Diamond v Schwartz

[*1] Diamond v Schwartz 2009 NY Slip Op 52621(U) [26 Misc 3d 1202(A)] Decided on May 7, 2009 Supreme Court, New York County Tolub, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 May 7, 2009
Supreme Court, New York County

Lynn Diamond, Plaintiff,

against

Dafna Schwartz, Defendant.



115819/06

Walter B. Tolub, J.

This action arises in connection with a dispute over the ownership rights to a 575 square foot condominium apartment ("the apartment") located on Central Park West in Manhattan. The parties acquired the apartment as tenants in common pursuant to a Bargain and Sale Deed dated March 17, 2006. By this motion, plaintiff seeks partial summary judgment on her third cause of action, and the issuance of an order which (1) declares that plaintiff paid the entire purchase price for the premises and (2) directs for the partition sale and accounting of the property pursuant to RPAPL §901 et seq., as well as for attorneys' fees and closing costs. Plaintiff additionally seeks an order pursuant to CPLR 3212(e) dismissing defendant's first, third, fourth, and fifth affirmative defenses as a matter of law. Defendant cross-moves for an order pursuant to CPLR 3212 (e) for partial summary judgment dismissing the third cause of action in its entirety for lack of triable issues of fact.

Background

Plaintiff, the former head of a real estate company, suffers from a severe illness which requires assistance in order to perform everyday tasks. While searching for an apartment in 2002, plaintiff was introduced to defendant, who at the time was a real estate agent. During the course of plaintiff's 2002 apartment search, the parties became friends, continuing their friendship after plaintiff had successfully purchased an apartment on East 63rd Street in Manhattan.

At some point after their initial introduction, defendant began assisting plaintiff with her daily tasks. At some point after this point, plaintiff began giving defendant money from time to time in return for defendant's assistance. The court notes that at no time was defendant ever "hired" by plaintiff to [*2]perform these tasks.

The parties concede, as evidenced in their papers, that plaintiff gave defendant generous gifts throughout their friendship. This included a gift of $40,000 to cover defendant's son's college tuition, and $350,000 after defendant succeeded in securing a higher bid for a parcel of Manhattan real estate plaintiff sold in 2005.

The parties' friendship peaked towards the latter part of 2005, and the two purchased the subject cooperative apartment as joint tenants in early 2006. The friendship soured shortly after the apartment purchase was completed, and this action followed.

The Purchase of the Apartment

The parties, as evinced by their papers, concede that plaintiff only became involved in the purchase of the subject apartment because defendant lacked the requisite net worth to garner the approval of the cooperative board. Also apparent to the court, is that plaintiff tendered the entire purchase price of the apartment and the attorneys' fees associated with the closing (Notice of Motion, Plaintiff's Affidavit, Exhibit C). The total amount expended by plaintiff, exceeds $500,000.

However, there are two vastly different accounts as to how the parties' came to purchase the apartment, and the circumstances by which their friendship fell apart.

According to plaintiff, when the purchase of the apartment was initially contemplated in 2005, it was plaintiff's understanding that defendant possessed the necessary funds to purchase the apartment on her own. Plaintiff only assisted defendant with the purchase once it became apparent that the board would not approve the sale of the apartment to defendant. As part of the transaction, plaintiff had defendant execute a "promissory note" on March 1, 2006 by which defendant promised to repay plaintiff $200,000 by May 15, 2006 (Notice of Motion, Plaintiff's Affidavit, Exhibit A). Plaintiff claims that the execution of this note supports her claim that neither the apartment, nor the funds she expended for it, were intended to be a "gift" to defendant.

According to defendant, in 2005, financial problems led her to seek housing outside of New York City. Defendant ultimately decided to purchase a townhouse in Ithaca, New York, and entered into a contract for what was to be her new home. Defendant claims that shortly after entering into the contract for the townhouse, plaintiff convinced defendant to stay in New York.

The apartment and additional financial support, according to defendant, were to be a gift in exchange for "walking away" from the townhouse purchase contract.

The facts surrounding the demise of the parties' friendship are also in dispute. Plaintiff claims that the friendship soured shortly after the purchase of the apartment was completed when [*3]plaintiff learned that defendant had obtained and presented $1.5 million dollars worth of checks to her bank. The checks, all made out to defendant, were drawn on plaintiff's JPMorgan accounts. Plaintiff claims that these checks were drawn without plaintiff's knowledge or authorization.[FN1]

Defendant claims that the undoing of the friendship was at the hands of plaintiff's prior counsel, Steven Horowitz, Esq., who, by defendant's account, not only influenced plaintiff to change her mind about the gift she agreed to make, but to commence this litigation. Defendant further claims that all of the allegations of wrongdoings with respect to the checks are unfounded, and maintains that the checks,[FN2] which were signed by plaintiff, were given to her in order to provide the funding for the apartment, and more particularly, as a means of providing the funds necessary to repay the March 13, 2006 "note". According to defendant, satisfaction of the "note" was to be completed with plaintiff's funds: plaintiff was to give defendant $200,000, and defendant was to use that same $200,000 to "purchase" plaintiff's interest in the apartment (Notice of Cross-Motion, Exhibit B).

Defendant additionally claims that a second agreement drafted by the parties' attorney, Ritu Singh Esq.[FN3], and executed by the parties on March 13, 2006, was to have provided defendant with a monthly allowance of $3,500 per month was never honored.[FN4] This resulted in defendant having had to undertake the obligation of making all of the maintenance and tax payments on the apartment. According to plaintiff, her then personal attorney, Steven Horowitz, Esq., declared the March 13, 2006 agreement invalid shortly after learning of its existence. Defendant never attempted to enforce the agreement prior to this action.

Lastly, there is the apartment itself. Defendant, who has [*4]been the sole occupant of the apartment since the completion of the 2006 sale, conducted extensive renovations following the purchase. According to defendant, both parties prior to the purchase of the apartment understood at all times that defendant alone was to be the exclusive owner and occupant of the apartment. Defendant further claims that following the completion of the real estate transaction, plaintiff was to transfer her ownership share of the apartment to defendant. There are however, no documents whatsoever to suggest that plaintiff intended to transfer her interest to the defendant, and, despite a demand for the return of the apartment, the ownership of the apartment remains in dispute.

This action, commenced in October of 2006, seeks a declaration that defendant holds no interest in the apartment (second cause of action), along with an order pursuant to RPAPL 901 directing for the partition sale of the apartment along with an accounting (third cause of action). In addition, plaintiff seeks recovery of additional monies[FN5] under theories of conversion (first cause of action). Defendant, in opposition, has asserted numerous affirmative defenses, including a claim that plaintiff lacks standing with respect to her second and third causes of action (fifth affirmative defense). In addition, defendant claims that even if plaintiff has standing to bring her second and third causes of action, they are barred because defendant is the co-owner of the premises, and has been in sole possession of them since the purchase of the apartment was completed (third and fourth affirmative defenses). Lastly, defendant asserts as a defense, that the only reason the action was commenced at all was due to the undue influence of plaintiff's prior counsel, whom defendant claims holds a personal grudge against her (first affirmative defense).

Discussion

Irrespective of whether the relief sought is partial or total, motions for summary judgment limit this court's role to that of finding issues, and not resolving them. Success on the motion is thus dictated by whether the moving party is able to provide the court with admissible evidence sufficient to demonstrate an absence of any triable issues of fact, thereby demonstrating entitlement to judgment as a matter of law (Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395 [1957]; Winegrad v New York Univ. Med. Center, 64 NY2d 851, 853 [1985]. See generally, Barr, Altman, Lipshie, and Gerstman; New York Civil Practice Before Trial, [James Publishing 2007] §37:91-92).

The opponent to the motion must produce evidentiary proof [*5]that establishes the existence of material issues of fact requiring trial. Mere conclusions, expressions of hope, or unsubstantiated allegations are insufficient for this purpose (Zuckerman v. City of New York, 49 NY2d 557 [1980]), and, if there is any doubt that triable issues of fact exist, summary judgment will not be granted.

As a preliminary matter, despite defendant's arguments to the contrary, as a tenant-in-common, plaintiff's lack of physical possession of the apartment does not act to bar an action for partition (Deegan v. Deegan, 247 AD 340 [2nd Dept 1936]; Donlon v. Diamico, 33 AD3d 841 [2nd Dept 2006]; RPAPL 901(1)). In the absence of an express waver of the right to partition the property, which is not evidenced here, plaintiff, with a clear right to possession of the premises as a tenant-in-common, may bring this action (id.; Chiang v. Chang, 137 AD2d 371 [1st Dept 1988]).

Contrary to defendant's assertions, this result is not changed by the cases of Ayers v. Ayers, 274 AD2d 352 [1st Dept 2000], Givens v. Givens, 138 AD2d 348 [2nd Dept 1988], and Trento v. Trento, 226 AD2d 1104 [4th Dept 1996]. Unlike the instant case, Ayers, Givens and Trento, all involved an attempt to partition a former marital residence where, under each case, there existed either a divorce judgment, or a stipulation or separation agreement that expressly gave one spouse exclusive occupancy and possession of the premises. In each one of those cases, the court concluded that the commencement of a partition action would have been inappropriate, as it would have interfered with the clear right of the other spouse to exclusively occupy the respective premises (Ayers, 274 AD2d 352; Givens, 138 AD2d 348; Trento, 226 AD2d 1104).

The instant case however, is not one where there either exists an agreement entitling defendant to exclusive occupancy. Nor has it been demonstrated that plaintiff ever waived her right to seek partition of the subject premises. Under these circumstances, dismissal of defendant's third, fourth and fifth affirmative defenses are warranted as a matter of law. Defendant's first affirmative defense is also dismissed. Although one may claim as an affirmative defense that an action is frivolous, or fails to state a cause of action, or was commenced to harass the opposition, the same cannot be said for the claim that plaintiff's counsel "influenced" or "convinced" a plaintiff to commence litigation as a vendetta against the other party. This is especially true when the claims advanced are meritorious.

Under the circumstances of this case, it is also apparent to this court, based on the concessions made by the parties, that plaintiff is entitled to a declaration that she alone financed the purchase of the apartment along with the accompanying closing [*6]costs and attorney's fees. It is also appropriate, given the prior and current relationship of the parties, to direct for the partition sale and an accounting of the property, the sale being held in abeyance pending a trial to determine the distribution of the sale proceeds.

Accordingly, it is

ORDERED that the portion of plaintiff's motion for partial summary judgment seeking the dismissal of defendant's second, third, fourth and fifth affirmative defenses is granted, and the aforementioned affirmative defenses are dismissed; and it is further

ORDERED that the portion of plaintiff's motion for partial summary judgment on the portion of her third cause of action which seeks a declaration that plaintiff paid the entire purchase price for the subject property, in the amount of $492,504.28 and the related attorney's fees and closing costs for a total expenditure of $503,004.28 is granted; and it is further

ORDERED that the portion of plaintiff's motion for partial summary judgment which seeks an order directing for a partition sale and accounting of the subject property pursuant to RPAPL 901 et seq. is granted, the sale to be held in abeyance pending a trial to ascertain the distribution of the sale proceeds; and it is further

ORDERED that defendant's cross-motion for an order for partial summary judgment dismissing plaintiff's third cause of action in its entirety is denied; and it is further

ORDERED that the clerk of court enter judgment in favor of the appropriate parties; and it is further

ORDERED that the balance of this action shall continue.

Counsel for the parties shall appear for a Pre-Trial conference in IA Part 15, Room 335, 60 Centre Street, New York, New York at 11:00 a.m. on June 19, 2009.

This memorandum opinion constitutes the decision and order of the Court.

Dated:

____________________________

HON. WALTER B. TOLUB, J.S.C. Footnotes

Footnote 1:Plaintiff contacted the police, but declined to press charges.

Footnote 2: The $1.5 million dollars obtain via the checks appears to have been returned to plaintiff.

Footnote 3: Ms. Singh was selected to handle the real estate transaction because according to defendant, plaintiff no longer trusted her personal attorney, Steven Horowitz, and did not want him to know about any of the transactions involved with respect to the purchase of the apartment.

Footnote 4: According to defendant, the monthly allowance of $3500 was to cover all maintenance and tax payments associated with the apartment. The balance of the allowance was hers to use to cover living expenses.

Footnote 5: The court is uncertain as to what "additional monies" are being sought by plaintiff.