Yonaty v. Glauber – Case Brief Summary (New York)

In Yonaty v. Glauber, 40 AD3d 1193, 834 N.Y.S.2d 744 [3d Dep't 2007], the court denied a notice of pendency motion because it found that the true action behind the plaintiff's request to impose a constructive trust on certain real property was "to enforce defendants' promise to give the plaintiff a 20% interest in the LLC which acquired the property, not an ownership interest in the real property itself." (Yonaty, 40 AD3d at 1194).

There, the plaintiff asserted that the defendants breached various oral contracts involving plaintiff's assistance in acquiring development rights to the real property in return for a 20% interest in the LLC that would take title to the property and a construction management fee. (Id. at 1194).

The plaintiff sought, inter alia declaratory relief, an accounting, and imposition of a constructive trust on the subject property. (Id.)

The Yonaty court held that, "while the plaintiff seeks imposition of a constructive trust on real property," the plaintiff never claimed to have an interest in the real property itself and asserted only an interest in the LLC which acquired the subject real estate. (Id. at 1195).

Such claim implicated a membership interest in the LLC, which is personal property, "and an LLC member has no interest in specific property of the LLC." (Id. quoting Limited Liability Company Law § 601).

The Yonaty court also pointed out that a realty-owning corporation, such as an LLC, itself owns its assets, and a shareholder merely owns an interest in the corporation, and does not have a direct claim on its real property. (Yonaty, 40 AD3d at 1195.)

Thus, in Yonaty, the court looked past the labels assigned to the plaintiff's causes of action and the relief sought, and ascertained that the pleadings did not support the notices of pendency. (Yonaty, 40 AD3d at 1195).