Suissa v Baron
Annotate this CaseDecided on August 14, 2009
District Court of Suffolk County, Third District
Ronald Suissa, Petitioner
against
Marcy R. Baron, Respondent
HULT 227-09
Steven G. Legum, Esq.
Attorney for Petitioner
170 Old Country Rd.
Mineola, New York 11501
(516) 873-9300
Ezratty, Ezratty & Levine, LLP
Dan Blumenthal, Esq.
Attorney for Petitioner
80 E. Old Country Rd.
Mineola, New York 11501
Martin K. Lang, P.C.
Attorney for Respondent
595 Stewart Avenue, Suite 400
Garden City, New York 11530
C. Stephen Hackeling, J.
The petitioner has commenced this summary proceeding pursuant to Section
713(7) of the New York R.P.A.P.L, seeking to dispossess the respondent licensee after giving a
ten day notice to quit. Respondent's license was terminated by Notice served on April 8, 2009.
Respondent has raised an affirmative defense, contending that she is entitled to the impressment
of a constructive trust upon her residence, which would constitute an inchoate equitable interest
in the property requiring dismissal of this holdover proceeding.
Undisputed Facts
The undisputed
relevant facts presented are that Ronald Suissa, the petitioner, is the sole deeded title holder of
the real property located at 602A Twin Hills Court, Northport, New York (hereafter "602A").
Until June 2008, the petitioner resided at 602A and co-habited with his ex-girlfriend, Marcy
Baron, the respondent. The respondent is an attorney, admitted to practice law in the State of
New York. The 602A residence was purchased in July 1999, and the respondent has [*2]continuously lived there since. Prior to the purchase of 602A, the
parties lived together in petitioner's house located at 3 Kimberly Court, East Northport, New
York.
Petitioner and respondent met in 1992, while Ms. Baron was in the midst of a
divorce proceeding pending in Westchester County. In 1998, the respondent's Westchester real
property was sold, pursuant to Court Order, and she received approximately $150,000 from the
sale proceeds. She transferred this money to her mother in Omaha, Nebraska, which was placed
in an account under her mother's name to avoid the reach of her and her ex-husband's creditors.
Thereafter, respondent's mother became ill and $112,000 of the subject funds were transferred to
her nephew's un-utilized business account in New Jersey, which was under the control of her
sister. The stated purpose of this transfer was to avoid potential Medicare obligations for her
mother's health care.
In July 1999, a certified check for $100,000 was drawn by respondent's sister
payable to the seller of 602A and tendered by the respondent toward the $751,000 purchase price
of the 602A residence at closing. The remaining balance on the purchase price was paid via
petitioner's funds and a mortgage of $450,000. Petitioner is the sole obligor on the mortgage and
has continuously paid $5400 per month towards it for in excess of ten years. The respondent has
continually made improvements to 602A acting in concert with the petitioner and utilizing
mostly his cash resources. 602A is now valued at approximately 1.6 million dollars.
The respondent has heretofore commenced a Supreme Court proceeding( Suffolk
County) in which she claimed an interest in the 602A premises by virtue of being a Pennsylvania
"common law wife" and alternatively asserted additional causes of action including constructive
trust. The divorce component of this action was dismissed by Justice Blydenburgh when he
determined that the respondent could not be a common law wife as she is still presently married
to her first husband. The alternative causes of action survived and have been litigated up to the
Appellate Division on several occasions. Repeated requests by the respondent for stays of this
proceeding or removal to the Supreme Court have been denied by the Supreme and Appellate
Courts.
Disputed Facts
Respondent asserts that
the $100,000 check represents her contribution to acquiring the 602A property. She claims that
her name was not placed on the deed because of her pending matrimonial action with her former
husband. It is the respondent's contention that she and petitioner had an agreement that once the
matrimonial dispute was resolved, petitioner would place her name on the deed. Respondent has
testified, under oath, in her prior Westchester divorce proceeding that she had no interest in
602A, and that the $100,000 was repayment of a loan from the petitioner. This testimony was
recanted in this action.
Petitioner argues that the check represents respondent's repayment for a loan (for which
promissory notes once allegedly existed) of approximately $250,000 to $300,000 for
respondent's legal expenses paid by petitioner during the 1990s. Petitioner has no documentary
or corroborative proof of these alleged payments or notes, nor could he remember any of the
specifics of these loans [*3]in his testimony. The respondent
testified, and produced corroborative documentary proof, that she paid all her own attorneys' fees
and that any legal fees paid by petitioner were to his own attorneys, which he employed to
monitor her divorce proceeding and to defend his personal civil and criminal proceedings which
arose in conjunction therewith.
Issue Presented
Whether a former
girlfriend/paramour, asserting the status of a constructive trust beneficiary, is a licensee who may
be dispossessed via a summary proceeding pursuant to New York R.P.A.P.L. Sec. 713(7)?
Discussion
Paramour/Licensee/ Constructive Trust Affirmative Defense
The Suffolk County Supreme Court has determined that the respondent is not recognized as a "wife" under New York law. In New York "mere co-habitation without marriage does not give rise to property or financial rights which attend the marriage relationship." Morone v. Morone, 50 NY 481 (NY 1980). Premised thereon, her legal status is that of "paramour/girlfriend/lodger.
New York's definition of "licensee" is not codified by statute and is instead left to the
common law. This court has previously opined that a paramour is a Sec. 713 (7) licensee as
defined under the common law unless they opt-out of said status by citation to a statutory
mechanism granting them greater occupancy protection under the law. See, Drost v.
Hookey, No.187-09 NYLJJune 29, 2009, pg. 29, col.3 2009; 2009 NY Slip Op 29257 (Dist.
Ct. Suffolk Co. 2009). Sec 743 of the New York R.P.A. P.L. also allows a licensee to defeat a
claim seeking summary proceeding dispossession premised upon the establishment of equitable
affirmative defenses. See Paladino v. Sotille, 15 Misc 3d 60 (App. Term 9th & 10th
Dists. 2nd Dep't. 2007). See generally, Nissequoge Boat Club v. State of New York, 14 AD3d 542 (NY
A.D. 2nd Dep't. 2005).
The respondent's answer does not assert a statutory licensee opt-out status but does
interpose the common law affirmative defense of "constructive trust". The doctrine of
constructive trust is a cause of action which can be brought by a plaintiff seeking to equitably
assert an interest in real property. See Foreman v. Foreman, 251 NY 237 (NY 1929);
A.G. Homes, LLC v. Gerstein,52 AD3d 546 (NY AD2d Dep't 2008). Scivoletti v.
Marsala, 97 AD2d 401 (NY AD2d Dep't 1983). New York Courts cite four specific
requirements of a constructive trust: (1) a confidential or fiduciary relationship; (2) a promise;
(3) a transfer in reliance of such promise; and (4) unjust enrichment. Sharp v. Kosmalski,
40 NY2d 119 ( NY 1976). These elements are not rigid and should be applied flexibly to satisfy
the underlying purpose of preventing unjust enrichment to a transferee. Jane Doe,16
Misc 3d 894, at 897 (Sup. Ct. Kings Co., 2007).
When the claim of a constructive trust is properly interposed by a respondent as
an affirmative equitable defense to a summary proceeding, the District Court must
entertain that defense. Vita v. Dol-Fan, III, Inc.,18 Misc 3d 30 (NY Sup. App. Term
2007). As for all affirmative defenses, the burden of proving a constructive trust is upon the
respondent. See generally, Firemen's [*4]Fund Ins. Co. v.
Farrel, 57 AD3d 721 (N.Y.A.D. 2nd Dep't. 2008). Mayer v. Chamberlin,178 A.D.
326 (NY A. D. 3rd Dep't. 1917). The District Court's adjudication of the constructive trust
defense, preclusively resolves the issue between the parties in all other proceedings. See Nissequoge Boat Club v. State of New
York, 14 AD3d 542 (N.Y.A.D. 2ND Dep't. 2005).
Confidential Relationship
A
confidential relationship is shown when there is a relationship of trust and confidence between
the parties. This relationship does not have to be marital or familial but rather one in which the
party refuting the claim does not abuse the trust and confidence placed in him by the party
seeking an imposition of a constructive trust. See Sharp, 40 NY2d at 121-22.
Nevertheless this court does not have to determine whether such a confidential relationship
existed between petitioner and respondent as it was stipulated by the parties.
Promise
The central disputed factual issue of this case was whether a promise was made by petitioner regarding respondents' interest in the property. An express written promise is not necessary for imposition of a constructive trust; rather, courts have imposed constructive trusts when oral promises have been made and have even found promises implied in law. See McGrath v. Hilding, 41 NY2d 625 ( NY 1977). In the instant proceeding, respondent claims that on multiple occasions, petitioner orally promised her that he would eventually place her name on the deed once her matrimonial issues with her former husband were settled. Petitioner contends that no such promise was ever made and that the equitable theory of "judicial estoppel" now compels this court to disregard the respondent's testimony, even if it were true.
This court finds that a promise and an agreement to convey an interest in 602A existed and adopts the respondent's version of events as true. Her evidence concerning the issue is compelling, consistent with human nature, and is corroborated by other witnesses. Respondents' sister, the maker of the $100,000 check, testified that respondent paid the money to obtain an interest in 602A. Furthermore a mutual attorney that represented both parties in the past testified that it was her understanding that respondents' check toward the purchase of 602a was used in reliance of a promise to have a stake in the property. Petitioners' argument that the money was a repayment for a loan is without merit. He did not introduce a single shred of documentary evidence to support this claim.
The record contains no promissory notes, bills, receipts or bank records that he paid her attorney's fees. The petitioner's convenient lack of testimonial memory as to the details of these alleged loans borders upon perjury. Additionally, the check was made out to the seller of 602A and not petitioner. If the $100,000 was a repayment of a loan to petitioner, then it logically follows that the check should have been made out to the petitioner directly.
The petitioner is correct that the respondent's testimony in her prior Westchester Supreme
Court proceedings stating that she maintained no interest in 602A and that she owed him money
is [*5]damming. This court believes that she committed perjury
in that proceeding to avoid creditors and to enhance her child support and equitable distribution
prospects in her pending divorce. Although it impacts her credibility, it does not diminish the
other evidence in her favor and it does not change the logical conclusion that the truth was told
in one of the two proceedings. It is the court's determination that the truth was told by respondent
in this instance. The court notes that the petitioner was a co-conspirator and an indirect
beneficiary of the respondent's prior conflicted testimony. As such, his unclean hands bar resort
to an equitable defense, such as judicial estoppel. See generally, Lagonegro v.
Lagonegro, 187 AD2d 490 (NY A .D. 2D Dep't. 1992); Dry Dock Savings Inst. v.
Harriman Realty Corp., 150 Misc. 860 (NY Co. Sup. Ct. 1934) aff'd 244 A. D. 793
(N.Y.A.D. 2ND Dep't. 1935).
Transfer In Reliance Of Such
Promise
Although reconveyance of the property occurs in some cases of a
constructive trust; it is not a requirement for the transfer in reliance element "The transfer
concept has been extended to instances where funds, time and effort are contributed in reliance
on a promise to share in the result." Tompkins v. Jackson, 20 Misc 3d 1108(A), 2008
WL 2548732 (Table) (NY Sup. 2008), 2008 NY Slip Op. 51285(U); see Lester v.
Zimmer, 147 AD2d 340, 855 (NY AD3d Dep't 1989). The transfer of money, in reliance of a
promise to grant title has been held sufficient. The $100,000 certified check from respondents'
sister to the seller of 602A and ten years of efforts improving 602A, satisfies the transfer
element.
Unjust Enrichment
In the absence of the
impressment of a constructive trust; the petitioner would be entitled to sole possession and
ownership rights of a $1.6 million home in which $100,000 was originally invested by the
respondent. The value of the home has more than doubled since it was purchased in 1999 and
that increase has been attributable to improvements orchestrated by the respondent over the last
ten years. A constructive trust may be imposed "when property has been acquired in such
circumstances that the holder of legal title may not in good conscience retain the beneficial
interest." Sharp v. Kosmalski, 40 NY2d 119 (NY 1976). The court could not "in good
conscience" allow the petitioner to retain the beneficial interest of respondents' contributions to
both the purchase of 602A and the improvements made to it. Such a deprivation of her rights to
the property would lead to an unjust enrichment for petitioner and constitute an inequitable
result.
Holding/Judgment
Respondent has satisfied her burden of proof by establishing all of the requirements of a constructive trust. Her $100,000 contribution to the $751,000 purchase of the home represents her 1/7.51 (13.33%) interest in the real property. As respondent is an equitable co-owner of the property, petitioner does not have the statutory right to dispossess her via a summary proceeding. Accordingly, the above captioned petition is dismissed. [*6]
______________________
J.D.C.
Dated:_________________________
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