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ABSENT SUBSTANTIAL PREJUDICE OR OTHER IMPROPER RESULTS, A MOTION FOR LEAVE TO DISCONTINUE THE ACTION WITHOUT PREJUDICE SHOULD BE GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the motion for leave to discontinue the action without prejudice should have been granted:

The plaintiff and the defendants own abutting real properties located in Brooklyn. In 2019, the plaintiff commenced this action against the defendants, inter alia, for injunctive relief, alleging that the defendants, among other things, erected a concrete wall and planted grass and trees on portions of the plaintiff’s property without the plaintiff’s permission. The defendants, inter alia, asserted a counterclaim for adverse possession of the disputed portions of the plaintiff’s property. Thereafter, the plaintiff moved pursuant to CPLR 3217(b) for leave to discontinue the action without prejudice. In an order dated November 17, 2022, the Supreme Court denied the plaintiff’s motion. …

The Supreme Court should have granted the plaintiff’s motion pursuant to CPLR 3217(b) for leave to discontinue the action without prejudice. The determination of a motion pursuant to CPLR 3217(b) for leave to discontinue an action without prejudice is within the sound discretion of the court … . “Generally such motions should be granted unless the discontinuance would prejudice a substantial right of another party, circumvent an order of the court, avoid the consequences of a potentially adverse determination, or produce other improper results” … . Here, the court improvidently exercised its discretion in denying the plaintiff’s motion, as there was no showing of substantial prejudice or other improper results … . KNG Realty NY Co., LLC v Halpern, 2024 NY Slip Op 06329, Second Dept 12-18-24

Practice Point: If there is no showing of substantial prejudice, a motion for leave to discontinue an action without prejudice should be granted.​

 

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AFTER THE DEATH OF THE COOPERATIVE OWNER, THE BOARD REFUSED TO TREAT PETITIONER AS DECEDENT’S “SPOUSE” WHICH WOULD AUTHORIZE AN AUTOMATIC TRANSFER OF DECEDENT’S LEASE AND SHARES; THE MAJORITY, OVER TWO DISSENTING OPINIONS, DETERMINED THE BOARD’S REFUSAL TO TREAT PETITIONER, WHO WAS NOT MARRIED TO DECEDENT, AS A “SPOUSE” DID NOT CONSTITUTE DISCRIMINATION BASED ON “MARITAL STATUS” (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Halligan, over two dissenting opinions, determined the cooperative board did not discriminate against the petitioner when it declined to treat petitioner as the decedent-cooperative-owner’s “spouse” for the purpose of transferring decedent’s shares to petitioner:

Petitioner Maryanne McCabe resided for 13 years in a New York City cooperative building with her “long-time romantic partner,” David Burrows. Upon Burrows’ death, he willed his real property, including his unit in the building, to petitioner, who then sought to acquire his lease and shares under a lease provision authorizing an automatic transfer to a shareholder’s “spouse.” The cooperative board declined to treat petitioner as a spouse but offered to consider whether she could retain the lease and shares under a clause covering a shareholder’s family member. Petitioner argues that the board’s failure to treat her as a spouse for purposes of the automatic transfer provision violated the prohibition against discrimination on the basis of marital status under the New York City Human Rights Law (NYCHRL) (see Administrative Code of City of New York § 8-107 [5]). We disagree. * * *

The two were neither married nor in a registered domestic partnership, and petitioner was never added as a shareholder of his unit. Burrows bequeathed his apartment to petitioner when he passed away … . * * *

The NYCHRL does not define “marital status,” but Black’s Law Dictionary defines it as “[t]he condition of being single, married, legally separated, divorced, or widowed” (Black’s Law Dictionary [12th ed 2024], marital status). Along the same lines is the general understanding: “when one is queried about one’s ‘marital status,’ the usual and complete answer would be expected to be a choice among ‘married,’ ‘single,’ etc.” … . A plain reading of the term, then, is that marital status reflects the legal condition of being single, married, legally separated, divorced, or widowed. Marital status turns on whether an individual has “participated or failed to participate in a marriage …”. Matter of McCabe v 511 W. 232nd Owners Corp., 2024 NY Slip Op 06290, CtApp 12-17-24

Practice Point: The cooperative board’s refusal to treat a “long time romantic partner” of the decedent-cooperative-owner as decedent’s “spouse” for purposes of an automatic transfer of the lease and shares did not constitute discrimination on the basis of “marital status” under the NYC Human Rights Law.

 

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DEFENDANT BOUGHT THE FORECLOSED PROPERTY WITHOUT KNOWLEDGE THE JUDGMENT OF FORECLOSURE AND SALE HAD BEEN APPEALED; DEFENDANT WAS A PURCHASER IN GOOD FAITH AND FOR VALUE AND WAS THEREFORE INSULATED FROM THE EFFECTS OF THE APPELLATE REVERSAL (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant (Bartlett) was a purchaser in good faith and for value of the foreclosed property. The foreclosure was reversed on appeal. Defendant, as the fee owner of the property, was insulated from the effects of the reversal:

Where a judgment of foreclosure and sale is reversed on appeal, the successful appellant may seek restitution of the real property lost by the judgment (see CPLR 5015[d]; 5523). However, where the real property was sold pursuant to the judgment of foreclosure and sale, and the title is held by “a purchaser in good faith and for value,” recovery is limited to the value of the real property (id. § 5523). In the absence of a stay of the sale or an outstanding notice of pendency, title of the purchaser in good faith and for value “is . . . insulate[d] . . . from the effects of an appellate reversal” … .

Here, in support of its cross-motion, Bartlett established, through an affidavit of its member, that Bartlett acquired title to the property subsequent to a foreclosure sale, without actual knowledge of a successful appeal by the plaintiffs in the underlying action that resulted in a vacatur of the judgment of foreclosure and sale … . The affidavit also demonstrated that the plaintiffs had not obtained a stay of the foreclosure sale in the underlying action. Under these circumstances, Bartlett established … that it was a purchaser in good faith and for value entitled to the protection of CPLR 5523 … . Puretz v Mae, 2024 NY Slip Op 06227, Second Dept 12-11-24

Practice Point: A buyer of foreclosed property who had no knowledge the judgment of foreclosure had been appealed is insulated from the effects of a reversal on appeal. The buyer, as a purchaser in good faith for value, is the fee owner of the property.

 

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THERE WAS A QUESTION OF FACT WHETHER THE TIME-OF-THE-ESSENCE CLOSING DATE SET IN SELLER’S LETTER PROVIDED SUFFICIENT TIME FOR BUYER TO CLOSE; THEREFORE SELLER WAS NOT ENTITLED TO SUMMARY JUDGMENT REQUIRING SPECIFIC PERFORMANCE; CRITERIA EXPLAINED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined there was a question of fact whether the time-of-the-essence closing date set in a letter from seller’s counsel allowed sufficient time for the buyer to close. Therefore the seller was not entitled to summary judgment requiring specific performance based on the buyer’s failure to appear:

“Where there is an indefinite adjournment of the closing date specified in the contract of sale, some affirmative act has to be taken by one party before it can claim the other party is in default; that is, one party has to fix a time by which the other must perform, and it must inform the other that if it does not perform by that date, it will be considered in default” … . “The notice setting a new date for the closing must (1) give clear, distinct, and unequivocal notice that time is of the essence, (2) give the other party a reasonable time in which to act, and (3) inform the other party that if he [or she] does not perform by the designated date, he [or she] will be considered in default” … . “It does not matter that the date is unilaterally set, and what constitutes a reasonable time for performance depends upon the facts and circumstances of the particular case” … . “Included within a court’s determination of reasonableness are the nature and object of the contract, the previous conduct of the parties, the presence or absence of good faith, the experience of the parties and the possibility of prejudice or hardship to either one, as well as the specific number of days provided for performance” … . “‘[T]he question of what constitutes a reasonable time is usually a question of fact'” … . Fink v 218 Hamilton, LLC, 2024 NY Slip Op 06026, Second Dept 12-4-24

Practice Point: Consult this decision for an explanation of the law surrounding setting an enforceable time-of-the-essence date for the closing.

 

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SUPREME COURT ERRONEOUSLY IGNORED AN ARTIFICIAL MONUMENT DESCRIBED IN A DEED WHEN ATTEMPTING TO RESOLVE A BOUNDARY DISPUTE (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the court, when attempting to resolve a boundary dispute, erred in ignoring an artificial monument, a railroad right-of-way, which was described in a deed:

Here, plaintiffs’ deed includes the only deed call to a natural landmark, as it places the southeast corner of plaintiffs’ property at “a willow tree on the bank of the creek.” Haley and Glasser [the parties’ surveyors] agreed that neither the willow tree nor its former location could be ascertained; similarly, the stake and stones called for in the deed at that location could not be found. Glasser also posited that, as creeks meander over time, the modern location of “the bank of the creek” provided no information as to the appropriate location of the southeast corner, so he disregarded that deed call. Glasser then opted to draw plaintiffs’ property to comport with the exact metes and bounds called for in plaintiffs’ deed, and Supreme Court adopted such methodology and accepted the resulting boundary. Even crediting Glasser’s methodology and his assertions about the meandering creek, as Supreme Court did here, Glasser also admitted that the deed call to the former railroad right-of-way reflects an artificial monument, and that he disregarded such deed call. In adopting Glasser’s methodology and accepting the resulting boundary, the court erred as a matter of law, as it focused on the courses and distances in the deed, in contravention of the long-established hierarchy giving preference to deed calls to artificial monuments … . As Supreme Court failed to consider the railroad right-of-way, we exercise our broad powers to review the record on appeal and make the appropriate determinations. Zwack v Hunt, 2024 NY Slip Op 05926, Third Dept 11-27-24

Practice Point: If an artificial monument, here a railroad right-of-way, is described in a deed, it cannot be ignored in attempting to locate boundaries.

 

CRITERIA FOR AN EASEMENT BY NECESSITY EXPLAINED, NOT MET HERE; THE NECESSITY MUST EXIST AT THE TIME THE LANDLOCKED PARCEL WAS SEVERED; PROOF OF A FUTURE INTENT TO USE THE PARCEL FOR PERSONAL PARKING WAS DEEMED INSUFFICIENT (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined plaintiff did not satisfy the criteria for an easement by necessity for access to a landlocked parcel:

“[T]he party asserting an easement by necessity bears the burden of establishing by clear and convincing evidence . . . that there was a unity and subsequent separation of title, and . . . that at the time of severance an easement over [the servient estate’s] property was absolutely necessary” … .

… [P]laintiff established that he had common ownership of the subject parcels at the time of severance. We agree with defendant, however, that, “inasmuch as the existence and extent of an easement by necessity is determined based on the circumstances as they existed at the time of severance” … , plaintiff failed to establish by clear and convincing evidence that the use and extent of a right-of-way he now seeks was “absolutely necessary” upon separation of title … . While plaintiff generally averred in his affidavit in support of his motion that he retained his landlocked parcel “for purposes of utilizing [the] space for personal parking needs,” any such statement of future intentions failed to establish the nature and extent of the access over the conveyed property that was “indispensable to the reasonable use for the [retained] property” upon severance of title … . Trusso v Brev519, LLC, 2024 NY Slip Op 04880, Fourth Dept 10-4-24

Practice Point: The “necessity” for an easement by necessity must be demonstrated to have existed at the time the landlocked parcel was severed. Proof of a future intent to use the parcel for personal parking was therefore deemed insufficient to support an easement by necessity.

 

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THE PROPERTY IS OWNED BY AN LLC; ALTHOUGH THE PARTIES TO THE PARTITION ACTION ARE EQUAL MEMBERS OF THE LLC, MEMBERS HAVE NO INTEREST IN THE SPECIFIC PROPERTY OF AN LLC; THEREFORE THE PARTITION ACTION WAS NOT AVAILABLE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the partition action could not be maintained because the real property was owned by an LLC and not by tenants in common or a joint tenancy, despite the fact that the parties to the partition action were members of the LLC:

An action for the partition and sale of real property may be maintained by “[a] person holding and in possession of real property as joint tenant or tenant in common” (RPAPL 901[1]). The evidence submitted by the plaintiffs on their summary judgment motion established that, contrary to the allegations in the complaint, the property was owned exclusively by the LLC and not by Emerson, Kasan, and the defendant as tenants in common. Essentially, the plaintiffs contended that the three individual parties held equal membership interests in the LLC, which owned the property. “A membership interest in the limited liability company is personal property. A member has no interest in specific property of the limited liability company” (Limited Liability Company Law § 601). Thus, the individual parties hold no ownership interest in the property. Further, even assuming that the plaintiffs had established that the individual parties held equal membership interests in the LLC, there is no allegation or evidence that the LLC has been dissolved or that the LLC’s affairs have been properly wound up (see id. § 703). Accordingly, this action, inter alia, for partition and sale of the LLC’s property cannot be maintained … . 459 Wash. Ave., LLC v Atkins, 2024 NY Slip Op 04538, Second Dept 9-25-24

Practice Point: Although the partition action would have been available if the parties were joint tenants or tenants in common, it was not available because the property was owned by an LLC of which the parties were equal members. Members of an LLC have no interest in the specific property of the LLC.

 

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HERE THE RIGHT OF FIRST REFUSAL IN THE ORIGINAL DEED DIVIDING THE PROPERTY INTO EIGHT PARTS WAS A VALID DEFENSE TO THE PARTITION ACTION; HOWEVER, IF DEEMED TO RUN WITH THE LAND, THE RIGHT OF FIRST REFUSAL VIOLATED THE RULE AGAINST PERPETUITIES (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the right of first refusal in the original deed which divided the property into eight parts was a valid defense to the partition action. However the right of first refusal could not be enforced because it violated the rule against perpetuities:

A right of first refusal . . . is a preemptive or contractual right to ‘receive an offer'” … . “[I]t is a restriction on the power of one party to sell without first making an offer of purchase to the other party upon the happening of a contingency” … . A reasonable, valid, and enforceable right of first refusal constitutes a good defense to a partition action … . However, with narrow exceptions not applicable here, rights of first refusal are subject to the rule against perpetuities and are thus invalid if it is possible for the future interests they represent to vest outside the prescribed time period (see EPTL 9-1.1[b] …).

Here, the 1966 deed demonstrates that the right of first refusal was for the benefit of the original grantees only … . Moreover, to the extent that the surrounding circumstances demonstrate an intent that the covenant should run with the land … , the restriction would violate the rule against perpetuities (see EPTL 9-1.1[b]…). Block 865 Lot 300, LLC v Baione, 2024 NY Slip Op 04189, Second Dept 8-14-24

Practice Point: A right of first refusal in a deed is a valid defense to a partition action.

Practice Point: Here the right of first refusal in the original deed applied only to the original grantees and, if deemed a covenant which runs with the land, it violated the rule against perpetuities.

 

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IN THIS PARTITION ACTION, THERE WAS NO PENDING MOTION FOR SUMMARY JUDGMENT AND THERE WAS NO INDICATION THE PARTIES HAD LAID THEIR PROOF BARE SUCH THAT THE COURT COULD CONSIDER GRANTING SUMMARY JUDGMENT; SUMMARY JUDGMENT SHOULD NOT HAVE BEEN AWARDED (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined the judge should not have granted summary judgment in the absence of a motion and a hearing. The underlying issue is whether the subject real property should be partitioned or sold at auction:

… [D]efendant and decedent made an oral motion for … a hearing on whether the property could be partitioned. Rather than decide that motion, the court directed the parties to exchange expert reports and set the matter down for a conference, at which time a hearing would be scheduled if the parties could not come to an agreement regarding partition. However, when the parties appeared for the scheduled conference, the court did not set a date for the hearing, but, instead, held the conference, and subsequently, in effect, granted summary judgment to plaintiffs. Because “there was no motion for summary judgment pending before the court at that time, . . . it was error for the court to grant such relief” … . Although a court “has the power to award summary judgment to a nonmoving party, predicated upon a motion for the relief by another party, it may not sua sponte award summary judgment if no party has moved for summary judgment . . . , unless it appears from a reading of the parties’ papers that they were deliberately charting a course for summary judgment by laying bare their proof” … . Here, contrary to plaintiffs’ contention, it does not appear that the parties were deliberately charting a course for summary judgment. Indeed, the only motion pending before the court was the oral motion of defendant and decedent for … a hearing. Therefore, we reverse … and remit the matter for a hearing on whether the property may be partitioned without undue prejudice and for an accounting. The accounting shall be held “before interlocutory judgment is rendered” (RPAPL 911 …). Smith v Smith, 2024 NY Slip Op 02478, Fourth Dept 5-3-24

Practice Point: Generally a judge cannot grant summary judgment absent a motion.

Practice Point: If the parties lay bare all their proof indicating they have charted a course for summary judgment (not the case here), the court may award summary judgment absent a motion.

 

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THE RESTRICTIVE COVENANT LIMITED THE USE OF THE PROPERTY TO ONLY “SINGLE-FAMILY RESIDENTIAL PURPOSES;” USE OF THE PROPERTY FOR SHORT-TERM RENTALS THROUGH AIRBNB VIOLATES THE RESTRICTIVE COVENANT (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Powers, determined that a restrictive covenant from a common grantor restricting the use of the property to only “single-family residential purposes” prohibited plaintiff from using the property for short-term rentals through Airbnb. Such use is not “residential:”

… [T]he restrictive covenant limits the permissible use to only “single[-]family residential purposes.” This phrase unambiguously directs that all properties within the subdivision must be used for only residential purposes, and, thus, any and all rentals must be to those who would utilize the property for residential purposes — i.e., as a residence. A residence is the location where an individual “actually lives” and is established by “[t]he act or fact of living in a given place for some time” (Black’s Law Dictionary [11th ed 2019], residence). Although there is no express durational requirement, a stay in a short-term rental property does not meet this definition … . Lodgers in short-term rental properties do not live on the premises but are instead on a short trip and often maintain a residence elsewhere where they “actually live[ ]” (Black’s Law Dictionary [11th ed 2019], residence). This is true even though lodgers may have access to the entirety of the property and may use it in the same manner as a resident, including by cooking meals and sleeping as plaintiff highlighted. West Mtn. Assets LLC v Dobkowski, 2024 NY Slip Op 02355, Third Dept 5-2-24

Practice Point: Here the restrictive covenant limited the use of the property to “residential” use. A “residence” is where someone actually lives, not where someone stays for a short time while on a trip. Therefore the restrictive covenant precluded short-term rentals of the property through Airbnb.

 

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