Counsel for the defendants, George Edrich, individually and as Executor of the Last Will and Testament of Ester Edrich, and his children, Bruce Edrich, Dina R. Edrich, Johnathan R. Edrich, and Ellen Y. Baratz (hereinafter, collectively referred to as the Edrichs), requests that this court, pursuant to CPLR §6515, issue an order to cancel the plaintiff's notice of pendency filed against 607 Avenue K, Brooklyn, NY, owned by Mr. George Edrich, upon the posting of an undertaking to be set by this court. This request is predicated on the fact that Mr. George Edrich currently has a buyer for the mentioned property, at a sales price of approximately 1.6 million dollars, whereas the plaintiff herein is merely seeking to satisfy a $250,000.00 judgment. According to the Edrichs, CPLR §6515 allows the court to cancel a notice of pendency, even where the action will affect title to realty, where the plaintiff can be adequately protected by a reasonable undertaking (citing, John H. Dair Bldg. Const. Co. v. Mayer, 31 AD2d 835, 298 NYS2d 122 [2d Dept., 1969]). In addition, case law provides for the cancellation of a notice of pendency where the action is to recover money damages and does not affect the title, use, possession, or enjoyment of real property (citing, Bennett v. John, 151 AD2d 711, 543 NYS2d 143 [2d Dept. 1989]; and, Long Island City Loan Ass'n v. Gottlieb, 90 AD2d at 766, 455 NYS2d at 301). Furthermore, counsel seeks, pursuant to CPLR §3211( a)(1) and 3211(a ) (5), dismissal of that part of the plaintiff's amended complaint alleging fraudulent conveyance of the subject [*2]property (to one or more of the Edrichs), as the same is barred by the statute of limitations, and dismissal, pursuant to CPLR §3211( a)(7), of plaintiff's claim for punitive damages for failure to state a cause of action upon which relief can be granted.

The Edrichs maintain that this court incorrectly denied their earlier request for dismissal of the plaintiff's constructive fraud cause of action as barred by its six year statute of limitations. That error is said to arise from the fact that they (the Edrichs) cannot be equitably estopped from relying on the statute of limitations since no fiduciary relationship has been shown to exist between the plaintiff and the defendants, and it has not been established that they made an affirmative misrepresentation—separate and apart; i.e., subsequent to and independent from the misconduct upon which the plaintiff's claim is based—which the plaintiff relied upon to prevent it from timely commencing an action (citing, Duberstein v. Nat'l Medical Resources, Inc., 37 AD3d 209, 829 NYS2d 95 [1st Dept., 2007]; Melnitzky v. Hollander, 16 AD3d 192, 791 NYS2d 96 [1st Dept., 2005]; Glachan v. Archdiocese of New York, 229 AD2d 468, 645 NYS2d 529 [2d Dept., 1996], etc.).

Despite the fact that the plaintiff has now amended its complaint to include an ad damnum clause for punitive damages, the Edrichs nevertheless contend that punitive damages are herein inapplicable inasmuch as the plaintiff has failed to demonstrate egregious tortious conduct by which it was aggrieved, and that such conduct was part of a pattern directed at the public generally (citing, Vanguard Eqwuipment Rentals, Inc. v. Cab Associates, 288 AD2d 306, 732 NYS2d 883 [2d Dept., 2001], and Rose Lee Mfg., Inc. v. Chemical Bank, 186 AD2d 548, 588 NYS2d 408 [2d Dept., 1992]).

Finally, the Edrichs assert that the public filings were sufficient to put the plaintiff on inquiry notice that would have activated the applicable statute of limitations for actual fraud; namely, six years from the July, 1994 transfer or two years from discovery of that fraud. The Edrichs maintain that the limitation period is not tolled where an aggrieved party has a reasonable basis to suspect wrongdoing but fails to exercise due diligence to investigate further (citing, Rattner v. York, 174 AD2d 718, 571 NYS2d 762 [2d Dept., 1991]; Prestandrea v. Stein, 262 AD2d 621, 692 NYS2d 689 [2d Dept., 1999]).

The Edrichs further argument that Festinger's representation in federal court though irrelevant to them since they didn't make it, is nevertheless consistent with their position; to wit, that they own the assets, is of no moment. The fact is that Festinger's federal court assertion in contrast to his state court lawsuit position evinced an intent to defraud, leading this court to find that he would not be permitted to recoup property that he had fraudulently transferred so as to avoid legitimate creditors. That finding left open the question of the Edrichs' involvement in that scheme to defraud (Festinger v. Edrichs, 2005 NY Slip Op. 251193, 8 Misc 3d 700, NYLJ 6/1/05, p. 18. col. 1).

The plaintiff, in response to the preceding, asserts that the Edrichs' instant motion to dismiss (their second) is essentially a motion to renew and/or reargue issues which were all previously raised, briefed, argued, and decided by this court's March 30, 2007 order, and should therefore be denied under the law of the case doctrine (citing, Haibi v. Haibi, 171 AD2d 842, 567 NYS2d 778 [2d Dept., 1991], Baron v. Baron, 128 AD2d 821, {2d Dept., 1987], and Hoffman v. Landers, 146 AD2d 744, 537 NYS2d 228 [2d Dept., 1989]), as well as for failing to comply with the requirements of CPLR §2221; that is, failing to be correctly labeled as a motion to reargue or renew, to set forth overlooked or misapprehended facts, or change in the law, and not having [*3]been made within thirty days of the order with notice of its entry. In addition, the plaintiff argues that multiple summary judgment motions in the same action are not to be encouraged in the absence of newly discovered evidence (citing, Detko v. McDonald's Restaurants of New York, Inc., 198 AD2d 208, 603 NYS2d 496 [2d Dept., 1993]). The plaintiff also notes that other than the self-serving, conclusory allegations of their attorney, no contract of sale (with particulars as to purchaser, closing date, etc.) or appraisal (with basis of valuation) is attached to the defendants' moving papers sufficient to permit the application of CPLR §6515(1) "upon such terms as are just;" especially in light of the fact that it is seeking money damages in the amount of $220,480.28 plus three years' interest, attorneys' fees, and punitive damages in excess of $1,000,000.00.Furthermore, the plaintiff maintains that the Edrichs actively engaged in conveyances, transactions, and conduct which were designed to assist Samuel Festinger in hindering, delaying, and/or defrauding his present and future creditors, which "morally culpable" conduct warrants the imposition of punitive damages. Finally, the plaintiff opposes the cancellation of the Notice of Pendency in the absence of an undertaking of not less than 1.5 million dollars.

In their reply, the Edrichs assert that George Edrich's contract of sale is for 2.6 million, not 1.6 million as they misstated in the earlier motion papers. In addition, inasmuch as the plaintiff's assigned judgment is for approximately $250,000.00 and grows at a rate of less than $20,000.00 per year, an undertaking in the amount of $350,000.00 would be more than sufficient to fully secure the plaintiff, who claims no interest in the subject property. The Edrichs also maintain that the additional personal property supposedly also fraudulently transferred to them would remain available to the plaintiff as well, thereby further reducing any possible prejudice. The Edrichs then assert that the dicta of the First Department holding, cited by the plaintiff, suggesting that punitive damages may be awarded in cases of fraudulent conveyances where the defendant's conduct was gross and wanton and involved high moral culpability (Blakeslee v. Rabinor, 182 AD2d 390, 582 NYS2d 132 [1stDept., 1992]) is irrelevant in light of the fact that the Second Department does not recognize punitive damages in the context of fraudulent conveyances (citing, Cadle Co. v. Oranges Enterprises, Inc., 29 AD3d 927, 815 NYS2d 732 [2d Dept., 2006]). The Edrichs add that they would have proceeded by way of motion to reargue/renew had it not been for the plaintiff's amended complaint filed after the court's prior order, which rendered such action moot (citing, Aikens Construction of Rome, Inc. v. Simons, 284 AD2d 946, 727 NYS2d 213 [4th Dept., 2001] and AMP Services, Ltd v. Walanparias Foundation, 2005 WL 4712308 [Sup., NY, 2005]). With regards to the law of the case doctrine referred to by the plaintiff, the Edrichs maintain that it is herein inapplicable as the judge who rendered the initial decision can change his/her mind and overrule his/her own order (citing, Dictograph Products Co., Inc. v. Sonotone, Corp., 230 F2d 131 [2d Cir., 1956] and Accord, Cohen v. New York Herald Tribune, Inc., 63 Misc 2d 87, 310 NYS2d 709 [Sup, NY, 1970]). Finally, the Edrichs argue that this court's prior finding that they could be estopped based on Festinger's representations that he had no assets is a non sequiter Their logic is that Festinger was estopped from claiming ownership in state court over property that he had disclaimed in federal court; i.e., from contradicting himself in the separate tribunals. However, since they are consistently claiming that Festinger does not own the property [but that they do], estoppel has no application here. In short, the Edrichs' position is consistent with Festinger's federal court position. The Edrichs also point out that since Esther Edrich purchased the property in 1994 and [*4]held it until her death, whereupon George inherited the same in 2003, the plaintiff cannot establish any affirmative acts of concealment, separate and apart from the underlying fraudulent conveyance (from Festinger to Esther), that would warrant estoppel.

Case law is clear that punitive damages may be awarded in a case of fraudulent conveyance where a defendant's conduct was gross and wanton and involved high moral culpability. However, the act of removing property from the reach of a creditor, without more, is not misconduct that is so gross and wanton as to justify an award of punitive damages (see James v. Powell, 19 NY2d 249; Blakeslee v. Rabinor, et al, 182 AD2d 390, 582 NYS2d 132; and, Marine Midland Bank v. Murkoff, 120 AD2d 122).

It is curious to note that the Edrichs again chose not to include the purported contract of sale or any appraisal in their reply papers. That they chose not to do so despite the fact that their motion and reply papers contain an unexplained discrepancy of one million dollars, which their attorney conveniently labeled as a typographical error, is even more disturbing. Under such circumstances, it is conceivable that the property is being undersold. Nevertheless, this court has already determined that ". . .the conveyances from Mr. Festinger to his sister, Esther, and the other Edrichs may have been supported by fair consideration. The documentary evidence proffered by the Edrichs; to wit, the deed and prior law suit, however, do not speak to that issue, but rather are attempts to crystalize the point at which inquiry notice should be set. To this court, as noted in the Del Vecchio v. Nassau County, et al, supra , decision, . . .the question of whether the actual fraud cause of action has been timely interposed after discovery of the alleged fraud, pursuant to the two year statute of limitations, should not be resolved on the motion to dismiss [as questions of fact abound]. Similarly, while a constructive fraud cause of action [if it existed in this case] is governed by a six year statute of limitations which begins to run at the time of the commission of the fraud (citing, CPLR 213[8]; Lapis Enterprises v. International Blimpie Corp., 84 AD2d 286, 445 NYS2d 574; see also Wall St. Assocs. v. Brodsky, supra ), a question of fact [would have existed] as to whether the [defendants] should be estopped from asserting the statute of limitations defense (citing, Simcuski v. Saeli, 44 NY2d 442, 406 NYS2d 259).' The plain fact is that it cannot be determined in this particular case, as a matter of law, whether the plaintiff was aware, or should have been aware, of any actual fraud more than two years before the commencement of this action. What is clear is that this court already decided in the matter of Festinger v. Edrichs, 2005 NY Slip Op. 251193; 8 Misc 3d 700; NYLJ 6/1/05, p. 18; col 1., that Samuel Festinger would not be permitted to claim any interest in the properties herein concerned since he had denied ownership of any assets in his prior federal parole hearing. That decision was predicated upon the doctrines of judicial estoppel and unclean hands which required that Mr. Festinger not be "permitted to play fast and loose with the courts by advocating contrary positions in different legal proceedings." The question now in contention is why the Edrichs would not be subject to these just mentioned doctrines as against Mr. Festinger's creditors and/or their assigns. To answer that inquiry, it needs to be determined whether the Edrichs were parties to Mr. Festinger's deceptions, either by complicity in design or by receipt without fair consideration. Such questions of fact cannot be summarily decided on the arguments herein made, and will have to be resolved at trial." (Bobash v. Festinger, et al, 2007 NY Slip Op 50645(U); 4/30/07 NYLJ p. 21; col. 1.). Nothing raised in the instant motion has changed that assessment; and, by no means can this court conclude at this time that George Edrich is unquestionably a holder in due course, or that he and the other Edrich defendants [*5]should not be subject to the doctrine of unclean hands. In addition, this court agrees with the plaintiff that the defendants are essentially attempting to renew and/or reargue their prior motion without the correct legal underpinning required therefor, both substantively [in the absence of misconstrued facts or new law] and procedurally [untimely; i.e., beyond thirty days of notice of entry] (CPLR §2221). Nevertheless, this court, as did the Court in Aikens Construction, Inc. v. Simons, et ano, 284 AD2d 946, 727 NYS2d 213, notes that although a motion to reargue a motion seeking dismissal of a complaint is rendered moot by service as of right of an amended complaint, the court in the interest of judicial economy can review the propriety of the dismissal of claims in the original complaint that are also asserted in the amended complaint. Here, the Edrichs have eliminated that need by proceeding via a new motion to dismiss. In any event, this court finds that dismissal is unwarranted at present for the reasons hereinabove set forth.

In considering a motion to bond a lis pendens, a court may ascertain the merits of a plaintiff's complaint and may consider the plaintiff's good faith and probability of success (see Brandstetter v. Kramer, 8 Misc 2d 718, 168 NYS2d 114). Although CPLR §6515 allows the court to cancel a notice of pendency, whether or not the action will affect title to realty, where the action is to recover money damages and the plaintiff can be adequately protected by a reasonable undertaking. The parties initially agreed that a bond in the amount of approximately 1.5 to 1.6 million [then modified by the Edrichs to $350,000.00] would cover their dispute. Nonetheless, the problem here is trying to determine exactly what "such terms as are just" means in this instance? By permitting the sale, this court could unwittingly be aiding in further concealing the initial fraud. The plain fact is that since the extent of the defendants' involvement in the subject fraudulent conveyances has not yet been determined, not only could the controversy involve "gross and wanton" conduct but it could potentially affect untold creditors, such that the court is unable to accurately determine the exact figure and/or equitable basis whereby to determine the undertaking amount needed to justly protect the interests herein concerned.

Wherefore, on the bases of all of the foregoing, the defendants' motion for an order, pursuant to CPLR §3211( a)(1) and 3211(a ) (5), for dismissal of that part of the plaintiff's amended complaint alleging fraudulent conveyance of the subject property (to one or more of the Edrichs), as barred by the statute of limitations, and dismissal, pursuant to CPLR §3211( a)(7), of plaintiff's claim for punitive damages for failure to state a cause of action upon which relief can be granted, are denied. The request for imposition of a bond, pursuant to CPLR §6515, is likewise denied inasmuch as the defendants have failed to provide this court with sufficient information whereby to determine the amount of undertaking to be imposed under such terms as are just. This constitutes the decision and order of this Court.

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