This is an action pursuant to Real Property Law ("RPL") § 294-b seeking an order directing payment of monies deposited with the Nassau County Clerk's Office (the "County Clerk") after a dispute arose regarding a real estate broker's commission claimed by defendants Andrea Levine and Keller Williams Realty Gold Coast (collectively, "defendants").

A nonjury trial was held on March 6, 2026. This decision sets forth the Court's findings of fact and conclusions of law. The findings of fact are based, in part, upon assessments of witness credibility. The parties submitted pretrial memoranda and a stipulation of facts, from which the following recitation of the facts is largely drawn.

FACTS AND PROCEDURAL HISTORY

The decedent, Irwin Paul Lew a/k/a I. Paul Lew a/k/a Paul Lew ("Lew"), was the owner of a one-family residence located at 28 Vanderbilt Drive, Lake Success, New York (the "property"). On March 14, 2020, Lew, as seller, entered into an exclusive right to sell listing agreement (the "ERSA") with defendants. During the term of the ERSA, which ran from March 14, 2020 through September 30, 2020, defendants procured buyers for the property, and Lew and the buyers entered into a written contract of sale.

On February 17, 2021, defendants recorded an affidavit of entitlement pursuant to RPL § 294-b with the County Clerk. On February 23, 2021, prior to delivery of the deed, Lew and his counsel were served with a copy of the affidavit of entitlement. The closing of title occurred on Friday, March 19, 2021, at the office of the buyers' counsel in Queens County. Neither Lew nor defendants attended the closing. Lew did not pay any commission to defendants at closing.

At closing, Lew, through his attorney, and the buyers executed a written stakeholder agreement providing, among other things, that the disputed commission, in the sum of $36,275.00, would be deposited with the County Clerk within five calendar days. Defendants were notified of the arrangement. The check representing the disputed commission was delivered to Federal Standard Abstract, Inc. ("FSA"), the title company. Following the closing and delivery of the deed, neither Lew nor defendants had access to the disputed funds. On Wednesday, March 24, 2021, three business days after the closing, FSA deposited the disputed commission with the County Clerk.

Thereafter, defendants did not commence an action or proceeding to determine entitlement to the disputed commission. On January 31, 2022, more than ten months after the deposit, Lew commenced this action seeking an order directing payment of the deposited funds to him. Defendants interposed an answer on February 23, 2022, asserting entitlement to the disputed commission and raising affirmative defenses and counterclaims. The counterclaims, sounding in breach of contract, unjust enrichment, and quantum meruit, were premised upon defendants' contention that Lew failed to pay the commission allegedly due under the ERSA. Defendants also sought attorneys' fees under RPL § 294-b(5)(h).

On February 27, 2022, Lew died. By order dated July 19, 2023, Noman Kaplan, as executor of Lew's estate ("plaintiff"), was substituted in Lew's place, and the caption was amended accordingly.

In October and November 2024, the parties moved for summary judgment. By order dated July 8, 2025, the previously assigned justice denied both motions. During the pendency of this action, the Nassau County Treasurer transferred $35,904.15 to the New York State Comptroller's Office of Unclaimed Funds, representing the deposited commission, together with interest earned thereon, less allowable fees.

On March 3, 2026, this matter was assigned to the undersigned for trial. The trial commenced and concluded on March 6, 2026. Plaintiff and defendant Andrea Levine testified. The parties stipulated to the admission of various documents into evidence, including the affidavit of entitlement, the ERSA, and the receipt reflecting deposit of the funds with the County Clerk. During plaintiff's case, they further stipulated to the dismissal of the complaint as against defendant Clerk of Nassau County, who was named solely as a nominal defendant in its capacity as stakeholder, because the funds are no longer held by the County Clerk.

STATUTORY FRAMEWORK

RPL § 294-b permits a licensed real estate broker to record an affidavit of entitlement where the broker claims to have produced a person "ready, able and willing to purchase or lease" real property pursuant to a written or oral contract (RPL § 294-b[1]; see 11 NY Jur 2d Brokers § 231 [Nov 2025 Update]). Where the sale is pursuant to a written contract, the statute provides that the seller shall, "at the time of delivery of the deed," deposit "the lesser of the net proceeds of the sale or the amount of the unpaid portion of the compensation agreed to in such written contract" with the recording officer in whose office the affidavit was recorded (RPL § 294-b[5][a]).

RPL § 294-b(5)(d) provides that monies deposited with the recording officer are held until the rights of the seller and broker to the deposit are determined by court order. If neither party commences an action or proceeding to determine entitlement to the funds within 60 days from the date of a deposit made pursuant to paragraph (a), the seller, upon petition, is entitled to an order directing payment to the seller of the deposited monies out of court, including accrued interest, less any fees to which a public officer may be entitled pursuant to law (see id. § 294-b[5][e]). RPL § 294-b(5)(f) further provides that, upon the seller making the deposit required by paragraph (a), the limitations period for any action or proceeding based upon the contractual obligation to pay a commission is shortened to six months from the date of deposit.

PARTIES' CONTENTIONS

It is undisputed that the commission was not deposited with the County Clerk until three business days after delivery of the deed. Plaintiff contends that, under the circumstances presented, including that the funds were segregated and held by the title company pursuant to a written stakeholder agreement at closing and were deposited promptly thereafter, plaintiff substantially complied with RPL § 294-b(5)(a), thereby triggering the time limitations and procedures set forth in RPL § 294-b(5), including the shortened limitations period in subdivision (5)(f).

Defendants contend that RPL § 294-b(5)(a) requires strict compliance, and that a deposit made three business days after delivery of the deed does not constitute a deposit made "at the time of delivery of the deed." Defendants further argue that because plaintiff did not comply with subdivision (5)(a), the shortened limitations period in subdivision (5)(f) was not triggered, and defendants' counterclaims for the commission are not time-barred and should be decided in their favor.

DISCUSSION

"It is fundamental that a court, in interpreting a statute, should attempt to effectuate the intent of the Legislature" (Oak Beverages, Inc. v D.G. Yuengling & Son, Inc., — AD3d — , 2025 NY Slip Op 04730, *2 [2d Dept 2025] [internal quotation marks omitted]). "As the clearest indicator of legislative intent is the statutory text, the starting point in any case of interpretation must always be the language itself, giving effect to the plain meaning thereof" (id. [internal quotation marks omitted]). Where the statutory language is ambiguous or a literal construction would lead to unreasonable consequences contrary to the statute's purpose, a court may consider legislative history and the statute's overall structure (see Matter of Albany Law School v New York State Off. of Mental Retardation & Dev. Disabilities, 19 NY3d 106, 120 [2012]; Saul v Cahan, 153 AD3d 951, 952 [2d Dept 2017]).

The parties' dispute turns on whether the deposit requirement in RPL § 294-b(5)(a), that the seller deposit the disputed commission "at the time of delivery of the deed," was satisfied where, as here, the disputed commission was segregated at closing pursuant to a written stakeholder agreement, held by the title company, and deposited with the County Clerk three business days after delivery of the deed.

Construed as a whole, subdivision (5) reflects a legislative tradeoff. Once the seller makes the deposit, the broker gains the protection of a secured fund held by the recording officer, but the broker must act promptly to obtain a judicial determination, including commencing an action or proceeding within six months of the deposit (see RPL § 294-b[5][f]). The statute also demonstrates that the Legislature knew how to impose an inflexible time limit when it intended to do so. Subdivision (5)(e) expressly provides that its 60-day period "shall not [*2]be extended," while subdivision (5)(a) contains no comparable prohibition.

Here, the record reflects that the deposit mechanism was implemented as part of the closing process, and that neither plaintiff nor defendants had access to the disputed funds following delivery of the deed. Defendants have not shown prejudice arising from the short, three-business-day interval between deed delivery and deposit. There is no indication of bad faith conduct or gamesmanship by plaintiff associated with the timing or manner of the deposit. In these circumstances, the statute's central protective purpose, securing the disputed commission from the sale proceeds pending any litigation, was achieved.

The Court also considers that this dispute arose only after defendants recorded and served an affidavit of entitlement, thereby triggering the provisions of the statute. Once the deposit was made, defendants had notice of the deposit date and of the statute's abbreviated timetable for seeking a judicial determination, yet defendants did not commence an action or proceeding within six months of the deposit and did not assert counterclaims until February 23, 2022. Allowing defendants to avoid the statute's shortened limitations period based solely on a brief, nonprejudicial delay would be inconsistent with the statute's structure, which is designed, among other things, to promote prompt adjudication once the funds are secured.

Although no appellate authority squarely addresses whether a deposit made several business days after deed delivery satisfies subdivision (5)(a), Matter of Nastri Real Estate, LLC v Beblo (96 AD3d 1476 [4th Dept 2012]) is persuasive by analogy in that it reflects a substantial compliance approach to RPL § 294-b. In Nastri, the broker commenced a proceeding pursuant to RPL § 294-b seeking payment of commission funds that had been deposited with the Onondaga County Clerk and later transferred to the county's chief fiscal officer (id. at 1476). The Fourth Department held that the broker established entitlement to the unpaid portion of the commission under the parties' exclusive right to sell contract, and it affirmed the determination that the broker's affidavit of entitlement was in substantial compliance with the statutory filing requirements, notwithstanding any technical defect (id.). Although not reflected in the Fourth Department's opinion, the broker in filing the affidavit of entitlement failed to include a copy of the brokerage agreement that RPL § 294-b requires to be filed with the affidavit.^[FN1]

Additionally, the general principle reflected in CPLR 2004, that minor, nonprejudicial timing deviations may be excused absent an express statutory prohibition, reinforces that conclusion. Under the circumstances presented, the funds were continuously segregated, the delay was minimal and administrative, and defendants have not demonstrated prejudice.

Accordingly, the Court concludes that plaintiff's substantial compliance with RPL § 294-b(5)(a) satisfied his obligations under the statute. This conclusion accords with the practical reality that residential closings generally do not occur at the County Clerk and that, in some closings, including this one, a brief interval may be required for the title company to process the closing funds and remit the check for deposit with the County Clerk. The March 24, 2021 deposit was sufficiently close in time to the March 19, 2021 deed delivery, under the [*3]circumstances presented, to trigger the six-month limitations period in RPL § 294-b(5)(f). Because defendants did not commence an action or proceeding within six months of the deposit and did not assert counterclaims within that period, defendants' counterclaims, which all arise from the ERSA or are duplicative of the breach of contract counterclaim based thereon, are time-barred. Nor are defendants entitled to attorneys' fees under RPL § 294-b(5)(h) considering that plaintiff complied with the statute by depositing the disputed commission.

Accordingly, it is

ORDERED that plaintiff is awarded judgment on the complaint against defendants Andrea Levine and Keller Williams Realty Gold Coast; and it is further

ORDERED that the counterclaims of defendants Andrea Levine and Keller Williams Realty Gold Coast are dismissed; and it is further

ORDERED that plaintiff, as executor of the Estate of Irwin Paul Lew, is adjudged to be entitled to the funds held by the New York State Comptroller's Office of Unclaimed Funds that were transferred from the Nassau County Treasurer in connection with the disputed commission deposited pursuant to Real Property Law § 294-b, together with any interest credited thereon, less any applicable fees lawfully assessed; and it is further

ORDERED that plaintiff is awarded costs and disbursements as taxed by the Clerk; and it is further

ORDERED that the complaint is dismissed against defendant Clerk of Nassau County; and it is further

ORDERED that, within 30 days of the date of entry of this order, plaintiff shall settle judgment on notice.

This constitutes the Decision and Order of the Court.