In motion sequence No.001, plaintiffs Bishop Nathaniel Snipes and Leila J. Snipes moved pursuant to CPLR § 6301 for a preliminary injunction to enjoin defendant the City of New York (City) from selling property located at 201 East 120th St., in the City and State of New York (the premises). Plaintiffs claimed ownership rights to the premises. On May 24, 2012, this court issued a temporary restraining order pursuant to an order to show cause staying the City from selling or otherwise disposing of the premises pending a decision on the motion.^[FN1] In motion sequence 002, the City moved pursuant to CPLR §§ 3211 (a) (1) and (7) to dismiss the amended complaint. Motion sequence numbers 001 and 002 are consolidated for disposition. The decision and order is as follows:

The amended complaint alleged that in November 1982, plaintiffs entered into a contract to purchase the premises from the pastor of the Greater Emmanuel Apostolic Tabernacles, Inc.. However, because earlier in 1982, the City had commenced an in rem tax foreclosure proceeding against the premises, plaintiffs also agreed to provide the pastor with money to pay delinquent real estate taxes. According to plaintiffs, the pastor did not pay the delinquent taxes with the money plaintiffs provided to him (see Krichmar affirmation, Exh A [hereafter Amended Complaint], ¶¶ 6, 7).

The complaint alleged that plaintiffs purchased the premises and received the deed on June [*2]25, 1984. However, that deed was never recorded.^[FN2] Thereafter, in July 1985, the City acquired the premises as a result of the delinquent taxes that were never paid (see Amended Complaint, ¶ 9). Plaintiffs alleged that through the years they invested in excess of $500,000 in the premises for necessary repairs and replacement of the roof, plumbing, windows, and other items (see Amended Complaint, ¶ 11).

HPD informed plaintiffs by a letter dated December 21, 2004 that they were approved to purchase the premises through an asset sale program. The letter stated that the premises would be sold in an "as is" condition for $190,000 (see Amended Complaint, ¶¶ 13, 14). The Amended Complaint stated that the closing was scheduled for a date in June 2005, but the City postponed the closing indefinitely and has consistently refused to close on the sale of the premises. Also in 2004, the plaintiffs entered into a month-to-month lease for the subject property with the City as landlord (see Krichmar affirmation, Exh D).

It is undisputed that plaintiffs resided in the premises from 1984 until April 27, 2012, when the building was damaged by fire and the Department of Buildings issued a vacate order (see Amended Complaint, ¶¶ 4, 5, 8).

Contentions of the Parties

The Amended Complaint stated six causes of action. The first cause of action alleged breach of contract and demands specific performance. The second cause of action claimed that the City breached the implied covenant of good faith and fair dealing that is a part of every contract. The third cause of action sought imposition of a constructive trust on the premises and the fourth cause of action alleged that the City was unjustly enriched. The fifth cause of action sought an equitable lien and the sixth cause of action claimed plaintiffs' right to the property through adverse possession. In their demand for relief, plaintiffs requested a permanent injunction restraining the sale of the premises; specific performance; the imposition of a constructive trust and/or an equitable lien; a determination that plaintiffs acquired the premises by adverse possession; and attorney's fees.

In support of the motion to dismiss the complaint and in opposition to plaintiffs' motion, the City argued that 1) the documentary evidence establishes that the City does not have a contractual obligation to sell the premises to plaintiffs; 2) there is no contract between the parties therefore, plaintiffs do not have a claim for breach of the covenant of good faith and fair dealing; 3) the constructive trust claim must be dismissed because there was no confidential or fiduciary relationship between the parties and there are no facts showing that the City was enriched at plaintiffs' expense; 4) the unjust enrichment claim fails because plaintiffs did not allege that the City requested the work that plaintiffs performed on the premises; and 5) the equitable lien cause of action cannot stand because plaintiffs did not allege that the City agreed to reimburse them for the [*3]improvements they allegedly made to the premises. Finally, the City contended that the claim for adverse possession must be dismissed because plaintiffs' occupancy of the premises was not adverse.



Discussion

On a motion to dismiss for failure to state a cause of action the court must accept each and every allegation as true and liberally construe the allegations in the light most favorable to the pleading party (see CPLR § 3211 [a][7] Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). "We . . . determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88 [1994]). A motion to dismiss must be denied, "if from the pleadings' four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law" (511 W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 152 [2002] [internal quotation marks and citations omitted]). While factual allegations contained in a complaint should be accorded a favorable inference, bare legal conclusions and inherently incredible facts are not entitled to preferential consideration (see Matter of Sud v Sud, 211 AD2d 423, 424 [1st Dept 1995]).

Moreover, where the motion to dismiss is based on documentary evidence the claim will be dismissed "if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" (see CPLR § 3211 [a][1] Leon v Martinez, 84 NY2d at 88; 150 Broadway NY Assoc., L.P. v Bodner, 14 AD3d 1, 5 [1st Dept 2004]). Where, as here, the defendants presented documentary evidence, the court is required to determine "whether the proponent of the pleading has a cause of action, not whether he has stated one" (Ark Bryant Park Corp. v Bryant Park Restoration Corp., 285 AD2d 143, 150 [1st Dept 2001] [internal quotation marks and citation omitted]).

A. Breach of Contract

Under New York Law, a contract for the sale of an interest in real property must be in writing. The statute of frauds, General Obligations Law (GOL) § 5-703 (1), provides that:

An . . . interest in real property . . . cannot be created, granted

assigned, surrendered or declared, unless . . . by a deed or

conveyance in writing, subscribed by the person creating,

granting, assigning, surrendering or declaring the same . . . .

Thus, in order to satisfy the statute of frauds, there must be a writing subscribed by the party to be charged setting forth the details of the transaction. Here, plaintiffs failed to produce a writing that satisfies the statute of frauds. Plaintiffs' contention that the December 21, 2004 letter constitutes an adequate note or memorandum to satisfy the statute of frauds is without merit. In order to qualify as a note or memorandum sufficient to satisfy the statute of frauds, the plain language of the document must manifest the parties' mutual intent to be bound by its terms (see Bed Bath & Beyond Inc. v IBEX Constr., LLC, 52 AD3d 413, 414 [1st Dept 2008]). It is rightfully well settled in the common law of contracts that a mere agreement to agree, where a material term is left for future negotiations is unenforceable (see Willmott v Giarraputo, 5 NY2d 250, 253 [1959]). Here, the [*4]document that plaintiffs cite as an agreement for the sale of the premises is merely a cover letter dated December 21, 2004, from HPD to plaintiffs, which demonstrates that HPD obtained permission from the City Council to sell the premises to plaintiffs for $190,000 (see Krichmar affirmation, Exh F). The letter clearly stated that any sale was conditional on the plaintiffs' ability

to close on the premises in timely manner and it encouraged plaintiffs to retain an attorney to begin the negotiations with the project manager (see Krichmar affirmation, Exh F). The letter does not in any way obligate the City to sell the premises to plaintiffs and it specifically includes a reservation of rights if the transfer is not accomplished within 90 days.

Indeed, the documentary evidence in this case establishes that the negotiations between the parties failed and that the parties never executed a written agreement (see Krichmar affirmation, Exh N). The only writing that plaintiffs refer to is the December 21, 2004 letter, which outlines the terms upon which contract negotiations were to proceed. The December 21, 2004 letter was not a contract for the purchase of real property, but rather was subject to the execution of a contract and thereafter execution of the deed for the premises (see e.g. Jordan Panel Sys. Corp. v Turner Constr. Co., 45 AD3d 165, 166 [1st Dept 2007]). Nor was the purported agreement removed from the statute of frauds by virtue of plaintiffs' actions in obtaining a mortgage commitments since that act was not unequivocally referable to the agreement, but rather was a preliminary step that contemplated the future formulation of an contract (see RAJ Acquisition Corp. v Atamanuk, 272 AD2d 164, 165 [1st Dept 2000]).



In the absence of a contract of sale between the parties, the plaintiffs have no claim for specific performance. Therefore, the first cause of action is dismissed.

B. Breach of the Implied Covenant of Good Faith and Fair Dealing

The cause of action which purports to state a claim for breach of the implied covenant of good faith and fair dealing is dismissed because it is well settled that "[a] cause of action based upon a breach of a covenant of good faith and fair dealing requires a contractual obligation between the parties (Duration Mun. Fund, L.P. v J.P. Morgan Sec. Inc., 77 AD3d 474, 474-475 [1st Dept 2010] Phoenix Capital Invs. LLC v Ellington Mgt. Group, L.L.C., 51 AD3d 549, 550 [1st Dept 2008]). In this case, the claim for breach of the covenant of good faith and fair dealing must be dismissed because there was no contractual relationship between the parties.

C. Constructive Trust

To state a claim for imposition of a constructive trust, plaintiffs must establish: (1) a confidential or fiduciary relationship; (2) a promise; (3) a transfer in reliance thereon; and (4) unjust enrichment (Simonds v Simonds, 45 NY2d 233, 242 [1978] Matter of Gupta, 38 AD3d 445, 446 [1st Dept 2007]). Further, plaintiffs must have had an actual interest in the subject property that was transferred (Kastrat v Wynnykiw, 13 AD3d 283, 283 [1st Dept 2004]). Here, plaintiffs have not alleged, nor can they, that there was a confidential or fiduciary relationship between them and the City. Moreover, in March 2004, plaintiffs entered into a lease for the premises with the City wherein they expressly represented that "Tenant does not have and will not now or hereafter claim or assert any right or interest in all or any part of the premises, the Building, or the real property . . ., other [*5]than a month-to-month tenancy" (Krichmar affirmation, Exh D, ¶ 3[B]).

In addition, as will be discussed in more detail below, plaintiffs cannot demonstrate that the City was unjustly enriched by the improvements that they allegedly made to the premises from 1984 to when the City first issued the letter of conditional approval for the sale of the property to plaintiffs — in December 2004. The amended complaint failed to allege that the improvements were made for the City, at the City's request or that the City had any obligation to pay for that work. Moreover, plaintiffs cannot rely on improvements that were allegedly made after plaintiffs entered into the 2004 lease, because in that document plaintiffs expressly acknowledge that any improvements they make to the premises would immediately become the City's property (see Krichmar affirmation, Exh D,¶ 10 [B]). Accordingly, the cause of action seeking imposition of a constructive trust is dismissed.

D. Unjust Enrichment

To succeed on a claim for unjust enrichment, the "plaintiff must show that the other party was enriched, at plaintiff's expense, and that it is against equity and good conscience to permit [the other party] to retain what is sought to be recovered" (Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 182 [2011][internal quotation marks and citation omitted]). A claim for unjust enrichment cannot be stated against a property owner for work done at the premises in the absence of any allegation that the owner specifically requested the work (see Amana Elevation Corp. v Ydrohoos-Aquarius, Inc. 244 AD2d 371 [2d Dept 1997]). Moreover, the March 2004 lease explicitly stated that any alterations, additions, installations or improvements by the plaintiffs became the property of the City (see Krichmar affirmation, Exh D, ¶ 10 [B]). Accordingly, the unjust enrichment cause of action is dismissed.

E. Equitable Lien

"[A]n equitable lien is dependent upon some agreement express or implied that there shall be a lien on specific property" (Teichman v Community Hosp. of W. Suffolk, 87 NY2d 514, 520 [1996] [internal quotation marks omitted]). The proponent of an equitable lien on property must establish the existence of "a clear intent between the parties that such property be held, given or transferred as security for an obligation" (US Bank N.A. v Lieberman, 98 AD3d 422, 424 [1st Dept 2012] [internal quotation marks and citations omitted]). Here, plaintiffs seek an equitable lien "for their monies invested in maintain [sic], repairing and improving the Premises in an amount in excess of $500,000" since June 1984 (Amended Complaint, ¶ 27). However, plaintiffs did not allege that there was an agreement, express or implied, that the City would reimburse them for their alleged expenditures nor was there any showing that such an agreement existed.

Indeed, the imposition of an equitable lien is precluded by the parties' lease, wherein plaintiffs represented that other than their month-to-month tenancy they did "not have and will not now or hereafter claim or assert any right or interest in all or any part" of the premises (Krichmar affirmation, Exh D, ¶ 3 [B]). Accordingly, the cause of action seeking imposition of an equitable lien is dismissed.

F. Adverse Possession [*6]

In Estate of Becker v Murtagh, 19 NY3d 75 (2012), the Court of Appeals stated "[t]o establish a claim of adverse possession, the occupation of the property must be (1) hostile and under a claim of right (i.e., a reasonable basis for the belief that the subject property belongs to a particular party), (2) actual, (3) open and notorious, (4) exclusive, and (5) continuous for the statutory period (at least 10 years)" (Estate of Becker at 81 citing Walling v Przybylo, 7 NY3d 228, 232 [2006] Ray v Beacon Hudson Mtn. Corp., 88 NY2d 154, 159 [1996]). Generally, adverse possession is disfavored under the law and thus, these elements must be proven under a clear and convincing standard (id.).

A claim of adverse possession cannot arise where the claimant's occupancy was permitted by the owner, because permissive use negates the "hostility" element (see Guariglia v Blima Homes, 89 NY2d 851, 853 [1996]). A plaintiff's admission that title resides in another will destroy the claim, because it negates hostility and destroys the claim of right (see Van Gorder v Masterplanned, Inc. 78 NY2d 1106, 1107-1108 [1991]). In addition, an otherwise colorable claim of adverse possession will be extinguished by the execution of a lease, even after the ten-year period (see City of New York v Stevens, NYLJ, Dec. 12, 2008 at. 27, col 1 [Civ Ct, NY County 2008]).

Here, plaintiffs acknowledged in the amended complaint and elsewhere that on July 31, 1985, the City acquired title to the property through an in rem deed (see Amended Complaint ¶¶ 4, 6, 9-10; Krichmar affirmation, Exh B; plaintiffs' Exhs attached to the order to show cause [unsigned lease between the parties for tenancy commencing November 1, 1994]). These acknowledgments vitiate their claim of right. Moreover, it is undisputed that the City permitted plaintiffs to remain in the premises from 1985 through 2012. This permissive use negates the element of hostility.

In addition, in 2001 plaintiffs applied to HPD to purchase the premises and expressly acknowledged on the application form that they were tenants and never owned the building (see Krichmar affirmation, Exh C). Thereafter, in the lease with the City they once again represented that they had no right or interest in the building other than a month-to-month tenancy (Krichmar affirmation, Exh D, ¶ 3 [B]).

Therefore, as the documentary evidence conclusively establishes that plaintiffs did not reside in the building under a claim of right and that their possession of the premises was not hostile, the cause of action seeking adverse possession of the premises is dismissed.

Accordingly, it is ORDERED that defendant City of New York's motion to dismiss the complaint (motion sequence 002) is granted in its entirety and the Clerk is directed to enter judgment as such; and it is further

ORDERED plaintiffs Bishop Nathaniel Snipes and Leila J. Snipes's motion (motion sequence 001) is dismissed as moot and the temporary restraining order is lifted.

This constitutes the decision and order of the court. [*7]

Dated:March 19, 2014

Margaret A. Chan , J.S.C.