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Malvia WALKER, Plaintiff, v. Cardinal Johnson BABALOLA,1 Mabadeje G. Demu, Woodbine Estates, Inc., Defendants.
The following is the decision, order and judgment after a non-jury trial in the above captioned matter on the cross claims of Cardinal Johnson Babalola (hereinafter Babalola) against Mabadeje G. Demu (hereinafter Demu).
On February 1, 2006, plaintiff Malvia Walker (hereinafter Walker) commenced the instant action by filing a summons, complaint and a notice of pendency with the Kings County Clerk's Office (KCCO). Sometime thereafter, Walker filed an amended summons and amended verified complaint dated December 12, 2007 against Babalola and Woodbine Estates, Inc. (hereinafter Woodbine).
Walker's amended complaint alleged the following salient facts. Prior to May of 2005, Babalola was the owner of certain real property located at 931 Fulton Street, Brooklyn, New York 11238 that was also known as 488 Waverly Avenue (hereinafter the subject property). In May of 2005, Babalola transferred his interest in the subject property to Walker by a quitclaim deed for valuable consideration. On June 16, 2005, Babalola forged Walker's signature on another quitclaim which purported to show that Walker had transferred Walker's interest in the subject property back to Babalola. Babalola then allegedly used the forged quitclaim deed to borrow money secured by a mortgage and by rents and profits from the subject property.
By order dated May 16, 2007, defendant Demu was permitted to intervene in the instant action. Demu interposed a verified answer with cross-claims against Babalola, among others, dated January 4, 2008.
Woodbine interposed an answer to Demu's cross claims against it and interposed it own cross-claims against Demu dated January 10, 2008.
Defendant Babalola interposed a pleading in response to Demu's cross claims denominated as “Answer To CrossClaims And Crossclaims Against Demu”, dated January 11, 2008.
By notice of motion filed on April 25, 2008 under motion sequence number six, defendant Demu moved for an order: (1) dismissing plaintiff's complaint; (2) dismissing Woodbine's cross claims; (3) dismissing Babalola's cross claims; (4) granting Demu's cross claims; and (5) declaring that all deeds pertaining to the subject property issued subsequent to Demu's deed null and void.
By decision and order dated July 3, 2008 (hereinafter the July 2008 order), Justice Martin M. Solomon decided Demu's motion sequence number six by granting it in part and denying it in part. The Court granted that branch of Demu's motion seeking dismissal of the complaint. The Court also granted Demu's request to strike the deed conveying the subject property to Walker and struck any deeds from Walker to Woodbine and any other subsequent party. The Court denied Demu's request to dismiss the cross claims of Woodbine and Babalola. The Court also deemed Babalola's cross claim against Demu to be the complaint and the cross claim of Demu to be the answer to Babalola's complaint.
By the July 2008 order, Justice Martin M. Solomon deemed Babalola's pleadings, dated January 11, 2008, to be the complaint against Demu. By the same order Justice Solomon deemed Demu's cross-claims, dated January 4, 2008, to be the answer to Babalola's complaint. It is noted that an answer to a complaint is generally issued in response to and after a complaint has been made. Here Demu's pleading dated January 4, 2018, asserts cross claims against Babalola, among others.
Babalola's pleading dated January 11, 2008 addresses the allegation of fact in Demu's pleading and specifically denies the facts alleged in paragraph 13, 14, 17 and 19 of that pleading. It also denominates six affirmative defenses. The first of action is for fraud, the second is for conversion, the third is for a constructive trust, the fourth is for breach of contract and the fifth is denominated as “Holding Out”. The pleading does not denominate any of the above as cross claims.
Demu's pleading dated January 4, 2008, denies the facts alleged in paragraph 5 of Walker's complaint, denominates three affirmative defenses, and asserts cross claim against all the defendants.
By the July 2008 order, the only issues remaining for trial were Babalola's claims asserted against Demu and Demu's claim for a declaration that he is the legitimate owner of the subject property. Both Babalola and Demu are claiming an ownership interest in the subject property, a multi-family property comprising of six residential and two commercial units located at 931 Fulton Street, Brooklyn, New York.
A non-jury trial was conducted on June 4 and 6, 2018. Babalola and Demu both testified. At the close of all the evidence, the Court directed the parties to submit their respective request for finding of fact pursuant to CPLR 4213 (a). Both sides complied by their submissions dated September 6, 2018.
FINDING OF FACT
Babalola and Demu have known each other since at least 1996. Both of them claim title to a specific property located at 931 Fulton Street, Brooklyn, New York. The property is a multi-family building comprised of six residential and two commercial units. Babalola held title to the subject property in his name alone and operated a real estate office and laundromat from the commercial units of the property. Babalola has been a licensed real estate broker since 1997.
Demu operated a tax preparation, travel agency and real estate management office at 763 Fulton Street. Sometime in 1996, Demu met Babalola though his travel agency. On a number of occasions during 1997 through 2003, Demu prepared and filed Babalola's annual New York State and Federal Tax returns.
In or about 2004, Babalola and Demu discussed the possible sale of the subject property and Babalola asked Demu if he knew anyone who would be interested in purchasing. Babalola told Demu that he wanted to be able to stay at the property operating his laundromat and real estate office for five years to restructure himself.
Demu introduced Babalola to a friend by the name of Doctor Ayodeje Lukula (hereinafter Lukala). At the time of the introduction, Lukula and Demu had a Joint Venture Agreement to locate and purchase properties. Babalola was not aware of the relationship between Demu and Lukula and Demu did not disclose the same to him.
Eventually, Babalola agreed to sell the subject property to Demu. In furtherance of same Demu prepared a contract of sale for the subject property (hereinafter the contract). Demu also drafted the deed of transfer dated May 3, 2004. Both Babalola and Demu signed the contract dated May 3, 2004 purporting to sell the property to Demu for the sum $650,000.00. The contract terms included a purchase price of $650,000 which was to be paid in substantial part by assuming payment on the existing mortgages, paying tax liens, water and sewer charges, and an allowance for rent so that Babalola could stay in the subject property. Demu and Babalola signed the contract of sale in Babalola's real estate office at the subject premises. Alvin Rudson Winston, a former school mate and friend of Babalola witnessed the execution of the contract. Karl Collymore, an assistant broker at Babalola's real estate office notarized Babalola and Demu's signatures.
At the same time, Babalola signed a lease for the commercial spaces at the subject property with Demu as the landlord and Babalola as the tenant dated May 3, 2004. The execution of the lease was also witnessed and notarized by Karl Collymore.
In July of 2004, Demu paid $27,2111.62 to IndyMac as part of his obligations to Babalola pursuant to the contract. Demu also paid the real estate taxes on the subject property on July 9, 2004 and the gas bill on August 16, 2004. On September 13, 2004, Demu also paid $30,202.00 to Ocwen Federal Bank to reinstate the mortgage on the subject property. After Demu made these payments, Babalola gave him the deed to the subject property which Demu filed in the office of the registrar on September 7, 2004. After recording the deed Demu continued to make payments towards the mortgage on the subject properly.
Babalola's first cause of action is for fraud. Babalola's fraud claim is premised on the allegation that Demu held himself out to be a lawyer and swindled Babalola to sign the subject contract and commercial lease. A party alleging fraud in the inducement bears the burden of proving the elements thereof by clear and convincing evidence (see Callahan v. Miller, 194 AD2d 904, 905 [3rd Dept 1993]. The elements of fraud require plaintiff to demonstrate that defendants knowingly misrepresented a material fact with the intent to deceive plaintiff and, after having justifiably relied upon such misrepresentation, plaintiff experienced pecuniary loss (see Young v. Williams, 47 AD3d 1084, 1086 [3rd Dept 2008] ).
Babalola testified in sum and substance that he signed the subject contract because he thought that Demu needed the documents to show it to the potential buyer, Lukula. He further testified that he signed the commercial lease with a specific rental amount so that Demu could show Lukula that the subject property was a good investment because it was income producing. This was done even though Babalola was not a tenant of the subject property. Babalola's explanation for signing the commercial lease with himself as a tenant, if believed, would constitute an admission that he knowingly created a false document to misrepresent to a potential buyer that the subject property was producing rental income from him as a tenant for the purpose of inducing a sale. Babalola did not adequately explain why he signed the contract before a notary public which unequivocally contained his name as the seller and Demu's name as the buyer. Babalola admittedly operated a real estate office for years and was involved in the rental and sale of real property. He was, therefore, familiar with the real estate business and with the use of real estate sales contracts.
The Court finds that Demu's testimony regarding the circumstances surrounding the signing of the contract of sale for the subject property and the commercial lease credible. On the other hand, the Court finds Babalola's testimony that Demu fraudulently pretended to be a lawyer and fraudulent induced him to sign the subject contract and commercial lease not credible. The Court further finds that Babalola, as an individual who has operated two distinct businesses, possessed a level of sophistication which rendered his claim of being fooled or defrauded by Demu as highly unlikely and not credible.
At trial Babalola stated that he met Demu on or before 1994 when Demu prepared the tax return for his daughter. Babalola also testified that received $4,500.00 from Demu when he signed the subject contract. At his cross examination Babalola was confronted with two affidavits that he filed in opposition to a motion for summary judgment in the instant action. In one of them he swore that he had known Demu since the time that they both lived in the same town in Nigeria. In the other affidavit Babalola stated that he received no money from Demu when he signed the subject contract. Babalola stated that the aforementioned alleged facts that he swore to in the affidavits were incorrect. He did not adequately explain why he knowingly signed the affidavits containing these incorrect facts.
The Court finds that Babalola's affidavits were wilfully false. The falsus in uno doctrine permits a factfinder to disregard entirely the testimony of a witness who has willfully testified falsely with respect to any material fact. The doctrine, however, is not mandatory, and the court is free to credit any part of a witness's testimony that it deems true and disregard what it deems false (see DiPalma v. State, 90 AD3d 1659 [4th Dept 2011] ). Applying falsus in uno, the Court disregards Babalola's testimony to the extent that it conflicts with Demu's testimony regarding the circumstances of the signing of the subject contract and lease.
Furthermore, Babalola's claim that he did not know what he was signing is unavailing. A signatory to a contract is presumed to know the contents of the instrument that it has signed and to have assented to such terms (Rubens v. UBS, 126 AD3d 421 [1st Dept 2015] citing, AG, British W. Indies Guar. Trust Co. v. Banque Internationale A Luxembourg, 172 AD2d 234, 234 [1st Dept 1991] ).
Babalola's second cause of action is for conversion. A conversion takes place when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person's right of possession (Petrone v. Davidoff Hutcher & Citron, LLP, 150 AD3d 776, 777 [2nd Dept 2017], citing C & B Enters. USA, LLC v. Koegel, 136 AD3d 957, 958 [2nd Dept 2016] ). Two key elements of conversion are (1) plaintiff's possessory right or interest in the property and (2) defendant's dominion over the property or interference with it, in derogation of plaintiff's right (Petrone, 150 AD3d at 777, citing Colavito v. New York Organ Donor Network, Inc., 8 NY3d 43,  ).
Money, if specifically identifiable, may be the subject of a conversion action (Petrone, 150 AD3d at 777 [2nd Dept 2017], citing Simpson & Simpson, PLLC v. Lippes Mathias Wexler Friedman LLP, 130 AD3d 1543, 1544—1545 [4th Dept 2015] ). However, the mere right to payment cannot be the basis for a cause of action alleging conversion since the essence of a conversion cause of action is the unauthorized dominion over the thing in question (CSI Group, LLP v. Harper, 153 AD3d 1314, 1320-1321 [2nd Dept 2017], citing Daub v. Future Tech Enter., Inc., 65 AD3d 1004, 1006 [2nd Dept 2009] ). In other words, tangible personal property or specific money must be involved (CSI Group, LLP, 153 AD3d at 1320-1321, citing Independence Discount Corp. v. Bressner, 47 AD2d 756, 757 [2nd Dept 1975] ). In the case at bar, Babalola presented no evidence demonstrating a cause of action against Demu for conversion.
Babalola's third cause of action is for a constructive trust. “A constructive trust is a fraud-rectifying remedy generally available where, in the context of a confidential relationship, a promisee, in reliance on a promise, transfers something of value, thereby unjustly enriching the promisor” (Schwab v. Denton, 141 AD2d 714, 715 [2nd Dept 1988] ). To establish that there was a transfer in reliance on the promise, it must be shown that the party seeking to impose the constructive trust had some interest in the property prior to obtaining the promise that the property would be conveyed, and that this interest was parted with in reliance on the promise (Bontecou v. Goldman, 103 AD2d 732, 733 [2nd Dept 1984] ). No constructive trust will be imposed by one who has no interest in the property prior to obtaining a promise that such an interest will be given to him (Schwab, 141 AD2d at 715, quoting Matter of Wells, 36 AD2d 471, 474 [4th Dept 1971] ).
The Court did not credit Babalola's claim that Demu held himself as an attorney. Nor did the Court credit Babalola's claim that Demu fraudulently induced Babalola into selling the subject property to Demu. In light of the foregoing, Babalola's testimonial and documentary evidence did not establish a claim for the imposition of a constructive trust.
Babalola's fourth cause of action is for breach of contract. The essential elements of a breach of contract cause of action are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of his or her contractual obligations, and damages resulting from the breach (Victory State Bank v. EMBA Hylan, LLC., 169 AD3d 963 [2nd Dept 2019] ). In light of the foregoing, Babalola's testimonial and documentary evidence did not establish a claim for breach of contract.
Babalola denominated the fifth cause of action as “Holding Out.” The Court assumes that the fifth cause of action is premised on Babalola's claim that Demu was falsely pretending to be a lawyer. To the extent that Babalola was referring to something else, Babalola's testimonial and documentary evidence neither explained nor established the fifth cause of action.
Demu's cross claim as asserted against Babalola is for a declaration that he is the sole rightful owner of the subject property. CPLR 3001 provides that the supreme court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a justiciable controversy whether or not further relief is or could be claimed (see Peters v. Smolian, 154 AD3d 980, 983 [2nd Dept 2017] citing CPLR 3001). To constitute a justiciable controversy, there must be a real dispute between adverse parties, involving substantial legal interests for which a declaration of rights will have some practical effect (see Cong. Machon Chana v. Machon Chana Women's Inst., Inc., 162 AD3d 635 [2nd Dept 2018] quoting Chanos v. MADAC, LLC, 74 AD3d 1007, 1008 [2nd Dept 2010] ).
The Court finds that the dispute between Babalola and Demu regarding ownership of the subject property presents a justiciable controversy for which a declaration of rights will have some practical effect. The Court finds from the credible evidence that Babalola conveyed title to the subject property to Demu by the subject contract dated May 3, 2004 and the deed filed in the office of the registrar on September 7, 2004. The Court further finds that between Demu and Babalola, Demu is the sole owner of the subject property
THE DECISION, ORDER AND JUDGMENT OF THIS COURT IS:
That all the causes of action asserted by Cardinal Johnson Babalola against Mabadeje G. Demu are dismissed; and
That Mabadeje G. Demu is the sole owner of the subject real property located at 931 Fulton Street, Brooklyn, New York 11238.
The foregoing constitutes the decision and order of this Court.
Francois A. Rivera, J.
Response sent, thank you
Docket No: 3385/2006
Decided: March 27, 2019
Court: Supreme Court, Kings County, New York.
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