Gentile v Spadaro

[*1] Gentile v Spadaro 2010 NY Slip Op 51387(U) [28 Misc 3d 1218(A)] Decided on July 27, 2010 Supreme Court, Queens County Hart, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 27, 2010
Supreme Court, Queens County

Dominick Gentile and Donna Gentile, Plaintiff(s),

against

Louis Spadaro, Concetta Spadaro, and Louis Spadaro, Defendant(s).



23982/09

Duane A. Hart, J.

Short Form Order(h)

NEW YORK SUPREME COURT -

QUEENS COUNTY

Present: Honorable, DUANE A. HART IAS PART 18

Justice

-

Dominick Gentile and Donna Gentile

Plaintiff(s),

against

Louis Spadaro, Concetta Spadaro, and Louis Spadaro

Defendant(s).

,

Index No.: 23982/09

Motion Date:3/29/2010

Cal. No.:16

Mot. Seq. No.:2

Defendant moves for dismissal pursuant to CPLR § 3211(a) of all claims in this action for declaratory judgment, quiet title, various types of fraud, and other relief. The motion is DENIED with respect to the claims for declaratory judgment, quiet title, to set aside title, unjust enrichment, constructive trust, breach of contract, specific performance, and GRANTED with respect to the claims for fraudulent misrepresentation, fraud, and fraud in the inducement.

Standard of Review

"On a motion to dismiss pursuant to CPLR 3211, . . . [w]e accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory." (Leon v. Martinez, 84 NY2d 83, 87-88 [1994]). Consequently, for the purposes of the present motion, the Court will only rely on the facts alleged in plaintiffs' complaint.



Facts

Plaintiff alleges that in 2001, plaintiff and defendant entered into an oral agreement for the sale of the parcel of land located at 155-15 Bayside Avenue, Rosedale NY, designated Block 13913, Lot 261 on the Tax Map for the County of Queens ("the Property"). Pursuant to this agreement, plaintiff alleges he paid a $15,359.95 "down payment" in four installments, each installment by check. Plaintiff further alleges that subsequent to the payment of the $15,359.95, defendant [*2]"executed and delivered" a deed to the Property. The deed states, in pertinent part, that "the party of the first part, in consideration of Ten Dollars and other valuable consideration paid by the party of the second part, does hereby grant and release unto the party of the second part, the heirs or successors and assigns of the party of the second part forever," a parcel which plaintiff claims is the Property. The deed names as "party of the first part" the defendants, Louis and Concetta Spadaro, and names as the "party of the second part" the plaintiffs, Dominick and Donna Gentile. The deed is signed by both defendants, and is notarized by Kenneth A. Francis. The deed contains the following clause: "subject to purchase money first mortgage held by Louis Spadaro, and Concetta Spadaro, his wife."

Plaintiff alleges that after the transfer of the deed, it was delivered to Richard Weiner, plaintiffs' attorney at the time, who was to record the deed. The deed was never recorded. Plaintiff further alleges that he continued to make payments on the Property until he had paid the total agreed purchase price, which he alleges was $150,000.

Statute of Frauds

Defendant argues that since all of plaintiffs' claims assume that the Property was conveyed for consideration to plaintiff, and since the complaint itself states that the exchange was pursuant to an "oral agreement," the Property could not have been conveyed, and all claims relying on the premise that it was conveyed are invalid.

New York's version of the Statute of Frauds, codified in General Obligations Law § 5-703(1) directs that "[a]n estate or interest in real property, other than a lease for a term not exceeding one year . . . cannot be created, granted, assigned, surrendered or declared, unless by act or operation of law, or by a deed or conveyance in writing, subscribed by the person creating, granting, assigning, surrendering or declaring the same, or by his lawful agent, thereunto authorized by writing."

The defendant suggests that the "purported deed" is not really a deed, but rather "security" for a "loan." Defendant cites as evidence for this claim the fact that the deed "specifically recites that it was [sic] subject to a purchase money first mortgage held by Louis Spadaro and Concetta Spadaro, his wife." However, according to the New York Court of Appeals, " purchase money mortgage' is generally defined as a mortgage executed at the time of purchase of the land and contemporaneously with the acquisition of legal title, or afterwards, but as part of the same transaction, to secure an unpaid balance of the purchase price." (10 East Realty, LLC v. Incorporated Village of Valley Stream, 12 NY3d 212, 215 [2009] [emphasis added]). By the defendants' own admission, the deed was subject to a "purchase money mortgage," which fact tends to show that the deed effectuated a transfer of title.

Defendant also claims the deed does not satisfy the statute of frauds because it does not contain "all essential terms of a complete agreement," which includes the "terms of payment." (Behrends v. White Acre Acquisitions LLC, 54 AD3d 700, 701 [2d Dept 2003]; Sabetfard v. Djavaheri Realty Corp., 18 AD3d 640, 641 [2d Dept 2005]). But see Cobble Hill Nursing Home v. Henry & Warren Corp., 74 NY2d 475, 483 [1989]. There, the Court of Appeals observed that "a price term is not necessarily indefinite because the agreement fails to specify a dollar figure . . . or contains no computational formula." Moreover, "[w]hile there must be a manifestation of mutual assent to essential terms, parties also should be held to their promises [*3]and courts should not be pedantic or meticulous' in interpreting contract expressions." Id. "[A] price term may be sufficiently definite if the amount can be determined objectively without the need for new expressions by the parties; a method for reducing uncertainty to certainty might, for example, be . . . ascertained by reference to an extrinsic event, commercial practice or trade usage." Id. [internal citations omitted].

The deed here names the parties, identifies the piece of land being conveyed, and states the conveyance is "in consideration of Ten Dollars and other valuable consideration." The complaint alleges consideration of $150,000 was paid to defendant for the Property. While defendant disputes this allegation, for the purposes of a motion to dismiss under CPLR 3211, this Court must assume it is true. Leon v. Martinez, supra , at 87-88. There may be extrinsic evidence that consideration of $150,000 was agreed upon by the parties. Alternatively, evidence of trade usage may show that $150,000 was a reasonable price for the Property at the time under the present circumstances of the parties.There may be cancelled checks written to defendant in payment of the consideration. If these checks are for construction work or anything else, as defendant contends, there will be evidence of that, which may or may not be refuted. In any case, based on the allegations in the complaint, together with the deed signed by plaintiffs, the allegations do make out a cause of action. The motion to dismiss all claims pursuant to the statute of frauds is therefore DENIED.

Declaratory Judgment and Quiet Title

"The supreme court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a justiciable controversy . . . ." CPLR § 3001. "If the court has jurisdiction of the subject matter, in any event, and if the dispute is genuine, and not moot or academic, the dispute will be deemed justiciable' and CPLR 3001 will in that regard be satisfied." (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3001:4)

An action to quiet title may be brought "[w]here a person claims an estate or interest in real property . . . to compel the determination of any claim adverse to that of the plaintiff which the defendant makes . . . ." RPAPL § 1501.

The parties here dispute ownership of the Property. The court has jurisdiction of the subject matter, and the dispute is genuine; nor is it moot or academic. The defendant maintains that the Property belongs to him, which claim constitutes a "claim adverse to that of the plaintiff." The motion to dismiss the claims for declaratory judgment and to quiet title is therefore DENIED.

Fraud Claims

Plaintiff brings three fraud claims: fraudulent misrepresentation, fraud, and fraud in the inducement. "The essential elements of a cause of action for fraud are representation of a material existing fact, falsity, scienter, deception and injury." (Daly v. Kochanowicz, 67 AD3d 78 [2d Dept 2009][internal citations omitted]). Defendant argues that plaintiffs' fraud claims should be dismissed because plaintiff fails to allege any of the required elements. However, the amended complaint clearly alleges that the defendants "misrepresented their ultimate intentions [*4]and thus misled the Plaintiffs . . . ." Plaintiff appears to claim that defendants purposely misled plaintiffs into believing that defendants wanted to sell the Property in order to induce plaintiff to pay defendant the purchase price. It is not the role of this court to examine the plausibility of these claims at this stage, only to decide whether, assuming their truth, the allegations make out a cause of action. (Leon, supra ).

Although plaintiffs make out a cause of action in the sense that they allege each of the elements of the fraud claims, such claims are not always permitted in cases involving a contractual dispute. Where, as here, claims of fraud arise out of an underlying breach of contractual duties, an action for fraud will not lie unless the misrepresentations at issue are "collateral or extraneous to the agreements entered into by the parties." (Spellman v. Columbia Manicure Manufacturing Co., 111 AD2d 320, 323 [2d Dept 1985]). On the other hand, the First Department of the appellate division held in Briefstein v. Rotondo Constr. Co., 8 AD2d 349, 351 [1st Dept. 1959] that "a cause of action sounding in fraud was insufficient where it alleges that the individual defendant did not intend to perform the contract with plaintiff when he made it.'" Spellman, supra , at 323. The Second Department has followed the First Department in consistently holding to the Briefstein rule. Id., Gould v. Community Health Plan, 999 AD2d 479. "Failure to fulfill promises to perform acts in the future is a breach of contract, and not fraud." (Spellman, supra , at 324 [quoting Gould, supra ]).

Plaintiffs' allegations here all center around a claimed sale of land pursuant to an oral contract. The alleged fraud was with regard to defendants' intentions at the time the contract was entered into. As such, if plaintiffs now claim defendants have failed to abide by the contract by refusing to acknowledge plaintiffs' ownership of the Property, plaintiffs' appropriate remedy would be damages for breach of contract, not fraud. Defendants' motion to dismiss with regard to plaintiffs' causes of action for fraudulent misrepresentation, fraud, and fraud in the inducement is therefore GRANTED.

Unjust Enrichment

Defendants contend that plaintiffs fail to allege sufficient facts to form the basis for a cause of action for unjust enrichment. The elements required for unjust enrichment are "(1) the other party was enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered." (Old Republic Natl. Title Ins. Co. V. Luft, 52 AD3d 491 [2d Dept. 2008]). Defendant claims that plaintiff fails to allege elements (1) and (2). However the amended complaint clearly alleges these in paragraph 79. Defendants' motion to dismiss is therefore DENIED with regard to plaintiffs' claim for unjust enrichment.

Constructive Trust

Imposition of a constructive trust requires (1) a confidential or fiduciary relation, (2) a promise, (3) a transfer in reliance on the promise, and (4) unjust enrichment. (Doxey v. Glen Cove Community Development Agency, 28 AD3d 511 [2d Dept. 2006]). "Generally, evidence of a friendship, without more [between the parties] would be insufficient to demonstrate the existence [*5]of a confidential relationship . . . ." (Byrd v. Brown, 208 AD2d 582 [2d Dept. 1994] [citing Prado v. De Latorre, 194 AD2d 656, 657 [2d Dept. 1993]]). "However, the four factors are not an unyielding formula which limits a court's freedom to fashion this equitable remedy' and the requirements are not to be rigidly applied." (Id. [citing Bontecou v. Goldman, 103 AD2d 732, 733 [2d Dept. 1984]]).

Plaintiff has alleged a confidential relationship exists between the parties based on a personal friendship and business relationship. Plaintiff alleges a bilateral contract, which, if proven, would indeed constitute a promise, since a bilateral contract is an exchange of promises.(Soderholm v. Kosty, 177 Misc 2d 403, 406 [Just Ct 1998]) Plaintiff further alleges a transfer of $150,000 to defendant in reliance on the alleged contract. Finally, plaintiff has pleaded the elements of unjust enrichment, as discussed above. Whether a relationship such as the one alleged by plaintiff can constitute a confidential relationship for the purposes of imposing a constructive trust will depend on the facts of the case. (See Bontecou, supra ). In order for the court to exercise its judgment in equity, specific facts and evidence must be made available. Plaintiffs' claim for constructive trust cannot be dismissed for failure to state a claim under CPLR § 3211 because the allegations, if proven, might lead the court to impose a constructive trust. Defendants' motion to dismiss with respect to plaintiffs' claim for a constructive trust is therefore DENIED.

All parts of defendants' motion not herein discussed are hereby DENIED. This constitutes the order of the court.

Dated: July 27, 2010

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J.S.C.