Opinion
Index No. 2023-23169
05-16-2023
Maria Frias, individually and as the sole member of 565 50th STREET LLC, Plaintiffs, v. Zoila Frias a/k/a ZOILA PENA, Defendants.
For Plaintiff Patrick W. Johnson, Esq. The Johnson Law Office P.C. For Defendant Jonathan Samuel Roller, Esq.
For Plaintiff Patrick W. Johnson, Esq. The Johnson Law Office P.C.
For Defendant Jonathan Samuel Roller, Esq.
Richard J. Montelione, J.
Background
Causes of Action/Counterclaims/Relevant Proceedings
The plaintiff sues for an accounting, declaratory judgment, injunctive relief, ejectment of the defendant and damages for conversion. The plaintiff MARIA FRIAS, and her brother AURELIO FRIAS, now deceased, purchased real property as joint tenants with rights of survivorship which is located at 565 50th Avenue, Brooklyn, NY 11209, block 784, lot 51,. By operation of law, plaintiff became the legal owner upon the death of her brother and now seeks, inter alia, to eject defendant ZOILA FRIAS who is her brother's widow and all the tenants. The counterclaim asserts a constructive trust and alleges that decedent AURELIO FRIAS placed plaintiff's name on the deed and mortgage because the sellers, who held the mortgage, required it and as an accommodation. Further, the counterclaim alleges that plaintiff MARIA FRIAS promised that she would transfer her entire ownership interest, upon request, to her decedent brother AURELIO FRIAS.
Although the plaintiff filed a jury demand, the court, without objection from plaintiff and over objection of the defendant, sua sponte vacated the jury demand because "the deliberate joinder of claims for legal and equitable relief arising out of the same transaction amounts to a waiver of the right to demand a jury trial." See Fakiris v Gusmar Enterprises, LLC, 189 A.D.3d 1543, 135 N.Y.S.3d 297, 2020 NY Slip Op 08039, 2020 WL 7760650 [2d Dept 2020]; see also Herbil Holding Co. v Mitrany, 11 A.D.3d 430, 432 [2d Dept 2004]), "(a)lthough one of the plaintiffs' causes of action sought a legal remedy, the Supreme Court properly granted the plaintiffs' motion to strike the appellant's jury demand. Where, as here, the appellant interposes a counterclaim of an equitable nature related to a cause of action asserted in the complaint, the appellant waives a jury trial on all causes of action, whether legal or equitable in nature (see Goldberg v Goldberg, 173 A.D.2d 679, 681, 570 N.Y.S.2d 333 [1991] (additional citations omitted)." Defendant has no right to a jury trial because her claim of a constructive trust is solely of an equitable nature. CPLR 4101.
ANDREW FRIEDMAN, Esq., was appointed Receiver by the Court by Order dated February 26, 2018 (NYSCEFNo.22) and a Notice of Appointment of Receiver (plaintiff's exhibit 16) was sent to the defendant and tenants of the subject property on or about August 12, 2019. The court by Order of the Hon. Peter P. Sweeney, J.S.C. dated March 4, 2021 held the defendant in contempt of court for, inter alia, failing to turn over all rents collected to the Receiver, to pay to the Receiver the sum of $1,500.00 for having to bring the motion, to pay use of occupancy of $1,500.00 monthly from May 1, 2019 and ongoing, and fined the defendant $2,500.00 (plaintiff's exhibit 18).
Trial/Witnesses
The trial commenced in this action on May 1, continued on May 2, and 4th, and concluded on May 5, 2023. Testimony was taken from plaintiff MARIA FRIAS, defendant ZOILA FRIAS, receiver ANDREW FRIEDMAN, tenant MAGDALYS DELVALLUE (apt. 1F), tenant JUAN ARIAS (apt. 2R), OLIVIA QUINTO (friend of tenant JACABOB GUANTA, apt. 3F), tenant TOMAS HERNANDEZ (apt. 2F), NYNERVA A. GARCIA (sister of decedent AURELIANO A. FRIAS), DOROTHY FRIAS (daughter of defendant ZOILA FRIAS and decedent AURELIANO A. FRIAS), and CARMEN NUNEZ (sister of decedent AURELIANO A. FRIAS).
Trial Testimony
Defendant ZOILA FRIAS testified that she was married to AURELIANO A. FRIAS in 1972 in the Dominican Republic. Neither party presented any documentation as to the marriage, but the court accepts defendant ZOILA FRIAS' uncontroverted testimony of marriage predating the purchase of the real property and that she resided on the premises since its purchase on March 12, 1980. Although plaintiff testified that she helped manage the property prior to the death of her brother AURELIANO A. FRIAS, all the tenants who testified said they never saw plaintiff on the property, they previously paid rent to the late AURELIANO A. FRIAS or his wife ZOILA FRIAS, and they never provided any rent payments to plaintiff. The court credits the testimony of these non-party witnesses, and defendant, and finds that prior to the death of AURELIANO A. FRIAS, the plaintiff neither collected rent nor managed the building.
The court accepts the testimony of plaintiff's two sisters, NYNERVA A. GARCIA and CARMEN NUNEZ, who testified that each heard on separate occasions that plaintiff specifically promised that plaintiff MARIA FRIAS would transfer the real property to defendant ZOILA FRIAS.
Plaintiff testified that although her brother spoke only Spanish, the attorney retained was bilingual and the title company added the language "joint tenants with rights of survivorship" because plaintiff and her brother wanted the survivor to have complete ownership upon the death of the first sibling. The plaintiff was 20 years old at the time the property was purchased and brother AURELIO FRIAS, now deceased, was twelve years her senior.
Findings of Fact
There is no issue of fact that plaintiff MARIA FRIAS and AURELIANO A. FRIAS, defendant ZOILA FRIAS' husband, became legal owners of a building located at 565 50th Avenue, Brooklyn, NY 11209, block 784, lot 51, which was purchased on March 12, 1980 (see deed and mortgage, plaintiff's Exhibits 1 & 2) which contained six-units. Plaintiff MARIA FRIAS, and defendant's deceased husband, AURELIANO A. FRIAS, were sister and brother. Further, there is no issue of fact that the deed was held, "as joint tenants with rights of survivorship," this language being handwritten into the deed. There is no issue of fact that decedent AURELIANO A. FRIAS was Spanish speaking and did not speak or write in English. There is no issue of fact that no documentary evidence was ever admitted indicating that the survivorship language was translated from English to Spanish. There is no issue of fact that AURELIANO A. FRIAS died on August 2, 2014. (See death certificate, Plaintiff's Exhibit 3). By operation of law, the ownership then vested in fee simple absolute with plaintiff MARIA FRIAS. Trotta v Ollivier, 91 A.D.3d 8, 933 N.Y.S.2d 66, 2011 NY Slip Op 08349, 2011 WL 5579030 [2d Dept 2011]. There is a sharp factual dispute regarding who actually contributed funds for the purchase of the real property on March 12, 1980. Neither party provided any documentation regarding the closing of the property which occurred approximately 43 years ago except for the deed and the mortgage (plaintiff's exhibit 1 and 2). The court takes judicial notice of its attorney registration records and notes that the closing attorney, Harold S. Keller, Esq., is deceased. The uncontroverted testimony is that plaintiff MARIA FRIAS was employed at the time of the closing. There is uncontroverted testimony that her decedent brother AURELIANO A. FRIAS was not employed but receiving Workers Compensation payments at the time of the closing.
There is no issue of fact that subsequent to AURELIANO A. FRIAS' death, the property was transferred on October 30, 2017, from plaintiff MARIA FRIAS to 565 50th STREET LLC. There is no issue of fact that MARIA FRIAS is the sole member of 565 50th STREET LLC ("LLC"). (Plaintiff's uncontroverted testimony). Between the purchase of the property and its transfer to the LLC, there is no evidence that the deed was ever changed from "joint ownership with rights of survivorship" to "tenants-in-common" or any other designation that would provide any rights to defendant, his widow, ZOILA FRIAS, or his estate. There is no issue of fact that a Receiver was appointed by Order of the Court dated March 2, 2021.
Applicable Law
Upon the death of a joint owner who held the property with "rights of survivorship," the property will be transferred to the remaining joint owner by operation of law. See § 13. Effect of Transfer on Death Deed at Transferor's Death., Unif. Real Property Transfer on Death Act § 13, (c), "(i)f a transferor is a joint owner and is: (1) survived by one or more other joint owners, the property that is the subject of a transfer on death belongs to the surviving joint owner or owners with right of survivorship."
The four elements of a constructive trust are: 1) confidential relationship, 2) a promise, 3) a transfer in reliance on that promise and 4) unjust enrichment. See Harounian v Harounian, 198 A.D.3d 734, 737-38, 2021 NY Slip Op 05550, 2021 WL 4763017 [2d Dept 2021]:
These factors serve only as a guideline, and a constructive trust may still be imposed even if all four elements are not established (see Tyree v. Henn, 109 A.D.3d 906, 971 N.Y.S.2d 319). "The ultimate purpose of a constructive trust is to prevent unjust enrichment and, thus, a constructive trust may be imposed 'when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest'" (Cruz v. McAneney, 31 A.D.3d 54, 58-59, 816 N.Y.S.2d 486, quoting Sharp v. Kosmalski, 40 N.Y.2d 119, 121, 386 N.Y.S.2d 72, 351 N.E.2d 721 [internal quotation marks omitted]).
Pursuant to NY Real Property §240-c, any joint owner with rights of survivorship can unilaterally terminate the survivorship aspects of the tenancy. This provision reflects:
1. In addition to any other means by which a joint tenancy with right of survivorship may be severed, a joint tenant may unilaterally sever a joint tenancy in real property without consent of any non-severing joint tenant or tenants by:
(a) Execution and delivery of a deed that conveys legal title to the severing joint tenant's interest to a third person, whether or not pursuant to an agreement requiring the third person to reconvey legal title to the severing joint tenant; or
(b) Execution of a written instrument that evidences the intent to sever the joint tenancy, including a deed that names the severing tenant as the direct grantee of the severing tenant's interest.
c. The term "marital property" shall mean all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held, except as otherwise provided in agreement pursuant to subdivision three of this part. Marital property shall not include separate property as hereinafter defined.
d. The term separate property shall mean:
(1) property acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse;
(2) compensation for personal injuries;
(3) property acquired in exchange for or the increase in value of separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse;
(4) property described as separate property by written agreement of the parties pursuant to subdivision three of this part.
Legal Analysis
Constructive Trust
There is an apparent anomaly in the law where on the one hand a spouse who divorces has an absolute right to a presumptive one-half interest in any property held by the other spouse that was acquired during the marriage (DRL §236) whether or not such property was held with a third-party as "joint tenants with rights of survivorship" because such status can be unilaterally changed to "tenants-in-common" (NY Real Property §240-c), but on the other hand the same spouse that stays married for decades loses all rights to the same property upon the death of the other spouse "by operation of law" (Unif. Real Property Transfer on Death Act § 13, [c]).
" 'Property acquired during the marriage is presumed to be marital property and the party seeking to overcome such presumption has the burden of proving that the property in dispute is separate property" (Ferrante v. Ferrante, 186 A.D.3d 566, 568, 128 N.Y.S.3d 590 [internal quotation marks omitted]).'" Cuomo v Moss, 199 A.D.3d 635, 157 N.Y.S.3d 475, 477, 2021 NY Slip Op 05945, 2021 WL 5099014 [2d Dept 2021].
The issue before the court is whether the defendant has shown by clear and convincing evidence that a constructive trust should be impressed upon the subject real property notwithstanding the survivorship clause. The plaintiff implied that the decedent AURELIANO A. FRIAS and his wife ZOILA FRIAS were separated at various points during the marriage, but no evidence was ever presented of an abandonment or separation. Therefore, the court finds that the decedent and defendant were married before the purchase of the subject property and up to the point of her husband's demise. See Matter of In re Estate of Hama, 39 Misc.3d 429, 435, 957 N.Y.S.2d 583, 588, 2012 NY Slip Op 22378, 2012 WL 6619199 [Sur Ct 2012], "(t)he burden of proof as to abandonment-including lack of consent-is on the party alleging it (Matter of Rechtschaffen, 278 NY 336, 16 N.E.2d 357 [1938]; Matter of Ruff, 91 A.D.2d 814, 458 N.Y.S.2d 38 [3d Dept.1982]).
Does ZOILA FRIAS have a right to assert a claim for a constructive trust when the alleged promise to transfer plaintiff's ownership interest was made by plaintiff's sister to her deceased brother AURELIO FRIAS, defendant's husband, or after his demise, to defendant wife? "Real property owned by an intestate decedent devolves directly to his or her statutory distributees without the necessity of any act by an administrator of his or her estate." Citimortgage, Inc. v. Balbi, 2009 WL 7829 (Sup.Ct., Suffolk County 2009) citing Matter of Roberts, 214 NY 369, 108 N.E. 562, 14 Mills 551 [1915]; Kraker v. Roll 100 A.D.2d 424, 474 N.Y.S.2d 527 [2nd Dept.1984]. See JP Morgan Chase, Nat. Ass'n v McDonald, 46 Misc.3d 315, 322, 998 N.Y.S.2d 275, 280, 2014 NY Slip Op 24340, 2014 WL 5801479 [Sup Ct 2014]. This court finds that defendant ZOILA FRIAS does have a right to raise the defense of constructive trust as a statutory distributee. See EPTL § 4-1.1 (a), "(i)f a decedent is survived by: (1) A spouse and issue, fifty thousand dollars and one-half of the residue to the spouse, and the balance thereof to the issue by representation." The court accepts the testimony of plaintiff's two sisters, NYNERVA A. GARCIA and CARMEN NUNEZ, each of whom testified that plaintiff specifically promised, on separate occasions, that plaintiff MARIA FRIAS would transfer the real property to AURELLIO FRIAS, defendant ZOILA FRIAS' decedent husband, and plaintiff's brother, or to defendant.
Although the plaintiff testified that the "right of survivorship" found in the deed was explained to her deceased brother by the closing attorney in Spanish, there was no written documentation in the form of an affidavit, as part of the closing papers, indicating that the "joint tenancy with a right of survivorship" was actually explained to the decedent or that decedent acknowledged such by signing a document translated from Spanish to English. There was no testimony that the attorney was aware the decedent was married or that decedent had children or, importantly, that decedent was ever advised that he had the right to unilaterally change the status from "joint tenancy with rights of survivorship" to "tenants-in-common" (see NY Real Property §240-c).
The plaintiff and her deceased brother, who was married to defendant at the time of purchase, had disparate interest regarding rights of survivorship. For defendant and her deceased husband, who was twelve years older than his sister, his demise would mean that by operation of law decedent's family would lose all rights to the real property, including valuable equity, and be subject to ejectment which the plaintiff now seeks. The plaintiff testified that she and her brother agreed to this status so that her brother would have the benefit of obtaining complete ownership upon her death, but the plaintiff never risked ejectment, never collected rent for at least 34 years, and the court finds, never managed the property until after the death of her brother. This court finds that because there was a period of at least 34 years where the plaintiff did not receive any rent or manage the property, it infers an implicit promise not to do so during the life of plaintiff's deceased brother AURELIO FRIAS given the circumstances surrounding the purchase. The plaintiff, being a sister of the decedent, being bilingual, was in a superior position to understand the significance of the survivorship language within the deed and is deemed to have had a personal and confidential relationship with her brother. Cf. Matter of Neumann, 210 A.D.3d 492, 179 N.Y.S.3d 5, 2022 NY Slip Op 06424, 2022 WL 16935662 [1st Dept 2022]. The court does not find credible plaintiff's testimony that her decedent brother understood the significance of joint tenancy of survivorship or that the attorney explained or adequately explained its ramification. In fact, the plaintiff testified at trial that this provision was inserted by the title company representative and not the attorney for the parties.
The court finds that given the fact that decedent was married at the time of the purchase of the subject property, that he spoke only Spanish, that no written translation was ever shown to be provided to decedent and no evidence of any acknowledgment of understanding the concept of "joint ownership with right to survivorship," or any evidence or documentation that the closing attorney knew that decedent was married with children or advised decedent of his right to change the status to "tenants-in-common" at any point in time, and in light of the fact that such property held by the husband would constitute marital property if an action was ever commenced for divorce (Domestic Relations Law § 236), and in light of the court's finding that plaintiff never collected rent or managed the property for at least a period of 34 years, and where plaintiff, being bilingual was in a superior position, and where the court further infers from the promise made by plaintiff to defendant, as testified by plaintiff's two sisters, that plaintiff would transfer ownership to the defendant (or to defendant's deceased husband), that the defendant has proven by clear and convincing evidence that a constructive trust must be impressed upon the property to prevent the unjust enrichment of the plaintiff. Harounian v Harounian, 198 A.D.3d 734, 737-38, 2021 NY Slip Op 05550, 2021 WL 4763017 [2d Dept 2021]. The court impresses a constructive trust to the extent that it deems the ownership at the time of inception as one of tenants-in-common with a promise that the collection of rents and management of the property should continue with her deceased brother collecting all the rent until the demand of the plaintiff to assert her rights as a tenant-in-common.
Conversion
Regarding the plaintiff's cause of action for conversion, the court finds that any rents received by defendant ZOILA FRIAS after December 21, 2017, the date this action was commenced and before August 12, 2019, the date defendant and all tenants were served with Notice of the Receivership with a copy of the Order Appointing the Receiver, were partially converted. The defendant is not entitled to any setoffs for payment of taxes, maintenance, or other building expenditures as there was no documentation submitted for these expenditures. The defendant is entitled to a set-off of $12,500.00 which represents one-half the sum she paid to the Receiver for some of the rent collected by her. The court finds that based on the testimony of the defendant and tenants, that the partial amount of rent converted follows:
| Apt. No. | Monthly Rent | Number of Months | Totals |
| 1R | $1,130.00 | 21 | $23,730.00 |
| 2F | $1,700.00 | 21 | $35,700.00 |
| 2R | $500.00 | 21 | $10,500.00 |
| 3F | $1,800.00 | 21 | $37,800.00 |
| 3R | $620.00 | 21 | $13,020.00 |
| SETOFF | (50% of $25,000.00=$12,500) | ($12,500.00) | |
| TOTAL RENT | $108,250.00 | ||
| SETOFF | (50% of $108,250.00=$54,125.00 | $54,125.00 |
The court finds that the defendant converted $54,125.00 which was due and payable to the plaintiff as a tenant-in-common who the court finds to be presumptively entitled to 50%.
The court will not award any use and occupancy for defendant's use of the premises. See Perretta v Perretta, 143 A.D.3d 878, 880, 39 N.Y.S.3d 495, 497, 2016 NY Slip Op 06814, 2016 WL 6089034 [2d Dept 2016], "(o)ne tenant in common is generally not liable to another for use and occupancy, in the absence of an agreement or ouster (see Jemzura v. Jemzura, 36 N.Y.2d at 503, 369 N.Y.S.2d 400, 330 N.E.2d 414; Goldberg v. Ochman, 143 A.D.2d 255, 258, 532 N.Y.S.2d 166)."
Accounting
Plaintiff Entitled to Reimbursement or Credit and Defendant is Not
Regarding the cause of action for an accounting, this cause of action is rendered moot at trial because the relief requested was already granted by order dated September 20, 2021 per the Hon. Peter P. Sweeney.
Unless there is a source of income other than the known rental income of the subject real property, the plaintiff is made whole because plaintiff is awarded her 50% share of all rental income during the relevant period without any set-off or deductions (except for $12,500.00).
The plaintiff provided the court with uncontroverted testimony and evidence that the following expenses should be reimbursed at one hundred percent because the defendant has failed to provide an accounting of the rents she has received, and as a matter of equity, the following is due to the plaintiff: $107,588.03 (Addendum A).
Based on the foregoing, it is
ORDERED, ADJUDGED AND DECREED that a constructive trust is impressed upon the real property located at 565 50th Street, Brooklyn, NY, block 784, lot 51, to the extent that defendant ZOILA FRIAS has a right as an heir-at-law to claim a share of her deceased husband's ownership interest which is deemed by the court to be held as a tenant-in-common since March 12, 1980, the date ownership was transferred by TERESA PAPA, JOSEPH PAPA and PHILIP PAPA, grantors, to MARIA FRIAS and decedent AURELIANO A. FRIAS, grantees, and the deed is reformed so as to delete the language "as joint tenants with the right of survivorship;" and it is further
ORDERED, ADJUDGED AND DECREED that the deed dated October 30, 2017 regarding the real property located at 565 50th Street, Brooklyn, NY, block 784, lot 51 which was transferred on October 30, 2017 from plaintiff MARIA FRIAS, grantor, to 565 50th STREET LLC, grantee, transferred only plaintiff MARIA FRIAS' FIFTY PERCENT (50%) ownership interest to the grantee as the Estate of AURELIANO A. FRIAS is the tenant-in-common with a FIFTY PERCENT (50%) ownership interest; and it is further
ORDERED, ADJUDGED AND DECREED, and without prejudice to 565 50th STREET LLC or the Estate of AURELIANO A. FRIAS, to bring a partition action, that plaintiff MARIA FRIAS is not entitled to ejectment of the defendant ZOILA FRIAS a/k/a ZOILA PENA, or non-parties MAGALLY DELVALLE, MARIA IGLESIA, JUAN ARIAS, JOSE RODRIGUEZ, MARIA SURIEL, JOSE CARLOSFRIAS, or any other person in possession, from the property located at 565 50th Street, Brooklyn, NY, block 784, lot 51, given that no action for partition or other action is currently pending for the sale of the premises, and except for the defendant, none of the parties were ever served process (RPAPL 903 Necessary defendants); and it is further
ORDERED, ADJUDGED AND DECREED, that the clerk shall enter judgment in favor of 565 50th STREET LLC, 513 Howard Ave., Staten Island, NY 10301, and against ZOILA FRIAS, located at 565 50th Street, Brooklyn, NY, block 784, lot 51, in the amount of $54,125.00 with interest from December 21, 2018, an intermediate date for the accrual of interest, together with statutory interest and costs; and it is further
ORDERED, ADJUDGED AND DECREED, that the court's interim order dated April 13, 2019 setting use and occupancy and directing the payment of use and occupancy is vacated inasmuch as the court has finally determined to impress a constructive trust upon the real property located at 565 50th Street, Brooklyn, NY, block 784, lot 51, creating ownership between the parties or heirs as tenants-in-common and a tenants-in-common's use and occupancy of real property alone does not make defendant liable for use and occupancy (see Misk v Moss, 41 A.D.3d 672, 839 N.Y.S.2d 143, 2007 NY Slip Op 05477, 2007 WL 1775984 [2d Dept 2007]); and it is further
ORDERED, ADJUDGED AND DECREED, that the Receiver shall continue his duties until further order of the court and may submit an attorney affirmation as to his fees or commission, which upon approval by the court, may be deducted from the amount now held in the Receiver's account, and after payment of any statutory liens, the Receiver may disburse from the Receiver's Account, and from any future rental income, funds to reimburse 565 50th STREET LLC, 513 Howard Ave., Staten Island, NY 10301, up to $107,588.03, with statutory interest from May 1, 2023, without prejudice to further applications for reimbursements, and to the extent there is any non-reimbursed expense, such expense shall be reimbursed at any future sale of the premises located at 565 50th Street, Brooklyn, NY, block 784, lot 51; and it is further
ORDERED that the parties and their counsel are directed to appear in courtroom 419 of the courthouse, on July 19, 2023 at 2:30pm, without prejudice to either of the parties, for a settlement conference with the court's attorney or a Judicial Hearing Officer, to discuss the potential sale of the real property without the need for a partition action, in order to avoid further expense to the respective parties, and the parties and their counsel, and a representative of the Estate of AURELIANO A. FRIAS is urged to join such discussions subject to approval of any settlement by the surrogate court.
This constitutes the decision and order of the Court.