Real Property Actions and Proceedings Law (RPAPL) – Page 33

Question of Fact Whether Encroaching Hedge Was De Minimus Encroachment Re: Adverse Possession

The Second Department determined there was a question of fact about whether a hedge which encroached eight feet into plaintiff’s right of way was a “de minimus” encroachment within the meaning of the Real Property Actions and Proceedings Law (RPAPL) (re: adverse possession):

RPAPL 543(1), which was enacted in 2008, provides: “Notwithstanding any other provision of this article, the existence of de [minimis] non-structural encroachments including, but not limited to, fences, hedges, shrubbery, plantings, sheds and non-structural walls, shall be deemed to be permissive and non-adverse.” The plaintiff contends that pursuant to RPAPL 543(1), the existence of all encroaching hedges and shrubbery, no matter how large, shall be deemed permissive and non-adverse. Under the plaintiff’s interpretation of the statute, the list of examples contained in RPAPL 543(1) are examples of “de [minimis] non-structural encroachments.” We reject this interpretation. The more reasonable interpretation of RPAPL 543(1) is that the list contains examples of “non-structural encroachments” which could still be adverse if they are not de minimis. This reading gives effect to the words “de [minimis],” while the plaintiff’s interpretation would render those words superfluous. “It is a cardinal principle to be observed in construing legislation that . . . whenever practicable, effect must be given to all the language employed. Our duty is to presume that each clause . . . has a purpose” … . Wright v Sokoloff, 2013 NY Slip Op 06856, 2nd Dept 10-23-13

October 23, 2013

Right of First Refusal Not Triggered by Partition Action

In a partition action, the Fourth Department determined the agreement between the parties was a right of first refusal, not an option to purchase, which was not triggered by the partition action. The court explained the operative law:

Plaintiff and Waite [one of the defendants] are tenants in common and acquired the property at issue by an executor’s deed pursuant to the settlement of their mother’s estate. In settling that estate, plaintiff, Waite and the other named defendants signed a settlement agreement providing that plaintiff and Waite “agree to grant to [each of the other named defendants] the option to purchase the . . . property, in the event that [plaintiff and Waite], either jointly or severally, determine to sell, assign or transfer the . . . property to someone other than each other. The option price shall be [$120,000] plus the costs of any improvements made by [plaintiff and Waite] to the premises subsequent to [their] purchase of the premises. Said option may be prepared in recordable form by any or all of the [other named defendants] at their own cost and expense, and [plaintiff and Waite] will execute any said recordable option. Upon receipt of an offer to purchase the premises, except from [each other], [plaintiff and Waite] shall notify each of the [other named defendants] then living, in writing of the proposed sale of the premises, and the [other named defendants] shall have sixty (60) days to exercise their option as granted herein.” * * *

We conclude that the right bestowed by the settlement agreement … is a right of first refusal, not an option to purchase, despite the use of the term “option” therein …, and thus that Supreme Court mistakenly treated the contractual right as an option to purchase. “A right of first refusal is a dormant right that is triggered when an owner decides to sell the property to a third party at an agreed-upon price” …, and those are the applicable facts set forth in the settlement agreement.

We agree with Waite on her appeal that the court erred in determining that the contractual right was triggered upon plaintiff’s commencement of the instant action, for partition and sale. It must first be determined in a partition action whether the property may be partitioned, i.e., divided among the owners in some fashion, without great prejudice to them, and “partition sale” is a secondary consideration only in the event that partition greatly prejudices the owners (see RPAPL 901 [1]…). Thus, commencement of the partition action did not trigger the right of first refusal inasmuch as a partition, as opposed to a partition sale, would not result in a transfer of the property to a third party. Furthermore, no offer of purchase from a third party triggered either the right of first refusal or the contractual obligation of plaintiff or Waite pursuant to the settlement agreement or recorded document. Tuminno v Waite…, 915, 4th Dept 10-4-13

October 4, 2013

Real Property Actions and Proceedings Law (RPAPL), Real Property Law

Plaintiffs Demonstrated They Acquired Title to Property with Cabin by Adverse Possession

The Third Department affirmed Supreme Court’s grant of summary judgment to plaintiffs in their RPAPL article 15 action to quiet title under the doctrine of adverse possession. The owner of the property, which included a cabin, died intestate and plaintiffs, who allegedly were close personal friends with the owner’s brother (who used the cabin and also died intestate), took possession of the property. The Third Department wrote:

…[T]o successfully acquire title by adverse possession, plaintiffs must establish by clear and convincing evidence that their occupation of the property was “(1) hostile and under a claim of right . . ., (2) actual, (3) open and notorious, (4) exclusive, and (5) continuous for the statutory period (at least ten years)” … . Additionally, because plaintiffs’ “claim was not founded upon a written instrument describing the boundaries of the property,” they were required to “establish that the land was usually cultivated or improved or protected by a substantial inclosure….In support of their motion for summary judgment, plaintiffs submitted evidence that, since the time of [the owner’s brother’s] death in 1976, they have enjoyed the exclusive use and possession of the property, have paid the taxes and made repairs upon the property, and have permitted various family members to use and reside upon the property. In 1990, plaintiffs improved the cabin to make it suitable for year-round use, and have used it throughout the year since that time. According to plaintiffs, no one else has had possession or control of the property since they first took it more than 35 years ago. Quinlan v Doe, 516140, 3rd Dept 6-27-13

June 27, 2013

Arbitration, Contract Law, Landlord-Tenant, Real Property Actions and Proceedings Law (RPAPL)

Court’s Limited Role Re: Contract with Arbitration Clause Explained

In determining a dispute involving a lease must be resolved in arbitration, the Fourth Department explained the court’s limited role in this context:

Plaintiff …. commenced this action pursuant to RPAPL article 15 seeking, inter alia, “to compel the determination of claims to the real property described herein,” and defendant moved to compel arbitration under the lease and to stay the action. Supreme Court properly granted the motion. “Where parties have entered into an agreement containing a broad arbitration provision, the question of whether the arbitration clause governs a particular aspect of the controversy, as well as the determination of the merits of the dispute, are matters within the exclusive province of the arbitrator”….“Once it appears that there is, or is not[,] a reasonable relationship between the subject matter of the dispute and the general subject matter of the underlying contract, the court’s inquiry is ended. Penetrating definitive analysis of the scope of the agreement must be left to the arbitrators whenever the parties have broadly agreed that any dispute involving the interpretation and meaning of the agreement should be submitted to arbitration”…. Thus, contrary to plaintiff’s contention, it is not entitled to a judicial determination with respect to the continued force and effect of the lease, i.e., “the ultimate issue in this case” …, before submitting the matter to arbitration. Gray v Talisman Energy USA Inc, 534, 4th Dept, 6-14-13

June 14, 2013

Foreclosure, Real Property Actions and Proceedings Law (RPAPL), Real Property Law

There Is No Transfer of Property Until the Deed Is Accepted by the Buyer

In a full-fledged opinion by Judge Read, the Court of Appeals determined that a grant of property takes place only when the deed is (1) delivered and (2) accepted. There was a foreclosure sale. In order to obtain a judgment for the deficiency between the amount of the foreclosed loan and the actual foreclosure sale price, a motion must be made within 90 days “after the date of the consummation of the sale by the delivery of the proper deed of conveyance to the purchaser…”. In this case the buyer at the foreclosure sale (M & T) did not at first accept the deed because M & T planned to assign its bid prior to the closing. The deed was returned to the referee who agreed to hold it. About three months later, M & T asked the referee to execute and resend the deed. About two weeks after that M & T filed a motion for a deficiency judgment. Defendants opposed the motion arguing it was made more than 90 days after the consummation of the sale. The appellate division agreed with the defendants. The Court of Appeals reversed and wrote:

As a general rule, a deed is presumed to have been “delivered and accepted at its date”; however, this presumption “must yield to opposing evidence” … . Here, M&T’s attorney twice declined to accept or retain physical possession of the referee’s deed dated May 11, 2010. As a result, the referee took back the deed and other closing documents and ultimately executed a deed on August 9, 2010, when M&T’s attorney accepted it … . This constitutes “opposing evidence” sufficient to rebut any presumption of delivery in May 2010 … . M&T’s motion was therefore timely because brought within 90 days “after the date of the consummation of the sale by the delivery of the proper deed of conveyance to the purchaser” (RPAPL 1371 [2]) — i.e., August 9, 2010. M & T Real Estate Trust v Doyle, 55, CtApp 3-26-13

March 26, 2013

Contract Law, Conversion, Nuisance, Private Nuisance, Real Property Actions and Proceedings Law (RPAPL), Real Property Law, Trespass

Injury to Real Property, Waste, Trespass, Conversion and Private Nuisance Actions Based Upon Removal of Trees from Unrecorded Easement

In an action for breach of contract, waste, injury to real property, trespass, conversion and private nuisance, based upon clearing land of trees pursuant to an unrecorded easement, the Second Department wrote:

Pursuant to RPAPL 861(1), a property owner may maintain an action for damages against any person who, without the consent of the owner, removes or causes to be removed trees on the owner’s property … . “To recover damages based on the tort of private nuisance, a plaintiff must establish an interference with his or her right to use and enjoy land, substantial in nature, intentional or negligent in origin, unreasonable in character, and caused by the defendant’s conduct”… . “In order to establish a cause of action to recover damages for conversion, the plaintiff must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion over the thing in question . . . to the exclusion of the plaintiff’s rights” … . * * *

“[A]n unrecorded conveyance of an interest in real property is deemed void as against a subsequent good faith purchaser for value who acquires his interest without actual or constructive notice of the prior conveyance” … . However, “ [w]here a purchaser has knowledge of any fact, sufficient to put him on inquiry as to the existence of some right or title in conflict with that he is about to purchase, he is presumed either to have made the inquiry, and ascertained the extent of such prior right, or to have been guilty of a degree of negligence equally fatal to his claim, to be considered as a bona fide purchaser’” …. “This presumption, however, is a mere inference of fact, and may be repelled by proof that the purchaser failed to discover the prior right, notwithstanding the exercise of proper diligence on his part” … . Schulz v Dattero, et al, 2013 NY Slip Op 01815, 2011-05813, 2012-02942, Index No 876/06, 2nd Dept. 3-20-13

March 20, 2013