The opinion of the court was delivered by: DAVID TRAGER, District Judge
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
property to MW. On the contrary, defendants claim that they clearly
intended to convey solely Parcels I and II, as described by the 1993
For the following reasons, defendants' motion to dismiss should be
granted in part and denied in part.
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
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.
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
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
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 ...