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LCD Holding Corp. v. Velez

Civil Court of the City of New York, Kings County

August 21, 2013

LCD Holding Corp., Petitioner,
v.
Michelle Velez, "JOHN DOE" and "JANE DOE, " Respondents.

Unpublished Opinion

Jared Rich, Esq. appeared on behalf of petitioner

Michelle Velez Albion State Correctional Facility appeared pro se

Bruce E. Scheckowitz, J.

After trial, the court makes the following findings and determination:

LCD Holding Corp. ("petitioner") commenced the instant "squatter" holdover proceeding against Michelle Velez ("respondent") seeking possession of the premises described as 84 Visitation Place, Brooklyn, NY 11231 (the "premises") on the grounds that respondent intruded or squatted upon the premises without the permission of the petitioner. The premises are described in the petition as a "certain plot, piece or parcel of land commonly known as 84 VISITATION PLACE..." Petitioner appeared in this proceeding through its attorney and respondent appeared pro se.

Petitioner commenced this proceeding on November 12, 2012. As respondent was incarcerated and serving a prison sentence at the Albion Correctional Facility in Albion, NY during the course of the proceeding, the matter was adjourned several times for respondent to be produced for video conference and trial. A video conference was conducted by the Honorable Eleanora Ofshtein on April 23, 2013, wherein respondent asserted a defense to the proceeding of adverse possession. Judge Ofshtein deemed the statement an oral answer and affirmative defense and marked the defense on the court file and in the transfer order. The proceeding was referred to this Part for trial on July 17, 2013 and the court conducted the trial over the course of one day.

The Testimony and Evidence

Petitioner's Prima Facie Case

At trial, Eddie Doran, vice president of petitioner, testified regarding petitioner's prima facie case. Mr. Doran asserted that LCD Holding Corp. owns the subject premises, 84 Visitation Place. In support, petitioner's attorney offered into evidence a self-certified copy of the deed for the premises under CPLR § 2105 (Pet. Ex. 1). Petitioner's counsel proffered that he compared the self-certified copy of the deed to the ACRIS version of the deed rather than comparing the copy of the document to the original deed.

Mr. Doran testified that 84 Visitation Place ("84 Visitation Place" or "84) is a "residential vacant lot." He stated that there is no physical division between the premises and 86 Visitation Place ("86 Visitation Place" or "86"), which is owned by respondent. Mr. Doran explained that his company purchased 84 Visitation Place in 2006 after managing it for one year for a "Mr. Redman, " the prior owner of the property. Mr. Doran further explained that while he managed the premises he advised the owners of the neighboring properties that 84 Visitation Place was "up for sale and was going to be marketed." He also stated that he visited the premises "numerous times" to check the property's condition and that he has been in control of the premises since petitioner purchased the lot in 2006.

The witness maintained that in or about 2007 he sent respondent a letter asking her to remove her property from 84 Visitation Place. He asserted that as a response to the letter, respondent commenced an adverse possession claim against petitioner and locked petitioner out of the property by adding a padlock to the fence on the property in 2007 or 2008. Mr. Doran testified that the adverse possession action was dismissed due to respondent's failure to file a Note of Issue and her failure to prosecute the case.

Mr. Doran acknowledged that in 2010 petitioner filed a petition for Chapter 11 bankruptcy in the Southern District of New York under In Re: LCD Holding Corp., Case No. 10-15084 (SHL), and has petitioned the Bankruptcy Court to sell 84 Visitation Place to a purchaser with the highest and best offer. Petitioner's attorney produced a certified copy of an order by the Bankruptcy Court dated June 27, 2013 authorizing petitioner to sell the premises "free and clear of all liens, claims, and interests with such liens, claims and encumbrances, and other interests to attach to the proceeds of sale in the order of their priority..." (Pet. Ex. 2). The order acknowledges that respondent Velez claimed an interest to the premises in a state court action, but that the New York State Unified Court System's website indicated that the case had been "disposed of." Mr. Doran testified that to his understanding, 84 Visitation Place is to be sold and nobody can make claims on or against the property but only against the money deposited in the court after the sale.

Petitioner moved into evidence photographs taken by Mr. Doran the day before trial which depict the premises as a lot with a small, man-made shed (Pet. Exs. 3A, 3B and 3C). Mr. Doran testified that the photos were taken from the stoop of 82 Visitation Place, the house to the right of the subject premises, and depict both 84 and 86 Visitation Place. The witness asserted that the lot has not been cared for in a long time. (Pet. Ex. 3C) Petitioner also produced a certified copy of an order from HPD regarding a demolition and bid on 84 Visitation Place in 1996. (Pet. Ex. 4). The order shows that the City demolished the structure existing on 84 Visitation Place, in 1996. (Pet. Ex. 4) Petitioner also offered an order issued by the Supreme Court in The People of the State of New York v. Raul Velez and Michelle Velez, Indictment 05547/10 by the Honorable Martin P. Murphy dated April 12, 2012 into evidence (Pet. Ex. 5). The order described the lots of 84 Visitation Place and 86 Visitation Place as "touching, contiguous, and unseparated" without a fence or other property marker between them. In support of its prima facie case, Mr. Doran alleged that respondents were intruders and squatters on 84 Visitation Place. Petitioner next called Mr. Longobardi, the president of LCD Holdings, as a witness, who verified his own signature on the ten-day notice to quit served on respondent.

Respondent's Defense

Respondent Michelle Velez testified in her own defense. Ms. Velez testified that she purchased and moved into 86 Visitation Place, a single-family house, in 1992 with her husband and six children. The witness explained that at the time 84 Visitation Place contained an old, abandoned house filled with garbage. She asserted that drug addicts would frequent the house on a constant basis. At that time there was a chain link fence that divided the two properties. Respondent represented that some time the following year after moving into 86 Visitation Place, she and friends moved the chain link fence dividing 84 and 86 so that the fence would enclose the back of the 84 property. She explained that doing so provided her with access to 84 Visitation Place, which served as the backyard to her house.

Ms. Velez next testified that in or about the winter of 1996, shards of glass broke off of the dilapidated house on 84 Visitation Place and cut her face. She then called HPD and explained that the property on 84 posed a danger to her family. Ms. Velez stated that shortly thereafter, HPD knocked down the house, cleaned out the lot and put up another chain link fence to block off that part of the property. Respondent represented that she removed this fence a week later and put up a sheet metal fence on the side of 84 facing the street, which provided her with total privacy and control over the joint properties of 84 and 86. The witness claims that in 2005 she put up a padlock on the outside of the sheet metal fence so that people could not gain access to the property from the street. The fence still remains on the property to date.

Ms. Velez further maintained that in or about 1997 she built an extension to her house on 86 that extended onto the lot of 84 Visitation Place. She also mentioned that she kept her dogs in the backyard, which consisted of the 84 lot. Respondent explained that she continuously used 84 as the backyard to her home and set up a play area on 84 that included swing sets and slides, where her children played daily and her family would barbecue on a regular basis. Ms. Velez stated that she would also store bikes on the subject premises, which the neighborhood kids would come and borrow with her permission. Respondent further stated that she would park some of her cars on the 84 property. Respondent Velez asserted that she and her family were the only people who had access to 84 Visitation Place and that her neighbors regarded the lot as her backyard throughout her years of residence at 86 Visitation Place. Ms. Velez also testified that she has used and cared for the premises since 1993 and that since Hurricane Sandy hit in October 2012, the property has been filled with debris, as depicted in petitioner's photographs. (Pet. Ex. 3 series). However, she asserts she has not been able to care for the property since Hurricane Sandy because she has been incarcerated.

The witness proffered that she was regarded as the owner of 84 Visitation Place by her neighbors and friends, listed on ACRIS in connection with the property, and approached various times to sell 84 Visitation Place because she was listed as the owner on the website "Propertyshark.com." She also stated that she spray-painted the words "Not For Sale" on the sheet metal fence that separated the property from the street. Respondent testified that she successfully prosecuted an encroachment case against Bob Patterson, the owner of the neighboring lot located at 82 Visitation Place ("82"), after Mr. Patterson added an extension to his house that encroached onto 84 Visitation Place. Ms. Velez stated that she prevailed in the lawsuit, however, petitioner ultimately received the payout from the suit as deed owner of 84. Ms. Velez further testified she paid $20, 000.00 in order to satisfy a lien placed on 84 Visitation Place, which saved the property from foreclosure. Respondent also maintained that she paid taxes on 84 Visitation Place from 1998 or 1999 through 2007.

On cross-examination, petitioner's attorney introduced into evidence a stipulation from the case of People of the State of New York v Raul and Michelle Velez, Indictment 05547/10, which is dated August 13, 2012 (Pet. Ex. 7). This stipulation provides that Michelle and Raul Velez reside at 86 Visitation Place and have done so for over 18 years. The stipulation also states, "Michelle Velez began an adverse possession claim in order to become the lawful owner of 84 Visitation Place." It further provides that "Michelle Velez paid the taxes on 84 Visitation Place" and she "had the water bills from 84 Visitation Place put into her name, and paid those water bills for 84 Visitation Place."

Legal Analysis

The Court's Jurisdiction

At the outset, the court finds that this proceeding is not properly before the Housing Court because the premises does not constitute a "residential property." The New York City Civil Court Act§110 imbues the Housing Court with the jurisdiction to preside over "[a]ctions and proceedings under article seven-A of the real property actions and proceedings law, and all summary proceedings to recover possession of residential premises." Summary proceedings in Housing Court are governed by RPAPL §§ 711 and 713."Residential property" is defined by the RPAPL as "real property located in this state improved by any building or structure that is or may be used, in whole or in part, as the home or residence of one or more persons, and shall include any building or structure used for both residential and commercial purposes." RPAPL § 1305. Summary proceedings are statute based proceedings. Accordingly, to bring a summary proceeding under RPAPL § 711, the property must conform precisely to the specific standards under the RPAPL and conform to its definition of real property. See DiBello v. Penflex, Inc., 165 Misc.2d 994 (Rensselaer County, 1995). Here, the subject premises is not considered residential because it consists of a vacant lot devoid of a building or structure "being used, in whole or in part, as a home or residence, " as required by RPAPL § 1305.

Therefore, the appropriate cause of action is an ejectment action in Supreme Court. [1] When a summary proceeding is not an appropriate cause of action under the RPAPL because the property is not "residential property" under the RPAPL or the situation does not fit the requirements for a summary proceeding under RPAPL §§ 711 or 713, a party may seek removal of an occupant through an ejectment action in the Supreme Court. See Kakwani v. Kakwani, 40 Misc.3d 627, 967 N.Y.S.2d 827, 832 (Nassau County Dist. Ct. 2013). In an ejectment action, the moving party seeks possession of the property. See Kosa v. Legg, supra. Ejectment is an action at law that can be commenced against an occupant who is adversely withholding possession of real property from a party claiming possessory entitlement. See Alleyne v. Townsley, 110 A.D.2d 674 (2nd Dept. 2006) ("Although resort to a summary proceeding to regain possession of real property has become the rule rather than the exception... the common-law action for ejectment still survives in New York and is more properly referred to as an action to recover possession of real property."). When an individual cannot be relieved through summary proceeding, he should seek relief through ejectment. See Kakwani v. Kakwani, supra. Therefore, petitioner's appropriate remedy is to seek relief through commencement of an ejection action in the Supreme Court, because he is seeking removal of occupants from an open vacant lot and not "residential real property." Accordingly, petitioner cannot use an RPAPL proceeding as a means of recovery here and the proceeding must be dismissed.

Admissibility of the Deed under CPLR § 2105

Assuming arguendo that the court were to find the premises falls within the definition of real property pursuant to Article 7 of the RPAPL, the proceeding could be dismissed due to petitioner's failure to establish a necessary element of its prima facie case. Specifically, the court finds that the deed presented by petitioner at trial does not satisfy the requirements of CPLR § 2105 and therefore is not admissible. CPLR § 2105 authorizes the submission of documents into evidence by allowing an attorney to present copies of such documents with a certified statement that the documents are a true and complete copy of the original.

CPLR § 2105 provides:

Where a certified copy of a paper is required by law, an attorney admitted to practice in the courts of the state may certify that it has been compared by him with the original and found to be a true and complete copy. Such a certificate, when subscribed by such attorney, has the same effect as if made by a clerk. Id.

At trial, petitioner's attorney asserted that he compared the deed offered at trial to the deed for the premises he viewed on the "ACRIS" database maintained by the New York City Department of Finance. ACRIS allows users to view a presumptive image of an original document relating to real property, such as a deed, by conducting a search by property address or block and lot through the database. Petitioner's attorney argues that it is permissible to certify a deed that was compared to the deed on ACRIS under CPLR § 2105 because it is "the same [deed] that the City Register views." However, viewing a document on ACRIS is not akin to viewing the original document. Indeed, the official ACRIS website contains the following disclaimer: "Please be advised that neither ACRISap nor ACRIS.com is a New York City Department of Finance approved service or website. Any errors that occur as a result of using these sites are the responsibility of the filer, including any resulting penalty and interest." See www . nyc.gov/html/dof/html/property/acris.shtml.

Here, petitioner's attorney viewed an image of the deed on ACRIS, printed a copy of the ACRIS deed, compared the copy to the ACRIS version on the screen, and signed the copy certifying that the copy is identical to the deed he viewed on ACRIS. Petitioner's attorney alleges that the ACRIS deed is equivalent to the original deed because it is common practice to view images of original documents on ACRIS. However, despite common practice, the ACRIS version is not the original deed, but only a presumptive image of the original document. Because the ACRIS deed is not the original document, petitioner cannot certify that he compared his copy to the original deed to satisfy the requirements of to CPLR § 2105. Therefore, petitioner's copy of the deed is not admissible into evidence under CPLR § 2105. (But see Mirriam Osborn Mem. Home Assn. v. Assessor of City of Rye, 9 Misc.3d 1019 [Sup. Ct. Westchester Co. 2005] [Dickerson, J.] and Scarsini Interiors, Inc. v. Just In Time Furniture Warehouse, Inc. 2009 NY Slip Op 31702[U] [Sup. Ct. NY Co. 2009] [Gische, J.], where the courts permitted into evidence electronic documents downloaded from government websites pursuant to CPLR § 4518). [2] Notwithstanding the above, the court notes that respondent did not challenge petitioner's ownership of the premises and conceded that petitioner holds the deed title to the property.

Respondent's Defense of Adverse Possession

Assuming arguendo the subject holdover proceeding is supported by Article 7 of the RPAPL, the court must consider respondent's affirmative defense of adverse possession which she interposed in this proceeding. Initially, the court notes that although the Housing Court cannot determine title "in the context of a Housing Court summary proceeding, " it may still determine the merits of a defense to a proceeding. See Chopra v. Prusik, 9 Misc.3d 42, 43, (2nd Dept. 2005). In Chopra v. Prusik, petitioner purportedly acquired property at a foreclosure sale upon occupant's default and commenced a summary proceeding against the occupant pursuant to RPAPL § 713(5). Id. The occupant in Chopra raised the defense that she, rather than the petitioner, was the owner. The Housing Court dismissed the respondent's defense on the grounds that it could not determine issues of ownership. On appeal, however, the Appellate Term held that even though the Housing Court cannot determine title in a summary proceeding, the Housing Court can hear any "legal or equitable defenses or counterclaims" raised by a respondent. See Id; See also Nissequogue Boat Club v. State of New York, 14 A.D.3d 542, 544 (2nd Dept. 2005) ("Even though title cannot be determined as an affirmative claim in the context of a summary proceeding, an allegation that the petitioner is not the owner of the subject property may properly be interposed as a defense to the proceeding."); Decaudin v. Velazquez, 15 Misc.3d 45 (App Term, 9th & 10th Jud Dists 2007); and RPAPL § 743.

In Nissequogue, 14 A.D.3d 542, the Appellate Division ruled that the defense of adverse possession was properly pled in a summary proceeding although the court could not ultimately determine the issue of legal title of the subject premises. Similarly in City of New York v. Akbar's Self Help, Inc., 25 Misc.3d 129(A), (App. Term. 2nd, 11th, 13th Dists. 2009), the Second Department also held that the defense of adverse possession was properly raised in a summary proceeding. Accordingly, this court shall still determine the merits of respondent's adverse possession defense.

It is a well established principle of law in New York State that to prove a claim of adverse possession the occupation of the property must be "(1) hostile and under a claim of right (i.e., a reasonable basis for the belief that the subject property belongs to a particular party), (2) actual, (3) open and notorious, (4) exclusive, and (5) continuous for the statutory period (at least 10 years)." Estate of Becker v. Murtagh, 19 N.Y.3d 75, 81 (2012). It is essential to a claim of adverse possession that the party establish each of the enumerated elements above. Id.

The first element of adverse possession, that the occupation of property must be "hostile and under a claim of right, " is satisfied where an individual asserts a right to the property that is "adverse to the title owner and also in opposition to the rights of the true owner." Estate of Becker v. Murtagh, 19 N.Y.3d at 81. In addition, where the claim of right is not founded upon a written instrument, the party asserting title by adverse possession must establish that the land was "usually cultivated or improved" or "protected by a substantial inclosure." Id. In Birnbaum v. Brody, 156 A.D.2d 408, 409 (2nd Dept. 1989) , the court held that unrefuted evidence in the record which established that the plaintiffs had maintained the grass, shrubbery and flowers and installed and playground equipment for their children in the backyard, was sufficient to satisfy the usual cultivation or improvement requirement of adverse possession.

Based on the testimony of respondent Velez, the court finds that she meets the first element of adverse possession. Respondent testified credibly that she erected a large metal fence on 84 Visitation Place in 1997 that enclosed the property and prevented any visibility of the land to outsiders. Similarly, in Birnbaum the court held that a chain link fence which runs along the eastern and western sides of the subject parcel constituted an enclosure as required by statute. Birnbaum, 156 A.D.2d 408. Moreover, respondent testified that she used the premises as a backyard to her home on 86 Visitation Place, by building a swingset and playground for her children on the property. She asserted that she took care of the landscaping and maintained the appearance of the property.

Furthermore, although respondent admitted that she was not the deed owner, respondent affirmatively took steps as the owner of the premises. In addition to building a fence around the property, respondent commenced an encroachment action against the owner of the neighboring lot, paid the taxes for the premises, and removed a $20, 000.00 lien off of the property's title. Ms. Velez also testified that she placed the water bill for the premises in her name and was listed on "ACRIS" as the owner of the premises (Ct. Ex. A.). These actions support the first element of adverse possession, which requires that use of the property be "hostile and under a claim of right." Birnbaum, 156 A.D.2d 408.

Respondent also established the second element of adverse possession, which is "actual" possession of the land. When she enclosed the premises with a fence in 1997, the 84 lot completely merged with the 86 lot and gave her exclusive control of the joint properties. Petitioner's photographs depict the fence enclosing the two contiguous lots. (Pet. Ex. 3A and 3B). The witness asserted that she then began to take care of the land and use it as a playground for her children. Cultivating, improving and enclosing property are acts deemed by statute to be acts of "possession and occupancy" of land. Ray v. Beacon Hudson Mountain Corp., 88 N.Y.2d 154, 160 (1996). Accordingly, respondent has shown that she actually possessed the land since 1997.

The third element of adverse possession is that the use of the land must be "open and notorious." Respondent Velez testified that no one prevented her from placing a fence around 84 and 86 although she did so openly. She further stated that none of her neighbors complained about the fence, in the years after she erected it, because she was considered the owner of the premises. Respondent's use of 84 Visitation Place was open and notorious, in that she treated that land as her own, and was recognized by her neighbors and friends as the owner. Ms. Velez asserted at trial that the children in the neighborhood would often visit her family at the property and borrow their bikes with her permission. Respondent explained that she was listed on various websites as the owner of 84 Visitation Place and was even approached by agents interested in purchasing the lot. Respondent also placed the water bills for 84 in her name and publically discharged a lien for the property. Additionally, Respondent stated that she defended the land when there was an encroachment by the owner of 82 Visitation Place, Bob Patterson, and sat down with Mr. Patterson on various occasions to discuss settlement of the encroachment claim she commenced against him.

The fourth element of adverse possession is "exclusive" use of the land. To establish the "exclusivity" element, the adverse possessor must alone care for or improve the disputed property as if it were his/her own. Estate of Becker v. Murtagh, 19 N.Y.3d at 83. Respondent Velez's testimony establishes that she has cared for 84 Visitation Place as if it were own. Ms. Velez testified that she contacted HPD to remove the deteriorating house on 84 Visitation Place and since its removal had exclusive control over the property. Respondent's exclusive control of the premises was further exhibited when she erected the fence on the street side of the lot to prevent access from outsiders, as well as her testimony that she had sole control of who could access 84 Visitation Place. Respondent also asserted that she and her family exclusively maintained the property, with the occasional assistance of friends and neighbors. Notably, petitioner did not produce any witnesses to contradict this testimony.

The fifth element required to satisfy a defense of adverse possession is that the land must be used continuously for a period of at least 10 years. Respondent demonstrates the continuous use element as she testified credibly that she has used the land continuously since erecting the fence in 1997. Respondent explained that her family continuously used the land as a playground, for barbeques, and later to park their cars on the land. Respondent proved at trial that she treated 84 Visitation Place as her backyard since at least 1997, as did her family, neighbors and friends. It is also undisputed that petitioner did not purchase the property until 2006 and never gained actual possession of the property. Rather, respondent stated that she continuously used the land through the present, and only received occasional inquiries from petitioner's agent regarding her use of the land. Petitioner's witness, Eddie Doran, testified that he sent a letter to Ms. Velez asking her to remove her property from the subject premises in 2007, by which time Ms. Velez had already met the ten year requirement for adverse possession. Even if Ms. Velez had not reached the ten year mark at that point, a mere letter is insufficient to challenge a claim of adverse possession. Respondent has therefore met the 10 year requirement of adverse possession.

Respondent satisfies the five elements of adverse possession and can affirmatively assert adverse possession as a defense to this holdover proceeding. Petitioner failed to refute respondent's claim of adverse possession. It should be noted that respondent's abandonment of the adverse possession case she commenced in Supreme Court does not prevent her from asserting the defense in this proceeding. Dismissal of an action for failure to prosecute is not a dismissal on the merits and therefore does not bar a subsequent action between the same parties based on the same or similar claims unless the court's order specifically states otherwise. Ziegler v. Serrano, 74 A.D.3d 1610, 1611 (3rd Dept. 2010). Here, petitioner has not provided this court with an order from the Supreme Court that bars respondent from raising a subsequent adverse possession claim, as the first case was not dismissed with prejudice.

Additionally, the June 27, 2013 order from the Bankruptcy Court In Re: LCD Holding Corp., Case No. 10-15084 (SHL), which authorizes petitioner to sell 84 Visitation Place "free and clear of all liens, claims, and interests with such liens, claims, encumbrances and other interests to attach to the proceeds of sale in the order of their priority" does not preclude respondent's defense. In Stevens v. Hauser, 39 NY 302, 306 (1868), citing 1 R. S. 739, the Court of Appeals stated, "at the time of the execution and delivery of the deed by the assignee in bankruptcy to the plaintiff, the defendant was in adverse possession, and the deed to the plaintiff is void on that ground by our statute, which enacts, that every grant of land shall be void, if, at the time of the delivery thereof, such lands shall be in the actual possession of a person claiming under a title adverse to that of the grantor." Here, the premises were indisputably in respondent's possession at the time of the Bankruptcy Court's order. Therefore, based on the Court of Appeal's decisional authority, even if petitioner had conveyed the land to another party in the context of the bankruptcy proceeding, such a conveyance could be considered void based on respondent's adverse possession claim. However, this court is not disaffirming the Bankruptcy Court's order because this court is not deciding the issue of ownership of the premises, but rather finds that Ms. Velez has succeeded in proving the elements to establish an adverse possession defense to the instant holdover proceeding.

Accordingly, the court finds that the facts of this case do not support a holdover proceeding based on an allegation that respondent intruded into or squatted unto premises without permission. Furthermore, respondent established her affirmative defense of adverse possession. Accordingly, the petition is dismissed with prejudice.

This constitutes the decision and order of the court.


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