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QUESTION OF FACT WHETHER QUITCLAIM DEED WAS UNCONSCIONABLE; DOCTRINES OF PROCEDURAL AND SUBSTANTIVE UNCONSCIONABILITY DISCUSSED.

The First Department, over a two-justice dissent, determined there were questions of fact about whether plaintiff’s signing of a quitclaim deed was procedurally and substantively unconscionable. Plaintiff, who believed he no longer owned the land, signed the deed in return for $5000. The property was worth $1,000,000:

No one procedural factor can be relied upon to support or discount a claim of procedural unconscionability. Such claims are most often fact sensitive and dependent upon the particular circumstances surrounding a transaction, which, at the very least, mandate the opportunity for an evidentiary hearing … . Certainly, the factual allegations … raise material issues of fact as to whether plaintiff was afforded a “meaningful choice” in his decision to execute the quitclaim deed and whether the terms of the agreement are “unreasonably favorable” to [defendants]. These issues cannot be resolved by summary judgment.

With respect to the element of substantive unconscionability, we also find that there are material issues of fact. In order to determine if the agreement is substantively unconscionable, there must be an “analysis of the substance of the bargain to determine whether the terms were unreasonably favorable to the party against whom unconscionability is urged” … . …[D]espite the fact that plaintiff believed he no longer owned the property, there is nothing in this record to indicate that he was ever divested of title by either an in rem proceeding or direct sale … . Green v 119 W. 138th St. LLC, 2016 NY Slip Op 05955, 1st Dept 9-8-16

 

REAL PROPERTY (QUESTION OF FACT WHETHER QUITCLAIM DEED WAS UNCONSCIONABLE; DOCTRINES OF PROCEDURAL AND SUBSTANTIVE UNCONSCIONABILITY DISCUSSED)/CONTRACT LAW (QUESTION OF FACT WHETHER QUITCLAIM DEED WAS UNCONSCIONABLE; DOCTRINES OF PROCEDURAL AND SUBSTANTIVE UNCONSCIONABILITY DISCUSSED)/QUITCLAIM DEED (QUESTION OF FACT WHETHER QUITCLAIM DEED WAS UNCONSCIONABLE; DOCTRINES OF PROCEDURAL AND SUBSTANTIVE UNCONSCIONABILITY DISCUSSED)/UNCONSCIONABILITY (QUESTION OF FACT WHETHER QUITCLAIM DEED WAS UNCONSCIONABLE; DOCTRINES OF PROCEDURAL AND SUBSTANTIVE UNCONSCIONABILITY DISCUSSED)

THEORIES OF LIABILITY FOR DAMAGE TO A PARTY WALL EXPLAINED.

The Second Department, affirming the denial of a motion to dismiss counterclaims, in an action stemming from alleged damage to a party wall, explained the law of party walls:

While one who hires an independent contractor generally will not be liable for the contractor’s negligence, an exception exists where the employer has a nondelegable duty to ensure the work is safely performed … . With regard to two owners whose properties abut the same party wall, each owns so much of the wall as stands upon his or her own lot, both “having an easement in the other strip for purposes of the support of his own building” … . “Although the land covered by a party wall remains the several property of the owner of each half, . . . the title of each owner is qualified by the easement to which the other is entitled” … . “[N]either owner may subject a party wall to a use for the benefit of its own property that renders the wall unavailable for similar use for the benefit of the other property” … .

Liability may also be imposed on a property owner where, during renovation, the party wall is altered to the detriment of the adjoining property owner (Schneider v 44-84 Realty Corp. , 169 Misc 249 [Sup Ct, Bronx County 1938], affd 257 App Div 932 [1st Dept 1939]). In Schneider , the court explained that the defendant who tore down its house on one side of the party wall “could not withdraw the wall or change its condition to the injury of plaintiffs or plaintiffs’ property without being liable in damages for any injury that might accrue to the plaintiffs thereby” (id. at 252). Moreover, “[e]ven if the defendant proceeded with all skill and diligence it is still liable to the plaintiffs for any injuries sustained in consequence of the intended alterations to the wall and to the support which the building on defendant’s premises gave to the plaintiffs’ property” (id. at 253). Ehrenberg v Regier, 2016 NY Slip Op 05938, 1st Dept 9-1-16

REAL PROPERTY (THEORIES OF LIABILITY FOR DAMAGE TO A PARTY WALL EXPLAINED)/PARTY WALLS (REAL PROPERTY, THEORIES OF LIABILITY FOR DAMAGE TO A PARTY WALL EXPLAINED)

JUSTIFIABLE RELIANCE ON PLAINTIFF’S INACTION RE A FORGED DEED NOT DEMONSTRATED, CRITERIA FOR EQUITABLE ESTOPPEL THEREFORE NOT MET.

The Second Department determined defendant was not entitled to summary judgment in a quiet title action under the doctrine of equitable estoppel. Plaintiff alleged a deed which purported to transfer her title to the property was forged. Defendant, citing the delay in plaintiff’s taking action, sought dismissal of the complaint on equitable estoppel grounds. The Second Department determined the “justifiable reliance” element of equitable estoppel had not been demonstrated:

Although [defendant] made a prima facie showing that the plaintiff knew of the allegedly forged deed transferring title from her to Edward Wallace, unjustifiably delayed almost two years in commencing this action from the time she was advised to do so by the Kings County District Attorney’s Office, and intended her delay to be acted upon, and that [defendant] lacked knowledge of the allegedly forged deed and prejudicially changed its position … , [defendant] failed to establish, prima facie, that its reliance upon the plaintiff’s conduct was justified … . Wallace v BSD-M Realty, LLC, 2016 NY Slip Op 05917, 2nd Dept 8-31-16

REAL PROPERTY (JUSTIFIABLE RELIANCE ON PLAINTIFF’S INACTION RE A FORGED DEED NOT DEMONSTRATED, CRITERIA FOR EQUITABLE ESTOPPEL THEREFORE NOT MET)/EQUITABLE ESTOPPEL (JUSTIFIABLE RELIANCE ON PLAINTIFF’S INACTION RE A FORGED DEED NOT DEMONSTRATED, CRITERIA FOR EQUITABLE ESTOPPEL THEREFORE NOT MET)

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CONDOMINIUM BOARD OF MANAGERS, NOT INDIVIDUAL CONDOMINIUM OWNERS, IS LIABLE FOR INJURY IN A COMMON AREA.

The First Department, in a full-fledged opinion by Justice Friedman, over a full-fledged dissenting opinion by Justice Gische, determined the board of managers of a condominium was liable under the Labor Law for plaintiff’s elevation-related injury in a common area (the boiler room), not the sponsor which still owned several unsold condominium units:

While defendant 41 West 72 LLC acquired the building in question by a deed recorded in January 2001, several months later, in August 2001, 41 West 72 LLC made the building subject to the Condominium Act (Real Property Law, article 9-B) by executing and filing a declaration of condominium pursuant to Real Property Law § 339-f … . The declaration defines the common elements of the condominium (Real Property Law § 339-e[2]) to include the building’s boiler room. As a common element of the condominium, the boiler room was, at the time of plaintiff’s accident, owned collectively by all of the owners of the building’s 130 units … . However, the conversion of the building to a condominium placed its common elements “solely under the control of the [condominium’s] board of managers” pursuant to the Condominium Act, which “recogni[zes] that the board exercises exclusive control over the common elements” … . Jerdonek v 41 W. 72 LLC, 2016 NY Slip Op 05666, 1st Dept 7-28-16

LABOR LAW (CONDOMINIUM BOARD OF MANAGERS, NOT INDIVIDUAL CONDOMINIUM OWNERS, ARE LIABLE FOR INJURY IN A COMMON AREA)/REAL PROPERTY LAW (LABOR LAW, CONDOMINIUMS, CONDOMINIUM BOARD OF MANAGERS, NOT INDIVIDUAL CONDOMINIUM OWNERS, ARE LIABLE FOR INJURY IN A COMMON AREA)/CONDOMINIUMS (LABOR LAW, CONDOMINIUM BOARD OF MANAGERS, NOT INDIVIDUAL CONDOMINIUM OWNERS, ARE LIABLE FOR INJURY IN A COMMON AREA)/BOARD OF MANAGERS (CONDOMINIUMS, LABOR LAW, CONDOMINIUM BOARD OF MANAGERS, NOT INDIVIDUAL CONDOMINIUM OWNERS, ARE LIABLE FOR INJURY IN A COMMON AREA)

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DEED PROVIDED AS SECURITY FOR A DEBT CONSTITUTES A MORTGAGE TRIGGERING THE NEED FOR FORECLOSURE PROCEEDINGS UPON DEFAULT.

The First Department determined a deed which was security for a debt constituted a mortgage. Therefore, foreclosure proceedings under the Real Property Law were triggered by default on the debt:

Real Property Law § 320 codifies the common-law principle that the giving of a deed to secure a debt, in whatever form and however structured, creates nothing more than a mortgage … . “The courts are steadfast in holding that a conveyance, whatever its form, if in fact given to secure a debt, is neither an absolute nor a conditional sale, but a mortgage, and that the grantor and grantee have merely the rights and are subject only to the obligations of mortgagor and mortgagee” … . “Significantly, the statute does not require a conclusive showing that the transfer was intended as security; it is sufficient that the conveyance appears to be intended only as a security in the nature of a mortgage” … . “In determining whether a deed was intended as security, examination may be made not only of the deed and a written agreement executed at the same time, but also of oral testimony bearing on the intent of the parties and to a consideration of the surrounding circumstances and acts of the parties” … . Patmos Fifth Real Estate Inc. v Mazl Bldg., LLC, 2016 NY Slip Op 04804, 1st Dept 6-16-16

REAL PROPERTY LAW (DEED PROVIDED AS SECURITY FOR A DEBT CONSTITUTES A MORTGAGE TRIGGERING THE NEED FOR FORECLOSURE PROCEEDINGS UPON DEFAULT)/FORECLOSURE (DEED PROVIDED AS SECURITY FOR A DEBT CONSTITUTES A MORTGAGE TRIGGERING THE NEED FOR FORECLOSURE PROCEEDINGS UPON DEFAULT)/DEEDS (DEED PROVIDED AS SECURITY FOR A DEBT CONSTITUTES A MORTGAGE TRIGGERING THE NEED FOR FORECLOSURE PROCEEDINGS UPON DEFAULT)/MORTGAGES (DEED PROVIDED AS SECURITY FOR A DEBT CONSTITUTES A MORTGAGE TRIGGERING THE NEED FOR FORECLOSURE PROCEEDINGS UPON DEFAULT)

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CITY’S ALLEGED VIOLATION OF AN EASEMENT SOUNDS IN CONTRACT, NOT TORT, NOTICE OF CLAIM NOT REQUIRED.

The Third Department, reversing County Court, determined plaintiff was not required to file a notice of claim because the action against the city sounded in contract, not tort. Plaintiff alleged the city violated an easement when work was done on plaintiff’s property:

General Municipal Law § 50-e (1) (a) provides that a party seeking to bring a tort action against a municipality must file a notice of claim within 90 days of the date that the claim arises … . A similar provision is contained in Charter of the City of Glens Falls § 10.14.5. The notice of claim provisions of General Municipal Law § 50-e, however, apply only to actions sounding in tort, not to those premised upon breach of contract … . The same is true of City of Glens Falls City Charter § 10.14.5, as its terms make clear. Here, plaintiff’s small claims action is premised upon defendant’s alleged failure to comply with the provisions of the easement agreement resulting in damage to his property in the amount of $5,000. Inasmuch as plaintiff’s action sounds in breach of contract, not tort, the notice of claim provisions of General Municipal Law § 50-e and Charter of the City of Glens Falls § 10.14.5 are inapplicable. Strauss v City of Glens Falls, 2016 NY Slip Op 04750, 3rd Dept 6-16-16

 

MUNICPAL LAW (CITY’S ALLEGED VIOLATION OF AN EASEMENT SOUNDS IN CONTRACT, NOT TORT, NOTICE OF CLAIM NOT REQUIRED)/REAL PROPERTY (CITY’S ALLEGED VIOLATION OF AN EASEMENT SOUNDS IN CONTRACT, NOT TORT, NOTICE OF CLAIM NOT REQUIRED)/CONTRACT LAW (CITY’S ALLEGED VIOLATION OF AN EASEMENT SOUNDS IN CONTRACT, NOT TORT, NOTICE OF CLAIM NOT REQUIRED)/EASEMENTS (CITY’S ALLEGED VIOLATION OF AN EASEMENT SOUNDS IN CONTRACT, NOT TORT, NOTICE OF CLAIM NOT REQUIRED)/NOTICE OF CLAIM (CITY’S ALLEGED VIOLATION OF AN EASEMENT SOUNDS IN CONTRACT, NOT TORT, NOTICE OF CLAIM NOT REQUIRED)

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QUESTION OF FACT WHETHER WATER RUNOFF CONSTITUTED TRESPASS AND NUISANCE.

The Second Department, reversing Supreme Court, determined summary judgment should not have been granted to defendants in this action alleging trespass and nuisance caused by water runoff:

A landowner will not be liable for damages to abutting property caused by the flow of surface water due to improvements to his or her land, provided that the improvements were made in good faith to make the property fit for some rational use, and that the water was not drained onto the other property by artificial means, such as pipes and ditches … . …

… [P]laintiffs raised triable issues of fact … by adducing evidence, inter alia, that a gutter downspout located on the defendants’ property and a drainage pipe installed under the low point in the defendants’ new driveway diverted rainwater runoff onto the plaintiffs’ properties … . Biaglow v Elite Prop. Holdings, LLC, 2016 NY Slip Op 04373, 2nd Dept 6-8-16

REAL PROPERTY (QUESTION OF FACT WHETHER WATER RUNOFF CONSTITUTED TRESPASS AND NUISANCE)/TRESPASS (QUESTION OF FACT WHETHER WATER RUNOFF CONSTITUTED TRESPASS AND NUISANCE)/NUISANCE (QUESTION OF FACT WHETHER WATER RUNOFF CONSTITUTED TRESPASS AND NUISANCE)/WATER RUNOFF (QUESTION OF FACT WHETHER WATER RUNOFF CONSTITUTED TRESPASS AND NUISANCE)

 DISPUTED BOUNDARY PROVEN THROUGH DOCTRINE OF PRACTICAL LOCATION.

The Third Department determined the disputed boundary line was established by the doctrine of practical location:

Under … doctrine [of practical location], “the practical location of a boundary line and an acquiescence of the parties therein for a period of more than the statutory period governing adverse possession is conclusive of the location of the boundary line” … . Moreover, “application of the doctrine requires a clear demarcation of a boundary line and proof that there is mutual acquiescence to the boundary by the parties such that it is definitely and equally known, understood and settled” … .

Here, defendant submitted plaintiff's deposition testimony in support of his motion. Plaintiff had lived continuously upon his property for approximately 23 years, and he acknowledged that, during that time, the occupiers of defendant's parcel had used the strip to access a garage in the rear of their property, and neither plaintiff nor his parents had ever attempted to prevent them from doing so. Plaintiff further acknowledged that there was previously a line of grass running between the two parcels that created the appearance of two separate driveways, and that the remnants of that line were still visible as a triangular patch or “point” of grass. Defendant also submitted an affidavit from a neighbor who had lived across the street for approximately 50 years. This neighbor confirmed that there had been a line of grass that ran between the parties' parcels, and that it had appeared that the occupants had always agreed that their respective driveways were on either side of that line. Finally, plaintiff submitted the affidavit of defendant's immediate predecessor in interest, who had lived on the property for approximately 40 years and had later rented it to tenants. This witness stated that, throughout his involvement with the property, the occupants of the two parcels had always mutually agreed that the boundary line was located along the line of grass bisecting the parcels' driveways. His affidavit included an aerial photograph portraying the boundary as a line extending along the remaining triangular strip of grass. Lounsbury v Yeomans, 2016 NY Slip Op 03798, 3rd Dept 5-12-16

REAL PROPERTY (DISPUTED BOUNDARY PROVEN THROUGH DOCTRINE OF PRACTICAL LOCATION)/PRACTICAL LOCATION, DOCTRIN OF, (DISPUTED BOUNDARY PROVEN THROUGH DOCTRINE OF PRACTICAL LOCATION)

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CONSOLIDATED MORTGAGES CONSIDERED FIRST MORTGAGE OF RECORD WITH PRIORITY OVER COMMON CHARGES LIEN.

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, determined a lien for unpaid (condominium) common charges did not take priority over the second of two Citibank mortgages which were consolidated. Plaintiff was the winning bidder in a foreclosure action commenced by the condominium board for unpaid common charges. Plaintiff took the property subject to the “first mortgage of record.” Years before the common charges lien two mortgages taken out by the previous condominium owner had been consolidated. Plaintiff argued the second of those two consolidated mortgages should be extinguished by the foreclosure action because, by statute, the lien for the common charges was subject only to the “first mortgage of record.” The Court of Appeals held the two consolidated mortgages should be considered the “first mortgage” in this context:

Given the practical realities of this case, … the agreement between Citibank and the previous unit owner to consolidate the mortgages “into a single mortgage lien,” recorded years before the common charges lien, qualifies as “the first mortgage of record.” To hold otherwise places form over substance. Indeed, the ease with which a formulaic application of the term “first mortgage of record” can be manipulated demonstrates that such holding would not promote the statutory purpose. Plotch v Citibank, N.A., 2016 NY Slip Op 03648, CtApp 5-10-16

FORECLOSURE (CONSOLIDATED MORTGAGES CONSIDERED FIRST MORTGAGE OF RECORD WITH PRIORITY OVER COMMON CHARGES LIEN)/REAL PROPERTY LAW (CONDOMINIUM COMMON CHARGES, CONSOLIDATED MORTGAGES CONSIDERED FIRST MORTGAGE OF RECORD WITH PRIORITY OVER COMMON CHARGES LIEN)/MORTGAGES (CONDOMINIUM COMMON CHARGES, ​CONSOLIDATED MORTGAGES CONSIDERED FIRST MORTGAGE OF RECORD WITH PRIORITY OVER COMMON CHARGES LIEN)/CONDOMINIUMS (COMMON CHARGES LIEN, ​CONSOLIDATED MORTGAGES CONSIDERED FIRST MORTGAGE OF RECORD WITH PRIORITY OVER COMMON CHARGES LIEN)

DEFENDANT DEMONSTRATED WATER WAS NOT DIVERTED ONTO PLAINTIFF’S PROPERTY IN BAD FAITH.

The Third Department, reversing Supreme Court, determined defendant land-owner was entitled to summary judgment dismissing the complaint alleging the improper diversion of water onto plaintiff's property:

“Landowners making improvements to their land are not liable for damage caused by any resulting flow of surface water onto abutting property as long as the improvements are made in a good faith effort to enhance the usefulness of the property and no artificial means, such as pipes and drains, are used to divert the water thereon” … . “Thus, a plaintiff seeking to recover must establish that the improvements on the defendant's land caused the surface water to be diverted, that damages resulted and either that artificial means were used to effect the diversion or that the improvements were not made in a good faith effort to enhance the usefulness of the defendant's property”… .

Defendant averred that the complained-of work involved the removal of 17 to 25 cubic yards of soil around the entrance to the culvert and that it did not artificially channel water onto plaintiffs' property. He also stated that he performed the work in a good faith effort to create a detention area that would remediate drainage issues on his property in the event that the flow through the culvert was slow or blocked. Defendant further submitted the affidavit of a neighbor of the parties, a civil engineer with experience in stormwater management, who opined that the work did improve drainage and had no effect on the amount of water flowing onto plaintiffs' property. Defendant accordingly met his prima facie burden of demonstrating his entitlement to summary judgment, shifting the burden to plaintiffs to demonstrate that the changes were undertaken in bad faith or diverted additional water onto their property by artificial means… . Silverman v Doell, 2016 NY Slip Op 03054, 3rd Dept 4-21-16


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