| Jean-Joseph v Burke |
| 2013 NY Slip Op 51835(U) [41 Misc 3d 1225(A)] |
| Decided on November 13, 2013 |
| District Court Of Nassau County, First District |
| Fairgrieve, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
Joanne
Jean-Joseph, Petitioner(s)
against Hugh Burke and MARIE BURKE, Respondent(s). |
Trial Decision
Petitioner commenced this holdover proceeding to recover the premises located at 142 Dean Street, Valley Stream, New York.
Respondent failed to file any answer. Petitioner appeared pro se and Respondents were represented by counsel.
Petitioner is the "common law" wife of the Respondents' son and the mother of the Respondents' two grandchildren.
In 2007, the Respondents located the premises at 142 Dean Street, Valley Stream, New York, for purchase. Respondents' credit was not at the proper level to purchase the property in their own names. Instead, Respondents requested Petitioner to use her credit to purchase the said premises. Petitioner agreed to purchase the premises in her name. The closing occurred on October 11, 2007 and the title to the property was placed in Petitioner's name. The purchase price was $411,000.00.
Respondents contend that Petitioner agreed verbally to transfer title into Respondents' names. [*2]
Respondents moved into the said property in 2007 and have continuously resided there until present. Petitioner has never lived at the home.
Paragraph 2 of the Petition dated March 14, 2013, states the following:
Respondent(s) Hugh Burke and Marie Burke is/are the Tenant(s) of said premises who entered in possession thereof under rental agreement made on or about the 18 day of October, 2007 and ending on 1, 2013 at the rental of $2700 for each month payable on the 8th day of each month. Respondent(s) John Doe is/are the Under-tenant(s) of the aforesaid respondent Tenant(s).
Petitioner testified that the rental agreement between the parties was for the Respondents to pay the mortgage at the rate of $2,700.00 per month. Petitioner, on cross examination, testified that the mortgage payment constituted rental payments.
Q.May I ask another question, Judge. Paragraph four of your petition states that you entered into a rental agreement with the Burkes on October of 2007. Did you in fact enter into a rental agreement with them in October of 2007?
A.The rental agreement was for them to pay the mortgage.
BY THE COURT:
Q.It's a yes or no. Did you do a rental — pardon me? That was the rental agreement?
A.For them to pay the mortgage, yes.
Q.Okay.
Petitioner testified that the Respondents made two mortgage payments in 2007 and then stopped paying anything further. Petitioner testified as follows concerning the default of Respondents to pay the mortgage.
Q.How much are you owed right now?
A.It's well over four hundred thousand dollars. It's —
Q.How much have they paid?
A.Nothing. They've paid nothing. He probably paid two mortgage payments, and then he stopped paying the mortgage. He lied to me when I called him and asked him about the mortgage, he told me it was fine. And [*3]then I found out about the mortgage not being paid, and my credit being ruined when I tried to purchase a car and then the dealership told me of, my credit was delinquent, and that.
He didn't even tell me himself. He lied to me and kept it a secret from me because he wanted to prevent me from trying to do anything.
In addition, he did that because he wanted to buy the house cheaper. He wanted to give the bank the impression that I couldn't afford the house.
Q.Okay. Have you made demand for — have you made demand for the money?
A.I did ask him to pay the mortgage. I did ask him to either, you know, try to buy the house. I tried to sell them the house.
Q.Okay.
A.He couldn't do it.
Q.Okay
A.You know, I've tried. And I'm trying to move on with my life now.
Respondents indicated that they stopped paying the mortgage in 2007 because Marie Burke's sister became sick with cancer and money was needed for her care. However, nothing has been paid on the mortgage through the present time.
Petitioner testified that three attempts were made to transfer the property to Respondents, but Respondents were unable to obtain a mortgage due to their poor credit.
The parties signed a real estate contract on April 25, 2012 for the purchase price of $270,000.00. The contract provided for Respondents to obtain a mortgage in the sum of $260,000.00 within 45 days.
As provided in paragraph 8 of the real estate contract, closing was to occur on or about 60 days as provided in paragraph 15 of the contract.
Petitioner testified that Respondents failed to obtain financing to close the deal. Respondents offered no competent proof to rebut the fact that they failed to obtain a mortgage to close.
Respondents claim that they are entitled to a constructive trust because Petitioner failed to [*4]transfer title to them.
Petitioner states that she is caught in a trap where her credit was used to buy a property in which Respondents have lived since 2007 and have failed to pay the mortgage payments (rent), except for two months.
The document from Ocwen Loan Servicing, LLC, dated 4/17/2013, demonstrates
that the current principal balance owed on the said premises is $411,288.56.
This court finds that Petitioner is entitled to a judgment of possession with the warrant stayed until December 31, 2013. After December 31, 2013, Petitioner may immediately evict Respondents.
The evidence demonstrates that the parties entered into a rental agreement for the payment of the mortgage by Respondents. Mortgage payments can constitute rent. See Matter of Lefton, 160 AD2d 702, 553 NYS2d 783 (2nd Dept 1990); 74 NY Jur 2d Landlord and Tenant § 325. The evidence clearly demonstrates that Respondents breached their agreement to pay the mortgage and have left Petitioner in a complete quandary. Petitioner needs to sell the premises and have Respondents vacate.
Respondents failed to file an answer and thus admit the allegations of the Petition. Furthermore, all affirmative defenses are waived for failure to assert same in an answer.
Even if this court were to consider the Respondents' affirmative defense of constructive trust, there is no basis to grant relief to Respondents. The facts demonstrate that Petitioner has not been unjustly enriched. Petitioner's credit has been damaged by Respondents' breach of its agreement to pay the mortgage. Furthermore, since Respondents breached its agreement, they are not entitled to relief based upon the doctrine of constructive trust.
In O'Brien v. Dalessandro, 43 AD3d 1123, 843 NYS2d 348 (2nd Dept, 2007), the Second Department held that even assuming that the defendant promised to transfer title to plaintiff, the doctrine of constructive trust could not be employed where there was no proof of unjust enrichment by defendant retaining title to the property.
In 106 NY Jur 2d Trusts § 176, the following relevant principal is set forth:
A constructive trust will not be imposed absent a finding of unjust enrichment.
In the case at bar, Petitioner has not been unjustly enriched, and thus there is no basis to [*5]impose a constructive trust or allow same to be used as a challenge to Petitioner's right to possession.
Since Respondents breached the agreement to pay the mortgage, they are not entitled to any relief afforded by constructive trust. See McGrath v. Hilding, 41 NY2d 625, 394 NYS2d 603 (1977), the Court of Appeals stated as follows:
There is an analogue in other branches of the law, especially in the field of contracts. A promisee may not recover for a broken promise unless he has performed his obligations, usually categorized as a condition precedent (see 5 Williston, Contracts (3d ed.), s 676). Certainly, the promisee seeking to establish a constructive trust must show that he has not been guilty of an equivalent breach of the trust and fidelity upon which the constructive trust is to be based (see 20 NY Jur, Equity ss 106-107).
In the instant case, Respondents breached their agreement to pay the mortgage and thus are not entitled to relief.
Finally, this court has jurisdiction to determine the issues in this case. See Nissequogue Boat Club v. State of New York, 14 AD3d 542, 789 NYS2d 71 (2nd Dept 2005), wherein the Court held that the doctrine of adverse possession could be litigated as a defense in the Suffolk County District.
The fact that the District Court does not have authority to determine issues of title does not bar the application of the doctrine of collateral estoppel. While the Yacht Club's claim of title by adverse possession was beyond the jurisdiction of the District Court to adjudicate as an affirmative claim in the summary proceeding (see Siegel, NY Prac § 571, at 946 [3d ed]; Dolan, Rasch's Landlord and Tenant-Equitable Counterclaim § 43:38, at 137, 138 [4th ed]), it was properly interposed therein as a defense (see RPAPL 743; Uniform District Court Act § 905; Hoffman v. Hoffman, 212 App Div 531, 532, 208 NYS 734; Mohar Realty Co. v. Smith, 46 Misc 2d 849, 260 NYS2d 685 [App Term, 2d Dept]; Siegel, NY Prac § 576, at 955 [3d ed]; Dolan, Rasch's Landlord and Tenant-Equitable Defenses § 43:32, at 129 [4th ed]). Where, as here, the defense, as opposed to the affirmative claim of adverse possession actually has been litigated in the District Court, the traditional rules of issue preclusion are fully applicable (see Buechel v. Bain, supra; Parker v. Blauvelt Volunteer Fire Co., supra; Ryan v. New York Tel. Co., supra, Vavolizza v. Krieger, 33 NY2d 351, 356, 352 NYS2d 919, 308 NE2d 439; O'Frias v. Melton, 27 NY2d 638, 640, 313 NYS2d 765, 261 NE2d 670; Siegel, NY Prac, § 469 at 760 [3d ed]; cf. Reich v. Cochran, 151 NY 122, 127-128, 45 NE 367). The Yacht Club asserted its defense of adverse possession in the summary proceeding in the District Court, giving it a full and fair opportunity to contest the issue and making the issue material to that proceedings. Had it [*6]withheld raising the issue, a judgment of the District Court in favor or OPRHP would not have precluded litigating its claim of adverse possession, provided that it commenced an action within 60 days of the entry of a judgment in the District Court (see RPAPL 747 [2]; but see Siegel, NY Prac, § 576 at 955 [3d ed], supra).
This court has the authority to resolve this unique set of facts to determine possession in the context of this summary proceeding. David D. Siegel writes, in the practice commentaries to UDCA § 204 that:
The summary proceeding tries only the immediate right to possession, not title, and yet a title question will sometimes crop up in the context of a summary proceeding. The judge should proceed to adjudicate possession, making that adjudication with whatever incidental disposition of the title issue seems necessary. Whether the title determination is binding must then be resolved as a question of res judicata. Refusing to entertain the summary proceeding at all merely because a party has interposed a title issue can readily frustrate the "summary" nature of the summary proceeding. There are other remedies to meet the problem (See Siegel, New York Practice [2d Ed] § 469).
Hon. Robert F. Dolan in Rasch's Landlord & Tenant (4th ed), vol. 3, Section 43:20 entitled "Effect on Jurisdiction", notes that the District Court is not ousted of jurisdiction because the tenant denies the landlord's title:
It is well settled, however, that these inferior courts are not ousted of jurisdiction of summary proceedings because the question of title may be raised therein by a tenant's denial of his landlord's title; for a summary proceeding is not an action but a special proceeding. Moreover, the real issue in the proceeding is the present right to possession; the question of title is only collaterally involved.
Petitioner is entitled to a judgment of possession with the warrant stayed until December 31, 2013.
The foregoing constitutes the decision and order of the Court. [*7]
So Ordered:
/s/ Hon. Scott Fairgrieve
DISTRICT COURT JUDGE
Dated:November 13, 2013