Wash. Temple Church of God in Christ, Inc. v. Global Props. & Assocs., Inc.

• Decision Date: 18 October 2012
• Docket Number: No. 29690/05.,29690/05.
• Citation: 37 Misc.3d 1211,2012 N.Y. Slip Op. 51997,961 N.Y.S.2d 362
• Parties: WASHINGTON TEMPLE CHURCH OF GOD IN CHRIST, INC., Plaintiff, v. GLOBAL PROPERTIES AND ASSOCIATES, INC., Henry Spitzer and the City of New York,, Defendants. Ticor Title Insurance Company a/s/o Henry Spitzer, Third–Party Plaintiff, Global Properties and Associates, Inc., Third–Party Defendants. Global Properties and Associates, Inc., Fourth–Party Plaintiff, United General Title Insurance Company, Fourth–Party Defendant.
• Court: New York Supreme Court

37 Misc.3d 1211

961 N.Y.S.2d 362

2012 N.Y. Slip Op. 51997

WASHINGTON TEMPLE CHURCH OF GOD IN CHRIST, INC., Plaintiff,

v. GLOBAL PROPERTIES AND ASSOCIATES, INC., Henry Spitzer and the City of New York,, Defendants.Ticor Title Insurance Company a/s/o Henry Spitzer, Third–Party Plaintiff,Global Properties and Associates, Inc., Third–Party Defendants.Global Properties and Associates, Inc., Fourth–Party Plaintiff,United General Title Insurance Company, Fourth–Party Defendant.

No. 29690/05.

Supreme Court, Kings County, New York.

Oct. 18, 2012.

Jonathan M. Cader, Esq., Garden City, for Plaintiff.

Max Markus Katz, P.C., New York City, for Defendant.

DAVID SCHMIDT, J.

The following papers numbered 1 to 5 read on this motion:

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                ¦Notice of Motion/Order to Show Cause/Petition/Cross Motion and    ¦1–3     ¦
                ¦Affidavits (Affirmations) Annexed                                 ¦          ¦
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                ¦Opposing Affidavits (Affirmations)                                ¦4         ¦
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                ¦Reply Affidavits (Affirmations)                                   ¦5         ¦
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                ¦Affidavit                                                         ¦          ¦
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Fourth-party defendant United General Insurance Company (United General) moves for summary judgment, pursuant to CPLR 3212, dismissing the fourth-party complaint of Global Properties and Associates, Inc. (Global) (motion sequence number 9).

Facts and Procedural Background

By deed dated September 27, 1976, the City of New York (the City) transferred title of the property listed as tax map designation Block 1212, Lot 4, in Brooklyn (the Property) to the successful bidder at a public auction, Washington Temple Church of God in Christ, Inc. (Washington Temple), for $850 (the Washington Temple Deed); that deed was recorded on October 21, 1976. By deed dated March 22, 1977, the City erroneously transferred title of the same parcel of Property, at another public auction, to non-party Darrell A. Shavers, for $250 (the Shavers Deed); that deed was recorded on June 16, 1977.

Mr. Shavers died on July 28, 2001. By deed dated December 24, 2004, Geraldine Shaver as Administratrix of the Estate of Darrell A. Shavers, Sr., and Individually, and by quitclaim deed dated January 7, 2005, Regina V. Shavers and Darrell V. Shavers Jr., transferred title to the Property to Global for $180,000 (the Global Deeds); the deeds were both recorded on April 1, 2005. At the time of that purchase, United General issued a title insurance policy to Global. By deed dated June 1, 2005, Global transferred title to the Property to defendant Henry Spitzer for $400,000 (the Spitzer Deed); that deed was recorded on June 13, 2005. At the time of that sale, third-party plaintiff Ticor Title Insurance Company (Ticor) issued a title insurance policy to Mr. Spitzer.

After Washington Temple acquired the property, it was held as a vacant lot continuously used for parking. In February 2005, shortly after it acquired the Property, Global posted a sign indicating that any vehicles parked there would be towed. Thereafter, on September 27, 2005, Washington Temple commenced the instant action against Global, Mr. Spitzer and the City, seeking to quiet title. Global asserted a cross-claim against the City, alleging that in the event that the court found Global liable to plaintiff, “such liability is the direct responsibility and incurred through the fault or acts” of the City, as well as a cause of action sounding in unjust enrichment. Mr. Spitzer also asserted a cross-claim against the City, virtually identical to that interposed by Global, as well as cross-claims against Global (the Washington Temple Action).

In August 2006, Washington Temple filed a motion for summary judgment; various cross motions were filed by the defendants. In a consent order dated January 17, 2007, all of the parties agreed that Ticor could intervene in the main action; by third-party summons and complaint dated February 16, 2007, Ticor commenced such action against Global (the Ticor Action). In its amended third-party complaint, Ticor seeks to recover the monies paid by Mr. Spitzer to Global on the grounds of, inter alia, breach of contract, breach of warranty, unjust enrichment and rescission.

As is relevant herein, by decision dated May 16, 2007, the Honorable Jack M. Battaglia, inter alia, granted Washington Temple's motion for summary judgment on its cause of action for a judgment declaring it to be owner of the Property; dismissed the cross-claims asserted by Global and Mr. Spitzer against the City; denied Global's cross-motion for summary judgment against the City on the issue of liability; granted the City's motion and cross motion for summary judgment; and denied Global's motion to dismiss the third-party complaint of Ticor (the May 16, 2007 Decision). Specifically, as is relevant herein, the Court stated that:

“[T]here can be no recovery here by Global Properties, Spitzer, or Ticor [against the City], because a diligent search of the public record would have revealed the successive deeds to Plaintiff and Shavers, without an intervening conveyance from Plaintiff to the City. At the least, any diligent searcher would have been put to a duty to investigate whether Shaver's estate and heirs held any interest in the Subject Property to convey.” ¹

( id. at 11). In denying Global's pre-answer motion to dismiss the third-party complaint of Ticor, the court stated:

“[T]he third-party action arises out of facts and circumstances that must be characterized as at least unusual, involving a recorded title that provided Global, Spitzer, and Ticor with constructive notice that any interest Global or Spitzer might claim in the Subject Property derived from someone who was not the owner, as well as open and obvious possession of the Subject Property by the owner at all times during the transactional history.”

( Id. 12).

Global subsequently appealed the Court's Decision. By decision and order dated October 14, 2008, the Appellate Division affirmed the May 16, 2007 Decision, holding that Global “was charged with record notice of all matters indexed under the block and lot numbers corresponding to the premises, regardless of whether such information also appeared in its direct chain of title” (55 AD3d 727, 728) (internal citations omitted). The Appellate Division explained that:

“Since it is undisputed that the deed held by Washington Temple was recorded prior to the deed issued to Shavers, Global Properties cannot claim to have lacked knowledge or notice of the deed held by Washington Temple or that Washington Temple would assert a claim for relief.”

( Id.) (internal citations omitted).

On March 6, 2009, Global filed a motion for summary judgment in the Ticor Action and Ticor similarly cross-moved for summary judgment. By decision dated October 2, 2009, the Honorable Lawrence Knipel denied both applications, finding that:

“[M]ultiple outstanding questions of fact necessitate the denial of both Global and Ticor's summary judgment motions. As previously stated, the Court and the Appellate Division found that Global is chargeable with record notice of the Washington deed. Here, there are issues of whether both Global and Ticor are charged with notice of the defect in title at the time of the sale of the property from Global to Spitzer, including whether both parties entered into the contract under a mutual mistake of fact, which consequently voids the contract under the equitable remedy of rescission, or whether the sale from Global to Spitzer was fraudulent as a matter of law. Global argues that Ticor likewise failed to conduct a thorough title examination, which is the superseding cause of Spitzer's purchase, thereby breaking any causal link between Global's conduct and the damages Ticor, as Spitzer's subrogee, alleges it suffered. Consequently, Global's causal connection to Ticor's damages is also subject to resolution by the trier of fact. The Court further finds a question of fact as to whether Ticor was required to tender both insurable and marketable title to Spitzer under the contract's terms ( see Creative Living, Inc. v. Steinhauser, 78 Misc.2d 29 [1974] ).”

(the October 2007 Decision, p. 8–9). Both parties appealed. The Appellate Division affirmed that decision on May 17, 2011, holding that “[u]nder the unusual and particular facts and circumstances of this case, the Supreme Court properly concluded that there were issues of fact warranting denial of the motion and cross motion for summary judgment” (84 AD3d 1066, 1067 [2011] [internal citations omitted] ).

On November 10, 2009, Global commenced a fourth-party action in which it asserts four causes against United General, i.e., two in contract, one in negligence and one in indemnification arising under the policy of title insurance issued by United General to Global on April 1, 2005 (the Fourth–Party Action). The instant motion followed.

United General's Contentions

In support of its motion for summary judgment, United General alleges that on January 10, 2006, Global submitted a title claim to United General, seeking a defense to the Washington Temple Action. By letter dated January 26, 2006, United General denied coverage, based on the fact that Global had conveyed title of the Property, so that the title insurance was terminated. More specifically, United General argues, in reliance upon paragraph 2 of the Conditions and Stipulations of the policy, that pursuant to the...