Baje Realty Corp. v. Cutler

• Decision Date: 17 August 2006
• Docket Number: 8505.
• Citation: 32 A.D.3d 307,2006 NY Slip Op 06259,820 N.Y.S.2d 57
• Parties: BAJE REALTY CORP., Appellant, v. ALICE CUTLER, as Executrix of ARTHUR CUTLER, Deceased, et al., Respondents and Third-Party Plaintiffs. WALTER SAKOW et al., Third-Party Defendants-Appellants, et al, Third-Party Defendants.
• Court: New York Supreme Court — Appellate Division

32 A.D.3d 307

820 N.Y.S.2d 57

2006 NY Slip Op 06259

BAJE REALTY CORP., Appellant, v. ALICE CUTLER, as Executrix of ARTHUR CUTLER, Deceased, et al., Respondents and

Third-Party Plaintiffs.

WALTER SAKOW et al., Third-Party Defendants-Appellants, et al, Third-Party Defendants.

8505.

Appellate Division of the Supreme Court of the State of New York, First Department.

August 17, 2006.

Order, Supreme Court, New York County (Sherry Klein Heitler, J.), entered December 1, 2004, which, to the extent appealed from as limited by the briefs, granted defendants and third-party plaintiffs' motion for partial summary judgment, unanimously reversed, on the law, without costs, and the motion denied.

At issue in this litigation, commenced in 1990, is the ownership of premises known as 180 West 81st Street in Manhattan, which consists of four commercial units on the ground floor and 12 residential units, which are variously subject to rent control or rent stabilization. Although little can be stated with certainty, the subject premises seem to have passed from an unknown seller to 180 West 81st Street, Inc. and thence to plaintiff Baje Realty Corp., of which corporations third-party defendant Robert Bianco was the sole owner, director and share owner. It is also apparent that defendants and third-party plaintiffs Jeffrey Baynon and Arthur Cutler, deceased—represented by defendant and third-party plaintiff Alice Cutler, as executrix (collectively, the Cutler interests)—were involved in the management of the premises, for which they were promised an unspecified ownership interest. Third-party defendants Walter and Marion Sakow claim ownership interest in Baje Realty by assignment. In an agreement settling the dispute between them, Bianco sold the premises to the Cutler interests by quitclaim deed dated February 11, 2004.

The Cutler interests moved, inter alia, for partial summary judgment to preclude the Sakows from asserting ownership to Baje Realty. The motion was predicated upon statements made by Walter Sakow in these and other proceedings. Supreme Court invoked the doctrine of judicial estoppel to grant the motion. We reverse.

In the course of these proceedings, Walter Sakow has given at least two inconsistent accounts of the material facts. In an affidavit sworn to on March 11, 2004, submitted in opposition to a motion to direct Baje Realty to turn over certain records, he averred that in approximately 1982, he was contacted by one Max Henick concerning the purchase of the subject premises. With the participation of a friend and business associate, Robert Bianco, Sakow caused 180 West 81st Street Corporation to be formed, which took assignment of Henick's right to purchase the building. Allegedly to avoid discord with the tenants should they to learn that Sakow was an owner, he and Bianco agreed that Bianco would be the sole share owner, officer and director of the corporation. This agreement was purportedly subject to an oral agreement that Bianco, upon demand, would transfer all of the shares in the corporation to Sakow. Sakow then induced Arthur Cutler and his associate, Jeffrey Baynon, to negotiate with the tenants for their relocation so the building could be vacated and rehabilitated. Thereupon, a new corporate owner, plaintiff Baje Realty, was formed, again with Bianco as sole shareholder and officer and again subject to the verbal transfer-on-demand agreement, with the further understanding that if Cutler and Baynon were successful in emptying the building, they would collectively receive 50% of the stock in Baje. Although the tenants were never relocated, Sakow alleges that Cutler and Baynon seized control of the premises, transferred the building to an entity they had formed and advised the tenants to send their rent payments to that entity, prompting this lawsuit.

In a prior affidavit sworn to on October 3, 1990 in support of a motion to enjoin Cutler and Baynon from acting as officers of Baje Realty, Walter Sakow took a different position and stated that his "only involvement with Baje" was as an advisor and supervisor of construction work. He stated that, in 1982, Robert Bianco "told me that he was having problems with a building he owned at 180 West 81st Street in Manhattan (the `Building') which he had purchased on my recommendation" with the intention to...