| Barretti v Detore |
| 2012 NY Slip Op 03390 [95 AD3d 803] |
| May 1, 2012 |
| Appellate Division, Second Department |
| Philip Barretti, Appellant, v Dominick Detore et al.,Respondents, et al., Defendants. (Action No. 1.) CML Loan Fund I, LLC, Respondent, v 156/158Clove Road Holdings, LLC, et al., Defendants, and Philip Barretti, Appellant. (Action No.2.) |
—[*1] Thomas S. Kyle, Staten Island, N.Y., for Dominick Detore, 156/158 Clove Road Holdings,LLC, Janine Detore, and Family Car Wash, respondents in action No. 1. Salamon, Gruber, Blaymore & Strenger, P.C., Roslyn Heights, N.Y. (Sanford Strenger andMichael C. Sferlazza of counsel), and Kriss & Feuerstein, New York, N.Y., for CML Loan FundI, LLC, respondent in action Nos. 1 and 2.
In an action, inter alia, to impose an equitable mortgage upon real property with priority overall other mortgages and liens (action No. 1), and a related action, inter alia, to foreclose amortgage (action No. 2), Philip Barretti, the plaintiff in action No. 1 and a defendant in actionNo. 2, appeals from (1) an order of the Supreme Court, Richmond County (McMahon, J.), datedJune 22, 2010, which, in action No. 1, in effect, converted the motion of the defendant CMLLoan Fund I, LLC, pursuant to CPLR 3211 (a) (1) and, in effect, pursuant to CPLR 3211 (a) (5),to dismiss the complaint insofar as asserted against it in action No. 1, into a motion for summaryjudgment dismissing the complaint insofar as asserted against it in that action, and thereupongranted the motion, (2) an order of the same court dated August 3, 2010, which, in action No. 1,granted that branch of the motion of the defendants Dominick Detore, 156/158 Clove RoadHoldings, LLC, Janice Detore, and Family Car Wash, LLC, which was for summary judgmentdismissing the complaint insofar as asserted against the defendant Dominick Detore in action No.1, and (3) an order of the same court dated June 22, 2010, which, in action No. 2, granted themotion of the plaintiff CML Loan Fund I, LLC, to dismiss his counterclaims in that actionpursuant to CPLR 3211 (a) (4), and to dismiss his affirmative defenses in that action pursuant toCPLR 3211 (a) (1) and (7), and, in effect, pursuant to CPLR 3211 (b).
Ordered that the order dated June 22, 2010, issued in action No. 1, is modified, [*2]on the law, by deleting the provision thereof which, in effect,converted the motion of the defendant CML Loan Fund I, LLC, pursuant to CPLR 3211 (a) (1)and, in effect, pursuant to CPLR 3211 (a) (5), to dismiss the complaint insofar as asserted againstit in action No. 1, into a motion for summary judgment, and thereupon granted the motion, andsubstituting therefor provisions granting that branch of the motion which was, in effect, pursuantto CPLR 3211 (a) (5) to dismiss the complaint insofar as asserted against the defendant CMLLoan Fund I, LLC, and denying, as academic, that branch of the motion which was pursuant toCPLR 3211 (a) (1) to dismiss the complaint insofar as asserted against the defendant CML LoanFund I, LLC; as so modified, the order dated June 22, 2010, issued in action No. 1, is affirmed;and it is further,
Ordered that the order dated August 3, 2010, is affirmed; and it is further,
Ordered that the order dated June 22, 2010, issued in action No. 2, is affirmed; and it isfurther,
Ordered that one bill of costs is awarded to the respondents appearing separately and filingseparate briefs.
In the complaint in action No. 1, the plaintiff, Philip Barretti, alleges that he and thedefendant Dominick Detore (hereinafter Detore) were informal business partners engaged in ajoint venture, pursuant to which they split the profits realized from certain real estatetransactions. Barretti allegedly purchased two adjoining parcels of real estate on Staten Island in2006 (hereinafter the subject properties). After Barretti allegedly agreed to sell the subjectproperties to Detore for the sum of $1,450,000, Barretti transferred the deeds for the subjectproperties to Detore, purportedly with the understanding that Detore would make monthlypayments to Barretti in satisfaction of the purchase price, although the complaint does not specifythe amount, term, or annual interest rate of this loan. Detore allegedly orally agreed with Barrettito execute a purchase money mortgage on the subject properties, as security for his indebtedness.The complaint concedes, however, that no such mortgage was ever executed.
In action No. 1, Barretti, inter alia, sought to impose an equitable mortgage on the subjectproperties, for which Detore had transferred his interest to his limited liability company, thedefendant 156/158 Clove Road Holdings, LLC (hereinafter Clove Road Holdings). In that action,Barretti also sought a judgment prioritizing such equitable mortgage over all other interests,liens, and mortgages on the subject properties. As the holder of a recorded mortgage on thesubject properties, the defendant CML Loan Fund I, LLC (hereinafter CML), moved to dismissthe complaint in action No. 1 insofar as asserted against it pursuant to CPLR 3211 (a) (1) and, ineffect, pursuant to CPLR 3211 (a) (5), contending that Barretti's alleged mortgage interest failedto comply with the statute of frauds (see General Obligations Law § 5-703), andthat any unrecorded mortgage interest held by Barretti was subordinate to its recorded mortgageunder the race-notice recording statute (see Real Property Law § 291). Thedefendants Detore, Janice Detore, Clove Road Holdings, and Family Car Wash, LLC (hereinaftercollectively the Detore defendants), separately moved for summary judgment dismissing thecomplaint insofar as asserted against them in action No. 1, contending that Barretti transferredthe subject properties to Detore in exchange for certain other real property, pursuant to alike-kind exchange under the Internal Revenue Code (26 USC) § 1031, and that Detorenever promised to execute a mortgage in Barretti's favor on the subject properties.
The Supreme Court, in an order dated June 22, 2010, issued in action No. 1, in effect,converted CML's motion to dismiss pursuant to CPLR 3211 (a) (1) and, in effect, pursuant toCPLR 3211 (a) (5), into a motion for summary judgment, and thereupon granted the motion. Indoing so, the Supreme Court erred, as it did not provide adequate notice to the parties (seeCPLR 3211 [c]), and none of the recognized exceptions to the notice requirement wasapplicable (see CPLR 3211 [c]; Mihlovan v Grozavu, 72 NY2d 506, 508 [1988];Velez v Captain Luna's Mar., 74AD3d 1191 [2010]; NeurologicalServs. of Queens, P.C. v Farmingville Family Med. Care, PLLC, 63 AD3d 703, 704[2009]).
Nonetheless, even in the context of a motion pursuant to CPLR 3211, dismissal of thecomplaint in action No. 1 is appropriate, since it is clear from the allegations of the complaintand Barretti's papers opposing CML's motion that Barretti's alleged mortgage interest is barred by[*3]the statute of frauds (see General Obligations Law§ 5-703). Barretti's alleged mortgage interest, which was premised entirely on a purportedoral agreement, failed to comport with the requirement in the statute of frauds that theconveyance be in writing and be subscribed by the person granting the interest (seeGeneral Obligations Law § 5-703 [1]; Sleeth v Sampson, 237 NY 69, 72[1923]; Hallaway Props. v Bank of N.Y., 155 AD2d 897 [1989]).
An agreement which violates the statute of frauds may nonetheless be enforceable "wherethere has been part performance 'unequivocally referable' to the contract by the party seeking toenforce the agreement" (Luft v Luft,52 AD3d 479, 481 [2008], quoting Messner Vetere Berger McNamee Schmetterer EuroRSCG v Aegis Group, 93 NY2d 229, 235 [1999]; see General Obligations Law§ 5-703 [4]; Pinkava vYurkiw, 64 AD3d 690, 692 [2009]). " 'Unequivocally referable' conduct is conductwhich is 'inconsistent with any other explanation' " (745 Nostrand Retail Ltd. v 745 Jeffco Corp., 50 AD3d 768, 769[2008], quoting Richardson & Lucas, Inc. v New York Athletic Club of City of N.Y., 304AD2d 462, 463 [2003]). Here, in his complaint in action No. 1, and in opposition to CML'smotion, Barretti failed to allege acts of partial performance that were unequivocally referable tothe alleged mortgage agreement sufficient to obviate the need for a writing. Barretti's allegedadvancement of a loan to Detore in the amount of $1,100,000 is insufficient to constitute partialperformance (see Sleeth v Sampson, 237 NY at 73), as are the allegations that Detorepartially performed by making three payments to Barretti in July and August 2009. Those threepayments, remitted over a period of two months several years after the alleged loan, for vastlydifferent amounts, and which contained no references to the alleged loan, did not "constitute therequisite unequivocal acts relating to the purported oral agreement" for a loan obligating Detoreto make monthly payments (Nicolaides v Nicolaides, 173 AD2d 448, 451 [1991]; see Singh v Kur, 64 AD3d 697,698 [2009]; Philip F. Alba, P.C. v Lindenman, 289 AD2d 550 [2001]).
Accordingly, the Supreme Court should have granted that branch of CML's motion whichwas, in effect, pursuant to CPLR 3211 (a) (5) to dismiss the complaint in action No. 1 insofar asasserted against it. In light of this determination, the Supreme Court should have denied, asacademic, that branch of CML's motion which was pursuant to CPLR 3211 (a) (1) to dismiss thecomplaint in action No. 1 insofar as asserted against it.
The Supreme Court properly granted that branch of the motion of the Detore defendantswhich was for summary judgment dismissing the complaint insofar as asserted against Detore inaction No. 1. The Detore defendants established Detore's prima facie entitlement to judgment asa matter of law by demonstrating that Detore never signed a document granting Barretti amortgage encumbering the subject properties (see General Obligations Law §5-703 [1]), and that the subject properties were actually transferred in exchange for certain otherreal property, pursuant to a like-kind exchange pursuant to Internal Revenue Code (26 USC)§ 1031. In opposition, Barretti failed to raise a triable issue of fact as to whether there wasan enforceable contract under the doctrine of part performance (see Singh v Kur, 64AD3d at 698; Philip F. Alba, P.C. v Lindenman, 289 AD2d 550 [2001]; Nicolaides vNicolaides, 173 AD2d at 450-451).
In action No. 2, brought by CML against, among others, Barretti and the Detore defendants,CML sought to foreclose upon its recorded mortgage on the subject properties. Contrary toBarretti's contentions, the Supreme Court properly granted that branch of CML's motion whichwas to dismiss his counterclaims asserted in action No. 2 pursuant to CPLR 3211 (a) (4), sincethe relief sought in those counterclaims was substantially the same as the relief sought by Barrettiagainst CML in action No. 1 (see CPLR 3211 [a] [4]; Coppa v Fabozzi, 5 AD3d 718 [2004]; Benenson v SKEKAssoc., 293 AD2d 694 [2002]). Moreover, as the affirmative defenses raised by Barrettiagainst CML in action No. 2 were dependent upon the enforceability of his alleged mortgageinterest, and as discussed above, that alleged mortgage violates the statute of frauds, the SupremeCourt properly granted that branch of CML's motion which was to dismiss those affirmativedefenses, in effect, pursuant to CPLR 3211 (b) (see generally Galasso, Langione & Botter, LLP v Liotti, 81 AD3d880, 882 [2011]; Coppa v Fabozzi, 5 AD3d at 718). Thus, we need not reach thosebranches of CML's motion which were to dismiss those affirmative defenses pursuant to CPLR3211 (a) (1) and (7). Florio, J.P., Balkin, Belen and Chambers, JJ., concur.