The following papers were read on this motion:

Order to Show Cause and Affidavits Annexed1-2, 3-9

Notice of Cross Motion and Affidavits Annexed10-11, 12-17

Reply18, 19-21

Supplemental Affirmation in Opposition22, 23

In this summary proceeding for possession and rent, Respondents move by Order to Show Cause for dismissal pursuant to § 1002 of the Uniform City Court Act (hereinafter "UCCA") and §§ 3211 and 3212 of the Civil Practice Law and Rules (hereinafter "CPLR"), dismissing the proceeding based upon lack of subject matter jurisdiction of the dispositive issue. In the alternative, Respondents seek an order pursuant to CPLR § 2201 staying the instant summary proceeding in this court pending the determination of the dispositive issue in the Supreme Court action bearing index number 8747/2009 presently pending in the Supreme Court Westchester County.[*2]Petitioner opposes Respondents' Order to Show Cause and cross-moves for summary judgment dismissing the answer, relying on General Obligation Law § 7-703. Specifically, Petitioner argues that where the documents are unambiguous, there is no need to resort to parol evidence to determine the intent of the parties. Petitioner further contends that the interposition of a title issue here is merely to frustrate the summary nature of the summary proceedings in this court. Parenthetically, Petitioner also points to the fact that the Supreme Court failed to provide a stay of this proceeding pending a determination of the outcome in the foreclosure proceeding.

Petitioner commenced the instant summary proceeding for back rent of approximately $189,000.00. Petitioner is the first cousin of Respondent Louis Capozzoli. Beyond this relationship, there is little else that the parties agree upon. Petitioner contends that he helped Respondents, who were facing foreclosure and loss of the subject property in 2007. The cousins allegedly struck a deal whereby Petitioner would purchase the property and give Respondents 90 days (or an indeterminate period of time, depending on the version) in which to re-finance and re-purchase the property.

In April, 2007, after Respondents deeded the property to Petitioner, Petitioner secured a $600,000.00 mortgage. With this money the Respondents' prior mortgage was paid off in the approximate amount of $480,000, the amount of $110,000.00 was paid to the Respondents and the remaining $10,000.00 was paid to Petitioner to cover his closing costs. Respondents continued to reside in the premises pursuant to an oral agreement whereby they would pay the mortgage costs as "use and occupancy". Sixteen months later, it is alleged that the Respondents stopped making payments to the lender. The house is now the subject of a foreclosure proceeding in the Supreme Court Westchester County. Petitioner contends that the house is only worth $560,000.00, $32,000.00 less that what is currently owed to the bank and that Respondents will never be able to remedy the situation.

Respondents aver that they purchased the house originally in 2004 for $500,000.00 from an unrelated third party in an arm's-length transaction. In 2007, Respondents fell behind in their mortgage payments and asked Petitioner, to assist them by "lending his credit" to Respondents. Respondents claim that they deeded over their interest to Petitioner in reliance upon an oral agreement that Petitioner would reconvey the property back to the Respondents and that Respondent would refinance the property when their financial situation improved. Other than this, the parties would pay nothing to each other going forward. Respondents would continue to pay the mortgage and taxes directly to the lender and municipality respectively and continue to reside in the premises.

In addition, Respondents allege that they invested "tens of thousands of dollars" in substantial improvements to the real property. In 2009, Respondents, admitted falling behind again in mortgage payments due to serious health issues. The lender brought a foreclosure proceeding naming both Petitioner and Respondents Louis Capozzoli and Maritza Capozzoli (as John Doe, etc) as defendants. Respondents and Petitioner both initially attended mandatory conferences in the Supreme Court foreclosure case. However, Respondents claim that once it was disclosed by the foreclosing lender that the current market value of the premises exceeded the mortgage amount by $50,000.00, Petitioner demanded payment of the $50,000.00 equity to [*3]secure his continued his "co-operation" in attendance at the mandatory foreclosure conferences, assistance in the loan modification, refinance, as well as reconveyance of the premises back to Respondents.

Respondents filed an Order to Show Cause in the in the foreclosure proceeding in Supreme Court seeking to vacate its default in answering the complaint, granting leave to interpose an answer and counter-claim against defendant Fizzinoglia, seeking, inter alia, reformation of the deed and establishment of a constructive trust for the benefit of the Respondents. By Decision and Order of the Hon. Orazio R. Bellantoni, dated March 16, 2011, said Order to Show Cause was denied in its entirety because (1) Respondents failed to offer any excuse for the delay in filing the answer and (2) a preliminary injunction was deemed inappropriate where the facts are so sharply disputed.

" [I]t is accepted that a constructive trust over real property can be imposed even where an underlying agreement is not in writing." (Thomas v Thomas, 70 AD3d 588 [1st Dept2010] [citing Sharp v Kosmalski, 40NY2d 122 [1976]]). Respondents, in their answer, allege that they transferred the property to Petitioner, their cousin, in reliance upon an oral promise made by Petitioner to reconvey the property back to Respondent. They further allege that they invested substantial sums of money in improvements. Based upon the foregoing, the Court finds initially that Respondents have asserted a claim for a constructive trust, in alleging a confidential relationship between the parties, a transfer in reliance upon a promise made, and allegations of unjust enrichment.

Petitioner's reliance on Byer v Hippolite, 2003 NY Slip 50611 (NY District Ct 2003), is misplaced. Byer dealt with a factual scenario where the alleged grantor denied signing the deed and the document purporting to convey his interest was not acknowledged. In the case at bar, Respondents' claim of title rests upon allegations of a constructive trust which are not amenable to disposition in a summary proceeding. In this instance, the factual issues ultimately probative of title are so interwoven with the facts and circumstances regarding possession that the Supreme Court is better able to resolve the legal issues regarding title and possession.

This Court declines to dismiss the action but rather exercises its authority to stay the proceedings pending a determination of the issues of title in the pending Supreme Court action which involve both of the parties and the lender. Only the Supreme Court has jurisdiction to render an equitable judgment to reform the deed or to declare a constructive trust or to decline granting such equitable relief. The Court notes parenthetically that the lender is a necessary party [*4]in the Supreme Court action: to the issue of title and in any subsequent workout of the current mortgage which is being foreclosed and they are notably absent in this summary proceeding. (Proctor & Gamble Distributors Co. v Lloyd's Underwriters, 44 Misc 2d 872 [Sup Ct, NY County 1964][pending Federal action, discussion of factors to be considered]); Britt v Int'l Bus Services, Inc, 255 AD2d 143 [1st Dept 1998][pending determination of a criminal proceeding]).

Accordingly, the Court hereby grants Respondent's Order to Show Cause to the limited extent of staying the instant summary proceeding pending a determination of the Supreme Court action.

The foregoing constitutes the Decision and Order of the Court.

New Rochelle, New York

Hon. Susan I. KettnerCity Court Judge