Opinion
No. 02096/2014.
07-08-2015
Margaret McPadden, Mary McPADDEN Siao, Michael McPadden and Clare Bisulca, Plaintiff, v. Thomas McPADDEN, Defendant.
Klein & Vizzi, L.L.P. by John J. Vizzi, Esq., West Babylon. Novick & Associates by Kimberly Schechter, Esq., Huntington.
Klein & Vizzi, L.L.P. by John J. Vizzi, Esq., West Babylon.
Novick & Associates by Kimberly Schechter, Esq., Huntington.
JAMES C. HUDSON, J.
Upon the following papers numbered 1–43; read on this Motion/Order to Show Cause for Summary Judgment; Notice of Motion/ Order to Show Cause and supporting papers 1–17; Notice of Cross Motion and supporting papers 0; Answering Affidavits and supporting papers 18–36; Replying Affidavits and supporting papers 37–43; Other; (and after hearing counsel in support and opposed to the motion),
"Let parents bequeath to their children not riches, but the spirit of reverence."
The Court cannot help but observe that Plato's immortal sentiment, if sincerely felt, would calm the discord in what should be a loving family.
The case at bar is a dispute between siblings over the disposition of their late parents home. The locus in quo was originally owned (presumably as tenants in the entirety), by James H. McPadden and Anna A. McPadden. Subsequently, Mr. McPadden transferred all right title and interest in the property to his wife alone. In contemplation of declining health and possible expenses attending same, in 1997 the McPadden's gathered their eight children together and met with an attorney to discuss the preservation of their assets.
Two documents were produced as a result of this meeting: In 2001, Anna McPadden executed a deed (Plaintiffs' "C") transferring fee simple to Thomas McPadden, with her retaining a life estate for the premises. The second document (executed in January of 2002), is an agreement between Defendant Thomas McPadden and his mother Anna A. McPadden. This provides, inter alia, that "Thomas McPadden further agrees that in the event of a sale of the property during the lifetime of Anna A. McPadden, he will divide his share of the net proceeds into eight shares and shall retain one such equal share for himself and shall give one equal share to each of his siblings who survive him. .....Thomas McPadden further agrees that within two years from the date of death of Anna A. McPadden, he shall pay to his siblings the sum of money equal to 7/8ths (seveneighths) of seventy-five (75%) of the appraised value of the property." (Plaintiffs' "B").
Mrs. Anna McPadden passed away in September of 2011. Her husband had predeceased her. Plaintiffs have made demand for their shares under the agreement. Defendant has not complied with this request. Instead, he avers that he purchased the subject parcel from the decedent for the sum of $150,000.00 (one-hundred, and fifty thousand dollars). Defendant filed a deed in 2008, which reflects that the life estate was removed.
At his examination before trial, Defendant stated that the purported sale of the property for $150,000.00 was pursuant to an oral agreement. Plaintiffs move for summary judgment. Defendant opposes same on the basis of outstanding disclosure and that "... there are material issues of fact with respect to whether the Plaintiffs were aware of the sale of the property ..." (Affirmation dated January 21, 2015, para 3).
Prior to our analysis of the motion papers, the Court would like to commend Mr. Vizzi, and Ms. Schechter, for the eloquence and scholarship in their respective briefs.
Summary judgment is a drastic remedy to be granted only when the Court determines there is no clear triable issue of fact. Even the color of a triable issue forecloses the remedy (Benincasa v. Garrubbo, 141 A.D.2d 636 [2d Dept.1988] ). When applied to an allegation of breach of contract, a prima facie case for summary judgment is satisfied when the movant shows: the existence of the contract, performance pursuant to its terms, and non-performance by the Defendant (Carltun on Bay Kosher Caterers, Ltd. v. Makani, 295 A.D.2d 464, 744 N.Y.S.2d 674 [2d Dept.2002] ). Once the burden has been met, the respondent cannot escape summary judgment "unless [their] opposing papers [raise] genuine factual issues" Badische Bank v. Ronel Systems, Inc. 36 A.D.2d 763, 321 N.Y.S.2d 320 [2nd Dept.1971] ; Leumi Fin. Corp. v. Richter, 24 A.D.2d 855, 264 N.Y.S .2d 707, affd. 17 N.Y.2d 166, 269 N.Y.S.2d 409, 216 N.E.2d 579 ; Stagg Tool & Die Corp. v. Weisman, 12 A.D.2d 99, 102, 208 N.Y.S.2d 585, 588 )."
Initially, the Court notes that Plaintiffs were not signatories to the original contract between Mr. Thomas McPadden and his deceased mother, so their standing to claim a benefit under its terms must be discussed. By way of historical background, the requirement for third-parties to claim contractual privity has long been dispensed with under the rule in Lawrence v. Fox, 20 N.Y. 268, 6 E.P. Smith 268 [1859]. A person seeking to enforce their rights as a "third-party beneficiary must [however] establish (1) the existence of a valid and binding contract between other parties, (2) that the contract was intended for [their] benefit and (3) that the benefit to [them] is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate [them] if the benefit is lost' " (Nanomedicon, LLC v. Research Foundation of State University of New York, 112 AD3d 594, 596, 976 N.Y.S.2d 191[2nd Dept.2013] quoting State of Cal. Pub. Employees' Retirement Sys. v. Shearman & Sterling, 95 N.Y.2d 427, 434–435, 718 N.Y.S.2d 256, 741 N.E.2d 101, quoting, Burns Jackson Miller Summit & Spitzer v. Lindner, 59 N.Y.2d 314, 336, 464 N.Y.S.2d 712, 451 N.E.2d 459 ). "Absent such an intent, the third party is merely an incidental beneficiary with no right to enforce the contract." (Strauss v. Belle Realty Co., 98 A.D.2d 424, 426, 469 N.Y.S.2d 948 (2nd Dept.1983).
Applying this standard, Plaintiffs were clearly intended (as opposed to incidental) beneficiaries of the contract provisions. As such they have standing to enforce its terms (Burns Jackson Miller Summit & Spitzer v. Lindner, supra; Grunewald v. Metropolitan Museum of Art, 125 AD3d 438, 3 N.Y.S.3d 23 [1st Dept.2015] ).
Not withstanding Plaintiffs' status as intended third party beneficiaries, the original promissor and promissee had the power to rescind a contract without the consent of the third party beneficiaries (Miller v. Miller, 82 AD3d 469, 918 N.Y.S.2d 417 [1st Dept.2011] ; In re Gross' Estate, 35 A.D.2d 830, 317 N.Y.S.2d 45 [2nd Dept.1970] ). The question becomes "did the Defendant and decedent rescind or modify the 2002 contract?" For the reasons discussed below, this query must be answered in the negative.
Even though a contract pertaining to the sale of realty must be in writing to be enforceable, the law in New York is equally emphatic that such a contract may be rescinded by the parties via a parol agreement (Rodgers v. Rodgers, 235 N.Y. 408, mod. on rearg. on other grnds., 236 N.Y. 577 ; Schwartzreich v. Bauman–Basch, 231 N.Y.196; Strychalski v. Mekus, 54 A.D.2d 1068, 388 N.Y.S.2d 969 [4th Dept.1976] ). This general rule, however, brooks the following exception; "A written agreement or other written instrument which contains a provision to the effect that it cannot be changed orally, cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought or by his agent." (G.O.L § 15–301[1] ).
Defendant cites to the case of Jones v. Trice, 202 A.D.2d 394, 608 N.Y.S.2d 688 [2nd Dept.1994] for the proposition that a written contract pertaining to an interest in land can be rescinded by the mutual consent of the obligor and obligee. Indeed, that is the principle, broadly stated, in Jones (as well as the other cases cited by defense counsel). What distinguishes the holding of the learned Court from the matter at hand, however, is that the parties in the Jones case had executed a written contract to supercede the earlier one (Id. at 395 ). The remaining cases relied upon by the defense are similarly inapposite.
We draw Defendant's attention to the written contract between Anna McPadden and Thomas McPadden, specifically, paragraph 11: "This agreement constitutes the entire agreement between the parties hereto and may be altered or changed, if such changes are in writing, signed by the parties hereto. " [emphasis ours] (Plaintiffs "B").
Defendant contends that the 2008 Deed constitutes the written agreement required for purposes of G.O.L. § 15–301[1]. We disagree. As correctly asserted by Plaintiffs, the 2008 deed merely conveyed the decedent's life estate to the Defendant. It did not disturb the conveyance of fee simple from the 2002 deed executed in conjunction with the contract. (Plaintiffs' "B") (Ubriaco v. Martino, 36 AD3d 793, 828 N.Y.S.2d 490 [2nd Dept.2007] ).
The sole issue worthy of discussion is whether the doctrine of laches creates a triable issue of fact, precluding summary judgment (Schirano v. Paggioli, 99 A.D.2d 802, 472 N.Y.S.2d 391 [2nd Dept.1984] ). If a party entitled to relief "sleeps on their rights" they will be precluded from enforcing same if the other party has suffered a detriment in reliance thereon (Dwyer by Dwyer v. Mazzola, 171 A.D.2d 726, 567 N.Y.S.2d 281 [2nd Dept.1991] citing 75 NYJur2d, Limitations and Laches, § 330 ):
"The four basic elements of laches are, (1) conduct by an offending party giving rise to the situation complained of, (2) delay by the complainant asserting his or her claim for relief despite the opportunity to do so, (3) lack of knowledge or notice on the part of the offending party that the complainant would assert his or her claim for relief, and (4) injury or prejudice to the offending party in the event that relief is accorded the complainant ." (Id. 727citing, 75 NYJur2d, Limitations and Laches, § 333 ).
Plaintiffs contend that they were unaware of any attempted rescission of the 2002 agreement until 2013. (Affidavit of Mary McPadden Siao dated 2/4/2015, para. 12). Defendant has submitted an affidavit from a Ms. Lucia Cepriano which relates "It was impossible for the siblings not to have known that Mrs. McPadden sold the house to Tom as I was there numerous times when it was discussed. Specifically, I remember one conversation that took place at Therese's house. Clare was there and was present during the planning stages ..." (Affidavit dated 1/20/2015, para. 24). The Defendant has also submitted an affidavit from Monsignor Brendan Riordan stating "Anna made it well known to me that Tommy owned the house." (Affidavit dated 1/21/15 para. 15).
A claim of laches (or equitable estoppel for that matter) cannot be founded upon non-specific promises or understandings. (see, Sanyo Elec., Inc. v. Pinros & Gar Corp., 174 A.D.2d 452, 453, 571 N.Y.S.2d 237 [1st Dept.1991] ). In the case at bar these vague assertions of a modus vivendi, do not create a viable argument for laches when compared with the certitude of the 2002 deed and contract. Moreover, although the defense has tendered proof that his other siblings were made aware that he had conveyed approximately $150,000.00 for the home in 2004, this action preceded Plaintiffs' becoming aware of the conveyance. Thus, Defendant cannot show any detriment inuring against him in reliance of Plaintiffs' refraining from commencing a lawsuit at an earlier time. In short, with the exception of the passage of time, none of the elements of laches have been shown to be present in this matter.
Defendant argues that summary judgment is inappropriate because the depositions of the parties have not been completed. In support of this argument, counsel draws the Court's attention to CPLR § 3212[f], as well as the cases of Estate of Fasciglione, 73 A.D.2d 769, 899 N.Y.S.2d 645 [2nd Dept.2010); Juseinoski v. New York Medical Center of Queens, 29 AD3d 636, 815 N.Y.S.2d 183 [2nd Dept.2006] ; and, Urcan v. Cocarelli, 234 A.D.2d 537, 651 N.Y.S.2d 611 [2nd 1996] ).
In Fasciglione, there is no discussion of the underlying fact pattern. Juseinoski involved the performance of an unauthorized autopsy and the decision to proceed with the procedure, which had a direct bearing on liability, was uniquely within the possession of one party (supra, at 638 ). Urcan was a negligence action.
In contrast to the readily distinguishable authority cited by the defense, the Court is guided by the holding in Westport Ins. Co. v. Altertec Energy Conservation, LLC, 82 AD3d 1207, 921 N.Y.S.2d 90 [2nd Dept.2011]. The lower Court denied summary judgment with leave to renew after discovery was completed. In explaining its reversal of the lower Court, the Appellate Division stated that the respondent had:
"failed to submit any affidavits establishing that facts existed which were essential to justify opposition to the motion but were not in its possession in light of the fact that discovery had yet to be completed (see, CPLR § 3212 [f]; Rodriguez v. DeStefano, 72 AD3d 926, 898 N.Y.S.2d 495 ; Juseinoski v. New York Hosp. Med. Ctr. of Queens, [cite omitted] ). "The mere hope or speculation that evidence sufficient to defeat a motion for summary judgment may be uncovered during the discovery process is insufficient to deny the motion." (Arpi v. New York City Tr. Auth., 42 AD3d 478, 479, 840 N.Y.S.2d 107 ; see, Orange County—Poughkeepsie Ltd. Partnership v. Bonte, 37 AD3d 684, 687, 830 N.Y.S.2d 571.)" (Id . at 1212).
The case law discussed above demonstrates that although summary judgment is appropriately rare, it finds proper application more in instances of breach of contract than in negligence (e.g., Essex Ins. Co. v. Carpentry, 74 AD3d 733, 904 N.Y.S.2d 78 [2nd Dept.,2010] ; Pancake v. Franzoni, 149 A.D.2d 575, 540 N.Y.S.2d 674 [2nd Dept.1989] ).
Based on the forgoing, we find that Plaintiffs have sustained their prima facie burden of demonstrating their entitlement to summary judgment. In response, the Defendant has failed to bring forth evidence which reveals the existence of a triable issue of fact on the issue of liability (Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 508 N.Y.S.2d 923 [1986] ).
The issue of damages, however, does not lend itself so readily to summary relief. Defendant states that he paid the sum of $150,000.00 to the decedent Mrs. McPadden for the purchase of the home. This was in the form of a check to the James H. McPadden Irrevocable Trust (Plaintiff's exhibit "H"). Defendant has averred that this sum is the subject of a claim before the Surrogate (In the Matter of the McPadden Trust, File No.2013–1/A), and that the Plaintiffs in this case "... will be receiving a refund of the Property proceeding." (Affidavit of Thomas McPadden dated 1/21/2015, [para. 49] ). Additionally, the Court is unwilling to accept the appraisal submitted by Plaintiffs as to the value of the locus in quo without affording the Defendant the opportunity to challenge same. We find that this mandates an immediate trial as to the issue of damages and set off (CPLR § 3212[c] ); Horizon Asset Management, LLC v. Duffy, 106 AD3d 594, 967 N.Y.S.2d 17 [1st Dept.,2013] ).
We have considered the remaining contentions of the defense and although presented with skill, they fail to persuade the Court. Therefore, Plaintiffs' motion will be granted to the extent provided herein. It is
ORDERED, that the Court directs judgment be entered in favor of Plaintiffs and against the Defendant on the issue of liability.
ORDERED, that the Defendant's answer is hereby stricken. It is further
ORDERED, that upon the filing of a note of issue and certificate of readiness, this matter will be referred to the Calendar Control Part for a trial on the issue of damages and set off.
The foregoing constitutes the decision and order of the Court.