ON BEHALF OF ALL UNIT OWNERS v. GRACE HUIMEI HUANG WU GRACE HUMEI HUANG BANK OF AMERICA JOHN DOE NO THROUGH JOHN DOE NO 10 THE NAMES BEING FICTITIOUS AND UNKNOWN THE PERSONS OR PARTIES INTENDED BEING THE TENANTS OCCUPANTS PERSONS OR ENTITIES IF ANY HAVING OR CLAIMING ANY INTEREST IN OR LIEN UPON THE PREMISES DESCRIBED IN THE COMPLA (2026)

This motion arises out of the lien-foreclosure sale by plaintiff, the Board of Managers of the Alfred Condominium, of defendant Grace Wu's apartment. On prior motions in this action, this court (W. Franc Perry, J.) held that plaintiff had a $91,012.28 common-charges lien against the apartment (see NYSCEF No. 56); and that plaintiff was entitled to foreclose based on that lien (see NYSCEF No. 68).¹ A judgment of foreclosure and sale was entered (see NYSCEF No. 73); and the property was sold (see NYSCEF Nos. 94-95 [report of sale and report of surplus].) The sale resulted in a surplus of $279,115.13. (See NYSCEF No. 94.)

Defendant Wu now moves to release the surplus funds to her. (See NYSCEF No. 126 [order to show cause].) Plaintiff cross-moves to confirm the referee's report of sale. (See NYSCEF No. 128 at 1 [notice of motion].) Plaintiff also moves that $30,719 of the surplus be distributed to plaintiff based on a notice of lien and notice of claim for surplus, with the balance to be distributed to Wu. (See id. at 1-2.) The branch of plaintiff's cross-motion seeking to confirm the referee's report of sale is granted without opposition. The branch of plaintiff's cross-motion for distribution of $30,719 of the surplus is denied. Wu's motion to release the full amount of the surplus funds to her is granted.

DISCUSSION

On motion sequence 001 in this action, Justice Perry referred the amount of plaintiff's common-charges lien to a special referee to hear and report. (See NYSCEF No. 18 at 1-2.) Before the referee (Philip Straniere, J.H.O.), one of the charges that plaintiff argued should compose part of its lien was $30,719 in attorney fees that plaintiff had incurred in a hoarding action that it brought against Wu. (See NYSCEF No. 32 at 4 [referee report].) The referee held that plaintiff was not entitled to include these fees in the lien. The referee gave two grounds for this conclusion: (i) the fees did not qualify as common charges under the condominium by-laws because they had not been assessed on a pro rata basis; and (ii) the by-laws provision on which the Board relied to claim entitlement to the costs of abating Wu's hoarding condition (§ 9.4) "does not specifically include legal fees in the costs recoverable," in contrast to "the damages incurred for enforcing unpaid common charges, which does permit them." (Id. at 4-5.)

Plaintiff then moved before the court to confirm in part and reject in part the referee's report. (See NYSCEF No. 35.) In doing so, plaintiff argued that the referee had erred in excluding several other charges from its lien. (See NYSCEF No. 36 at 5-6.) But plaintiff expressly declined to challenge the referee's conclusion with respect to the $30,719 in attorney fees incurred in the hoarding action. Plaintiff's affirmation of counsel in support of the motion stated that although plaintiff "disagreed with the JHO's conclusions with regard to these categories of damages, it does not challenge them for purposes of this motion." (NYSCEF No. 36 at 5 n 3 [emphasis added].) The court granted plaintiff's motion. (See NYSCEF No. 56.) In doing so, the court rejected the referee's conclusion that only charges assessed on a pro rata basis could qualify as common charges for purposes of a common-charges lien. (See id. at 3-4.) And the court held that under § 9.4 of the bylaws one of the charges that was properly included within the lien was the cost to abate the hoarding condition in Wu's apartment that had led plaintiff to bring the related action. (See id. at 4.) But the court was not asked to consider—and did not discuss—whether the attorney fees incurred in that action could be recovered as common charges under § 9.4.

On the current motion, plaintiff asks this court to hold that it is entitled to the same $30,719 in fees that the referee previously declined to award, again based on § 9.4 of plaintiff's by-laws. (See NYSCEF No. 129 at 3.) But as plaintiff candidly acknowledges, the "attorneys' fees and expenses incurred in connection with the Hoarding Actions were not included" in the court's decision confirming in part and rejecting in part the referee's report. (Id. at 4 ¶ 16.) Indeed, they were not included in that decision because plaintiff chose not to seek their inclusion. As a result, those fees were not included in the foreclosure judgment entered in this action, either.

In other words, it is law of the case that plaintiff's common-charges lien against the apartment at issue in this action—and therefore the judgment amount that had to be deducted from the proceeds of any sale of the apartment—did not encompass the $30,719 in attorney fees incurred in the related hoarding action. (See Fourth Fed. Sav. Bank v Nationwide Assoc., 183 Misc 2d 165, 169 [Sup Ct, NY County 1999] [discussing the law-of-the-case doctrine with respect to referee reports that underlie judgments of foreclosure and sale].) Plaintiff does not even attempt to explain how it may nonetheless be entitled to assert (and enforce) a common-charges-based lien for that same $30,719 against the surplus proceeds after sale.

Plaintiff's request to confirm the referee's report of sale is granted. Defendant Wu's request for distribution to her of the surplus sale proceeds is granted. Plaintiff's request for distribution to it of $30,719 of the surplus, and distribution of the balance to Wu, is denied. Plaintiff's asserted common-charges lien for the $30,719 must be vacated. Plaintiff is directed, on or before April 20, 2026, to submit to the court a proposed order reflecting these determinations, by e-filing on NYSCEF and email to SFC-Part7-Clerk@nycourts.gov.

DATE 4/11/2026

FOOTNOTES

1.   This action was later reassigned for administrative reasons from Justice Perry to the undersigned.

Gerald Lebovits, J.