Real Property Law

The court granted summary judgment to the delinquent owner with respect to the money judgment action, concluding that plaintiff lot owner lacked standing to bring the claim. The court relied on section 623 of the Not for Profit Corporation Law, which permits derivative actions only when the complaint sets forth with particularity the efforts of the plaintiff to secure initiation of the action by the corporate board. The court noted that plaintiff's complaint alleged only that plaintiff lot owner had requested the board to initiate a foreclosure action, but not that plaintiff lot owner had requested the board to bring an action for a money judgment. The court also rejected the argument that the Declaration of covenants itself authorized individual lot owners to bring an action, despite language in the declaration providing that the provisions shall be enforceable both by the HOA and by “any Owner.” The court concluded that the declaration was intended to grant individual lot owners authority to enforce the declaration only to the extent the violations implicate the owner's individual property rights. With respect to the foreclosure action, the court denied summary judgment, concluding that questions of fact remained about whether plaintiff lot owner's request that the HOA board commence a lien foreclosure action was sufficient to satisfy section 623 of the Not for Profit Corporation Law.

Comment

A lot owner within a Home Owners Association (HOA) organized under non-for-profit law N-PCL §623 does not have standing to bring a derivative suit on behalf of the HOA unless the lot owner brings the claim together with at least 5% of the members and sets forth with particularity his efforts to secure initiation of the action by the Board or justifiable reasons for not making such effort. In Schaefer v. Chautauqua Escapes Association, Inc., 158 A.D.3d 1186, the Fourth Department dismissed a group of property-owners' breach of contract claim for unpaid assessments by the Sponsor-lot owner and their claim seeking enforcement of a covenant the Sponsor made to the HOA to keep a lodge building in good repair. Since both claims were advanced derivatively on behalf of the HOA, they failed because they met neither N-PCL §623(a)'s requirement that the claim be brought by 5% of the HOA members, nor N-PCL §623(c)'s requirement that the complainants demonstrate an effort to secure initiation of the action by the Board or present justifiable reasons for not making such effort. The court did not discuss a possibility that the covenant to keep the lodge in good repair was created for the benefit of all the property owners, which might have allowed for the plaintiffs to bring the claim on their own behalf.

However, any lot owner within a common interest community has standing to commence an action that seeks to enforce a restrictive covenant that was created for the benefit of all property owners within the community. For instance, in Hidalgo v. 4-34-68 117, A.D.3d 798, the Second Department affirmed the lower court's conclusion that a landowner had standing to seek an injunction when her neighbor planned to build too close to their shared property line in violation a restrictive covenant. The court determined that any property owner within the community could seek to enforce the covenant since it was part of a common development scheme and created for the benefit of all property owners. Although there is no case law on point, the existence of an HOA would presumably not affect this individual right if the claim is not brought on behalf of the HOA. (See, Westmoreland Ass'n, Inc. v. West Cutter Estates, Ltd., 174 A.D.2d, holding that an HOA had standing to seek injunction against construction that violated a restrictive covenant by way of the HOA's capacity to represent the property owners who have the primary right to the claim.)

No Foreclosure Jurisdiction Over Deceased Owners

Matter of Foreclosure of Tax Liens. County of Orange v. Goldman NYLJ 10/26/18, p. 32, col. 1 AppDiv, Second Dept. (3-1 decision; majority memorandum; dissenting memorandum by Scheinkman, P.J.)

In a tax foreclosure action, the county appealed from Supreme Court's dismissal of the petition. A divided Appellate Division affirmed, holding that because the foreclosure proceeding was brought against deceased owners for whom an estate administrator had not been appointed, Supreme Court lacked jurisdiction over the proceeding.

On Nov. 1, 2013, the county filed with the county clerk a list of tax delinquent properties, including the subject property. The county then brought a tax foreclosure action by petition dated Aug. 5, 2014. The petition indicated that the last day to redeem was March 2, 2015. The county mailed the petition and notice of petition to the record owners, Thomas and Sharon Dixon, at the address in the town's recorded. The post office returned the certified mailing with a legend “forward time expired,” and with a post office box listed above the note “return to sender.” The county then mailed notice to the Dixons at the post office box. An individual named Stephanie Burton signed for the certified mailing on Jan. 7, 2015. The county then affixed notices of the foreclosure proceeding at the property. On Feb. 27, 2015, Tammy Burton Goldman, the Dixons' niece, filed an answer to the County's petition. The answer stated that the Tomas Dixon had died in 2002 and Sharon had died in 2013, and no estate proceeding had been commenced on behalf of either decedent. The answer concluded by saying that if taxes were due, the as yet unnamed personal administrator of the estates would be the responsible party to be named in the tax proceedings. The County subsequently moved for a judgment of foreclosure. Although there was no opposition to that motion, Supreme Court concluded that because the proceeding was brought against deceased individuals, it was a nullity. As a result, the court dismissed the petition. The county appealed.

In affirming, the Appellate Division majority concluded that because the proceeding was brought against the Dixons after their death, the proceeding was a nullity. The majority indicated that the county's remedy was to have an administrator appointed in the foreclosure proceeding. Justice Scheinkman, dissenting, argued that tax lien foreclosures are in rem proceedings against the property, not against the owners, and that the death of the owners did not divest the court of jurisdiction. He argued that the only issue was notice, not jurisdiction, and that the county had complied with all constitutional notice requirements.

Questions of Fact Preclude Summary Judgment on Claims of Easement By Necessity and Prescription

Kheel v. Molinari 2018 WL 5288841 AppDiv, Third Dept. (10/25/18) (Opinion by Lynch, J.)

In landowner's action to quiet title, landowner appealed from Supreme Court's denial of his summary judgment motion. The Appellate Division modified to grant summary judgment dismissing neighbor's adverse possession claim but affirmed the denial of summary judgment with respect to neighbor's claims of easement by prescription and necessity.

In 2001, landowner sold the adjacent parcel to neighbor. Neighbor's parcel includes a multifamily residence that connects to a septic system located on landowner's parcel. In addition, neighbor has used a driveway running along the border between the two parcels, but located largely on landowner's parcel. In 2011, landowner built a fence that blocked neighbor's access to the septic system and driveway, and then brought the instant quiet title action. Neighbor counterclaimed for adverse possession or for an easement, and Supreme Court denied both motions, finding that there were unresolved questions of fact.

In modifying, the Appellate Division first held that landowner was entitled to summary judgment dismissing neighbor's adverse possession counterclaim. The court emphasized that neighbor had acknowledged during the statutory period that landowner owned the subject property, foreclosing any adverse possession claim. The court, however, held that questions of fact remained with respect to the hostility of neighbor's use of the driveway and septic system, precluding summary judgment on neighbor's easement by prescription claim. The court then noted that the driveway itself was not necessary for neighbor to access his own parcel, which is not landlocked. But the court held that questions of fact remained about whether it was necessary for neighbor to use the septic system on landowner's parcel, citing disputes about whether a septic system could be located on neighbor's own parcel. Finally, the court held that questions of fact about whether use of the driveway was necessary to access the septic tank precluded summary judgment on the easement by necessity claim with respect to the driveway.

Comment

An owner who seeks access across a neighboring parcel previously held in common ownership can advance two related claims, both of which rest on the necessity of access: an easement by strict necessity or an easement by implication. An easement by necessity over a neighboring parcel arises when, at the time the parcels were severed, the only access from landowner's parcel to a public road was over the neighboring parcel. Thus, in Stock v. Ostrander, 233 AD2d 816, landowner obtained an easement by necessity when landowner introduced title maps and an abstract of title to show that at the time of severance, landowner's parcel became landlocked. The necessity, however, must be strict: in Foti v. Nofsier, 72 AD3d 1605, the Fourth Department affirmed dismissal of an easement by necessity claim when, at the time of severance, landowner's parcel had access to a navigable waterway, though not to a public road.

To establish an easement by implication, the landowner need not establish strict necessity; reasonable necessity is enough, and easements by implication are not limited to access alone. Thus, in Freeman v. Walther, 110 AD3d 1312, the Third Department held that questions of fact precluded summary judgment on landowner's claim for an easement by implication to use a water pipeline across his neighbor's land. The pipeline had been in place at the time of severance — a requirement for an easement by implication — but the court held that questions of fact remained about whether potable water was available from another source. For an easement by implication, unlike an easement by necessity, failure to establish use at the time of severance is fatal. Thus, in Beretz v. Diehl, 302 AD2d 808, the court affirmed dismissal of landowner's easement by implication claim, despite proof that the parcel had become landlocked at severance, because landowner had not established that a road across the neighbor's parcel had been used prior to severance. The court noted, however, that landowner had failed to advance an easement by necessity claim, suggesting that if landowner's lawyer had advances such a claim, landowner might have prevailed.