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PLAINTIFF DEMONSTRATED DEFENDANTS’ CONSTRUCTION OF A FENCE VIOLATED A VALID RESTRICTIVE COVENANT IN THE PARTIES’ DEEDS (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined plaintiff’s motion for summary judgment should have been granted. Plaintiff alleged defendants violated a restrictive covenant in the parties’ deeds by constructing a fence along the property line:

Plaintiff and defendants own adjoining properties in Wayne County with views of Sodus Bay, and those properties can be traced to one original grantor, nonparty Sodus Bay Heights Land Co., Inc. (Land Company). The Land Company created a subdivision and, between the years of 1924 and 1937, it sold numerous parcels in accordance with its planned development. Plaintiff and defendants obtained title to their property through chains of title that date back to owners who purchased their property directly from the Land Company. Both properties are subject to two relevant restrictive covenants that run with the land. The first stated “[t]hat no line fence shall be erected on said lot without the written consent of the [Land Company], or its successors or assigns.” The second stated “[t]hat no unnecessary trees or other obstructions shall be permitted on said lot which shall hide the view of other residents in Sodus Bay Heights.” * * *

Generally, “[r]estrictive covenants will be enforced when the intention of the parties is clear and the limitation is reasonable and not offensive to public policy”… , and it is well settled that the party seeking to enforce such a restriction “must prove, by clear and convincing evidence, the scope, as well as the existence, of the restriction” … . Here, plaintiff established as a matter of law the scope and the existence of a restriction against fences. Dodge v Baker, 2021 NY Slip Op 02891, Fourth Dept 5-7-21

 

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THE PLAINTIFFS WERE ENTITLED TO A DECLARATORY JUDGMENT TO THE EFFECT THE VILLAGE WAS REQUIRED TO REPAIR A BULKHEAD/STORM DRAIN WHICH RAN THROUGH AN EASEMENT ON PLAINTIFFS’ PROPERTY; THE WOODEN BULKHEAD WHICH CRADLED THE DRAIN PIPE HAD DETERIORATED CAUSING SINK HOLES (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiffs were entitled to a declaratory judgment to the effect that the village was required to repair the bulkhead/storm drain pipe that ran through plaintiffs’ property pursuant to an easement. The drain pipe was encased in a wooden bulkhead which had deteriorated, causing sink holes on plaintiffs’ property. The village had refused to repair the bulkhead, claiming it was responsible only for maintenance of the drain pipe:

In 1961, the plaintiffs’ predecessors, who were the parents of the plaintiff June Anson, granted the Village a perpetual easement over a portion of their property, approximately 65 feet long and 10 feet wide, “to construct and maintain one underground storm water drain and one tide gate accessory thereto.” In the easement agreement, the Village was also granted the right and privilege “to do whatever acts [we]re necessary and proper” in the easement premises for maintaining and operating the storm water drain and tide gate. The easement agreement did not assign any responsibility for maintenance of the easement premises to the property owners. * * *

The plaintiffs’ evidence demonstrated, prima facie, that the bulkhead was an integral part of the storm water drainage system currently maintained by the Village on the easement premises. Inasmuch as the easement agreement did not place affirmative responsibility for maintenance of those premises upon the owners of the servient estate, it was the Village’s obligation to maintain the bulkhead … . … [T]he plaintiffs were entitled to a judgment declaring that the Village is required to maintain the easement premises, including the bulkhead, in a proper and safe condition, and an injunction requiring the Village to do so. Anson v Incorporated Vil. of Freeport, 2021 NY Slip Op 02266, Second Dept 4-14-21

 

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THE COMMERCIAL LEASE GUARANTEE MET THE DEFINITION OF AN INSTRUMENT FOR THE PAYMENT OF MONEY; THE COVID-19 RESTRICTIONS ON ENFORCEMENT OF COMMERCIAL LEASE GUARANTEES DO NOT APPLY; THE WARRANTY OF HABITABILITY DEFENSE IS NOT AVAILABLE (FIRST DEPT).

The First Department, reversing Supreme Court, determined: (1) although guarantees generally are not instruments for the payment of money within the meaning of CPLR 3213, the language of the guarantee was unconditional and therefore met the criteria of such an instrument; (2) the COVID-19-related provision of the NYC Administrative Code and executive orders, prohibiting enforcement of commercial lease guarantees, do not apply where the business were not required to cease operations; (3) the warranty of habitability was not available as a defense because of the language of the guarantee; and (4) a commercial tenant cannot assert the warranty of habitability:

While a guarantee of both payment and performance does not qualify as an instrument for the payment of money only under CPLR 3213 … , paragraph 1 of the guaranty signed by defendants includes an unconditional obligation to pay all rent and additional rent owed under the sublease, and therefore does so qualify … ; “it required no additional performance by plaintiff[] as a condition precedent to payment or otherwise made defendant[s’] promise to pay something other than unconditional” … .

While the prohibition on the enforcement of commercial lease guaranties against natural persons under Administrative Code of City of NY § 22-1005 applies to businesses that were required to “cease operation” or “close to members of the public” under executive orders 202.3, 202.6, or 202.7, issued in connection with the COVID-19 pandemic, defendants never asserted that the nonparty subtenant ceased operations or closed to the public as a result of those orders.

Defendants’ claim that they properly raised warranty of habitability defenses under the sublease is without merit. Such defenses are not available to defendants because all defenses under the guaranty, with the exception of prior payment, were waived. Moreover, a commercial tenant cannot avail itself of the statutory warranty of habitability (see Real Property Law § 235-b …). iPayment, Inc. v Silverman, 2021 NY Slip Op 01846, First Dept 3-25-21

 

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PLAINTIFF, WHO PURCHASED THE PROPERTY, SUED THE PRIOR OWNER IN NEGLIGENCE FOR DAMAGES STEMMING FROM PLAINTIFF’S EXPOSURE TO CHEMICAL CONTAMINATION ON THE PROPERTY; LIABILITY FOR A DANGEROUS CONDITION ON PROPERTY GENERALLY CEASES UPON TRANSFER OF THE PROPERTY; THE NEGLIGENCE CAUSE OF ACTION SHOULD HAVE BEEN DISMISSED (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supeme Court, determined plaintiff’s negligence cause of action seeking damages for exposure to contaminants on the land plaintiff purchased from defendant city should have been dismissed. A property owner’s liability for a dangerous condition ceases upon the transfer of the property:

We … agree with defendant that the court erred in denying the motion with respect to the negligence cause of action, and we therefore further modify the order accordingly. That cause of action is based on allegations that plaintiff was injured due to a dangerous condition on the parcel of property that defendant sold to plaintiffs, i.e., chemical contamination, to which plaintiff was exposed after the sale. It is well settled that “[o]ne’s liability in negligence for the condition of land ceases when the premises pass out of one’s control before injury results. Such is the general rule” … . Thus, under that general rule, defendant’s liability for negligence based on a dangerous condition on the property ended when it sold the parcel to plaintiffs … , and “liability may be imposed upon defendant only if the allegedly dangerous condition . . . existed at the time [it] relinquished possession and control of the premises ‘and the new owner has not had a reasonable time to discover the condition, if it was unknown, and to remedy the condition once it is known’ ” … .

Here, defendant met its burden on the motion of establishing that any injury allegedly sustained by plaintiff was caused by exposure after defendant sold the property. In response, “plaintiff[s have] offered nothing to show that [they, as] the new owner[s,] did not have adequate time to discover and remedy such defects” … . Powers v City of Geneva, 2021 NY Slip Op 01684, Fourth Dept 3-19-21

 

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THE CRITERIA FOR APPOINTMENT OF A TEMPORARY RECEIVER IN THIS PARTITION AND SALE ACTION WERE NOT MET (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the evidence did not support the appointment of a temporary receiver of a residential building and cooperative apartment that were the subjects of a partition and sale action:

CPLR 6401(a) permits the court, upon a motion by a person with an “apparent interest” in property, to appoint a temporary receiver of that property where “there is danger” that it will be “materially injured or destroyed.” However, the appointment of a temporary receiver “is an extreme remedy resulting in the taking and withholding of possession of property from a party without an adjudication on the merits” … .Therefore, a motion seeking such an appointment should be granted only where the moving party has made a “clear and convincing” evidentiary showing of “irreparable loss or waste to the subject property and that a temporary receiver is needed to protect their interests” … .

Here, the plaintiff failed to make the requisite showing. In particular, the plaintiff’s speculative and conclusory allegations that the defendants failed to repair and maintain the subject properties and commingled income derived from the subject properties with their personal income were insufficient to demonstrate that there was a danger of irreparable loss or material injury to the subject properties warranting the appointment of a temporary receiver … . Similarly, without more, the defendants’ failure to maintain adequate records does not demonstrate that the plaintiff’s interest in the subject properties is in imminent danger of irreparable loss or waste … . Cyngiel v Krigsman, 2021 NY Slip Op 01390, Second Dept 3-10-21

 

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SUPREME COURT DID NOT HAVE SUBJECT MATTER JURISDICTION OVER AN ACTION TAKEN BY THE UNKECHAUG INDIAN NATION TO EXCLUDE A MEMBER OF THE NATION FROM A PARCEL OF NATION LAND (SECOND DEPT).

The Second Department determined Supreme Court properly ruled it did not have subject matter jurisdiction over a land-possession dispute within the Unkechaug Indian Nation. The Nation first sought a Supreme Court ruling on the rightful possessor of the land (claimed to be Curtis Treadwell), thereby waiving sovereign immunity on that issue. Then the Nation, pursuant to its own internal Tribal Rules, determined Danielle Treadwell, who occupied a portion of the land, was an “undisirable person” and, based on that finding, could no longer occupy the property. The Supreme Court did not have subject matter jurisdiction over the “undesirable person” action taken by the Nation:

… [B]y bringing the April 2018 determination that Curtis was the rightful possessor of the subject property before the state Supreme Court, and seeking a declaration and enforcement, the Nation waived its sovereign immunity, though only as to that determination and its enforcement … . Accordingly, so long as the Nation relied on the April 2018 determination as its basis for excluding Danielle from the disputed portion of the subject property, the defendants’ counterclaims seeking inverse declarations could proceed along with the Nation’s action for declaratory relief. However, once the Nation proceeded to take the undesirability vote in September 2019 and issue the tribal resolution and directives based upon the membership’s vote, the Nation, pursuant to its own Tribal Rules, created a new and independent basis, under its sovereign authority, for excluding Danielle from the disputed portion of the subject property. The Supreme Court properly recognized that once it was informed of the 2019 undesirability determination, it could not take any action with respect thereto, as this was a sovereign act of the Nation outside the court’s subject matter jurisdiction … . Unkechaug Indian Nation v Treadwell, 2021 NY Slip Op 01286, Second Dept 3-3-21

 

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THE LANGUAGE OF THE EASEMENT CREATED AN AMBIGUITY ABOUT WHETHER THE EASEMENT WAS INTENDED TO BE USED TO ACCESS A PUBLIC ROAD; DEFENDANT’S MOTION TO DISMISS THE COMPLAINT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the language in an easement indicating it is to be used for agricultural activities “and any use incidental thereto” did not support a finding, at the motion-to-dismiss stage, the easement could be used to access a public road:

“Easements by express grant are construed to give effect to the parties’ intent, as manifested by the language of the grant” … . The extent of an easement claimed under a grant is generally limited by the language of the grant, as a grantor may create an extensive or a limited easement” … .

… [T]he plain meaning of the phrase “and any use incidental thereto” contemplates a use incidental to the agricultural activities on easement A, specifically, not agricultural activities outside of easement A. The record contains no evidence demonstrating that the grantor intended to allow the owner of lot 9 to enter easement A for a reason other than to engage in agricultural activities there, and thus, at the very least, there is an ambiguity as to whether [defendant] may use easement A solely as a thoroughfare, warranting denial of its motion to dismiss pursuant to CPLR 3211(a) … . Strong Real Estate, LLC v 55 Town Line, LLC, 2021 NY Slip Op 01280, Second Dept 3-3-21

 

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DEFENDANT TITLE INSURANCE COMPANY WAS ABLE TO DEMONSTRATE DEFENDANT AGENCY DID NOT HAVE ACTUAL AUTHORITY TO ISSUE THE TITLE INSURANCE POLICY TO PLAINTIFF; HOWEVER IT DID NOT DEMONSTRATE THE AGENCY DID NOT HAVE APPARENT AUTHORITY TO ISSUE THE POLICY; THEREFORE THE TITLE INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant WFG, a title insurance company, should not have been granted summary judgment on the “apparent authority” cause of action. WFG had terminated its agency relationship with NMR and had served a temporary restraining order on NMR prohibiting NMR from issuing any title insurance underwritten by WFG. The day after the restraining order was served, NMR issued a policy to plaintiff on property which turned out to have been encumbered with millions of dollars of liens. WFG was able to prove NMR did not have actual authority to issue the policy, but did not demonstrate NMR did not have apparent authority to issue the policy:

In the absence of actual authority, a principal may still be bound by the actions of a person who has apparent authority … . “Essential to the creation of apparent authority are words or conduct of the principal, communicated to a third party, that give rise to the appearance and belief that the agent possesses authority to enter into a transaction” … . The proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact … . Failure to make such a showing requires a denial of the motion, regardless of the sufficiency of the opposing papers … .

Here, WFG failed to establish, prima facie, that NMR Realty lacked apparent authority to issue the policy. WFG merely pointed to gaps in the plaintiff’s proof, which was insufficient to meet its prima facie burden as the party moving for summary judgment … . Schwartz v WFG Natl. Tit. Ins. Co., 2021 NY Slip Op 01279, Second Dept 3-3-21

 

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DESPITE AMBIGUITIES IN THE DESCRIPTION OF THE EASEMENT, THE LOCATION CAN BE DETERMINED AND THE EASEMENT IS THEREFORE VALID (SECOND DEPT).

The Second Department, reversing Supreme Court (referee), determined the easement granted to defendants was valid. The easement related to an area which included a stucco wall and a covered wooden deck. The fact that the area may not have been accurately described by metes and bounds did not defeat the validity of the easement:

“In order to create an easement by express grant, plain and direct language must be used which evidences the grantor’s intention to permanently give a use of the servient estate to the dominant estate” … . The extent of an easement claimed under a grant is generally determined by the language of the grant … . The fact that the easement grant does not give the precise location of the easement is not fatal to a finding that an easement was intended … . Where the language of the grant is ambiguous or unclear, the court will consider surrounding circumstances tending to show the grantor’s intent in creating the easement … .

… [W]here, as here, the language was ambiguous, the Supreme Court should have considered “the surrounding circumstances and the situation of the parties when it was executed” … . The evidence presented at the hearing, which included the testimony of Emily Mazzuoccola [defendant], surveys, and photographs, demonstrated that the grantor intended to grant a perpetual easement with regard to the disputed area of land … containing improvements of a stucco wall and a covered wooden deck. The easement was specifically referenced on a survey dated July 2, 2002. Accordingly, the court should have determined that the subject easement was valid. Marino v Mazzuoccola, 2021 NY Slip Op 08176, Second Dept 2-24-21

 

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ONLY THE HUSBAND TOOK OUT A MORTGAGE AND DEFENDANTS DENIED THE ALLEGATION IN THE COMPLAINT THAT THE WIFE’S INTEREST WAS SUBJECT TO AN EQUITABLE MORTGAGE; THEREFORE THE BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED; THE COURT NOTED THAT “NEITHER ADMITTED NOR DENIED” IN AN ANSWER TO A COMPLAINT IS DEEMED AN ADMISSION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate its foreclosure action could affect the wife’s (Gloria’s) interest in the property based on the husband’s (David’s) mortgage. It was not necessary for defendants to claim that Gloria’s interest was not subject to an equitable mortgage as an affirmative defense. [Although not related to the equitable mortgage issue, the Second Department noted that “Neither Admitted nor Denied” in an answer to an allegation in a complaint should be deemed to admit the allegation (see CPLR 3018[a] …)]:

… [W]e disagree with the plaintiff’s contention that the defendants, by not pleading it as an affirmative defense, waived their defense to the cause of action relating to the alleged equitable mortgage on Gloria Saff’s interest in the subject property. “CPLR 3018, which governs responsive pleadings, draws a distinction between denials and affirmative defenses” … . “Denials generally relate to allegations setting forth the essential elements that must be proved in order to sustain the particular cause of action” and “[t]hus a mere denial of one or more elements of the cause of action will suffice to place them in issue” … . A defendant, however, must plead, as an affirmative defense, “all matters which, if not pleaded, would be likely to take the adverse party by surprise or would raise issues of fact not appearing on the face of a prior pleading” … . Here, the defendants, in their answer, denied the allegations in the complaint relating to the existence of an equitable mortgage on Gloria Saff’s interest in the subject property. As the denials of an equitable mortgage were in response to allegations in the complaint, they would not take the plaintiff by surprise. * * *

Where spouses own property as tenants by the entirety, a conveyance by one spouse, to which the other has not consented, cannot bind the entire fee … . The mortgage executed by David Saff did not encumber Gloria Saff’s interest in the subject property, and the plaintiff failed to submit evidence demonstrating that it held an equitable mortgage on Gloria Saff’s interest in the subject property. Thus, the Supreme Court should have denied those branches of the plaintiff’s motion which were for summary judgment on the causes of action to foreclose the mortgage and for a judgment declaring that the plaintiff has an equitable mortgage against the interest of Gloria Saff in the subject property. U.S. Bank N.A. v Saff, 2021 NY Slip Op 00590, Second Dept 2-3-21

 

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