Goodell v. Rosetti

• Decision Date: 05 June 2008
• Docket Number: 503440.
• Citation: 2008 NY Slip Op 04980,859 N.Y.S.2d 770,52 A.D.3d 911
• Parties: NORMAN GOODELL et al., Appellants, v. RICHARD ROSETTI, Defendant and Third-Party Plaintiff-Respondent. DREW CATHELL CUSTOM HOMES, INC., Third-Party Defendant-Respondent.
• Court: New York Supreme Court — Appellate Division

52 A.D.3d 911

859 N.Y.S.2d 770

2008 NY Slip Op 04980

NORMAN GOODELL et al., Appellants, v. RICHARD ROSETTI, Defendant and Third-Party Plaintiff-Respondent DREW CATHELL CUSTOM HOMES, INC., Third-Party Defendant-Respondent.

503440.

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

Decided June 5, 2008.

Appeals (1) from an order of the Supreme Court (Teresi, J.), entered March 26, 2007 in Albany County, which, among other things, granted defendant's motion for summary judgment dismissing the complaint, and (2) from an order of said court, entered July 15, 2007 in Albany County, which denied plaintiff's motion for reconsideration.

Stein, J.

On January 24, 2004, plaintiff Norman Goodell (hereinafter plaintiff) was injured while performing carpentry work for third-party defendant, Drew Cathell Custom Homes, Inc. (hereinafter Cathell). Plaintiff and his wife, derivatively, commenced this tort action against defendant, the record owner of the property at which plaintiff was injured. Defendant brought a third-party action against Cathell on the basis of contractual indemnification and moved for summary judgment dismissing the complaint, alleging that he was not the owner of the property on the date of the accident. Cathell then cross-moved for dismissal of the third-party complaint and plaintiffs cross-moved for summary judgment declaring that defendant was the owner of the property on the relevant date. Supreme Court granted defendant's motion for summary judgment dismissing the complaint and dismissed Cathell's cross motion as moot. Plaintiffs' subsequent motion to renew and reargue was denied by Supreme Court. Plaintiffs now appeal from the order granting summary judgment to defendant and the order denying their motion to renew and reargue. The question presented by this appeal is whether plaintiffs have raised a triable issue of fact concerning ownership of the property in question on the date of the accident. We find that they have and, therefore, reverse the grant of summary judgment to defendant.

Defendant is a land developer and Cathell is a home builder which started doing business in 2000. In August 2000, defendant and Cathell entered into a contract for the purchase of improved subdivided lots located in the subdivision of which the subject property was a part. Pursuant to that contract, the purchase price of each lot was to be "paid upon transfer of title of such lot." Initially, in order to assist Cathell in obtaining financing, defendant agreed to guarantee a commercial line of credit issued to Cathell to fund some of the construction costs of these lots. However, defendant subsequently requested that he be released from his guarantee obligation. The lender agreed to do so on the condition that defendant would execute a deed to a particular lot, conveying title to Cathell, at the time funds were advanced for construction on such lot, which deed would be held in escrow by the lender's attorney. This became the custom and practice between defendant and Cathell. These deeds were not recorded and no other real estate transfer documents were executed or recorded in connection therewith. A second deed to each property was later executed, along with the other necessary real estate transfer documents, and was recorded simultaneously with the deed conveying title from Cathell to the new homeowner. Consistent with the contract between defendant and Cathell, defendant would be paid out of the new homeowner mortgage proceeds and the construction debt would be paid off at that time.

In order to transfer an ownership interest in real property, there must be a deed, or other "conveyance in writing" (General Obligations Law § 5-703 [1]; see Edelstein v Lieb, 205 AD2d 491, 492-493 [1994], lv denied 85 NY2d 802 [1995]). Although it is not necessary that such conveyance be recorded (see Cayea v Lake Placid Granite Co., 245 AD2d 659, 661 [1997]), it is a well-established rule that delivery of the deed with intent to transfer title is required and the absence thereof will render the attempted transfer of ownership ineffective (see 219 Broadway Corp. v Alexander's, Inc., 46 NY2d 506, 511 [1979]; Cayea v Lake Placid Granite Co., 245 AD2d at 660). While there is a strong presumption that a deed purporting to transfer ownership in real property has been delivered and accepted, this presumption may be overcome by evidence of the parties' actual intent (see Manhattan Life Ins. Co. v Continental Ins. Cos., 33 NY2d 370, 372 [1974]; Janian v Barnes, 284 AD2d 717, 718 [2001]; see also Diamond v Wasserman, 8 AD2d 623 [1959]).

New York does not recognize conditional conveyances (see In re Ellison Assoc., 63 BR 756, 761 [SD NY 1983]; Herrmann v Jorgenson, 263 NY 348, 353 [1934]; Hamlin v Hamlin, 192 NY 164, 167-168 [1908]). Thus, if the intention in transferring possession of a deed is merely to have it transmitted to a third person, such as an escrow agent, there is no legal delivery which will pass title to the property (see Rapp v Cansdale, 29 Misc 2d 236, 244-245 [1960], affd 12 AD2d 884 [1961]). Whether a deed is absolute or is only a security device is a question of intent (see Finnegan v Brown, 43 AD2d 812, 813 [1973...