The New York Appellate Division has ruled to cancel a notice of pendency that affected the sale of a property associated with an automobile dealership. This decision impacts Marchese Associates, LLC, the owner of the property, and Limitless Automotive Group, LLC, which sought to enforce a term sheet regarding the dealership's sale. The ruling clarifies the legal standards surrounding notices of pendency and their implications for property transactions.
The case, titled Matter of Marchese Assoc., LLC v. Limitless Auto. Group, LLC (docket number 2025-07442), was decided on October 14, 2026. The court's decision is significant as it addresses the balance of interests in real estate transactions and the conditions under which a notice of pendency can be maintained.
In this case, Marchese Associates, LLC, was the respondent, while Limitless Automotive Group, LLC, was the appellant. The dispute arose from a failed attempt to finalize the sale of an automobile dealership and the property on which it was located. After initial negotiations between L.J. Marchese Chevrolet, Inc., the seller, and Marina Letsios, the buyer, fell through, Limitless Automotive, as the successor in interest to Letsios, initiated legal action to enforce the term sheet and prevent the sale to another party.
The term sheet, signed in June 2023, outlined the basic terms for the sale but was contingent on several factors, including formal agreements and financing. When the parties could not agree on a more formal contract, Marchese Chevrolet opted to sell the dealership to a third party. Limitless Automotive responded by filing for specific performance of the term sheet and placed a notice of pendency on the property in Orange County.
The Supreme Court of Nassau County denied Limitless Automotive's request for a preliminary injunction to stop the sale, ruling that monetary damages would suffice as a remedy. Following this, Marchese Associates filed a motion to cancel the notice of pendency, claiming it hindered their ability to sell the property. Limitless Automotive countered that their legal action still warranted the notice's existence.
On June 10, 2025, the Supreme Court granted Marchese Associates' motion to cancel the notice of pendency. Limitless Automotive appealed this decision, leading to the current ruling from the Appellate Division.
The court ruled that the notice of pendency should be canceled, affirming the lower court's decision. The judges involved in the ruling included Betsy Barros, Lara J. Genovesi, Helen Voutsinas, and Carl J. Landicino. The court highlighted that while the notice was initially placed in good faith, it became unreasonable once it was determined that monetary damages were adequate to resolve the dispute.
The court stated, "once Limitless Automotive was relegated to monetary damages, maintaining the notice of pendency carries indicia of bad faith."
This ruling is important as it clarifies the conditions under which a notice of pendency can be maintained. The court emphasized that the likelihood of success on the merits of a case does not determine the validity of a notice of pendency. Instead, the focus is on whether the plaintiff has acted in good faith in prosecuting their claim.
The impact of this ruling extends beyond the immediate parties involved. It sets a precedent regarding the use of notices of pendency in real estate transactions, particularly when a party is seeking specific performance of a contract. It reinforces the notion that if a court determines that monetary damages are sufficient, a notice of pendency may no longer be justified.
This decision may influence how future cases involving notices of pendency are handled in New York. It serves as a reminder for parties involved in similar disputes to carefully consider the implications of filing such notices and the necessity of maintaining them as the case progresses.
Looking ahead, it is unclear whether Limitless Automotive will seek further appeal options following this decision. The court did not specify any related cases pending that might affect or be affected by this ruling. The legal landscape surrounding notices of pendency in New York may continue to evolve as more cases arise and as courts clarify the standards governing their use.