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Pre-2008 Criteria for Adverse Possession Explained

Applying the law of adverse possession as it was in 2002 (the legislature changed the law in 2008), the Second Department determined plaintiffs had demonstrated they acquired land enclosed by a fence by adverse possession:

In 2008, the Legislature enacted changes to the adverse possession statutes … . Here, however, since title to the disputed property allegedly vested in the plaintiffs by adverse possession in 2002 at the latest, the law in effect prior to the amendments is applicable … . Accordingly, the plaintiffs were required to demonstrate that their possession was “(1) hostile and under a claim of right, (2) actual, (3) open and notorious, (4) exclusive, and (5) continuous for the statutory period of 10 years” … . Additionally, under the former version of RPAPL 522 that was in effect at the relevant time, the plaintiffs were required to establish that the disputed area was either “usually cultivated or improved” or “protected by a substantial inclosure” … . “Since adverse possession is disfavored as a means of gaining title to land, all elements of an adverse possession claim must be proved by clear and convincing evidence” … .

Here, the plaintiffs demonstrated their prima facie entitlement to judgment as a matter of law declaring that they were the owners of the disputed property by adverse possession. They submitted evidence that the disputed property had been enclosed by fencing since at least 1992, and that both the plaintiffs and their predecessor in interest cultivated and maintained the lawn on their side of the fence until 2010, while the property on the defendant’s side of the fence was wooded and remained uncultivated. Warren v Carreras, 2015 NY Slip Op 07967, 2nd Dept 11-4-15

 

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Dismissal of Criminal Case Did Not Collaterally Estop Civil Case Based Upon the Same Forged-Deed Allegation/No Statute of Limitations Applies to Case Based Upon Forged-Deed Allegation

In an action based upon the allegation the signature on a deed was forged, the Third Department determined no statute of limitations applies to forged deeds which are void ab initio and the dismissal of a Spanish criminal case based upon the forged-deed allegation did not collaterally estop the New York civil action:

We agree with plaintiffs that they are not collaterally estopped from maintaining this action. It is well established that “dismissal of a criminal charge . . . does not generally constitute collateral estoppel in relation to a civil action because of the difference in the burden of proof to establish the factual issues” … . Indeed, the Spanish court dismissed the Spanish criminal action “without prejudice,” expressly permitting the matter to “be referred to civil jurisdiction.” Inasmuch as this dismissal of the Spanish criminal action did not conclusively establish whether the signature was forged, and did not preclude plaintiffs from commencing a similar civil action, defendants have failed to satisfy their burden of proving “that this identical issue was necessarily decided in the [prior action] and is conclusive in the [present] action” … .

Nor should plaintiffs’ action have been deemed time-barred by the statute of limitations. While the limitations period for a cause of action sounding in fraud is the greater of six years after the cause of action accrued or two years after it could have been discovered with reasonable diligence (see CPLR 213 [8]), the Court of Appeals has recently held that this period does not apply when the particular species of fraud alleged is the forgery of a deed. The Court found that, unlike other fraud-based causes of action, “a claim against a forged deed is not subject to a statute of limitations defense” because of “the clarity of our law that a forged deed is void ab initio, and that it is a document without legal capacity to have any effect on ownership rights” … . Mazo v Mazo, 2015 NY Slip Op 07721, 3rd Dept 10-22-15

 

Question of Fact Whether Abutting Landowners Owned to the Centerline of the Roadway Bed, Relevant Law Explained

Reversing Supreme Court, the Second Department determined there was a question of fact whether abutting landowners owned to the centerline of a roadway bed, or whether defendants had acquired title to the roadway bed. The court explained the relevant analytical criteria:

” [W]hen an owner of property sells a lot with reference to a map, and the map shows that the lot abuts upon a street, the conveyance presumptively conveys fee ownership to the center of the street on which the lot abuts, subject to the rights of other lot owners and their invitees to use the entire area of the street for highway purposes'” … .

“The presumption is not, however, inflexible and will yield to a showing in the deed of a contrary intent to exclude from the grant the bed of the street” … . Indeed, the presumption can be rebutted ” by determining the intent of the parties gathered from the description of the premises [conveyed] read in connection with the other parts of the deed, and by reference to the situation of the lands and the condition and relation of the parties to those lands and other lands in the vicinity'” … . Thus, the presumption can be rebutted by a showing in the deed of a contrary intent to exclude from the grant the bed of the street … . Stanley Acker Family L.P. v DePaulis Enters. V, Ltd., 2015 NY Slip Op 07259, 2nd Dept 10-7-15

 

Requirements of Adverse Possession by “Tacking” Explained (Not Met Here)

In affirming the grant of defendant’s motion for summary judgment dismissing the complaint claiming adverse possession of a strip of land, the Second Department explained the requirements for adverse possession by “tacking” the possession of prior owners:

A party claiming adverse possession may establish possession for the statutory period by “tacking” the time that the party possessed the property onto the time that the party’s predecessor adversely possessed the property … . Tacking is permitted where there is an “unbroken chain of privity between the adverse possessors” … . For tacking to apply, a party must show that the party’s predecessor “intended to and actually turned over possession of the undescribed part with the portion of the land included in the deed” … . In order to succeed on a claim of adverse possession, a party must provide clear and convincing evidence that the possession was “hostile and under a claim of right”; (2) actual; (3) open and notorious; (4) exclusive; and (5) “continuous for the statutory period of 10 years” … . The party must also show that the disputed property was “usually cultivated or improved” or “protected by a substantial inclosure” (RPAPL former § 522 …). Munroe v Cheyenne Realty, LLC, 2015 NY Slip Op 06902, 2nd Dept 9-23-15

 

Deed-Escrow Conditions Never Satisfied—Transfer Never Took Place

The Second Department explained that property is not transferred until the escrow conditions (re: a deed held in escrow) are satisfied:

“When a deed is delivered to be held in escrow, the actual transfer of the property does not occur until the condition of the escrow is satisfied and the deed is subsequently delivered to the grantee by the escrow agent” … . Here, in support of their motion for summary judgment dismissing the complaint, the defendants established their prima facie entitlement to judgment as a matter of law … by submitting, inter alia, an escrow agreement … entered into by the plaintiff and the defendant … . Pursuant to the agreement, an escrow agent was required to hold the deed to the subject property until the plaintiff paid certain sums due on a purchase money mortgage. The evidence proffered by the defendants established, prima facie, that the plaintiff failed to satisfy the aforementioned condition of the escrow agreement and, thus, actual transfer of the subject property to the plaintiff never took place. Xui v Iron City Properties, Inc., 2015 NY Slip Op 06898, 2nd Dept 9-23-15

 

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A Town’s Zoning Powers Include the Creation of a Zoning District for Senior Citizens—Residents of a Retirement Community Had the Power to Enforce the Zoning Ordinance Limiting the Use of the Community Portion of a Building to Community Residents—Agreement to Pay Social Membership Fees Re: a Community Golf Course Constituted a Covenant Which Ran with the Land

The Second Department, in a detailed decision dealing with many issues, resolved a dispute concerning the use of the community portion of a building within a retirement community, which included a golf course. The plaintiffs (residents) alleged the community portion of the building was to be used solely by the community residents and should not be used for special events involving non-residents. The Second Department determined (1) the plaintiffs had the power to enforce the zoning ordinance requiring that the community portion of the building be for the exclusive use of the retirement-community (over 55) residents, (2) the residents were benefitted by easements over the common areas held by the defendants and therefore were obligated to share in the cost of maintenance of those areas, and (3) the requirement that the residents pay social membership fees (re: the golf course) was a covenant which ran with the land, binding subsequent purchasers. The Second Department specifically held that zoning ordinances may properly create a zoning district for senior citizens:

… Town Law § 268(2) permits the individual plaintiffs to enforce the Town Code § 198-21.2(F)(1)(b) to the extent it gives them exclusive use of the community building portion of the combined building. The defendants contend, however, that even if the individual plaintiffs may use Town Law § 268(2) to seek enforcement of this portion of Town Code § 198-21.2(F)(1)(b), it, in fact, may not be enforced because the Town lacked the authority to regulate who owns or occupies land …  . A town does not act in excess of its authority when it creates a zoning district for senior citizens …, or when it limits the occupancy of dwelling units within a planned retirement community to persons aged 55 or over … . Since these are valid exercises of a town’s zoning power, it must follow that a town may also limit the use of a recreational facility within a senior residential community to those seniors living there.  * * *

The defendants were given an easement over the common areas and common elements, including roadways, walkways, and landscaped areas, for ingress, egress, and the retrieval of golf balls. … Generally, absent an express agreement, all persons benefitted by an easement must share ratably in the cost of its maintenance and repair … .  * * *

…[T]the defendants established that the covenant to pay social membership fees runs with the land, as the record demonstrates that the “grantor and grantee intended that the covenant should run with the land,” “the covenant is one touching or concerning the land with which it runs,” and “there is privity of estate between the . . . party claiming the benefit of the covenant and the right to enforce it, and the . . . party who rests under the burden of the covenant” … . Greens at Half Hollow Home Owners Assn., Inc. v Greens Golf Club, LLC, 2015 NY Slip Op 06887, 2nd Dept 9-23-15

 

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Requirements for an Easement In Favor of Public Use Not Met

The Second Department determined the city had failed to demonstrate that an unmapped roadway used since the 1970’s had become a public highway under the Highway Law, and the city failed to demonstrate an “easement in favor of public use” existed over the portion of the roadway which was on defendant’s land. The “Highway Law” statute invoked by the city applied only to towns, not cities. And the requirements for an easement in favor of public use had not been demonstrated. The court explained the easement requirements:

The City argues … that an easement in favor of the public was created over the defendant’s property pursuant to the common-law doctrine of dedication. This doctrine requires evidence of the owner’s intent to dedicate the property for public use and acceptance of the dedication by the public authorities … . Here, however, the City’s submissions in support of its motion for summary judgment failed to establish, prima facie, that the defendant’s land had been dedicated to the use of public travel by any prior owner or the defendant. City of New York v Gounden, 2015 NY Slip Op 06569, 2nd Dept 8-19-15

 

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Purported Deed Was Actually an Usurious Mortgage—All Related Transfers and Encumbrances Void

The Second Department determined a deed purporting to transfer property was actually an usurious mortgage and therefore void.  All further attempted transfers of the property were therefore a nullity.  The deed was provided in return for a $200,000 loan requiring repayment of $220,000 in 90 days. The transaction was therefore an illegal mortgage with a 40% annual interest rate:

Real Property Law § 320 provides, in pertinent part, that a “deed conveying real property, which, by any other written instrument, appears to be intended only as a security in the nature of a mortgage, although an absolute conveyance in terms, must be considered a mortgage” (Real Property Law § 320…). 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'” … . Thus, ” a court of equity will treat a deed, absolute in form, as a mortgage, when it is executed as a security for a loan of money. That court looks beyond the terms of the instrument to the real transaction; and when that is shown to be one of security, and not of sale, it will give effect to the actual contract of the parties'”… .  * * *

Real Property Law § 245 provides that a “greater estate or interest does not pass by any grant or conveyance, than the grantor possessed or could lawfully convey, at the time of the delivery of the deed.” Thus, “conveyances of land to which the grantors had no title convey no interest to the grantees” … . Likewise, “[i]f a document purportedly conveying a property interest is void, it conveys nothing, and a subsequent bona fide purchaser or bona fide encumbrancer for value receives nothing”… . Bouffard v Befese LLC, 2013 NY Slip Op 07925, 2nd Dept 11-27-13

 

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Although Plaintiff Limited Liability Company’s Articles of Incorporation Were Not Filed When It Took Title to Real Property—It May Have Validly Taken Title Pursuant to the “De Facto Corporation Doctrine”

The Second Department determined the defense motion to dismiss based upon documentary evidence was properly denied. Plaintiff limited liability company was able to demonstrate that it may be entitled to a declaration that it was the fee simple owner of property under the “de facto corporation doctrine.” When plaintiff limited liability company took title, the company was not yet “in legal existence” because all the necessary documents had not been filed. Under the “de facto corporation doctrine” the limited liability company could be deemed to have taken title if (1) a law existed under which it might be organized, (2) there was an attempt to organize, and (3) there was an exercise of corporate powers thereafter:

Here, the documentary evidence submitted by [defendants] in support of their motion demonstrated that the plaintiff’s articles of organization had not been filed with the New York State Department of State prior to the conveyance to the plaintiff of the subject property. However, in opposition to the motion, the plaintiff submitted the affidavit of its sole member, which demonstrated the applicability of the de facto corporation doctrine … . Specifically, the affidavit of the plaintiff’s sole member demonstrated that there was a law under which the LLC might be organized (see Limited Liability Law §§ 203, 209), that the plaintiff made a “colorable attempt” to comply with the statutes governing the formation of an LLC, including the filing requirement, and that the plaintiff exercised its powers as an LLC thereafter… . Lehlev Betar, LLC v Soto Dev. Group, Inc., 2015 NY Slip Op 06496, 2nd Dept 8-12-15

 

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Petition Sufficiently Alleged the Town’s Restrictive Covenant Was Invalid (1) Because It Sought to Regulate the Owner of Land Rather than the Use of the Land, (2) Because It No Longer Could Accomplish Its Purpose, and (3) Because It Effected an Unconstitutional Taking of Petitioner’s Land

The Second Department determined petitioner had stated causes of action contesting the validity and enforceability of a restrictive covenant promulgated by the town requiring that condominiums built by petitioner be sold rather than leased. Petitioner had sufficiently alleged (1) the restrictive covenant was invalid because it regulated the person who owned the land (petitioner) rather than the use of the land, (2) the restrictive covenant was not enforceable because its purpose could not be accomplished, and (3) the restrictive covenant amounted to an unconstitutional taking. The court explained the applicable legal principles:

The power to zone “is not a general police power, but a power to regulate land use” … . “It is a fundamental rule that zoning deals basically with land use and not with the person who owns or occupies it'” … . Furthermore, ” a zoning ordinance will be struck down if it bears no substantial relation to the police power objective of promoting the public health, safety, morals or general welfare'” … .

“[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” … . However, even the ” [p]urchase of property with knowledge of [a] restriction does not bar the purchaser from testing the validity of the zoning ordinance [because] the zoning ordinance in the very nature of things has reference to land rather than to owner'” … .

…[Petitioner] sufficiently alleged that the restrictive covenant is improper because it regulates [petiioner’s] ability as the owner of the property to rent the units rather than the use of the land itself. [Petitioner] has further alleged that, particularly in light of the provision permitting future owners to lease units in the development, the restrictive covenant “bears no substantial relation to . . . the public health, safety, morals or general welfare”… .

“Pursuant to RPAPL 1951(1), a restrictive covenant shall not be enforced if, at the time enforceability of the restriction is brought into question, it appears that the restriction is of no actual and substantial benefit to the persons seeking its enforcement or seeking a declaration or determination of its enforceability, either because the purpose of the restriction has already been accomplished or, by reason of changed conditions or other cause, its purpose is not capable of accomplishment, or for any other reason'” . Here, assuming that there is a benefit to be obtained by requiring the units to be sold rather than rented, [petitioner] has alleged that, because the rental restriction imposed by the restrictive covenant applies only to it and not to any subsequent owner of any of the units in the planned development, it is of no substantial benefit to the Town or its citizens. In support of its motion to dismiss, the Town has offered no explanation as to why this is not so. … * * *

With respect to the third cause of action, which alleged an unconstitutional taking based upon “denial of development, as opposed to excessive exactions” …, the test set forth by the United States Supreme Court in Agins v City of Tiburon (447 US 255) applies … . Pursuant to this test, “a zoning law effects a regulatory taking if either: (1) the ordinance does not substantially advance legitimate state interests’ or (2) the ordinance denies an owner economically viable use of his land'” … . However, “[a] reasonable land use restriction imposed by the government in the exercise of its police power characteristically diminishes the value of private property, but is not rendered unconstitutional merely because it causes the property’s value to be substantially reduced, or because it deprives the property of its most beneficial use” … . Thus, a court must examine “(1) [t]he economic impact of the regulation on the claimant’; (2) the extent to which the regulation has interfered with distinct investment-backed expectations’; and (3) the character of the governmental action'”… . Blue Is. Dev., LLC v Town of Hempstead, 2015 NY Slip Op 06488, 2nd Dept 8-12-15

 

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