206 59 LLC CHAIM MILLMAN v. LLC CALIOPI STRATIGAKIS CALIOPI BOYIATZIS STRATIGAKIS (2026)

The following papers, numbered NYSCEF Doc. Nos. 240 through 254, were read and considered in connection with the branch of Plaintiffs' Order to Show Cause (Motion Seq. No. 7) seeking a temporary restraining order:

PAPERS NYSCEF Doc. No.

Proposed Order to Show Cause 240

Affirmation of Dennis E. A. Lynch, Esq., in Support, with Exhibits A—E

241—246

Affirmation of Plaintiff Chaim Millman in Support 247

Letter of Joseph Sferrazza, Esq., dated October 7, 2026 248

Court Notice dated October 7, 2026 249

Affirmation of Joseph Sferrazza, Esq., in Opposition to TRO, with Exhibits A—D

250—254

Upon the foregoing papers, and upon the oral argument conducted virtually on October 9, 2026, the Court determines the temporary restraining order branch of the application as follows.

PRELIMINARY STATEMENT

Plaintiffs 206 Route 59 Holdings, LLC and Chaim Millman (together, "Plaintiffs") move by Order to Show Cause for an order restraining defendants Boyiatzis Holdings Co, LLC and Caliopi Stratigakis a/k/a Caliopi Boyiatzis-Stratigakis (together, "defendants"), and those acting on their behalf, from causing the release of $1,655,478 in cash collateral (the "Collateral") held by Atlantic Specialty Insurance Company (the "Surety") as security for an undertaking posted in this action (the "Bond"). By Court Notice dated October 7, 2026 (NYSCEF Doc. No. 249), the Court scheduled argument on the temporary restraining order ("TRO") only, directed defendants to submit written opposition to the TRO, and reserved the setting of a briefing schedule on the balance of the application.

Defendants do not seek, at this juncture, the release of any portion of the Collateral to themselves. Defendants instead oppose a restraint directed to the Surety and consent to an order directing that the entire Collateral be held in the escrow account of their counsel pending the determination of the motion. See NYSCEF Doc. No. 250, ¶¶ 2—4, 6. The narrow question presently before the Court is therefore one of interim custody: whether, pending the hearing and determination of the Order to Show Cause, the Collateral should remain with the Surety or be transferred to defense counsel's escrow account. For the reasons that follow, the TRO is granted to the extent of maintaining the Collateral with the Surety, and the Order to Show Cause is otherwise set down for full briefing.

BACKGROUND

I.The Contract and the Notice of Pendency

In May 2018, Plaintiffs contracted to purchase real property known as 206 Route 59, Nanuet, New York (the "Property") from defendants for $3,300,000. See NYSCEF Doc. No. 247, ¶ 14. A tenant of the Property held a right of first refusal, and the contract recited the seller's representation that the right would expire on June 17, 2018. See id. ¶ 15. Plaintiffs allege that they identified the Property as replacement property in an Internal Revenue Code § 1031 exchange in reliance on that representation, and that Defendants thereafter accepted the tenant's offer to purchase. See id. ¶¶ 16—19. Plaintiffs commenced this action asserting, among other things, causes of action for breach of contract, specific performance, and a constructive trust, and filed a notice of pendency against the Property. See NYSCEF Doc. No. 241, ¶ 18.

II. The March 2020 So-Ordered Stipulation

By stipulation so-ordered by the Hon. Rolf M. Thorsen, J.S.C., on March 2, 2020 (NYSCEF Doc. No. 46) (the "March 2020 Stipulation"), Defendants agreed to place into escrow, with Kenneth K. Ho, Esq. as escrow agent, a bond in the minimum sum of $950,000 "as replacement security" for the Property, to be held "always subject to the jurisdiction of this Court." See NYSCEF Doc. No. 241, ¶ 21. Plaintiffs represent, and Defendants do not dispute for present purposes, that the March 2020 Stipulation further provides that the Bond is to be held as security pending the final, non-appealable resolution of this litigation and released only pursuant to an order of this Court. See NYSCEF Doc. No. 247, ¶ 26, quoting NYSCEF Doc. No. 46, ¶ 2.¹ In reliance on that stipulation, Plaintiffs consented to the cancellation of the notice of pendency. See NYSCEF Doc. No. 52.

III. The Judgment, the Appeal, and the February 2025 So-Ordered Stipulation

By Decision and Order dated April 8, 2021, Justice Thorsen granted Plaintiffs summary judgment on liability on the breach of contract claim. See NYSCEF Doc. No. 112. Following a bench trial on damages, the court rendered a decision on June 11, 2024 (NYSCEF Doc. No. 188), and an amended judgment was entered on February 13, 2025, in favor of Plaintiffs in the sum of $1,379,564.17 See NYSCEF Doc. No. 241, ¶ 27.² Defendants appealed.

In connection with the appeal, the parties entered into a further stipulation, so-ordered by this Court (NYSCEF Doc. No. 227) (the "February 2025 Stipulation").³ That stipulation provided for the transfer of the original $950,000 from the escrow agent to the Surety, recited that defendant Stratigakis had wired an additional $705,478 to the Surety to supplement the $950,000 "so the proper amount of an Appeal Bond can be realized," and amended the March 2020 Stipulation. It further provided, as quoted by plaintiffs:

All the Parties and the Surety as well as the Principal have consented to the jurisdiction of this Court as well as being subject to the jurisdiction of this Court by operation of law over all funds aforementioned in the event of any dispute or controversy over the disbursement or retention of said funds totally $1,655,478 which shall only be disbursed, in whole or part, on written consent of all the undersigned Counsel for the Parties, or in default thereof, by Order of this Court or the Appellate Division.

See NYSCEF Doc. No. 241, ¶ 30, quoting NYSCEF Doc. No. 227, p. 2).

Defendants characterize the Bond as an appeal bond posted pursuant to Civil Practice Law and Rules § 5519 (a) (2) to stay enforcement of the money judgment pending appeal, secured by the $1,655,478 in cash Collateral deposited with the Surety. See NYSCEF Doc. No. 250, ¶¶ 7—8.

IV. The Appellate Division Decision and the Present Dispute

By Decision and Order dated August 19, 2026 (NYSCEF Doc. No. 236), the Appellate Division, Second Department, determined that Plaintiffs had failed to eliminate all triable issues of fact on liability, and the judgment was reversed. See NYSCEF Doc. No. 241, ¶ 31; See also NYSCEF Doc. No. 250, ¶ 9. The Decision and Order was served with notice of entry on August 27, 2026. See NYSCEF Doc. No. 250, ¶ 9. The action, which was reassigned to the undersigned upon Justice Thorsen's reassignment, remains pending.

On October 2, 2026, defense counsel requested that the Surety wire the Collateral to his firm's escrow account. See NYSCEF Doc. No. 250, ¶ 11. Plaintiffs' counsel objected that any release without consent or court order would violate the so-ordered stipulations, and the parties exchanged correspondence in which Defendant's counsel offered, and Plaintiffs' counsel declined, a stipulation to hold the Collateral in defense counsel's escrow account pending motion practice See id.; See also NYSCEF Doc. No. 241, ¶¶ 32—34. By letter dated October 5, 2026, defense counsel instructed the Surety's agent to disregard the October 2 letter and to hold the Collateral pending the Court's consideration of the anticipated application. See NYSCEF Doc. No. 241, ¶ 4; NYSCEF Doc. No. 250, ¶ 12. The Collateral remains with the Surety. See NYSCEF Doc. No. 250, ¶ 13. Plaintiffs filed the instant Order to Show Cause on October 7, 2026.

THE PARTIES' CONTENTIONS

Plaintiffs contend that the March 2020 and February 2025 Stipulations bar any release of the Collateral absent the written consent of counsel for all parties or an order of the Court; that no consent has been given; that the Collateral is the bargained-for substitute for the notice of pendency Plaintiffs surrendered, such that its release would leave them without security for any judgment they may ultimately obtain; and that the balance of equities favors maintaining an arrangement that has existed for more than six years. See NYSCEF Doc. No. 241, ¶¶ 2, 5, 35—42; See also NYSCEF Doc. No. 247, ¶¶ 6—8, 10, 26—30). Plaintiffs further point out that Defendants' own October 5, 2026, letter acknowledges that the Collateral should be held pending the Court's determination and argue that only an order of the Court will ensure compliance. See NYSCEF Doc. No. 241, ¶¶ 5, 35—36.

Defendants respond that the Bond was an appeal bond under Civil Practice Law and Rules § 5519 (a) (2) that terminated upon the reversal of the judgment, citing Agai v Liberty Mut. Agency Corp. (118 AD3d 830 [2d Dept 2014]); that release of the Collateral is governed by an indemnity agreement between defendant Stratigakis and the Surety, to which Plaintiffs are not privy, whose conditions for release have been satisfied; that a restraint directed to the Surety would make it an involuntary escrow agent and raises questions as to the Court's continuing jurisdiction over a nonparty against which no cause of action is pleaded; and that Defendants are incurring a premium of $24,833.00 annually to maintain the Bond. See NYSCEF Doc. No. 250, ¶¶ 14—27. Defendants maintain that holding the Collateral in their counsel's escrow account is the functional equivalent of the Surety's continued custody and fully protects plaintiffs pending the motion. See id. ¶¶ 4, 23, 30. Defendants reserve their arguments on the merits of plaintiffs' application, including their contention that some or all of the Collateral should be released outright to defendant Stratigakis, for their full opposition. See id. ¶¶ 5—6, 28.

DISCUSSION

I. The Governing Standard

A temporary restraining order may be granted pending the hearing of a motion for a preliminary injunction where the movant shows that "immediate and irreparable injury, loss or damages will result unless the defendant is restrained before a hearing can be had." Civil Practice Law and Rules § 6313 [a]. The party seeking provisional injunctive relief must demonstrate a probability of success on the merits, a danger of irreparable injury in the absence of an injunction, and a balance of the equities in its favor. See Nobu Next Door, LLC v Fine Arts Hous., Inc., 4 NY3d 839, 840 [2005]; See also Doe v Axelrod, 73 NY2d 748, 750 [1988]; Civil Practice Law and Rules § 6301. The purpose of such relief is to preserve the status quo pending a determination on the merits, and the remedy, being a drastic one, is to be used sparingly. See 203-205 N8 MB, LLC v 203-205 N 8th St., LLC, 212 AD3d 694 [2d Dept 2023]. At the TRO stage, the inquiry is necessarily limited to what is required to hold matters in place until the application can be heard on a full record.

The present application, moreover, does not rest solely on the equitable framework of Civil Practice Law and Rules Article 63. It also invokes the Court's authority to give effect to its own so-ordered stipulations. Stipulations entered into in the course of litigation are favored by the courts and are not lightly cast aside; a party will be relieved from such a stipulation only upon a showing of cause sufficient to invalidate a contract, such as fraud, collusion, mistake, or accident. See Hallock v State of New York, 64 NY2d 224, 230 [1984]. No party seeks to be relieved of either stipulation on this application.

II The February 2025 Stipulation Governs Interim Custody of the Collateral

The dispositive feature of this record is the parties' own agreement, so-ordered by the Court. Under the February 2025 Stipulation, the $1,655,478 is to be "disbursed, in whole or part," only upon the written consent of counsel for all parties "or in default thereof, by Order of this Court or the Appellate Division." There is no written consent. A transfer of the Collateral from the Surety to defense counsel's escrow account is a disbursement of the funds from their stipulated custodian, and it is precisely the kind of act the stipulation reserves to consent or court order. The Appellate Division's decision on the appeal did not itself direct any disbursement. Accordingly, absent consent, the question of where the Collateral is to reside is one for this Court, and the status quo to be preserved pending the hearing is the arrangement the parties agreed to, and the Court so- ordered: custody by the Surety.

Defendants do not seriously contend otherwise for purposes of the interim period. Their counsel acknowledges that the Court has jurisdiction to resolve the present dispute concerning the Surety pursuant to the February 2025 Stipulation (NYSCEF Doc. No. 250, ¶ 26), and his October 5, 2026, letter instructed the Surety to hold the Collateral pending the Court's consideration of the application. See id. ¶ 12. Plaintiffs have thus demonstrated a sufficient likelihood of success on the question presently at issue, namely, whether the Collateral may be moved from its stipulated custodian without consent or court order, to warrant interim relief.⁴

This likelihood is reinforced as to at least the original $950,000 component of the Collateral. As Plaintiffs describe it, the March 2020 Stipulation established that sum as replacement security for the Property in exchange for the cancellation of the notice of pendency, to be held pending the final, non-appealable resolution of this litigation. Defendants' position that the Appellate Division's decision and order is "final and non-appealable" (NYSCEF Doc. No. 250, ¶ 10) speaks to the finality of the appeal, not to the resolution of the litigation. The Appellate Division determined that triable issues of fact exist on liability; far from resolving the action, that determination returns Plaintiffs' claims for breach of contract and specific performance to this Court for trial. Whether, and to what extent, the supplemental $705,478 — which the February 2025 Stipulation recites was funded so that "the proper amount of an Appeal Bond can be realized" — stands on different footing following the reversal is a substantial question that is properly reserved for the return date on a full record.

III. Defendants' Reliance on Agai Does Not Warrant a Different Interim Result

In Agai, the Second Department held that an undertaking obtained pursuant to Civil Practice Law and Rules § 5519 (a) (2) was unambiguously an appeal bond, that the bond was extinguished upon the court's determination of the appeal in the principal's favor, and that the surety therefore did not breach the bond by returning the collateral to the principal's counsel after reversal. See Agai, 118 AD3d 830. Defendants may ultimately persuade the Court that the instrument issued by the Surety, considered by itself, is such an appeal bond and has terminated. But Agai did not involve a so-ordered stipulation, to which the parties, the principal, and the surety consented, that conditions the disbursement of the collateral on the written consent of counsel or an order of the court; nor did it involve collateral that originated as replacement security for a cancelled notice of pendency. Whether the Bond instrument has terminated is therefore not dispositive of whether the Collateral may be moved without the consent or order that the February 2025 Stipulation requires.

The same is true of the indemnity agreement between defendant Stratigakis and the Surety. See NYSCEF Doc. No. 254. As Defendants describe it, that agreement provides that the Surety "shall not have any obligation to release" the collateral until specified conditions are met. See NYSCEF Doc. No. 250, ¶ 20. Whatever rights the agreement confers as between the indemnitor and the Surety, it does not purport to authorize either of them to disregard a subsequent so-ordered stipulation governing the very same funds, and the Surety and the principal are, by the terms of that stipulation, subject to this Court's jurisdiction over the disbursement or retention of the Collateral. Defendants' argument that plaintiffs lack privity with the indemnity agreement does not address plaintiffs' rights under the stipulations to which defendants are parties.

IV. Irreparable Injury and the Balance of the Equities

Defendants' principal argument is that their proposed alternative, the deposit of the entire Collateral into their counsel's attorney escrow account, would equally protect plaintiffs, so that a restraint directed at the Surety serves no purpose. The Court does not doubt the good faith of that proposal, and an attorney escrow account is subject to the fiduciary obligations imposed upon counsel. The proposal nevertheless alters, rather than preserves, the status quo. It would transfer custody of the security from the neutral custodian designated by the parties' so-ordered stipulation to the counsel for the parties adverse to the secured parties, while defendants have expressly stated their intention to seek the outright release of all or part of the Collateral to defendant Stratigakis. See NYSCEF Doc. No. 250, ¶¶ 6, 28. The very offer to substitute custodians, made and declined between counsel, is itself a request for "consent" that the February 2025 Stipulation contemplates, and its refusal leaves the matter to the Court.

Plaintiffs, for their part, have shown that the Collateral is the bargained-for substitute for the notice of pendency they relinquished in 2020, and that its release, in whole or in part, before the Court can consider the parties' respective rights would deprive them of the specific security for which they surrendered their lien on the Property. That injury is not adequately measured by the risk that funds held by counsel would be misapplied; it lies in the loss of the agreed-upon arrangement itself before the Court has determined whether that arrangement continues. A restraint that preserves the Surety's custody for the limited period necessary to brief and hear the application is the most conservative means of holding matters in place, and it is consistent with the instruction defendants' counsel himself gave the Surety on October 5, 2026.

On the other side of the balance, Defendants identify a Bond premium of $24,833.00 per year, or $2,069.42 per month. See NYSCEF Doc. No. 250, ¶ 22.⁵ That harm is purely monetary, readily quantified, and modest in relation to the $1,655,478 fund, and its accrual during the interim period is in large part the product of the return date that Defendants themselves have requested to accommodate their counsel's travel schedule. Whether Plaintiffs should bear that cost, or post an undertaking securing it, if the restraint is continued beyond the return date is a matter Defendants may raise on the full motion. For the limited period of the TRO, the balance of the equities tips in favor of maintaining the stipulated custodial arrangement.

V. The Court's Jurisdiction Over the Surety for Interim Purposes

Defendants question the Court's authority to direct a nonparty Surety against which no cause of action is pleaded, particularly for what may be a lengthy period pending trial and any further appeals. See NYSCEF Doc. No. 250, ¶¶ 24—27. For purposes of the TRO, it is sufficient that the Surety and the principal consented, by the February 2025 Stipulation, to this Court's jurisdiction over any dispute or controversy concerning the disbursement or retention of the Collateral, and that defendants acknowledge that jurisdiction with respect to the present dispute. See id. ¶ 26. The interim restraint operates in aid of that so-ordered stipulation. Whether the Court may, or should, require the Surety to continue to hold the Collateral beyond the determination of the Order to Show Cause, including until the final resolution of this action, is reserved for the return date.

VI. Undertaking

Under Civil Practice Law and Rules § 6313 (c), the Court may, in its discretion, require an undertaking as a condition of a temporary restraining order. Because the TRO preserves an existing arrangement to which defendants agreed, is of limited duration, and has been extended in part at defendants' request, and because defendants' asserted damages for the interim period are modest and quantifiable, the Court declines to require an undertaking at this time, without prejudice to defendants' application for an undertaking pursuant to Civil Practice Law and Rules § 6312 (b) on the return date should any further restraint be granted.

CONCLUSION

Accordingly, it is hereby

ORDERED that the branch of plaintiffs' Order to Show Cause (Motion Seq. No. 007) seeking a temporary restraining order is GRANTED to the extent set forth herein; and it is further

ORDERED that, pending the hearing and determination of the Order to Show Cause, defendants Boyiatzis Holdings Co, LLC and Caliopi Stratigakis a/k/a Caliopi Boyiatzis- Stratigakis, their counsel, agents, and all persons acting on their behalf or in concert with them, and Atlantic Specialty Insurance Company, as Surety, together with its agents, upon service of a copy of this Decision and Order, are temporarily restrained from releasing, disbursing, transferring, wiring, assigning, pledging, or otherwise encumbering any portion of the $1,655,478 in cash collateral securing the Bond, which shall continue to be held by the Surety; and it is further

ORDERED that defendants' alternative request that the Collateral be transferred to the escrow account of Sferrazza & Keenan, PLLC pending the determination of the Order to Show Cause is DENIED, without prejudice; and it is further

ORDERED that, pursuant to Civil Practice Law and Rules § 6313 (c), no undertaking is required as a condition of this temporary restraining order, without prejudice to defendants' application for an undertaking pursuant to Civil Practice Law and Rules § 6312 (b) on the return date; and it is further

ORDERED that Plaintiffs shall serve a copy of this Decision and Order, together with the signed Order to Show Cause, upon the Surety and its agent by email and by overnight delivery on or before October 13, 2026, and shall file proof of such service via NYSCEF; service upon counsel for Defendants shall be complete upon the filing of this Decision and Order via NYSCEF; and it is further

ORDERED that Defendants shall serve and file any opposition to the balance of the Order to Show Cause via NYSCEF on or before November 5, 2026; Plaintiffs shall serve and file any reply via NYSCEF on or before November 12, 2026; and the Order to Show Cause shall be returnable on November 19, 2026, at 11:00 a.m., by virtual appearance on a Microsoft Teams link to be provided by Chambers, or in such other manner as the Court may direct;⁶ and it is further

ORDERED that nothing herein constitutes a determination of the parties' respective rights to the Collateral, including whether the Bond has terminated, whether the March 2020 and February 2025 Stipulations require the continued retention of all or any part of the Collateral pending the final resolution of this action, the extent of the Court's continuing jurisdiction over the Surety, or the merits of any claim or defense in this action, all of which are reserved for the return date.

The foregoing constitutes the Decision and Order of the Court as to the Temporary Restraining Order.

Dated: October 9, 2026

New City, New York

E N T E R:

FOOTNOTES

1.   The Court's recitation of the operative language of the March 2020 and February 2025 Stipulations is drawn from the quotations set forth in the parties' sworn submissions. See NYSCEF Doc. No. 241, ¶¶ 21, 30, 36; NYSCEF Doc. No. 247, ¶ 26). Defendants do not dispute the accuracy of those quotations for present purposes; to the contrary, Defendants acknowledge the Court's jurisdiction under the February 2025 Stipulation. See NYSCEF Doc. No. 250, ¶ 26.

2.   Plaintiffs' counsel recites the judgment amount as $1,379,546.17 at one point. See NYSCEF Doc. No. 241, ¶ 28. The amended judgment, the February 2025 Stipulation as quoted by Plaintiffs, the Millman affirmation, and Defendants' papers all reflect $1,379,564.17, and the Court treats the transposition as typographical.

3.   Plaintiffs date this stipulation February 13, 2025 (NYSCEF Doc. No. 241, ¶ 30), while Defendants refer to it as dated February 10, 2025. See NYSCEF Doc. No. 250, ¶ 26. Both sides identify it as NYSCEF Doc. No. 227, and nothing in the present determination turns on the discrepancy. The Court refers to it as the "February 2025 Stipulation."

4.   Plaintiffs' papers repeatedly characterize defendants as having "admit[ted]" the breach. See NYSCEF Doc. No. 247, ¶ 9. The Appellate Division has determined that triable issues of fact exist on liability (NYSCEF Doc. No. 241, ¶ 31), and this Court will not treat liability as established on an interim application. The determination herein does not rest upon any assessment of the underlying breach of contract claim.

5.   Defendants maintain both that the Bond "has been terminated by definition" and that a continuing annual premium of $24,833.00 ($2,069.42 per month) is being incurred to maintain it. See NYSCEF Doc. No. 250, ¶ 22). The Court need not reconcile those positions on this application and accepts the premium figure for present purposes.

6.   Defendants' counsel has advised that he will be traveling abroad from October 11 through October 25, 2026, and has requested that opposition be due on November 5, 2026. See NYSCEF Doc. No. 250, ¶ 29. Although Civil Practice Law and Rules § 6313 (a) directs that the hearing be set at the earliest possible time, the requested accommodation is reasonable in light of Defendants' consent to the continued protection of the Collateral in the interim and the absence of any prejudice to Plaintiffs from the Surety's continued custody. The Court therefore adopts Defendants' proposed opposition date and fixes a reply date and return date that afford Plaintiffs a fair opportunity to respond.

John P. Collins, Jr., J.