Bryan v Lindsay

[*1] Bryan v Lindsay 2008 NY Slip Op 51781(U) [20 Misc 3d 1138(A)] Decided on August 27, 2008 Supreme Court, Kings County Schack, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 27, 2008
Supreme Court, Kings County

Robert G. Bryan, Plaintiff,

against

Roy Lindsay and BRIAN RAMIREZ, Defendants.



3906/06



Appearances:

Plaintiff:

Bruce S Reznick, PC

Brooklyn NY

Defendant - ROY LINDSAY:

Paul Fink Esq

Brooklyn NY

Co- Defendant - BRIAN RAMIREZ:

John Cannistraci, Esq.

NY NY

Arthur M. Schack, J.

Plaintiff ROBERT G. BRYAN (BRYAN), in this real estate action, alleges in his verified complaint [exhibit A of motion] that defendant ROY LINDSAY (LINDSAY) scammed him out of ownership of his former home, 600 Van Siclen Avenue, Brooklyn, New York (Block 4087, Lot 40, County of Kings), in a mortgage foreclosure "rescue" scheme. He requests that the Court order LINDSAY to reconvey the premises to him. Defendant LINDSAY, pursuant to CPLR Rule 3212, moves for summary judgment and dismissal of the complaint, alleging that the complaint lacks any merit. Plaintiff BRYAN, pursuant to CPLR Rule 3212, cross-moves for summary judgment on his complaint. Co-defendant BRIAN RAMIREZ (RAMIREZ), who subsequently purchased the premises from LINDSAY, supports LINDSAY, in his counsel's [*2]affirmation in support of the motion and against the cross-motion. Both defendant LINDSAY's motion for summary judgment and Plaintiff BRYAN's cross-motion for summary judgment are denied. There are triable issues of fact whether LINDSAY fraudulently induced BRYAN into conveying the premises to him.

Background

Defendant BRYAN lived at the subject premises for many years. His father, Cameron Bryan, purchased the premises, by deed, dated November 17, 1977, and recorded in the Kings County Office of the City Register, on December 6, 1977, at Reel 962, Page 630. Subsequently, the elder Mr. Bryan conveyed the premises to his son, plaintiff BRYAN by deed, dated July 31, 2002, and recorded in the Office of the City Register, on March 24, 2003, at City Register File Number (CRFN) 2003000048296. Simultaneously, BRYAN mortgaged the house with Homestar Mortgage Services, LLC, to secure a $149,500.00 loan, recorded in the Office of the City Register, on March 24, 2003, at City Register File Number (CRFN) 2003000048295.

It is uncontroverted that BRYAN conveyed the premises on January 22, 2004 to LINDSAY, with the deed recorded on April 23, 2004, in the Office of the City Register at CRFN 2004000250841. More than two years later, on February 14, 2006, LINDSAY conveyed the premises to RAMIREZ, with the deed recorded on August 12, 2006, at CRFN 2006000476429.

Plaintiff BRYAN alleges in ¶ 6 of the verified complaint:

That prior to January 22, 2004, plaintiff discussed his financial

woes with defendant, ROY LINDSAY, who suggested plaintiff convey

the premises to defendant so that plaintiff's bill could be paid and that

defendant would secure a new mortgage so as to cover all of plaintiff's

debts and obligations and that at any time plaintiff desired the defendant

to re-convey the premises to plaintiff, defendant would comply.

Further, in ¶ 12 of the verified complaint, BRYAN alleges, "[t]hat defendant obtained its interest in the premises solely on the basis that plaintiff required funds to prevent a foreclosure and to pay outstanding bills; however, defendant paid no other consideration to plaintiff." BRYAN, in the first page of his affidavit in opposition and in support of cross-motion, states "I never intended to transfer a present beneficial interest in my real property located at 600 Van Siclen Avenue, Brooklyn, New York to defendant-movant." Then, he states in the second page of the affidavit:

defendant-movant never paid a single dollar for the property and

literally stole my real estate . . .

Furthermore, when my mortgage was paid off, I was supposed

to get any extra proceeds. However, defendant-movant secreted

$10,000.00 to himself and when I discovered the theft, he advised

that was for the services he rendered in getting me the mortgage.

He was not a mortgage broker and not entitled to a fee.

When I requested the deed back in my name he refused and

subsequent thereto he re-financed my property and kept the proceeds

of the refinance.

Then without advising me, he "sold" the property to defendant

BRIAN RAMIREZ, who had to be a "shill" since neither I nor my

attorney ever heard of a closing of title taking place within one (1) [*3]

week of the execution of a contract. What makes the matter more

suspicious, the contract was executed on the same day that I filed

a lis pendens.

Plaintiff BRYAN, in his affidavit, then cites testimony he gave in his August 15, 2007 deposition. He testified that he fell behind in his mortgage payments and was threatened with foreclosure by Homestar [p. 10]. He testified about the instant foreclosure "rescue" scheme, at p. 54, line 11 - p. 55, line 9, and p. 55, lines 13 - 20:

Q. Did you understand with the foreclosure, that they were going to

try to take your house for not paying the mortgage?

A. Right.

Q. Did you make any attempt to refinance the house once you were

in foreclosure?

A. Yes, that is when me and Roy [LINDSAY] had talked about that.

I confided in him in my situation. He said he could get me the loan.

Q. Did you make any other attempt to refinance or get the money to

take the house out of the foreclosure proceedings, aside from any

communications you had with Mr. Roy Lindsay?

A. No.

Q. How did you know Mr. Lindsay?

A. We knew each other through music.

Q. When did you first meet him?

A. I think it was at a block party or something like that in the area.

Q. When was that?

A. I think in around late 90's . . .

Q. When did you first speak with him about purchasing the house?

A. Well, when I confided to him about my situation, he said that he

will be able to attain a loan because he has perfect credit.

Q. When you say situation, you mean the foreclosure?

A.. Yes.

BRYAN, at p. 98, lines 12 - 16, answered the following question:

Q. Is it your claim you had an agreement with Mr. Lindsay for him to transfer the property, ownership of the property at 600 Van Siclen back to you?

A. Yes.

Defendant LINDSAY was deposed on October 1, 2007. In LINDSAY's version of the conversations he had with BRYAN in 2003 about the possible foreclosure of 600 Van Siclen Avenue, he testified at his EBT, p. 16, line 9 - p. 17, line 25:

Q. The second conversation that you had with Mr. Bryan wherein

you suggested that you might be interested in purchasing his property,

do you remember what the conversation entailed?

A. Yes, exactly that. That I wanted to - - that I had an interest in

purchasing the property.

Q. What did he say to you after that? [*4]

A. I know he was thinking about it, he didn't say yes immediately.

Q. On the second conversation, apparently he brought up . . . the

fact that he was in foreclosure and you suggested to him you may

be interested in purchasing the property. Was there any further

conversation, did he say he will talk about it, I will think about it

or was it just left alone?

A. Yes, he told me that he would think about it but he was entertaining

other options.

Q. Did he tell you what other options he was entertaining?

A. Yes.

Q. What was that?

A. He was trying to find a person to put their name on his house to

save him from foreclosure.

Q. Did he explain to you what he meant by that?

A. Yes.

Q. What did he say?

A. He told me he wanted to put someone's name on the deed of

the house, pay off his mortgage with that and pay then a certain

amount of money to do it.

Q. In other words, that person would take out a mortgage?

A. Yes.

Q. This is what he said to you on that second conversation?

A. It could have been the second or the third but he did mention it

to me in one of our conversations. I don't recall which one.

BRYAN and LINDSAY executed a written contract of sale for 600 Van Siclen

Avenue on October 15, 2003 [exhibit C of motion]. They acknowledged, in ¶ 29 of the contract, that Kensington Realty was the broker. Plaintiff BRYAN testified at his EBT that he was not represented by counsel in the drafting of the contract [p. 12] or at the January 22, 2004 closing and never sought the advice of counsel [p. 15]. He testified about the role of Kensington Realty, at p. 5, line 22 - p. 16, line 23:

Q. Did you know at that particular time that you were transferring

title, that means you were transferring ownership of this property to

Roy Lindsay?

A. No, they did not explain that to me.

Q. Who is the they?

A. Kensington Realty. The way they explained it to me, me and Roy

was not family, my name to have to come off the deed for the deal to

go through. At the end of the closing, they have to put my name back

on it, which never happened.

Q. Who is Kensington Realty, who are they?

A. That was the people that was doing the loan.

Q. Who arranged for that?

A. What do you mean who arranged for that? [*5]

Q. Who arranged for Kensington Realty to do that?

A. Roy arranged that.

Q. You did not direct him?

A. Right. He was getting the loan, so he had to do it.

Defendant LINDSAY testified at his EBT that he retained an attorney Allen Biegelson, who had office space at 123 Church Avenue, Brooklyn, the same location as Kensington Realty [p. 24], the broker for LINDSAY's mortgage. LINDSAY claimed that BRYAN had counsel, but he could not remember the name [p. 28], and that BRYAN never told him the name of his lawyer [p. 31]. Mr. Biegelson, who had a history of disciplinary actions prior to October 15, 2003, was subsequently disbarred for misconduct in other real estate matters, including commingling escrow funds with his personal funds and not properly maintaining proper records for his IOLA account. (Matter of Biegelson, 25 AD3d 124 [2d Dept 2005]).

Plaintiff BRYAN testified at his EBT [pp. 30 -33] that after the closing it was his understanding that his name would be placed back on the deed, but it was not done. After the closing he repeatedly called Danny Soiny, the head of Kensington Realty, to have the deed transferred back into his name, but was usually told that Mr. Soiny was not available, or if Mr. Soiny spoke to him he was told "we are looking for your file, same situation over and over, we are looking for your file, we misplaced the filed, and all that stuff like that [p. 33, lines 4 - 8]." Also, BRYAN testified that he asked LINDSAY why the deed had not been transferred back to him [p. 73] and LINDSAY "kept on saying you got to talk to Danny about it, stuff like that [p. 73, lines 14 - 15]. "

BRYAN testified that he was forced to move from the premises in March 2006 by LINDSAY, after LINDSAY had him arrested after complaining that BRYAN menaced him with a gun.

Discussion

The proponent of a summary judgment motion must make a prima facie showing

of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case. (See Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]). Failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers. (Qlisanr, LLC v Hollis Park Manor Nursing Home, Inc., 51 AD3d 651, 652 [2d Dept 2008]; Greenberg v Manlon Realty, 43 AD2d 968, 969 [2nd Dept 1974]; Winegrad v New York University Medical Center, 64 NY2d 851 [1985]).

CPLR 3212 (b) requires that for a court to grant summary judgment the court must

determine if the movant's papers justify holding as a matter of law "that there is no defense to the cause of action or that the cause of action or defense has no merit." The evidence submitted in support of the movant must be viewed in the light most favorable to the non-movant. (Marine Midland Bank, N.A. v Dino & Artie's Automatic Transmission Co., 168 AD2d 610 [2d Dept 1990]). Summary judgment shall be granted only when there are no issues of material fact and the evidence requires the court to direct judgment in favor of the movant as a matter of law. (Friends of Animals, Inc., v Associated Fur Mfrs., 46 NY2d 1065 [1979]).

Defendants, in the instant action, made out a prima facie case that the October 15, 2003-[*6]contract existed and that the premises were deeded to LINDSAY at the January 22, 2004 closing. However, with the burden shifting to the plaintiff, BRYAN has submitted evidence demonstrating the existence of triable issues of fact, namely whether LINDSAY fraudulently induced him into a scheme by which LINDSAY was to act as a "straw buyer," utilizing his good credit to refinance the premises and then convey them back to BRYAN. Thus, BRYAN, without the benefit of counsel, signed the October 15, 2003-contract and the January 22, 2004-deed, while LINDSAY had the benefit of working with Kensington Realty and the soon-to-be disbarred lawyer Biegelson.

BRYAN's cause of action is not for breach of contract, as defendants' argue, but an action caused by LINDSAY's alleged misrepresentations to BRYAN. The Court of Appeals, in Channel Master Corp. v Aluminum Limited Sales, Inc. (4 NY2d 403, 406-407 [1958]), instructed:

To maintain an action based on fraudulent representations,

whether it be for the rescission of a contract or, as here, in tort for

damages, it is sufficient to show that the defendant knowingly uttered a

falsehood intending to deprive the plaintiff of a benefit and that the

plaintiff was thereby deceived and damaged . . . The essential constituents

of the action are fixed as representation of a material existing fact, falsity,

scienter, deception and injury . . . Accordingly, one "who fraudulently

makes a misrepresentation of * * * intention * * * for the purpose of

inducing another to act or refrain from action in reliance thereon in a

business transaction" is liable for the harm caused by the other's

justifiable reliance upon the misrepresentation. (3 Restatement,Torts,

§ 525, p. 59.)

The Court of Appeals has continued to hold that to prove fraud, there must be:

a misrepresentation of fact by the defendant; known to be untrue or recklessly made; to deceive the plaintiff to rely upon it; and, causing injury to the plaintiff. (See Small v Lorillard Tobacco Company, Inc., 94 NY2d 43, 57 [1998]; Held v Kaufman, 91 NY2d 425, 431 [1998]; Barclay Arms, Inc. v Barclay Arms Associates, 74 NY2d 644, 646-647 [1989]; Jo Ann Homes at Bellmore, Inc. v Dworetz, 25 NY2d 112119 [1969]).

The Appellate Division, Second Department, in Giurdanella v Giurdanella (226 AD2d 342, 343 [1996], held:

to establish a prima facie case of fraud, the plaintiff must establish

(1) that the defendant made material representations that were false,

(2) that the defendant knew the representations were false and made

them with the intent to deceive the plaintiff, (3) that the plaintiff

justifiably relied on the defendant's representations, and (4) that the [*7]

plaintiff was injured as a result of the defendant's representation.

The Second Department continues to follow that standard. (See Shovak v Long Island Commercial Bank, 50 AD3d 1118 [2d Dept 2008]; Sellinger Enterprises, Inc. v Cassuto, 50 AD3d 766 [2d Dept 2008]; Williams v Eason, 49 AD3d 866 [2d Dept 2008]; McMorrow v Dime Sav. Bank of Williamsburg, 48 AD3d 646, [2d Dept 2008]; Heaven v McGowan, 40 AD3d 583 [2d Dept 2007]).

The Heaven case is similar to the instant case. The Heaven plaintiffs were faced with a potential foreclosure of their residential property in Queens, and they consulted with defendant McGowan, an attorney. Plaintiffs alleged that based upon McGowan's representations, they contracted with him for what they believed to be a refinance of the premises. Plaintiffs actually signed documents for a sale of the property to an entity created by McGowan, with a leaseback to plaintiffs at a rent higher than their previous mortgage payments. Plaintiffs sued McGowan to recover damages, claiming fraud in the inducement, based upon their reliance on McGowan's characterization of the transaction as a refinance. McGowan was granted summary judgment and dismissal of the complaint in Supreme Court, Queens County. However, the Appellate Division, Second Department reversed the Supreme Court. The Court held, after discussing the elements of a fraud cause of action, at 585, that:

The defendants met their initial burden of establishing their

entitlement to summary judgment on the fraud claim by submitting

documentary evidence in the form of the real estate contract of sale

dated July 5, 1997, and the recorded deed executed and acknowledged

by the plaintiffs on May 29, 1998, demonstrating the plaintiffs'

knowledge that the transaction was an actual sale of the property

(see Alvarez v Prospect Hosp., 68 NY2d 320, 326 [1986]). However,

in opposition, the plaintiffs raised triable issues of fact, precluding the

granting of summary judgment, on the basis of Lorna's [one of the

plaintiffs] affidavit, in which she asserted that McGowan "told us that

he would help us refinance the mortgage" and that the "market value of

our house is approximately $200,000." Similarly, in the instant case, triable issues of fact are raised in BRYAN's affidavit and in the in the deposition testimony of LINDSAY and BRYAN. This precludes granting summary judgment to LINDSAY. On the other hand, LINDSAY's testimony is equivocal about whether he intended to purchase 600 Van Siclen Avenue or was involved in a mortgage rescue scam. Thus, there are triable issues of fact to be determined in the instant action. Did LINDSAY make false material representations to BRYAN? If so, did LINDSAY know that the representations were false and were they made to deceive BRYAN? Did BRYAN justifiably rely on LINDSAY's representations? Was BRYAN injured by LINDSAY's representations? Further, the trier of fact must evaluate the credibility of both BRYAN and LINDSAY. Therefore, the court denies [*8]summary judgment to both plaintiff BRYAN and defendant LINDSAY.

Conclusion

Accordingly, it is

ORDERED that the motion of defendant ROY LINDSAY, pursuant to CPLR Rule 3212, for summary judgment and dismissal of the complaint is denied; and it is further

ORDERED that the cross-motion of plaintiff ROBERT G. BRYAN, pursuant to CPLR Rule 3212, for summary judgment is denied.

This constitutes the Decision and Order of the Court.

ENTER

___________________________

HON. ARTHUR M. SCHACKJ. S. C.