Gilgoff v Maldonado

[*1] Gilgoff v Maldonado 2005 NY Slip Op 51122(U) Decided on July 15, 2005 Supreme Court, New York County York, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 15, 2005
Supreme Court, New York County

Hugh Lorin Gilgoff, Plaintiff,

against

Theresa Maldonado, Defendant.



110253/03

Louis B. York, J.

This is a case where the court is called upon to disentangle a business affair from an affair of the heart. The undisputed facts leading up to this case are as follows. Plaintiff Hugh Lorin Gilgoff and Defendant Theresa Maldonado worked together as medical residents at Mount Sinai Hospital in New York City, where they became involved in a romantic relationship. After a time, the couple determined that they would purchase an apartment in which they would live together. In June of 1999, approximately three years from the onset of their relationship, plaintiff and defendant viewed the cooperative apartment, unit 30-K at 340 East 93rd Street ("the Unit"), for the first time and decided to buy it together. The couple proceeded to satisfy the prerequisites of joint ownership of a cooperative apartment including: acquiring letters of recommendation, and co-signing the purchase application, a promissory note and a loan agreement. Defendant paid the $12,800 down-payment out of a "wedding account" held jointly by defendant and her mother. On September 1, 1999 the couple closed on the property, co-signing the contract for purchase of shares and the proprietary lease which listed plaintiff and defendant as "joint tenants." Plaintiff soon moved into the Unit; defendant did not. Responding to plaintiff's request for "room" in their relationship, Defendant left only a few belongings at the apartment and retained her rented apartment on 33rd Street, until such time as they were ready to cohabitate.

On November 28, 1999, two months after the closing date, plaintiff tendered, and defendant accepted, two checks for $6,500.00, one of which was endorsed "down-payment of house." Plaintiff claims that this sum was consideration to an oral contract in which defendant agreed to transfer her proprietary interest in the Unit to the plaintiff. Defendant denies that an oral contract was ever agreed to or discussed. Rather, defendant claims that the payment was intended to replenish her wedding account. The parties' rocky relationship persisted for another year or so after which time they maintained intermittent contact. During 2002, plaintiff requested, from time to time, that defendant transfer her interest in the Unit to him. Plaintiff offered a gift of a mountain bike to compensate defendant for the trouble of transferring her interests which defendant did not accept. In May of 2002, Plaintiff also arranged for proprietary [*2]lease assignment and stock transfer documents to be sent to defendant. Defendant did not sign the documents. On June 1, 2003, defendant married another man. On June 11, 2003, plaintiff served the Summons and Complaint in the instant action.

Plaintiff seeks a declaratory judgment that defendant has relinquished her interest in the Unit and specific performance of the purported oral agreement. Defendant moves to amend the Verified Answer pursuant to CPLR 3025(b) and to state that the $12,800. down-payment was not a loan from her mother but drawn from a "wedding account" jointly held by defendant and her mother. Defendant also moves to dismiss the complaint pursuant to CPLR 3211(a)(7); for summary judgment pursuant to CPLR 3212(b) and to appoint a referee to conduct a partition sale pursuant to RPAPL 901 et seq. and to hold a hearing to determine the amount due to each party from the proceeds of the same, relative to the debits and credits due to each party, pursuant to CPLR 3212 . In the second and third counterclaims, plaintiff also claims that defendant has been unjustly enriched and seeks a set-off for the rent she has paid for her apartment during the period of plaintiff's occupancy of the Unit. Plaintiff opposes and cross moves to dismiss defendant's second and third counterclaims.

DISCUSSION

Defendant asserts that an oral contract to transfer her interest in the Unit never arose and that even if such an agreement existed it is within the statute of frauds and unenforceable. Plaintiff responds that the agreement is enforceable because he has partially performed on the contract.

The purported agreement to transfer defendant's interest in the Unit is within the statute of frauds. Codifying the statute of frauds, § 5 703 of the General Obligations Law, requires that certain agreements be proved by a writing. General Obligations Law § 5-703; Bayles v. Strong, 104 A.D. 153, 93 N.Y.S. 346, (2nd Dept. 1905), affirmed 185 NY 582, 78 N.E. 1099 (1906). The sale or conveyance of an interest in a cooperative apartment has been held to be a contract for the sale or conveyance of real property, thereby requiring a writing pursuant to the Statute of Frauds See Moloney v. Weingarten, 118 AD2d 836, 837, 500 N.Y.S.2d 320 (2nd Dept. 1983), lv. to appeal denied, 69 NY2d 608, 516 N.Y.S.2d 1023, 509 N.E.2d 358; see also Anton Sattler, Inc. v. Cummings, 103 Misc 2d 4, 425 N.Y.S.2d 476 (N.Y.Sup. 1980) (cooperative apartment proprietary lease is an interest in real property for statute of frauds). Plaintiff does not dispute the fact that no memorandum exists that would remove the purported agreement from the orbit of GOL § 5-703 and the statute of frauds, therefore plaintiff must satisfy an exception to the statute if he is to survive summary judgment.

Plaintiff asserts that in returning defendant's down-payment, paying the mortgage and occupying the Unit he has partially performed on the oral contract; therefore, the purported agreement is enforceable despite the statute of frauds. Defendant responds that the purported agreement remains unenforceable as a matter of law and that plaintiff's payment of money was gratuitous and does not constitute partial performance.

The court finds that plaintiff's partial performance defense is without merit. A court of equity will enforce an oral agreement that is within the statute of frauds where part performance has taken place and nonenforcement will result in injustice. See General Obligations Law, § 5-703, §§ 4, However, the conduct constituting part performance must be "unequivocally referable" to the oral agreement. Anostario v. Vicinanzo, 59 NY2d 662, 664. Plaintiff's conduct was not "'unintelligible or at least extraordinary' [and] explainable only with reference to the oral [*3]agreement." Id., (citing Burns v. McCormick, 233 NY 230, 232 [1922]; Cooper v. Schube, 86 AD2d 62 [1st Dept. 1982]). Plaintiff's payment of money "is not enough" to constitute part performance. , 3 AD2d 206, 210, 159 N.Y.S.2d 333 (1st Dept. 1957). While "other acts, such as possession or improvements, when combined with the payment of rent, may be sufficient" to establish part performance, Club Chain v. Gourmet, Ltd, 74 AD2d 277, 283, 159 N.Y.S.2d 333 (1st Dept. 1980), courts have recognized possession or improvements of the premises as constituting partial performance only where the acts involved were extraordinary or otherwise inexplicable. See e.g., Club Chain, supra, at 283 (redesign of billboard only 90 days before lease expiration raised issue of fact regarding oral agreement to modify the lease); Russell v. Briggs, 59 N.E. 303 (NY 1901) (oral contract to pay agency fee enforced where plaintiff supervised extensive alterations to premises, procured tenants and collected rents). Plaintiff took no actions after the alleged oral agreement arose on November 28, 1999, that he had not taken prior to that time. Plaintiff's continued occupation and enjoyment of the premises and his continued payment of the mortgage is therefore insufficient to establish partial performance of the purported oral agreement.

Next, plaintiff asserts that, as in Wood v. Rabe, 96 NY 414 (1884), the court should grant relief in order to prevent an abuse of confidence. In Wood, the plaintiff confessed to a judgment against him and for his mother so that she could act for his benefit by retrieving property he had previously forfeited. Id. at 421. After the property was retrieved the mother refused to transfer title to her son, as had been orally agreed. Id. Wood is distinguishable from the present case because the relationship at issue in Wood was tantamount to that of trustee and beneficiary. Id. at 426. The son had only recently attained the age of majority and he had acted in reliance upon the assurances of his parent and attorney, who was also his former guardian. Id. at 421. In the present case, the plaintiff has impressed upon the court his ambivalence regarding his relationship with the defendant: a fact amply supported by his change of heart two months prior to the day the defendant allegedly agreed to relinquish her interest in the Unit to the plaintiff. Although the dealings of the parties may not have been at arms length, it cannot be said that the plaintiff negotiated at a disadvantage or that defendant was plaintiff's trustee. Also, unlike the situation in Wood, in this case the plaintiff is the original actor; it was the plaintiff who altered their plans to move in together and it was the plaintiff who initiated the return of the sum of the down-payment to the defendant. Thus, the court finds that no fiduciary relationship existed between the parties that would elevate "the mere breach . . . of an oral agreement to convey an interest in lands [to] such a fraud as will authorize the court to interfere." Id. at 426. Therefore, the purported oral agreement is unenforceable as a matter of law and based upon the undisputed evidence, defendant Maldonado owns a one-half interest in the shares allocated to this apartment as a joint tenant with plaintiff Gilgoff, who owns the other half-interest as joint tenant.

[*4]DEFENDANT'S SECOND AND THIRD COUNTERCLAIMS DISMISSED

Defendant's second counterclaim for unjust enrichment is mooted by the court's decision to grant summary judgment in favor of the defendant.

Defendant's third counterclaim seeking a judgment in the amount of rental payments paid for her apartment fails to state a cause of action. Defendant does not claim ouster. The undisputed record shows that defendant volunteered to forego occupation of the unit in order to give the Plaintiff emotional "space" and never sought possession of the premises. In the absence of a specific agreement, a cotenant is not required to pay any rent in order to exercise his right to take and occupy the whole of the premises. Burchell v. Burchell, 96 Misc. 600, 160 N.YS. 805 (Sup. Ct. Kings Co. 1916). Therefore, Plaintiff's claim for rental payments is dismissed for failing to state a cause of action.

REMEDY FOR PARTITION

Defendant's request for equitable relief is granted. A joint tenancy is subject to partition during the lifetimes of the joint tenants. See 24 N.Y.Jur.2d, Cotenancy & Partition § 33; 3A. Partition is "the act or proceeding by which co-owners of property cause it to be divided into as many shares as there are owners, according to their interests therein, or if that cannot be equitably done, to be sold for the best obtainable price and the proceeds distributed according to the respective interests." Id. at § 116, p. 376. It is an action between tenants in common or joint tenants ; and may be effected voluntarily by mutual consent of the parties or by judicial order upon the application of one or more co-owners. See Chiang v. Chang, 137 AD2d 371, 529 N.Y.S.2d 294, (1st Dept. 1988). The complaint and the motion before the court states undisputed facts showing sufficient reason for equitable interference. Loker v. Edmans, 204 A.D. 223, 228, 197 N.Y.S. 857, 861 (3rd Dept. 1923). The status of the parties has been so changed by the dissolution of their personal relationship that they cannot mutually enjoy the joint benefits which were contemplated when the Unit was purchased. Id. Therefore the court grants defendant's motion for partition with the caveat that defendant shall have an option to purchase defendant's interest before that Unit is put up for public auction.

CONCLUSION

Accordingly, it is

ORDERED that defendant's motion to dismiss plaintiff's claims is granted;

and it is further

ORDERED defendant's third counterclaim for relief for the rental payments on her apartment is denied;

and it is further

ORDERED that a referee shall be appointed to hear and report on the debits and credits due to each party as a set-off to their equal shares;

and it is further [*5]

ORDERED that each party is to appoint an appraiser who is familiar with the property values in the area in which the Unit is located. In the event the appraisals are more than $15,000 apart, the two appraisers are to appoint a third appraiser, and upon receipt of his report the average of the values set by the three appraisers shall be binding upon the parties, or, in the event the appraisals are less than $15,000 apart, the average of the values set by the two appraisers shall be binding upon the parties; each party shall pay the fees of the appraiser appointed by him or her, and in the event a third appraiser is necessary, his fee shall be paid equally by the parties;

and it is further

ORDERED the plaintiff may exercise an option to purchase defendant's interest in the Unit within 60 days after service upon him of a notice of the value so fixed; the option shall be exercised in a writing to be served upon counsel for the defendant by certified mail, return receipt requested; the date set for the closing shall be for 60 days after the exercise of the option;

and it is further

ORDERED that if the plaintiff chooses not to purchase the defendant's interest, the referee shall preside over the public auction of the Unit and the proceeds of the sale shall be divided equally between the parties except for any set-offs as determined by the referee.

And it is further

ORDERED that the parties shall be responsible for their own counsel fees and disbursements in this action.

Dated: July 15, 2005

Enter:

Louis B. York

J.S.C.