Real Property Law

Questions of Fact on Easement Claim

Bryer v. Terleph

NYLJ 2/2/10, p. 37, col. 3

AppDiv, Second Dept.

(memorandum opinion)

In landowner'fs action to enjoin neighbor from using a parking area in front of landowner'fs parcel, landowner appealed from Supreme Court'fs grant of neighbor'fs summary judgment motion. The Appellate Division modified to deny summary judgment to both parties, citing unresolved issues of fact.

Landowner owns a parcel fronting on Route 9W in Rockland County. Neighbor owns a parcel behind landowner'fs parcel, with no direct access to the street, but with a right of way across landowner'fs parcel. A walkway and staircase provide pedestrian access from the street to both parcels, and to a third parcel fronting on the street and immediately south of landowner'fs parcel. Because none of these parcels has off-street parking, landowner and the owner of the parcel immediately to landowner'fs south made improvements on the state'fs right of way to facilitate parking. In particular, they built retaining walls and widened and paved a shoulder to create two parking areas separated by the common stairway. Neighbor began parking in the parking area in front of landowner'fs parcel, and landowner brought this action, seeking injunctive relief. Supreme Court granted summary judgment to neighbor, and landowner appealed.

In modifying, the Appellate Division relied on the principle that an owner whose parcel abuts a highway or street enjoys an easement of light, air, and access. The court also noted, however, that an abutting owner may not prevent others from parking on the public street unless parking would unreasonably affect landowner'fs ingress or egress. Here, the court concluded that there were questions of fact about whether neighbor'fs parking interfered with landowner'fs right of ingress and egress, and whether there is a safe alternative area in which neighbor might park. As a result, the court held that summary judgment had been improperly granted.

Subprime Mortgagor Has Claims for Fraud and Violation of Deceptive Practices Act

Jones v. OTN Enterprise Inc.

NYLJ 2/1/10, p. 30, col. 5

Supreme Ct., Kings Cty.

(Schmidt, J.)

In an action by purchasers of a two-family house against a variety of parties for fraud and a variety of statutory violations in inducing purchaser to buy a house they could not afford, defendants sought dismissal of the complaint. The court dismissed claims under RESPA, and claims for usury and negligent appraisal, but held that claims for fraud, aiding and abetting fraud, and for violation of the state deceptive practices act were sufficient to state a claim.

Purchasers responded to a newspaper advertising offering help to first-time home buyers with the purchase of a home. The advertiser showed them some homes, and when purchasers expressed concerns about their ability to afford the homes, the advertiser directed her to USA Home Financial. USA'fs representative allegedly instructed purchasers to sign a set or forms, some of which seriously misrepresented purchasers'f employment history and income. USA Financial allegedly used this data to obtain a mortgage commitment from Bank of America. The loan closed on Dec. 11, 2007, at which time purchasers'f lawyer (recommended by USA) instructed them that there was no need to read any of the papers. As a result, purchasers, whose annual combined income was $35,000, bought a two-family house at a contract purchase price of $700,000, and executed two mortgages totaling $629,300. Purchasers then brought this action alleging violation of General Business Law section 349 (the deceptive practices act), RESPA, Banking Law section 64, and the Usury Statute. Various parties ” USA Financial, Bank of America, the firm that appraised the home at $700,000, and the settlement agent for Bank of America ” all moved to dismiss the complaint.

The court started by holding that the complaint adequately asserted a violation of GBL 349 by all of the moving defendants. The court indicated that to prevail, purchasers would not have to prove or allege a repetition or pattern of deceptive behavior; it would be enough to establish that the acts or practices have a broader impact on consumers at large ” a standard the court concluded had been satisfied in this case because the very act, if true, of preying on unsophisticated clients to make a loan doomed to failure, could adversely affect the public at large. The court then turned to the fraud claim, and held that the complaint stated a cause of action against USA and Band of America, but not against the settlement agent or the appraiser, because there was no allegation that purchasers relied on statements made by those parties. The court did hold, however, that the complaint stated a claim against those parties for aiding and abetting fraud.

The court dismissed the remainder of purchasers'f claims, noting first that purchasers had not established a fiduciary relationship with any of the parties that would support a claim for breach of fiduciary duty. The court then observed that the one-year statute of limitations had run on any claim for a violation of the federal Real Estate Settlement and Procedures Act (RESPA). The Banking Law claim failed because purchasers had not alleged that the loan rates exceeded the threshold rates specified in the statute, a failure that also mandated dismissal of the usury claim. Finally, the court dismissed a negligent appraisal claim against the appraiser, noting that the appraiser owed no duty to purchasers, and that purchasers had not alleged facts to support their contention that they had relied on the appraisal.

No Specific Performance Of Option Unless Tenant Was Ready, Willing, and Able to Perform

Island Auto Seat Cover Company, Inc. v. Minunni

NYLJ 1/11/10, p.29, col. 1

AppDiv, First Dept.

(memorandum opinion)

In tenant'fs action for specific performance of an option to purchase the leased premises, both tenant and landlord appealed from Supreme Court'fs denial of their cross motions for summary judgment. The Appellate Division affirmed, holding that questions of fact remained about whether tenant was ready, willing, and able to perform.

In a ten-year lease dated October 2000, tenant received an option to purchase at a price of $350,000 at any time during the lease term, provided that tenant provided timely notice. In March 2008, tenant notified landlord that it was exercising the option to purchase in an all cash transaction. Landlord refused to schedule a closing, and tenant brought this action for specific performance. Both parties moved for summary judgment, and Supreme Court denied both cross-motions.

In affirming, the Appellate Division first held that tenant had established the enforceability of the option, and landlord had not demonstrated any basis for questioning the validity of the option. The court then noted, however, that in order to obtain summary judgment, tenant was obligated to show that it was ready, willing and able to close. The court held that an affidavit from tenant'fs corporate secretary that hew was ready to close with monies funded by a mortgage taken on property owned by his mother-in-law and father-in-law was insufficient to demonstrate that tenant had sufficient funds o close. At the same time, the court concluded that landlord had failed to establish entitlement to judgment as a matter of law dismissing the complaint.

Prima Facie Tort Claim Against Village for Building Inspector'fs Actions

Shervington v. Village of Piermont

NYLJ 1/20/10, p. 30, col. 1

U.S.Dist Ct., S.D.N.Y.

(Sweet, J.)

In an action by homeowner for violation both of constitutional rights and of state law, the village and the village building inspector moved to dismiss for failure to state a claim. The court granted the motion in part, holding that homeowner did not state a claim for violation of the equal protection clause or for violation of 42 USC section 1982.

Landowner is a female African-American who owned a home in the village. When she bought the home in 2005, the title company requested a search for violations at the premises. Defendant building inspector conducted the search and found no violations. Two years later, when landowner sought to sell the premises, purchaser'fs title company again requested a violation search. The time, the same building inspector informed landowner that unauthorized improvements had been made to the premises and recommended a contractor to do the work necessary to bring the home into compliance. Landowner refused to hire the contractor. Building inspector then issued a notice of violation, requiring landowner to commence demolition work, and then to rebuild in accordance with the inspector'fs instructions. As a result, landowner spent considerable sums of money remedying the violations, and was forced to reduce the sale price of the home to compensate for the delay in closing pending completion of the work. Landowner then brought this action against the village and the building inspector in federal court, alleging violations of the equal protection clause, 42 USC section 1982, and state law claims for intentional infliction of emotional distress, prima facie tort, and negligent hiring, training, supervision, and retention of the building inspector.

In dismissing the equal protection claim, the court emphasized that landowner'fs complaint did not establish how landowner had been treated differently from other similarly situated landowners. In particular, landowner did not demonstrate that other landowners were given certificates of occupancy on properties with violations, or that other landowners were permitted to conduct more moderate measures upon a finding of a violation. The court then turned to landowner'fs claim that the village and the building inspector had violated landowner'fs right to “hold and sell real property” within the scope of 42 USC section 1982. The court noted that such a claim requires proof of intentional discrimination based on race, and that landowner had not alleged facts suggesting intentional discrimination.

With respect to the state law claims, the court dismissed the claim for intentional infliction of emotional distress, noting that New York courts had been quite strict in applying standards to such a claim. The court did, however, hold that landowner had stated a claim for prima facie tort against both the village and the building inspector based on the allegation that the village had maliciously required her to incur damages in demolition and rebuilding parts of her home. The court then held that landowner had stated a claim for common law negligence against the building inspector, but not against the village itself. Finally, the court dismissed landowner'fs claim against the village for negligent hiring, training, supervision, and retention, noting that the complaint made no reference to facts that might have alerted the village to the inspector'fs behavior.

Mortgagor'fs Predator Lending Defenses Dismissed

Deutsche Bank National Trust Co. v. Campbell

NYLJ 1/20/10, p. 26, col. 3

Supreme Ct., Kings Cty.

(Miller, J.)

In a mortgage foreclosure action, mortgagee sought summary judgment. The court granted the motion, dismissing mortgagor'fs affirmative defenses and counterclaims alleging predatory lending, fraud, and violation of the federal Truth in Lending Act (TILA).

Mortgagor executed a mortgage for $561,000 to secure a loan from Impac Funding. Impac subsequently assigned the mortgage to current mortgagee. When mortgagor defaulted, mortgagee foreclosed, and sought summary judgment.

In rejecting mortgagor'fs reliance on RPAPL section 1302, which provides a defense to foreclosure of high-cost or subprime home loans, the court emphasized that section 1032 is applicable only where the terms of the loan violation Banking Law section 64. But the court noted that a loan does not fall within the scope of section 64 when the loan amount exceeds the lesser of $300,000 or the conforming loan limit established by the Federal National Mortgage Association. In this case, the loan exceeded the statutory limit. The court then held that mortgagor had not established any violation of TILA, and suggested that any violations mortgagor did allege were instead violations of the Real Estate Settlement Procedures Act (RESPA). The court held, however, that violations of RESPA do not constitute a defense to a mortgage foreclosure action. Finally, the court held that mortgagor could not establish a fraud defense because, even if there were false statement provided by mortgage broker to mortgagee'fs predecessor, mortgagor could not establish that it relied on those false statements to its detriment.

No Amendment of Invalid Notice of Lien

Matter of Bridge View Tower, LLC v. Roco G.C. Corp.

NYLJ 1/19/10, AppDiv, Second Dept.

(memorandum opinion)

In landowner'fs proceeding to vacate and discharge a mechanic'fs lien, landowner appealed from Supreme Court'fs denial of the petition and grant of lienor'fs motion to amend the notice of lien. The Appellate Division reversed, holding that a lienor may not amend a notice of lien that was itself invalid.

While landowner was in the process of converting the subject premises into condominium ownership, mechanics lienor supplied and installed plumbing and fire safety equipment. On Feb. 8, 2008, landowner filed a condominium declaration with regard to the property. On June 19, 2008, lienor filed a lien against the property, describing the property as “189 Bridge Street” in Brooklyn. Landowner moved to vacate and discharge the lien for failure of the notice of lien to describe the property adequately. Lienor then moved to amend the notice of lien to reflect the blocks and lots set forth in the condominium declaration, less any units sold prior to filing of the lien. Supreme Court granted lienor'fs motion.

In reversing, the Appellate Division held that because the description of the property in the original notice of lien purported to create a blanket lien on the entire property, the lien is not valid against the individual condominium units, including the unsold units retained by the landowner, or the common elements of the condominium. The court also relied on RPL section 339-l(1), which prohibits creation of a lien against a condominium'fs common elements without unanimous consent of the unit owners. The court held, therefore, that the landowner was entitled to discharge of the original lien. The court then held that Lien Law section 12-a, which provides for amendment of a notice of lien, presupposes the existence of a valid lien and may not be used to revive an invalid notice of lien. As a result, the court held that Supreme Court should not have granted lienor'fs motion to amend.

Questions of Fact on Easement Claim

Bryer v. Terleph

NYLJ 2/2/10, p. 37, col. 3

AppDiv, Second Dept.

(memorandum opinion)

In landowner'fs action to enjoin neighbor from using a parking area in front of landowner'fs parcel, landowner appealed from Supreme Court'fs grant of neighbor'fs summary judgment motion. The Appellate Division modified to deny summary judgment to both parties, citing unresolved issues of fact.

Landowner owns a parcel fronting on Route 9W in Rockland County. Neighbor owns a parcel behind landowner'fs parcel, with no direct access to the street, but with a right of way across landowner'fs parcel. A walkway and staircase provide pedestrian access from the street to both parcels, and to a third parcel fronting on the street and immediately south of landowner'fs parcel. Because none of these parcels has off-street parking, landowner and the owner of the parcel immediately to landowner'fs south made improvements on the state'fs right of way to facilitate parking. In particular, they built retaining walls and widened and paved a shoulder to create two parking areas separated by the common stairway. Neighbor began parking in the parking area in front of landowner'fs parcel, and landowner brought this action, seeking injunctive relief. Supreme Court granted summary judgment to neighbor, and landowner appealed.

In modifying, the Appellate Division relied on the principle that an owner whose parcel abuts a highway or street enjoys an easement of light, air, and access. The court also noted, however, that an abutting owner may not prevent others from parking on the public street unless parking would unreasonably affect landowner'fs ingress or egress. Here, the court concluded that there were questions of fact about whether neighbor'fs parking interfered with landowner'fs right of ingress and egress, and whether there is a safe alternative area in which neighbor might park. As a result, the court held that summary judgment had been improperly granted.

Subprime Mortgagor Has Claims for Fraud and Violation of Deceptive Practices Act

Jones v. OTN Enterprise Inc.

NYLJ 2/1/10, p. 30, col. 5

Supreme Ct., Kings Cty.

(Schmidt, J.)

In an action by purchasers of a two-family house against a variety of parties for fraud and a variety of statutory violations in inducing purchaser to buy a house they could not afford, defendants sought dismissal of the complaint. The court dismissed claims under RESPA, and claims for usury and negligent appraisal, but held that claims for fraud, aiding and abetting fraud, and for violation of the state deceptive practices act were sufficient to state a claim.

Purchasers responded to a newspaper advertising offering help to first-time home buyers with the purchase of a home. The advertiser showed them some homes, and when purchasers expressed concerns about their ability to afford the homes, the advertiser directed her to USA Home Financial. USA'fs representative allegedly instructed purchasers to sign a set or forms, some of which seriously misrepresented purchasers'f employment history and income. USA Financial allegedly used this data to obtain a mortgage commitment from Bank of America. The loan closed on Dec. 11, 2007, at which time purchasers'f lawyer (recommended by USA) instructed them that there was no need to read any of the papers. As a result, purchasers, whose annual combined income was $35,000, bought a two-family house at a contract purchase price of $700,000, and executed two mortgages totaling $629,300. Purchasers then brought this action alleging violation of General Business Law section 349 (the deceptive practices act), RESPA, Banking Law section 64, and the Usury Statute. Various parties ” USA Financial, Bank of America, the firm that appraised the home at $700,000, and the settlement agent for Bank of America ” all moved to dismiss the complaint.

The court started by holding that the complaint adequately asserted a violation of GBL 349 by all of the moving defendants. The court indicated that to prevail, purchasers would not have to prove or allege a repetition or pattern of deceptive behavior; it would be enough to establish that the acts or practices have a broader impact on consumers at large ” a standard the court concluded had been satisfied in this case because the very act, if true, of preying on unsophisticated clients to make a loan doomed to failure, could adversely affect the public at large. The court then turned to the fraud claim, and held that the complaint stated a cause of action against USA and Band of America, but not against the settlement agent or the appraiser, because there was no allegation that purchasers relied on statements made by those parties. The court did hold, however, that the complaint stated a claim against those parties for aiding and abetting fraud.

The court dismissed the remainder of purchasers'f claims, noting first that purchasers had not established a fiduciary relationship with any of the parties that would support a claim for breach of fiduciary duty. The court then observed that the one-year statute of limitations had run on any claim for a violation of the federal Real Estate Settlement and Procedures Act (RESPA). The Banking Law claim failed because purchasers had not alleged that the loan rates exceeded the threshold rates specified in the statute, a failure that also mandated dismissal of the usury claim. Finally, the court dismissed a negligent appraisal claim against the appraiser, noting that the appraiser owed no duty to purchasers, and that purchasers had not alleged facts to support their contention that they had relied on the appraisal.

No Specific Performance Of Option Unless Tenant Was Ready, Willing, and Able to Perform

Island Auto Seat Cover Company, Inc. v. Minunni

NYLJ 1/11/10, p.29, col. 1

AppDiv, First Dept.

(memorandum opinion)

In tenant'fs action for specific performance of an option to purchase the leased premises, both tenant and landlord appealed from Supreme Court'fs denial of their cross motions for summary judgment. The Appellate Division affirmed, holding that questions of fact remained about whether tenant was ready, willing, and able to perform.

In a ten-year lease dated October 2000, tenant received an option to purchase at a price of $350,000 at any time during the lease term, provided that tenant provided timely notice. In March 2008, tenant notified landlord that it was exercising the option to purchase in an all cash transaction. Landlord refused to schedule a closing, and tenant brought this action for specific performance. Both parties moved for summary judgment, and Supreme Court denied both cross-motions.

In affirming, the Appellate Division first held that tenant had established the enforceability of the option, and landlord had not demonstrated any basis for questioning the validity of the option. The court then noted, however, that in order to obtain summary judgment, tenant was obligated to show that it was ready, willing and able to close. The court held that an affidavit from tenant'fs corporate secretary that hew was ready to close with monies funded by a mortgage taken on property owned by his mother-in-law and father-in-law was insufficient to demonstrate that tenant had sufficient funds o close. At the same time, the court concluded that landlord had failed to establish entitlement to judgment as a matter of law dismissing the complaint.

Prima Facie Tort Claim Against Village for Building Inspector'fs Actions

Shervington v. Village of Piermont

NYLJ 1/20/10, p. 30, col. 1

U.S.Dist Ct., S.D.N.Y.

(Sweet, J.)

In an action by homeowner for violation both of constitutional rights and of state law, the village and the village building inspector moved to dismiss for failure to state a claim. The court granted the motion in part, holding that homeowner did not state a claim for violation of the equal protection clause or for violation of 42 USC section 1982.

Landowner is a female African-American who owned a home in the village. When she bought the home in 2005, the title company requested a search for violations at the premises. Defendant building inspector conducted the search and found no violations. Two years later, when landowner sought to sell the premises, purchaser'fs title company again requested a violation search. The time, the same building inspector informed landowner that unauthorized improvements had been made to the premises and recommended a contractor to do the work necessary to bring the home into compliance. Landowner refused to hire the contractor. Building inspector then issued a notice of violation, requiring landowner to commence demolition work, and then to rebuild in accordance with the inspector'fs instructions. As a result, landowner spent considerable sums of money remedying the violations, and was forced to reduce the sale price of the home to compensate for the delay in closing pending completion of the work. Landowner then brought this action against the village and the building inspector in federal court, alleging violations of the equal protection clause, 42 USC section 1982, and state law claims for intentional infliction of emotional distress, prima facie tort, and negligent hiring, training, supervision, and retention of the building inspector.

In dismissing the equal protection claim, the court emphasized that landowner'fs complaint did not establish how landowner had been treated differently from other similarly situated landowners. In particular, landowner did not demonstrate that other landowners were given certificates of occupancy on properties with violations, or that other landowners were permitted to conduct more moderate measures upon a finding of a violation. The court then turned to landowner'fs claim that the village and the building inspector had violated landowner'fs right to “hold and sell real property” within the scope of 42 USC section 1982. The court noted that such a claim requires proof of intentional discrimination based on race, and that landowner had not alleged facts suggesting intentional discrimination.

With respect to the state law claims, the court dismissed the claim for intentional infliction of emotional distress, noting that New York courts had been quite strict in applying standards to such a claim. The court did, however, hold that landowner had stated a claim for prima facie tort against both the village and the building inspector based on the allegation that the village had maliciously required her to incur damages in demolition and rebuilding parts of her home. The court then held that landowner had stated a claim for common law negligence against the building inspector, but not against the village itself. Finally, the court dismissed landowner'fs claim against the village for negligent hiring, training, supervision, and retention, noting that the complaint made no reference to facts that might have alerted the village to the inspector'fs behavior.

Mortgagor'fs Predator Lending Defenses Dismissed

Deutsche Bank National Trust Co. v. Campbell

NYLJ 1/20/10, p. 26, col. 3

Supreme Ct., Kings Cty.

(Miller, J.)

In a mortgage foreclosure action, mortgagee sought summary judgment. The court granted the motion, dismissing mortgagor'fs affirmative defenses and counterclaims alleging predatory lending, fraud, and violation of the federal Truth in Lending Act (TILA).

Mortgagor executed a mortgage for $561,000 to secure a loan from Impac Funding. Impac subsequently assigned the mortgage to current mortgagee. When mortgagor defaulted, mortgagee foreclosed, and sought summary judgment.

In rejecting mortgagor'fs reliance on RPAPL section 1302, which provides a defense to foreclosure of high-cost or subprime home loans, the court emphasized that section 1032 is applicable only where the terms of the loan violation Banking Law section 64. But the court noted that a loan does not fall within the scope of section 64 when the loan amount exceeds the lesser of $300,000 or the conforming loan limit established by the Federal National Mortgage Association. In this case, the loan exceeded the statutory limit. The court then held that mortgagor had not established any violation of TILA, and suggested that any violations mortgagor did allege were instead violations of the Real Estate Settlement Procedures Act (RESPA). The court held, however, that violations of RESPA do not constitute a defense to a mortgage foreclosure action. Finally, the court held that mortgagor could not establish a fraud defense because, even if there were false statement provided by mortgage broker to mortgagee'fs predecessor, mortgagor could not establish that it relied on those false statements to its detriment.

No Amendment of Invalid Notice of Lien

Matter of Bridge View Tower, LLC v. Roco G.C. Corp.

NYLJ 1/19/10, AppDiv, Second Dept.

(memorandum opinion)

In landowner'fs proceeding to vacate and discharge a mechanic'fs lien, landowner appealed from Supreme Court'fs denial of the petition and grant of lienor'fs motion to amend the notice of lien. The Appellate Division reversed, holding that a lienor may not amend a notice of lien that was itself invalid.

While landowner was in the process of converting the subject premises into condominium ownership, mechanics lienor supplied and installed plumbing and fire safety equipment. On Feb. 8, 2008, landowner filed a condominium declaration with regard to the property. On June 19, 2008, lienor filed a lien against the property, describing the property as “189 Bridge Street” in Brooklyn. Landowner moved to vacate and discharge the lien for failure of the notice of lien to describe the property adequately. Lienor then moved to amend the notice of lien to reflect the blocks and lots set forth in the condominium declaration, less any units sold prior to filing of the lien. Supreme Court granted lienor'fs motion.

In reversing, the Appellate Division held that because the description of the property in the original notice of lien purported to create a blanket lien on the entire property, the lien is not valid against the individual condominium units, including the unsold units retained by the landowner, or the common elements of the condominium. The court also relied on RPL section 339-l(1), which prohibits creation of a lien against a condominium'fs common elements without unanimous consent of the unit owners. The court held, therefore, that the landowner was entitled to discharge of the original lien. The court then held that Lien Law section 12-a, which provides for amendment of a notice of lien, presupposes the existence of a valid lien and may not be used to revive an invalid notice of lien. As a result, the court held that Supreme Court should not have granted lienor'fs motion to amend.