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Criteria for Reformation of a Deed (Removing a Restrictive Covenant) Not Met

The Third Department explained the criteria for reformation of a document, in this case a deed.  The court determined that the plaintiff, who was seeking to have a restrictive covenant removed from a deed, did not demonstrate the criteria for reformation of the deed.  The criteria were described as follows:

“A party seeking reformation must establish, by clear and convincing evidence, that the writing in question was executed under mutual mistake or unilateral mistake coupled with fraud” … . The burden is on the proponent of reformation to establish, by clear and convincing evidence, that the relief is warranted … .

Here, it is undisputed that the deed’s restrictive covenant was not set forth in the contract of sale and Salenger testified that he first became aware of it when he received the deed after the closing. Thus, plaintiff established the existence of a unilateral mistake regarding whether the restrictive covenant was intended to be included as a condition of the sale. Nonetheless, plaintiff’s proof fell short of establishing fraud on decedent’s part, which requires “‘a misrepresentation that is false and that the defendant knows is false, made to induce the other party to rely on it, justifiable reliance on the misrepresentation by the other party, and injury'” … . Timber Rattlesnake LLC v Devine, 2014 NY Slip Op 03718, 3rd Dept 5-22-14

 

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