Opinion
No. 20579/13.
11-03-2014
YOMI HOMES, INC., Plaintiff, v. Herman DURAND and Olga Durand, Defendants.
Opinion
The following papers numbered 1 to 11 read herein:
| Papers | Numbered |
|---|---|
| Notice of Motion/Order to Show Cause/Petition/Cross Motion and Affidavits (Affirmations) Annexed | 1–4 |
| Opposing Affidavits (Affirmations) | 5–7, 8–9, |
| Reply Affidavits (Affirmations) | 10 |
| Affidavit (Affirmation) |
Other Papers Defendants' Memorandum of Law11
Upon the foregoing papers, Juan A. Cruz (Mr. Cruz or movant) moves, by order to show cause, for an order to intervene in this action as a necessary and/or interested party as of right, pursuant to CPLR 1012(a)(2) or, in the alternative, for an order to intervene in this action as a necessary and/or interested party by permission, pursuant to CPLR 1013, and to allow him to serve and file the attached proposed answer to the complaint or to deem the instant order to show cause, with supporting papers, as his answer, and for a preliminary injunction staying defendants Herman Durand and Olga Durand (defendants) from encumbering, selling, assigning or otherwise transferring ownership and/or control of the real property with the street address 337 South 5th Street, Brooklyn, New York, 11211 to any party, for value, by gift, or otherwise.
Facts and Procedural History
This action involves property located at 337 South 5th Street in Brooklyn. The property was purchased by defendants for $5,000.00 from the City of New York on June 11, 1982 at an auction. The deed for the property was signed by the City of New York and contained three main covenants, as follows:
“1. The purchasers covenanted and agreed “not to sell, transfer, exchange, or otherwise dispose or lease all or substantially all of the Premises to any person or entity that owned the Premises within the three-year period immediately prior to the City's acquisition of title through tax foreclosure proceedings;”
2. The purchasers covenanted and agreed “that within two (2) years from the date of this deed, the Buyer[s] will comply with the Repair Agreement on file with the City's Department of Housing Preservation and Development and recorded as a part of the purchase money mortgage referred to herein;”
3. The purchasers covenanted and agreed “not to sell, transfer, exchange, or otherwise dispose or lease all or substantially all of the Premises for a period of three (3) years from the date of this Deed or from the date of obtaining a Certificate of Occupancy for the building(s) on the Premises, whichever is later, without the prior written approval of the City's Department of Housing Preservation and Development” (emphasis added).
The deed provided that these covenants ran with the land, and was recorded with the City Registrar on August 17, 1982.
According to the sworn affidavit of defendant Herman Durand, after defendants purchased the property from the City, Mr. Cruz offered to purchase it from them. Defendants explained to Mr. Cruz that “any sale would have to be completed after a Certificate of Occupancy was obtained” (Aff., Mr. Herman Durand). Mr. Cruz “understood this point ....“ (id. ).
According to Mr. Cruz's sworn affidavit, at some unidentified point in time (albeit before December 13, 1988), Mr. Cruz purchased the property from defendant Herman Durand for $50,000.00. Mr. Cruz states that a document dated December 13, 1988 memorialized an agreement between him and Mr. Durand for the purchase of the property. The document provides as follows:
Exh. B, Order to Show Cause
“PREMISES: 339 SOUTH 5TH STREET, BROOKLYN, NEW YORK
SELLER: HERMAN DURAND
BUYER: JUAN A. CRUZ
CLOSED: DECEMBER 13, 1988 at the offices of JOHN SHEEHAN, 42–20 Broadway, Long Island City, New York
PRESENT: IRVING COHEN, JUAN A. CRUZ, JOHN SHEEHAN, HERMAN DURAND, and EVELYN FORTI
PURCHASE PRICE: $50,000.00
DOWN PAYMENT: $5,000.00
BALANCE: $45,000.00
$50,000.00
DISBURSEMENTS:
To: Barristers Abstract
For: Fee Insurance $439.00
R.E. Taxes 1988/89 $311.50
(2nd, 3rd, 4th qtrs.)
Recording & Other
Charges $186.00 $936.50
To: Evelyn Forti
For: Gratuity $50.00
To: Forman & Ziff, Esqs. $850.00
TOTAL DISBURSEMENTS $1,836.50
“By agreement of the parties, there were [sic] no adjustment of rents, real estate taxes, water and sewer or any other.
On this date the parties entered into an agreement with respect to 337 South 5th Street, which also has been contracted for sale. 337 South 5th Street cannot close until the New York City Department of Housing Preservation and Development gives its approval to the sale or three (3) years after a Certificate of Occupancy (C of O) is obtained.
Herman Durand hired and paid in full Architect Gerald Goldstein to determine what work would be necessary to obtain a C of O. Juan Cruz agreed to undertake the necessary repairs, etc., in exchange for a $15,000.00 reduction in the purchase price of $50,000.00.
Additionally on this date Juan Cruz paid $15,000.00 to Herman Durand in exchange for the right to collect the rents at the premises. Mr. Cruz has all the rights and obligations as if he were the owner of the premises.
The agreement is summarized as follows:
Purchase Price: $50,000.00
Down Payment($5,000.00)
Renovation Credit($15,000.00)
Paid on this Date($15,000.00)
Balance Due at Closing $15,000.00” (emphasis added).
Mr. Cruz's sworn affidavit further states, and it is undisputed by defendants, that Mr. Durand executed a document acknowledging that he and Mr. Cruz had “signed a contract to sell and purchase [the ... property] on November 21, 1988.” The purchase price was $50,000.00. This document, which is neither dated nor notarized, provides as follows:
“AGREEMENT between HERMAN DURAND and JUAN CRUZ with respect to building known as 337 South 5th Street, Brooklyn, New York.
The parties signed a contract to sell and purchase the aforesaid premises on November 21, 1988. The total price is $50,000, of which $5,000 has already been paid on contract, leaving a balance of $45,000. Inasmuch as JUAN CRUZ has agreed to do whatever construction work is necessary in the premises to obtain a certificate of occupancy from the City of New York and obtain their approval for a transfer, he is given a credit of $15,000 off the purchase price, thus leaving a balance of $30,000. Upon the execution hereof, he will pay HERMAN DURAND the additional sum of $15,000, thus leaving a balance of $15,000.
That $15,000 will be paid to HERMAN DURAND when, as and if he is able to deliver to JUAN CRUZ a good and marketable title to the premises. JUAN CRUZ shall be entitled to collect all rents in the premises. However, JUAN CRUZ shall also be required to pay all expenses for the premises such as providing services to the tenants such as heat and whatever else the landlord is supposed to supply to the tenants, including the paying of the taxes and the water and sewer on the premises.
This agreement is intended to be an amendment of the contract referred to herein to the extent it has been amended.
The parties will close title when New York City approves the sale” (emphasis added).
Exh. C, Order to Show Cause
The document is signed by Mr. Durand and Mr. Cruz.
According to the sworn affidavit of Mr. Durand, his attorney, Mr. John J. Sheehan, informed the New York City Department of Housing Preservation and Development that an architect-Mr. Gerald I. Goldstein-had been retained, that renovation work had started, and that Mr. Cruz “tried to work with [Mr. Goldstein] to obtain a Certificate of Occupancy.”
By letter dated December 7, 1988, Mr. Sheehan requested “transfer information” on the subject property on behalf of defendants from the Central Sales Unit of the City of New York. Mr. Sheehan advised the City that defendants “had completed the rehabilitation [of the property] but [were] not in receipt of a new Certificate of Occupancy (CO) as required,” although defendants had “retained an architect and [had] filed plans with the Department of Buildings.” On January 17, 1989, in response to Mr. Sheehan's inquiry, Ms. Rose Brown, Director of the Central Sales Unit of the Department of Housing Preservation and Development, advised Mr. Sheehan that defendants were required to submit a new Certificate of Occupancy to the Central Sales Unit before the premises could be sold. She further advised that:
“The new prospective buyer will be bound to the owner-occupancy agreement. Enclosed please find a copy of the terms and conditions outlining such. They will be required to submit social security numbers and daytime and evening telephone numbers and a copy of the recorded new deed.”
At this time, the Durands need to submit a copy of the Altered Building Application and filing receipt that was submitted to DOB.
By document dated November 16, 1993, Mr. Durand acknowledged a balance of $4,000.00 on the purchase price of the property. The handwritten document, signed by Mr. Cruz and Mr. Durand, which is not notarized, provides as follows:
“To All Partys [sic] Concern [sic]:
This is to inform you that Juan A. Cruz have [sic] giving in payments eleven thousand dollar [sic] to Herman Durand from the total of Fifteen Thousand Dollars leaving me owing him a total [s]um of Four Thousand Dollar [sic].”
Exh. D, to Order to Show Cause
According to Mr. Cruz's sworn affidavit, on July 14, 1998, Mr. Durand executed a notarized document acknowledging that a balance of $4,000.00 remained outstanding on the purchase price of the property. This document provides as follows:
“To Whom it May Concern:
I, Hernan [sic] Durand, state that I have sold the premises located at 337 South 5th St Brooklyn N.Y. 11211, to Mr. Juan A[sic] Cruz and have been paid in full for the sale. I assign all rights to Mr. Cruz including the Eviction of any tenant for rents in arrears.
Any questions please contact me at 718–388–4819.”
Exh. E, Order to Show Cause
According to the sworn affidavit of Mr. Cruz, “[f]or various reasons, efforts to have a C of O issued for the subject premises were unsuccessful; however Juan A. Cruz has been in notorious, continuous, uninterrupted and exclusive possession of the subject premises since 1988 and has paid any and all expenses appurtenant to ownership since that time.” Mr. Cruz annexes a “sampling of bills paid by [him] ... including but not limited to a tax lien on the subject premises.”
Exh. G, Order to Show Cause [sampling of bills]
With respect to the Certificate of Occupancy (hereinafter the CO), Mr. Goldstein, (the architect hired by Mr. Durand 1988 to “perform work with respect to the application to obtain a Certificate of Occupancy for the property”), avers in his own sworn affidavit that in January, 1989, he received a copy of the letter from the Central Sales Unit, New York City (above), advising defendants that they would have to submit a new CO to the Central Sales Unit before the premisses could be sold. Mr. Goldstein states that during the next four years, he spoke to Mr. Cruz about the plans to obtain a CO, and that while plans and documents were submitted to the Building Department over the next four years, a CO for the premises was never obtained.
On or about February 18, 2013, Mr. David Ettedgui, officer of plaintiff (Yomi Homes, Inc.), avers in his sworn affidavit that defendants (the sellers) entered into a written agreement with Fuzion Lounge & Restaurant, Inc. (Fuzion) (the buyer) for the sale of the property. As part of the agreement, Fuzion agreed to pay defendants $525,000.00. Fuzion tendered to defendants the sum of $5,000.00 as a deposit to be held in escrow until the completion of the sale, and this deposit was “retained by the [d]efendants, and/or [d]efendant's [sic] attorney.” Thereafter, Fuzion assigned the rights, title and interest of the contract to plaintiff in exchange for $30,000.00. Twenty-five thousand dollars ($25,000.00) of this amount was for the rights of assignment, and $5,000.00 was to cover the down payment originally paid by Fuzion to the defendants.
On or about April 18, 2013, defendants consented to this assignment. However, according to Mr. Ettedgui, defendants refused to close upon the contract of sale, despite his repeated requests to defendants' counsel to close on the real estate transaction in accordance with the contract. Mr. Ettedgui also avers that plaintiff had fulfilled all of its obligations and was never in default of the contract, and was always ready and willing to proceed pursuant to the terms of the contract. Mr. Ettedgui further states that “[i]n attempting to prepare for the closing, it was necessary to resolve the issues regarding the deed's restrictive covenants, prohibiting the [d]efendants from transferring the [s]ubject [p]remises for a period of no less than three years from the issuance of a Certificate of Occupancy.” He and his attorneys “were able to work with the New York City Department of Housing Preservation and Development (N.Y.C DHPD) to obtain a Release of Repair Agreement, Owner Occupancy Agreement and Termination of Deed Covenants' “ within a few months. In exchange for this release, plaintiff paid $4,525.00 as the Release's referenced liquidated damages, based upon a mortgage services payoff letter provided by the NYC DHPD (Exh. C to Plaintiff's Opposition). However, according to plaintiff's attorney and Mr. Ettedgui, defendants refused to close upon the contract of sale, despite plaintiff's repeated requests to defendants' counsel to close on the real estate transaction in accordance with the contract, and the instant action followed.
On or about November 13, 2013, plaintiff commenced the instant action against defendants seeking specific performance, breach of contract, repayment of the $5,000.00 down payment, and costs and attorney's fees. Thereafter, according to Mr. Ettedgui, he and defendants were in the process of resolving the matter in its entirety and proceeding with the closing. Mr. Ettedgui states that “[a] stipulation of settlement had already been drafted and signed by the [d]efendants and their real estate attorney, on or about March 6, 2014” and that the “matter was drawing to a swift end, and the closing was anticipated to take place swiftly.” Pursuant to this stipulation, plaintiff agreed to purchase the property for $640,000.00, which was $115,000.00 more than the original purchase price, and plaintiff would not receive any credit for the $5,000.00 it paid to Fuzion for the down payment.
Subsequently, Mr. Cruz made the instant motion to intervene as a necessary party in this action, to allow him to serve and file an answer, and for a preliminary injunction staying defendants from selling and/or transferring the property.
Arguments
In support of his motion, Mr. Cruz argues that any contract of sale between plaintiff and defendants is unenforceable and/or and void because he purchased the property from defendants for $50.000.00. He cites the agreement for the sale of the property which was memorialized by document dated December 13, 1988, and the other documents noted above evidencing that he paid for the property in full. He also notes that a deed evidencing the transfer of the property from defendants to him was never drafted or recorded because of the restrictive covenants in the deed between defendants and the City, dated June 11, 1982, which prohibited the transfer of title for a period of no less than three years from the issuance of a CO for the property.
Mr. Cruz also asserts that while efforts to obtain the CO were unsuccessful, he has been in notorious, continuous, uninterrupted and exclusive possession of the property since 1988, and has paid all expenses appurtenant to the property. As such, he contends that he is the equitable owner of the property despite the fact that a deed memorializing the transfer was not recorded. In the alternative, he contends that his ownership derives from his adverse possession of the property.
With respect to the preliminary injunction, Mr. Cruz states that plaintiff and defendants “will close title to the subject premises at any time, causing [him] ... irreparable harm.”
In opposition, defendants argue that Mr. Cruz cannot show that he is entitled to obtain the property by adverse possession since he entered the property with the permission of the owner and made an offer to purchase it (i.e., the possession was not hostile or adverse).
Defendants also assert that Mr. Cruz may not claim the property on the basis of a constructive trust because Mr. Cruz tried to enter into a contract to purchase the property but failed to fulfill a condition precedent, namely to obtain the CO, nor does Mr. Cruz claim he had a confidential or fiduciary relationship with defendants.
In addition, defendants contend that Mr. Cruz has no right to obtain a preliminary injunction because he failed to obtain the deed, and that in any event, the statute of limitations ran long ago on any right to enforce a purported “contract” or an “amended contract.”
Finally, defendants argue that: 1) Mr. Cruz has not established irreparable injury because he has not shown that he has a legal basis to proceed in this case; 2) he cannot show the probability of success on the merits for the same reason; and 3) the equities do not favor Mr. Cruz because he failed to obtain the CO years ago and therefore could not seek specific performance even if the statute of limitations had not already run, which it did decades ago.
Plaintiff also opposes Mr. Cruz's motion, first arguing that allowing Mr. Cruz to intervene would impose undue delay and would substantially prejudice plaintiff, who has expended much time and funds to purchase the property. With respect to Mr. Cruz's request for an injunction, plaintiff asserts that Mr. Cruz does not have a real and substantial interest in the outcome of this action. First, plaintiff argues that Mr. Cruz cannot establish a constructive trust as the basis for an injunction because there already exists an agreement between Mr. Cruz and defendants, which also precludes a claim for unjust enrichment. In addition, plaintiff argues that even assuming the written agreement proffered by Mr. Cruz is valid, Mr. Cruz would have to proceed under a claim for breach of contract. Second, plaintiff contends that Mr. Cruz cannot show irreparable injury because his claims are compensable with money damages. Third, plaintiff points out that Mr. Cruz claims to be the equitable title holder of the property since the November 1988 written agreementover two decades ago. However, plaintiff contends that if Mr. Cruz sought to have himself declared the title holder, he should have brought such a cause of action years ago. In this regard, plaintiff implies that Mr. Cruz does not have clean hands because while Mr. Cruz is attempting to enforce an agreement he alleges to be valid, he failed to comply with his obligations pursuant to that agreement, namely Mr. Cruz does not explain why he failed to obtain the CO. Fourth, plaintiff contends that Mr. Cruz's claim of adverse possession is without merit because Mr. Cruz does not and has never possessed the property because it is used as a rental property occupied solely by tenants. In this regard, plaintiff notes that the checks submitted by Mr. Cruz, which he claims represent payments associated with the property, list his address in Kunkletown, PA. Plaintiff further asserts that Mr. Cruz's claim of ownership has never been such that defendants, as legal title holders, could have a cause of action for ejectment against Mr. Cruz, an element of a claim for adverse possession. In his reply, counsel for Mr. Cruz argues that: 1) Mr. Durand does not deny the authenticity of any of the documents proffered by Mr. Cruz to demonstrate the existence of a contract for the sale of the property to Mr. Cruz, or payment for the property; 2) that defendants' claim that a sale could only take place if the CO was obtained fails because Mr. Durand acknowledged the sale of the property to Mr. Cruz in the July 14, 1998 writing, and “it was merely the deed formally evidencing the transaction that could not be executed until the conditions set forth in the restrictive covenant were satisfied,” 3) that Mr. Cruz has a real and substantial interest in the outcome of this proceeding; 4) that Mr. Durand's failure to deny the authenticity of Mr. Cruz's evidence of a contract establishes a likelihood of success on the merits with respect to proving his equitable interest in the property; 5) that Mr. Cruz's equitable interest in the property demonstrates irreparable harm if the sale to plaintiff is permitted to proceed; 6) that the equities favor Mr. Cruz since the value of the property has greatly appreciated since he purchased the property for $50,000.00; (7) that the statute of limitations for Mr. Cruz's claims has been tolled because his claim to ownership of the property was not challenged until he learned of the proposed sale to plaintiff; 8) that Mr. Cruz has established a constructive trust because (a) Mr. Durand does not dispute the existence of a confidential relationship with Mr. Cruz and “acknowledged receipt of the necessary consideration underlying his promise and the transfer of ownership of said [property],” and (b) appreciation in the value of the property would unjustly enrich defendants if the sale went through; 9) that Mr. Cruz established his adverse possession claim (and his claim of equitable ownership) because he states that he was in exclusive possession of the property and paid all expenses appurtenant to its ownership, which Mr. Durand does not deny; and 10) that the relief Mr. Cruz seeks can only be granted in equity, not in money damages.
Plaintiff also asserts that Mr. Cruz's proposed counterclaim seeking a declaratory judgment to quiet title to the property (in asking that this court render an ultimate decision making him the equitable owner of the property) is time-barred. Specifically, plaintiff claims that this claim is barred by the applicable 10–year statute of limitations (CPLR 212[a] ); that Mr. Cruz has failed to show that he holds title to the property, and in fact, acknowledges, that he has never held title; and that therefore any proceeding for declaratory relief to quiet title is time-barred.
It seems that Mr. Cruz is arguing that he did not have to obtain the CO before the sale of the property could take place, and that the restrictive covenant so indicating only meant that it was the deed (evidencing the transaction) which could not be formally executed until the conditions set forth in the restrictive covenant were satisfied.
Analysis
“Upon a timely motion, a person is permitted to intervene as of right in an action involving the disposition of property where that person may be adversely affected by the judgment” (Wells Fargo Bank, Natl. Assn. v. McLean, 70 AD3d 676, 676 [2010], citing CPLR 1012[a][3] ). Further, “a court, in its discretion, may permit a person to intervene, inter alia, when the person's claim or defense and the main action have a common question of law or fact” (Wells Fargo Bank, Natl. Assn., at 676–677, citing CPLR 1013 ). “Whether intervention is sought as a matter of right under CPLR 1012(a), or as a matter of discretion under CPLR 1013, is of little practical significance since a timely motion for leave to intervene should be granted, in either event, where the intervenor has a real and substantial interest in the outcome of the proceedings” (id. at 677 ). Moreover, “[i]n exercising its discretion, the court shall consider whether the intervention will unduly delay the determination of the action or prejudice the substantial rights of any party” (id. ).
Here, Mr. Cruz has not established that he has a real and substantial interest in the outcome of this action because he has failed to proffer any legal theory upon which he can base his claim to the subject property. First, although Mr. Cruz contracted to purchase the property, he has failed to demonstrate that he is the title holder of the property. “It is well established that transfer of title is accomplished only by the delivery and acceptance of an executed deed” and that a conditional delivery of a deed is unenforceable (ERHAL Holding Corp. v. Rusin, 229 A.D.2d 417, 419 [1996] ). In this regard, Mr. Cruz does not present any deed to the court and in fact concedes that “a deed evidencing transfer was never drafted or recorded” (Ward Aff., ¶ 10). Further, the 1988 “amendment” to the contract of sale does not constitute a deed to the property. In any event, this 1988 amendment states that “[t]he parties will close title when New York City approves the sale,” but New York City never approved the sale-and over 25 years have elapsed since the execution of that amendment. Moreover, the statute of limitations to enforce a contract or the amended contract ran long ago.
Secondly, Mr. Cruz is not entitled to obtain a constructive trust with respect to the property. “To obtain the remedy of a constructive trust, a plaintiff generally is required to demonstrate four elements: (1) a fiduciary or confidential relationship between the parties, (2) a promise, (3) a transfer of an asset in reliance upon the promise, and (4) unjust enrichment flowing from a breach of the promise” (County of Nassau v. Expedia, Inc., Ad3d, 2014 N.Y. Slip Op 06049 [2d Dept 2014], revd on other grounds 2014 N.Y. Slip Op 06050 [2d Dept 2014] ). In this regard, “a fiduciary relationship may be found ... in transactions concerning common ownership of property and in close family ties with a history of trust in the mutual actions of the parties” (Miller v. Merrell, 73 A.D.2d 128, 132 [1980] ). Here, Mr. Cruz does not allege that he had a fiduciary or confidential relationship with defendants, and he has not demonstrated that a fiduciary relationship exited between him and defendants. In any event, as plaintiff asserts, since there was a written agreement between Mr. Cruz and defendants, any claim for equitable relief, namely a constructive trust, is precluded (see generally Moloney v. Weingarten, 118 A.D.2d 836, 837 [1986], lv denied 69 N.Y.2d 608 [1987] ). Moreover, Mr. Cruz cannot claim unjust enrichment because there was a written agreement (see IDT Corp. v. Morgan Stanley Dean Witter & Co., 12 NY3d 132, 142 [2009] [“Where the parties executed a valid and enforceable written contract governing a particular subject matter, recovery on a theory of unjust enrichment for events arising out of that subject matter is ordinarily precluded”] ).Mr. Cruz's argument-that defendants do not deny that they sold the property to Mr. Cruz-does not support Mr. Cruz's claim for a constructive trust, as the analysis above indicates. Similarly, in response to defendants' reliance upon the restrictive covenant in the deed to the property indicating that a sale to Mr. Cruz could not take place until a CO was obtained, Mr. Cruz argues that “it was merely the deed formally evidencing the transaction that could not be executed until the conditions set forth in the restrictive covenant were satisfied.” However, Mr. Cruz provides no support for this claim, and the deed for the property clearly states that the property could not be sold until a CO was obtained. Next, Mr. Cruz claims that Mr. Durand's failure to dispute the existence of a confidential relationship with him, “wherein [Mr. Durand] promised to convey the subject premises and acknowledged receipt of the necessary consideration underlying his promise and the transfer of ownership of the said premises,” establishes the elements of a constructive trust. However, for the reasons noted above, Mr. Cruz failed to establish his entitlement for a constructive trust in support of his motion. As such, defendants were not required to show that Mr. Cruz was not entitled to a constructive trust. In any event, defendants have done so, and they have, contrary to Mr. Cruz's claim, denied that a confidential or fiduciary relationship between them and Mr. Cruz existed. They even note that a business relationship is not considered a confidential relationship under New York law. As to Mr. Cruz's claim that appreciation of the market value of the property would result in unjust enrichment to Mr. Durand, Mr. Cruz cannot prove the element of unjust enrichment because of the written agreement he had with defendants.Finally, since Mr. Cruz has failed to demonstrate that he has a viable claim for a constructive trust, his contention that the statute of limitations has not run for this claim has been rendered moot. Accordingly, plaintiff correctly argues that a constructive trust is inappropriate to enforce the alleged intent of the 1988 agreement between Mr. Cruz and defendants.
Thirdly, Mr. Cruz has not established that he is entitled to the property based upon the legal theory of adverse possession. “A claim of adverse possession requires the establishment of five elements. The possession must be hostile and under claim of right; it must be actual; it must be open and notorious; it must be exclusive; and it must be continuous for a period of 10 years” (Fitzgerald v. Conroy, 15 AD3d 534, 534–535 [2005] ). Moreover, “[i]f any one of these elements is not established by clear and convincing evidence, the claim of adverse possession must fail” (id. at 535 ). Here, Mr. Cruz has not demonstrated that his possession of the property was hostile or was under claim of right because he concedes that he purchased the property from defendants (although the purchase was not consummated) (see Orsetti v. Orsetti, 6 AD3d 683, 684 [2004] ). “An offer to purchase prior to the running of the statutory period defeats an adverse possession claim because it negates the element of hostility by undermining notice to the owner that another is possessing his land under claim of title” (Knapp v. Hughes, 32 Misc.3d 1216(A), *15–16 [Sup Ct, Broome Cty 2011], citing Larsen v. Hanson, 58 AD3d 1003, 1005 [2009] ). As such, the offer by Mr. Cruz to purchase the property in 1988 or 1989 defeated any claim based on adverse possession for a later period.
In any event, the court notes that in opposition to Mr. Cruz's motion, Mr. Goldstein states in his sworn affidavit that: “It was always my understanding that Mr. Durand and his wife were the owners of the property” and that “Mr. Cruz never stated to me that he was the owner of the property ... [or] that he intended to make a claim that he was the owner of the property.” Further, Mr. Durand avers in his sworn affidavit that he had “authorized Juan Cruz to come on the premises as my representative and he was authorized to work with my architect to try and obtain a Certificate of Occupancy.” He also states that “[i]t was the understanding of both Juan Cruz and myself that he was trying to purchase the property and that we were cooperating with each other, not that there was a hostile claim.” Finally, as noted above, Mr. Goldstein states that after January, 1989, he had spoken to Mr. Cruz about the plans to obtain a CO, and that while plans and documents were submitted to the Building Department over the next four years, a CO for the property was never obtained. Consequently, Mr. Cruz's entry onto the property was that of representative of Mr. Durand and as a prospective purchaser, and thus it was not hostile, rather it was permissive.
With respect to the arguments made by Mr. Cruz in his reply, Mr. Cruz claims, through his attorney, that he has established a prima facie case for adverse possession because Mr. Durand does not deny that he (Mr. Cruz) was in exclusive possession of the property and that he (Mr. Cruz) paid all expenses appurtenant to it. However, it is Mr. Cruz who did not establish that he has a viable claim for adverse possession for the reasons stated above. Moreover, Mr. Cruz did not establish that he was in exclusive possession of the premises since 1988. Finally, although the court has already held that Mr. Cruz has failed to demonstrate that he has a viable claim for adverse possession, Mr. Cruz's contention that the statute of limitations for this claim has been tolled by the fraud of Mr. Durand has been rendered moot, and is unsupported by any facts or legal authority.
Based upon the foregoing, plaintiff has failed to show that he is entitled to intervene in this action. In addition, intervention under these circumstances would “unduly delay the determination of the action” and “would prejudice the substantial rights of [the parties]” (Wells Fargo Bank, Natl. Assn. v. McLean, 70 AD3d at 677 ). In this regard, the record reveals that the parties to this action have signed a stipulation of settlement on March 6, 2014 and were proceeding to the closing. If Mr. Cruz were permitted to intervene, he would delay the proceedings, which have already been substantially delayed. In addition, plaintiff has expended substantial time and effort in attempting to purchase this property, and would suffer considerable prejudice if it were not permitted to proceed.
In light of the above analysis, plaintiff is not entitled to a preliminary injunction. “Although the purpose of a preliminary injunction is to preserve the status quo pending a trial, the remedy is considered a drastic one, which should be used sparingly” (Trump on the Ocean, LLC v. Ash, 81 AD3d 713, 715 [2011] ). In general, “the decision to grant or deny a preliminary injunction lies within the sound discretion of the Supreme Court” (id. ). “In exercising that discretion, the Supreme Court must determine if the moving party has established: (1) a likelihood of success on the merits, (2) irreparable harm in the absence of an injunction, and (3) a balance of the equities in favor of the injunction” (id . ).
Here, since Mr. Cruz has not established any legal basis which would entitle him to proceed in this action, he has not established the likelihood of success on the merits or that he will be irreparably harmed if an injunction is not granted. Moreover, Mr. Cruz has not shown that his damages, if any, are not compensable in money damages. Thus, even if Mr. Cruz had any viable claim against defendants, such as for recovery of expenses or breach of contract, he would have an adequate remedy at law.However, this does not mean that he is entitled to the drastic remedy of a preliminary injunction.
Further, Mr. Cruz has not demonstrated that the equities are in his favor because he abandoned his attempts to obtain the CO for the property, and provides no explanation for this failure, only stating that “for various reasons” he was unable to do so, without setting forth any of the efforts he made. In contrast, defendants will likely suffer substantial prejudice if the planned sale is not permitted to proceed.
The court has considered any remaining arguments of Mr. Cruz and finds them to be without merit.
In view of the foregoing, the motion of Mr. Cruz to intervene in this action, to serve and file an answer, and for a preliminary injunction is denied.
This constitutes the decision and order of the court.