328 Owners Corp. v 330 W. 86 Oaks Corp.
Annotate this CaseDecided on December 13, 2004
Supreme Court, New York County
328 Owners Corp., Plaintiff,
against
330 West 86 Oaks Corp., 330 WEST 86TH STREET, LLC and THE CITY OF NEW YORK, Defendants.
604570/00
Barbara R. Kapnick, J.
Plaintiff 328 Owners Corp., a cooperative corporation, is the owner of the apartment building located at 328 West 86th Street, New York, New York which shares a party wall with the adjoining property, a five-story townhouse located at 330 West 86th Street. By deed dated June 22, 1999, that property was sold to defendant 330 West 86 Oaks Corp. ("Oaks Corp.") by defendant The City of New York, pursuant to a City Council Resolution. The property was then sold by Oaks Corp. less than two years later at a substantial profit to defendant 330 West 86th Street, LLC, ("the new Owner") which apparently plans to develop a narrow high-rise apartment building on the property.
By decision dated June 16, 2003, this Court (i) denied the new Owner's motion (motion sequence no. 007) for summary judgment; (ii) granted defendant Oaks Corp.'s motion (motion sequence number 008) for summary judgment and dismissed plaintiff's complaint and the City of New York's cross-claims against it; and (iii) granted the cross-motions of the plaintiff and The City of New York for summary judgment against the new Owner on its claims and cross-claims, respectively.[FN1]
The decision specifically noted that:
(a) the City may sell property, as was done here, under the Urban Development Action Area [*2]Act (UDAAA) and, specifically, the Accelerated Urban Development Action Area Project Program ("Project Program") established by Article 16 of the General Municipal Law (see, GML §§ 693, 694[1] and [5] and 695[6][d]) only if the proposed project consists of the "rehabilitation or conservation" of an existing private dwelling or the construction of a one to four unit dwelling without change in land use;
(b) the Deed dated June 22, 1999, pursuant to which the City transferred the property to Oaks Corp., recites, among other things, that the Property "is eligible as a municipally-owned area to be conveyed pursuant to Article 16 of the GML", and
(c)the Deed refers to the Resolution of the City Council, a copy of which was annexed to the Deed.
The City Council approved the project as a UDAAA project pursuant to GML § 694. City Council Resolution No. 673 provided that "[t]he Project shall be disposed of and developed upon such terms and conditions in the Project Summary that HPD has submitted to the Council..." The HPD Project Summary itself describes the Project type as "Conservation", as opposed to the broader term, "Conservation and Rehabilitation", found in Article 16 of the GML. However, the substance of the HPD Project Summary is not specifically set forth in the Deed's Recital, nor does the Deed itself contain any other indication that the property was to be used solely for conservation.
The June 16, 2003 decision of this Court directed that an Order be settled. More than one proposed Order was submitted for this Court's consideration. This Court ultimately signed an Order and Judgment on October 28, 2003 which (i) adopted the language set forth in Article 16 of the GML and declared that the property located at 330 West 86th Street "may not be used other than for (a) rehabilitation or conservation of the existing building thereon, or (b) construction of one to four unit dwellings without any change in land use", and (ii) declared that the new owner, its successors and assigns "are enjoined from using the property for any other purpose."
The City of New York now moves for: (i) reargument of the June 16, 2003 decision and (ii) upon reargument a) correcting the decision to declare that the new Owner, its successors and assigns may only use the property for conservation (i.e., not for rehabilitation) and b) enjoining the new Owner and its successors and assigns from using the property for any other purpose; and (iii) resettling the October 28, 2003 Order and Judgment to declare that a) the property can only be used for conservation and enjoining its use for any other purpose, and b) to provide that the use restrictions imposed by the Deed constitute a restrictive covenant running with the land.[FN2]
The City argues that the proposed modifications are necessary because the new Owner would not be required under the October 28, 2003 Order to conserve the present five-story townhouse, but could demolish the structure and erect a new 15-story apartment building provided that the new structure contained no more than four units.
[*3]
The City contends that this result would render inoperative the very purpose of the conveyance upon which the City Council's approval was conditioned.
The City further argues that the imposition of a restrictive covenant (which would be recorded and indexed against the property) is required in order to ensure the future enforceability of this Court's decision. Thus, it urges this Court to amend its Order and Judgment to indicate that the restriction runs with the land.
The new Owner opposes the motion, arguing that there is no basis to essentially further reform the Deed and replace the statutory language with an even more restrictive limitation on the use of the property.
Real Property Law § 240(3) mandates that "[e]very instrument creating [or] transferring...an estate or interest in real property must be construed according to the intent of the parties, so far as such intent can be gathered from the whole instrument, and is consistent with the rules of law."
This Court finds that defendant The City of New York has failed to meet its burden of proving that it was the clear intent of the City Council to impose a limitation on the use of the real property that is more restrictive than the restriction set forth in the General Municipal Law since the City Council's Resolution and the Deed both specifically cited the statute (and thus incorporated its language by reference).
As this Court noted in its prior decision, where a deed "derives all its validity" from a special statutory provision, that provision "will be construed into and with the deed." Matter of Lade v. Abbott, 185 Misc. 501, 507 (Sup. Ct., Onondaga Co. 1945). See also, United States v. The City of New York, 233 F.2d 307 (2nd Cir. 1956).
Accordingly, those portions of the motion seeking to reargue this Court's prior decision so as to limit the use of the property for conservation only is denied.
However, the motion is granted to the extent that it seeks to resettle the Order of this Court dated October 28, 2003 only to the extent of declaring that the restrictions imposed by the Deed - i.e., that the property may not be used for any purpose other than for (a) rehabilitation or conservation of the existing building thereon, or (b) construction of one to four unit dwellings without any change in land use - run with the land.
This constitutes the decision and order of this Court.
Dated: December 13, 2004
BARBARA R. KAPNICK
J.S.C.
Footnotes
Footnote 1:The City of New York cross-claimed for a declaration that the property may not be used other than for conservation or, in the alternative, for rehabilitation or conservation of existing private or multiple dwellings or the construction of one to four unit dwellings without any change in land use permitted by existing zoning, and a permanent injunction to that effect.
Footnote 2:Plaintiff has submitted an affirmation in support of the motion.
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