Opinion
511513/2018
05-29-2020
Daniel CRUZ, Plaintiff, v. Gloria CRUZ, Defendant.
Recitation as required by C.P.L.R. 2219(a) of the papers considered in the review of the motion for summary judgment and cross motion for consolidation and costs/fees.
Papers/Papers Numbered
Plaintiff's notice of motion and exhibits: 1-9
Defendant's notice of cross motion and exhibits: 1-18
Plaintiff's affirmation in further support and in opposition: 1-7
Defendant's affirmation in further support: 1-9
September 11, 2019 transcript: 1-30
Plaintiff moves by notice of motion to (1) strike defendant answer and affirmative defenses first through fourth; (2) award plaintiff $315,000 plus statutory interest from December 14, 2017; and (3) grant summary judgment on the partition action and direct the sale of the former marital residence.
Defendant opposes plaintiff's application in its entirety and cross moves (1) to consolidate the within action with the parties' matrimonial action under index number 52256/2013; and (2) for costs, fees and disbursements of $15,000 pursuant to 22 NYCRR 130-1.1.
BACKGROUND
The parties were divorced by judgment dated May 14, 2018. The judgment incorporated by reference the parties' so ordered settlement agreement (Agreement) which survived and did not merge into the judgment. The Agreement provides, in relevant part:
"Defendant shall pay the sum of $315,000 to counsel for Plaintiff's escrow account, Berke & Berke, IOLA by December 14, 2017. This satisfies all claims for equitable distribution and property distribution, as well as spousal maintenance, [and] counsel fees. The lump sum payment of $315,000 constitutes a non-taxable property settlement as a distributive award of equitable distribution."
Plaintiff was represented by Jeffrey R. Berke, Esq. in the divorce action.
After entry of the judgment of divorce, defendant moved to enforce the Agreement in (1) directing plaintiff to cooperate in defendant refinancing the former marital residence, pay all judgments and liens on the property in his name as well as penalties at closing occasioned by his delay, and pay 50% of all transfer taxes as well as (2) appointing defendant the limited power of attorney to act on plaintiff's behalf in the event he failed to cooperate and comply with the above directives (mot. seq. No.2). After argument on August 13, 2018, that application was denied on the basis that the terms defendant sought to "enforce" exist nowhere in the parties' contract and cannot be inserted into the Agreement by the court (order dated January 31, 2019).
Thereafter, defendant moved this court to amend the judgment of divorce and add language directing plaintiff to comply with defendant's refinancing and removing plaintiff from the deed or, in the alternative, modifying the Agreement to add language directing plaintiff to cooperate in defendant refinancing the property and on that basis, granting all of the relief sought in her prior motion (mot. seq. #3). After oral argument on September 27, 2018 that application was similarly denied on the basis that the relief sought essentially mirrored that contained in motion sequence #2 (order dated September 27, 2018).
Upon a determination of defendant's prior post judgment applications in the matrimonial action, nothing further is pending under that index number. However, by order dated May 24, 2019, the within action was transferred to the undersigned on the basis that the prior divorce action between the parties was before this court. Accordingly, that application in defendant's notice of cross motion seeking consolidation of the partition action with the matrimonial action is denied as moot. The court considers the remaining relief sought below.
Plaintiff's Position
Plaintiff sets out that the parties were married in 1974 and bought the subject property as husband and wife on May 22, 1981. Plaintiff commenced an action for divorce in May 2013, which was settled pursuant to the Agreement dated September 14, 2017. That Agreement was incorporated into the subsequent divorce judgment, was incorporated by reference, survived and did not merge into the judgment. Defendant's post judgment applications to compel plaintiff to, inter alia , cooperate in her refinance of the property, and removal of plaintiff from the deed, and to amend the judgment and/or Agreement to provide for same were denied (as detailed above).
Plaintiff commenced the within breach of contract and partition action with the filing of the summons and verified complaint on or about June 5, 2018 and defendant filed an answer on or about August 13, 2018. He asserts that he is entitled to summary judgment on both his cause of action for breach of contract of the Agreement and on his partition claim.
As to the elements of breach of contract, plaintiff avers that (1) a valid contract exists (the Agreement); (2) that he has performed under the contract in waiving his claim to equitable distribution, plaintiff's pension, other property, counsel fees and spousal maintenance; (3) that defendant is in breach in failing to pay plaintiff $315,000; and (4) that this breach has resulted in damages to plaintiff of $315,000 plus statutory interest from December 14, 2017.
As to his partition claim, upon purchasing the property as husband and wife, they held title as tenants by the entirety. However, by operation of the divorce judgment, the title to the property was converted from tenants by the entirety to tenants in common. Plaintiff argues that either party to a tenancy in common may seek a physical partition or partition and sale of the property unless it appears that physical partition would greatly prejudice the owners. Plaintiff submits that defendant's own motion practice establishes that the parties cannot cooperate in managing the property and that physical partition cannot be made without great prejudice to them. Thus, as a matter of law, plaintiff is entitled to summary judgment on the partition action.
As to distribution of the sale proceeds of the property, plaintiff argues that the Agreement is silent as to the distribution of the property and the proceeds should therefore be divided equally between the parties as tenants in common, each with a 50% interest in same.
In support of striking defendant's affirmative defense that there is no breach of contract action, plaintiff reiterates that the Agreement is a valid contract under which defendant has failed to perform. Plaintiff also states generally, that he has "a valid cause of action for partition of the [p]roperty." He submits further that the estoppel and unclean hands fails as an affirmative defense as an inapplicable equitable defense to a cause of action in law seeking monetary damages. Or, in the alternative, estoppel and unclean hands fails as defendant does not allege any such conduct by plaintiff. Breach of contract and failure to mitigate damages must also fail as affirmative defenses because defendant again does not state any such conduct by plaintiff.
In reply, plaintiff's counsel reiterates that he is entitled to summary judgment on the breach of contract claim as defendant, in her own papers, admits that she has not paid plaintiff pursuant to the Agreement. Further, alleged discussions between the parties prior to execution of the Agreement cannot be considered as the Agreement is complete and clear on its face. As to summary judgment on the partition action, counsel submits that defendant offers no legal or factual defense to this claim.
Defendant's Position
Defendant argues that plaintiff is neither entitled to summary judgment nor a partition of the property as the parties' Agreement resolved all issues of distribution of the marital estate. She submits that she entered into the Agreement with every intention of complying with its terms. Her agreement to pay the defendant $315,000 was in full satisfaction of all equitable distribution in the matrimonial action, including plaintiff's interest in the subject property. Defendant asserts that it was always discussed that to make payment to plaintiff, she would refinance the property which requires removing plaintiff from the deed and mortgage. She adds that in 2017 and 2018, she tried to refinance the property but plaintiff's then counsel did not respond to requests for cooperation and responded only to say in June 2018 that he no longer represented plaintiff. Thereafter, also in June 2018, plaintiff served defendant with the summons and complaint in this action, notwithstanding that this lawsuit is based on the matrimonial Agreement. Defendant acknowledges that she must find a way to pay plaintiff pursuant to the Agreement but submits that she can only borrow $50,000 without incurring a 20% penalty, and she cannot use the property as collateral as the plaintiff is on the deed and mortgage.
Defendant's counsel argues that plaintiff has unclean hands as he has attempted to circumvent the matrimonial action and the court familiar with the issues and his conduct during protracted divorce proceedings by retaining new counsel and filing a separate civil action before a new justice.
In support of her cross motion for counsel fees pursuant to 22 NYCRR 130-1.1, defendant asserts that plaintiff's conduct is wholly frivolous. He failed to respond to her requests to comply with the Agreement and instead filed a frivolous breach of contract claim before another justice to evade the matrimonial court's jurisdiction despite the matrimonial court's direction that any motion practice be filed in the matrimonial court.
DECISION
Plaintiff seeks summary judgment on both his breach of contract and partition claims. To prevail on a motion for summary judgment, it is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists ( Alvarez v. Prospect Hospital, 68 NY2d 320 [1986] ). The burden is upon the moving party to make a prima facie showing that he or she is entitled to summary judgment as a matter of law by presenting evidence in admissible form demonstrating the absence of any material facts ( Giuffrida v. Citibank, 100 NY2d 72 [2003] ).
A failure to make that showing requires the denial of that summary judgment motion, regardless of the adequacy of the opposing papers ( Ayotte v. Gervasio, 81 NY2d 923 [1993] ). If a prima facie showing has been made the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact ( Alvarez v. Prospect Hospital, 68 NY2d 320 at 324 [1986] ).
A party opposing a motion for summary judgment is obligated "to lay bare his proofs" to sufficiently demonstrate, with admissible evidence, that a triable issue of fact will exist ( Friends of Animals, Inc. v. Associated for Manufacturers, Inc., 46 NY2d 1065 [1979] ). A genuine issue of fact may not be demonstrated by using mere conclusions, expressions of hope or unsubstantiated allegations or assertions ( Amatulli v. Delhi Constr. Corp., 77 NY2d 525 [1991] ).
"Pursuant to CPLR 3212(b) a court will grant a motion for summary judgment upon a determination that the movant's papers justify holding, as a matter of law, ‘that there is no defense to the cause of action or that the cause of action or defense has no merit.’ Further, all of the evidence must be viewed in the light most favorable to the opponent of the motion ( People ex rel. Spitzer v. Grasso, 50 AD3d 535 [2008] ; citing Marine Midland Bank v. Dino & Artie's Automatic Transmission Co., 168 AD2d 610 [1990] ). The movant's burden is to establish that there are no triable issues of fact as to each cause of action.
Partition Action
"A person holding and in possession of real property as joint tenant or tenant in common, in which he [or she] has an estate of inheritance, or for life, or for years, may maintain an action for the partition of the property, and for a sale if it appears that a partition cannot be made without great prejudice to the owners ( RPAPL 901[1] ). The right to partition is not absolute, however, and while a tenant in common has the right to maintain an action for partition pursuant to RPAPL 901, the remedy is always subject to the equities between the parties" ( Goldberger v. Rudnicki , 94 AD3d 1048 [2012], internal quotations omitted ; see also Arata v. Behling, 57 AD3d 925 [2008] ; Graffeo v. Paciello, 46 AD3d 613 [2007] ). A claim in partition necessarily requires a co-tenancy. Thus, plaintiff must first establish an ownership interest in the real property sufficient to bring a partition action. In order to determine same, the court must look to the parties' Agreement which governs all claims between them in the context of their divorce action.
The parties' Agreement states, in its entirety:
"IT IS AGREED AND STIPULATED BY THE PARTIES that this matter is resolved as follows: Defendant withdraws her Amended Answer with counterclaim and consents that Plaintiff proceeds to judgment on his complaint dated May 21, 2013.
Defendant shall pay the sum of $315,000 to counsel for plaintiff's escrow account, Berke & Berke IOLA by December 14, 2017. This satisfies all claims for equitable distribution and property distribution, as well as spousal maintenance, & counsel fees.
The lump sum payment of $315,000 constitutes a non-taxable property settlement as a distributive award of equitable distribution."
Here, plaintiff has not established his prima facie entitlement to judgment as a matter of law by demonstrating his ownership and right to possession of the subject property. A claim in partition necessarily requires a co-tenancy. The plaintiff argues that partition is an absolute right of a tenant in common. However, it first should be noted that in this case the parties, during the marriage, had been tenants by the entirety and a tenancy in common was created upon entry of the divorce judgment. However, the creation of the tenancy in common is necessarily intertwined with the obligations laid down in the judgment effecting the divorce. It must be said that plaintiff's rights are curtailed and limited by the terms of the Agreement and the judgment of divorce. As was articulated in Moses v. Moses (170 AD 211 [1915] ), quoting approvingly from a then contemporary treatise:
"In Freeman on Cotenancy and Partition it is said (section 505): ‘When a suit for partition is in a court of equity, or in a court authorized to proceed with powers as ample as those exercised by courts of equity, it may be employed to adjust all the equities existing between the parties and arising out of their relation to the property to be divided. ‘He who seeks equity must do equity . (emphasis added)’ Hence whoever, by a suit for partition, invokes the jurisdiction of a court of equity in his behalf, thereby submits himself to the same jurisdiction, and concedes its authority to compel him to deal equitably with his co-tenants."
Moreover,
"The equitable remedy of partition is not the absolute right of a cotenant in common (see, Ripp v. Ripp , 38 AD2d 65, 68, affd. 32 NY2d 755 ). This court has specifically recognized that with respect to a former marital residence, the "right to maintain an action for partition is subject to equitable considerations as between husband and wife" and, accordingly, partition may be precluded by the equities presented in a given case (see, Gasko v. Del Ventura , 96 AD2d 896 ; see also, Bufogle v. Greek , 152 AD2d 527 )"
( Stressler v. Stressler , 193 AD2d 728, 728 [1993] ).
Here, plaintiff asks that the court utilize its equitable powers to recognize him as a full tenant in common as created by operation of the judgment and in taking the position that he is not obligated to transfer legal title under the Agreement he is asking the court to reward him by finding him to be unrestricted by the Agreement. Given that the property was wholly turned over to the defendant in the Agreement and judgment, any interest plaintiff arguably possesses is subject to his obligation to tender his title interest to defendant pursuant to the Agreement as incorporated in the judgment of divorce. The parties' Agreement "satisfies all claims for equitable distribution and property distribution, as well as spousal maintenance, & counsel fees." Thus, although by operation of law a co-tenancy was created upon entry of the divorce judgment, plaintiff's claims related to the property are subject to the Agreement. Despite this, plaintiff now seeks relief both as a true co-tenant and also pursuant to the Agreement as a former spouse in asking the court to force the sale of the property and award him both 50% of the proceeds therefrom and to award him the $315,000 as the sum he contracted for in satisfaction of all claims between the parties in the divorce. Plaintiff asks the court to reward him by adopting his position that he had no obligation to sign the deed, which is reflected by the very nature of the claim he now makes; seeking partition of the former marital residence as a true tenant in common.
Accordingly, plaintiff has no partition action available to him because the tenancy in common created by operation of law does not allow for same as his rights to the property are defined by the Agreement. The mere fact that a tenancy in common was created is subject to the terms of the Agreement which do not entertain the notion that plaintiff would ever be entitled to equally divide the parcel or force the sale. Having failed to establish that he is a tenant in common inclusive of the rights he now seeks to enforce and having failed to demonstrate that he has acted equitably in seeking the court's intervention to permit such relief, plaintiff's motion for summary judgment seeking partition is denied.
Breach of Contract
The parties' Agreement set forth again herein, in its entirety provides:
"IT IS AGREED AND STIPULATED BY THE PARTIES that this matter is resolved as follows: Defendant withdraws her Amended Answer with counterclaim and consents that Plaintiff proceeds to judgment on his complaint dated May 21, 2013.
Defendant shall pay the sum of $315,000 to counsel for plaintiff's escrow account, Berke & Berke IOLA by December 14, 2017. This satisfies all claims for equitable distribution and property distribution, as well as spousal maintenance, & counsel fees.
The lump sum payment of $315,000 constitutes a non-taxable property settlement as a distributive award of equitable distribution."
In order to meet the prima facie burden to recover damages for breach of contract, the plaintiff needs to establish in his motion and supporting papers the existence of a contract, his performance pursuant to the contract, the defendant's breach of her contractual obligations, and damages the plaintiff has sustained as a result of that breach ( Dee v. Rakower, 112 AD3d 204 [2013] ).
The terms of a stipulation of settlement which are incorporated but not merged into a judgment of divorce is a contract, and its terms " ‘operate as contractual obligations binding on the parties’ " ( Levi-Marchessault v. Marchessault , 162 AD3d 650 [2018] ). "The terms thereof ‘operate as contractual obligations binding on the parties’ " ( Ackermann v. Ackermann , 82 AD3d 1020 [2011], quoting Nelson v. Nelson , 75 AD3d 593, 593 [2010] ). "Therefore, a court should interpret a stipulation of settlement ‘in accordance with its plain and ordinary meaning’ " ( DeCamello v. DeCamello , 151 AD3d at 805 [internal quotation marks omitted], quoting Ackermann v. Ackermann , 82 AD3d at 1020 ; see Rauso v. Rauso , 73 AD3d 888, 889 [2010] ). "Where such an agreement is clear and unambiguous on its face, the intent of the parties must be gleaned from the four corners of the instrument, and not from extrinsic evidence" ( Rosenberger v. Rosenberger , 63 AD3d 898, 899 [2009] ; see DeCamello v. DeCamello , 151 AD3d at 805 ; Ackermann v. Ackermann , 82 AD3d at 1021 ). When interpreting a contract, the court should arrive at a construction which will give fair meaning to all the language employed by the parties to reach a practical interpretation of the expressions of the parties so that their reasonable expectations will be realized (see Hepburn v. Hepburn , 78 AD3d 1001 [2010] ).
"A court may not write into a contract conditions the parties did not insert or, under the guise of construction, add or excise terms, and it may not construe the language in such a way as would distort the apparent meaning (see Toscano v. Toscano , 153 AD3d 1440, 1442 [2017] ; Cohen-Davidson v. Davidson, 291 AD2d 474, 475 [2002] ). Whether a writing is ambiguous is a matter of law for the court, and the proper inquiry is " ‘whether the agreement on its face is reasonably susceptible of more than one interpretation’ " ( Clark v. Clark , 33 AD3d 836, 837 [2006], quoting Chimart Assoc. v. Paul , 66 NY2d 570, 573 [1986] ). In making this determination, the court also should examine the entire contract and consider the relation of the parties and the circumstances under which the contract was executed (see Clark v. Clark , 33 AD3d at 837-838 )" ( Ayers v. Ayers , 92 AD3d 623, 624—25 [2012] ).
Applying these principles here, it is clear that the parties did not intend to create a tenancy in common, sharing the burdens and potential gains of property ownership beyond the divorce. There is no reasonable interpretation of their Agreement other than that it intended to fully and permanently dissolve the marriage and divide all the marital property. As plaintiff conceded in oral argument of the motion, there is no claim that the parties erroneously omitted their house, their main joint asset, from the Agreement only that "the stipulation of settlement did not deal with the house (t)here was no disposal of the house" (tr., p 8). In this regard, remaining within the four corners of the contract, and reiterating this court's finding on defendant's earlier motion, the Agreement does not obligate plaintiff to aid in the refinance of the property, or to initiate the legal steps to effectuate the transfer of the deed. Rather, the plaintiff's distributive award covered all the financial obligations of the parties then existing, specifically including legal fees, which implies that any further costs following the divorce, such as the costs of preparing and filing a quitclaim deed are not included. Finally, the circumstances of this case preclude a contrary conclusion. To rewrite a judgment of divorce which has been relied on by both parties would defeat the plaintiff's reasonable expectation that the judgment was valid as entered, and would subvert the policy of upholding settled domestic relations that underlies the doctrine of equitable estoppel in divorce cases (see Rainbow v. Swisher , 72 NY2d 106, 110—11 [1988] ).
"To prevail on a cause of action for specific performance of a contract for the sale of real property, a ... purchaser must establish that it substantially performed its contractual obligations and was ready, willing, and able to perform its remaining obligations, that the vendor was able to convey the property, and that there was no adequate remedy at law" ( 1107 Putnam, LLC v. Beulah Church of God in Christ Jesus of the Apostolic Faith, Inc., 152 AD3d 474, 475 ; see ADC Orange, Inc. v. Coyote Acres, Inc. , 7 NY3d 484, 490 ; Cipriano v. Glen Cove Lodge # 1458, B.P.O.E., 1 NY3d 53, 62, 769 N.Y.S.2d 168 )"
( Liberty Equity Restoration Corp. v. Park , 160 AD3d 628, 630 [2018] ).
Here, the plaintiff has established the element of the existence of a valid, enforceable contract, but has not satisfied the requirement of demonstrating that he performed his obligations under the contract, particularly as plaintiff contends that he still owns the property in question and has not cooperated in transferring his interest to defendant. According to the parties' Agreement, the money due under the contract was to be paid over to plaintiff's counsel's escrow account, not directly to plaintiff. The Agreement was made on September 14, 2017. Defendant was to put the $315,000.00 into the plaintiff's attorneys IOLA account by December 14, 2017, three months later, satisfying "all claims for equitable distribution and property distribution." That the property was to be divided in accordance with the contract's terms in conjunction with the payment therefor is inherent in these terms. That the escrow would be held until the contract terms were carried out, such as plaintiff's counsel fees and other adjustments made, if any, therefrom and the deed transfer albeit tacit, is materially implied in the escrow arrangement.
"In the usual case, the question of the sale of the marital home or other property of the spouses should be decided at the time of the making of the judgment. At that point in the marital career of the parties all questions at issue are better resolved, so that disputes and irritants do not linger and present further incentives for litigation" ( Ripp v. Ripp , 38 AD2d 65, 68—70 (1971), aff'd, 32 NY2d 755 [1973] ). The marital contract here fully resolved the issues between the parties except the details of how and under what circumstances the escrow was to be distributed and how title was to be conveyed. In this regard, the plaintiff instructed his lawyer that he had no further authority to work out the mechanics of the transfer, thus acting in bad faith, arguably putting defendant into breach by not paying the $315,00.00 by the stipulated date while blocking enforcement of his own obligation under that contract (def. ex. G, letter from Berke to Cardi dated June 21, 2018). Indeed, this correspondence is contemporaneous with the retention on new counsel and the commencement of the instant action.
Implicit in every contract is a covenant of good faith and fair dealing, which encompasses any promise that a reasonable promisee would understand to be included (see New York Univ. v. Continental Ins. Co. , 87 NY2d 308, 318 [1995] ; Staffenberg v. Fairfield Pagma Assoc., L.P. , 95 AD3d 873, 875 [2012] ). The covenant is breached "where one party to a contract seeks to prevent its performance by, or to withhold its benefits from, the other" ( Collard v. Incorporated Vil. of Flower Hill, 75 AD2d 631, 632 [1980], affd 52 NY2d 594 [1981] ; see Aventine Inv. Mgt. v. Canadian Imperial Bank of Commerce , 265 AD2d 513, 514 [1999] ).
Even if a party is not in breach of its express contractual obligations, it may be in breach of the implied duty of good faith and fair dealing when it exercises a contractual right as part of a scheme to realize gains that the contract implicitly denies or to deprive the other party of the fruit (or benefit) if its bargain" ( Elmhurst Dairy Inc., v. Bartlett Dairy Inc. 97 AD3d 781 [2012] ). Here, plaintiff seeks to deny defendant legal title and demands both full payment (with interest) under the Agreement as well as partition and entitlement to 50% of any sale proceeds while asserting that he has no duty to effectuate the title transfer. Plaintiff swore under oath at the inquest that the Agreement resolved all ancillary issues between the parties which the court notes is mandated under DRL Sec. 170 (7) in order to grant plaintiff, the relief he sought as plaintiff in the divorce action. Plaintiff is now asserting a 50% ownership interest in the property, asking to force a sale of the property and retain 50% of the proceeds therefrom, while also asking for payment of $315,000 plus interest pursuant to the rights he separately contracted for under the Agreement in the divorce action. Thus, plaintiff's motion for summary judgment on his breach of contract claim is denied for failure to meet the legal threshold mandating his own performance under the contract under circumstances that raise the specter of bad faith.
Defendant's Cross Motion
Defendant's cross motion for consolidation of this action with the divorce action and sanctions is also denied as moot. This court previously determined that there is no action pending with which to consolidate this partition and contract action as the divorce action had concluded; and sanctions, costs and fees are inappropriate as neither party here has moved to enforce the judgment and stipulation in accordance with their terms. That portion of defendant's motion seeking to strike defendant's answer is moot in light of the determination here and the parties' remaining contentions are without merit.
Conclusion
Accordingly, it is
ORDERED that, plaintiff's motion for summary judgment on the partition action is denied; and it is further
ORDERED , that plaintiff's motion for summary judgment on and breach of contract is denied; and it further
ORDERED , that defendant's cross motion is denied as moot.
The foregoing constitutes the decision and order of this court. Plaintiff's counsel is directed to serve a copy of this order with notice of entry within twenty (20) days.