Opinion
23250/2008
05-22-2009
Patricia Bodden, Plaintiff, v. David Kean, Defendant.
Attorney for Plaintiff Law Offices of J.R. Hairston, P.C. Attorney for Defendant Joseph Monaco
Attorney for Plaintiff Law Offices of J.R. Hairston, P.C.
Attorney for Defendant Joseph Monaco
Lawrence S. Knipel, J.
Upon the foregoing papers, defendant, David Kean, moves for an order, pursuant to CPLR 3211 (a) (1), (5), and (7), dismissing the complaint of plaintiff, Patricia Bodden, on the grounds that a defense is founded upon documentary evidence, plaintiff's claims are barred by the statute of limitations, and the complaint fails to state a cause of action; and upon such dismissal, canceling the Notice of Pendency on a certain parcel of property pursuant to CPLR 6514.
Background
Plaintiff seeks to impose a constructive trust on defendant's ownership interest in the two-family house located at 660 East 86th Street in Brooklyn (the property). By way of relief, plaintiff seeks to compel defendant (i) to convey a 50% interest in the property to plaintiff, and (ii) to pay plaintiff 50% of all monies obtained by defendant from each refinancing of the purchase-money mortgage on the property.
Plaintiff was a housekeeper for defendant's parents, and defendant's nanny since defendant was approximately eight months old. Defendants' parents died in 1988. Plaintiff continued to be defendant's housekeeper until 2006. According to plaintiff, she and defendant maintained a close relationship and she treated defendant as one of her sons. The parties agreed in a letter of March 11, 1997 (the letter agreement) that in "consideration for . . . past services and assistance rendered to [defendant] by [plaintiff]," defendant would purchase for plaintiff and her mother and children an identified property, that such property would be titled in defendant's name only, that plaintiff would pay all expenses associated with the property, and that upon payment of a specified sum by plaintiff to defendant, defendant would transfer title to the property to plaintiff. Plaintiff alleges that her mother paid $15,000 to defendant to be applied towards the down payment on the property prior to closing, that defendant acquired such property on June 30, 1997 and executed a purchase money mortgage therefor, that plaintiff paid the mortgage and other expenses associated with the maintenance of the property and collected rent from the first-floor tenant, but that defendant, unbeknownst to plaintiff, refinanced the purchase-money mortgage five times, obtained $180,000 in equity from the property, and converted the same to his own use. Plaintiff further alleges that notwithstanding her May 2008 offer to defendant to pay him $15,000 as required by the letter agreement, he has refused to recognize her ownership of the property, but is claiming it as his own and is seeking to evict her and her family therefrom.
In support of his motion to dismiss, defendant avers in his affidavit that he alone tendered the down payment for the property that is titled solely in his name, that from the date the property was purchased to the present, he alone made all mortgage payments and insurance premiums, and that he paid thousands of dollars over the years towards the maintenance and upkeep of the property. He further avers that he did not enter into the letter agreement with plaintiff and that if he did enter into such agreement, the same was unenforceable for lack of consideration, and that even if the same were enforceable when it was entered into, it is no longer unenforceable because plaintiff breached her obligations to pay the mortgage and other expenses for the property. In any event, defendant concludes, the letter agreement is unenforceable because defendant has rejected plaintiff's tender offer.
Plaintiff commenced the instant action in August 2008. In lieu of serving an answer, defendant moves to dismiss the complaint.
Analysis
Enforceability of the Letter Agreement
Defendant's first ground for dismissal is that the letter agreement is unenforceable for lack of consideration. Plaintiff responds that the $15,000 check allegedly given by plaintiff's mother to defendant towards the down payment on the purchase contract was an additional consideration for the letter agreement.
Generally, past consideration is no consideration and cannot support an agreement because "the detriment did not induce the promise. That is, since the detriment had already been incurred, it cannot be said to have been bargained for in exchange for the promise" (Umscheid v Simnacher, 106 AD2d 380, 381 [2d Dept 1984] [internal quotations omitted]). However, General Obligations Law (GOL) § 5-1105 provides that "[a] promise in writing and signed by the promisor . . . shall not be denied effect as a valid contractual obligation on the ground that consideration for the promise is past or executed, if the consideration is expressed in the writing and is proved to have been given or performed and would be a valid consideration but for the time when it was given or performed." "To be enforceable pursuant to [GOL] section 5-1105 . . ., the writing must contain an unequivocal promise to pay a sum certain, at a date certain, and must express consideration for the promise" (Umscheid, 106 AD2d at 381). The consideration set forth in the letter agreement, i.e., "past services and assistance rendered to [defendant] by [plaintiff]," fails to qualify under GOL 5-1105 (see Umscheid, 106 AD2d at 381 ["The consideration alluded to in the documents, viz., services rendered on the respondent's behalf, is vague, imprecise, and, indeed, is without meaning. In short, resort to evidence extrinsic to the documents is necessary to give meaning to the consideration expressed' in those documents"]).
The court next examines the relevance of the $15,000 check allegedly given by plaintiff's mother to defendant prior to closing for his use as a portion of the down payment. It is well established that "when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing" (W.W.W. Assocs., Inc. v Giancontieri, 77 NY2d 157, 162 [1990]). Nevertheless, where a contract is ambiguous on its face, resort to extrinsic evidence is permissible (see Geothermal Energy Corp. v Caithness Corp., 34 AD3d 420, 423 [2d Dept 2006]). Whether a writing is ambiguous, or not, is a question of law to be resolved by the court (see W.W.W. Assocs., 77 NY2d at 162).
In this case, the agreement, read as a whole to determine its purpose and intent (see W.W.W. Assocs., 72 NY2d at 162), indicates that the consideration for the arrangement was plaintiff's past services to defendant. Although the agreement stated that defendant was buying the property, it made no mention of plaintiff or her mother contributing anything towards the down payment. Thus, the letter agreement is unambiguous regarding the underlying consideration. As a result, extrinsic evidence cannot be considered in order to create an ambiguity in a written agreement which is complete, clear, and unambiguous on its face (see W.W.W. Assocs., 72 NY2d at 163). In this context, therefore, the $15,000 check cannot be admitted to vary the terms of the letter agreement. Thus, the letter agreement is unenforceable for lack of consideration. Statute of Limitations
Lest there be any misunderstanding on defendant's part, the court's ruling on the inadmissibility of the $15,000 check to vary the terms of the letter agreement pertains only to its determination concerning the validity of the letter agreement as an enforceable contract. The $15,000 check is certainly admissible with respect to plaintiff's constructive trust claim.
In light of this determination, the issue of whether plaintiff breached the letter agreement is moot. Again, the court wishes to make clear that plaintiff's performance or non-performance in furtherance of the letter agreement will be admissible with respect to plaintiff's constructive trust claim.
A cause of action to impose a constructive trust is subject to a six-year limitations period (see CPLR 213 [1]; Mazzone v Mazzone, 269 AD2d 574 [2d Dept 2000]). It "commences to run upon the occurrence of the wrongful act giving rise to a duty of restitution" (Id. at 575 [internal quotation marks and citation omitted]). "A determination of when the wrongful act triggering the running of the Statute of Limitations occurs depends upon . . . whether the constructive trustee wrongfully withholds property acquired lawfully from the beneficiary, in which case the property would be held adversely from the date the trustee breaches or repudiates the agreement to transfer the property" (De Laurentis v De Laurentis, 47 AD3d 750, 751-752 [2d Dept 2008] [internal quotation marks and citations omitted], lv denied 11 NY3d 706 [2008]; see also Augustine v Szwed, 77 AD2d 298, 301 [4th Dept 1980] ["the cause of action accrues when the acts occur upon which the claim of constructive trust is predicated, the wrongful withholding"]).
Here, evidence supports plaintiff's claim that defendant did not repudiate his duty as constructive trustee until June 2008 when he refused to convey the property to plaintiff. The gravamen of plaintiff's complaint is not that defendant acquired the property wrongfully in June 1997, but, rather, that he breached the trust relationship in June 2008 when he refused to convey the property to plaintiff (see Sitkowski v Petzing, 175 AD2d 801, 802 [2d Dept 1991]). The fact that defendant purchased the property in his name was not a repudiation because he and plaintiff agreed at that time that defendant would hold the property in his name (see In re Barabash Estate, 31 NY2d 76, 80 [1972] ["The law requires proof of a repudiation by the fiduciary which is clear and made known to the beneficiaries."], rearg denied 31 NY2d 963 [1972]). Applying the six-year statute of limitations to the June 2008 accrual date, plaintiff's assertion of her claim two months later in August 2008 is obviously timely (see Maric Piping, Inc. v Maric, 271 AD2d 507, 508 [2d Dept 2000] [in an action to impose a constructive trust on the property purchased by plaintiff's brother allegedly on behalf of both brothers, the six-year limitations period began to run when defendant breached fiduciary duty to convey interest in property to plaintiff]). Therefore, that branch of defendant's motion seeking to dismiss the complaint on the statute of limitations grounds is denied. Constructive Trust
Defendant's claim that a cause of action alleging unjust enrichment is subject to a three-year statute of limitations (see CPLR 214 [3]; Lambert v Sklar, 30 AD3d 564, 566 [2d Dept 2006]), while correct, is irrelevant. Plaintiff's claim is for a constructive trust and is governed by the six-year statute of limitations. She does not allege a separate claim for unjust enrichment.
Defendant contends that plaintiff's complaint must be dismissed, pursuant to CPLR 3211 (a) (1), based upon the documentary evidence (the deed, mortgages, bills, etc.), and pursuant to CPLR 3211 (a) (7), for failure to state a cause of action. Defendant's position is that plaintiff cannot adequately assert a claim for a constructive trust against the property.
In the context of a motion to dismiss, the court "must accept as true the facts as alleged in the complaint and submissions in opposition to the motion, and accord plaintiffs the benefit of every possible favorable inference," determining only "whether the facts as alleged fit within any cognizable legal theory" (Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 414 [2001]). "[W]here a motion to dismiss a complaint pursuant to CPLR 3211 has not been converted to a motion for summary judgment, affidavits submitted by the plaintiff may be used to remedy an inartfully pleaded complaint, but affidavits from the defendant seldom may be used to defeat a claim" (Johnson v Spence, 286 AD2d 481, 483 [2d Dept 2001]).
"Generally, a constructive trust may be imposed [w]hen property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest'" (Sharp v Kosmalski, 40 NY2d 119, 121 [1976], quoting Beatty v Guggenheim Exploration Co., 225 NY 380, 386 [1919]). The purpose of the imposition of a constructive trust is to prevent unjust enrichment (see 106 NY Jur 2d, Trusts § 176 ["a person may be deemed to be unjustly enriched' if he has received a benefit, the retention of which would be unjust"] [footnote omitted]). "The constructive trust doctrine is given broad scope to respond to all human implications of a transaction in order to give expression to the conscience of equity and to satisfy the demands of justice" (Iwanow v Iwanow, 39 AD3d 476, 477 [2d Dept 2007]; see Simonds v Simonds, 45 NY2d 233, 241 [1978] [constructive trust doctrine's "applicability is limited only by the inventiveness of men who find new ways to enrich themselves unjustly by grasping what should not belong to them"]; Beatty, 225 NY at 389 ["A court of equity in decreeing a constructive trust is bound by no unyielding formula. The equity of the transaction must shape the measure of relief."]). "Performance of a wrongful act by the party unjustly enriched is not required. Rather, what is required, generally, is that a party hold property under such circumstances that in equity and good conscience he [or she] ought not to retain it'" (Iwanow, 39 AD3d at 477, quoting Simonds, 45 NY2d at 242 [internal quotation marks omitted]).
Four elements are relevant to the imposition of a constructive trust: (i) a confidential or fiduciary relationship; (ii) a promise, express or implied; (iii) a transfer in reliance thereon; and (iv) unjust enrichment (see Sharp, 40 NY2d at 121). The court is satisfied that, by virtue of a long-term care rendered by plaintiff to defendant, there was a confidential relationship between plaintiff and defendant. The letter agreement, buttressed by the $15,000 bank check from plaintiff's mother to defendant, constitutes at least some evidence of a promise by defendant to transfer the property to plaintiff. Next, plaintiff's allegations that after the closing, she contributed funds, time, and effort in reliance on defendant's promise to share in the result are sufficient to satisfy the transfer in reliance element of a constructive trust (see Gottlieb v Gottlieb, 166 AD2d 413, 414 [2d Dept 1990]). Finally, defendant's retention of the property and his cashing out of the equity in the property through multiple refinancings satisfy the unjust enrichment element of a constructive trust. Overall, accepting plaintiff's allegations as true, and according them the benefit of every possible favorable inference, they are sufficient to state a cause of action to impose a constructive trust on the property (see Iwanow, 39 AD3d at 477). Given the evidence that defendant's conduct contravenes equity and good conscience and results in his substantial unjust enrichment, "the definitive resolution of this essentially equitable issue should be made only after the parties have had a full opportunity to present all pertinent considerations to a finder of fact" (In re Koreag, Controle et Revision S.A., 961 F2d 341, 355 [2d Cir 1992], cert denied sub nom. Koreag Controle et Revision, S.A. v Refco F/X Assocs., 506 US 865 [1992]). Consequently, that branch of defendant's motion, pursuant to CPLR 3211 (a) (1) and (7), to dismiss plaintiff's cause of action to impose a constructive trust is denied. Notice of Pendency
"A notice of pendency is authorized to be filed in an action seeking a judgment that would affect the title to, or possession, use, or enjoyment of, real property" and "[a]n action seeking to impose a constructive trust over real property qualifies as one in which the filing of a notice of pendency is allowed" (Nastasi v Nastasi, 26 AD3d 32, 35-36 [2d Dept 2005]). As stated, plaintiff's allegations are facially sufficient to make out a cause of action for the imposition of a constructive trust. Accordingly, that branch of the motion seeking cancellation of the notice of pendency is denied.
Conclusion
In sum, the motion is granted solely to the extent that the letter agreement is determined to be unenforceable for lack of consideration, but is otherwise denied.
The foregoing constitutes the decision and order of this court.
ENTER,
J. S. C.