Real Property Law

AppDiv, Second Dept.

(memorandum opinion)

In landowners' action for a judgment declaring that they had established title to a boundary strip by adverse possession, both parties appealed from Supreme Court's denial of their respective summary judgment motions. The Appellate Division held that the adverse possessors were entitled to summary judgment, even though they knew the land they were occupying was not their own.

Adverse possessors purchased their parcel in 1989 and have lived there ever since; their neighbors bought the adjacent parcel in 2003. At the time adverse possessors purchased the parcel, a six-foot stockade fence was located along a part of what was apparently the border between the parcels. Adverse possessors replaced the stockade fence in 1989, using the same fence post holes, and planted shrubbery on their side of the fence. In the late 1990s, prior owners of the adjacent parcel extended the fence toward the street. Adverse possessors believed the fence sat on the boundary line until 1999 or 2000, when they surveyed the property in order to obtain permits to renovate their house. The survey revealed that the fence encroached on the adjacent parcel by about one foot, but adverse possessors never discussed the survey with their neighbor.

After the current owners bought the adjacent parcel, they replaced part of the fence at the same location, after asking permission from the adverse possessors. Then, in 2007, after commissioning a revised survey, the neighbors began placing wooden stakes and string on the actual boundary, leading adverse possessors to bring this action. Supreme Court denied the parties' respective summary judgment motions.

In holding that the adverse possessors were entitled to summary judgment, the Appellate Division emphasized that actual knowledge that someone else owns the land and adverse possessor is occupying did not, under the law as it existed when adverse possessor brought this action, defeat an adverse possession claim. Here, the adverse possessors demonstrated that they had infringed on the rights of their neighbor for a 10-year period, that their possession was open and notorious and exclusive, and that they usually cultivated and improved the property. The neighbors raised no triable issue of fact in response to the adverse possessors' prima facie showing.

COMMENT

The Second, Third, and Fourth Departments have held that the 2008 amendments to New York's adverse possession statute do not apply to adverse possession claims which matured prior to the effective date of the new law. (The First Department has not yet confronted the issue.) In Hogan v. Kelly, 86 A.D.3d 590, the Second Department reversed a grant of summary judgment to the true owner, holding that the new law could not be applied to deprive a party of a property right that had already been vested, as the adverse possession claim here had upon ripening in 2006. See also Barra v. Norfolk Southern Railroad Company, 75 A.D.3d 821 (Third Department); Franza v. Olin, 73 A.D.3d 44 (Fourth Department).

The amended section 501 requires that an adverse possessor have a “reasonable basis for the belief” that the property belongs to him. The change was enacted in response to Walling v. Przybylo, 7 N.Y.3d 228, where the Court of Appeals affirmed a summary judgment grant to a party who had adversely used part of his neighbor's lawn, despite allegations that he had actual knowledge that the property did not belong to him. The court, in citing cases spanning back to 1840, considered it to be long settled law that the adverse possessor's knowledge of the legal status of the land is irrelevant.

Had the 2008 laws been applied in Kelly, the claim may have satisfied section 501's “reasonable basis for the belief” standard. In Calder v. 731 Bergan LLC, 83 A.D.3d 758, the court reversed a dismissal for failure to state an adverse possession claim, finding a reasonable basis in the adverse possessor's affidavit that she was advised that the dispute parcel was part of the property she had purchased from the United States Secretary of Housing and Urban Development, even though no mention was made of who had advised her.

However, the newly created section 543 would likely have barred the claim in Kelly, as it requires that “lawn mowing or similar maintenance” of an adjoining landowner's property and “de minim[i]s non-structural encroachments including, but not limited to, fences, hedges, shrubbery, plantings, sheds and non-structural walls, shall be deemed permissive and non-adverse.” Courts have considered the actions expressly listed in 543 to be de minimis as a matter of law, even if they required a significant investment in the property. In Sawyer v. Prusky, 71 A.D.3d 1325, the court affirmed a dismissal for failure to state a cause of action on an adverse possession claim because the adverse possessors' actions, which involved erecting a rock wall along the boundary, planting, storing equipment and other property on the land, and maintaining the lawn, walkway, and beach, were non-adverse as a matter of law in light of section 543.

By contrast, courts have found actions not expressly enumerated in section 543 sufficient to sustain adverse possession claims even though the actions involve a less significant investment than many actions enumerated as “permissive and non-adverse.” In Maya's Black Creek, LLC v. Angelo Balbo Realty Corporation, 82 A.D.3d 1175, the court held that paving of part of the land with blacktop was not non-adverse as a matter of law. Similarly, in Healy v. Amedore Quantum, LLC, 24 Misc. 3d 1221(A), the court denied a true owner's summary judgment motion on an adverse possession claim, holding that a swimming pool and a tree house were not de minimis under section 543.

Statute of Limitations Does Not Bar Inverse
Condemnation Claim

Corsello v. Verizon New York, Inc.

NYLJ 3/30/12, p. 25, col. 1

Court of Appeals

(Opinion by Smith, J.)

In building owner's action against Verizon for wrongfully attaching a box to its building without paying just compensation, both parties appealed from Appellate Division decisions dismissing the owner's inverse condemnation claim, but sustaining claims for unjust enrichment and violation of the General Business Law. The Court of Appeals modified to reinstate the inverse condemnation claim, but to dismiss the other two claims, and to uphold the Appellate Division's denial of a class certification motion.

Many years ago, Verizon's predecessor attached a terminal box to landowner's Brooklyn apartment building, informing the landowner in 1986 that it had a right to put the box on the building wall. The box did not merely include wires designed to serve landowner's building, but instead included wires that would serve other buildings as well. Verizon and its predecessors never disclosed to landowner that landowner would be entitled to payment for installation of the box. Landowner then brought this action on four theories: inverse condemnation, trespass, unjust enrichment, and deceptive trade practices in violation of the General Business Law. Supreme Court dismissed the unjust enrichment claim, but upheld the others, and denied a motion for class certification. The Appellate Division modified to reinstate the unjust enrichment claim, but to dismiss the inverse condemnation ground on statute of limitations grounds. (Verizon had never appealed denial of its motion to dismiss the trespass claim).

The Court of Appeals started by upholding the inverse condemnation claim. The court rejected Verizon's argument that inverse condemnation is available only when an entity has chosen to exercise its eminent domain power, and held instead when a landowner alleges a continuous and permanent occupation by an entity that enjoys condemnation power (as Verizon does by statute), landowner states a legally sufficient claim for inverse condemnation. The court then held that the claim was not barred by a three-year statute of limitations, relying upon Real Property Law section 261, which provides that when telephone or other wires are attached to a building, “no lapse of time whatever shall ' justify a prescription of any perpetual right to, such attachment or extension.” The court held that just as the statute bars defenses of adverse possession or prescription to trespass claims by a landowner, it also bars similar defenses to inverse condemnation claims. The court then held, however, that the statute of limitations did bar the General Business Law deceptive practices claim, and held that the unjust enrichment claim should be dismissed because it merely duplicated plaintiff's other claims. Finally, the court held that class certification was properly denied because much of the evidence on which Verizon would rely, including accounts of discussions with this landowner about installation of the box, related specifically to this building and would not be common to a class.

COMMENT

A landowner may recover separately on causes of action for trespass and inverse condemnation when the condemnor's action causes harm that is distinct from the harm resulting from appropriation of landowner's land. For instance, in Buholtz v. Rochester Telephone Corporation, 40 A.D.2d 283, a trespass action against a telephone company for unlawfully entering and digging a trench, the Fourth Department held that the phone company was entitled to summary judgment on its counterclaim seeking imposition of nominal damages for inverse condemnation, but remanded for determination of a trespass claim based on damaging and removing trees. See also Kupersmidt v. New York Telephone Co., 54 Misc.2d 332 (awarding damages for trespass when phone company's digging of a trench on landowner's land resulted in collapse of a pier at landowner's building, while holding that inverse condemnation was the appropriate remedy for installing cable beneath landowner's property).

When an entity with condemnation power takes action that significantly interferes with use of landowner's land, the condemnor sometimes seeks to characterize the action as a “taking” in order to avoid treble damages available in some trespass cases, while landowner sometimes seeks to characterize the action as a taking to avoid the 90-day statute of limitations for trespass claims against the state. If the condemnor has not expeditiously asserted its condemnation power, courts are unlikely to invoke inverse condemnation as a defense in order to avoid trevle damages for harm to trees (Real Property Law Section 861). Thus, in Braman v. Rochester Gas & Electric Corporation, 54 A.D.2d 174, the court held that landowner was entitled to proceed on a trespass claim against a utility for cutting trees in the vicinity of its power lines, rejecting the utility's invocation of inverse condemnation as a ground for dismissal, noting that the utility had delayed raising the inverse condemnation defense, and that remained free to seek inverse condemnation in a separate proceeding.

Courts also seem to focus on the whether condemnor's action causes continuous and systematic harm when the statute of limitations is at issue. Thus, in Stewart v. State, 248 A.D.2d 761, the state sought to avoid liability for damages resulting from water runoff generated by highway construction by contending that landowner had not brought the action within the 90-day statute of limitations. The Third Department remanded for trial, indicating that if landowner could demonstrate that the harm was not merely intermittent, landowner might prevail on a takings claim not subject to the short statute of limitations

Covenant Not Binding Because Not Recorded in Neighbor's Chain of Title

Petrouleas v. Noce Management, Inc.

NYLJ 3/14/12

Supreme Ct., Richmond Cty.

(Minardo, J.)

In an action by landowner to enjoin neighbor's construction of a building that violates a restrictive covenant imposing a height limitation, neighbor moved to dismiss on the ground that the complaint failed to state a cause of action. After a hearing, the court granted neighbors' motion to dismiss, holding that the covenant was not binding because not recorded in neighbor's chain of title.

Landowner purchased his lot from the Cambrias in 1991. The lot, situated atop a hill, provided an unobstructed view of a golf course and surrounding areas. To preserve those views, landowner required the Cambrias to include a provision in the deed restricting construction on the neighboring parcels owned by the Cambrias so that no structure would have a height greater than 280 feet above sea level. Landowner recorded his deed. In 2003, the Cambrias sold the two neighboring parcels to Lisa Noce, who, two years later, transferred the property to her husband and herself. Neither deed included language referring to the height limitation. In 2010, the Noces transferred the parcel to a corporate entity in which they were the only two shareholders. The Noces have substantially completed building a three-story residence on the restricted parcels, and the height of the building has been measured at 285 to 287 feet above sea level at various locations. The Noces' architect, who had worked for landowner 15 to 20 years earlier, testified that before starting construction on the new house, he had informed the Noces of the height restriction. Landowner then brought this action to enjoin construction of the roof in a way that exceeds the height restriction.

In dismissing the complaint, the court first noted that it was undisputed that Lisa Noce did not have actual notice of the restrictive covenant when she bought the neighboring land in 2003. The court then held the failure to record the covenant in the Noces' chain of title precluded enforcement of the covenant. The court held that Richmond's block and lot index system did not mandate a different result, concluding that conversion of Richmond to a block and lot index system did not change the prevailing rule that a covenant is unenforceable if not recorded in the chain of title of the person burdened by the covenant.

Adverse Possessor Raises Issues of Fact

Vitale v. Witts

NYLJ 3/16/12, p. 28, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In an action to determine claims to real property, alleged true owner appealed from Supreme Court's denial of his summary judgment motion. The Appellate Division affirmed, holding that adverse possessor had raised issues of fact about the hostile nature of her claim, and that true owner had not produced conclusive evidence of his own record title.

Adverse possessor began occupation with her grandmother and stepgrandfather, the apparent owners of the property, during the 1960s, and continued to live there after the death of her grandmother in 1972 and stepgrandfather in 1982. Alleged true owner, adverse possessor's nephew, holds a deed dated 2001 from adverse possessor's mother (his own grandmother). Alleged true owner brought this action, contending that adverse possessor's claim must fail because her entry into possession was permissive. Supreme Court denied his summary judgment motion, and he appealed.

In affirming, the Appellate Division held that any permission ended with the stepgrandfather's death in 1982. As a result, permission would not be an absolute bar to an adverse possession claim, and adverse possessor was entitled to establish that she met the other requirements necessary to support an adverse possession claim. The court then noted that alleged true owner had not tied his own title to that of adverse possessor's stepgrandfather, noting that the stepgrandfather had died intestate, and that adverse possessor's mother, the source of alleged true owner's title, was not a blood relative of the stepgrandfather.

Adverse Possession Claim Succeeds

Kelly v. Bastianic

NYLJ 3/16/12, p. 25, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In landowners' action for a judgment declaring that they had established title to a boundary strip by adverse possession, both parties appealed from Supreme Court's denial of their respective summary judgment motions. The Appellate Division held that the adverse possessors were entitled to summary judgment, even though they knew the land they were occupying was not their own.

Adverse possessors purchased their parcel in 1989 and have lived there ever since; their neighbors bought the adjacent parcel in 2003. At the time adverse possessors purchased the parcel, a six-foot stockade fence was located along a part of what was apparently the border between the parcels. Adverse possessors replaced the stockade fence in 1989, using the same fence post holes, and planted shrubbery on their side of the fence. In the late 1990s, prior owners of the adjacent parcel extended the fence toward the street. Adverse possessors believed the fence sat on the boundary line until 1999 or 2000, when they surveyed the property in order to obtain permits to renovate their house. The survey revealed that the fence encroached on the adjacent parcel by about one foot, but adverse possessors never discussed the survey with their neighbor.

After the current owners bought the adjacent parcel, they replaced part of the fence at the same location, after asking permission from the adverse possessors. Then, in 2007, after commissioning a revised survey, the neighbors began placing wooden stakes and string on the actual boundary, leading adverse possessors to bring this action. Supreme Court denied the parties' respective summary judgment motions.

In holding that the adverse possessors were entitled to summary judgment, the Appellate Division emphasized that actual knowledge that someone else owns the land and adverse possessor is occupying did not, under the law as it existed when adverse possessor brought this action, defeat an adverse possession claim. Here, the adverse possessors demonstrated that they had infringed on the rights of their neighbor for a 10-year period, that their possession was open and notorious and exclusive, and that they usually cultivated and improved the property. The neighbors raised no triable issue of fact in response to the adverse possessors' prima facie showing.

COMMENT

The Second, Third, and Fourth Departments have held that the 2008 amendments to New York's adverse possession statute do not apply to adverse possession claims which matured prior to the effective date of the new law. (The First Department has not yet confronted the issue.) In Hogan v. Kelly, 86 A.D.3d 590, the Second Department reversed a grant of summary judgment to the true owner, holding that the new law could not be applied to deprive a party of a property right that had already been vested, as the adverse possession claim here had upon ripening in 2006. See also Barra v. Norfolk Southern Railroad Company, 75 A.D.3d 821 (Third Department) ; Franza v. Olin, 7 3 A.D.3d 44 (Fourth Department).

The amended section 501 requires that an adverse possessor have a “reasonable basis for the belief” that the property belongs to him. The change was enacted in response to Walling v. Przybylo, 7 N.Y.3d 228, where the Court of Appeals affirmed a summary judgment grant to a party who had adversely used part of his neighbor's lawn, despite allegations that he had actual knowledge that the property did not belong to him. The court, in citing cases spanning back to 1840, considered it to be long settled law that the adverse possessor's knowledge of the legal status of the land is irrelevant.

Had the 2008 laws been applied in Kelly, the claim may have satisfied section 501's “reasonable basis for the belief” standard. In Calder v. 731 Bergan LLC, 83 A.D.3d 758, the court reversed a dismissal for failure to state an adverse possession claim, finding a reasonable basis in the adverse possessor's affidavit that she was advised that the dispute parcel was part of the property she had purchased from the United States Secretary of Housing and Urban Development, even though no mention was made of who had advised her.

However, the newly created section 543 would likely have barred the claim in Kelly, as it requires that “lawn mowing or similar maintenance” of an adjoining landowner's property and “de minim[i]s non-structural encroachments including, but not limited to, fences, hedges, shrubbery, plantings, sheds and non-structural walls, shall be deemed permissive and non-adverse.” Courts have considered the actions expressly listed in 543 to be de minimis as a matter of law, even if they required a significant investment in the property. In Sawyer v. Prusky, 71 A.D.3d 1325, the court affirmed a dismissal for failure to state a cause of action on an adverse possession claim because the adverse possessors' actions, which involved erecting a rock wall along the boundary, planting, storing equipment and other property on the land, and maintaining the lawn, walkway, and beach, were non-adverse as a matter of law in light of section 543.

By contrast, courts have found actions not expressly enumerated in section 543 sufficient to sustain adverse possession claims even though the actions involve a less significant investment than many actions enumerated as “permissive and non-adverse.” In Maya's Black Creek, LLC v. Angelo Balbo Realty Corporation, 82 A.D.3d 1175, the court held that paving of part of the land with blacktop was not non-adverse as a matter of law. Similarly, in Healy v. Amedore Quantum, LLC, 24 Misc. 3d 1221(A), the court denied a true owner's summary judgment motion on an adverse possession claim, holding that a swimming pool and a tree house were not de minimis under section 543.

Statute of Limitations Does Not Bar Inverse
Condemnation Claim

Corsello v. Verizon New York, Inc.

NYLJ 3/30/12, p. 25, col. 1

Court of Appeals

(Opinion by Smith, J.)

In building owner's action against Verizon for wrongfully attaching a box to its building without paying just compensation, both parties appealed from Appellate Division decisions dismissing the owner's inverse condemnation claim, but sustaining claims for unjust enrichment and violation of the General Business Law. The Court of Appeals modified to reinstate the inverse condemnation claim, but to dismiss the other two claims, and to uphold the Appellate Division's denial of a class certification motion.

Many years ago, Verizon's predecessor attached a terminal box to landowner's Brooklyn apartment building, informing the landowner in 1986 that it had a right to put the box on the building wall. The box did not merely include wires designed to serve landowner's building, but instead included wires that would serve other buildings as well. Verizon and its predecessors never disclosed to landowner that landowner would be entitled to payment for installation of the box. Landowner then brought this action on four theories: inverse condemnation, trespass, unjust enrichment, and deceptive trade practices in violation of the General Business Law. Supreme Court dismissed the unjust enrichment claim, but upheld the others, and denied a motion for class certification. The Appellate Division modified to reinstate the unjust enrichment claim, but to dismiss the inverse condemnation ground on statute of limitations grounds. (Verizon had never appealed denial of its motion to dismiss the trespass claim).

The Court of Appeals started by upholding the inverse condemnation claim. The court rejected Verizon's argument that inverse condemnation is available only when an entity has chosen to exercise its eminent domain power, and held instead when a landowner alleges a continuous and permanent occupation by an entity that enjoys condemnation power (as Verizon does by statute), landowner states a legally sufficient claim for inverse condemnation. The court then held that the claim was not barred by a three-year statute of limitations, relying upon Real Property Law section 261, which provides that when telephone or other wires are attached to a building, “no lapse of time whatever shall ' justify a prescription of any perpetual right to, such attachment or extension.” The court held that just as the statute bars defenses of adverse possession or prescription to trespass claims by a landowner, it also bars similar defenses to inverse condemnation claims. The court then held, however, that the statute of limitations did bar the General Business Law deceptive practices claim, and held that the unjust enrichment claim should be dismissed because it merely duplicated plaintiff's other claims. Finally, the court held that class certification was properly denied because much of the evidence on which Verizon would rely, including accounts of discussions with this landowner about installation of the box, related specifically to this building and would not be common to a class.

COMMENT

A landowner may recover separately on causes of action for trespass and inverse condemnation when the condemnor's action causes harm that is distinct from the harm resulting from appropriation of landowner's land. For instance, in Buholtz v. Rochester Telephone Corporation, 40 A.D.2d 283, a trespass action against a telephone company for unlawfully entering and digging a trench, the Fourth Department held that the phone company was entitled to summary judgment on its counterclaim seeking imposition of nominal damages for inverse condemnation, but remanded for determination of a trespass claim based on damaging and removing trees. See also Kupersmidt v. New York Telephone Co., 54 Misc.2d 332 (awarding damages for trespass when phone company's digging of a trench on landowner's land resulted in collapse of a pier at landowner's building, while holding that inverse condemnation was the appropriate remedy for installing cable beneath landowner's property).

When an entity with condemnation power takes action that significantly interferes with use of landowner's land, the condemnor sometimes seeks to characterize the action as a “taking” in order to avoid treble damages available in some trespass cases, while landowner sometimes seeks to characterize the action as a taking to avoid the 90-day statute of limitations for trespass claims against the state. If the condemnor has not expeditiously asserted its condemnation power, courts are unlikely to invoke inverse condemnation as a defense in order to avoid trevle damages for harm to trees (Real Property Law Section 861). Thus, in Braman v. Rochester Gas & Electric Corporation, 54 A.D.2d 174, the court held that landowner was entitled to proceed on a trespass claim against a utility for cutting trees in the vicinity of its power lines, rejecting the utility's invocation of inverse condemnation as a ground for dismissal, noting that the utility had delayed raising the inverse condemnation defense, and that remained free to seek inverse condemnation in a separate proceeding.

Courts also seem to focus on the whether condemnor's action causes continuous and systematic harm when the statute of limitations is at issue. Thus, in Stewart v. State, 248 A.D.2d 761, the state sought to avoid liability for damages resulting from water runoff generated by highway construction by contending that landowner had not brought the action within the 90-day statute of limitations. The Third Department remanded for trial, indicating that if landowner could demonstrate that the harm was not merely intermittent, landowner might prevail on a takings claim not subject to the short statute of limitations

Covenant Not Binding Because Not Recorded in Neighbor's Chain of Title

Petrouleas v. Noce Management, Inc.

NYLJ 3/14/12

Supreme Ct., Richmond Cty.

(Minardo, J.)

In an action by landowner to enjoin neighbor's construction of a building that violates a restrictive covenant imposing a height limitation, neighbor moved to dismiss on the ground that the complaint failed to state a cause of action. After a hearing, the court granted neighbors' motion to dismiss, holding that the covenant was not binding because not recorded in neighbor's chain of title.

Landowner purchased his lot from the Cambrias in 1991. The lot, situated atop a hill, provided an unobstructed view of a golf course and surrounding areas. To preserve those views, landowner required the Cambrias to include a provision in the deed restricting construction on the neighboring parcels owned by the Cambrias so that no structure would have a height greater than 280 feet above sea level. Landowner recorded his deed. In 2003, the Cambrias sold the two neighboring parcels to Lisa Noce, who, two years later, transferred the property to her husband and herself. Neither deed included language referring to the height limitation. In 2010, the Noces transferred the parcel to a corporate entity in which they were the only two shareholders. The Noces have substantially completed building a three-story residence on the restricted parcels, and the height of the building has been measured at 285 to 287 feet above sea level at various locations. The Noces' architect, who had worked for landowner 15 to 20 years earlier, testified that before starting construction on the new house, he had informed the Noces of the height restriction. Landowner then brought this action to enjoin construction of the roof in a way that exceeds the height restriction.

In dismissing the complaint, the court first noted that it was undisputed that Lisa Noce did not have actual notice of the restrictive covenant when she bought the neighboring land in 2003. The court then held the failure to record the covenant in the Noces' chain of title precluded enforcement of the covenant. The court held that Richmond's block and lot index system did not mandate a different result, concluding that conversion of Richmond to a block and lot index system did not change the prevailing rule that a covenant is unenforceable if not recorded in the chain of title of the person burdened by the covenant.

Adverse Possessor Raises Issues of Fact

Vitale v. Witts

NYLJ 3/16/12, p. 28, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In an action to determine claims to real property, alleged true owner appealed from Supreme Court's denial of his summary judgment motion. The Appellate Division affirmed, holding that adverse possessor had raised issues of fact about the hostile nature of her claim, and that true owner had not produced conclusive evidence of his own record title.

Adverse possessor began occupation with her grandmother and stepgrandfather, the apparent owners of the property, during the 1960s, and continued to live there after the death of her grandmother in 1972 and stepgrandfather in 1982. Alleged true owner, adverse possessor's nephew, holds a deed dated 2001 from adverse possessor's mother (his own grandmother). Alleged true owner brought this action, contending that adverse possessor's claim must fail because her entry into possession was permissive. Supreme Court denied his summary judgment motion, and he appealed.

In affirming, the Appellate Division held that any permission ended with the stepgrandfather's death in 1982. As a result, permission would not be an absolute bar to an adverse possession claim, and adverse possessor was entitled to establish that she met the other requirements necessary to support an adverse possession claim. The court then noted that alleged true owner had not tied his own title to that of adverse possessor's stepgrandfather, noting that the stepgrandfather had died intestate, and that adverse possessor's mother, the source of alleged true owner's title, was not a blood relative of the stepgrandfather.