Upon the foregoing cited papers and after considering oral argument on August 28, 2024 and October 23, 2024, pursuant to CPLR § 3212, Defendants Jorge Colon and Maritza Camacho-Colon's ("Colon") Motion for Summary Judgment dismissing Plaintiff's complaint and all crossclaims (Motion Sequence # 2) is GRANTED and Plaintiff's Motion for Summary Judgment (Motion Sequence # 3) as against Defendants Colon is DENIED and as against Defendant City is GRANTED to the extent set forth herein.

Plaintiff commenced this action seeking to extinguish a certain restrictive covenant placed by the City of New York ("City") in its deed to the subject property located at 257 [*2]Jefferson Street, Brooklyn.^[FN1] The City became the owner of the subject property following a tax lien foreclosure action ^[FN2] and in 1992, initiated a Uniform Land Use Review Procedure ("ULURP") application through the New York City Department of General Services, Division of Real Estate Services ("DRES"), filed a land use application with the New York City Department of City Planning ("DCP") to dispose of the property under the Adjacent Homeowner's Program ("AHOP").^[FN3] The AHOP program required that properties be used solely for accessory, extension, or enlargement ("AEE") purposes, limiting development to adjacent property owners.^[FN4] Such a restriction effectively prohibits development of the property unless it is owned by the owner of an adjacent lot.

In July 1996, DRES amended the application to remove the AHOP condition and proposed sale pursuant to zoning.^[FN5] The New York City Planning Commission ("CPC") approved the amended application despite objections from the Borough President.^[FN6] However, on January 23, 1997, the City Council modified CPC's approval by requiring that the first attempt at disposition be subject to an AEE restriction.^[FN7]

By deed dated September 21, 1998, the City conveyed the property to Jorge Colon, the highest bidder at the first auction,^[FN8] even though he was not an adjoining property owner.^[FN9] The deed expressly contained the following AEE restriction:

"Use of said property will be restricted in perpetuity to 'accessory,' 'extension,' or 'enlargement' as such quoted terms are defined in the New York City Zoning Resolution... The restriction shall run with the land."^[FN10]

Subsequent conveyances in 2009 ^[FN11] and 2012 ^[FN12] did not explicitly recite the AEE [*3]restriction, though they referenced the 1998 deed. Plaintiff, who acquired the property in 2012,^[FN13] alleges they only discovered the restriction in 2019 after an unsuccessful property sale, by which time significant construction on a three-family residence had been completed. Plaintiff subsequently applied for approval to build a three-family residence on the subject property and the Department of Buildings (DOB) approved the construction application and issued permits in furtherance thereof.^[FN14] The Department of Finance (DOF) changed the property's tax class to Tax Class 1 (one-to-three families) and Building Class to Building Class C0 (three families).^[FN15]

Plaintiff's amended complaint asserts causes of action against the City seeking declaratory relief pursuant to Real Property Actions and Proceedings Law ("RPAPL") § 1951 and Article 15, arguing that the restriction is unenforceable due to mistake, waiver, and ratification. Additional claims against the Colons include fraud, breach of warranty of title, and unjust enrichment pursuant to Article 15 of the RPAPL, that the restriction on the property be removed from the land records and directing the City to remove the restriction.^[FN16]

On June 4, 2021, the Colons filed an answer to the amended complaint setting forth various affirmative defenses, including statute of limitations, a counterclaim for costs, disbursements, and reasonable attorneys' fees under 22 NYCRR § 130-1.1.^[FN17] The City filed an answer to the amended complaint on July 13, 2021.^[FN18] On March 1, 2024, Plaintiff filed a note of issue and certificate of readiness for trial.^[FN19] On May 6, 2024, the Colons moved for summary judgment dismissing the amended complaint.^[FN20] On July 1, 2024, Plaintiff moved for summary judgment on its amended complaint.^[FN21]

The proponent of a summary judgment motion must tender sufficient evidence to demonstrate the absence any material issue of fact.^[FN22] The "[f]ailure to make such showing [*4]requires denial of the motion, regardless of the sufficiency of the opposing papers."^[FN23] "Once this showing has been made, however, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action."^[FN24] In moving to dismiss a cause of action as barred by the applicable statute of limitations, "the moving defendant bears the initial burden of demonstrating, prima facie, that the time within which to commence the cause of action has expired. The burden then shifts to the plaintiff to raise a question of fact as to whether the statute of limitations is tolled or is otherwise inapplicable."^[FN25]

To establish fraud, Plaintiff must demonstrate (1) a material misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) justifiable reliance, and (5) damages.^[FN26] Here, Plaintiff fails to identify any affirmative misrepresentation by the Colons. Instead, Plaintiff argues that the Colons omitted material information but does not adequately allege that the Colons had a duty to disclose said information.^[FN27] Since Plaintiff has failed to plead that the Colons had a duty to disclose, the fraud claim must be dismissed.

The six-year statute of limitations governs claims for breach of warranty of title and unjust enrichment.^[FN28] These claims accrued at the 2012 conveyance and are untimely under CPLR § 213. Plaintiff's argument for equitable estoppel fails, as it must establish subsequent and specific acts of deception preventing a timely lawsuit.^[FN29] "[E]quitable estoppel does not apply where the misrepresentation or act of concealment underlying the estoppel claim is the same act [*5]which forms the basis of plaintiff's underlying substantive cause[s] of action."^[FN30] No such acts are alleged beyond the Colons' initial conduct, rendering estoppel inapplicable. There is no allegation the Colons took any actions, following the conveyance of the subject property, which prevented Plaintiff from commencing the instant lawsuit in a timely manner. The Colons' sufficiently demonstrated Plaintiff's fifth and sixth causes of action are untimely.

Accordingly, the Colons' motion for summary judgment dismissing the complaint is granted in its entirety.

Plaintiff's motion against the Colon Defendants is denied considering the above dismissal.

Regarding the City, Plaintiff has not demonstrated entitlement to relief on the grounds of mistake or waiver. Jorge Colon purchased the property at an auction where the AEE restriction was advertised.^[FN31] Also, there is an issue of fact regarding whether municipal approvals for construction and tax reclassification constitutes a waiver of deed restrictions.^[FN32] However, Plaintiff established entitlement to relief under RPAPL § 1951(2), which permits extinguishment of restrictions lacking "actual and substantial benefit." Generally, under RPAPL 1951(2), Courts balance the equities of the restrictive covenant and its relationship to the land, and consider, among other factors, (1) the hardship on the owner,^[FN33] (2) the restriction's utility to the land,^[FN34] and (3) whether the restriction is reasonable and not offensive to public policy.^[FN35] "The issue in determining whether a restrictive covenant is unenforceable is not whether the party seeking the enforcement of the restriction obtains any benefit, but whether, in a balancing of equities, the restrictive covenant is of no actual and substantial benefit."^[FN36]

Here, the restriction renders Plaintiff's lot functionally useless unless it is owned by an adjacent property owner. The City's only justification is the initial ULURP process, yet the restriction was clearly intended for adjoining owners. Once the property was conveyed to a non-adjoining owner, the City could no longer claim any actual or substantial benefit from the AEE restriction, the encumbrance was not expressly set forth in the deed from the Colons, approval and permits were issued for construction of a three-family residence, and the subject lot was [*6]reclassified in building and zoning class to reflect a three-family development.^[FN37] Given the substantial hardship imposed on Plaintiff, the equities favor extinguishing the restriction. Accordingly, Plaintiff's motion is granted under RPAPL § 1951, subject to a damages payment of $95,000 to the City in accordance with RPAPL § 1951(2).

The Court considered the remaining contentions and find them to be without merit, and all relief not specifically granted herein has been considered and is denied.

Accordingly, it is hereby ORDERED that:

1. The Colons' motion for summary judgment (Motion Sequence # 2) is granted in its entirety, and the complaint is dismissed with prejudice against the Colon Defendants.

2. Plaintiff's motion for summary judgment (Motion Sequence # 3) as against the Colon Defendants is denied.

3. The Colon Defendants counterclaim is severed.

4. Plaintiff's motion for summary judgment (Motion Sequence # 3) as against the City is granted to the extent that the AEE restriction is declared unenforceable under RPAPL § 1951(2), and said restriction shall be extinguished upon payment of $95,000 to the City.

5. Any remaining relief sought is denied.

This constitutes the Decision and Order of the Court.