Real Property Law

In affirming, the Appellate Division concluded that the terms of the contract should be determined by the manifestations of the parties' intentions rather than their actual intentions. In this case, broker's actions in having its client enter the lease agreement established that it had not rejected the counteroffer. Even though silence itself does not generally indicate assent, the action of moving forward with the lease did constitute a sufficient manifestation of assent to the counteroffer.

Statements in Earlier Action Did Not Accelerate Mortgage and Trigger Statute of Limitations

U.S. Bank National Association v. Gordon
NYLJH 3/2/18, p. 29., col. 4.
AppDiv, Second Dept. 94-1

(decision; majority memorandum; dissent by Braithwaite-Nelson, J.)

In a mortgage foreclosure action, mortgagor moved to dismiss the action as time-barred. The court denied the motion, holding that statements in an earlier foreclosure action were insufficient to accelerate the mortgage and trigger the statute of limitations on the mortgage debt.

In 2005, mortgagor borrowed $412,000 from Fremont Investment & Loan. She defaulted on the loan, and in 2007, US Bank National Association (prior plaintiff) brought a foreclosure action stating that it was electing to call due the entire amount secured by the mortgage. In 2011, mortgagor filed an answer asserting that prior plaintiff lacked standing. On May 16, 2013, Supreme Court granted mortgagor's motion and dismissed the foreclosure action, concluding that prior plaintiff was not the holder of the note at the time the action was commenced. Then, on Oct. 22, 2013, US Bank National Association, as Trustee for JP Morgan Acquisition Corp. (the current plaintiff) commenced the current foreclosure action, alleging that the mortgage had been assigned to it in 2009, and that it was the current holder of the note and mortgage. Mortgagor moved to dismiss, alleging that the six-year statute of limitations had expired because the mortgage had been accelerated as of the date of default, March 1, 2007. Supreme Court agreed and dismissed the action. Current mortgagee appealed.

In reversing, the Appellate Division first held that the purported acceleration in the complaint in the 2007 foreclosure action was ineffective, and did not trigger the statute of limitations on the entire debt. The court's majority noted that the complaint had been dismissed on the ground that the prior plaintiff was not the holder of the note, making ineffective any attempt by the prior plaintiff to accelerate the note. The majority went on to indicate that even if the prior complaint had triggered the statute of limitations, current plaintiff would not be barred by the statute of limitations because current plaintiff could take advantage of CPLR 205, which authorizes a plaintiff to bring a new action within six months of dismissal of a prior action, so long as the prior dismissal was not for one of several specified grounds (including lack of jurisdiction, voluntary dismissal, and dismissal on the merits). Because the current action was brought within six months of the dismissal of the prior action, current plaintiff's action was timely.

Justice Braithwaitte Nelson, dissenting, emphasized that current plaintiff had not argued below that the acceleration of the mortgage was ineffective, and she concluded that the court should not rely on that ground on appeal. She then concluded that CPLR 205 was not available to the current mortgagee because it was not the same party as the plaintiff in the original action.

Comment

Although CPLR 205 generally permits the same person or entity to refile an action within six months after a voluntary dismissal, the statute does not permit a corporate parent to refile an action when a previous action has mistakenly been commenced in the name of a different, related corporate entity. In Reliance Ins. Co. v. Polyvision, 9 N.Y.3d 52, the court held that CPLR 205 did not entitle a corporate parent to bring suit three months after a court had dismissed a suit mistakenly brought in the name of a corporate subsidiary. For unknown reasons, an insurance company, a wholly owned subsidiary of a corporate entity, initially brought an action against a manufacturer for reimbursement for faulty metal wall panels, while the proper corporate entity never attempted to enter the action over a 10-year period. The court construed the statute narrowly, emphasizing the line-drawing difficulties courts might otherwise face in determining whether the two entities were sufficiently related to warrant application of the statute.

However, CPLR 205 permits a transferee of a mortgage to recommence a foreclosure action initially brought by the transferor. In Wells Fargo Bank, N.A. v. Eitani, 148 A.D.3d 193, the court held that CPLR 205(a) applied when the plaintiff mortgage company in the previously dismissed foreclosure action had transferred the note and mortgage to the current plaintiff during the course of the prior action. Although the named plaintiffs in the two actions were different entities, they each brought suit to foreclose on the subject property based on the same default. The court concluded that because Wells Fargo, as the assignee, was essentially the plaintiff in the prior action when it was dismissed, the facts of the case met the requirements of CPLR 205(a). The court reasoned that the core purpose of the statute is remedial, avoiding the “harsh consequences” of applying limitations where the defending party has had timely notice of the action.

In U.S. Bank N.A. v. Gordon, 158 A.D.3d 832, the court followed Wells Fargo, rejecting the dissent's argument that, unlike the situation in Wells Fargo, the record neither established that U.S. Bank became holder of the note while the initial action was pending nor established that U.S. Bank was successor in interest to the plaintiff.

Death Does Not Extend Foreclosure Limitations Period

U.S. Bank, N.A. v. Kess
NYLJ 3/918, [. 29., col. 6
AppDiv, Second Dept.
(memorandum opinion)

In a foreclosure action, mortgagor appealed from Supreme Court's denial of his motion to dismiss the action as time-barred. The Appellate Division reversed and dismissed the complaint against him, holding that his wife's death did not extend the limitations period with respect to him.

In May 2008, mortgagee accelerated the mortgage debt and brought a foreclosure action against defaulting mortgagors, husband and wife. In June 2013, the wife died. Mortgagee voluntarily discontinued the action in October 2014. When mortgagee brought the instant foreclosure action on Feb. 2, 2014, mortgagor moved to dismiss the action as time-barred. Supreme Court denied the motion, holding that the wife's death tolled the statute of limitations for 18 months, making the action timely. Mortgagor appealed.

In reversing, the Appellate Division held that CPLR 210(b), which tolls the statute of limitations for six months in an action against a decedent's executor or administrator, was inapplicable in this case. The court noted that neither action in this case was brought against an administrator or an executor, noting that husband has denied serving as his wife's executor or administrator. Moreover, CPLR 201(b) would not, in any event, toll the statute with respect to the husband individually. As a result, the court held that the action against the husband as an individual should have been dismissed as time-barred.

Neighbor Granted Statutory Licence to Paint Fence

Stuck v. Hickmott
158 AD3d 1331, 2/9/18
AppDiv, Fourth Dept.
(memorandum opinion)

In neighbor's adverse possession action, neighbor appealed from Supreme Court's judgment granting landowner a license to enter onto neighbor's property to paint a fence located on the property boundary. The Appellate Division affirmed, holding that RPAPL authorized grant of the license.

When landowners purchased their parcel, they discovered that neighbor's driveway encroached on their parcel. When neighbor refused to remove the encroachment, landowners built a six-foot all wooden stockade fence along the side of the driveway. Neighbor then brought this action seeking to establish ownership of the driveway by adverse possession, or at least a prescriptive easement over the driveway. Landowners counterclaimed, seeking removal of the encroaching portion of the driveway. Supreme Court dismissed the adverse possession claim, but ordered that neighbor be allowed continued use of the driveway, and that neither party impair the use of the driveway or fence. The parties then reached an agreement allowing landowners to enter neighbor's parcel to paint the fence, but they abandoned the effort to paint when a confrontation arose. Landowners then sought an order holding neighbor in contempt for denying landowners use of the fence. Supreme Court converted the motion into a proceeding under RPAPL 881 for a license to enter onto neighbor's land to paint the fence, and granted a license to landowners for the limited purpose of painting once every two years, subject to time limitations and notice requirements. Neighbors appealed.

In affirming, the Appellate Division held that painting qualified as a repair under FPAPL 881, which authorizes issuance of a license for entry onto neighboring land when improvements or repairs cannot be made without entry and where permission to enter has been refused. The court noted that the statute contemplates that property owners may building on their own property such that improvement or repairs cannot be made without entering an adjoining property, so that landowners were not disqualified from invoking the statute merely because they had built the fence so close to the boundary line.

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Record Did Not Establish Conveyance of Easement

Matter of Violet Realty v. County of Erie
158 A.D.3d 1316, 2/9/18
AppDiv, Fourth Dept.
(memorandum opinion)

In realty company's combined Article 78 proceeding and declaratory judgment action to establish an easement over lands owned by the county, realty company appealed from Supreme Court's dismissal of the petition and complaint. The Appellate Division affirmed, holding that the record in the case did not establish that the original holder of the easement had ever conveyed it to realty company or to anyone else.

The City of Buffalo owns fee title to a parking garage, together with the current right to operate the garage. Pursuant to an urban renewal project that began in 1965, realty company exercised an option to acquire title to the parking garage as of 2019. As part of the urban renewal project, a tunnel was built under a newly constructed building, connecting the garage to the street on the other side of the building. The building site was originally owned by a bank, but the bank conveyed the site to the Erie County in 1968, reserving to itself an easement across the parcel transferred to the county. The tunnel was built under the county's parcel. In 2016, the county blocked all public access to the tunnel, citing security concerns. Realty company brought this proceeding asserting an easement to use the tunnel, but Supreme Court dismissed for failure to state a claim.

In affirming, the Appellate Division emphasized that the record before the court did not reflect any conveyance of the easement from the bank to any party in this litigation. The court noted that the parties had failed to submit an abstract of title for the bank's chain of title after the 1968 deed creating the easement. As a result, on the record before the court, the county met its burden of establishing that the realty company had no interest in the easement.

Co-Tenant Entitled to Partition

Hitech Homes, LLC v. Burke
NYLJ 3/14/18, p. 22., col. 3.
AppDiv, First Dept.
(memorandum opinion)

In a partition action, defendant co-tenant appealed from Supreme Court's order granting summary judgment on plaintiff co-tenant's claim for partition and sale. The Appellate Division affirmed, holding that defendant co-tenant had raised no triable issues of fact that would preclude partition and sale.

The parties jointly own a single-family dwelling comprising either four stories or three stories and a basement. The building is seventeen feet wide and 50 feet long, and sits on a lot that is 25 feet wide and 100 feet long. Supreme Court held that physical partition could not be arranged without great prejudice to the owners, and therefore ordered partition in kind. Defendant co-tenant appealed.

In affirming, the Appellate Division conceded that partition has always been subject to the equities between the parties, but concluded that defendant had raised no equities sufficient to preclude partition. In particular, the court held that plaintiff co-tenant's failure to pay real estate taxes was an insufficient basis to support dismissal of the partition action. The court also concluded that defendant co-tenant's desire to keep the property in the family was insufficient to deny partition and sale.