Real Property Law – Page 35 – New York Appellate Digest

Fact Deed Not Recorded Did Not Rebut Presumption of Delivery and Acceptance of Deed

In reversing Supreme Court, the Second Department determined the proof in this action to quiet title demonstrated that plaintiff’s decedent was the rightful owner of the subject property. The Second Department noted the fact that the deed was not recorded did not overcome the presumption of delivery and acceptance of the deed:

Although the presumption of delivery and acceptance of a deed as of its date “must yield to opposing evidence…, here, no admissible evidence which would have overcome the presumption was presented in opposition to the evidence showing that the 1996 deed was executed in the presence of and delivered to the parties’ mutual attorney …. The fact that the deed was not recorded was not sufficient evidence to overcome the presumption of delivery of the deed to the attorney, the mutual agent of both parties, since recording is not required in order to transfer title to real property (see Real Property Law § 291). No evidence was presented that the delivery of the deed on the date of its execution was conditional. Saline v Saline, 2012 NY Slip Op 03827, 2nd Dept, 5-29-13

May 29, 2013

Erroneous Boundary Line Agreement Presents Triable Issue of Fact Re: Liability of Title Insurance Company

In reversing Supreme Court, the Second Department determined there was a triable issue of fact about whether the defendant title insurance company was liable for a defect in title (boundary line agreement) which resulted in plaintiffs owning half the property they thought they were purchasing:

…Chicago Title established, prima facie, that the defect in title fell within exclusion 3(c) of the policy, which excludes from coverage defects “resulting in no loss or damage to the insured claimant.” Chicago Title presented an affidavit from a certified real estate appraiser opining that the plaintiffs have not sustained any loss in property value as a result of the boundary line agreement. Indeed, Chicago Title’s appraiser opined that the boundary line agreement resulted in a benefit to the plaintiffs and added significant value to their property due to the government’s maintenance and nourishment of the beach. In opposition, however, the plaintiffs raised a triable issue of fact as to whether they suffered a loss or damages as a result of the defect in title. The plaintiffs submitted an affidavit of their certified real estate appraiser, who opined that the total loss to the plaintiffs of all title to the portion of their purchased premises lying to the south of the 188-foot line constituted a measurable diminution in the value of the plaintiffs’ purchase. In light of these conflicting expert opinions, there is a triable issue of fact as to whether the plaintiffs sustained a loss or damages as a result of the defect in title …. Nastasi v County of Suffolk, 2013 NY Slip Op 03824, 2nd Dept, 5-29-13

May 29, 2013

Real Property Law, Trusts and Estates

Will Provisions Can Not Be “Re-Written” by Court Even If Intestacy Results

In determining Surrogate’s Court properly determined mortgages secured by notes represented personal property and not “interests in real property” within the meaning of the will, the Second Department wrote:

Here, as the Surrogate’s Court properly recognized, notes secured by mortgages are generally construed to be personal property…, and there is nothing in the language of the decedent’s will that manifests an intent to include the subject notes within the clause devising his “interests in real property” to the petitioner. The construction suggested by the petitioner cannot be accepted since the court should not rewrite a will or supply an omission not necessarily implied by the language used, even though intestacy with respect to a particular asset results … . Matter of Cincotta, 2013 NY Slip Op 03671, 2nd Dept, 5-22-13

May 22, 2013

Real Property Law

Adverse Possession Not Demonstrated

In reversing the adverse-possession ruling in favor of the plaintiffs, because the proof showed only non-exclusive, sporadic and incomplete use of the land, the Third Department wrote:

…[W]e conclude that plaintiffs’ vague testimony did not establish by clear and convincing evidence that they ever cultivated and improved the entire .17 acre of the disputed area, or that they usually cultivated and improved even a small portion of the disputed area for the full 10-year requisite time period. That is, the minimal and sporadic use that was demonstrated is insufficient, as a matter of law, to constitute the requisite cultivation or improvement …. Further, in light of Powell’s testimony that he cared for the disputed area for defendants, plaintiffs cannot establish the “exclusivity” element, which requires a showing that “the adverse possessor . . . alone care[d] for or improve[d] the disputed property as if it were his/her own”…. Robbins v Schiff, 514749, 3rd Dept, 5-9-13

May 9, 2013

Eminent Domain, Real Property Law

Public Access Easement to Recreation Area Granted; Public Hearing Not Required

In a full-fledged opinion by Justice Stein, the Third Department upheld the grant of a petition pursuant to the Eminent Domain Procedure Law (EDPL) to acquire a public access easement over private land abutting a recreation area on land owned by a hydroelectric facility. The condemnation proceeding was triggered when the owner of the private property abutting the recreation area blocked roads which for years had provided public access to the recreation area. In a lengthy and detailed opinion, the Third Department explained the applicable procedures pursuant to the EDPL and why statutory exemptions to the public hearing requirement of the EDPL applied in this case. In the Matter of Eagle Creek Land Resources, LLC, et al v Woodstone Lake Development, LLC, 514046, 3rd Dept, 5-9-13

May 9, 2013

Civil Procedure, Contract Law, Real Property Law

Statute of Frauds Precluded Real Property-Related Action; Equitable Part Performance Doctrine Not Applicable

The Second Department determined the statute of frauds barred the real-property-related action and, since the action was brought “at law,” the equitable “part performance” doctrine could not be applied:

Here, the County established, prima facie, that there is no extant writing subscribed by the County or its agent referencing an alleged oral agreement involving real property, as described by the plaintiff (see General Obligations Law § 5-703[3];…). In opposition, the plaintiff failed to raise a triable issue of fact. “Part performance by the party seeking to enforce [a] contract [for the sale of real property] may be sufficient in some circumstances to overcome the statute of frauds, but only in an action for specific performance” (…see General Obligations Law § 5-703[4];…). Since, here, the action is pleaded as one at law, and seeks only money damages, without any specific prayer for equitable relief, the plaintiff cannot rely on the doctrine of part performance to defeat the statute of frauds defense …. Accordingly, the Supreme Court should have granted the County’s motion for summary judgment dismissing the complaint, based on the statute of frauds. Zito v County of Suffolk, 2013 NY Slip Op 03324, 2nd Dept, 5-8-13

May 8, 2013

Contract Law, Corporation Law, Environmental Law, Real Property Law

The Term “Release” (Re Hazardous Substances) Did Not Apply to Migration of Hazardous Substance to Neighbor’s Property Underground

The Third Department determined there were two equally plausible interpretations of the term “sellers” as used in the contract, rendering the contract ambiguous. Therefore, the motion to dismiss the complaint prior to discovery was properly denied. In addition, the Third Department determined that the term “release” (re: hazardous substances) did not extend to the migration of hazardous substances to neighboring properties under ground:

…[The provision] requires indemnification for environmental claims related to, among other things, a “Release” of hazardous substances “at locations other than [500 Beech].” “Release” is defined to include “any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, dumping or disposing of any Hazardous Material into the environment.” In its Canadian action, the neighbor alleged that contaminants – which would be classified as “Hazardous Materials” under the agreement – in the ground at 500 Beech migrated into the soil and groundwater at 606 Beech. There is no allegation that hazardous substances were spilled, leaked or otherwise disposed of directly onto the property at 606 Beech. Rather, the allegation is that the flow of underground water carried those substances from 500 Beech, where they had been spilled or leaked, to the neighboring property. Although the hazardous substances eventually wound up at 606 Beech, there is no support for an allegation that the “Release” of those substances occurred at a location other than 500 Beech. Vectron International, Inc, v Corning Oak Holding, Inc, 515408, 3rd Dept, 5-2-13

May 2, 2013

Real Property Law, Trusts and Estates

Elements of Constructive Trust Not Demonstrated

The plaintiff had conveyed her 25% interest in real property to her cousin, allegedly with the understanding plaintiff would share in the proceeds if the property were sold. Eventually the cousin was deeded 100% of the property. The cousin lived on the property from 1989 to 2005. The cousin deeded the property to her brother and his wife, the defendants. The defendants maintained the house and paid taxes on it, although they did not live there. The plaintiff did not contribute to the property maintenance or taxes and did not submit any proof that the defendants had been unjustly enriched by owning the property (i.e. rental income). The Second Department upheld the referee in finding that the plaintiff had not proved the elements of a real-property constructive trust. The Second Department explained the elements as follows:

“The elements of a constructive trust are a confidential or fiduciary relationship, a promise, a transfer in reliance thereon, and unjust enrichment… . These requirements, however, are not to be rigidly applied …. The ultimate purpose of a constructive trust is to prevent unjust enrichment, and it will be imposed ” [w]hen property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest'” …. Broderson v Parsons, 2013 NY Slip Op 03050, 2nd Dept, 5-1-13

May 1, 2013

Civil Procedure, Landlord-Tenant, Real Property Law

Class Certification Properly Granted; Rent Overcharge and Attorney’s-Fees Claims Did Not Seek “Penalties” In Violation of CPLR 901

The First Department affirmed the grant of class certification in a landlord-tenant action finding that plaintiff’s rent overcharge claim and attorney’s-fees claim did not seek “penalties” in violation of CPLR 901. There was a dissent. The First Department wrote:

Although plaintiff did not waive her right to reimbursement for alleged overcharges and interest, these claims did not render her action an action for a penalty for purposes of CPLR 901(b), even though such recovery is denominated a penalty by the RSL [Rent Stabilization Law], because they lack a punitive, deterrent and litigation-incentivizing purpose ….

Nor did the attorneys’ fees request seek a penalty, as the general right to attorneys’ fees in landlord-tenant proceedings (Real Property Law § 234) does not apply to administrative proceedings …, and the RSL provision should be understood as having the same nonpunitive purpose as the statute applicable to actions and summary proceedings. Notably, the reference in Rent Stabilization Code (9 NYCRR) § 2526.1(d) to attorneys’ fees as an “additional penalty,” while otherwise not dispositive, is absent from the attorney fee provision in the legislatively enacted RSL. Gudz v Jemrock Realty Co, LLC, 2013 NY SlipOp 02814, 1st Dept, 4-25-13

April 25, 2013

Foreclosure, Real Property Law

Tenancy by the Entirety Extinguished When Both Husband and Wife Convey their Interests to Same Grantee, Who then Conveys His Interest Back to the Husband and Wife

Both the appellant and her husband had separately transferred their interests in property to the same grantee, defendant Feliciano. Feliciano then mortgaged the property and executed a deed transferring 99% of the property back to appellant and her husband. Feliciano was alleged to have defaulted. The appellant moved for summary judgment in the foreclosure action contending the tenancy by the entirety, created when she and her husband first bought the property, was never terminated. In affirming the denial of appellant’s motion to dismiss, the Second Department wrote:

…[W]here a tenancy by the entirety is created, “there is nothing in New York law that prevents one of the co-owners from mortgaging or making an effective conveyance of his or her own interest in the tenancy . . . subject to the continuing rights of the other” …. “[T]he interest acquired by a grantee or mortgagee of such a unilateral conveyance is not denominated a tenancy by the entirety, but rather is labeled a tenancy in common”; however, “the grantee’s or mortgagee’s rights in the property are essentially the same as those possessed by the grantor or mortgagor: a right to shared possession and ownership subject to the original cotenants’ reciprocal rights of survivorship” … . …[W]here, as here, the interests separately conveyed away by both spouses are unified in a single grantee, the tenancy by the entirety is extinguished by merger, since the sequence in which the grantors die will no longer affect the disposition of title …. “Separate conveyances by each tenant to the same grantee . . . terminate the tenancy by the entirety vesting the entire estate in that grantee” …. Deutsche Bank Nation Trust Co v Feliciano, et al, 2013 NY Slip Op 02531, 2012-00130, Index No 18752/08, 2nd Dept, 4-17-13

April 17, 2013