Richman & Levine, P.C., Garden City, NY (Seth A. Levine
and Keith H. Richman of counsel), for appellants-respondents.
Schnaufer & Metis, LLP, Hartsdale, NY (John C. Schnaufer
of counsel), for respondents-appellants.
M. LEVENTHAL, J.P., JEFFREY A. COHEN, HECTOR D. LASALLE,
BETSY BARROS, JJ.
DECISION & ORDER
action, inter alia, pursuant to RPAPL article 15 to compel
the determination of claims to real property, the plaintiffs
appeal, as limited by their brief, from so much of a judgment
of the Supreme Court, Queens County (Yablon, Ct. Atty. Ref.),
entered February 20, 2015, as, upon a decision of the same
court dated April 22, 2014, made after a nonjury trial, is in
favor of the defendants and against them dismissing their
first and second causes of action, which sought a judgment
declaring the plaintiff Vernon-Sutton, Inc., the owner of the
subject real property by adverse possession, and the
defendants cross-appeal from so much of the same judgment as
is in favor of the plaintiffs and against them dismissing
their first and third counterclaims, which sought to recover
damages for waste and mismanagement of corporate assets.
that the judgment is modified, by (1) deleting the provision
thereof dismissing the first and second causes of action, and
(2) adding thereto a provision declaring that the plaintiff
Vernon-Sutton, Inc, . is not the owner of the subject real
property by adverse possession; as so modified, the judgment
is affirmed insofar as appealed and cross-appealed from,
without costs or disbursements.
action pursuant to RPAPL article 15 is to compel the
determination of claims to a parcel of real property located
on Vernon Boulevard in Long Island City (hereinafter the
property). The property was acquired in 1960 by
brothers-in-law Clemente Bratone (the individual
plaintiffs' father) and Ray Conforti (the defendants'
father). Upon Bratone's death in 1966, Conforti became
the sole fee owner. By deed dated September 7, 1971, Conforti
transferred ownership of a portion of the property to the
plaintiff Vernon-Sutton, Inc. (hereinafter VSI), a
corporation formed in 1960 by Conforti and Bratone. Conforti
retained title to the remaining portion of the property, and
it is this parcel (hereinafter the disputed parcel) that is
the subject of this action. The plaintiffs Arthur Bratone,
Ronald Bratone, and Steven Bratone collectively own 50% of
VSI's stock, and the defendants, Linda Conforti-Brown and
Martha Conforti, own the remaining 50% of VSI's stock.
2007, the plaintiffs commenced this action, alleging, inter
alia, that VSI had acquired title to the disputed parcel
through adverse possession. In response, the defendants
maintained that they own the disputed parcel, having
inherited it from their father. In addition, the defendants
asserted, in their answer, derivative counterclaims on behalf
of VSI, which alleged that certain transactions approved by
the individual plaintiffs constituted a waste and
mismanagement of VSI's corporate assets.
nonjury trial, the Supreme Court, in a judgment, dismissed,
inter alia, the plaintiffs' first and second causes of
action, which alleged adverse possession. The court
determined that VSI's use of the disputed parcel was with
the implied permission of the owner and that such permission
was never repudiated. In addition, the court dismissed the
defendants' first and third counterclaims. The court
determined, in effect, that the evidence did not demonstrate
that the money expended was a waste of corporate assets. The
plaintiffs appeal from so much of the judgment as dismissed
their adverse possession claims, and the defendants
cross-appeal from so much of the judgment as dismissed their
first and third counterclaims.
reviewing a determination made after a nonjury trial, this
Court's power is as broad as that of the trial court, and
this Court may render the judgment it finds warranted by the
facts, taking into account that, in a close case, the trial
judge had the advantage of seeing and hearing the witnesses
(see Northern Westchester Professional Park Assoc. v Town
of Bedford, 60 N.Y.2d 492, 499).
Supreme Court properly determined that VSI is not the owner
of the property by adverse possession. Under the law as it
existed at the time that the plaintiffs commenced this
action, where a claim of adverse possession was not based
upon a written document, plaintiffs had to demonstrate that
they "usually cultivated, improved, or substantially
enclosed the land" (Walsh v Ellis, 64 A.D.3d
702, 703; see RPAPL former 522). In addition, an
adverse claimant must establish by clear and convincing
evidence that possession of the property was "(1)
hostile and under claim of right; (2) actual; (3) open and
notorious; (4) exclusive; and (5) continuous for the required
period" (Walling v Przybylo, 7 N.Y.3d 228, 232;
see Koudellou v Sakalis, 29 A.D.3d 640;
Congregation Yetev Lev D'Satmar v 26 Adar N.B.
Corp., 192 A.D.2d 501, 503).
purpose of the hostility requirement is to provide the title
owner notice of the adverse claim through the
"unequivocal acts of the usurper" (Monnot v
Murphy, 207 NY 240, 245; see Walling v
Przybylo, 7 N.Y.3d at 232; Hall v Sinclaire, 35
A.D.3d 660, 662). "Hostility can be inferred simply from
the existence of the remaining four elements, thus shifting
the burden to the record owner to produce evidence rebutting
the presumption of adversity" (United Pickle Prods.
Corp. v Prayer Temple Community Church, 43 A.D.3d 307,
309; see Harbor Estates Ltd. Partnership v May, 294
A.D.2d 399, 400; City of Tonawanda v Ellicott Cr.
Homeowners Assn., 86 A.D.2d 118). However, where there
is a close and cooperative relationship between the record
owner and the person claiming title through adverse
possession, the presumption of hostility may not apply
(see Estate of Becker v Murtagh, 19 N.Y.3d 75, 82).
"[T]o establish the hostility element, the party
asserting the adverse possession claim must come forward with
affirmative facts to establish that the use [of the property]
was under a claim of right and adverse to the interests of
[the true owner]'" (id. at 82, quoting
Albright v Beesimer, 288 A.D.2d 577, 578).
the entry upon land has been by permission or under some
right or authority derived from the owner, adverse possession
does not commence until such permission or authority has been
repudiated and renounced and the possessor thereafter has
assumed the attitude of hostility to any right in the real
owner" (Hinkley v State of New York, 234 NY
309, 316; see Goldschmidt v Ford St., LLC, 58 A.D.3d
803, 805; Koudellou v Sakalis, 29 A.D.3d at 640;
Kings Park Yacht Club, Inc. v State of New York, 26
A.D.3d 357; Forsyth v Clauss, 242 A.D.2d 364;
Congregation Yetev Lev D'Satmar v 26 Adar N.B.
Corp., 192 A.D.2d at 503). Such permission can be
express or implied (see Goldschmidt v Ford St., LLC,
58 A.D.3d at 805; Koudellou v Sakalis, 29 A.D.3d at
641; Congregation Yetev Lev D'Satmar v 26 Adar N.B.
Corp., 192 A.D.2d at 503), and "if the first
possession is by permission it is presumed to so continue
until the contrary appears" (Hinkley v State of New
York, 234 NY at 317).
the Supreme Court's determination that VSI's initial
entry and continued presence on the property, including the
disputed parcel, was with the implied permission of record
owners Bratone and Conforti was warranted by the facts.
Indeed, the evidence is uncontroverted that Bratone and
Conforti were agents of VSI, responsible for managing its
daily operations. Thus, while no formal written agreement
existed, VSI's initial entry and use of the property,
including its use of the disputed parcel, was implicitly
permissive based on Bratone's and Conforti's
knowledge regarding the ownership of the property and
VSI's use of the property (see Center v Hampton
Affiliates, 66 N.Y.2d 782, 784; see e.g. Goldschmidt
v Ford St., LLC, 58 A.D.3d at 805; Susquehanna
Realty Corp. v Barth, 108 A.D.2d 909, 909-910). Contrary
to the plaintiffs' contention, the fact that the
permitted use was overly broad did not effectively repudiate
the permission granted (see e.g. Hinkley v State,
234 NY at 318). Rather, "permission[ ] is presumed to so
continue until the contrary appears" (id. at
317), and "adverse possession will not arise until there
is a distinct assertion of a right hostile to the owner"
(Koudellou v Sakalis, 29 A.D.3d at 641 [internal
quotation marks omitted]; see e.g. McNeill v Shutts,
258 A.D.2d 695, 695-697). Here, VSI's use of the property
from 1960 until about 2005 remained consistent with the
implied permission initially granted by Bratone and Conforti.
The first distinct assertion of a right hostile to the owner
did not occur until about December 2005, when VSI first began
to explore selling the entire property (see e.g. Allen v
Mastrianni, 2 A.D.3d 1023, 1024-1025; Dickerson Pond
Sewage Works Corp. v Valeria Assoc., 231 A.D.2d 488,
488-489; Congregation Yetev Lev D'Satmar v 26 Adar
N.B. Corp., 192 A.D.2d at 503). This action was
commenced in 2007. Consequently, the plaintiffs failed to
prove that they possessed the disputed parcel under a hostile
claim of right for the required statutory period of 10 years.
Since this is, in part, a declaratory judgment action, the
judgment should have included a provision declaring that VSI
is not the owner of the property by adverse possession
(see Lanza v Wagner, 11 N.Y.2d 317, 334).
to the defendants' cross appeal, the Supreme Court's
determinations to dismiss the defendants' first and third
derivative counterclaims were warranted by the facts. The
defendants' first derivative counterclaim alleged that
$70, 000 expended by VSI for counsel fees in connection with
a prior action was a waste of corporate assets. The evidence
at trial demonstrated, however, that the plaintiffs, in
commencing the prior action, did not engage in bad faith,
fraud, self-dealing, or other misconduct. Thus, the business
judgment rule is applicable, and the plaintiffs are entitled
to the presumption that they acted "in good faith and in
the exercise of honest judgment in the lawful and legitimate
furtherance of corporate purposes" (Levandusky v One
Fifth Ave. Apt. Corp., 75 N.Y.2d 530, 538 [internal
quotation marks omitted]; see Auerbach v Bennett, 47
N.Y.2d 619, 620). Even absent this presumption, the evidence
established that the amount expended was not a waste ...