In an action to impose constructive trusts on certain real property, to recover damages for breach of contract, and for specific performance of an agreement to acquire certain shares of common stock, the defendants appeal, as limited by their brief, from so much of a judgment of the Supreme Court, Suffolk County (Spinner, J.), entered April 18, 2008, as, upon a decision of the same court dated March 12, 2008, made after a non-jury trial, imposed a constructive trust on certain real property and is in favor of the plaintiff and against them in the principal sum of $6,428,204.50.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
MARK C. DILLON, J.P., HOWARD MILLER, JOHN M. LEVENTHAL and CHERYL E. CHAMBERS, JJ.
ORDERED that the judgment is modified, on the law, by deleting the third decretal paragraph thereof which is in favor of the plaintiff and against the defendants in the principal sum of $6,428,204.50; as so modified, the judgment is affirmed insofar as appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Suffolk County, for a recalculation of damages in accordance herewith, and the entry of an appropriate amended judgment.
The plaintiff brought this action to impose constructive trusts on four parcels of real property, to obtain specific performance of a certain agreement dated April 30, 1999, between the plaintiff and the defendant Pitcairn-Properties, Inc. (hereinafter PPI), and to recover damages for breach of the agreement. Two of the real estate parcels (hereinafter the Islip Properties) are owned by the defendant Ronkonkoma Realty Venture I, LLC (hereinafter Ronkonkoma I), and two parcels (hereinafter the Brookhaven properties) are owned by the defendant Ronkonkoma Realty Venture II, LLC (hereinafter Ronkonkoma II).
These parcels originally were owned by the plaintiff individually, and encumbered with mortgages which were in arrears. The plaintiff had given deeds to the properties to the mortgage creditor North Fork Bank (hereinafter North Fork), and North Fork had recorded those deeds, allegedly in violation of an agreement between them.
The plaintiff sued North Fork, claiming it improperly recorded those deeds. By agreement dated April 8, 1999, the plaintiff and North Fork entered into a settlement, which permitted the plaintiff to redeem the properties for $3 million, and provided for the discontinuance of the action against North Fork.
To secure the funds to redeem the property, the plaintiff entered into an agreement dated April 30, 1999, with PPI, whereby PPI agreed to satisfy the plaintiff's outstanding mortgages on the properties, and the plaintiff agreed to direct the mortgage creditor North Fork to convey the properties to Ronkonkoma I and Ronkonkoma II. At the trial of this action, the plaintiff testified that it was his understanding that upon satisfaction of the North Fork mortgages, title to the properties would be vested in Pitcairn-Parr, LLC, a limited liability company formed by his corporation Parr Financial, Inc., and PPI in 1998.
According to the plaintiff, since the agreement dated April 30, 1999, did not provide that title to the properties would be vested in Pitcairn-Parr, LLC, the plaintiff entered into a handwritten agreement at the closing. Pursuant to that handwritten agreement, PPI agreed to pay the plaintiff 50% of the value of the properties at the closing, less the amount paid for the property and related closing costs, in common stock of PPI. The handwritten agreement further provided that the "cash invested to acquire the property or amounts paid for related costs shall be handled as set for in the Pitcairn-Parr LLC agreement."
PPI paid $5,653,590.93, inter alia, to satisfy the outstanding mortgages. It is undisputed that the plaintiff never received any stock.
The plaintiff claimed that, as president of Pitcairn-Parr, LLC, he was to have control over development of the properties. Instead, PPI used the Brookhaven properties to secure a $4,000,000 mortgage loan which it used for its own purposes.
The plaintiff commenced the instant action, alleging that Ronkonkoma I and Ronkonkoma II failed to transfer the four parcels to Pitcairn-Parr, LLC. The first eight causes of action sought imposition of constructive trusts against each of the Ronkonkoma defendants. The ninth and tenth causes of action sought damages, or in the alternative, specific ...