Toobian v. Golzad
| Decision Date | 07 April 2021 |
| Docket Number | 2018–10728, (Index No. 504238/15) |
| Parties | Payam TOOBIAN, respondent, v. Mehrdad GOLZAD, et al., appellants. |
| Court | New York Supreme Court — Appellate Division |
193 A.D.3d 784
148 N.Y.S.3d 114
Payam TOOBIAN, respondent,
v.
Mehrdad GOLZAD, et al., appellants.
2018–10728
(Index No. 504238/15)
Supreme Court, Appellate Division, Second Department, New York.
Argued—November 23, 2020
April 7, 2021
Mintz Levin Cohn Ferris Glovsky and Popeo, P.C., New York, N.Y. (Christopher J. Sullivan, Dominic J. Picca, and Alexandra G. Calistri of counsel), for appellants.
Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara, Wolf & Carone, LLP, Brooklyn, N.Y. (Justin T. Kelton and Mark Furman of counsel), for respondent.
MARK C. DILLON, J.P., CHERYL E. CHAMBERS, HECTOR D. LASALLE, ANGELA G. IANNACCI, JJ.
DECISION & ORDER
In an action, inter alia, to impose a constructive trust, the defendants appeal from an interlocutory judgment of the Supreme Court, Kings County (Lawrence Knipel, J.), dated July 30, 2018. The interlocutory judgment imposed a constructive trust in favor of the plaintiff on certain real property and directed an accounting.
ORDERED that the interlocutory judgment is affirmed, with costs.
The facts of this case are set forth in greater detail in our decision in Toobian v. Golzad, 193 A.D.3d 778, 147 N.Y.S.3d 61 [Appellate Division Docket No. 2018–02266 ; decided herewith]). Insofar as relevant here, it is sufficient to note that the plaintiff claims that in 2009, the defendant Mehrdad Golzad (hereinafter the defendant), at the plaintiff's request, financed and purchased real property and formed a limited liability company, the defendant BK 2102, LLC (hereinafter the LLC), for the purpose of holding the property. The plaintiff alleges that he funded the transaction, both via cash contributions and loans from the defendant, and that the defendant agreed to hold the property and the LLC on the plaintiff's behalf until such time as the plaintiff could obtain credit enabling him to hold the property and the LLC in his own name. In 2014, the plaintiff obtained financing and sought conveyance of the property, but the defendant refused on the ground that he was the true owner of the property and the LLC. This action ensued. After a nonjury trial, the Supreme Court found in the plaintiff's favor and imposed a constructive trust on the subject property, but directed a special referee to conduct an accounting to compute the sums due to the defendant and interest thereon in connection with his contributions to the property. The defendants appeal. We affirm.
"In reviewing a determination made after a nonjury trial, this Court's authority is as broad as that of the trial court, and this Court may render the judgment it finds warranted by the facts, taking into consideration that in a close case the trial court had the advantage of seeing and hearing the witnesses" ( Reingold v. Bowins, 180 A.D.3d 722, 723, 119 N.Y.S.3d 487 ; see Northern Westchester Professional Park Assoc. v. Town of Bedford, 60 N.Y.2d 492, 499, 470 N.Y.S.2d 350, 458 N.E.2d 809 ).
Contrary to the defendants’ contention, the Supreme Court did not err in relying on Joint Exhibit 59 as an admission by the defendant and a means of determining the true nature of the parties’ relationship. "An informal judicial admission is evidence of the fact or facts admitted" ( Rosales v. Rivera, 176 A.D.3d 753, 755, 110 N.Y.S.3d 47 ; see Gangi v. Fradus, 227 N.Y. 452, 456, 125 N.E. 677 ; Koester v. Rochester Candy Works, 194 N.Y. 92, 93, 87 N.E. 77 ). While the defendant was entitled to proffer an explanation for his admissions in Joint Exhibit 59 (see Wachtel v. Equitable Life Assur. Socy., 266 N.Y. 345, 351, 194 N.E. 850 ; Chamberlain v. Iba, 181 N.Y. 486, 492, 74 N.E. 481 ), the defendant's assertion that he recorded property-related payments in an attempt to calculate the money he had invested in the subject property failed to explain his characterization of those payments as loans to the plaintiff, particularly since he created the document marked as Joint
Exhibit 59 for his own use years prior to this action. Similarly, the defendant's explanation that an entry labeled "Final Balance after real estate transfer" which, by the defendant's calculations, reduced the plaintiff's debt to him by approximately $1.7 million, represented the plaintiff's contemplated purchase of the property was incoherent since there was no explanation of why the plaintiff's purchase of the subject property from the defendant would reduce his debt to the defendant.
Notwithstanding the acknowledged computational errors in Joint Exhibit 59, the Supreme Court properly looked to the defendant's choice to record sums which he paid toward the purchase and maintenance of the subject property as loans to the plaintiff as weighty evidence that those expenditures were, in fact, loans. Similarly, the court correctly determined that the defendant's calculation of "Final Balance after real estate transfer" was explicable only if, as the plaintiff claimed, the equity in the property belonged to the plaintiff.
" ‘The statute of frauds prohibits the conveyance of real property without a written contract’ " ( Gendler v. Guendler, 174 A.D.3d 507, 509, 107 N.Y.S.3d 300, quoting Pinkava v. Yurkiw, 64 A.D.3d 690, 692, 882 N.Y.S.2d 687 ; see General Obligations Law § 5–703[3] ). However, " ‘[n]othing contained in [ General Obligations Law § 5–703 ] abridges the powers of courts of equity to compel the specific performance of agreements in cases of part performance’ " ( Korman v. Corbett, 183 A.D.3d 608, 610, 123 N.Y.S.3d 192, quoting General Obligations Law § 5–703[4] ; see Zito v. County of Suffolk, 106 A.D.3d 814, 815, 964 N.Y.S.2d 644 ). Thus, "the statute of frauds is not a defense to a properly pleaded cause of action to impose a constructive trust on real property" ( Ubriaco v. Martino, 36 A.D.3d 793, 794, 828 N.Y.S.2d 490 ).
A party who relies on the part performance exception must demonstrate that his or her actions are "unequivocally referable" to the oral agreement which he or she seeks to establish (see
Messner Vetere Berger McNamee Schmetterer Euro RSCG v. Aegis Group, 93 N.Y.2d 229, 235, 689 N.Y.S.2d 674, 711 N.E.2d 953 ; Weiss v. Halperin, 149 A.D.3d 1143, 1145, 53 N.Y.S.3d 176 ; Barretti v. Detore, 95 A.D.3d 803, 806, 944 N.Y.S.2d 166 ). " ‘Unequivocally referable’ conduct is conduct which is inconsistent with any other explanation" ( Barretti v. Detore, 95 A.D.3d at 806, 944 N.Y.S.2d 166 [internal quotation marks omitted]). "It is insufficient that the oral agreement gives significance to plaintiff's actions. Rather, the actions alone must be unintelligible or at least extraordinary, explainable only with reference to the oral agreement" ( Gendler v. Guendler, 174 A.D.3d at 509, 107 N.Y.S.3d 300 [internal quotation marks omitted]; see Anostario v. Vicinanzo, 59 N.Y.2d 662, 664, 463 N.Y.S.2d 409, 450 N.E.2d 215 ).
"Significantly, the doctrine of part performance ‘is based on principles of equity, in particular, recognition of the fact that the purpose of the Statute of Frauds is to prevent frauds, not to enable a party to perpetrate a fraud by using the statute as a sword rather than a shield’ " ( Pinkava v. Yurkiw, 64 A.D.3d at 692, 882 N.Y.S.2d 687, quoting Nicolaides v. Nicolaides, 173...
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