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Ray Mincone and Mary Anne Mincone v. Greens Golf Club

SUPREME COURT OF THE STATE OF NEW YORK APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS


May 24, 2011

RAY MINCONE AND MARY ANNE MINCONE,
RESPONDENTS,
v.
GREENS GOLF CLUB, LLC,
APPELLANT.

Appeal from an order of the District Court of Suffolk County, Third District (C. Stephen Hackeling, J.), entered July 14, 2009. The order denied defendant's motion for summary judgment dismissing the second amended complaint and stayed the action for a period of 60 days.

Mincone v. Greens Golf Club, LLC

Appellate Term, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 24, 2011

PRESENT: TANENBAUM, J.P., MOLIA and IANNACCI, JJ

ORDERED that the order is reversed, without costs, and defendant's motion for summary judgment dismissing the second amended complaint is granted.

On December 6, 2001, plaintiffs entered into a purchase agreement for a residential unit in The Greens at Half Hollow condominium development (The Greens), in the Town of Huntington, New York. On an adjacent parcel, the developer of The Greens also built a recreational facility which included a club house, swimming pool, tennis courts, and a golf course. Ownership of that parcel and the recreational facility was subsequently transferred to defendant, which operated a private business known as The Greens Golf Club (the Golf Club). In 2001, when plaintiffs entered into their purchase agreement, The Greens and the adjacent parcels were still in the process of development. On December 17, 2002, a declaration of covenants, restrictions, easements, charges and liens for The Greens at Half Hollow, LLC was recorded by the Suffolk County Clerk, and a supplemental declaration of covenants, restrictions, easements, charges and liens was recorded by the Suffolk County Clerk on August 26, 2003. On January 12, 2004, plaintiffs closed on the purchase of their condominium unit.

Plaintiffs commenced this action in May 2008, complaining that, from the time of their purchase of a condominium unit at The Greens in 2004, they had wrongfully been compelled to pay social membership fees to the Golf Club, even though they were not participating members of the Golf Club, had no voting rights at the Golf Club, and did not use the Golf Club's facilities. Plaintiffs asserted that they had been falsely coerced into paying dues under a baseless threat that, if they failed to do so, defendant would impose penalties, including interest and collection costs, which sums would constitute a lien against their condominium home. The District Court granted the branches of a cross motion by defendant seeking summary judgment dismissing the amended complaint's causes of action for breach of contract, breach of implied contract, and unjust enrichment; however, plaintiffs' fraud cause of action was not dismissed, rather plaintiffs were ordered to replead it with the particularity required under CPLR 3016 (b). No appeal was taken from this order.

Plaintiffs then served a second amended complaint, alleging fraud and seeking a refund of all the Golf Club social membership fees they had ever paid to defendant. The second amended complaint repeated the assertions of the first amended complaint, alleging that defendant had represented to plaintiffs that they were obligated to pay "social membership" dues to the Golf Club and that the penalty for plaintiffs' failure to pay social membership dues was the imposition of a lien on their condominium unit for any unpaid dues, as well as interest and collection costs; that defendant had billed them for social membership dues; and that defendant knew or should have known that its representations concerning plaintiffs' duty to pay such dues were false. Plaintiffs also alleged that defendant had falsely represented that the Golf Club was a membership corporation with voting rights and a right to challenge increases in dues, and that membership in the Golf Club was available only to residents of The Greens. In addition, the second amended complaint asserted causes of action for breach of implied contract and unjust enrichment, which causes of action had previously been dismissed.

Defendant moved for summary judgment dismissing the second amended complaint. The District Court denied defendant's motion, upon a finding that triable issues of fact existed as to when representations had been made to plaintiffs with respect to social membership in the Golf Club, as to defendant's right to enforce a lien for nonpayment, and as to the substance of the alleged fraudulent misrepresentations that had been made to plaintiffs. This appeal by defendant ensued.

In support of its motion for summary judgment, defendant submitted to the District Court, among other things, copies of plaintiffs' purchase agreement for their condominium unit at The Greens, the proposed declaration, by-laws and offering plan for The Greens, the declaration of covenants, restrictions, easements, charges and liens for The Greens at Half Hollow, LLC, and the recording page from the Suffolk County Records Office for plaintiffs' condominium deed. Plaintiffs' purchase agreement stated, in pertinent part: "the Purchaser . . . agrees to be bound by the proposed Declaration, By-Laws and Offering Plan of the said Condominium and the Declaration of Covenants, Restrictions, Easements, Charges and Liens and Association By-Laws (and the Schedules, Plans and Exhibits attached thereto) all of which are incorporated by reference and made a part of this agreement with the same force and effect as if set forth in full herein . . . The purchaser acknowledges that . . . except as stated in this agreement (and as set forth in the Declaration, By-Laws, Exhibits and Offering Plan), it has not relied on any representations or other statements of any kind or nature made by the Seller, and representatives of Seller, or otherwise . . ." The purchase agreement also contained a merger clause, which set forth that, "This agreement states the entire understanding of the parties and the Seller shall not be bound by any oral representations and/or agreements made by Seller, its agents, or representatives."

The condominium offering plan fully disclosed that the Golf Club would be a privately owned country club, that all homeowners in The Greens would automatically be "social members" of the Golf Club, that they would be required to pay monthly dues to the Golf Club owner, and that the Golf Club owner would have a lien on the home of any social member for such member's unpaid social membership fees. Disclosure of a number of the same particulars was repeated in the declaration of covenants, restrictions, easements, charges and liens for The Greens at Half Hollow, LLC. By the time plaintiffs closed on the purchase of their condominium unit on January 12, 2004, the declaration of covenants, restrictions, easements, charges and liens for The Greens at Half Hollow, LLC had been recorded with the Suffolk County Clerk.

"The essential elements of a cause of action sounding in fraud are a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury" (Orlando v Kukielka, 40 AD3d 829, 831 [2007]). However, a purchaser of real property is chargeable with notice of the facts which a proper inquiry would have disclosed (see HSBC Mtge. Servs., Inc. v Alphonso, 58 AD3d 598, 600 [2009]; Washington Temple Church of God in Christ, Inc. v Global Props. & Assoc., Inc., 55 AD3d 727, 728 [2008]; Town of Riverhead v Silverman, 54 AD3d 1025, 1026 [2008]; Fairmont Funding v Stefansky, 301 AD2d 562, 564 [2003]). By statute, purchasers in Suffolk County are on notice of all recorded encumbrances on land (see Real Property Law § 316-a [6]).

In Country Pointe at Dix Hills Home Owners Assn., Inc. v Beechwood Org. (80 AD3d 643 [2011]), based on its review of documents for a different, non-age-restricted community adjacent to the Golf Club, which documents were substantially identical in all relevant respects to the underlying documents in this case, the Appellate Division determined, as a matter of law, that there had been no fraud in connection with the requirement that homeowners in that community be mandatory dues-paying social members of the Golf Club. As the documents defendant submitted here in support of its motion for summary judgment clearly refuted plaintiffs' claims of fraud, defendant established, prima facie, its entitlement to summary judgment dismissing the second amended complaint.

The burden thereupon shifted to plaintiffs to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which would require a trial of the action (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557 [1980]). In his affidavit in opposition, plaintiff Ray Mincone did not refute defendant's claim that he had signed the purchase agreement or that he had received full disclosure of the organizational documents relating to The Greens, which documents set forth the requirements and restrictions for residents of The Greens with respect to social membership in the Golf Club. Thus, plaintiffs failed to show that any representations by defendant were fraudulent, or even false.

In view of the foregoing, we do not reach the issue raised by defendant as to whether the action was in any event time-barred. Nor do we consider any of the issues raised by plaintiffs on appeal which relate to causes of action other than fraud, since, as no appeal was taken from the District Court's earlier dismissal of those causes of action, fraud was the only cause of action properly pleaded in the second amended complaint.

We note that to the extent that plaintiffs' opposition papers asserted that there had been fraudulent representations made by agents of The Greens as part of their sales pitch, such allegations, even if true, have no bearing on claims of fraud against defendant, which is a separate entity.

Accordingly, the order denying defendant's motion for summary judgment is reversed and defendant's motion for summary judgment dismissing the second amended complaint is granted. The second amended complaint is hereby dismissed.

Tanenbaum, J.P., Molia and Iannacci, JJ., concur. Decision

Date: May 24, 2011

20110524

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