US INCOME PARTNERS LLC PLAINTIFF APPELLANT v. CYPRESS POINTE FL HOLDINGS LLC ET AL DEFENDANTS RESPONDENTS (2026)

MEMORANDUM AND ORDER

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.

Memorandum: Plaintiff commenced this action in Supreme Court seeking, inter alia, to void a sale of real property by defendant Cypress Pointe FL Holdings, LLC (Cypress Pointe), to void the distribution of the sale proceeds, a preliminary injunction requiring return of the sale proceeds to Cypress Pointe, and the appointment of a receiver to take charge of the sale proceeds. Plaintiff alleged that Cypress Pointe sold the real property, allegedly its only asset, for less than fair market value and thereby violated the terms of a promissory note memorializing a multi-million dollar loan from plaintiff to Cypress Pointe. Plaintiff further alleged that the sale constituted a fraudulent conveyance because it was made to frustrate the enforcement of a potential judgment in a related action brought by plaintiff in the same court to recover for nonpayment of the promissory note (related action). The related action arose from Cypress Pointe's attempt to repay the loan, which ended in computer hackers diverting the payoff funds to three foreign bank accounts. Those funds were never recovered.

In the present action, plaintiff moved for an order of attachment against the proceeds from the sale of the real property and for the appointment of a temporary receiver of the sale proceeds. Defendants opposed plaintiff's motion and cross-moved pursuant to CPLR 3211 to dismiss the complaint or, in the alternative, to stay the action pending resolution of the related action. Subsequently, in the related action, the court, inter alia, denied plaintiff's motion for summary judgment on its breach of contract causes of action against Cypress Pointe and other defendants inasmuch as, among other things, there was a question of fact whether Cypress Pointe fulfilled its obligation to repay the amount owed to plaintiff pursuant to the terms of the promissory note. Thereafter, in the present action, the court, inter alia, denied plaintiff's motion for attachment and the appointment of a temporary receiver and granted defendants’ cross-motion pursuant to CPLR 3211 (a) (4) insofar as it sought to dismiss the first two causes of action and insofar as it sought to stay proceedings on the remaining causes of action pending the outcome of the related action. Plaintiff appeals, and we affirm.

We reject plaintiff's contention that the court erred in denying the part of the motion for an order of attachment. “An order of attachment directs the sheriff to take constructive and sometimes actual hold of a defendant's property, so that it can be applied to the plaintiff's judgment in the action, should the plaintiff prevail” (VisionChina Media Inc. v Shareholder Representative Servs., LLC, 109 AD3d 49, 59 [1st Dept 2013]; see Koehler v Bank of Bermuda Ltd., 12 NY3d 533, 538 [2009]). It is “frequently used when the creditor suspects that the debtor is secreting property or removing it from New York” (Koehler, 12 NY3d at 538). On a motion for an order of attachment, “the plaintiff shall show, by affidavit and such other written evidence as may be submitted, that there is a cause of action, that it is probable that the plaintiff will succeed on the merits, that one or more grounds for attachment provided in [CPLR 6201] exist, and that the amount demanded from the defendant exceeds all counterclaims known to the plaintiff” (CPLR 6212 [a]). “Attachment is a ‘harsh’ remedy, and is construed narrowly in favor of the party against whom the remedy is invoked,” and the decision to grant a motion for an order of attachment “rests within the discretion of the court” (VisionChina Media Inc., 109 AD3d at 59, quoting Penoyar v Kelsey, 150 NY 77, 80 [1896]). Here, plaintiff has not demonstrated that it will probably succeed on its breach of contract causes of action in the related action insofar as the causes of action are premised on Cypress Pointe's failure to repay the promissory note. The record demonstrates that a number of entities, including plaintiff itself, through the negligence of its agents, may be responsible for the payoff funds being diverted. We thus conclude that the court properly denied the part of plaintiff's motion for an order of attachment because plaintiff failed to show a probability of success on the merits (see GKER Ltd. v Clarkson BU LLC, 235 AD3d 426, 427 [1st Dept 2025]; Founders Ins. Co. Ltd. v Everest Natl. Co., 41 AD3d 350, 351 [1st Dept 2007]; McDonald v Jarrabet, 188 AD2d 1045, 1046 [4th Dept 1992]).

We also reject plaintiff's contention that the court erred in denying that part of the motion for the appointment of a temporary receiver to marshal the proceeds from the sale of the real property. “Upon motion of a person having an apparent interest in property which is the subject of an action in the supreme or a county court, a temporary receiver of the property may be appointed, before or after service of summons and at any time prior to judgment, or during the pendency of an appeal, where there is danger that the property will be removed from the state, or lost, materially injured or destroyed” (CPLR 6401 [a]). “The appointment of a temporary receiver is an extreme remedy resulting in the taking and withholding or possession of property from a party without an adjudication on the merits” (Dan’s Hauling & Demo, Inc. v GMMM Hickling, LLC [appeal No. 2], 218 AD3d 1248, 1251 [4th Dept 2023] [internal quotation marks omitted]). Thus, such appointment “should be granted only where the moving party has made a clear evidentiary showing of the necessity for the conservation of the property at issue and the need to protect the moving party's interests” (id. [internal quotation marks omitted]). Courts will deny applications for a temporary receiver when the application is based upon speculative and conclusory allegations and not supported by clear and convincing evidence (see generally Cyngiel v Krigsman, 192 AD3d 760, 762 [2d Dept 2021]; Manning-Kranes v Manning-Franzman, 175 AD3d 1403, 1403-1404 [2d Dept 2019]; Beatty v Williams, 227 AD2d 912, 912 [4th Dept 1996]). The appointment of a temporary receiver is a matter of judicial discretion (see Dan’s Hauling & Demo, Inc., 218 AD3d at 1251). We conclude that the court did not abuse its discretion in denying the part of plaintiff's motion for the appointment of a temporary receiver inasmuch as plaintiff's submissions are wholly conclusory and are thus insufficient to warrant the appointment of a temporary receiver (see generally id.; Cyngiel, 192 AD3d at 762; Manning-Kranes, 175 AD3d at 1403-1404).

Finally, we reject plaintiff's contention that the court erred with respect to defendants’ cross-motion by staying proceedings on the remaining causes of action pending the outcome of the related action. “A party may move for judgment dismissing one or more causes of action asserted against [them] on the ground that ․ there is another action pending between the same parties for the same cause of action in a court of any state or the United States; the court need not dismiss upon this ground but may make such order as justice requires” (CPLR 3211 [a] [4]). Furthermore, “[e]xcept where otherwise prescribed by law, the court in which an action is pending may grant a stay of proceedings in a proper case, upon such terms as may be just” (CPLR 2201). “A stay may be warranted based on due consideration of issues of comity, orderly procedure, and judicial economy where there is a substantial identity of the issues, relief sought, and parties” in the two actions (Britt v Buffalo Mun. Hous. Auth., 63 AD3d 1593, 1593 [4th Dept 2009] [internal quotation marks omitted]). The decision to issue a stay pursuant to CPLR 3211 (a) (4) rests with the discretion of the court (see Britt, 63 AD3d at 1593; Belopolsky v Renew Data Corp., 41 AD3d 322, 322 [1st Dept 2007]). Here, we conclude that there is substantial identity of the parties and the issues are sufficiently similar in the two actions “such that the goals of preserving judicial resources and preventing an inequitable result are properly served” by staying the present action pending the resolution of the related action (Finger Lakes Racing Assn. v New York Racing Assn., 28 AD3d 1208, 1209 [4th Dept 2006] [internal quotation marks omitted]).

Entered: July 24, 2026

Ann Dillon Flynn

Clerk of the Court