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TEG N.Y. LLC v. ARDENWOOD ESTATES

March 30, 2004.

TEG N.Y. LLC, an Illinois Limited Liability Company, Plaintiff against ARDENWOOD ESTATES, INC., a New York corporation, HANNA BOKSER, and FIMA BOKSER, Defendants


The opinion of the court was delivered by: DAVID TRAGER, District Judge

MEMORANDUM AND ORDER

Plaintiff TEG N.Y. LLC ("TEG") brings this action for a determination of the ownership rights in four lots of real property in Staten Island against three named defendants: Ardenwood Estates, Inc. ("Ardenwood"), Hanna Bokser, and Fima Bokser. Hanna and Fima Bokser were the two sole shareholders of Ardenwood. TEG seeks to secure title in the property via equitable relief. Alternatively, if the defendants are found to be the rightful owners of any of the lots, TEG seeks monetary relief, arguing that the defendants have been unjustly enriched.

This action involves a dispute over the ownership of four vacant lots of real property ("Lot A"; "Lot B"; "Lot C"; "Lot D"). The "entire" property, that is, the four lots taken together with two vacant parcels ("Parcels I and II"), was allegedly transferred from Ardenwood to Montgomery Ward, Inc. ("MW") in 1993, who then transferred the property to TEG in 2003. TEG claims that an examination of the legal description and survey of the land, attached as Exhibits to a 1992 Stipulation of Agreement, reveal the defendants' intent to convey the entire Page 2 property to MW. On the contrary, defendants claim that they clearly intended to convey solely Parcels I and II, as described by the 1993 Deed.

  For the following reasons, defendants' motion to dismiss should be granted in part and denied in part.

  Background

  The following facts are drawn from the Complaint and, for purposes of this opinion, are presumed to be true. On or about May 11, 1992, M W and defendant Ardenwood entered into a Stipulation of Settlement (the "Stipulation") in the case of Ardenwood Estates, Inc. v. Montgomery Ward, Inc., et al. (N.Y.Sup.Ct. Richmond Cty. 1992), an action arising out of the presence of potential environmental contaminants on the property. Compl. ¶ 12. As part of the Stipulation, Ardenwood transferred title to certain real property, which is at the core of this dispute. Compl. Exhibit 3.

  TEG alleges that Ardenwood agreed to convey the entire property to MW. Id. ¶ 2. The relevant portion of the Stipulation provides that:

  Within sixty (60) days from the date hereof, a closing to transfer title of the premises as set forth in Exhibit A annexed hereto, ("PREMISES"), from ARDENWOOD to MONTGOMERY WARD, shall take place. . . . The sale includes of all [sic] ARDENWOOD'S ownership and rights, if any, in any land lying in the bed of any street or highway, opened or proposed, in front of or adjoining the PREMISES to the center line thereof. It also includes any right of ARDENWOOD to any unpaid award by reason of any taking by condemnation and/or for any damage to the PREMISES by reason of change of grade of any street or highway. ARDENWOOD will deliver at no additional cost to MONTGOMERY WARD, at closing, or thereafter, on demand, any documents which MONTGOMERY WARD may require to collect the award and damages. Page 3

 Compl. Exhibit 3 ¶ 1. Exhibit A to the Stipulation contains two metes and bounds legal descriptions and one survey. Compl. ¶ 14. The two legal descriptions describe Parcels I and II and Lot C. Id. The survey depicts Parcels I and II, and Lots A, B, and D. Id. Therefore, taken as a whole, TEG claims that Exhibit A to the Stipulation describes the entire property and evidences the defendants' intent to convey the entire property: Parcels I and II, and Lots A, B, C, and D. Id. ¶¶ 14, 15. In further support of this conclusion, TEG claims that during negotiations between MW and Ardenwood, they always discussed the inclusion of the entire property in their agreement. Id. ¶ 15.

  On or about November 19, 1993, Ardenwood transferred the deed to MW. Id. ¶ 16. However, the deed did not conform to Exhibit A of the Stipulation. The legal description only described Parcels I and II. Id. ¶¶ 2, 16. The deed did not mention Lots A, B, C, or D. Id. ¶¶ 2, 16.

  Nonetheless, for the nine years following the transfer of the deed, M W acted as though it owned the entire property. Id. ¶¶ 3, 18, 29. MW built fences around the entire property, repaired and maintained these fences, maintained the property, exercised sole dominion and control over the property until it was sold to TEG, and paid all real estate taxes. Id. ¶¶ 3, 18. Additionally, under an Order on Consent with the State of New York for environmental remediation, MW was identified as the sole property owner of the entire property. Id. ¶ 18. Furthermore, during this time, TEG alleges that all of the defendants proceeded as though the entire property was conveyed to M W. Id. ¶ 19. Defendants never challenged Ward's dominion and control over the property, never objected to the erection or maintenance offences, took no part in any environmental remediation, never paid real estate taxes or any expenses associated with the Page 4 property, and finally, never accessed, possessed, maintained, used or developed the property after the deed was transferred to M W. Id. ¶¶ 3, 19, 29.

  On September 24, 1997, Ardenwood was voluntarily dissolved by its two shareholders, Hanna and Fima Bokser. Id. ¶¶ 3, 20. Upon dissolution, Ardenwood's assets, if any, were distributed to these shareholders. Id. ¶ 20. At this time, Ardenwood never attempted to convey, transfer, distribute, or sell any portion of the property to its shareholders. Id. ¶¶ 3, 20.

  In 2002, TEG agreed to purchase the entire property from M W. Id. ¶¶ 4, 21. However, at or prior to closing, TEG and MW discovered the omission of Lots A, B, C, and D from the deed. Id. ¶¶ 4, 21. TEG claims that this exclusion must have been the result of either: (1) mutual mistake, or (2) fraud on behalf of the defendants and unilateral mistake on the behalf of M W. Id. ¶¶ 2, 17. Therefore, because of this omission, in August 2002, TEG contacted Hanna and Fima Bokser and requested a revised deed, correcting the omission of Lots A, B, C, and D from the legal descriptions attached to the 1993 Deed. Id. ¶¶ 5, 25. TEG claims that defendants agreed to reform the deed in exchange for a fair and reasonable sum to cover the expenses associated with addressing the issue. Id. ¶¶ 5, 26. Accordingly, when defendants' attorney told TEG that the defendants were in the office reforming the contract, TEG deposited $25,000 in Chicago Title and Trust in New York. Id. ¶ 26. However, shortly thereafter, defendants reneged their agreement and claimed that they were the rightful owners of a fee simple interest in Lots A, B, C, and D. Id. ¶¶ 5, 26, 31.

  In January 2003, MW transferred Parcels I and II to TEG by warranty deed, since both parcels were contained in the 1993 deed and not in dispute, and transferred Lots A, B, C, and D by quitclaim deed. Id. ¶¶ 4, 22. Further, MW assigned TEG all of its rights relevant to Page 5 Ardenwood and the property, including but not limited to Ward's rights under the 1992 Stipulation. Id. At this time, TEG entered into an Order on Consent with the State of New York, to take over the environmental remediation for the entire property. Id. ¶ 23. This Order did not ...


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