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Blocking Easement Constitutes Continuous Trespass
Bloomingdales, Inc. v. New York City Transit Authority
NYLJ 6/12/09, p. 38, col. 1
Court of Appeals
(opinion by Pigott, J.)
In an action by Bloomingdales for negligence, trespass, and nuisance, the New York City Transit Authority appealed from the Appellate Division's reversal of Supreme Court's grant of summary judgment to the transit authority. The Court of Appeals affirmed, holding that the transit authority's actions constituted a continuous interference with Bloomingdales' easement, and that the statute of limitations had not run on Bloomingdales' claim. In 1999, a contractor working on a project for the transit authority severed an underground working drain pipe that originated on Bloomingdales' roof and continued underground pursuant to an easement held by Bloomingdales. The contractor then installed a concrete-encased conduit in place of the drain pipe. When Bloomingdales began to experience flooding on its lower level, it hired a contractor to investigate, and the contractor, in 2002, discovered that the drain pipe had been cut and the conduit installed. Bloomingdales then installed a new drainpipe above the conduit at a cost of $165,000. When Bloomingdales brought this action against the transit authority, the authority moved to dismiss, contending that the action had been brought more than one year and 90 days after the complained-of negligent act. Supreme Court agreed, and Bloomingdale's appealed. The Appellate Division reversed, concluding that the transit authority's action constituted a continuing tort. The transit authority appealed.
In affirming, the Court of Appeals started by noting that if Bloomingdale's only complaint involved severance of the drainpipe, its claim would have been time-barred. The court, however, concluded that the placement of the conduit constituted a continuing interference with Bloomingdales' easement interest. Because the conduit encroached on Bloomingdales' right of way, the statute of limitations would not run until expiration of the time period for establishing a prescriptive easement. The court emphasized that it was the placement of the conduit that required Bloomingdales to install a new drainpipe in a different location, so that the damage claim was not time-barred.
No Foreclosure for Failure to Obtain Certificates of Occupancy
American Community Bank v. 419 County Road 39 Corp.
NYLJ 6/3/09, p. 28, col. 3
Supreme Ct., Suffolk Cty
(Whelan, J.)
Mortgagee sought to foreclose a commercial mortgage for failure by mortgagor to complete work necessary to obtain certificates of occupancy. The court awarded summary judgment to mortgagor, finding no obligation to obtain the certificates.
In 2007, mortgagee lent $1,350,000 to mortgagor secured by commercial property, and by personal guarantees. The mortgage agreement gave mortgagee the right to foreclose “in case of any default in payment or performance of the terms of said mortgage.” Mortgagee brought this foreclosure action, contending that mortgagor had defaulted by failing to complete the work necessary to obtain certificates of occupancy. The parties concede that there have been no other defaults. The mortgage agreement itself says nothing about mortgagor's obligation to complete the work, but mortgagee contends that a commitment letter dated
Aug. 15, 2007, should be incorporated by reference into the mortgage.
In granting mortgagor's summary judgment motion, the court noted that even the commitment letter included no language imposing on the mortgagor an obligation to complete the work necessary to obtain certificates of occupancy. The court rejected mortgagee's argument that the commitment letter requiring mortgagor to make payments into escrow implied a promise to complete the work and obtain certificates of occupancy. The court emphasized that mortgagee could have included express language to impose a condition on mortgagor, but did not do so. As a result, the court held that mortgagor had no obligation to complete the work, and mortgagee had no right to foreclose.
In Mortgage Cancellation Action, Limitations Period Runs from Execution of Mortgage
Booth v. Ameriquest Mortgage Co.
NYLJ 6/16/09, p. 41, col. 1
AppDiv, Second Dept.
(memorandum opinion)
In an action to cancel and discharge a mortgage, mortgagee bank appealed from a Supreme Court order denying its motion seeking summary judgment on the ground that the complaint was time-barred. The Appellate Division affirmed on that issue, holding that the limitations period runs from the date the mortgage was executed.
Donald and Diane Booth held a leasehold estate in land. After Diane died, Donald, in 1998, assigned the lease to himself and his younger son, Donald, Jr. Donald, Sr. died in 2000, and Donald, Jr. then assigned the lease to himself and his wife as joint tenants. In 2003, Donald and his wife borrowed $435,000 from mortgagee bank, secured by a mortgage on the leasehold. When Donald and his wife defaulted, mortgagee brought a foreclosure action. Meanwhile, Donald Sr.'s older son, Richard, brought an action to declare the assignment from his father to his brother invalid. When Donald Jr. died, the action was transferred to Surrogate's Court, and that court held the assignment invalid. Richard then brought this action to cancel the mortgage, contending that an examination of the records would have led mortgagee to realize that Donald, Sr. was incapacitated at the time of the assignment. The bank moved for summary judgment, contending that the statute of limitations ran from the date of the 1998 assignment, and that the claim was therefore time-barred. Supreme Court denied the motion, and mortgagee bank appealed.
In affirming, the Appellate Division held that the six-year limitations period on an action to cancel a mortgage runs from the time there is a legal right to relief. In this case, the court held, the cause of action did not accrue until Donald, Jr. and his wife executed the mortgage in 2003. As a result, Richard's action, which was brought in 2006, was timely.
Purchaser Failed to Exercise Cancellation Right
Regal Realty Services, LLC v. 2590 Frisby, LLC
NYLJ 5/19/09, p. 36., col. 6
AppDiv, First Dept.
(memorandum opinion)
In purchaser's action for return of its down payment, both parties appealed from Supreme Court's denial of their respective summary judgment motions. The Appellate Division modified to award summary judgment to seller, concluding that purchaser had failed to timely exercise its cancellation option pursuant to the contract's mortgage contingency clause.
Purchaser agreed to buy the subject property for $3,050,000 and paid a down payment of $152,500. The sale contract included a standard mortgage contingency clause which gave either party the option to cancel if purchaser could not obtain a mortgage commitment in the amount of $2,182,500 by the 30th day after the contract signing. The contract also provided that its terms could only be modified or changed in writing. Purchaser applied to a bank, and the bank did not approve the requested mortgage. Rather than cancelling, purchaser entered into further negotiations with seller. Purchaser applied to another bank, which approved a mortgage for $2,135,000 ' less than the amount provided in the mortgage contingency clause. Purchaser then sought to cancel the contract, but seller refused, and purchaser brought this action for return of its down payment. Supreme Court denied summary judgment motions filed by both parties.
In modifying to grant seller's summary judgment motion, the court emphasized that purchaser had not exercised its cancellation option within the period provided in the sale contract. The court rejected purchaser's argument that seller's willingness to work with purchaser to find another lender somehow waived seller's right to insist on cancellation within the contract period.
Blocking Easement Constitutes Continuous Trespass
NYLJ 6/12/09, p. 38, col. 1
Court of Appeals
(opinion by Pigott, J.)
In an action by Bloomingdales for negligence, trespass, and nuisance, the
In affirming, the Court of Appeals started by noting that if Bloomingdale's only complaint involved severance of the drainpipe, its claim would have been time-barred. The court, however, concluded that the placement of the conduit constituted a continuing interference with Bloomingdales' easement interest. Because the conduit encroached on Bloomingdales' right of way, the statute of limitations would not run until expiration of the time period for establishing a prescriptive easement. The court emphasized that it was the placement of the conduit that required Bloomingdales to install a new drainpipe in a different location, so that the damage claim was not time-barred.
No Foreclosure for Failure to Obtain Certificates of Occupancy
American
NYLJ 6/3/09, p. 28, col. 3
Supreme Ct., Suffolk Cty
(Whelan, J.)
Mortgagee sought to foreclose a commercial mortgage for failure by mortgagor to complete work necessary to obtain certificates of occupancy. The court awarded summary judgment to mortgagor, finding no obligation to obtain the certificates.
In 2007, mortgagee lent $1,350,000 to mortgagor secured by commercial property, and by personal guarantees. The mortgage agreement gave mortgagee the right to foreclose “in case of any default in payment or performance of the terms of said mortgage.” Mortgagee brought this foreclosure action, contending that mortgagor had defaulted by failing to complete the work necessary to obtain certificates of occupancy. The parties concede that there have been no other defaults. The mortgage agreement itself says nothing about mortgagor's obligation to complete the work, but mortgagee contends that a commitment letter dated
Aug. 15, 2007, should be incorporated by reference into the mortgage.
In granting mortgagor's summary judgment motion, the court noted that even the commitment letter included no language imposing on the mortgagor an obligation to complete the work necessary to obtain certificates of occupancy. The court rejected mortgagee's argument that the commitment letter requiring mortgagor to make payments into escrow implied a promise to complete the work and obtain certificates of occupancy. The court emphasized that mortgagee could have included express language to impose a condition on mortgagor, but did not do so. As a result, the court held that mortgagor had no obligation to complete the work, and mortgagee had no right to foreclose.
In Mortgage Cancellation Action, Limitations Period Runs from Execution of Mortgage
Booth v. Ameriquest Mortgage Co.
NYLJ 6/16/09, p. 41, col. 1
AppDiv, Second Dept.
(memorandum opinion)
In an action to cancel and discharge a mortgage, mortgagee bank appealed from a Supreme Court order denying its motion seeking summary judgment on the ground that the complaint was time-barred. The Appellate Division affirmed on that issue, holding that the limitations period runs from the date the mortgage was executed.
Donald and Diane Booth held a leasehold estate in land. After Diane died, Donald, in 1998, assigned the lease to himself and his younger son, Donald, Jr. Donald, Sr. died in 2000, and Donald, Jr. then assigned the lease to himself and his wife as joint tenants. In 2003, Donald and his wife borrowed $435,000 from mortgagee bank, secured by a mortgage on the leasehold. When Donald and his wife defaulted, mortgagee brought a foreclosure action. Meanwhile, Donald Sr.'s older son, Richard, brought an action to declare the assignment from his father to his brother invalid. When Donald Jr. died, the action was transferred to Surrogate's Court, and that court held the assignment invalid. Richard then brought this action to cancel the mortgage, contending that an examination of the records would have led mortgagee to realize that Donald, Sr. was incapacitated at the time of the assignment. The bank moved for summary judgment, contending that the statute of limitations ran from the date of the 1998 assignment, and that the claim was therefore time-barred. Supreme Court denied the motion, and mortgagee bank appealed.
In affirming, the Appellate Division held that the six-year limitations period on an action to cancel a mortgage runs from the time there is a legal right to relief. In this case, the court held, the cause of action did not accrue until Donald, Jr. and his wife executed the mortgage in 2003. As a result, Richard's action, which was brought in 2006, was timely.
Purchaser Failed to Exercise Cancellation Right
Regal Realty Services, LLC v. 2590 Frisby, LLC
NYLJ 5/19/09, p. 36., col. 6
AppDiv, First Dept.
(memorandum opinion)
In purchaser's action for return of its down payment, both parties appealed from Supreme Court's denial of their respective summary judgment motions. The Appellate Division modified to award summary judgment to seller, concluding that purchaser had failed to timely exercise its cancellation option pursuant to the contract's mortgage contingency clause.
Purchaser agreed to buy the subject property for $3,050,000 and paid a down payment of $152,500. The sale contract included a standard mortgage contingency clause which gave either party the option to cancel if purchaser could not obtain a mortgage commitment in the amount of $2,182,500 by the 30th day after the contract signing. The contract also provided that its terms could only be modified or changed in writing. Purchaser applied to a bank, and the bank did not approve the requested mortgage. Rather than cancelling, purchaser entered into further negotiations with seller. Purchaser applied to another bank, which approved a mortgage for $2,135,000 ' less than the amount provided in the mortgage contingency clause. Purchaser then sought to cancel the contract, but seller refused, and purchaser brought this action for return of its down payment. Supreme Court denied summary judgment motions filed by both parties.
In modifying to grant seller's summary judgment motion, the court emphasized that purchaser had not exercised its cancellation option within the period provided in the sale contract. The court rejected purchaser's argument that seller's willingness to work with purchaser to find another lender somehow waived seller's right to insist on cancellation within the contract period.
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