Hobbesland v HobbeslandAnnotate this Case
Decided on November 15, 2017
Supreme Court, Richmond County
Alfred Hobbesland, Plaintiff
John Hobbesland and LINDA HOBBESLAND, Defendants.
Attorney for Plaintiff
Angiuli & Gentile
60 Bay Street
Staten Island, NY 10301
Attorney for Defendant
1320 Rexcorp Plz
Uniondale, NY 11556
Philip S. Straniere, J.
Plaintiff, Alfred Hobbesland (Alfred), commenced this action in Supreme Court, Richmond County, against the defendants, John Hobbesland (John), plaintiff's son and Linda Hobbesland (Linda), plaintiff's daughter-in-law, alleging that owing to the fraudulent misrepresentations of the defendants, plaintiff unknowingly conveyed title to real property to the defendants. Plaintiff sought to have the court undo the conveyance and restore plaintiff to title. In the alternative, plaintiff asked the court to impose a constructive trust in his favor in regard to the conveyed property. A non-jury trial was held on September 25, 26 & 27, and October 4, 2017. A post-trial briefing schedule was agreed upon. Both sides were represented by counsel.
Plaintiff was the owner of the premises 864 56th Street, Brooklyn, New York as the surviving tenant by the entirety after his spouse predeceased him in 1999. It is a two-family residence with the defendants residing in the first-floor apartment for about 20 years paying $600.00 a month as rent to the plaintiff. Plaintiff occupied the upstairs apartment.
Plaintiff was born in Norway in 1934 making him seventy-nine at the time of these [*2]transaction in 2013.
In 2013, it was decided that the family would move from Brooklyn. A two-family house on Staten Island was located. Plaintiff agreed to sell the Brooklyn property and use the proceeds to purchase the Staten Island house. Plaintiff participated in the selection of the Staten Island property.
On March 4, 2013, plaintiff entered into a written contract of sale for the Brooklyn property. The contract was prepared by Andrew L Sichenze, Esq.(Sichenze), an attorney who practiced in that section of Brooklyn for over fifty-years. Plaintiff signed the contract. The sale price was $1,325,000.00.
On March 8, 2013, plaintiff signed an amendment to the contract permitting the purchasers to assign the contract to a corporate entity.
On March 28, 2013, plaintiff signed a contract to purchase a two-family home located at 111 Dawson Circle, Staten Island, New York. Only plaintiff is listed as the purchaser. The purchase price was $549,900.00. It was anticipated that Alfred would have the smaller apartment on the first floor with John and Linda and their family occupying the master apartment.
On or about May 20, 2013, plaintiff fell while attending the Norwegian Day Parade in Brooklyn, and was hospitalized. Because both the sale of the Brooklyn property and the purchase of the Staten Island house were imminent, Sichenze prepared a New York Statutory Short Form Power of Attorney with Alfred as principal and John as agent. The document was executed in Sichneze's presence at Lutheran Medical Center, Brooklyn.
The power of attorney was used by John to complete the sale of the Brooklyn property on May 21, 2013 and the purchase of the Staten Island property on May 24, 2013.
The closing statement from the sale prepared by Sichenze discloses that the plaintiff netted $1,198,142.42 after payment of all city and state transfer taxes, closing costs, and the satisfaction of a home equity line of credit loan secured by a mortgage on the Brooklyn property. There was testimony that the mortgage proceeds had been used to assist one of Alfred's daughters, Christina Polemini (Christina), in meeting certain financial obligations she had incurred. Another daughter, Torunn Roinestad (Torunn), was not involved in the sale or purchase in any manner.
On November 19, 2013, Alfred, as principal, executed a new power of attorney on a New York Statutory Short Form, with John as the agent. On that date, Alfred also executed a "Last Will and Testament" in which he left 111 Dawson Circle to John and Linda, with the any assets remaining in his residuary estate being bequeathed to Christina and Torunn in equal shares. John and Linda would inherit nothing else under the Will other than the Staten Island property. Also on this date a Health Care Proxy was signed by Alfred naming John as the health care agent and Christina as the substitute agent.
On November 19, 2013, Alfred executed a deed transferring the Staten Island property to John and Linda as tenants by the entirety. The deed created a life estate in favor of Alfred. The Schedule A description to this deed contained the following recitation: "Excepting and reserving to the party of the first part herein a life estate in the premises described herein which shall continue in all events until the death of the party of the first part."
The power of attorney, health care proxy, will and deed all dated November 19, 2013 were all prepared by Sichenze.
In the summer of 2014, an in-ground swimming pool was installed at the Staten Island property at a cost of more than $38,000.00. The monies were paid from a joint account in Alfred [*3]and John's name. It was conceded that the money was Alfred's from the sale of the Brooklyn property where he netted an amount more than $500,000.00.
In May 2015, at the behest of Torunn and Christina, plaintiff was taken to see new lawyers, Connors & Sullivan where he was told that he had sold the Staten Island house to John for "$10.00" and that he had no rights in the property. He was led to believe that there was no life estate.
On May 12, 2015 Alfred executed a document establishing a "Revocable Trust" with himself as Grantor and Alfred and Torunn as Trustees.
On May 20, 2015 Alfred executed a new will leaving all his assets to Torunn and Christina. John and Linda were excluded from the new will. John was removed as executor and replaced by Torunn. Christina now called Christina Hobbesland, is the alternate executor.
The Trust and Will from May 2015 were prepared by Connors & Sullivan.
This litigation was filed in Supreme Court on August 3, 2015. The complaint continues the canard that Alfred did not have a life estate in the Staten Island property.
Legal Issues Presented:
A. Has Plaintiff Established a Cause of Action for Fraudulent Misrepresentation?
In order to prevail on a cause of action for fraudulent misrepresentation, plaintiff must establish the fraud by clear and convincing evidence [Matter of Gross, 242 AD2d 333 (1997)]. The existence of a familial relationship such as exists here, does not in and of itself give rise to a presumption of undue influence. There must be evidence that other facts and circumstances exist which show inequality or some other controlling influence are present for a plaintiff to prevail [Matter of Estate of Nealon, 104 AD3d 1088 (2013) affd 22 NY3d 1045 (2014)].
Plaintiff alleges that he was steered to Sichenze for the legal services by John and Linda. He asserts that he did not have independent counsel because of this and the fact that although Sichenze had never represented John and Linda in the past, he had provided legal services for other members of Linda's family. It appears that the fraudulent misrepresentation being alleged by plaintiff was that he had no intention of surrendering title to the Staten Island property to anyone.
At trial Alfred testified that he did not sign the Will prepared by Sichenze and that although the signature on the deed looks like his, he did not remember signing the document. He also denied signing the power of attorney and health care proxy dated November 19, 2013. He stated that he did not know he had transferred title to the house to John until his daughter took him to her lawyers, Connors & Sullivan. In spite of having a new Will prepared by Connors & Sullivan, Alfred testified that he did not have a new Will, but when showed a copy of it he indicated that if his daughter asked him to sign it he would have. A review of Alfred's signatures on all the documents leads to the conclusion they were all signed by the same person. No expert testimony was presented to support the contention they are not Alfred's signatures. Nor do the pleadings contain an allegation that the signatures are not his.
It is conceded that there is no written retainer agreement between Alfred and Sichenze for any of the services Sichenze rendered. There is also no showing of any retainer agreement between Sichenze and John or Linda. Sichenze stated that it is not his practice to have written retainer agreements for commonplace residential sale or purchase transactions nor for simple wills. Both of which is how he characterized his services to Alfred.
Sichenze testified that Alfred was his client. He stated that although initially contacted by [*4]John about the real estate transaction, he met with Alfred on several occasions and that after the Staten Island purchase was complete Alfred approached Sichenze wanting to put John only into title. Sichenze stated that he did not recommend that course of action, but if he insisted on it, Sichenze would require that any transfer of title from Alfred include a life estate. Sichenze asserted that he had to insist Alfred take back a life estate to protect himself because Alfred wanted title in John. This is how the transaction was structured. Further discussion between Sichenze and Alfred led to Alfred wanting to convey the property to both Linda and John so as to protect her and his grandchildren.
Sichenze produced copies of his diary pages from 2013 showing six meetings with Hobbesland between January and March 2013, in reference to the sale and purchase of the properties. Sichenze stated that Alfred participated in all these meetings. There were three more diary entries in May 2013 which correspond to the dates of the execution of the power of attorney, and the closings of the Brooklyn and Staten Island houses. Alfred was unable to attend either closing hence the need for the power of attorney.
Sichneze's diary shows another meeting in July 2013 regarding the Will and the conveyance to John. The final 2013 meeting is on November 19, 2013 when the Will and title transfer were accomplished. Regarding the Will, Sichenze testified that Alfred did not feel it was necessary to have one because he trusted John would give his daughters any money he had when he died and would divide it equally between the women. Sichenze insisted a Will was necessary to ensure that John would do so.
Sichenze testified that on all occasions when he met with Alfred, Alfred was competent and articulated his wishes concerning the real property and the Will. Sichenze convinced of him of the need to have these documents executed so that his intentions would have to be carried out. When questioned as to why there was no alternate executor in the Will, Sichenze stated that Alfred indicated that he did not trust his daughters to carry out his wishes. The eldest, Torunn, was always questioning whether Alfred was really her father, while Christina was having marital problems and always needed financial assistance.
The credible testimony is that at the time of the execution of the Will, Deed and other documents, Alfred was competent, knew what he was doing in regard to the disposition of his real and personal property. There is no credible evidence that either John or Linda made any fraudulent misrepresentations to Alfred or asserted either undue influence or duress to compel Alfred execute those documents.
The advice and services provided by Sichenze accomplished what were the wishes of Alfred in November 2013. Had John or Linda wanted to take advantage of Alfred, and if Sichenze was not representing Alfred's interest, title would have been conveyed to them without a life estate for Alfred. No Will would have been executed thereby giving John a one-third interest in the residuary estate to the detriment of his sisters. None of this occurred because Sichenze was taking steps to legally ensure Alfred's wishes were carried out.
In fact, the testimony and evidence presented at trial leads to the conclusion that Alfred was misled not by defendants, but by one or both of his daughters or the lawyers to whom they brought Alfred in 2015.
Someone put into Alfred's head that he had no life estate, when a clear reading of the deed disclosed its existence. This misconception was continued into this litigation. A reservation of the life estate by recitation in the deed, as was done here, is all that is necessary to create the interest [U.S. v Baran, 996 F2d 25 (1996)].
Someone told Alfred he had sold the house to John for "$10.00." This too is a false statement because that is the standard amount of consideration set forth in an arm's length real estate transaction in New York State. Why this practice continues is something the legislature should consider remedying because transfer tax returns accompanying all deeds recite the full sale price. In fact, there was no monetary consideration at all for the transfer to John and Linda as it was an inter-family transaction and the property was owned by Alfred free and clear of all liens.
Someone convinced Alfred to execute a Revocable Trust in May 2015. This document is sixteen pages long and although it indicates there is property to place into the "Trust Estate" no such property is described in the document. Alfred paid Connors & Sullivan for this document. Perhaps if he succeeded in this litigation and the real property was reconveyed to Alfred, he would have assets to place into the Trust. The effect of the May 2015 Will is only to change the Executor from John to Torunn, as title to the real property is still with John and Linda. Excluding John as a named beneficiary was not changed by the Will because the November 2013 Will left the residuary estate to both Torunn and Christina to the exclusion of John.
Did anyone explain to Alfred that if he is successful in winning this litigation, and title is conveyed back to him, when he dies, based on the 2015 Will, Torunn and Christina would own the house and could evict John and Linda from the premises?
Plaintiff's cause of action for fraudulent misrepresentation is dismissed on the merits.
B. Has Plaintiff Established a Cause of Action for a Constructive Trust?
Plaintiff's second cause of action is to impose a constructive trust in favor of Alfred on the Staten Island property. A constructive trust is an equitable remedy imposed on the owner of real property when the land has been acquired in such circumstances that the holder of the legal title may not retain the beneficial interests of ownership. Equity converts the record owner to a trustee [Beatty v Guggenheim Exploration Co., 225 NY 380 (1919)].
A constructive trust must also be proven by clear and convincing evidence [Matter of Bourne, 38 Misc 2d 838 (1963)]. To prevail on this cause of action the plaintiff must show (1) a confidential relationship; (2) a promise; (3) a transfer in reliance on the promise; and (4) unjust enrichment [Simonds v Simonds, 45 NY2d 233 (1978)]. There is no evidence that there was any promise by John and Linda to Alfred to convince him to transfer title to them. The credible testimony is that the 2013 documents were all done at the request of Alfred and reflected his wishes at that time.
There is no need to impose a constructive trust as Alfred has a valid life estate in the Staten Island property. It was properly created. A life estate may be terminated either voluntarily by Alfred, which would require the recordation of a document, or by his death.
Plaintiff apparently pled the constructive trust as an alternative theory of relief should the court rule that the conveyance to John and Linda was valid. That conveyance is valid, but as set forth herein, the life estate gives Alfred more protection than the imposition of a constructive trust.
It is not the court's role to explain to plaintiff the legal implications of his possessing a life estate. However, based on the legal "advice" he received in 2015, he may consider locating an attorney with experience in real estate transactions to advise him in this regard.
Plaintiff's cause of action for a constructive trust is dismissed on the merits. There was no evidence that the defendants made any promise to Alfred to induce him to convey title to them.
C. Other Issues
1. This court has concluded that Sichenze was the attorney for Alfred in these transactions and not for the defendants. Sichenze has been practicing law for almost sixty-years and the court is not going to second-guess his standards of practice. However, any misconception regarding for whom he was providing legal services could have been avoided had he had a written retainer with Alfred. The Rules of Professional Conduct require that there be written letters of engagement with clients in almost every situation (Rule 1.5) so as to avoid fee disputes with the client. An equally important result of having a letter of engagement or retainer agreement, is that it clearly informs the client as to the scope of the legal services to be performed and protects the lawyer from being accused of having a conflict of interest. There is no penalty in the rules for failing to have such an agreement. Had he had such an agreement, perhaps Sichenze could have avoided being deposed and examined at trial as to who was his client in 2013.
2. A review of the contract to purchase 111 Dawson Circle, discloses a clause in the document informing Alfred as the purchaser, that on the certificate of occupancy for a two-family dwelling the garage has been converted to living space without having received approvals from the Department of Buildings. Plaintiff has purchased the premises with an "undocumented" alteration. A check of the Buildings Department on-line records shows that no permits were ever sought for this alteration.
The parties conceded that Alfred paid to have an in-ground pool costing over $38,000.00 installed at the property in 2014. Although title was in John and Linda at that point, Alfred paid for the pool, from the proceeds of the Brooklyn sale. A check of the Buildings Department records indicates that there were no permits nor filings made concerning the pool. The pool also is "undocumented." John and Linda will have to bear the expense of any legalization of these two improvements should a purchaser in the future or a mortgage lender require it.
A copy of this decision with a request for inspection of the premises will be sent by the court to the Buildings Department.
Plaintiff's causes of action are dismissed on the merits. Title was validly transferred to defendants. Plaintiff has an enforceable life estate.
The foregoing constitutes the decision and order of the court.
DATED: November 15, 2017
Philip S. Straniere
Acting Justice of the Supreme Court