New York Law Review

Tag: Real Property Law

  • Galetta v. Galetta, 21 N.Y.3d 186 (2013): Enforceability of Prenuptial Agreements and Defective Acknowledgments

    Galetta v. Galetta, 21 N.Y.3d 186 (2013)

    A prenuptial agreement must be acknowledged in the manner required to entitle a deed to be recorded, and a defective acknowledgment, where a core component is missing, cannot be cured by a later affidavit if the affidavit does not provide sufficient detail of the notary’s customary practices.

    Summary

    In a divorce action, Michelle Galetta sought to invalidate a prenuptial agreement due to a defective acknowledgment of Gary Galetta’s signature. The New York Court of Appeals held that the acknowledgment was indeed defective because it omitted language confirming the notary’s verification of the signer’s identity. Furthermore, the court found that the notary’s affidavit, submitted later, was insufficient to cure the defect as it lacked specific details about the notary’s customary practices. The Court emphasized that prenuptial agreements must adhere strictly to the formality required for recorded deeds, ensuring deliberation and authentication of the signatures. As a result, the prenuptial agreement was deemed unenforceable.

    Facts

    Michelle and Gary Galetta signed a prenuptial agreement a week before their wedding in 1997. Each party signed separately, with different notaries public witnessing their signatures. The agreement stipulated that their separate properties would remain separate and neither would seek maintenance from the other. Gary’s certificate of acknowledgment omitted a crucial phrase indicating the notary confirmed Gary’s identity. In 2010, Gary filed for divorce, and Michelle sought to invalidate the prenuptial agreement based on the defective acknowledgment.

    Procedural History

    The Supreme Court denied Michelle’s motion for summary judgment, finding substantial compliance with the Real Property Law. The Appellate Division affirmed, holding the acknowledgment was defective but could be cured, finding the notary’s affidavit raised a triable issue of fact. A dissenting opinion argued the defect could not be cured. The Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the certificate of acknowledgment accompanying the husband’s signature was defective.

    2. Whether a defective certificate of acknowledgment can be cured after the fact, and if so, whether the notary public’s affidavit was sufficient to raise a question of fact precluding summary judgment.

    Holding

    1. Yes, because the certificate of acknowledgment omitted language indicating the notary public knew or had ascertained the signer was the person described in the prenuptial agreement.

    2. No, the affidavit was insufficient because it lacked specific details about the notary’s customary practices for verifying identity, even assuming a defect can be cured, therefore it did not raise a triable question of fact.

    Court’s Reasoning

    The Court reasoned that Domestic Relations Law § 236 (B) (3) requires prenuptial agreements to be executed with the same formality as recorded deeds, as per Real Property Law § 291. This formality serves to authenticate the signer’s identity and impose deliberation in signing, as established in Matisoff v. Dobi, 90 N.Y.2d 127 (1997). Real Property Law §§ 292, 303, and 306, read together, mandate that the notary confirm the signer’s identity and certify that confirmation. The court emphasized that “acknowledgment serves to prove the identity of the person whose name appears on an instrument and to authenticate the signature of such person.”

    The Court distinguished Weinstein v. Weinstein, 36 A.D.3d 797 (2d Dept 2007), noting that the case involved a deviation in form, not substance, unlike the present case where a core component of a valid acknowledgment was missing. While the Court acknowledged the possibility of curing a defective acknowledgment under certain circumstances, it found the notary’s affidavit insufficient. The affidavit lacked specific details about the notary’s routine procedure for verifying identity. “Custom and practice evidence draws its probative value from the repetition and unvarying uniformity of the procedure…”. Because the notary only generally stated that it was his practice to “ask and confirm” the identity of the signer, it was too conclusory to establish a triable issue of fact.

  • M&T Real Estate Trust v. Doyle, 20 N.Y.3d 533 (2013): Delivery of Deed Requires Acceptance for Deficiency Judgment

    M&T Real Estate Trust v. Doyle, 20 N.Y.3d 533 (2013)

    For the purposes of determining the timeliness of a motion for a deficiency judgment under RPAPL 1371(2), “consummation of the sale by the delivery of the proper deed” occurs only when the grantee accepts the deed, not merely when the grantor presents it.

    Summary

    M&T Real Estate Trust sought a deficiency judgment after foreclosing on commercial mortgages. The defendants argued that M&T’s motion was untimely because it was filed more than 90 days after the referee initially mailed the deed to M&T’s attorney. M&T argued that the 90-day period started later, when the referee re-executed and delivered the deed which was then accepted. The New York Court of Appeals held that the 90-day period under RPAPL 1371(2) begins only upon acceptance of the deed by the grantee, reversing the Appellate Division’s decision and reinstating the County Court’s order and judgment.

    Facts

    M&T obtained a foreclosure judgment against James Doyle and Jim Doyle Ford, Inc. At auction, M&T purchased the property and planned to assign the bid to MAT Properties, Inc. The referee executed a deed naming MAT as the grantee and mailed it to M&T’s attorney. Before the deed arrived, M&T’s attorney, learning of a potential higher bidder, told the referee that MAT would not accept the deed and that the documents would be returned, which they were. Later, M&T instructed the referee to record the deed. The referee then re-executed a new deed, which was accepted and subsequently recorded.

    Procedural History

    County Court granted M&T’s motion for a deficiency judgment, holding that the motion was timely because it was filed within 90 days of the re-executed deed. The Appellate Division reversed, concluding that the 90-day period began with the initial delivery attempt. The Court of Appeals granted M&T leave to appeal.

    Issue(s)

    Whether, for purposes of RPAPL 1371(2), the “consummation of the sale by the delivery of the proper deed of conveyance to the purchaser” occurs when the referee (grantor) first executes and mails the deed, or only when the grantee (or its agent) accepts the deed?

    Holding

    No, the consummation of the sale occurs when the grantee accepts the deed, because acceptance is a necessary component of delivery under New York real property law.

    Court’s Reasoning

    The Court of Appeals relied on Real Property Law § 244, which states that a grant takes effect only from its delivery, and on common law principles requiring both presentment and acceptance for delivery. The court stated, “[t]he delivery of a deed without acceptance is nugatory…An intention to deliver on the one hand and to accept on the other, is necessary to give effect to the instrument.” The court emphasized that no statutory basis exists to treat a referee’s deed differently from other deeds. In this case, M&T’s attorney twice declined to accept the initially delivered deed. The court found this to be “opposing evidence” sufficient to rebut any presumption of delivery in May 2010. Only when the deed was re-executed and then accepted did the transfer occur, making M&T’s motion timely. The court distinguished this case from situations where the grantee accepts and retains the deed without objection, as in Crossland Sav. v Patton. The court emphasized that the key is not merely physical transfer, but the intention to accept the conveyance, quoting Ten Eyck v Whitbeck, “[t]he delivery of a deed is essential to the transfer of title, and there can be no delivery without an acceptance by the grantee”.

  • NYCTL 1999-1 Trust v. 573 Jackson Avenue Realty Corp., 13 N.Y.3d 573 (2009): Clarifying Redemption Rights in Foreclosure Actions

    NYCTL 1999-1 Trust v. 573 Jackson Avenue Realty Corp., 13 N.Y.3d 573 (2009)

    A property owner seeking to exercise their equity of redemption must make an unconditional tender of the full amount due before the foreclosure sale; depositing funds with the County Clerk without clear indication of intent to redeem is insufficient.

    Summary

    This case clarifies the requirements for a property owner to redeem their property before a foreclosure sale. Jackson failed to pay property taxes, leading to a tax lien acquired by the Trust. After Jackson paid the initial lien amount but not the accrued interest, the Trust initiated foreclosure proceedings. Jackson attempted to stay the foreclosure sale by depositing funds with the County Clerk without specifying the purpose. The Court of Appeals held that this action did not constitute a proper redemption because Jackson failed to make an unconditional tender of the full amount owed to the Trust. The decision emphasizes that simply depositing money is not enough; the intent to redeem must be clear and communicated to the mortgagee.

    Facts

    Jackson failed to pay real property taxes on its Bronx property.

    The Trust acquired a tax lien against the property for $2,412.75.

    Jackson paid the initial lien amount nearly three years later, but not the accrued statutory interest.

    The Trust commenced a foreclosure action to recover the outstanding balance.

    A foreclosure sale was scheduled for August 24, 2007.

    Jackson deposited $19,563.71 with the Bronx County Clerk before the sale, stating the purpose and beneficiaries were “to be determined.”

    Jackson informed the Trust that the deposit “stayed” the sale.

    The foreclosure sale proceeded, and a third party purchased the property.

    Procedural History

    Supreme Court granted summary judgment to the Trust and ordered foreclosure.

    Jackson appealed the judgment of foreclosure.

    Jackson moved to cancel the foreclosure sale, arguing a statutory stay was in effect.

    Supreme Court denied the motion.

    The Appellate Division affirmed the foreclosure judgment and the denial of the motion.

    The Court of Appeals granted Jackson leave to appeal.

    Issue(s)

    Whether Jackson properly stayed the foreclosure sale under CPLR 5519(a)(2) or (6) or RPAPL 1341.

    Whether Jackson effectively exercised its right to redeem the property before the foreclosure sale.

    Holding

    No, because CPLR 5519(a)(2) does not apply to judgments of foreclosure, and Jackson’s undertaking was not in a sum fixed by the court as required by CPLR 5519(a)(6). RPAPL 1341 is inapplicable as the case did not involve a partial foreclosure.

    No, because Jackson did not make an unconditional tender of the full amount owed to the Trust before the sale.

    Court’s Reasoning

    The Court found CPLR 5519(a)(2) inapplicable because it pertains only to judgments directing the payment of money, not foreclosure judgments. CPLR 5519(a)(6) was also not applicable, as the undertaking wasn’t in a sum fixed by the court.

    Regarding RPAPL 1341, the Court clarified that this provision applies only to partial foreclosures where future payments are anticipated. The statute authorizes a stay when a property owner pays a sufficient amount into court in situations “[w]here an action is brought to foreclose a mortgage upon real property upon which any part of the principal or interest is due, and another portion of either is to become due.” Since this was not a partial foreclosure, RPAPL 1341 did not apply.

    Addressing the right of redemption, the Court emphasized that a property owner must make an unconditional tender of the full amount due before the foreclosure sale to redeem the property. Simply depositing funds with the County Clerk, without clearly communicating the intent to redeem and without tendering the funds to the mortgagee, is insufficient. The Court explicitly disapproved of Appellate Division cases that had engrafted RPAPL 1341’s requirements onto the common-law right of redemption, stating, “To the extent LFJ, EMC and Green Point suggest that a property owner must comply with RPAPL 1341’s requirements—including a motion for a stay and a sum deposited with the court—as preconditions for redemption, those cases should not be followed. An unconditional tender of the full amount due is all that is required.”

    The Court noted that Jackson only sought to stay the sale through its deposit, never claiming it had fully satisfied the debt or making an unconditional tender.

  • 805 Third Ave. Co. v. M.W. Realty Associates, 58 N.Y.2d 547 (1982): Enforceability of Unambiguous Contract Terms

    805 Third Ave. Co. v. M.W. Realty Associates, 58 N.Y.2d 547 (1982)

    Clear, complete writings should generally be enforced according to their terms, especially in real property transactions negotiated between sophisticated, counseled business people at arm’s length.

    Summary

    This case concerns the enforceability of a 99-year ground lease between landlords and a tenant. The lease contained a renewal clause that, if read literally, would postpone the rent appraisal for the renewal term by 32 years. When the parties disputed the interpretation of this clause, the landlords sought to stay an immediate appraisal. The tenant claimed a scrivener’s error and sought reformation. The court held that the lease was unambiguous and enforceable as written, despite the tenant’s argument that it led to an absurd result. The court emphasized that sophisticated parties negotiated the lease and that commercial certainty in real estate transactions is paramount.

    Facts

    In 1960, the landlords and tenant entered into a 99-year ground lease for property on Madison Avenue. The lease provided for an initial 33-year term with two renewal options for 33 years each. The lease outlined incremental rent increases during the initial term. The renewal clause (Article 17) stated that neither party could seek an appraisal to determine the rent for the renewal term until twelve months prior to the “expiration” of the renewal term. The tenant constructed a 26-story office building on the property. The tenant exercised its option to renew for the first 33-year renewal term.

    Procedural History

    The landlords commenced a proceeding under CPLR 7601 to stay the appraisal, arguing it was premature. The tenant sought reformation of the lease based on a scrivener’s error. The Supreme Court granted the petition to stay the appraisal, finding the lease clear and unambiguous. The Appellate Division affirmed. The dissenting justices believed the provision was so at odds with normal business practice as to render its meaning unclear, necessitating a trial. The tenant appealed to the Court of Appeals.

    Issue(s)

    Whether the word “expiration” in the lease’s appraisal clause (Article 17) was a scrivener’s error, rendering the clause unenforceable as written.

    Holding

    No, because the lease was unambiguous, and its literal enforcement did not lead to an absurd result or render the lease unenforceable.

    Court’s Reasoning

    The Court of Appeals held that the lease was unambiguous and enforceable as written. The court emphasized that New York law dictates that clear, complete writings should be enforced according to their terms, especially in real property transactions where commercial certainty is paramount. The court stated: ” ‘It is axiomatic that a contract is to be interpreted so as to give effect to the intention of the parties as expressed in the unequivocal language employed.’ ” The court found that the lease was negotiated by sophisticated business people with counsel. While the retrospective appraisal mechanism might be unconventional, this did not justify ignoring the plain language of the contract. The court rejected the tenant’s claim of scrivener’s error, noting that the statute of limitations for reformation had expired. The court distinguished cases where transposition, rejection, or supplying of words would be appropriate, limiting such actions to instances where an absurdity has been identified or the contract would otherwise be unenforceable. The court reasoned that Article 17, considered in isolation or within the entire lease, was clear, complete, and allowed for the implementation and enforcement of its terms.

  • Wing Ming Properties (U.S.A.) Ltd. v. Mott Operating Corp., 79 N.Y.2d 1021 (1992): Trespass on Air Rights and De Minimis Encroachments

    Wing Ming Properties (U.S.A.) Ltd. v. Mott Operating Corp., 79 N.Y.2d 1021 (1992)

    Encroachments on conveyed airspace are actionable as trespass, but de minimis variations and the lack of demonstrable harm can preclude injunctive or monetary relief.

    Summary

    Wing Ming Properties sued Mott Operating Corp. for trespass, alleging that new rooftop air-conditioning equipment and parapets erected by a sublessee encroached on airspace Wing Ming acquired in a 1973 conveyance. The Court of Appeals affirmed the dismissal of the suit, holding that while development rights were conveyed, the new structures were excluded from Floor Area Ratio (FAR) calculations, thus not affecting those rights. Further, any physical encroachment on the conveyed airspace was considered de minimis, and Wing Ming failed to demonstrate any actual harm or diminution in property value resulting from the slight variations. Therefore, neither injunctive nor monetary relief was warranted.

    Facts

    In 1973, Mott, Kaplan, Chu, and Tam conveyed the airspace above a building at 5 Chatham Square in Manhattan to Wing Ming’s predecessor. Mott et al. retained the right to maintain an existing rooftop air-conditioning unit and room. Wing Ming’s predecessor intended to transfer unused development rights (FAR) to a contiguous building. In 1985, Kaplan subleased the property to the Bank of Central Asia (BCA), allowing BCA to use the roof for HVAC equipment and alter the facade. BCA removed the old equipment, installed new equipment, and built parapet walls extending over the rooftop.

    Procedural History

    Wing Ming, as successor in interest, sued for trespass. The Supreme Court granted summary judgment for the defendants, dismissing the complaint. The Appellate Division affirmed this decision. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the new rooftop air-conditioning equipment and parapets erected by BCA constituted a trespass on Wing Ming’s conveyed rooftop airspace, entitling Wing Ming to injunctive or monetary relief.

    Holding

    No, because the new rooftop structures did not affect Wing Ming’s development rights (FAR), and any physical encroachment was de minimis with no demonstrable harm. Therefore, neither injunctive nor monetary relief is warranted.

    Court’s Reasoning

    The Court of Appeals agreed with the lower courts that no trespass occurred that warranted relief. The new structures were excluded from FAR calculations under New York City Zoning Resolution § 12-10, meaning Wing Ming’s development rights were unaffected. More importantly, the court found that any physical intrusion into the conveyed airspace was minimal. The court stated, “The variations between the air-conditioning unit and room existing at the time of the 1973 conveyance and the replacement unit and ducts subsequently erected by BCA, and the extent to which the newly constructed parapets rise above the elevation plane of the conveyed airspace, are de minimis at best.” The court emphasized that Wing Ming had not demonstrated that these slight variations negatively impacted its property value. This lack of demonstrated harm was crucial to the decision. Even if a technical trespass occurred, the principle of de minimis non curat lex (the law does not concern itself with trifles) applied, precluding the need for injunctive or monetary relief. The court implicitly acknowledged the conveyance of the airspace property right, but focused on the lack of substantial interference and provable damages. The court emphasized a practical approach, requiring demonstrable harm to justify legal intervention in property disputes.

  • Suffolk Business Center, Inc. v. Applied Digital Data Systems, Inc., 78 N.Y.2d 383 (1991): Distinguishing Covenants Running with the Land from Future Interests

    78 N.Y.2d 383 (1991)

    Whether a clause in a deed is a covenant running with the land or a future interest on a condition subsequent depends on the parties’ intent, as gleaned from the deed’s language and the omission of a right of reentry effecting forfeiture.

    Summary

    Suffolk Business Center (SBC) sold land to Applied Digital Data Systems (Applied) with a clause requiring Applied to build improvements within a year, or SBC could repurchase the land at the original price. Applied built part of the improvements but failed to complete the rest. SBC sought specific performance of the repurchase option. The court had to determine if the clause was a covenant, enforceable by specific performance, or a future interest, subject to RPAPL 1953. The Court of Appeals held that the clause was a covenant running with the land, based on the parties’ intent as shown in the deed, because it used the term “covenant” and lacked a right of reentry. This allows SBC to seek specific performance.

    Facts

    Suffolk Business Center (SBC) sought to develop an industrial park and sold a parcel to Applied Digital Data Systems (Applied).
    The contract required Applied to start construction on improvements within one year and diligently continue until completion.
    If Applied failed, SBC had the option to repurchase the parcel at the original price.
    The deed, which was recorded, contained the construction/repurchase provision.
    Applied began but did not complete all required construction due to economic conditions.
    SBC tried to exercise its repurchase option, but Applied refused.

    Procedural History

    SBC sued Applied for specific performance in Supreme Court, Suffolk County.
    The Supreme Court granted Applied’s cross-motion for summary judgment and dismissed the complaint, suggesting SBC bring an action under RPAPL 1953.
    The Appellate Division affirmed the Supreme Court’s decision.
    The Court of Appeals granted SBC’s motion for leave to appeal.

    Issue(s)

    Whether the construction/repurchase provision in the deed constituted a covenant running with the land, enforceable by specific performance, or a future interest on a condition subsequent, enforceable only under RPAPL 1953.

    Holding

    No, because the parties intended to create a covenant running with the land enforceable in equity, as evidenced by the use of the term “covenants” in the deed and the omission of any right of reentry effecting a forfeiture.

    Court’s Reasoning

    The Court’s reasoning hinged on determining the parties’ intent from the deed’s language. The Court emphasized that the deed specifically used the term “covenants running with the land” in relation to the construction/repurchase provision. “[T]he deed to be delivered by the Seller under this Agreement shall contain such provisions as are necessary to implement the [construction/repurchase] provisions * * * so that such provisions shall constitute covenants running with the land“. This explicit language indicated the parties intended to create a covenant.

    Further, the absence of a right of reentry, which is typical of future interests on a condition subsequent, suggested that the parties did not intend a forfeiture. The Court noted that “a covenant is intended and preferred where, as here, the deed is tellingly silent as to any reentry authorization”.

    The Court distinguished covenants from future interests, noting that future interests often involve a forfeiture if the condition is not met, whereas the repurchase provision in this case required SBC to pay Applied the original purchase price, thus avoiding forfeiture in the traditional sense. The court emphasized that “the provision does not effect a forfeiture, which is usually an essential component of a future interest on a condition subsequent”.

    The Court also considered the legislative history of RPAPL 1953, which was designed to limit the enforceability of forfeiture provisions. Since the provision in question did not effect a forfeiture, the statute was deemed inapplicable.

    The dissenting opinion argued that the provision created a condition subsequent, as the right to repurchase was personal to the grantor (SBC). The dissent also contended that requiring Applied to reconvey the property for the original purchase price, when its value had significantly increased, constituted a forfeiture. However, the majority rejected this argument, focusing on the explicit language in the deed and the lack of a right of reentry.

    The court considered the distinction between a covenant and a condition subsequent, noting that a covenant is a promise concerning real property, while a condition subsequent involves a right of reacquisition triggered by a specific event. The characterization depends on the intent of the parties at the time of the transaction.

    Ultimately, the Court’s decision turned on the importance of interpreting the deed according to the parties’ intent, as evidenced by the specific language used and the absence of terms traditionally associated with future interests. The Court prioritized the specific use of the word “covenants” over the boilerplate language of the contract. This approach emphasizes the importance of clear and precise language in real estate transactions.

  • Witter v. Taggart, 78 N.Y.2d 223 (1991): Restrictive Covenants and Chain of Title

    Witter v. Taggart, 78 N.Y.2d 223 (1991)

    A property owner is only bound by a restrictive covenant if it appears in a deed of record in the conveyance to that owner or their direct predecessors in title, absent actual notice or other exceptional circumstances.

    Summary

    This case addresses whether a restrictive covenant in a deed to a “dominant” parcel, which does not appear in the direct chain of title to an adjacent “servient” parcel, burdens the servient property. The New York Court of Appeals held that, absent actual notice or other exceptional circumstances, a property owner is only bound by restrictions appearing in their direct chain of title. This decision reinforces the importance of clear, accessible property records and protects bona fide purchasers from hidden encumbrances, promoting certainty in land ownership and use.

    Facts

    Witter and Taggart owned neighboring properties separated by a canal. Witter’s property was conveyed from a common grantor (Lawrance) in 1951 with a restrictive covenant preventing the erection of structures on Lawrance’s retained land that would obstruct Witter’s view. Taggart’s property was later conveyed by Lawrance’s heirs in 1962, with no mention of the restrictive covenant. The Taggarts built a 70-foot dock on their property. Witter sued to compel the removal of the dock, claiming it violated his scenic easement protected by the restrictive covenant in his chain of title.

    Procedural History

    The Supreme Court granted summary judgment for the Taggarts, dismissing Witter’s complaint. The Appellate Division affirmed, holding that the restrictive covenant in Witter’s chain of title was outside the Taggarts’ chain of title and did not constitute binding notice. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether a restrictive covenant recited in the chain of title to Witter’s land, which appears nowhere in the direct chain of title to the Taggarts’ land, burdens the Taggarts’ property?

    Holding

    No, because a purchaser is only bound by restrictions if they appear in some deed of record in the conveyance to that owner or that owner’s direct predecessors in title, absent actual notice before or at the time of purchase or other exceptional circumstances.

    Court’s Reasoning

    The Court of Appeals affirmed, relying on the principle established in Buffalo Academy of Sacred Heart v. Boehm Bros., that a landowner is only bound by restrictions appearing in their direct chain of title, absent actual notice or exceptional circumstances. The court emphasized that New York’s recording act aims to protect innocent purchasers and provide a public record of conveyances and encumbrances. The recording statutes only charge a purchaser with notice of matters in the record of the purchased land’s chain of title back to the original grantor.

    The Court reasoned that imposing a duty to search outside the direct chain of title would undermine the purpose of the recording acts and place an unreasonable burden on prospective purchasers. It stated that “[i]n the absence of actual notice before or at the time of * * * purchase or of other exceptional circumstances, an owner of land is only bound by restrictions if they appear in some deed of record in the conveyance to [that owner] or [that owner’s] direct predecessors in title.”

    The Court distinguished Ammirati v. Wire Forms, explaining that it involved a landlocked parcel with an affirmative easement by necessity, putting the servient owner on inquiry notice. The Court clarified that its affirmance in Ammirati did not mean that a deed conveying a dominant parcel is considered part of the chain of title of the retained servient land.

    The court further stated that the grantor may extinguish a covenant when the grantor conveys retained servient land to a bona fide purchaser who takes title without actual or constructive notice of the covenant because the grantor and dominant owner failed to record the covenant in the servient land’s chain of title.

    In its holding, the Court emphasized the importance of definiteness, certainty, alienability, and unencumbered use of property, which would be undermined by restricting the Taggarts due to Lawrance’s failure to include the covenant in the deed to his retained servient land.

  • Matter of Parkside Community Church, Inc. v. Zoning Bd. of Appeals of the Vil. of Dobbs Ferry, 66 N.Y.2d 967 (1985): Abandonment of Nonconforming Use Requires Complete Cessation

    66 N.Y.2d 967 (1985)

    A nonconforming use is only deemed abandoned when there has been a complete cessation of the nonconforming use.

    Summary

    This case addresses the issue of whether a property owner abandoned a nonconforming use by allowing one of two structures on the property to remain vacant for a period of years. The New York Court of Appeals held that abandonment of a nonconforming use requires a complete cessation of the entire nonconforming use, not just a portion of it. Because the other structure on the property remained in use, the nonconforming use was not abandoned. The Court modified the lower court’s order by removing the requirement that the matter be remitted to the Zoning Board of Appeals (ZBA) to determine if the petitioner was improperly extending or enlarging the structure.

    Facts

    Parkside Community Church owned a parcel of land in the Village of Dobbs Ferry with two structures: a three-family dwelling in the front and a one-family house in the rear. Prior to 1969, the owner lived in the one-family house and rented out the three-family dwelling. A zoning ordinance passed before 1969 made this use nonconforming, as it only permitted one two-family structure on the lot. Both dwellings continued to be occupied as nonconforming uses until 1969. From 1969 to 1984, the rear one-family house remained vacant, while the front three-family dwelling continued to be used. In 1984, Parkside Community Church purchased the property and applied for a permit to renovate the rear building.

    Procedural History

    The village building inspector denied Parkside Community Church’s application for a permit. The Zoning Board of Appeals (ZBA) affirmed the denial, stating that the use of the property for four families had been abandoned. The Supreme Court annulled the ZBA’s decision. The Appellate Division affirmed the Supreme Court’s judgment but remitted the matter to the ZBA to determine whether the petitioner’s application sought to improperly extend or enlarge the structure. The ZBA appealed to the New York Court of Appeals.

    Issue(s)

    Whether the vacancy of one of two dwellings on a property, where both dwellings contribute to a single nonconforming use, constitutes abandonment of the entire nonconforming use.

    Holding

    No, because abandonment does not occur unless there has been a complete cessation of the nonconforming use.

    Court’s Reasoning

    The court stated that abandonment requires a complete cessation of the nonconforming use. The court cited several cases in support of this proposition, including Matter of Daggett v Putnam, 40 AD2d 576; Baml Realty v State of New York, 35 AD2d 857; City of Binghamton v Gartell, 275 App Div 457, 460; and Barron v Getnick, 107 AD2d 1017, 1018. The court found that there was no evidence that the entire nonconforming use (use of the lot for more than one two-family structure) had been abandoned, since the three-family dwelling continued to be occupied. Therefore, the petition was properly granted and the determination of the ZBA annulled.

    The court also addressed the lower court’s decision to remit the matter to the ZBA to determine whether the petitioner’s application sought to improperly extend or enlarge the structure. In light of the fact that the petitioner’s application only sought to restore the rear structure to its former condition and the ZBA’s request that the matter not be remitted, the Court of Appeals modified the Supreme Court’s order by deleting the provision ordering such remittal.

  • Willow Tex, Inc. v. Dimacopoulos, 68 N.Y.2d 963 (1986): Establishing an Easement by Express Grant

    Willow Tex, Inc. v. Dimacopoulos, 68 N.Y.2d 963 (1986)

    To create an easement by express grant, there must be a written document containing plain and direct language evincing the grantor’s intent to create a right in the nature of an easement, demonstrating an intent to give a permanent right of use to the dominant estate.

    Summary

    Willow Tex, Inc. and George Dimacopoulos are adjacent property owners. Willow Tex sought a declaration of an easement over Dimacopoulos’s property to access fire doors on Willow Tex’s building. The alleged easement stemmed from a 1966 certificate of occupancy application where Dimacopoulos’s predecessor in title, Davis, allowed Willow Tex’s predecessor to use the driveway for exits. After Dimacopoulos obstructed access to the fire doors, Willow Tex sued, claiming easements by express grant, implication, and necessity. The trial court found an easement by express grant. The Appellate Division modified the judgment. The Court of Appeals reversed, holding that the certificate of occupancy created a revocable license, not a permanent easement.

    Facts

    Willow Tex, Inc. owned a factory building (parcel No. 1) adjacent to George Dimacopoulos’s property (parcel No. 2). The factory had fire doors opening onto Dimacopoulos’s property, which were necessary for access to a public road. In 1966, when parcel No. 2 was owned by Davis, who was also the lessor of parcel No. 1 (through his company Sida Realty Corp.), Davis joined Sida’s application for a certificate of occupancy, proposing to legalize exits including the fire doors. Dimacopoulos purchased his parcel in 1976, and Willow Tex purchased its parcel in 1980. A dispute arose when Willow Tex’s tenant tried using the fire doors, and Dimacopoulos blocked them.

    Procedural History

    Willow Tex and its tenant sued Dimacopoulos, seeking damages and a declaration of an easement based on implied grant, prescription, and necessity. The trial court amended the pleadings to conform to the proof and decreed an easement by express grant, ordering Dimacopoulos to keep his driveway gate unlocked. The Appellate Division modified the judgment, requiring the gate to be unlocked at all times. Dimacopoulos appealed to the Court of Appeals based on the issue of easement by express grant.

    Issue(s)

    Whether the joint certificate of occupancy application constituted an express grant of easement over Dimacopoulos’s property for access to the fire doors on Willow Tex’s building.

    Holding

    No, because the certificate of occupancy, at most, created a license that terminated upon the transfer of parcel No. 2, not an easement by express grant.

    Court’s Reasoning

    The Court of Appeals reasoned that an easement by express grant requires a written document with clear language demonstrating the grantor’s intent to create a permanent easement, not a revocable license. The court emphasized that the writing must unequivocally establish the grantor’s intention to grant a permanent use of the servient estate to the dominant estate. “The policy of the law favoring unrestricted use of realty requires that where there is any ambiguity as to the permanence of the restriction to be imposed on the servient estate, the right of use should be deemed a license, revocable at will by the grantor, rather than an easement.” The court found that Davis’s participation in the certificate of occupancy application primarily benefited his own corporation and did not demonstrate an intent to grant a permanent easement to future tenants of parcel No. 1. At most, it created a license that terminated when Davis sold parcel No. 2. The court also agreed with the trial court’s rejection of an easement by implied grant.

  • Joseph v. Josanth Realty Corp., 24 N.Y.2d 1030 (1986): Measure of Damages for Breach of Covenant Against Encumbrances

    Joseph v. Josanth Realty Corp., 24 N.Y.2d 1030 (1986)

    Damages for breach of a covenant against encumbrances are measured by the difference between the property’s value before and after the defect is discovered.

    Summary

    Joseph sued Josanth Realty Corp. for breach of covenant against encumbrances after discovering the State had previously acquired a portion of the property. The trial court calculated damages based on square footage and an added amount for reduced marketability. The Appellate Division struck the marketability addition. The Court of Appeals reversed, holding that damages should be calculated by subtracting the property’s value after discovering the defect from its value before the defect existed. The Court remitted the case because the lower courts failed to adequately explain their deviation from the expert valuations presented.

    Facts

    In 1974, Joseph purchased property from Josanth Realty Corporation. Subsequently, Joseph learned that in 1971, the State of New York had acquired a portion of the property and a permanent easement from Josanth. The State paid Josanth $46,000 for the acquisition. Joseph then sued Josanth for breach of the covenant against encumbrances.

    Procedural History

    The trial court awarded Joseph damages. The Appellate Division modified the award by striking a $10,000 component. Joseph appealed to the Court of Appeals.

    Issue(s)

    Whether the lower courts properly calculated damages for breach of the covenant against encumbrances.

    Holding

    No, because the proper measure of damages is the difference between the property’s value before the defect and its value after the defect is discovered, and the lower courts did not adequately explain their deviation from presented expert valuation evidence.

    Court’s Reasoning

    The Court of Appeals stated that the “general rule is that damages for a breach of covenant against encumbrances or a breach of a warranty of title are measured by subtracting the value of the property after the defect is discovered from its value before the defect existed.” The court found that the lower courts appeared to have ignored this rule, compensating Joseph only for the direct damages related to the property taken by the State. While the trial court’s additional award might have been an attempt to award consequential damages, it was not related to any specific evidence. While a court is not bound to accept an expert’s valuation even if it is the only evidence presented, the court must provide sufficient explanation for its decision and there must be other evidence in the record to support the court’s determination. Here, the courts failed to explain why they departed from the expert’s values or how they arrived at the damage award. The case was remitted to the Appellate Division for further consideration and explanation or further action as warranted.