LMWT REALTY CORP., D/B/A TRIANGLE REALTY, RESPONDENT, v. THE DAVIS AGENCY
INC., ET AL., DEFENDANTS, v. MATALON-SHAMMAH GROUP, LTD., THIRD-PARTY
DEFENDANT. / CITY OF NEW YORK, APPELLANT MUNICIPAL LIENHOLDER.
85 N.Y.2d 462, 649 N.E.2d 1183, 626 N.Y.S.2d 39 (1995).
April 27, 1995
1 No. 90 (1995 NY Int. 087)
Decided April 27, 1995
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This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Linda H. Young, for Appellant.
David Jaroslawicz, for Respondent.
SIMONS, J:
Plaintiff LMWT Realty Corporation is the owner of two adjacent
buildings on Manhattan Avenue in the City of New York. The buildings
were extensively damaged in a 1990 fire and plaintiff submitted a
claim to its insurer, defendant First Central Fire Insurance Company,
seeking indemnification for the loss. When the carrier disputed the
claim, plaintiff retained the law firm of Jaroslawicz and Jaros on a
one-third contingency basis to recover the fire insurance proceeds.
The action was settled on the eve of trial for $130,000 but the
insurer refused to issue the settlement check because the City of New
York had previously served and filed certificates of lien for unpaid
property taxes and other charges against the proceeds of the policy
pursuant to General Municipal Law § 22.
The attorneys do not dispute the City's right to the bulk of the fire
insurance proceeds under the statute; they contend, however, that the
amount of the City's recovery should be reduced by the amount of their
charging lien. We agree with the attorneys that without their efforts,
there would be no proceeds against which the City could enforce its
special tax lien, because the City has no right of action against the
insurer. Equitable considerations thus persuade us that the attorneys'
charging lien should be given priority. Accordingly, we affirm the
order of the Appellate Division, which awarded them their attorneys'
fees and expenses.
I
General Municipal Law § 22(2) authorizes tax districts to file claims
SNIPPETS:
This opinion is uncorrected and subject to revision before publication in the New York
Plaintiff LMWT Realty Corporation is the owner of two adjacent buildings on Manhattan Avenue
The buildings were extensively damaged in a 1990 fire and plaintiff submitted a claim to its
When the carrier disputed the claim, plaintiff retained the law firm of Jaroslawicz and Jaros
The action was settled on the eve of trial for $130,000 but the insurer refused to issue the
The attorneys do not dispute the City's right to the bulk of the fire insurance proceeds
Soon after the statute was enacted, the City of New York filed a Notice of Intention to Claim
By August 1992, when the underlying claim was settled, the unpaid liens totalled $219,841.21.
Just prior to jury selection, defendant made a settlement offer of $130,000, which was orally
Plaintiff's attorneys also learned of the existence of separate, on-going litigation begun in
Plaintiff then moved for an order compelling defendant insurer to turn over to its attorneys
By explicitly providing an exception for the mortgagee, the City contends, the Legislature
Under the common law, the attorney was entitled to a lien upon the judgment, but the scope of
In Matter of the City of New York (5 NY2d 300, 307-308, cert denied sub nom.
United States v Coblentz, 363 US 841), we stated that because a cause of action is a species
The City asserts that under the common law a claim may nevertheless supersede an attorney's
In according the attorney's lien priority, the court ruled that the government's liens
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