In Consumer Protection Restoration, LLC v. Hickory House Tenants Corp., the Second Department of the New York Appellate Division upheld a trial court's decision to impose sanctions and legal fees on the plaintiffs for filing a frivolous notice of pendency. The plaintiffs initially sought to foreclose on two mechanic's liens and recover damages for breach of contract and unjust enrichment against the defendant, Hickory House Tenants Corp. (hereinafter "Hickory House"). However, the Supreme Court of Rockland County had previously directed the expungement of the mechanic's liens under Lien Law § 39, ruling that they were willfully exaggerated.
Subsequently, the plaintiffs filed a notice of pendency against Hickory House's cooperative apartment complex in relation to their sole remaining claim for unjust enrichment. Hickory House moved to impose sanctions, arguing that the notice of pendency was frivolous.
The Second Department affirmed the lower court's ruling that the plaintiffs' notice of pendency was frivolous and upheld the imposition of sanctions. The court reiterated that a notice of pendency is proper only when a plaintiff's claim directly affects the title, possession, use, or enjoyment of real property. In this case, the plaintiffs' unjust enrichment claim did not implicate a property interest in a manner that justified filing a notice of pendency.
The ruling underscores the judiciary's willingness to impose financial consequences on litigants who file a notice of pendency without a legitimate property interest claim.
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