Plaintiff appeals from an order and judgment (one paper) of the Supreme Court, New York County (Deborah A. Kaplan, J.), entered December 2, 2008, which, to the extent appealed from as limited by the briefs, rescinded a 2007 agreement to sell the cooperative apartment and share equally in the proceeds and dismissed the complaint seeking to enforce that agreement.
The opinion of the court was delivered by: Saxe, J.P.
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.
David B. Saxe, J.P., John T. Buckley, James M. McGuire, Karla Moskowitz, Rolando T. Acosta, JJ.
Plaintiff Michele Beudert-Richard, the second wife and widow of decedent Adam Richard and executor of his estate, commenced this action against Adam's first wife, Pamela Richard, seeking to enforce a claim to share in the proceeds of the sale of a cooperative apartment that had been the joint marital property of Adam and Pamela before their divorce.
Pamela and Adam purchased the cooperative apartment in 1978, while they were married. They took title to the co-op shares as joint tenants with rights of survivorship rather than as tenants by the entirety, since prior to the amendment of EPTL 6-2.1 and 6-2.2 on January 1, 1996 (L 1995, ch 480), co-op shares were treated as personalty rather than realty, and a married couple's ownership interest in such shares could be as joint tenants or as tenants in common, but could not be as tenants by the entirety (see EPTL 6-2.1; Stewart v Stewart, 118 AD2d 455, 457 ).
On April 12, 1989, Pamela and Adam entered into a separation agreement which provided for distribution of the marital property. The paragraph of the separation agreement concerning the apartment erroneously stated that the couple owned the apartment "as tenants by the entirety," and gave Pamela exclusive possession during their child's minority, after which the apartment was to be sold and the net proceeds split. Adam also agreed to pay one-half of the mortgage and maintenance for the apartment until it was sold and to maintain a life insurance policy to cover his child support obligations in the event of his death. The parties' December 1989 divorce judgment, which incorporated but did not merge their separation agreement, stated that the marital property was to be distributed pursuant to the separation agreement.
Adam thereafter married plaintiff Michele. Adam died on September 23, 1999, and his will bequeathed to Michele his ownership interest in the apartment. At the time of Adam's death, the obligation to sell the apartment under the separation agreement had not yet been triggered because his child with Pamela was then 16 years old. The proceeds of Adam's life insurance policy were turned over to Pamela in accordance with the separation agreement.
Several years after Adam and Pamela's son completed college and became emancipated, Michele and Pamela entered into an agreement dated November 21, 2007, which provided that Pamela was the owner of a one-half interest in the apartment and Michele was the beneficiary of Adam's one-half interest in the apartment, and both agreed to sell the apartment and split the net proceeds. In January 2008, Michele and Pamela, as sellers, entered into a contract to sell the apartment for $1,385,000. However, in February, 2008, the managing agent of the cooperative insisted that the contract be amended to omit Michele's name from the contract. Pamela then filed an application in the context of the Connecticut probate proceeding concerning Adam's estate, seeking a determination that the estate did not have a legal right or interest in the apartment or the proceeds of its sale, while Michele commenced this action seeking enforcement of the separation agreement and the November 2007 contract. The Connecticut probate court declined jurisdiction with respect to all claims arising under the separation agreement.
Michele moved, pre-answer, for an order substituting the estate as plaintiff for the purposes of enforcing the separation agreement and directing Pamela to sell the apartment and equally divide the proceeds. Pamela cross-moved for an order directing that Michele was not entitled to share in the proceeds of the sale of the apartment and rescinding the November 2007 agreement between them based upon mutual mistake, maintaining that because the co-op had been owned by Adam and Pamela as joint tenants with the right of survivorship, Adam's death, which preceded the events that would trigger a sale under the separation agreement, left her the sole owner of the co-op.
The motion court denied Michele's motion to divide the net proceeds of the estate, and granted Pamela's cross motion, directing that Michele was not entitled to share in any portion of the proceeds of the sale of the apartment, rescinding the 2007 agreement and dismissing the complaint. Relying on Matter of Violi (65 NY2d 392 ), the motion court reasoned that at the time of Adam's death the relevant provision of the separation agreement was merely an executory contract to divide the proceeds when a sale occurred that did not alter the form of its ownership, and since Adam's contract right to the sale of the co-op was not enforceable at the time of his death, his estate could not claim it (citing Brower v Brower, 226 AD2d 92 ).
For the reasons that follow, we reverse.
Matter of Violi involved a situation where spouses who owned their residence as tenants by the entirety entered into a separation agreement pursuant to which they agreed to sell their residence within four years and split the net proceeds, but the wife died a year later, before the parties were divorced, with the residence still unsold. Since the parties had not altered their tenancy by the entirety either by a judicial decree such as a divorce judgment, or by a written instrument satisfying General Obligations Law § 3-309 by clearly expressing an intent to convert the form of tenancy in which the property was held, the tenancy had continued to be held by the entirety; so, upon the wife's death, the husband became seized of the whole property (Violi, 65 NY2d at 395). Had ...