Bank of Am., N.A. v. 414 Midland Ave. Associates, LLC

• Decision Date: 09 November 2010
• Citation: 78 A.D.3d 746,911 N.Y.S.2d 157
• Parties: BANK OF AMERICA, N.A. etc., respondent, v. 414 MIDLAND AVENUE ASSOCIATES, LLC, et al., appellants, et al., defendants.
• Court: New York Supreme Court — Appellate Division

911 N.Y.S.2d 157

78 A.D.3d 746

BANK OF AMERICA, N.A. etc., respondent,

v.414 MIDLAND AVENUE ASSOCIATES, LLC, et al., appellants, et al., defendants.

Supreme Court, Appellate Division, Second Department, New York.

Nov. 9, 2010.

Cuddy & Feder LLP, White Plains, N.Y. (Andrew P. Schriever and Anthony P. Luisi of counsel), for appellants.

Kurzman Eisenberg Corbin & Lever, LLP, White Plains, N.Y. (Eric D. Koster and Judith C. Zerden of counsel), for respondent.

MARK C. DILLON, J.P., ANITA R. FLORIO, DANIEL D. ANGIOLILLO, and THOMAS A. DICKERSON, JJ.

In an action to quiet title to the plaintiff's alleged one-third interest in certain real property, to be restored to possession of the property, and for damages, the defendants 414 Midland Avenue Associates, LLC, and Provident Bank appeal from stated portions of an order of the Supreme Court, Westchester County (Smith, J.), dated July 16, 2009, which, inter alia, granted those branches of the plaintiff's motion pursuant to CPLR 3211(b) which were to dismiss their affirmative defenses of ouster, adverse possession, failure to state a cause of action, a defensefounded on documentary evidence, the statute of limitations, laches, waiver, estoppel, unclean hands, and culpable conduct on the part of the plaintiff, and so much of their first counterclaim as asserted that the plaintiff's interest in the property was extinguished by ouster, the statute of limitations, estoppel, and laches.

ORDERED that the order is affirmed insofar as appealed from, with costs.

At issue in this case is whether the appellant 414 Midland Avenue Associates, LLC (hereinafter the LLC), holds a two-thirds interest in the subject property, with the plaintiff, Bank of America, N.A. (hereinafter the Trustee), holding the remaining one-third interest. In its complaint, the Trustee alleges, inter alia, that it administers a trust created during the life of Edith Quirk, who died on October 27, 1997. Edith Quirk had acquired a one-third undivided interest in the subject property upon the death of her husband, John P. Quirk, in 1995. At that time, Leslie P. Quirk was the owner of an undivided two-thirds interest. In his will, Leslie P. Quirk bequeathed his interest in equal shares to the defendants Corey Kupersmith and Kenneth Kupersmith. By deed dated May 26, 1996, recorded June 11, 1996 (hereinafter the Kupersmith deed), Corey Kupersmith, as executor of Leslie P. Quirk's estate, conveyed Leslie P. Quirk's interest to himself and his brother Kenneth Kupersmith. The Kupersmith deed stated that "ALL" of the property was being conveyed. In 2007, Kenneth Kupersmith executed a quitclaim deed releasing any interest he had to Corey Kupersmith. In 2008, Corey Kupersmith purported to convey the entire subject property to the LLC, which took out a first mortgage in the principal sum of $840,000 and a second mortgage in the sum of $280,000 from the appellant Provident Bank.

On December 2, 2008, the Trustee commenced this action, inter alia, to quiet title to its alleged one-third interest in the subject property. In their answer, the appellants asserted affirmative defenses including ouster, adverse possession, failure to state a cause of action, a defense founded on documentary evidence, the statute of limitations, laches, waiver, estoppel, unclean hands, and culpable conduct on the part of the Trustee. In their first counterclaim, they seek a judgment declaring that the LLC is the owner of the complete fee interest on the grounds, among other things, that the LLC is a bona fide purchaser for value, the Trustee was effectively ousted from the subject property by the Kupersmith deed, and the Trustee's interest was extinguished by the applicable 10-year statute of limitations, equitable estoppel, and laches. In their secondcounterclaim pursuant to RPAPL article 15, they seek a judgment quieting title and declaring any interest of the Trustee to be void on the ground that the LLC is a bona fide purchaser for value. In support of their counterclaims, the appellants allege that the Trustee had constructive notice of its ouster on June 11, 1996, when the Kupersmith deed was recorded, and inquiry notice of the ouster on October 27, 1997, when Edith Quirk died and the property passed to the trust, for which the Trustee had a duty to account. They further allege that the Trustee had actual notice of the ouster in 2001, when the Trustee's attorney became aware of a chain of title containing the Kupersmith deed, yet waited until 2008 to commence this action to quiet title.

The Trustee moved to dismiss the affirmative defenses and counterclaims, contending that as a matter of law, the Kupersmith deed did not constitute an ouster because there was no change in possession after that deed was recorded. The Supreme Court, in the order appealed from, inter alia, dismissed the affirmative defenses of ouster, adverse possession, failure to state a cause of action, a defense founded on documentary evidence, the statute of limitations, laches, waiver, estoppel, unclean hands, and culpable conduct on the part of the Trustee, and so much of the first counterclaim as asserted that the Trustee's interest in the property was extinguished by ouster, the statute of limitations, estoppel, and laches. That branch of the Trustee's motion which sought dismissal of the second counterclaim alleging that the LLC is a bona fide purchaser for value was denied, and that determination is not challenged on appeal.

In determining a motion to dismiss a cause of action pursuant to CPLR 3211(a)(7), or, as in this case, a counterclaim, the pleading is afforded a liberal construction, the facts alleged are accepted as true, and the proponent of the pleading is accorded the benefit of every favorable inference ( see CPLR 3026; Leon v. Martinez, 84 N.Y.2d 83, 87-88, 614 N.Y.S.2d 972, 638 N.E.2d 511; Cayuga Partners v. 150 Grand, 305 A.D.2d 527, 759 N.Y.S.2d 347). Those branches of the Trustee's motion which were to dismiss the affirmative defenses were governed by CPLR 3211(b), which authorizes a plaintiff to make such a motion on grounds that "a defense is not stated or has no merit." The motion is granted if the plaintiff can demonstrate that the "defenses are without merit as a matter of law because they either do not apply under the factual circumstances of [the] case, or fail to state a defense" ( Tenore v. Kantrowitz, Goldhamer & Graifman, 76 A.D.3d 556, 557-558, 907 N.Y.S.2d 255). On a motion pursuant to CPLR 3211(b), the court should apply the same standard as it applies to motions todismiss pursuant to CPLR 3211(a)(7), and the factual assertions will be accepted as true ( see Siegel, N.Y. Prac. § 269, at 449 [4th ed.];Greco v. Christoffersen, 70 A.D.3d 769, 771, 896 N.Y.S.2d 363). Here, accepting the appellants' allegations as true, the Supreme Court properly dismissed the aforesaid affirmative defenses and so much of their first counterclaim as asserted that the Trustee's interest in the property was extinguished by ouster, the statute of limitations, estoppel, and laches.

"Where parties hold property as tenants in common, Real Property Actions and Proceedings Law § 541 creates a statutory presumption that a tenant in common in possession holds the property for the benefit of the cotenant" ( Russo...