PG & D Realty Corp. v Commonwealth Land Tit. Ins. Co.

[*1] PG & D Realty Corp. v Commonwealth Land Tit. Ins. Co. 2009 NY Slip Op 52495(U) [25 Misc 3d 1239(A)] Decided on November 10, 2009 Supreme Court, Nassau County Feinman, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 10, 2009
Supreme Court, Nassau County

PG & D Realty Corporation, Plaintiff,

against

Commonwealth Land Title Insurance Company, Defendants.



832/08



Harry Raptakis, Esq.

Miller, Rosado & Algios, LLP

Thomas Feinman, J.

The defendant, Commonwealth Land Title Insurance Company, (hereinafter referred to as "Commonwealth"), moves for an order pursuant to CPLR §3212 granting defendant summary judgment dismissing plaintiff's first, second and third cause of action contained in the complaint. The defendant submits a Memorandum of Law in support of defendant's motion. The plaintiff, PG & D Realty Corporation, (hereinafter referred to as "PG & D"), cross-moves for an order pursuant to CPLR §3212 granting summary judgment against Commonwealth in the sum of Six Hundred Sixty-Six Thousand Seventy-Six and 80/00 Dollars, ($666,076.80), and submits opposition to the defendant's motion. The defendant submits opposition to the plaintiff's cross-motion. The plaintiff submits a reply affirmation.

BACKGROUND

The plaintiff initiated this action to recover damages allegedly sustained as a result of the defendant's failure to disclose a reciprocal parking easement affecting the subject real property purchased by the plaintiff.

The plaintiff purchased a commercial parcel of real estate in 1988 located at 380 Northern Boulevard, Great Neck, New York, and procured a title insurance policy from the defendant at that time. As per the title insurance policy, the defendant agreed to indemnify and insure the plaintiff up to One Million Six Hundred Thousand and 001/00 Dollars, ($1,600,000.00), as a result of any [*2]defects or unmarketability of the title to the plaintiff.

The plaintiff provides that a duly recorded right of way easement agreement dated March 10, 1947, amended by an agreement duly recorded, dated January 30, 1953, were not raised as an exemption in the pre-closing title report or the actual policy of title insurance issued by defendant to plaintiff. The plaintiff claims that the outstanding encumbrance, the right of way easement, affects the plaintiff's property, to wit, forty feet of the premises of which plaintiff claims is more than one-third of the entire property.

The plaintiff, by way of this action, submits, essentially, that plaintiff learned that the premises was affected by the outstanding encumbrance sometime in 2005 when plaintiff entered into a contract of sale to sell the subject property for Four Million One Hundred Thousand and 00/100 Dollars, ($4,100,000.00), whereby the purchaser obtained a title report disclosing the outstanding encumbrance. As a result, the purchaser rejected title on the basis of the right of way and demanded the return of the down payment, the cost of title investigation and the cost of a new survey. The contract was terminated and plaintiff returned the down payment. Thereafter, plaintiff placed the property back on the market and on or about January 19, 2007, plaintiff entered into a contract of sale to sell the property with a new purchaser for the sum of Three Million Eight Hundred Thousand and 00/100 Dollars, ($3,800,000.00). Plaintiff claims it has been damaged in the difference between the value of the property with its initial purchaser and the net amount received by plaintiff by the subsequent purchaser, as well as the carrying charges and loss of income. Plaintiff seeks recovery for defendant's alleged failure to provide plaintiff with clear title, resulting in the interference of plaintiff's ability to enjoy the full use and occupancy of the premises on plaintiff's ability to sell the property. Plaintiff claims the defendant has failed to fulfill its obligation pursuant to the title insurance policy by failing to indemnify the plaintiff for such losses.

The plaintiff's first and second causes of action sound in breach of contract, and plaintiff's third cause of action sounds in negligence. The plaintiff alleges, in its first cause of action, that the defendant failed to perfect title whereby on or about August 10, 2005, title was rejected as a result of the easement and right of way causing plaintiff to return the down payment with respect to a contract of sale dated June 9, 2005 for Four Million One Hundred Thousand and 00/100 Dollars, ($4,100,000.00). Plaintiff alleges in its second cause of action that plaintiff attempted to sell the property from approximately October 2005 through February 2007, paid real estate taxes, carrying charges and earned no income, whereby plaintiff sold the property in February 2007 for a loss. The plaintiff alleges in its third cause of action that the defendant was negligent in its failure to investigate the state of title and in its failure to discover the easement and right of way and amendment thereto. As a result, plaintiff also seeks punitive damages in its third cause of action.

DISCUSSION

At the outset, that branch of the defendant's motion seeking to dismiss plaintiff's third cause of action sounding in negligence seeking punitive damages is granted as it is unopposed. [*3]

The defendant argues, essentially, assuming arguendo that the reciprocal parking easement constitutes a title defect the title policy, plaintiff cannot recover under plaintiff's first and second causes of action, contractual claims, as plaintiff cannot demonstrate the plaintiff suffered as a result of a diminution in value of the property as a result of the title defect.

It is well established that a title insurer's indemnification is "for any diminution in value of the property sustained as a result of defects in a title insured by the policy". (Darbonne v. Goldberger, 31 AD3d 693, quoting Citibank v. Chicago Title Insurance Co., 214 AD2d 212). The defendant argues that the plaintiff cannot demonstrate the difference in the value in the land with the encumbrance and without it, as it is required to do so, (L. Smirlock Realty Corp. v. Title Guarantee Co., 97 AD2d 208), as plaintiff is precluded from submitting an appraisal and/or an expert affidavit on the grounds that the plaintiff has failed to identify an expert in pretrial disclosure. The defendant provides that any proposed expert affidavit that may be submitted by the plaintiff in opposition to the defendant's motion should not be considered as plaintiff has not identified an expert until after the note of issue and certificate of readiness were filed attesting to the completion of discovery, citing Wartski v. C.W. Post Campus of Long Island University, 63 AD3d 916, Construction by Singletree Inc. v. Lowe, 55 AD3d 861).

However, in Wartski, supra and Construction by Singletree, supra , as well as Gerardi v. Verizon New York, Inc., 2009 WL 3488575 (NYAD 2 Dept.), the plaintiff offered no valid excuse for his delay in identifying his expert. Here, the plaintiff has offered a valid excuse, and in accordance with CPLR §3101(d)(1)(I), where a party "for good cause has shown it retains an expert in an insufficient period of time before the commencement of a trial to give appropriate notice thereof, the party shall not be precluded from introducing the expert's testimony at the trial solely on the grounds of noncompliance with this paragraph". The plaintiff has shown, and it is not disputed, that plaintiff's counsel and defendant's counsel had agreed that plaintiff's expert disclosure would be exchanged within the ninety (90) days set to file the Note of Issue. Plaintiff's counsel provides that after consultation with the plaintiff, and after plaintiff attempted to retain an expert, plaintiff ascertained the expert would require additional time to prepare a report, and therefore, plaintiff sought defendant's consent to extend the time to file a Note of Issue, as indicated in the correspondence annexed to plaintiff's cross-motion. In any event, plaintiff submitted an Order to Show Cause which was declined. Contrary to the defendant's assertion, this Court did "dismiss" the Order to Show Cause as it was declined, and as so, this Court did not entertain such motion. Accordingly, plaintiff submits that plaintiff filed the Note of Issue in compliance with the certification order, to wit, within ninety (90) days, so as to not violate the certification order, and not abandon plaintiff's action by way of automatic dismissal.

Here, the defendant's expert submits that the reciprocal parking easement has not diminished the value of the premises, but rather has "enhanced" it. The plaintiff's expert submits that the net effect of the existence of the right of way of easement was to "decrease" the value of the premises by Four Hundred Thousand and 00/100 Dollars, ($400,000.00), as of August 15, 2005. [*4]

As the defendant submits, should this Court consider plaintiff's expert's affidavit, there exists a "battle of the experts". As so, the defendant's motion and plaintiff's for summary judgment, with respect to plaintiff's first and second cause of action are denied.

CONCLUSION

Upon the foregoing, it is hereby

ORDERED that that branch of the defendant's motion seeking summary judgment dismissing the plaintiff's third cause of action is granted, and it is hereby further

ORDERED that that branch of the defendant's motion seeking summary judgment dismissing the plaintiff's first and second causes of action is denied, and it is hereby further

ORDERED that the plaintiff's cross-motion seeking summary judgment is denied.

ENTER:

________________________________

J.S.C.

Dated: November 10, 2009

cc:

Harry Raptakis, Esq.

Miller, Rosado & Algios, LLP