Relevant facts of this matter are fully set forth in the prior decisions of this Court dated June 22, 2020 (Roedel Cos., LLC v JNK Home Enters., LLC, 67 Misc 3d 1233[A], 2020 NY Slip Op 50707[U] [Sup Ct, Warren County 2020]) and May 21, 2021 (Roedel Cos. v Jnk Home Enters., 71 Misc 3d 1223[A], 2021 NY Slip Op 50468[U] [Sup Ct, Warren County 2021]). As relevant here, in 2018 petitioners commenced an action in Warren County Supreme Court against JNK Home Enterprises ("JNK") and Kevin and Jean Knobloch (collectively the "Knoblochs"). On April 3, 2019, petitioners and respondents entered into a settlement agreement whereby a confession of judgment was entered in the amount of $1,093,456.70 in favor of petitioners.^[FN1] According to the settlement agreement, the judgment would remain valid for a period of five years from the date of entry (NYSCEF Doc. No. 19, ¶3). The judgment was filed and entered in the Warren County Clerk's Office on May 8, 2019 (NYSEF Doc. No. 20)

On May 7, 2024, the day before the expiration of the judgment, Roedel Companies, LLC, Roedel Partners of Saranac Lake II, LLC and ROK Builders, LLC (collectively "petitioners") commenced the present action seeking the sale of the Knobloch's homestead located at 7 Pollazzo Court in the Town of Queensbury (hereinafter "real property") pursuant to CPLR 5206(e). Petitioners also seek a determination that respondents are not entitled to claim an exemption in their homestead.

Respondents simultaneously filed an answer with counterclaims and a proposed order to show cause seeking dismissal of the petition pursuant to CPLR 5240, vacatur of the judgment pursuant to CPLR 5015(a)(3) or, alternatively, an order marking the judgment satisfied pursuant to CPLR 5021(a)(2). (Mot. Seq. #2) This Court signed the Order to Show Cause on May 23, 2024, and oral argument was heard on December 6, 2024.^[FN2]

Respondents seek to have the Court invoke its authority under CPLR 5240 which states, "[t]he court may at any time, on its own initiative or the motion of any interested person, and upon such notice as it may require, make an order denying, limiting, conditioning, regulating, extending or modifying the use of any enforcement procedure". Respondents contend dismissal of the petition is an appropriate remedy because under the terms of the settlement agreement the judgment has expired. Specifically, they contend the settlement agreement stated the judgment was to remain in force for five years - until May 8, 2024 - and a satisfaction of judgment was to be provided to respondents' counsel prior to that time so that it could be filed on that date. Respondents' claim due to the expiration of the judgment and petitioners' failure to provide a satisfaction of judgment, dismissal is warranted.

Preliminarily, it is permissible for the parties to contractually agree to reduce the statute of limitations for enforcing a judgment from twenty years to five years. However, respondents' contention - that the judgment expired on May 8, 2024, even though an enforcement action was commenced the day prior — is misplaced. New York courts have routinely found that, "[u]nless an action on a judgment is commenced within 20 years after the judgment is recovered, the right of action thereon is extinguished. However, once an action is actually commenced within the 20 years, the statute cannot be set up as a bar, even though at the time the answer is served more than 20 years have expired" (In re Scott, 272 NY 228, 230 [1936]) Such a judgment may be continued by commencing an action on the judgment within the prescribed time (Levine v Bornstein, 4 NY2d 241, 244 [1958]).

The Court is not persuaded by respondents' argument that regardless of whether an enforcement action was commenced, the judgment expired on May 8, 2024. Notwithstanding the parties' agreement to a shortened validity period for the judgment, the enforcement action was initiated prior to its expiration. As such, the action is timely, and dismissal of the petition on this ground is improper.^[FN3]

Next, respondents seek vacatur of the judgment pursuant to CPLR 5015(a)(3) which authorizes the Court to relieve a party from a judgment based upon "fraud, misrepresentation, or other misconduct of an adverse party". Respondents submit that petitioners' disregard of their [*2]obligations contained in the settlement agreement - refusal to tender an executed satisfaction of judgment and releases - constitute sufficient misconduct, if not fraud. Petitioners submit they never refused to provide the documents but simply disagree with the timing of their production.

The settlement agreement states in pertinent part:

"Contemporaneous with the execution of this Agreement, counsel for [petitioners] shall execute a Satisfaction of Judgment in the form attached as Exhibit 'B', which executed Satisfaction of Judgment shall be held in escrow by counsel to [respondents] until the expiration of said five (5) year period. Upon the expiration of said five (5) year period, unless the Judgment is satisfied sooner, counsel shall present said Satisfaction of Judgment for filing, such that the Judgment shall thereafter have no force or effect." (NYSCEF Doc. No. 18, ¶3)

Indeed, it is clear the satisfaction of judgment was to be executed contemporaneously with the settlement agreement, but the agreement is silent as to when the documents were to be turned over to respondents' counsel. The same is true with the releases (id. at ¶13). Regardless, respondents' assertions regarding delivery of the satisfaction of judgment and releases are grounded in breach of contract rather than misconduct or fraud in obtaining the judgment. Respondents have failed to satisfy their burden of establishing that the judgment was procured through fraud or other misconduct or that any of the other statutory grounds for vacatur set forth in CPLR 5015(a) applied (Bay Crest Assn., Inc. v Paar, 99 AD3d 744, 952 N.Y.S.2d 211, 2012 NY App. Div. LEXIS 6745 (NY App. Div. 2d Dep't 2012), app. dismissed, 20 NY3d 1054, 961 N.Y.S.2d 829, 985 N.E.2d 424, 2013 NY LEXIS 268 (NY 2013).

In view of the Court's determination that the judgment was still in force and effect at the time this enforcement action was commenced and the undisputed fact that the judgment has not been satisfied, respondents' motion seeking an order from the Court directing the judgment be deemed satisfied pursuant to CPLR 5021(a)(2) is denied. Similarly, respondents demand for specific performance of those terms of the settlement agreement requiring petitioners deliver a satisfaction of judgment and releases is also denied.

The Court turns next to the relief sought in the petition for an order pursuant to CPLR 5206(e) compelling the Sheriff of Warren County to sell respondents' property pursuant to CPLR 5236 and a determination as to whether the proceeds of that sale are subject to the homestead exemption set forth in CPLR 5206(a).

CPLR 5206(e) provides that a judgment creditor may commence a special proceeding against a judgment debtor to direct the sale, by sheriff or receiver, of a homestead exceeding $102,400.00 in value above liens and encumbrances in the county where the property is located.^[FN4] Thus, the Court being satisfied that petitioners have demonstrated the judgment to be valid, the action was timely commenced, and respondents were served the instant petition, the remaining contention is whether the proceeds from the sale of the property are subject to the homestead [*3]exemption provided for in CPLR 5206(a) and whether the value of the real property exceeds the total encumbrances.

To be entitled to a homestead exemption, CPLR 5206 requires evidence the real property is owned and occupied as a principal residence by the debtor(s). There is no dispute that respondents own and occupy the property (See NYSCEF Doc. No. 28, ¶12; NYSCEF Doc. No. 41, pg. 6). Instead, petitioners assert respondents are not entitled to a homestead exemption because the equity accumulated in the property since January of 2016 was the result of respondents' fraudulent conduct. Petitioners maintain a substantial amount of equity in the property was achieved with funds which were fraudulently taken from petitioners.^[FN5]

The petition alleges respondents made no payments on the first mortgage during the time they filed for bankruptcy in February 2016 until a lump sum payment of $14,300.00 was made in April 2017 and, thereafter both the Chapter 13 Trustee and the respondents made payments until respondents voluntarily dismissed their bankruptcy petition (NYSEF Doc. No. 1, ¶33-34). The petitioner further alleges respondents made extra and lump sum payments on the first mortgage from April 2018 through the end of 2019 (id. at ¶35). These conclusory statements, which are not supported by documentary evidence, are insufficient to establish that respondents fraudulently built equity in their real property with petitioners' funds so as to prohibit their entitlement to the homestead exemption. (see generally Matter of Helen [H.]O. v Mark L.O., 281 AD2d 937, 938, 722 NYS2d 206 [4th Dept 2001], lv denied in part and dismissed in part 98 NY2d 666, 774 NE2d 217, 746 NYS2d 452 [2002]; Matter of Coniglio, 242 AD2d 901, 902, 663 NYS2d 456 [4th Dept 1997] as cited in Matter of Jon Z., 178 AD3d 1417, 1418 [4th Dept 2019]) Additionally, petitioners acknowledge that significant amounts of cash withdrawals were made from respondents' accounts throughout 2018 and that after post judgment discovery and collection efforts in 2020 and 2021, it became apparent that various cash assets that were unaccounted for and could not be traced. (NYSCEF Doc No. 38, ¶¶19, 20)

Although this Court previously found that respondents fraudulently transferred petitioners' funds into an investment account in Roedel Cos. v JNK Home Enterprises, 71 Misc 3d 1223[A], 2021 NY Slip Op 50468[U] (Sup Ct, Warren County 2021), petitioners have not presented sufficient evidence to establish that respondents similarly used petitioners' funds to build equity in the property. As such, there is no basis to deny respondents the homestead exemption.

In support of the petition, petitioner submits the full market value of the property, as assessed by the Town of Queensbury on the Warren County Image Mate Online, is $541,000.00 (NYSCEF Doc. No. 66); a copy of the Flagstar/JP Morgan Chase Loan Servicer mortgage (NYSCEF Doc. No. 2); a copy of the subordinate mortgage held by the Department of Housing and Urban Development ("HUD")(NYSCEF Doc. No. 3); a copy of petitioner's judgment lien (NYSCEF Doc. No. 39); a statement from first mortgage holder, Flagstar/JP Morgan Chase Loan Service, indicating that as of March 1, 2025, the unpaid balance on the mortgage was $176,954.61 (NYSCEF Doc. No. 64); a payoff letter from HUD stating a payoff of $43,137.93 was good until September 3, 2025 (NYSCEF Doc. No. 65), along with the Supplemental Affidavit of Merrit S. Locke, Esq (NYSCEF Doc. No. 66). Respondents made no objection to the figures or documents offered above.

The Court finds the fair market value of the real property to be $541,000.00 and the combined mortgage debt to be approximately $220,093.00 resulting in nearly $321,000.00 in equity in the real property. The Court also finds respondents are each entitled to a homestead exemption of $102,400.00 leaving approximately $116,200.00 in potential surplus equity in the real property.

Therefore, having considered NYSCEF document numbers 1 through 8, 11 through 13, 16 through 34, 36 through 47, 56 and 58 through 66 and oral argument having been heard on December 6, 2024, with Merritt S. Locke, Esq. appearing on behalf of petitioners and Scott C. Paton, Esq. appearing on behalf of respondents, it is hereby

ORDERED that the respondents' motion is denied in its entirety; and it is further

ORDERED that petition is granted to the extent that the Sheriff of Warren County is authorized to conduct a Sheriff's Sale of respondents' property located at 7 Pollazo Court, Town of Queensbury, Warren County, New York State pursuant to CPLR §5206(e), to satisfy the judgment entered on May 8, 2019, in the Warren County Clerk's Office in favor of petitioners herein and against respondents subject to the first and second mortgages on the property; and it is further

ORDERED that respondents are entitled to a combined homestead exemption of $204,800.00 pursuant to CPLR 5206(a); and it is further

ORDERED that petitioners' counsel is directed to file to NYSCEF a proposed order within thirty (30) days pursuant to CPLR §§5206(e) and 5236 directing the execution sale of the respondents' homestead by the Sheriff of Warren County, and for disposition of proceeds pursuant to further order of this Court; and it is further

ORDERED that any relief not specifically addressed herein has nonetheless been considered and is expressly denied.

The original of this Decision and Order has been e-filed by the Court. Counsel for petitioners is hereby directed to serve the Decision and Order with notice of entry.