DeRicco v Sackrider
Annotate this CaseDecided on March 27, 2006
Supreme Court, Kings County
Henry DeRicco, Plaintiff,
against
Ann Sackrider, Defendant.
20827/02
Mark I. Partnow, J.
The above captioned lawsuit is premised upon the breach of an alleged oral contract to equal ownership of a residential cooperative apartment, between plaintiff, Henry "Hank" DeRicco (a sculptor and a sometime art teacher and a construction industry consultant) and defendant, Ann Sackrider ( an editorial research director). Plaintiff seeks to impose a constructive trust on the property and obtain a declaratory judgment giving him fifty (50%) percent ownership in the premises.
After conducting a bench trial on this action on October 18, 2005, this Court is now called upon to marshal the evidence and to determine and resolve issues based on the sworn testimony of Henry ("Hank") DeRicco, William Anton Polyn ("Polyn"), Jon Williams ("Williams") and Ann Sackrider, and the documentary evidence submitted herein. The following constitutes the Court's Findings of Fact and Conclusions of Law.
Findings of Fact
Plaintiff, Henry De Ricco and defendant, Ann Sackrider, were involved in an intimate relationship for 18 years, from 1984 to 2002. On August 3, 1993, a son by the name of Hudson Sackrider was born to the couple. From 1985-1998 the parties lived together in an apartment leased by the plaintiff, located at 68 Bergen Street, Brooklyn, New York (Bergen Street Apartment). Defendant paid her proportionate share of the rent for the entire 13 years that she resided in the Bergen Street Apartment. Defendant contributed one third ($200) for the first year and then thereafter one half ($300) of the $600 rent. Defendant paid rent to plaintiff even after the plaintiff stopped paying rent to the landlord because of a landlord/tenant dispute. The rent dispute was litigated over a period of two years, and resulted in plaintiff recovering $5,000 and an abatement of rent for two (2) years. During the time they resided in the Bergen Street apartment defendant also loaned plaintiff $21,000 to finish his art sculpture, $1,000 toward his school loans, and a composite $5,000 for smaller expenses.
The parties never married, joined their finances, or signed any partnership or cohabitation agreement. In March 1998 plaintiff gave defendant a check for $40,350 which consisted of $32,000 received from defendant's mother and $8,350 from plaintiff. In June 1998 defendant entered into a contract to purchase apartment No. 4B located at 110 Clifton Place, Brooklyn, New York (Clifton Place Apartment). The purchase price for the apartment was $122,000. Defendant made a down payment of $12,500, and applied for a mortgage for the remaining amount. Plaintiff was neither a party to the contract of sale, nor to the parallel bank [*2]loan. In October 1998 the parties along with their 5-year old son moved into the Clifton Place apartment.
Plaintiff began renovating the apartment around October 1998. Less than two months thereafter, he had exhausted the funds in his bank account and asked defendant for financial assistance with the renovations. During the period of 1998-2001, plaintiff had a part time position at Pratt University, teaching twice a week. His annual income therefrom, was approximately $25,000 gross. In June 1998 when defendant entered into the contract to purchase the apartment plaintiff had $18,000 in his bank account, an American Express card with a $200 credit line (increased to $900 toward the end of 2001), and a Home Depot credit card with a $2,500 credit line. Additionally, in 1999 plaintiff received a $20,000 grant from Pollock-Krasner Foundation for the advancement of his career in sculpting. In addition to paying the rent on his studio, some of the above-mentioned money was applied to the cost of renovating the Clifton Place Apartment. Over the entire period of the renovations defendant contributed $16,000, shared the cost for appliances, as well as, physically working with plaintiff on completing the renovation. As part of the renovation plaintiff insulated the ceilings, built a number of extra storage cabinets in several of the rooms, replaced several closet doors, replaced lights, installed ceiling fans, tiled the bathroom and kitchen walls, skim coated and painted the entire apartment, installed a galvanized steel counter top in the kitchen, replaced the fireplace with cabinetry and built a roof garden deck. Additionally, he purchased appliances and some furniture for the apartment [ stove, dishwasher, microwave, dressers, sleeper sofa and a refrigerator]. He enlisted the assistance of two of his friends, Williams and Polyn, who are both carpenters to work on various projects. The combined discounted cost for their assistance with the projects was $16,000.
During the renovation both parties enjoyed the benefit of residing in the apartment. However, defendant alone paid the mortgage, maintenance and utilities as well as any other expenses associated with occupancy. In March 2002, the parties had a parting of the ways which was not necessarily amicable and plaintiff was asked to vacate the premises. Plaintiff commenced the present action for injunctive and equitable relief on May 24, 2002.
Conclusion of Law
A constructive trust is an equitable remedy employed to prevent unjust enrichment. Simonds v Simonds, 45 NY2d 233, 242 (1978). It may be imposed when property has been acquired in such circumstances that the holder of the legal title may not, in good conscience, retain the beneficial interest. Sharp v Kosmalski, 40 NY2d 119 (1976). In deciding whether such a circumstance is present, the courts have traditionally relied upon the following four factors: (1) a confidential or fiduciary relation, (2) a promise, (3) a transfer in reliance thereon and (4) unjust enrichment. Id.
The parties do not dispute that there was a confidential or fiduciary relationship, one of the four factors enumerated in Sharp v Komalski. Such a relationship can grow out of a marital or other family relationship. Minieri v Knittel, 188 Misc 2d 298 (2d Dept. 2001). However, there are questions of fact as to the other three factors.
Plaintiff contends that the parties agreed to equal ownership of the Clifton Place Apartment where defendant would finance the purchase and maintenance of the residence and plaintiff would finance and work on the renovations (including providing work, labor and materials).
As to the issue of promise, defendant has categorically denied entering into any agreement with plaintiff regarding the Clifton Place apartment. Even assuming arguendo that the court believed plaintiff and held that the parties did in fact have an agreement, the record shows that any such agreement was breached by plaintiff's failure to unilaterally finance and finish the renovations.
Plaintiff emphasized and this Court agrees, the Sharp factors should not be rigidly [*3]applied but rather serve as a guide to identify and prevent unjust enrichment. Simonds, 45 NY2d 233 at 242. In Knappen v Denett, the court found a constructive trust where both parties were jointly liable for the underlying debt, and paid their mortgage expense either out of funds kept in joint bank account or by personal checks from both parties. 237 AD2d 677 (3d Dept. 1997). Similarly, in Palazzo v Palazzo, the court imposed a constructive trust where there was evidence of joint financial liability even though the property title was in the plaintiff's name only and plaintiff was the sole guarantor of the mortgage. 121 AD2d 261 (1st Dept. 1986). The court reasoned that the equitable remedy was appropriate because the parties had a history of joint ownership, the property was purchased with funds from a joint bank account, and defendant contributed both funds and labor to renovate the property, Id.
Plaintiff has failed to demonstrate that the facts of this case fall in line with those that have been traditionally upheld by equity. Plaintiff has not shown that there was a promise between the parties, the reliance on which resulted in unjust enrichment at plaintiff's expense. Ironically, the record supports the very opposite conclusion. It is difficult to isolate the unjust enrichment that plaintiff claims to have suffered, where he enjoyed the benefits of occupying the apartment at the defendant's expense. During the 18 years that plaintiff and defendant were in a relationship, they lead financially separate lives. They had no bipartite agreements. They never did anything jointly; in fact they never had a joint account, leased an apartment together, paid for their expenses jointly, or purchased a car together. Indeed, this is not a feat easily accomplished for a couple in a long-term intimate relationship. Nevertheless, plaintiff was very efficient about making sure that the couples' personal relationship did not color their financial dealings. For example, plaintiff testified during trial, on page 102, lines 13 - 25 and page 103, lines 1 - 4, as follows:
Q: What was the rental on the 68 Bergen Street when Ann Sackrider moved in with you?
A: 600 a month.
Q: How much was her contribution when she first moved in? I think initially it was 200.
Q. Did there come a period of time when her contribution increased on a monthly basis?
A. Yes. At a certain point she started paying $300.
Q. What was the reason for that?
A. We created a studio for her in what had been the second bedroom and she was using it as her office.
During their 13 years in the Bergen Street apartment defendant paid her share of the utilities, she paid for the child care expenses and managed to lend plaintiff $21,000 to finish his art sculpture. Plaintiff contributed to payments for parking of plaintiff's mother car which he frequently used and he periodically bought or paid for items pertaining to his son. In effect, Plaintiff contributed his services and derived immediate benefit from all contributions. A joint ownership is inconsistent with the parties' prior course of conduct. It seems disingenuous, for plaintiff to claim that with respect to the Clifton Place apartment the parties decided to pool their assets and informally enter into an equal partnership. The history of the parties establishes that they did not purchase anything in a joint name, and the Clifton Place apartment was not an exception.
Plaintiff claimed that he was not on the mortgage application because the parties feared that his default on student loans in May 1, 1996 would jeopardize their chances of getting a mortgage. In addition to not appearing on the mortgage application, plaintiff was not a party to any of the debt documents, nor was he a party to any title papers even after closing. Thus, plaintiff absolved himself from any liability as an owner and abstained from contributing to the expenses associated with joint partnerships, except for a $471.24 payment for an assessment in March of 2000.
The parties do not dispute the fact that plaintiff gave defendant $8,350 prior to moving. This sum included $5,000 that plaintiff recovered in a landlord-tenant dispute over rent arrears. Plaintiff withheld rent for two years in which he had a dispute with his landlord. However, he continued to collect defendant's share and deposited it into his bank account. Therefore, the [*4]$8,350 is offset for some of the funds given to plaintiff by defendant and her proportionate return on the rent rebate and award. Defendant contributed beyond her fair share to the purchase and renovation of this apartment and therefore, was not unjustly enriched.
Plaintiff claims that he contributed $59,350 of his funds and four years of his time doing renovations. This figure is inconsistent with plaintiff's financial position. Initially, Plaintiff had $18,000 in an account at Independence Bank. During the time period in question, he was earning a maximum income of $25,000 before taxes. The rental expense for his studio was $725 per month, or $8,700 annually. He did not take out an additional bank loan or extend his credit line during this time. He had an American Express credit card with a $900 limit, and Home Depot card with a $2,500 limit. Plaintiff also asserts that he used the $20,000 grant, to advance his sculpting career, from Pollock-Krasner Foundation toward the renovation.
Plaintiff has not demonstrated that there was a promise or unjust enrichment. "A conclusion that one has been unjustly enriched is essentially a legal inference drawn from the circumstances surrounding the transfer of the property and the relationship of the parties." Sharp v Komalski, 40 NY2d at 123. Here, the parties were in an intimate relationship but living separate financial lives. Defendant purchased an apartment in which plaintiff resided. He renovated it to his specifications and continued to enjoy the benefit of residence. In such a situation, both parties got what they bargained for and neither was unjustly enriched. This is not a case that requires the interference of equity.
I find that the facts underlying the subject dispute do not satisfy the elements of a constructive trust, nor do they lend themselves to an inference of unjust enrichment. Where two people lived together, at times borrowing money from each other but maintaining their financial lives separate, one party cannot claim, upon the dissolution of that relationship, that he is owed something that he never had a legal right to. Defendant contributed toward the rent, covered all utility and maintenance expense, took care of all childcare expenses and contributed toward the renovation. Defendant is not unjustly enriched by retaining whole ownership interest in an apartment purchased in her name only. In effect, plaintiff contributed his services and derived immediate benefit from all contributions. Plaintiff's contributions do not establish an interest of any kind, much less an equal one. This is not the type of "transaction pregnant with opportunity for abuse and unfairness" that calls for the intervention of equity. Id.
Accordingly, the court renders verdict for defendant.
This constitutes the decision and order of the court.
Dated: March 27, 2006________________
Mark I. Partnow
J.S.C
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