These motions arise from disputes following the 2005 death of David Schulte, the late husband of defendant, Sandra Schulte. David Schulte owned shares in a residential cooperative; and he and defendant lived in the co-op apartment appurtenant to those shares. Before his death, Mr. Schulte executed three documents—a prenuptial agreement, a will and a revocable trust—that defendant alleges were intended to provide for her continued residence in the apartment for the rest of her life. (NYSCEF No. 14 at ¶ 71.) Defendant still resides in the apartment.

Plaintiff, Holly Ellison, is Mr. Schulte's daughter from a previous marriage and executor of Mr. Schulte's estate. After Mr. Schulte's death, at defendant's request, plaintiff asked the co-op to transfer Mr. Schulte's shares to a marital trust, under which defendant would have a life interest in the apartment. The co-op refused this request, and subsequent litigation before Surrogate's Court found in favor of the co-op and against defendant. (See Matter of Schulte, 2022 NY Slip Op 34000[U] [Sur Ct, NY County 2022].) The Appellate Division, First Department, affirmed Surrogate's Court's ruling in 2023. (See Matter of Schulte, 220 AD3d 586 [1st Dept [*2]2023].)

In March 2024, plaintiff brought this action, seeking a declaration that defendant no longer has a right to live in the apartment, an order of ejectment, use and occupancy, and indemnification. Defendant did not timely respond to plaintiff's complaint. Plaintiff moved for default judgment (motion sequence 001). In December 2024, this court granted plaintiff's motion in part, to the extent of declaring that defendant no longer had a right to occupy the apartment and granting an order of ejectment. (See Ellison v Schulte, 2024 NY Slip Op 51669[U], at *3-4 [Sup Ct, NY County 2024].) This court also granted in part defendant's cross-motion to serve an untimely answer, including counterclaims seeking various forms of relief to which defendant alleges she is entitled given this court's conclusion that defendant must move out of the apartment. (See id. at *2 [order granting cross-motion]; NYSCEF No. 61 [answer].)

Defendant has moved on motion sequence 002 to stay enforcement of this court's order on motion sequence 001 pending determination of one of her counterclaims; or, in the alternative, to stay defendant's eviction for six months. (See NYSCEF No. 89 at 1-2 [signed order to show cause].)

Defendant brought on motion sequence 002 by order to show cause. The proposed order to show cause also sought an interim stay of enforcement pending determination of motion sequence 002. (See NYSCEF No. 62 at 2.) After defendant filed the proposed order to show cause, plaintiff filed motion sequence 003, seeking dismissal of defendant's counterclaims. (See NYSCEF No. 78 [notice of motion].) Taking into account the pendency of plaintiff's motion to dismiss, this court granted defendant's interim-stay request only to the extent of staying enforcement of the court's prior order pending a determination of the dismissal motion.^[FN1] (See NYSCEF No. 89 at 2.)

Plaintiff's motion to dismiss (mot seq 003) is granted.^[FN2] Defendant's motion to stay (mot seq 003) is denied in part as academic, and otherwise granted only to the extent of staying enforcement of this court's order on motion sequence 001 for 30 days from service of a copy of this order with notice of its entry.

In moving to dismiss defendant's counterclaims, plaintiff asserts that some issues raised in these counterclaims have already been litigated, and therefore should be barred by claim and [*3]issue preclusion. (See NYSCEF No. 87 at 9-10.) Defendant argues that she is not seeking to relitigate earlier claims, but rather seeks damages and other remedies stemming from her inability to live in the apartment. (See NYSCEF No. 94 at 3.)

Claim preclusion bars a party from relitigating a claim or issue that has been the subject of an earlier lawsuit. The party asserting a claim-preclusion defense must show that (1) the earlier action resulted in a final judgment on the merits; (2) the claim arises out of the same transaction or series of transactions; and (3) the earlier action was between the same parties or their privies. (Napoli v New York Post, 206 AD3d 816, 109 [2d Dept 2022].)

Repeated claims are barred "even if based upon different theories or if seeking a different remedy." (East Hampton Capital LLC v. Fergusson, 183 AD3d 409, 409-410 [1st Dept 2020] [internal citations omitted].) The doctrine applies "not only to claims actually litigated but also to claims that could have been raised in the prior litigation." (Matter of Hunter, 4 NY3d 260, 269 [2005].)

Issue preclusion bars the relitigation of an issue determined in a previous action. Issue preclusion applies when (1) the issue was resolved by a prior final judgment; (2) the issue was actually litigated and necessarily decided in reaching the judgment; (3) the issue in the first action is decisive of an issue in the later action; and (4) the party to be estopped had a full and fair opportunity to contest the issue. (Feng Li v Peng, 161 AD3d 823, 825-826 [2d Dept 2018].)

In her first counterclaim, defendant alleges that because the apartment was not transferred to the marital trust, it reverts as an estate asset, such that she is entitled to one-third of the entire estate as a surviving spouse under New York State Law.

Plaintiff suggests that this counterclaim rests, at least in part, on the contention that as a substantive matter, defendant has the legal right to live and remain in the apartment. (NYSCEF No. 87 at 10.) Specifically, plaintiff points to defendant's allegation that any action to remove defendant from the apartment would be based on a "false claim" and that she "had the rights" to occupy the apartment. (NYSCEF No. 61 at ¶ 143.) This court previously held in November 2024 that any contention regarding defendant's right to live and remain in the apartment is barred by both claim and issue preclusion. (See Ellison v Schulte, 2024 NY Slip Op 51669[U], at *3 [Sup Ct, NY County 2024].)

Plaintiff is correct that this claim rests on an assumption that defendant has a legal right to the apartment. Notably, rather than arguing that she is directly entitled to the apartment itself, defendant argues that she is indirectly entitled to the apartment (as an estate asset) via the spousal right of election. (See Estates, Powers, and Trusts Law (EPTL) § 5-1.1-A.)

In any event, even if defendant's first counterclaim were not based on the contention that she has legal rights to the apartment, the claim would still be barred by claim preclusion. As mentioned, the doctrine applies "not only to claims actually litigated but also to claims that could have been raised in the prior litigation." (Matter of Hunter, 4 NY3d at 269.) In earlier litigation, defendant's counsel could have argued that defendant was entitled to one-third of her late husband's estate, should defendant's efforts to compel the transfer of the apartment to the marital trust fail.

Furthermore, this claim arises out of the same transaction as defendant's claims in earlier litigation. In earlier litigation, defendant petitioned Surrogate's Court to compel the transfer and [*4]distribution of her late husband's interests in the apartment to the marital trust. (Matter of Schulte, 2016 WL 1546922 [Sur Ct, NY County Apr. 14, 2016].) This action stemmed from a dispute with the co-op board, which on December 13, 2010 denied defendant's request to transfer interests in the apartment to the marital trust. (NYSCEF No. 87 at 4-5.)

Here, defendant's claim to one-third of the estate also stems from this co-op board decision, as she contends that if the apartment is not a trust asset, then it must be an estate asset. Further, the other elements of the claim-preclusion test are satisfied, as the action before Surrogate's Court resulted in a final decision on the merits and was between the same parties.

Ultimately, defendant's claim that she is entitled to one-third of the estate assets is based, at least in part, on the contention that she has a legal right to the apartment. As held by this court in November 2024, this contention is barred under claim and issue preclusion. Based on this result, there is no need to reach the parties' arguments on statute of limitations.

The first counterclaim is therefore dismissed.

In her second counterclaim, defendant argues that plaintiff is obligated to provide defendant with a replacement property in the event defendant is compelled to move out of the apartment. Defendant further claims that "three properties equivalent in every way in the same geographic area should be offered to her to provide her with her right to make a choice." (NYSCEF No. 61 at ¶ 149.)

This argument is subject to the claim-preclusion bar because it could have been raised in the prior litigation before Surrogate's Court. In that litigation, it was foreseeable that defendant's action might prove unsuccessful, which would (and ultimately did) leave defendant without a legal right to remain in her residence. Defendant's counsel could have raised an alternative argument in Surrogate's Court that should defendant be compelled to leave the apartment, she would be entitled to the provision of a replacement property by plaintiff.

Further, this claim arises out of the same transaction as the previously litigated claims, namely, the board's refusal to transfer the interests in the apartment to the marital trust. Accordingly, the second counterclaim is dismissed as barred by claim preclusion.^[FN3]

Defendant's third counterclaim alleges that plaintiff has failed to perform lawfully her duties and obligations as executor of defendant's husband's Estate. Specifically, defendant alleges that plaintiff breached her duties as executor "to ensure that the goals of the Estate are carried out in accordance with David's wishes" and "to ensure that a defense is properly mounted against the Co-op's over-reach." (NYSCEF No. 61 at ¶¶ 171-2.) As a result of these alleged breaches, defendant claims that she is entitled to at least $26,666,666.70 in damages.

Defendant has raised this claim in earlier litigation. Before Surrogate's Court, defendant alleged that plaintiff, in her role as executor, had "violated her obligation as fiduciary to carry [*5]out the terms of David's will" by failing to effectuate the transfer of David's interests in the apartment to the marital trust. (Matter of Schulte, 2016 WL 1546922, at *1.)

Again, this claim arises out of the same transaction as past claims, namely, the board's refusal to transfer the interests in the apartment to the marital trust. Accordingly, claim preclusion bars the third counterclaim.

In her fourth counterclaim, defendant claims that if she is removed from the apartment, she should be reimbursed for all maintenance paid by her and all expenses incurred including reasonable legal fees. This claim, too, is barred by claim preclusion: It could have been raised before Surrogate's Court. Like the second counterclaim, this counterclaim could have been asserted in the alternative in the Surrogate's Court proceedings, to obtain relief for defendant in the event that the court rejected her argument that the co-op board should be required to transfer the apartment shares into the marital trust. The branch of the motion to dismiss this counterclaim is granted.^[FN4]

In her fifth counterclaim, defendant requests that this court apply the doctrine of equitable deviation to reform the will, amended trust, and prenuptial agreement, so that they provide that plaintiff must sell the apartment and purchase a new apartment for defendant. This argument rests on defendant's contention that her late husband's wishes have been frustrated by unforeseen circumstances, namely, the "co-op's refusal to approve the transfer of the apartment into the marital trust." (NYSCEF No. 61 at ¶¶ 182.)

This claim, though, could also have been raised by defendant in earlier litigation. If defendant believed that her late husband's wishes were being frustrated, she could have asked Surrogate's Court to reform the will, amended trust, and prenuptial agreement to align better with his wishes. There is evidence that defendant's husband's asserted wishes were being frustrated before proceedings began in Surrogate' Court, as the co-op denied defendant's request to transfer interests in the apartment to the trust back in December 2010. And Surrogate's Court is the preferred venue for raising claims (and seeking relief) with respect to decedents' estates. (See Williams v Williams, 36 AD3d 693, 695 [2d Dept 2007].)

The fifth counterclaim is therefore barred by claim preclusion as well.

On motion sequence 003, defendant seeks (i) a stay of this court's order on motion sequence 001 (including the grant of a warrant of ejectment) pending determination of defendant's fifth counterclaim; or, in the alternative, (ii) a six-month stay of eviction.

Given this court's resolution above of plaintiff's motion to dismiss defendant's [*6]counterclaims, defendant's first stay request is denied as academic. With respect to the alternative stay request, taking into account the time that has already elapsed since this court's order on motion sequence 002 (and since defendant brought on her stay motion by order to show cause), the court grants a further stay only for 30 days from service of notice of entry.

Accordingly, it is

ORDERED that plaintiff's motion to dismiss defendant's counterclaims asserted in her amended answer (mot seq 003) is granted, and the counterclaims are dismissed, with costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further

ORDERED that the balance of the claims and defenses in this action are severed and shall continue; and it is further

ORDERED that the branch of defendant's motion (mot seq 002) seeking a stay of this court's order on motion sequence 001 pending determination of defendant's fifth counterclaim is denied as academic; and it is further

ORDERED that the branch of defendant's motion (mot seq 002) seeking a stay of ejectment for a further six months is granted only to the extent that the Sheriff shall not execute the warrant of ejectment or place plaintiff in possession of the premises located at 1125 Park Avenue, Penthouse C, New York, NY 10128, as against defendant, for 30 days from service of notice of entry of this order; and it is further

ORDERED that plaintiff shall serve a copy of this order with notice of its entry on defendant, on the Sheriff, and on the office of the County Clerk (by the means set forth in the court's e-filing protocol, available on the e-filing page of the court's website, https://ww2.nycourts.gov/courts/1jd/supctmanh/E-Filing.shtml), which shall enter judgment accordingly.