The plaintiffs seek a judgment declaring that certain parcels of real property in the Town of Hector that were deeded to the defendant Bradley Johnson, must be transferred to the plaintiffs by virtue of the imposition of a constructive trust. The plaintiffs now move for summary judgment pursuant to Section 3212 of the Civil Practice Law and Rules.

The defendant Bradley Johnson cross-moves for partial summary judgment contending that he never agreed to transfer the parcels to the plaintiffs, and that a return of the property would unjustly enrich the plaintiffs.

For the sake of simplicity, the Court will refer to Robert W. Johnson as the plaintiff and Bradley Johnson as the defendant throughout this decision, unless otherwise indicated.

Plaintiff Robert W. Johnson is the principal officer and sole shareholder of the plaintiff corporation and is the father of defendant Bradley Johnson.

It is undisputed that the plaintiff corporation transferred ownership of three parcels of real property (described as numbers 19, 33 and 34) to the defendant for nominal consideration on February 4, 2004 for the purpose of delaying efforts by the County of Schuyler to obtain title by foreclosure of tax liens.

Parcel 19 is described as the "home farm parcel" and consists of 63 acres. Parcel 33 consists of 62 acres and the defendant operates an off-road "moto-cross" business on the site. Parcel 34 consists of 26 acres and is mostly brush and woods.^[FN1] The February 4, 2004 deed retained life use of the premises to plaintiff.

The plaintiff effected the transfers upon the advice of attorney Mary Reynolds and contends that the defendant orally agreed to transfer title back to the plaintiff upon request after the tax liens were resolved. The defendant contends that the transfer was to delay foreclosure to allow him time to arrange financing in order to purchase the property.

Parcel 34 was not included in the foreclosure action as a result of an installment agreement with the County. The County of Schuyler continued the foreclosure action against parcels 19 and 33 and obtained title to those parcels on November 2, 2004. [*2]

The plaintiff then retained attorney Gary Lucas to pursue a stay of the County's foreclosure sale and to "open" the judgment of foreclosure. The plaintiff borrowed $49,000 from friends and $25,000 of that amount was paid to the County to obtain the stay. The remaining $24,000 was left in attorney Lucas' escrow account and allegedly embezzled by attorney Lucas. The motion to vacate the foreclosure judgment was argued before Judge Argetsinger in January 2005.

In the Spring of 2005, the plaintiff, with the defendant's participation, retained attorney James Salk to settle the proceeding with the County. As a result, on June 2, 2005, the plaintiff corporation, plaintiff Robert W. Johnson and the County executed a stipulation wherein the plaintiff, individually and as corporate president, agreed to pay the sum of $208,973.39 to the County by July 8, 2005 in satisfaction of all tax arrears and interest (Exhibit B annexed to the Complaint).

On June 27, 2005, the plaintiff and the plaintiff corporation executed quit-claim deeds conveying parcels 19 and 33 to the defendant.

On July 8, 2005, defendant obtained a mortgage loan from PHH Mortgage Services Corporation in the amount of $174,506. He also obtained a loan from Boston and Annette Martin in the amount of $60,000, granting a mortgage on parcel 33. The tax arrears and another mortgage were paid from these proceeds. The County of Schuyler thereafter deeded parcels 19 and 33 to the defendant on July 11, 2005.

Although the defendant admits that the purpose of the property transfer was to defeat the pending tax foreclosure, he has alleged that he never made a promise to return the property upon the plaintiff's request. However, he does allege an oral agreement with the plaintiff (and denied by the plaintiff) wherein the plaintiff promised to make the payments on the PHH and the Martin mortgage loans in lieu of paying rent for the use of parcels 19 and 34. The defendant reports these loan payments as rental income for tax purposes. He pays the property taxes on parcels 33 and 34, and PHH pays the property taxes on parcel 19 with escrowed payments by the plaintiff.

The plaintiff resides in a home on Parcel 19 and runs a business from that site. He has furnished affidavits from several individuals who recount statements by the defendant in late 2003 in which he described the tax arrears, the plan to transfer the property into his name for tactical reasons, and his promise to transfer the property back to the plaintiffs after the liens were cleared. The plaintiff has also furnished an affidavit from attorney Mary Reynolds. Reynolds met with the plaintiff and defendant in late 2003 and suggested the transfer as a means to delay foreclosure. She recalls that she advised father and son to execute a written agreement to memorialize the son's promise to return the property, yet neither felt it was necessary.

The plaintiff has demanded that the defendant reconvey as promised. The defendant has refused and has sought the eviction of the plaintiff from parcel 19. [*3]

The plaintiffs contend that the proof requires the imposition of a constructive trust, to wit:

-the existence of a confidential or fiduciary relationship between the plaintiffs and defendant;

-the defendant's express or implied promise to return title upon request;

-the transfer of title to the defendant in reliance on defendant's promise; and

-unjust enrichment of the defendant by retention of the property.

These elements are not to be rigidly applied, however, and as an equitable remedy, a constructive trust may be imposed whenever necessary to satisfy the demands of justice. Cinquimani v. Lazio, 37 AD3d 882 (Third Dept., 2007).

The plaintiffs' main contention is that the defendant's promise to hold the property for the benefit of the plaintiffs is express and implied, and that defendant's denial of such a promise is so implausible that the Court must find it to be incredible as a matter of law. Rickert v. Travelers Insurance Co., 159 AD2d 758 (Third Dept., 1990)

The defendant argues that the property was not given to him, and that the consideration paid includes his indebtedness on the mortgages ($234,506) and his payment of property taxes. He also contends that he ultimately obtained title to parcels 19 and 33 from the County of Schuyler, and not from the plaintiffs, and that because the plaintiffs were no longer the owners of those parcels after the foreclosure, they cannot assert that they gave up any interest in reliance upon any promise by the defendant.

The defendant also argues that even if the Court finds that such a promise was made upon the initial transfers in February 2004, there is no proof of a new promise after it was discovered that the County of Schuyler took title through foreclosure on November 2, 2004. He points out that neither the plaintiffs nor defendant owned the properties after the County obtained title, therefore he had no right or ability to transfer title back to the plaintiffs. However, the plaintiffs contend that the express or implied promise remained in effect, and point to the plaintiffs' continuing efforts to vacate the County's foreclosure and employ attorneys to clear the title. It is difficult to conclude that the plaintiff would engage in such efforts if the February 2004 warranty deed and the June 2005 quit-claim deeds were outright gifts.

In confidential family relationships, mutual understanding does not always depend upon words expressly uttered, and silence in the presence of conditional assertions may constitute tacit consent and a promise to comply with the conditions. Djamoos v. Djamoos, 153 AD2d 871, 872 (Second Dept., 1989). See also, Moak v. Ranor, 28 AD3d 900 (Third Dept., 2006). A trier of fact may infer a promise to reconvey from "the very transaction itself." Halvorsen v. Sheive, 2004 WL 626939 (WDNY, 2004). An implied promise may be properly inferred from the circumstances surrounding the transfer of property in reliance upon a confidential relationship of one family member to another. Id. [*4]

In this case, the trier of fact may view the plaintiff's actions in pursuing the legal proceedings against the County to retrieve parcels 19 and 33, and his monthly payment of the PHH and Martin mortgages as consideration for defendant's promise to reconvey.

Issues of fact exist regarding the alleged agreement to reconvey as well as the amount of monies contributed by the parties to various legal expenses, taxes and other costs. These issues cannot be resolved on this record without resolving issues of credibility, therefore summary judgment must be denied. Mounsey v. Mounsey, 40 AD3d 1293 (Third Dept., 2007).

The Court is also concerned that the factual record is incomplete and certain issues of law have not been fully explored:

1. Did the corporation ever have title to parcel 34? If not, what is the effect of the February 2004 deed with regard to that parcel? If this was a valid transfer, what effect does the retained life use have on the constructive trust theory?

2. Was there a written agreement between the defendant and the County with regard to installment payments for tax arrears on Parcel 34? Is there any proof of who made these payments?

3. What is the legal effect of the County's foreclosure on parcels 19 and 33 with regard to the constructive trust theory? Did the foreclosure extinguish all of the parties' rights and interests in those parcels as of November 2004?

Resolution of these issues may abide the trial.

For the foregoing reasons the plaintiffs' motion and the defendant's cross-motion are denied.

Plaintiffs shall file a trial note of issue no later than December 1, 2007.

Submit order.

Signed this ___ day of October 2007 at Ithaca, New York.

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Robert C. Mulvey, J.S.C.