation having been had thereon,

It is hereby ORDERED that the motion insofar as it seeks to consolidate Colonial's appeals taken herein from the orders and judgment entered on July 13, 2010, and September 16, 2010, is granted, and the appeals are consolidated for purposes of perfecting and arguing the appeals, and

It is further ORDERED that the motion insofar as it seeks a preliminary injunction pursuant to CPLR 5518 is granted, pursuant to the conditions ordered below, to the extent that, pending this Court's determination of Colonial's appeals consolidated herein, any payments by Resolution Management, LLC (Resolution) to the "Note Holders" described in the Yankelunas Affidavit and referenced in the February 25, 2010, letter of Resolution (included in Exhibit 15 of the Yankelunas Affidavit) shall be restrained, enjoined, and prohibited, and

It is further ORDERED that said payments withheld from the Note Holders shall be held in escrow by Resolution's counsel herein until further order of this Court, and the amount withheld shall be disclosed to Colonial on a monthly basis, and

It is further ORDERED that the preliminary injunction ordered above is granted on the condition that Colonial perfects its appeals on or before November 26, 2010, in which case the appeals shall be added to the calendar for the term of this Court commencing January 18, 2010, and

It is further ORDERED that the preliminary injunction ordered above is granted on the condition that Colonial files a surety bond undertaking acceptable to the Court, if it has not done so already, by November 26, 2010, in the amount of $531,832.87, plus interest pursuant to CPLR 5003 and 5004, computed from October 1, 2004 (a total of $817,973.52), and

It is further ORDERED that Resolution or Lakeview Advisors, LLC may seek leave to increase the amount of said undertaking in the event Colonial's judgment against Paul W. O'Brien in Supreme Court, Allegany County (Index No. 27361), is increased pursuant to Colonial's pending application to increase said judgment, with the amount of any increase in the aforesaid undertaking being limited to the amount of any such further amended judgment of Colonial, with interest, and

It is further ORDERED that the motion insofar as it seeks a stay of enforcement pursuant to CPLR 5519 (c) is denied.

Entered: November 5, 2010

Patricia L. Morgan, Clerk