Real Property Law

Separation of Dominant and Servient Estates

Simone v. Heidelberg

NYLJ 11/16/07, p. 27, col. 1

Court of Appeals (Opinion by Ciparick, J.)

In an action to declare that an easement was not recreated upon separation of the dominant and servient estates, servient owner appealed from the Appellate Division's determination that the easement had been recreated. The Court of Appeals reversed and reinstated the Supreme Court's judgment declaring that the easement had been terminated upon unification of dominant and servient estates, and had not been recreated when the common owner subsequently sold off the servient estate.

In 1933, owners of adjacent parcels on Staten Island entered into a reciprocal common driveway easement by the terms of which each owner enjoyed the right to use part of the other owner's parcel as a driveway. The easement was of particular importance for one of the parcels (the dominant parcel), because the easement was necessary to permit access to a garage structure on the rear of that parcel. In 1978, the two parcels were acquired by a common owner, terminating the easement. Then, in 1982, common grantor sold off the servient parcel without reference to any driveway easement. Two years later, the grantor sold off the dominant parcel under a deed that purported to convey an easement permitting purchaser to use the easement over servient owner's parcel. The respective parcels were subsequently sold to the current plaintiff and defendant. In 2003, owner of the dominant parcel removed a 50-foot tree and a fence that had been blocking all access to the garage on the dominant parcel in order to permit access across the easement. Servient owner then brought this action for a declaration that the easement was no longer in force or effect. Supreme Court granted servient owner the requested declaration, but the Appellate Division reversed, concluding that the easement was recreated when the properties were separately sold while the owners of the servient parcel had actual knowledge of the easement. Servient owner appealed.

In reversing, the Court of Appeals started by noting that all parties agreed that the easement had been extinguished when the parcels came under common ownership. The court then rejected dominant owner's claim that the easement had been recreated when the common grantor transferred the dominant parcel to the dominant owner at a time when the servient owner had actual knowledge of the easement. The court noted that the common grantor had first conveyed the servient parcel by a deed that made no reference to the easement. That deed did not re-create an easement in favor of the common grantor. After that point, the common grantor had no power to convey an easement over servient owner's land. Hence, the subsequent conveyance to the dominant owner could not have recreated the easement. Finally, the court rejected dominant owner's contention that an easement arose by necessity because the dominant owner had no other way to get to the garage. The court noted that no need to use the easement arose until dominant owner cut down the tree ' 21 years after severance of the estates. Hence, no easement by necessity could have arisen at the time of severance. Moreover, the need to access off-street parking did not, in any event, constitute the sort of necessity that would lead to recognition of an easement by necessity.

 

Due Date of Mortgage's Final Installment

Plaia v. Safonte

NYLJ 11/26/07, p. 27, col. 3

AppDiv, Second Dept

(memorandum opinion)

In a mortgage foreclosure action, mortgagors appealed from the Supreme Court's denial of their summary judgment motion, which was based on the statute of limitations. The Appellate Division affirmed, holding that mortgagee had raised questions of fact about when the final installment became due.

On July 8, 1988, mortgagors executed a $50,000 note, secured by a mortgage on the subject premises. The mortgage provided that it would be self-amortizing over a 15-year period, but it also provided for monthly installments to be made on the seventh day of every month commencing Aug. 7, 1988, and continuing until Aug. 7, 1999, when the entire unpaid principal and interest would become due. No payments have been made on the mortgage since November 1995. Mortgagees brought this foreclosure action on Oct. 17, 2005. Mortgagors sought summary judgment, contending that the last payment was due Aug. 7, 1999, and arguing that the six-year statute of limitations barred the claim. The Supreme Court denied the motion and mortgagors appealed.

In affirming, the Appellate Division acknowledged that the statute of limitations on a foreclosure claim runs from the due date for each installment, or from the time the mortgagee is entitled to demand full payment. The court conceded that mortgagors had made a prima facie showing of entitlement to summary judgment by pointing to the stated due date for the final balloon payment to be due on Aug. 7, 1999. The court concluded, however, that mortgagees had raised triable issues of fact about whether the final payment was to be due on that date or on Aug. 7, 2003, when the final monthly payment became due based on the self-amortization schedule. As a result, summary judgment was not warranted.

 

Voluntary Payment Doctrine Inapplicable

MacDonell v. PHH Mortgage Corp.

NYLJ 11/13/07, p. 37, col. 3

AppDiv, Second Dept (memorandum opinion)

In a putative class action by mortgagors against mortgage company for charging a $40 fee for faxing payoff statements to mortgagors, both parties appealed from a Supreme Court order dismissing mortgagors' actions for unjust enrichment, conversion, and for money had and received, and refusing to dismiss claims pursuant to Real Property Law section 274-1(2) and General Business Law section 349(a).

Mortgagors mortgaged their premises to the mortgage company. In anticipation of sale, they requested a payoff statement. Mortgage company forwarded the payoff statement, which included a $40 fee labeled 'unpaid other fees.' The parties agree that this fee was a charge for faxing payoff statements to mortgagors. Mortgagors paid the fee, conveyed title, and then brought this action contending that mortgage company had violated RPL section 274-a(2), which provides that a mortgagee may not charge 'for providing the mortgage-related documents,' but may charge 'not more than twenty dollars, or such amount as fixed by the banking board, for each subsequent payoff statement.' Mortgagors also alleged that mortgagee's charges constituted consumer fraud in violation of GBL 349, and alleged causes of action for unjust enrichment, conversion, and money had and received.

In affirming the Supreme Court's determination, the Appellate Division agreed with that court that the voluntary payment document barred mortgagors' common law claims. The Appellate Division also agreed with the Supreme Court's determination that the voluntary payment doctrine did not bar the statutory causes of action, and that the complaint adequately stated causes of action for violation of both statutes. Hence, mortgagee was not entitled to dismissal of the complaint.

COMMENT

The voluntary payment doctrine disallows recovery of payments made by a party to a contract if the party made the payment while not operating under either mistake of fact or law. Most often the issue arises in cases when a party tries to recover money for payments in excess of those required by the terms of the contract. Thus, in Eighty Eight Bleecker Co., LLC v. 88 Bleecker Street Owners, Inc., 34 A.D.3d 244, the court applied the voluntary payment doctrine to bar tenant's recovery of overpayments on a lease, emphasizing that tenant's payments demonstrated a marked lack of diligence. In Eighty Eight Bleecker, landlord had billed tenant for more than the leasehold amount for over 20 years, and tenant paid the amounts billed. In denying tenant recovery for overpayments, the court held that the statute of limitations barred some of the claims, but applied the voluntary payment doctrine to bar recover for the remaining claims, explaining that the lessee was a sophisticated entity who had participated in the drafting of the lease and who had been represented by a law firm at all times. The court emphasized that tenant only needed to check the rent provisions in the lease against the rent bills he was receiving to find the discrepancy. (See also Lavin v. Town of East Greenbush, 17 Misc.3d 766, where the court applied the voluntary payment doctrine in an action by a town to recover overpayments it made under the General Municipal Law Section 207-m.)

Although the court in Eighty Eight Bleecker concluded applied the voluntary payment document because tenant could so easily have discovered the billing error, in other cases, courts have suggested that the voluntary payment doctrine does not apply where a party was operating under a mistake of fact or law. Thus, in Fashion Bug No.2100 of Batavia, Inc. v. 425 West Main Associates (Batavia) LP, 10 Misc.3d 1053(A), the court held the voluntary payment doctrine inapplicable when lessee made payments in the mistaken belief that the entire adjacent premises were continuously occupied by a single-user tenant as stated under the contract. Under the lease agreement, the lessee was entitled to abatement of rent if the adjacent tenant ceased operations and until a single-user tenant was found to replace them. Lessee continued to make payments even after the adjacent premises were used by two retail operations. The court held the voluntary payment doctrine did not bar lessee from its claim for rent abatement, reasoning that lessee was operating under a mistake of fact, as it did not know of the changed tenant circumstances and acted promptly upon discovering the problem.

The First Department, applies voluntary payment doctrine to bar both statutory and common law claims. See Westfall v. Chase Lincoln First Bank, N.A., 258 A.D.2d 299, where the court applied voluntary payment doctrine to bar claims for breach of contract, unjust enrichment, as well as claims pursuant to General Business Law section 349. By contrast, the Second Department has held that the doctrine does not apply to statutory claims. Thus, in Dowd v. Alliance Mortgage Co., 32 A.D.3d 894, the court sustained statutory claims by mortgagors under the General Business Law section 349, while holding that the voluntary payment doctrine required dismissal of common-law claims.

 

No Duty to Warn of Condition on Neighboring Land

Bhandari v. Isis

NYLJ 11/19/07, p. 36, col. 2

AppDiv, Second Dept (memorandum opinion)

In an action by tenants who lived in a two-family home for personal injuries suffered by infant plaintiff in a swimming pool located on neighboring land, tenants appealed from the Supreme Court's grant of summary judgment to New York City dismissing infant plaintiff's claim for failure to investigate a code violation. Owner of the two-family home cross-appealed from the Supreme Court's denial of her summary judgment motion. The Appellate Division modified to grant the owner's summary judgment motion, holding that owner had no duty to warn the infant or his parents of the dangerous condition on neighboring premises.

On Oct. 22, 2000, tenants' son was seriously injured when he fell into a swimming pool maintained by a neighbor. The son remains in a vegetative state. Although there was a three-foot fence between the neighbor's backyard and the owner's yard, the neighbor had not installed a gate to block access to his pool from a neighboring alleyway. In July 2000, before the accident, the city Department of Buildings had received a complaint that neighbor was building the swimming pool without a permit. The Department, however, did not investigate the complaint until the day after the accident ' after expiration of the 40-day period during which regulations required investigation. Tenants then brought this action against neighbor, against the city, and against owner of the building in which tenants lived. The Supreme Court dismissed the action against the city, but not against owner of the two-family home.

In modifying, the Appellate Division first agreed with the Supreme Court that regulations mandating investigation within forty days did not create a private right of action against the city for failure to investigate. The court then turned to the claim against owner of tenants' building, and noted that as a general matter, an owner owes no duty to protect others from a dangerous condition on neighboring premises unless the owner created or contributed to that condition. Here, the court concluded that owner did not cause or contribute to the condition, and that the danger posed by the pool did not give rise to a duty to the infant plaintiff. Hence, owner was entitled to summary judgment dismissing the complaint.

COMMENT

Landowners do not have a duty to warn visitors or tenants on their property of dangers that exist on neighboring property. In Galindo v. Town of Clarkstown, 2 N.Y.3d 633, the Court of Appeals dismissed a housekeeper's claim against her employer for the death of her husband, who had been killed by a damaged tree that fell from a neighbor's yard onto the employer's driveway. The court rejected the housekeeper's argument that the employer had a duty to warn the husband that the tree had been badly damaged in a recent storm. The majority reasoned that the landowner did not have a duty to warn because he was not in a position to remedy the situation.

Landowners are only liable for conditions maintained on property adjacent to their own when they have contributed to or caused the danger. For example, in Herbert v. Rodriguez, 191 A.D.2d 887, the court denied the landowners' motion for summary judgment, holding that they could be held liable for the plaintiff's slip on an ice patch on the neighboring property because water was diverted from the landowner's property to the adjacent sidewalk causing the ice patch to form. The plaintiff presented evidence that the downspout on the landowners' property along with the inabsorbent nature of the soil at the base of the downspout caused water to be diverted to the adjacent sidewalk and turn to ice. Similarly, in Webster v. Town of Saugerties, 25 A.D.3d 861, the court denied the landowner's motion for summary judgment where a man was killed when his truck was struck by a freight train at a railroad crossing because evidence was presented that the landowner arranged with the town to relocate the railroad crossing to accommodate his business needs and that landowner was involved in maintaining the crossing. The court rejected the landowner's argument that he was not liable because he did not own the property on which the man was killed. The court reasoned that a landowner who alters and thereby causes the danger on the neighboring property and also maintains the adjacent property may be held liable for resulting injuries. In cases like Herbert and Webster, unlike Galindo and Bharandi, landowner had an obligation to cure the dangerous condition, and was subject to liability not for failure to warn, but for failure to cure the dangerous condition.

Separation of Dominant and Servient Estates

Simone v. Heidelberg

NYLJ 11/16/07, p. 27, col. 1

Court of Appeals (Opinion by Ciparick, J.)

In an action to declare that an easement was not recreated upon separation of the dominant and servient estates, servient owner appealed from the Appellate Division's determination that the easement had been recreated. The Court of Appeals reversed and reinstated the Supreme Court's judgment declaring that the easement had been terminated upon unification of dominant and servient estates, and had not been recreated when the common owner subsequently sold off the servient estate.

In 1933, owners of adjacent parcels on Staten Island entered into a reciprocal common driveway easement by the terms of which each owner enjoyed the right to use part of the other owner's parcel as a driveway. The easement was of particular importance for one of the parcels (the dominant parcel), because the easement was necessary to permit access to a garage structure on the rear of that parcel. In 1978, the two parcels were acquired by a common owner, terminating the easement. Then, in 1982, common grantor sold off the servient parcel without reference to any driveway easement. Two years later, the grantor sold off the dominant parcel under a deed that purported to convey an easement permitting purchaser to use the easement over servient owner's parcel. The respective parcels were subsequently sold to the current plaintiff and defendant. In 2003, owner of the dominant parcel removed a 50-foot tree and a fence that had been blocking all access to the garage on the dominant parcel in order to permit access across the easement. Servient owner then brought this action for a declaration that the easement was no longer in force or effect. Supreme Court granted servient owner the requested declaration, but the Appellate Division reversed, concluding that the easement was recreated when the properties were separately sold while the owners of the servient parcel had actual knowledge of the easement. Servient owner appealed.

In reversing, the Court of Appeals started by noting that all parties agreed that the easement had been extinguished when the parcels came under common ownership. The court then rejected dominant owner's claim that the easement had been recreated when the common grantor transferred the dominant parcel to the dominant owner at a time when the servient owner had actual knowledge of the easement. The court noted that the common grantor had first conveyed the servient parcel by a deed that made no reference to the easement. That deed did not re-create an easement in favor of the common grantor. After that point, the common grantor had no power to convey an easement over servient owner's land. Hence, the subsequent conveyance to the dominant owner could not have recreated the easement. Finally, the court rejected dominant owner's contention that an easement arose by necessity because the dominant owner had no other way to get to the garage. The court noted that no need to use the easement arose until dominant owner cut down the tree ' 21 years after severance of the estates. Hence, no easement by necessity could have arisen at the time of severance. Moreover, the need to access off-street parking did not, in any event, constitute the sort of necessity that would lead to recognition of an easement by necessity.

 

Due Date of Mortgage's Final Installment

Plaia v. Safonte

NYLJ 11/26/07, p. 27, col. 3

AppDiv, Second Dept

(memorandum opinion)

In a mortgage foreclosure action, mortgagors appealed from the Supreme Court's denial of their summary judgment motion, which was based on the statute of limitations. The Appellate Division affirmed, holding that mortgagee had raised questions of fact about when the final installment became due.

On July 8, 1988, mortgagors executed a $50,000 note, secured by a mortgage on the subject premises. The mortgage provided that it would be self-amortizing over a 15-year period, but it also provided for monthly installments to be made on the seventh day of every month commencing Aug. 7, 1988, and continuing until Aug. 7, 1999, when the entire unpaid principal and interest would become due. No payments have been made on the mortgage since November 1995. Mortgagees brought this foreclosure action on Oct. 17, 2005. Mortgagors sought summary judgment, contending that the last payment was due Aug. 7, 1999, and arguing that the six-year statute of limitations barred the claim. The Supreme Court denied the motion and mortgagors appealed.

In affirming, the Appellate Division acknowledged that the statute of limitations on a foreclosure claim runs from the due date for each installment, or from the time the mortgagee is entitled to demand full payment. The court conceded that mortgagors had made a prima facie showing of entitlement to summary judgment by pointing to the stated due date for the final balloon payment to be due on Aug. 7, 1999. The court concluded, however, that mortgagees had raised triable issues of fact about whether the final payment was to be due on that date or on Aug. 7, 2003, when the final monthly payment became due based on the self-amortization schedule. As a result, summary judgment was not warranted.

 

Voluntary Payment Doctrine Inapplicable

MacDonell v. PHH Mortgage Corp.

NYLJ 11/13/07, p. 37, col. 3

AppDiv, Second Dept (memorandum opinion)

In a putative class action by mortgagors against mortgage company for charging a $40 fee for faxing payoff statements to mortgagors, both parties appealed from a Supreme Court order dismissing mortgagors' actions for unjust enrichment, conversion, and for money had and received, and refusing to dismiss claims pursuant to Real Property Law section 274-1(2) and General Business Law section 349(a).

Mortgagors mortgaged their premises to the mortgage company. In anticipation of sale, they requested a payoff statement. Mortgage company forwarded the payoff statement, which included a $40 fee labeled 'unpaid other fees.' The parties agree that this fee was a charge for faxing payoff statements to mortgagors. Mortgagors paid the fee, conveyed title, and then brought this action contending that mortgage company had violated RPL section 274-a(2), which provides that a mortgagee may not charge 'for providing the mortgage-related documents,' but may charge 'not more than twenty dollars, or such amount as fixed by the banking board, for each subsequent payoff statement.' Mortgagors also alleged that mortgagee's charges constituted consumer fraud in violation of GBL 349, and alleged causes of action for unjust enrichment, conversion, and money had and received.

In affirming the Supreme Court's determination, the Appellate Division agreed with that court that the voluntary payment document barred mortgagors' common law claims. The Appellate Division also agreed with the Supreme Court's determination that the voluntary payment doctrine did not bar the statutory causes of action, and that the complaint adequately stated causes of action for violation of both statutes. Hence, mortgagee was not entitled to dismissal of the complaint.

COMMENT

The voluntary payment doctrine disallows recovery of payments made by a party to a contract if the party made the payment while not operating under either mistake of fact or law. Most often the issue arises in cases when a party tries to recover money for payments in excess of those required by the terms of the contract. Thus, in Eighty Eight Bleecker Co., LLC v. 88 Bleecker Street Owners, Inc., 34 A.D.3d 244, the court applied the voluntary payment doctrine to bar tenant's recovery of overpayments on a lease, emphasizing that tenant's payments demonstrated a marked lack of diligence. In Eighty Eight Bleecker, landlord had billed tenant for more than the leasehold amount for over 20 years, and tenant paid the amounts billed. In denying tenant recovery for overpayments, the court held that the statute of limitations barred some of the claims, but applied the voluntary payment doctrine to bar recover for the remaining claims, explaining that the lessee was a sophisticated entity who had participated in the drafting of the lease and who had been represented by a law firm at all times. The court emphasized that tenant only needed to check the rent provisions in the lease against the rent bills he was receiving to find the discrepancy. ( See also Lavin v. Town of East Greenbush, 17 Misc.3d 766, where the court applied the voluntary payment doctrine in an action by a town to recover overpayments it made under the General Municipal Law Section 207-m.)

Although the court in Eighty Eight Bleecker concluded applied the voluntary payment document because tenant could so easily have discovered the billing error, in other cases, courts have suggested that the voluntary payment doctrine does not apply where a party was operating under a mistake of fact or law. Thus, in Fashion Bug No.2100 of Batavia, Inc. v. 425 West Main Associates (Batavia) LP, 10 Misc.3d 1053(A), the court held the voluntary payment doctrine inapplicable when lessee made payments in the mistaken belief that the entire adjacent premises were continuously occupied by a single-user tenant as stated under the contract. Under the lease agreement, the lessee was entitled to abatement of rent if the adjacent tenant ceased operations and until a single-user tenant was found to replace them. Lessee continued to make payments even after the adjacent premises were used by two retail operations. The court held the voluntary payment doctrine did not bar lessee from its claim for rent abatement, reasoning that lessee was operating under a mistake of fact, as it did not know of the changed tenant circumstances and acted promptly upon discovering the problem.

The First Department, applies voluntary payment doctrine to bar both statutory and common law claims. See Westfall v. Chase Lincoln First Bank, N.A., 258 A.D.2d 299, where the court applied voluntary payment doctrine to bar claims for breach of contract, unjust enrichment, as well as claims pursuant to General Business Law section 349. By contrast, the Second Department has held that the doctrine does not apply to statutory claims. Thus, in Dowd v. Alliance Mortgage Co., 32 A.D.3d 894, the court sustained statutory claims by mortgagors under the General Business Law section 349, while holding that the voluntary payment doctrine required dismissal of common-law claims .

 

No Duty to Warn of Condition on Neighboring Land

Bhandari v. Isis

NYLJ 11/19/07, p. 36, col. 2

AppDiv, Second Dept (memorandum opinion)

In an action by tenants who lived in a two-family home for personal injuries suffered by infant plaintiff in a swimming pool located on neighboring land, tenants appealed from the Supreme Court's grant of summary judgment to New York City dismissing infant plaintiff's claim for failure to investigate a code violation. Owner of the two-family home cross-appealed from the Supreme Court's denial of her summary judgment motion. The Appellate Division modified to grant the owner's summary judgment motion, holding that owner had no duty to warn the infant or his parents of the dangerous condition on neighboring premises.

On Oct. 22, 2000, tenants' son was seriously injured when he fell into a swimming pool maintained by a neighbor. The son remains in a vegetative state. Although there was a three-foot fence between the neighbor's backyard and the owner's yard, the neighbor had not installed a gate to block access to his pool from a neighboring alleyway. In July 2000, before the accident, the city Department of Buildings had received a complaint that neighbor was building the swimming pool without a permit. The Department, however, did not investigate the complaint until the day after the accident ' after expiration of the 40-day period during which regulations required investigation. Tenants then brought this action against neighbor, against the city, and against owner of the building in which tenants lived. The Supreme Court dismissed the action against the city, but not against owner of the two-family home.

In modifying, the Appellate Division first agreed with the Supreme Court that regulations mandating investigation within forty days did not create a private right of action against the city for failure to investigate. The court then turned to the claim against owner of tenants' building, and noted that as a general matter, an owner owes no duty to protect others from a dangerous condition on neighboring premises unless the owner created or contributed to that condition. Here, the court concluded that owner did not cause or contribute to the condition, and that the danger posed by the pool did not give rise to a duty to the infant plaintiff. Hence, owner was entitled to summary judgment dismissing the complaint.

COMMENT

Landowners do not have a duty to warn visitors or tenants on their property of dangers that exist on neighboring property. In Galindo v. Town of Clarkstown, 2 N.Y.3d 633, the Court of Appeals dismissed a housekeeper's claim against her employer for the death of her husband, who had been killed by a damaged tree that fell from a neighbor's yard onto the employer's driveway. The court rejected the housekeeper's argument that the employer had a duty to warn the husband that the tree had been badly damaged in a recent storm. The majority reasoned that the landowner did not have a duty to warn because he was not in a position to remedy the situation.

Landowners are only liable for conditions maintained on property adjacent to their own when they have contributed to or caused the danger. For example, in Herbert v. Rodriguez , 191 A.D.2d 887, the court denied the landowners' motion for summary judgment, holding that they could be held liable for the plaintiff's slip on an ice patch on the neighboring property because water was diverted from the landowner's property to the adjacent sidewalk causing the ice patch to form. The plaintiff presented evidence that the downspout on the landowners' property along with the inabsorbent nature of the soil at the base of the downspout caused water to be diverted to the adjacent sidewalk and turn to ice. Similarly, in Webster v. Town of Saugerties, 25 A.D.3d 861, the court denied the landowner's motion for summary judgment where a man was killed when his truck was struck by a freight train at a railroad crossing because evidence was presented that the landowner arranged with the town to relocate the railroad crossing to accommodate his business needs and that landowner was involved in maintaining the crossing. The court rejected the landowner's argument that he was not liable because he did not own the property on which the man was killed. The court reasoned that a landowner who alters and thereby causes the danger on the neighboring property and also maintains the adjacent property may be held liable for resulting injuries. In cases like Herbert and Webster, unlike Galindo and Bharandi, landowner had an obligation to cure the dangerous condition, and was subject to liability not for failure to warn, but for failure to cure the dangerous condition.