Scott E. Mollen

Landlord-Tenant—Familial Relationship Requires Dismissal of Licensee Proceeding— Adoptive or Biological Relationship Irrelevant

An owner (sister) commenced a licensee holdover proceeding, after service of a 10-day notice to quit, seeking to evict her respondent brother from a studio apartment. The sister, the record owner of the subject two-family home, alleged that she had revoked the brother's license to occupy the apartment. The 76-year-old brother was a disabled Vietnam War veteran. He had continuously lived in the house for more than 60 years.

The brother moved to dismiss the proceeding pursuant to CPLR §3211(a)(2) for lack of subject matter jurisdiction. He contended that his sister had obtained the deed to the home by fraud. Alternatively, he sought an order transferring the proceeding to the Surrogate's Court, where the brother had brought an order to show cause seeking an order directing the transfer of the home to him, based upon the sister's alleged fraud in obtaining a deed from their father. The sister cross-moved for “reissuance and execution of the warrant of eviction which had previously been granted on default.”

The sister alleged “she had the…studio apartment built in the garage for [the brother] in or about 2016.” The brother alleged that he paid “$1,000 monthly for fuel and $600 for the entire house.” The relationship between the two parties had been extremely contentious for several years.

The brother had been injured in the Vietnam War, when a grenade exploded and he suffered from “mental illness.” The brother claimed that “on numerous occasions [sister] would call the police and complain that [brother] had threatened to harm her.” The sister had previously sought to have the brother “committed” pursuant to the New York State Mental Hygiene Law (MHL). However, a court had found that the brother “did not have a mental illness which would result in harm to himself or others as defined by the MHL, and the petition was dismissed.”

The brother had filed two petitions in Family Court seeking an order of protection, alleging that the sister was “stealing his personal property while he was away from home, and threatening to have him 'bumped off'” and intended to “'steal his house.'” Those proceedings were dismissed for lack of jurisdiction. The brother also alleged that the stress from the foregoing situation “caused him to have two double coronary by-pass surgeries.”

The brother referred to the owner as “his 'adoptive' sister” and claimed that he did not know that “she was the deed owner” until “May 27, 2016, when he attempted to register his letters of administration with the city of New York.” The sister countered that “she was not adopted and that she and [brother] are biological siblings.” The brother further asserted that “their father had a severe stroke” and “could not have signed the deed transferring the property to [sister].” Their father had died in 2011. Thus, the brother claimed that the transfer of the home was fraudulent.

The court stated that whether the parties are “adoptive siblings or biological siblings” is irrelevant for the purposes of deciding the subject motion. Prior judicial decisions “held that certain types of family members cannot be characterized as licensees subject to eviction pursuant to RPAPL §713(7).” The court explained that:

Courts have…held that certain types of family members cannot be characterized as licensees subject to eviction pursuant to RPAPL §713(7). In a marital relationship, one spouse cannot be considered a licensee of the other spouse for the purpose of commencing such a proceeding…. Couples who live together as domestic partners without marriage have also been precluded from the use of summary licensee proceedings…. Where a petitioner sought to maintain a licensee proceeding against an ex-girlfriend and their two minor children, the court held that although respondent was not his wife, she was more than a licensee and petitioner had an obligation pursuant to Family Court Act §§413 and 513 to support his children financially as well as by providing shelter…. A grandmother may not use a summary proceeding to evict her adult grandsons from a New York City Housing Authority apartment where they were listed in family composition documents.

The court opined that Sirota v. Sirota, 164 Misc2d 966 (Civ. Ct., Kings Co., 1995), affd, 168 Misc2d 123 (App. Term 2d & 11th Jud. Dists 1996), is analogous to the subject case. Sirota involved a father attempting to evict his two adult children who had resided in the family home for nearly 30 years and had taken care of their mother until her death. Based on “marital discord,” the father had left the home before the death of his wife. Sirota held that based on “the familial relationship and the substantial temporal ties to the house, the father could not oust his children by means of a summary proceeding.” The Civil Court had transferred the Sirota proceeding to the Supreme Court.

The subject court viewed the instant proceeding as “analogous” to the aforementioned cases “which involved spouses, ex-partners, children and grandchildren with lifelong or substantial temporal ties to a marital or familial residence.” Thus, the court held that the brother is not a licensee and “his familial relationship with [the sister] and nearly lifelong ties to the [home] remove this proceeding from the court's subject matter jurisdiction.”

Accordingly, the court granted the brother's motion, dismissed the petition and vacated the existing judgment and warrant. Additionally, the court noted that the “both parties are free to pursue” their “remedies in…more appropriate forums” and there is already a pending action in the Surrogate's Court, “which is a court of appropriate jurisdiction for this inter-family matter.” Accordingly, the sister's cross-motion was denied.

Morris v. Morris, Civ. Ct., Bx. Co., Index No. 72014/2016, Weissman, J.

Appraiser's Award Found to be “Irrational”—Award Excluded Commercial Space—Rent Reset Proceeding

This decision involved a special proceeding to confirm an appraisal award arising from a rent reset proceeding. The fee owner (owner) had entered into a long-term ground lease (lease) with the respondent residential cooperative corporation (tenant). The tenant occupied an apartment building located on the subject property, but did not occupy the commercial space which was located on the ground floor and basement. The tenant's rent obligation was to be reset pursuant to a valuation formula and an appraisal process which was incorporated into the lease.

Pursuant to the lease, the owner and the tenant had each appointed a real estate appraiser to ascertain the value of the land and building. After the party appointed appraisers could not reach an agreement with respect to value, they selected a third appraiser to serve as a neutral appraiser (neutral). The neutral's appraisal was to be final and binding on the parties.

The neutral had issued a valuation determination which had been accepted by the owner. The neutral and the owner's appraiser had both included the value of “the Commercial Space (including the retail rent roll)” when they determined the fair market value of the building. In contrast, the tenant's appraiser determined that “the value of the Commercial Space” should be “excluded from the value of the building.” The tenant opposed the petition to confirm on the ground that “the neutral failed to comply with the terms of the lease by including the value of the Commercial Space in its calculation of the fair market value of the building.”

The court explained:

In general, “'the market value of real property is the amount which one desiring but not compelled to purchase will pay under ordinary conditions to a seller who desires but is not compelled to sell'…'Unless there be express provisions to the contrary, the provisions of the lease between the parties insofar as they affect the fair market value of the land must be given effect'”…. Moreover, appraisal determinations will be upheld in the absence of irrationality, fraud, bad faith or bias….

The court found that the lease terms manifest an intention to “exclude the existing Commercial Space from the value of the building for the purpose of calculating the building's fair market value.” The lease specified that “for the relevant time period, the annual rent” was to be “36 percent of the 'FMV [fair market value] index' multiplied by the Mortgage Index Percentage.” The FMV Index was to be “computed in two components, the value of the land plus the value of the building.” When valuing the land, the appraisal provision required that the appraisal ignore “all other factors, including the existence of the lease. There is no exclusion of any value attributable to the commercial tenancies.” However, the court noted that with respect to valuing the building component, the lease did not embody “a similar provision which would avoid consideration of the existence of encumbrances on the building.” The lease did not provide “without regard to any other liens and encumbrances.” Rather, the appraisal procedure stated that “[f]or the purposes of this lease, the value of the building shall mean the fair market value of the building existing on said land.”

The court reasoned that the failure “to include such a provision requires that the Commercial Space, comprised of an underground parking garage, a Citibank branch, a Dunkin Donuts and UPS store, leased by the owner to other parties not party to the co-op lease, is not to be considered in the valuation of the building.” Thus, in valuing the building, the court held that “the appraisal must be conducted with regard to the existence of the lease, which excludes the commercial space….”

The parties had agreed that “the neutral included the value of the Commercial Space,” i.e., included the retail rent roll, in determining the fair market value of the building. Since the neutral appraiser “failed to comply with the terms of the lease, the appraisal award is wholly irrational and cannot stand.”

101 W. Owner I LLC v. 715-723 Sixth Ave. Owners Corp., Sup. Ct., N.Y. Co., Index No. 650905/18, decided Aug. 2, 2018, Ramos, J.

Mortgages—Court Rejected Plaintiff's Claim that He Lacked Notice Based on Notary's Illegible Signature On Recorded Document

After the court had dismissed the plaintiff's complaint which sought to invalidate mortgages and loan agreements relating to the subject property (property) and declaratory judgments that “his rights to the property are superior” to those of the defendant lender, the plaintiff moved to amend his complaint to add claims seeking to invalidate a “consolidated extension, and modification agreement” (2005 CEMA) and a 2005 consolidated mortgage (mortgages) that the prior owner had executed in favor of the lender. The plaintiff had not attacked the validity of the 2005 consolidated mortgage in his original complaint. The lender argued that the plaintiff's proposed amended complaint would be “futile as it fails to state a claim.”

The plaintiff contended that since the prior owner's “signatures on the recorded copies of those documents were 'not properly witnessed, notarized, or acknowledged' those documents 'do not meet the requirements for recording in the Kings County land records,” and therefore cannot be enforced again him.

New York Real Property Law (RPL) §291 specifies that a conveyance of real property within New York State, may be recorded “on being duly acknowledged by the person executing the same… and such acknowledgement with proof duly certified when required by this chapter.” RPL §298 provides that acknowledgement of proof of a conveyance of real property may be made by a notary public. The court noted that “a conveyance of real property may be recorded when signed by the party executing the conveyance and acknowledged by a notary public.”

The plaintiff argued on the instant motion, that the mortgages were defective and were invalid as to the plaintiff, notwithstanding that they had been recorded in “the public registry and plaintiff actually reviewed them prior to his purchase of the property.” The plaintiff claimed that he lacked “proper notice of the [mortgages] because the versions of the documents viewable by him in the public record did not show the identifying information of the notary public who acknowledged (the prior owner's) signature.” The court noted that the “scribbled signature appears in the notary blocks on the [mortgages]….” However, the notary's “printed name, notary number, county of qualification, and date of commission expiration do not appear.”

The plaintiff had not claimed that there was anything improper with the notarizations on the underlying documents. Rather, he argued that he cannot read the notary's signature and view the notary's identifying information on the face of the documents in the public record and therefore he could not be “charged with notice of those documents.”

The plaintiff cited no authority for his position that the public record “must provide him with notice of the identifying information of a notary public acknowledging these documents.” The court found that the public record contains such information. The plaintiff admitted that the “tax affidavit was filed on the public record with the [mortgages] and was executed contemporaneously with them.” The tax affidavit, underneath the notary signature contained the notary's name, license number and notary expiration date. Thus, the court found that even if the public record must provide a subsequent purchaser with such information, the plaintiff had that information.

The plaintiff also argued that the recorded 2005 consolidated mortgage was not “recordable” and therefore was invalid as to him under RPL §329. The court distinguished the plaintiff's authorities, noting that such cases involved fundamental defects with the underlying record. Plaintiff's cases involved, e.g., a mortgage signed pursuant to a forged power of attorney, a party's acknowledgement that was not done before a notary, a memorandum that had not been acknowledged by the parties, a contract that had not been signed by the mortgagor, an agreement not been signed by the property owner, a notary whom did not witness mortgage execution, an executory contract that was unacknowledged and a process server's affidavit that had not been fully executed before a notary. Here, plaintiff had not made a claim of such defect.

Thus, the court denied the plaintiff's motion to amend the complaint.

Additionally, the plaintiff had suggested that the absence of the notary's information “itself” invalidated the acknowledgement. The court determined that such contention was contrary to New York Law. New York Law provides as follows, with regard to the notary public's execution of his or her duties:

In exercising his powers pursuant to this article, a notary public, in addition to the venue of his act and his signature, shall print, typewrite, or stamp beneath his signature in black ink, his name, the words “Notary Public State of New York,” the name of the county in which he originally qualified, and the date upon which his commission expires…. No official act of such notary public shall be held invalid on account of the failure to comply with these provisions. If any notary public shall willfully fail to comply with any of the provisions of this section, he shall be subject to disciplinary action by the secretary of state. In all the courts within this state the certificate of a notary public, over his signature, shall be received as presumptive evidence of the facts contained in such certificate; provided, that any person interested as a party to a suit may contradict, by other evidence, the certificate of a notary public.

N.Y. Exec. Law §137.

Plotch v. Wells Fargo Bank N.A., USDC, EDNY, Case No. 17-CV-00309, Aug. 1, 2018, Gershon, J.

Scott E. Mollen is a partner at Herrick, Feinstein.

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