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Konstantin GEYMAN, Plaintiff, v. Mary J. AGOSTINI, et al., Defendants.
The following papers numbered NYSCEF Document Numbers 19 to 65 were read on the motions by:
(1) 2028 Grove LLC (“Grove”), to dismiss the complaint pursuant to CPLR 3211[a]; to dismiss plaintiff's demand for legal fees as against Grove pursuant to CPLR 3211[a]; to dismiss all fraud allegations and all cause of action sounding in fraud as against Grove pursuant to CPLR 3211[a] and 3016; to dismiss plaintiff's second cause of action pursuant to CPLR 3211[a]; and to cancel the notice of pendency pursuant to CPLR 6514[a]; and
(2) Sharestates Investments LLC (“Sharestates”), to dismiss the complaint pursuant to CPLR3211[a][ , and 3015[b], and to cancel the notice of pendency; and
(3) Mary J. Agostini to dismiss the complaint pursuant to CPLR 3211[a]; to dismiss plaintiff's demand to recover legal fees as against Agostini pursuant to CPLR 3211[a]; to dismiss plaintiff's second cause of action pursuant to CPLR 3211[a]; and for costs and disbursements with respect to this motion.
Notices of Motions - Affidavits - Exhibits NYSCEF Doc. Nos. 19-29, 37-49
Answering Affidavits - Exhibits NYSCEF Doc. Nos. 51-62
Reply Affidavits NYSCEF Doc. Nos. 63-65
Upon the foregoing papers, it is ordered that the motions are combined herein for disposition, and determined as follows:
This is an action for specific performance of a contract to purchase premises known as 2028 Grove Street, in Ridgewood, Queens County, New York (“premises” or “property”). A Judgment of Foreclosure and Sale was signed to foreclose on a tax lien on the premises, owned by Mary J. Agostini, on March 3, 2017. Thereafter, on May 12, 2017, the subject property was sold at a foreclosure sale to a third-party bidder, Nison Badalov, for the sum of $1,000,000. On March 30, 2017, prior to the sale, but after the signing of the Judgment of Foreclosure, Agostini entered into a contract to sell the premises to plaintiff Konstantin Geyman for the price of $1,100,000.
On June 2, 2017, Geyman brought an Order to Show Cause to enjoin all parties from transferring the property and for leave to intervene in the matter. The court signed the Order to Show Cause and granted a Temporary Restraining Order, enjoining all parties as well as the successful bidder from transferring title to the subject premises. Geyman there, asserted that he had an interest in the subject property pursuant to the March 30, 2017 contract, and argued that he should be allowed to be a part of the action.
The Court, in a decision by Justice Carmen Velasquez, dated September 29, 2017, noted the following:
Under RPAPL 1311, persons holding title to the premises or acquiring any right to or lien on the property subsequent to a mortgage should be made defendants in the foreclosure action (Polish Natl Alliance of Brooklyn, U.S.A. v White Eagle Hall Co., Inc., 98 AD2d 400,404 [2d Dept 1983] ). However, where an interest in the property is obtained after a mortgagee filed a notice of pendency, such parties need not be joined in a foreclosure action (RPAPL 1353; Greenpoint Sav. Bank v McMann Enters., Inc., 214 AD2d 647, 648 [2d Dept 1995]; Polish Natl Alliance of Brooklyn, U.S.A. v White Eagle Hall Co., Inc., 98 AD2d at 404; Westchester Fed. Sav. & Loan Assn. v H.E.W. Constr. Corp., 29 AD2d 670, 671 [2d Dept 1968] ).
The Court (Velasquez, J.) held that since the summons, complaint, and notice of pendency in the foreclosure action were filed with the Clerk of the Court on June 16, 2015, and Geyman's contract with Agostini was signed on March 30, 2017, that Geyman had acquired his interest in the property after the notice of pendency was filed and therefore was not entitled to intervene.
On or about December 6, 2017, the parties to the foreclosure action entered into a Stipulation filed January 3, 2018, whereby the successful bidder at the foreclosure sale withdrew his bid, defendant Agostini redeemed the property and the foreclosure action was discontinued. The property was then deeded to 2028 Grove St. LLC, and on or about December 28, 2017, Grove St. LLC entered into a mortgage agreement with Sharestates, for the sum of $1,402,000.00.
Plaintiff commenced the instant action seeking specific performance of the contract. The first cause of action alleges fraud. Plaintiff's second cause of action is for civil conspiracy. Plaintiff's third cause of action is for breach of the implied covenant of good faith and fair dealing. As provided above, defendants separately move for dismissal of the complaint on various grounds. Plaintiff opposes the motions.
Under the doctrine of collateral estoppel, plaintiff should not be allowed in this action to raise any of the issues he unsuccessfully litigated in his motion to intervene in the related foreclosure action (see Manhattan School of Music v Solow, 106 AD2d 624 [2d Dept 1984] ). Collateral estoppel, or issue preclusion, “precludes a party from re-litigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party * * *, whether or not the tribunals or causes of action are the same” (Parker v Blauvelt Volunteer Fire Co., Inc., 93 NY2d 343, 349-50 , citing Ryan v New York Tel. Co., 62 NY2d 494, 500  ). The doctrine applies if the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action (Ryan v New York Tel. Co., supra, at 500–501). “[T]he burden rests upon the proponent of collateral estoppel to demonstrate the identicality and decisiveness of the issue, while the burden rests upon the opponent to establish the absence of a full and fair opportunity to litigate the issue in [the] prior action or proceeding” (id., at 501).
In the prior proceeding, the Court addressed Geyman's rights as pertaining to the Grove property based on his acquisition of an interest in the property after the notice of pendency in the foreclosure action was filed. The present complaint is virtually a verbatim repetition of the claims asserted in the prior motion. Thus, the factual issues dispositive of the rights of Geyman as pertaining to the Grove property being raised in the instant action were necessarily decided in the prior motion to intervene.
Moreover, plaintiff has failed to meet his burden of establishing that he lacked a full and fair opportunity in the prior proceeding to litigate the foregoing issues and thereby avoid the preclusive effect of an adverse determination of those issues. Nothing prevented him from fully litigating the grounds he advances for invalidating the sale. Indeed, in his submissions, made part of the record here, plaintiff raised the very same legal and factual issues in asserting that he had certain rights that now form the basis of his current action. Thus, plaintiff not only had the opportunity to litigate all of the constitutional issues he is now raising, but also availed himself of that opportunity. Consequently, plaintiff may not now re-litigate these issues (see, Parker v Blauvelt Volunteer Fire Co., Inc., 93 NY2d 343, 350  ).
In short, the dispositive factual and legal issues in plaintiff's instant specific performance claim, are identical to the allegations previously decided against plaintiff in the prior motion to intervene. Therefore, the denial of plaintiff's motion to intervene in the foreclosure action bars plaintiff's claim in this action for specific performance, under the doctrines of res adjudicata and collateral estoppel (see, Manhattan School of Music v Solow, supra ). Accordingly, the branches of the motions which are to dismiss count one of the complaint pursuant to CPLR 3211[a], are granted.
As contended in the affirmation of Helmut Borchert, Esq., in his compelling, well-written, and thoroughly researched affirmation on behalf of defendant 2028 Grove LLC, the unopposed branches of the motions seeking dismissal of plaintiff's demand for legal fees, is also granted as dictated by prevailing law (see, U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 NY3d 592, 597-598 ; Hooper Assoc. v AGS Computers, 74 NY2d 487, 491 ; Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21-22 ; RAD Ventures Corp. v Artukmac, 31 AD3d 412, 414 [2d Dept 2006]; Levine v Infidelity, Inc., 2 AD3d 691, 692 [2d Dept 2003] ) [“Attorneys' fees and disbursements are incidents of litigation which the prevailing party may not collect from the loser unless such an award is authorized by agreement between the parties, by statute, or by court rule].
The branches of the motions seeking dismissal of plaintiff's conclusory fraud claims are granted. Fraud requires showing “a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff, and damages” (Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559  ). For fraudulent inducement, “plaintiffs must show misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury” (Shea v Hambros PLC, 244 AD2d 39, 46 [1st Dept 1998] ).
For fraud-based claims, the CPLR, in addition, requires that “the circumstances constituting the wrong shall be stated in detail” (CPLR 3016[b] ). “[C]omplaints based on fraud which fail in whole or in part to meet this special test of factual pleading have consistently been dismissed” (Megaris Furs, Inc. v Gimbel Bros., Inc., 172 AD2d 209, 210 [1st Dept 1991] ). A cause of action must be dismissed where, as here, “sufficient factual allegations of even a single element are lacking” (Shea v Hambros PLC, 244 AD2d at 46). Here, plaintiff's conclusory allegations that fail to detail defendants' fraud with sufficient particularity are insufficient to withstand a motion to dismiss (Carlson v Am. Int'l Grp., Inc., 30 NY3d 288, 310  ).
The branches of the motions seeking dismissal of the second cause of action for civil conspiracy, are granted as unopposed, and otherwise on the merits (see Barns & Farms Realty, LLC v Novelli, 82 AD3d 689, 691 [2d Dept 2011] [New York does not recognize civil conspiracy to commit a tort as an independent cause of action] ).
The branches of the motions which are to cancel the Notice of Pendency are granted (see CPLR 6514[a] [notice of pendency must be cancelled when action is abated] ). A notice of pendency is proper only in actions “in which the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property” (CPLR 6501). CPLR 6514(a) provides that, the court “shall direct any county clerk to cancel a notice of pendency, if ․ [such] action has been settled, discontinued or abated”.
This Court notes that the contract between Geyman and Agostini was not recorded thus depriving Sharestates of any record notice of Geyman's alleged interest in the premises. Plaintiff's failure to record his contract is fatal as against Sharestates (see RPL 294 (An unrecorded contract of sale is unenforceable against a bona fide purchaser); TCJS Corp. v Koff, 74 AD3d 1188, 1189 [2d Dept 2010] ).
New York is a “race-notice” state (see CPLR 6501; Goldstein v Gold, 106 AD2d 100, 101–102 [2d Dept 1985], affd. 66 NY2d 624 ; Matter of Jenkins v Stephenson, 293 AD2d 612 [2d Dept 2002] ), and plaintiff “having failed to avail [himself] of the protection of either Real Property Law §§ 291 or 294, the [plaintiff] may not successfully contend that [its] filing of a notice of pendency serves as a substitute for the recording of a conveyance or a contract” (Finkelman v Wood, 203 AD2d 236, 237–238 [2d Dept 1994]; see 2386 Creston Ave. Realty, LLC v M–P–M Mgt. Corp., 58 AD3d 158, 160–161 [1st Dept 2008] ). “Such notices have as their general object the preservation of existing property rights and do not affect the merits of those interests” (Varon v Annino, 170 AD2d 445, 446 [2d Dept 1991] ).
In any event, the complaint is hereby dismissed, and the notice of pendency is therefore cancelled.
Accordingly, it is
ORDERED that the complaint is dismissed; and
ORDERED, that the January 12, 2018 Notice of Pendency, docketed by the Queens County Clerk on February 6, 2018, filed by plaintiff Konstantin Geyman for real property located at 2028 Grove Street, Ridgewood, NY 11385 (Block 3385, Lot 32, County of Queens), is cancelled.
The foregoing constitutes the decision, order, and opinion of the Court.
Salvatore J. Modica, J.
Response sent, thank you
Docket No: 701702/2018
Decided: October 03, 2018
Court: Supreme Court, Queens County, New York.
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