The following e-filed documents, listed by NYSCEF document number (Motion 001) 2, 13, 14, 15, 16, 17, 18, 19, 21, 22, 23, 24 were read on this motion to/for JUDGMENT - DECLARATORY.

In this declaratory judgment proceeding, petitioner, Irving H. Picard, as trustee for the substantively consolidated liquidation of Bernard L. Madoff Investment Securities LLC ("BLMIS"), seeks a declaratory judgment that that certain condominium units owned by Respondents Malcolm Sage and Lynne Sage are not subject to a homestead exemption, and directing the sheriff to execute on the sale of the units. Petitioner seeks the declaratory judgment and subsequent sale, for apartments 14B and 14C located at 45 Christopher Street, New York, New York, 10014. Respondents argue that these two units, along with Apartment 14A, also owned by respondents were combined to make one unit in 1995 and the combined unit is their primary residence and thus subject to the CPLR § 5206, homestead exemption. Petitioner argues that respondents are only entitled to the homestead exemption for Unit 14A and the combined unit can be separated, and 14B and 14C can then be sold. Respondents cross-move seeking a protective order vacating all judgment enforcement proceedings against them.

Malcolm Sage was a general partner in Sage Associates and Sage Realty, two partnerships that held investment accounts at BLMIS between 1978 and 2008 (NYSCEF Doc No 1 ¶ 6). Petitioner commenced proceedings against Malcolm Sage, Sage Realty, and Sage Associates to recover fraudulent transfers made by BLMIS to Sage Associates and Sage Realty, totaling $16,880,000 (id. at ¶ 7). Following trial, the United States District Court for the Southern District of New York ("SDNY") entered two money judgments both against Martin Sage and others, jointly and severally, for $13,510,000.00 and for $3,370,000.00 totaling $16,880,000 (id at ¶ 8; NYSCEF Doc No 4). The entire judgment remains unpaid and due (NYSCEF Doc No 1 ¶ 12).

Respondents purchased Apartment 14B in 1992 (id. at ¶ 14). In 1993 respondents purchased Apartment 14A and in 1995 they purchased Apartment 14C, and combined all three apartments into one where they have lived since (id. at ¶¶ 13 — 16). The three apartments retain their original, distinguishable block and lot numbers (id. at ¶ 17).

CPLR § 5206 provides:

(a) Exemption of homestead. Property of one of the following types, not exceeding one hundred fifty thousand dollars for the counties of . . . New York, . . . in value above liens and encumbrances, owned and occupied as a principal residence, is exempt from application to the satisfaction of a money judgment, unless the judgment was recovered wholly for the purchase price thereof:

1. a lot of land with a dwelling thereon,

2. shares of stock in a cooperative apartment corporation,

3. units of a condominium apartment, or

4. a mobile home.

. . .

(e) . . . A judgment creditor may commence a special proceeding in the county in which the homestead is located against the judgment debtor for the sale, by a sheriff or receiver, of a homestead exceeding one hundred fifty thousand dollars for the counties of . . . New York . . . The court may direct that the notice of petition be served upon any other person. The court, if it directs such a sale, shall so marshal the proceeds of the sale that the right and interest of each person in the proceeds shall correspond as nearly as may be to his right and interest in the property sold. Money, not exceeding one hundred fifty thousand dollars for the counties of . . . New York . . . is exempt for one year after the payment, unless, before the expiration of the year, he acquires an exempt homestead, in which case, the exemption ceases with respect to so much of the money as was not expended for the purchase of that property; and the exemption of the property so acquired extends to every debt against which the property sold was exempt

The purpose of the homestead exemption is to protect the family of a judgment debtor by exempting their home from execution on an outstanding judgment if it falls below a monetary threshold, or if it the property exceeds that value, exempting some of the proceeds from the sale to allow the debtor to purchase an exempt property (see CFCU Community Credit Union v Hayward, 552 F3d 253 [2d Cir 2009]; see also Sklar v Gestetner, 190 AD3d 750 [2d Dept 2021]). "In order to claim a homestead exemption under New York law, a debtor must show actual physical occupancy on a regular basis and an intent to reside permanently" (In re Issa, 501 BR 223, 226 [Bankr SDNY 2013]).

Here, petitioner argues that respondents are only entitled to claim the homestead exemption for Apartment 14A, and that the sheriff should be directed to proceed with an execution of the sale of Apartments 14B and 14C as exempt from CPLR § 5206(e). There are no cases directly on point whether two or more combined condominiums or cooperatives qualify collectively for the homestead exemption. However, in In re Flatt, (160 BR 497 [Bankr NDNY 1993]) United States Bankruptcy Court for the Northern District of New York considered an analogous issue. The issue before the Court in Flatt was whether two parcels of land — one with [*2]the dwelling and the second across the street and vacant — together acquire the status of homestead property (id. at 498 — 499). The Court reasoned that a "nearly identical issue arises in the context of determining severance damages incident to an appropriation of real property in eminent domain" context (id. at 501). The Court noted that in the context of eminent domain "separate parcels will generally be considered as comprising a single unit only when three requirements are met: i) there is unity of title or ownership, ii) unity of use and iii) the parcels are contiguous" (id.; see also Matter of Vil. of Port Chester v Bologna, 95 AD3d 895, 896 [2d Dept 2012] (["To establish the propriety of valuing two separate parcels of property as a single economic unit for the purpose of awarding condemnation damages, 'the property owner must show that the subject parcels are contiguous, and that there is a unity of use and of ownership"]).

Here, it is undisputed that all three of the elements are satisfied. There is unity of title and ownership in that Malcolm and Lynne Sage have owned the three apartments by a tenancy in the entirety since 1995 (see NYSCEF Doc Nos 6 — 8)^[FN1] . Further, petitioner acknowledges that the three apartments have been combined into one contiguous apartment which is used for respondents' primary home (see NYSCEF Doc No 1 ¶ 11). Therefore, the three combined apartments may be treated as one solitary homestead property, and the petition must be denied. While CPLR § 5206(e) provides that a judgment creditor may commence a special proceeding to direct the sale of a debtor's homestead property, and as stated above, if such a sale is directed must exempt an amount of the sale proceeds to allow the debtors an opportunity to acquire a fully exempt property, however, petitioner did not request this relief here. Since petitioner only seeks a declaratory judgment, declaring Apartments 14B and 14C are not subject to the homestead exemption, the petition must be denied.

As for respondent's cross-motion, petitioner correctly notes a fatal procedural defect in that it does not contain a Notice of Cross-Motion (Estate of Briger, 95 AD2d 887, 888 [3d Dept 1983]). However, notwithstanding the procedural defect, respondents are not entitled to a vacatur of the money judgments against them. Respondent, Malcolm Sage has already exhausted all appeals of the judgment and has provided no evidence that the judgments were obtained by fraudulent means. Furthermore, respondents "proffered no evidence that permitting the [petitioner] to enforce the judgment would cause unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice" (Castle Restoration & Constr., Inc. v Castle Restoration, LLC, 155 AD3d 678, 682 [2d Dept 2017]). Therefore, the cross-motion will be denied.

Accordingly, it is,

ORDERED and ADJUDGED that the petition and the cross-motion are denied, and the Clerk is directed to enter judgment accordingly with costs and disbursements to respondents as taxed by the Clerk.