Recitation, as required by CPLR 2219(a), of the papers considered in the

review of petitioner's motion for an order vacating all restraining notices,

providing related relief, awarding costs and legal fees, and imposing

sanctions, and respondent's cross-motion for an order vacating all stays

or, in the alternative, requiring petitioner to file a proper or supplemental

undertaking:

PAPERSNUMBERED

Petitioner's Order to Show Cause, Affirmation, Affidavit, and Exhibits1

Respondent's Notice of Cross-Motion, Affirmation, and Exhibits2

Petitioner's Reply Affirmation and Affirmation in Opposition

to Cross-Motion, and Exhibits3

Respondent's Affirmation in Further Support of Cross-Motion4

Petitioner's motion for an order vacating all restraining notices, providing related relief, awarding it costs and legal fees, and imposing sanctions on respondent (sequence no. 007), and respondent's cross-motion for an order vacating the stay of enforcement of the "August 18, 2010 Judgment" or, in the alternative, directing petitioner to file a proper or supplemental undertaking (sequence no. 008), are consolidated for decision.

In a decision and order dated July 6, 2010, the Court held that respondent was entitled to an award of attorneys fees for her successful defense of this holdover proceeding. By decision and order dated August 18, 2010, after having conducted an attorneys fee hearing, the Court awarded respondent $6,606.25 for attorneys fees and directed the Clerk of the Court to enter a money judgment in that amount.

On September 3, 2010, respondent filed a notice of appeal of the Court's August 18th decision and order and on September 8, 2010, petitioner filed a notice of cross-appeal.

On or about August 26, 2010, respondent mailed an "information subpoena with restraining notice" to petitioner's bank. At some point thereafter, the bank notified petitioner that [*2]its account had been restrained, leading petitioner to deposit a check for $7,000.00 with the Clerk of the Court on or about November 1, 2010.

By letter dated October 30, 2010, petitioner's attorney notified respondent's attorney that petitioner would be posting an undertaking in the amount of $7,000.00 on November 1st. The letter further stated that "once [the undertaking] is filed, it is expected that you will notify [petitioner's] bank . . . to release the account and that you will cease and desist from all collection activities."

By letter dated November 2, 2010, petitioner's attorney notified respondent's attorney that the undertaking had been filed on November 1st, attached a copy of the receipt provided by the Clerk of the Court, and asked respondent's attorney to "notify your Marshal to cease and desist as well as to notify [petitioner's] bank . . . that the account has been released.

On November 4th, petitioner's attorney called respondent's attorney and asked him to release petitioner's bank from the restraining notice. Later that day, petitioner's attorney faxed respondent's attorney a letter in which he stated that respondent had until November 5th at 5:00 p.m. to provide him with proof that petitioner's bank was notified that the restraining order had been lifted ,and that upon his failure to do so, he would seek judicial intervention, costs, legal fees, and sanctions.

In a letter dated November 8, 2010, respondent's attorney demanded that petitioner's attorney provide a certified copy of the receipt from the Clerk of the Court and stated that "[u]pon receipt of the certified copy of this document, we will proceed accordingly with [the petitioner's bank]." On November 9th, petitioner's attorney faxed respondent's attorney a letter

along with an attorney-certified copy of the receipt from the Clerk of the Court.

Although respondent's attorney acknowledges that he received the certified copy of the receipt that he had requested, it appears that he did not notify petitioner's bank to release the restraint on petitioner's account. Consequently, petitioner now moves for an order, inter alia, vacating all restraining notices; directing respondent and her attorney to cease and desist from seeking to collect on the "Judgment of August 18, 2010"; and awarding petitioner costs and legal fees, as well as imposing sanctions on respondent, for failing to notify petitioner's bank to release the restraint on petitioner's account. Respondent cross-moves for an order vacating the stay of enforcement of the "August 18, 2010 Judgment" on the ground that the undertaking filed by petitioner is insufficient to invoke the stay provisions of Section 5519(a)(2) of the CPLR or, in the alternative, directing petitioner to file a proper or supplemental undertaking.

In its reply papers, petitioner states that the Record on Appeal of the Court's August 18th decision and order does not include a judgment and argues that if, in fact, there is none, respondent did not have the right to execute on the decision and order. Responding to that argument in her reply papers in further support of her cross-motion, respondent argues that petitioner's claim that there is no judgment is "outrageous," given that the August 18th decision and order explicitly directed the Clerk of the Court to enter a money judgment in her favor and against petitioner.

Although the August 18th decision and order did direct the Clerk of the Court to enter a money judgment in favor of respondent, it does not appear that such judgment has yet been entered. Because only money judgments and orders directing the payment of money may be enforced as prescribed in Article 52 of the CPLR, see CPLR § 5101, and an order directing that [*3]judgment be entered is not a judgment, see Marsh v. Johnston, 123 AD 596 (2d Dept 1908); Concourse Super Service Station, Inc. v. Price, 33 Misc 2d 503 (Sup Ct, Bronx County 1962), respondent is not a "judgment creditor," as that term is defined in Section 105(l) of the CPLR, and therefore had no right to serve a restraining notice on petitioner's bank pursuant to Section 5222 thereof. Thus, the absence of a judgment, in and of itself, provides sufficient grounds for the Court to vacate respondent's restraining notice.^[FN1]

Even if a judgment had been entered, the Court would reach the same result. Section 5519(a) of the CPLR provides, in pertinent part, that

Service upon the adverse party of a notice of appeal . . . stays all

proceedings to enforce the judgment or order appealed from pending

the appeal . . . where:

. . .

2. the judgment or order directs the payment of a sum of money, and

an undertaking in that sum is given that if the judgment or order

appealed from, or any part of it, is affirmed, or the appeal is dismissed,

the appellant or moving party shall pay the amount directed to be paid

by the judgment or order, or the part of it as to which the judgment or

order is affirmed.

Section 5519(c) of the CPLR provides, in pertinent part, that "The court from or to which an appeal is taken or the court of original instance . . . may vacate, limit or modify any stay imposed by subdivision (a) . . ." Thus, where a court awards a money judgment, a party may obtain a stay of all proceedings to enforce the judgment without court order by serving a notice of appeal and giving an undertaking in "the amount directed to be paid by the judgment or order." However, any interested person may move for an order requiring a new or additional undertaking. See CPLR § 2508.

Here, it is undisputed that petitioner gave an undertaking for several hundred dollars more than the judgment amount ^[FN2] and that petitioner's attorney served proof of the funds deposited with the Clerk of the Court on respondent's attorney no later than November 9, 2010.Respondent argues, however, that petitioner's deposit of $7,000.00 did not trigger the stay provision of Section 5519(a)(2) because that amount is insufficient to cover interest in the amount of approximately $50.00 per month that has accrued since August 18, 2010 and that will continue to accrue during the pendency of respondent's appeal and petitioner's cross-appeal, as well as marshal's fees, costs, and the additional attorneys fees that respondent will incur while litigating the appeals. The Court finds that respondent's argument is without merit. [*4]

Section 5519(a)(2) of the CPLR expressly provides that service of a notice of appeal stays enforcement of a judgment directing payment of a sum of money, without court order, when "an undertaking in that sum is given that if the judgment or order appealed from, or any part of it, is affirmed, or the appeal is dismissed, the appellant . . . shall pay the amount directed to be paid by the judgment or order, or the part of it as to which the judgment or order is affirmed." (Emphasis added). Although "[i]n most of the instances in which an undertaking is required by one of the paragraphs of subdivision (a), the amount of it must be fixed by the court

. . . [u]nder paragraph 2, . . . involving the ordinary money judgment, the amount of the judgment fixes the amount of the undertaking." Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C5519:2. See Gerard Owners Corp. v. Roshodesh, 2008 NY Slip Op 84358(U) (App Term, 2d and 11th Jud Dists 2008) (Appellate Term notes that because judgment being appealed was not a possessory judgment, tenant may obtain stay of enforcement of said judgment pursuant to Section 5519(a)(2) of the CPLR by depositing the amount of the judgment into the court below).

None of the cases cited by respondent in support of her argument compels a different result. In HGCD Retail Services, LLC v. 44-45 Broadway Realty Co., 12 Misc 3d 1166(A), 2006 NY Slip Op 51082(U) (Sup Ct, NY County 2006), the court held that it had discretion to require the defendants to procure and file an amendment to their existing bond to cover post-judgment interest. It did not hold that Section 5519(a)(2) required an undertaking to do so. Similarly, in Dwyer v. Nicholson, 154 Misc 2d 123 (Sup Ct, Kings County 1991), the court granted the plaintiff's motion for an order vacating the defendants' bond and enjoining them from withdrawing funds from their bank account to the extent of requiring each of the defendants' appeal bonds to provide for the payment of the judgment amount and all accruing interest and costs. As in HGCD Retail Services, the court in Dwyer did not hold that Section 5519(a)(2) required an undertaking to do so.

Thus, her arguments to the contrary, respondent was stayed from enforcing the August 18th "judgment" no later than November 9, 2010, when her attorney received proof that petitioner had deposited $7,000.00 with the Clerk of the Court.^[FN3] Consequently, respondent should have notified petitioner's bank that her restraining notice had been stayed or, in the alternative, moved expeditiously for an order requiring a new or additional undertaking.^[FN4]

Respondent's Cross-Motion

Apparently, respondent agrees that a Section 5519(a)(2) stay is in effect, given that her cross-motion, dated November 29, 2010, nearly three weeks after her attorney received proof of [*5]the $7,000.00 deposit, seeks an order vacating that stay or, in the alternative, directing petitioner to file a proper or supplemental undertaking. In support of her motion, she argues that the $7,000.00 deposit is insufficient because it only exceeds the judgment amount by approximately $394, which is unlikely to be enough to cover the post-judgment interest of approximately $50.00 per month due from August 18, 2010 through the date the appeals in this case will be decided, plus unspecified marshal's fees, costs and additional attorneys fees. Consequently, she asks the Court to require petitioner to give an additional undertaking of at least $15,000.00.

In opposition to respondent's cross-motion, petitioner argues, inter alia, that the amount it has already deposited with the Clerk of the Court is sufficient to protect respondent because the funds deposited are earning interest, which can be paid to respondent if she prevails on the pending appeals, and, in addition, respondent owes approximately $7,800.00 in rent (through December 2010).

The Court finds that the funds deposited by petitioner, coupled with respondent's undisputed rent arrears, which are likely to increase by more than $650 per month unless paid to

petitioner, provide adequate protection for respondent should she prevail on the pending appeals.

Accordingly, the Court denies respondent's cross-motion and grants petitioner's motion to the extent of (1) vacating the restraining notice against HSBC Bank; (2) directing respondent and her attorney to notify HSBC bank forthwith that the restraining notice has been vacated; and (3) directing respondent and her attorney to cease and desist from otherwise seeking to enforce the August 18th "judgment."^[FN5]

Costs, Attorneys Fees, and Sanctions

Petitioner seeks an award of costs and legal fees, and imposition of sanctions against respondent for her frivolous conduct in failing to notify petitioner's bank to lift the restraining [*6]notice after her attorney received proof that petitioner had deposited $7,000.00 with the Clerk of the Court.

Section 130-1.1(a) of the Rules of the Chief Administrative Judge ("the Rules"), 22 NYCRR § 130-1.1(a), authorizes a court, in its discretion, to award to any party or attorney "costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct . . ." The Rules also provide that "[i]n addition to or in lieu of awarding costs, the court, in its discretion may impose financial sanctions upon any party or attorney . . . who engages in frivolous conduct . . . , which shall be payable as provided in section 130-1.3 of this Part." Id. The court may award such costs or impose such financial sanctions "against either an attorney or a party to the litigation or against both." Id. § 130-1.1(b).

In determining whether to impose the penalties authorized by Section 130-1.1(a), the Court must determine whether respondent's refusal to notify petitioner's bank that the restraining notice had been stayed is "frivolous" within the meaning of the Rules. Conduct is considered "frivolous" if "(1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false." Id. § 130-1.1(c).

As noted above, even assuming that there were a judgment to enforce, Section 5519(a)(2) is eminently clear that where a court awards a money judgment, all proceedings to enforce the judgment are stayed without court order by serving a notice of appeal and giving an undertaking in "the amount directed to be paid by the judgment or order." Given that respondent has cited no cases to the contrary, it appears that her attorney's failure to promptly notify petitioner's bank that the restraining notice on petitioner's account had been stayed upon petitioner's deposit of nearly $400.00 in excess of the judgment amount with the Clerk of the Court was completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law. Also, given the petitioner's allegation regarding the respondent's and her attorney's acrimony toward petitioner and its attorney, it may be the case that the failure of respondent's attorney to promptly notify petitioner's bank that the restraining notice had been stayed was done to harass petitioner.

In order to give both sides a final opportunity to present evidence and make legal arguments regarding petitioner's claim for an award of costs and legal fees, and for the imposition of sanctions against respondent, this case is restored to the Court's calendar for a hearing on March 9, 2011 at 2:15 p.m.

This constitutes the decision and order of the Court.

Dated:Bronx, New York

February 15, 2011

________________________________________

Hon. Andrew Lehrer [*7]