Lekakis v Kamamis

[*1] Lekakis v Kamamis 2005 NY Slip Op 51542(U) [9 Misc 3d 1114(A)] Decided on June 21, 2005 Supreme Court, Queens County Risi, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 June 21, 2005
Supreme Court, Queens County

Ilias Lekakis, formally known as ELIAS LECKAS, Plaintiff

against

Stanley Kamamis and OLGA KAMAMIS, Defendants.



28566/01

Joseph J. Risi, J.

The above captioned matter was tried non jury before this Court on May 31, 2005 and June 1, 2005. It involves a dispute over the enforceability of an alleged "option to purchase" a one family home located at 46-13 243rd Street, Douglaston, New York (herein after "premises"). On or about September 1990, the Plaintiff, in response to an ad in a newspaper, met with the Defendant to rent the premises. At their second meeting on September 27, 1990, the Plaintiff and the Defendant signed a document titled "Real Estate Option." The document is set forth as follows:

REAL ESTATE OPTION

STANLEY KAMAMIS, referred to as SELLER, grants to BUYER, ELIAS LECKAS the

exclusive right to purchase the following parcel of real estate located at 46-13 243rd Street, Douglaston, in Queens County, State of New York:

SINGLE FAMILY

After September 27, 2001, upon the terms and conditions stated herein.

To pay two thousand ($2,000.00) per month starting September 27, 1990 to August 27, 1995 and three thousand ($3,000.00) per month starting September 27, 1995 to August

27, 2001.

The BUYER has the right to exercise this option thereafter. The sales price shall be a total of $339,000.00 (three hundred thirtynine thousand & no/l00 dollars). Including the three thousand ($3,000.00) security deposit.

The amounts paid herein for the option shall be credited to the purchase price.

Upon exercise of this option by BUYER, a closing shall take place. The SELLER shall convey to the owner by warranty deed the property herein, and the title thereto shall be merchantable.

During the period of the pendency of this option the SELLER shall keep the premises adequately insured for fire and other extended perils.

The reasonable and customary closing costs for transactions in Queens County, New York shall be pay by the BUYER. [*2]

Dated: September 27/1990

SELLER, Optionee

__/s/________________

BUYER, Optionor

__/s/___________________

The Plaintiff testified that he prepared the option by himself, receiving no help whatsoever from outside sources. Plaintiff also testified that he knew the meaning of all of the legal phrases encompassed in the agreement and the spelling of words he could not spell were obtained by him from a dictionary. The Defendant testified that he went to the premises to collect rent from the time the agreement was signed until some time late in 1994.

The Defendant and Plaintiff both testified that all payments were made in cash

or by third party checks. No receipts were given for the cash and Plaintiff cannot

remember anything about the third party checks. The Defendant claims that from about 1994 he did not go to the premises to collect rent or for any other reason. On or about September 2001, the Defendant's wife went to the premises and demanded that rent be paid for the seven preceding years as she just became aware that her husband had not collected rent for about seven years. In response to her demand, the Plaintiff showed the Defendant wife a copy of the option to purchase and insisted that he lived up to its terms and that he expected Defendants to do likewise. In fact, the Plaintiff and his wife showed the Defendant wife all the renovations and improvements made to the house, which he claims added up to over $350,000 The Defendant wife, a co-owner and tenant by the entirety, testified that this was the first time she saw the agreement and she had not signed the agreement. The Plaintiff's complaint states that on October 1, 2001 he exercised his option to purchase in a letter sent by certified mail. Accordingly, the complaint includes a claim for specific performance as well as claims for damages based on breach of contract, fraudulent misrepresentation, unjust enrichment, negligence and infliction of emotional distress. The claim for specific performance against the Defendant wife was previously dismissed by the Appellate Division because she did not sign the agreement (See 4Ad 3rd 507).

The Defendants counterclaimed for use and occupancy in the sum of $214,610 and pleaded an affirmative defense alleging that his name on the option was a forgery.

The credibility of both Plaintiff and Defendant are highly suspect. Defendant's testimony that he did not collect any money from the Plaintiff for approximately seven years, did not visit the property to see its condition, or inquire about the rent is incredible. It also strains the Court to believe that the Plaintiff, a businessman of average intelligence who took pride in the fact that he and he alone authored and typed the option agreement, did not take the trouble to find out who actually owned the premises, never got receipts for over $300,000 in cash payments, and could not remember the person who owed him money and from whom he received third party checks to pay to the Defendant. Furthermore, it is unbelievable that the Plaintiff, who clearly demonstrated before this Court his familiarity in real estate matters, did not determine who had title to the premises before expending hundreds of thousands of dollars in improvements. [*3]

As to the alleged forgery, despite an experts testimony refuting the genuineness of the signature, this Court feels that the Defendant STANLEY KAMANIS did in fact sign the agreement.

Having determined that the agreement was in fact signed and the payments made, the Court must now provide proper and equitable relief. The premises are owned by defendants as tenants by the entirety, but the wife was not a party to the contract. The Court, looking to the intent of the agreement, will not grant a decree of Partial Specific Performance that would have the effect of decreeing the enforcement of a contract not intended by the parties. The Defendant STANLEY KAMAMIS only owns an undivided one-half interest in the property. It is therefore impossible for the Defendant to perform the contract because the Defendant cannot convey the entire premises, nor can the defendant deliver the contracted for Warranty Deed and merchantable title. Good title was the essence of this agreement, therefore it was incumbent upon the plaintiff, the author of the option, to have determined who actually had title to the premises prior to the time he presented the option for signature.

The Plaintiff claims damages in that he has lost the benefit of the bargain and has made hundreds of thousands of dollars in improvements to the house in anticipation of its purchase. Loss of bargain damages are recoverable only where there is a showing of the Seller's bad faith or fraud. There is no showing that at the time Mr. KAMAMIS signed the agreement that he did so in bad faith or with an intent to defraud (See NY Jur2d, Real Property Sales and Exchanges, Sect 184-185 and WALTON v. MEEKS, 120 NY 79). Mr. KAMAMIS may have believed he had the authority to bind his wife. Certainly the plaintiff presented no evidence to the contrary to this Court. The established rule has been set forth in the seminal case of WALTON v. MEEKS, supra, where the Court of Appeals stated that in the absence of fraud or bad faith the Buyer in a contract for the sale of land is not entitled to recover any damages aside from purchase money paid and nominal damages if the default on the part of the Seller arises from his inability to convey good or marketable title.

It is an ancient principle of our law that one who makes improvements to real property under the mistaken belief that he is the owner, is not entitled to compensation for those improvements. In this case, the Plaintiff has testified in Court that it was his understanding that he was buying the property not renting it. The Plaintiff's mistake in this case inures to the benefit of the Defendants because the owners did not authorize the improvements. The Court's goal herein is to restore the parties to the status quo before they entered into their agreement.

The Court calculates that Plaintiff made $300,000 in payment under the agreement plus a $3,000 deposit, which was to be applied to the purchase price. Accordingly, the Clerk of Queens County is authorized to enter judgment on behalf of Plaintiff ILIAS LEKAKIS against defendant STANLEY KAMAMIS in the amount of $303,000 with statutory interest from June 1, 2005. As for the Defendant's counterclaim for rent, that claim is hereby severed pursuant to CPLR '603. Because the Court has found that the payments made pursuant to the contract from September 27, 1990 to August 27, 2001 were not rental payments, defendants may not recover same as rent or use and occupancy. Any use and occupancy due Defendants from August 28, 2001 shall be recoverable, if at all, in a summary proceeding.

All other causes of action, cross-claims and counterclaims, except for rent/use and occupancy subsequent to August 27, 2001, are hereby dismissed.

All motions made at the end of the trial are now denied or moot as per this opinion.

This constitutes the Decision and Order of the Court.

Dated:June 21, 2005__________________________________

JOSEPH J. RISI J.S.C.