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Chasewood v. Kay

United States District Court, E.D. New York

January 6, 2020

CHRISTOPHER KAY, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, NEW YORK CITY BUREAU OF HIGHWAY OPERATIONS, and “JOHN DOE” and “JANE ROE, ” said names being fictitious, it being the intention of Plaintiff to designate any and all occupants of the premises at issue herein, and any parties, corporations or entities, if any, having or claiming an interest or lien upon the subject premises at issue herein, Defendants.




         Plaintiff Dorothy Chasewood brings this action for partition and sale of real property located at 176 West Street, Brooklyn, New York (the “property”), pursuant to Article 9 of the New York Real Property Actions and Proceedings Law (“RPAPL”). Presently before the Court is plaintiff's motion for summary judgment granting partition and sale of the property and, if required, the appointment of a referee to accomplish partition and sale and conduct an accounting with respect to proper distribution of the sale proceeds. For the reasons and to the extent described below, plaintiff's motion for summary judgment is granted.


         A. Plaintiff's Version

         The following facts are drawn from plaintiff's statement filed in accordance with Rule 56.1 of the Local Rules of the United States District Court for the Eastern District of New York. See Pl.'s Statement of Uncontested Facts (“Pl.'s 56.1”), Dkt. 36-1. Where defendant's Rule 56.1 statement controverts a fact put forth in plaintiff's Rule 56.1 statement, that dispute is noted below. See Def. Christopher Kay's Statement Controverting Pl.'s Rule 56.1 Statement and Statement of Additional Material Facts Pursuant to Rule 56.1 (“Def.'s 56.1”), Dkt. 38-4.

         Plaintiff and defendant are tenants in common of the property by deed dated October 17, 2016. Pl.'s 56.1 ¶ 1; Bargain and Sale Deed, Pl.'s Ex. 3 (“Deed”), Dkt. 36-5. The Deed lists 176 West Street Corp. as grantor and plaintiff and defendant as grantees. Pl.'s 56.1 ¶ 2; Deed at 1.[1] Plaintiff and defendant were married in 2000 and divorced in 2009. Pl.'s 56.1 ¶ 4; Final J. Dissolving Marriage, Pl.'s Ex. 2 (“Divorce Judgment”), Dkt. 36-4.[2] The parties entered into a “Separation and Settlement Agreement” that the Divorce Judgment approved and incorporated by reference. Divorce Judgment ¶ 6. The Agreement and Divorce Judgment provide that plaintiff and defendant are each entitled to a 50% interest in 176 West Street Corp., which was at that time the owner of the property. Pl.'s 56.1 ¶¶ 5-6; Divorce Judgment, Separation and Settlement Agreement at 24.[3]

         Plaintiff contends that, despite this provision in the Separation and Settlement agreement, defendant refused to transfer a 50% interest in 176 West Street Corp. to her. Pl.'s 56.1 ¶ 7. Plaintiff thereafter brought an enforcement proceeding in Florida against defendant. Id. ¶ 8. That proceeding resulted in a stipulation and order effectively dissolving 176 West Street Corp. as of October 26, 2011, by which time defendant still had not transferred any interest in the corporation to plaintiff. Id. ¶¶ 9-12; Stipulated Order dated July 9, 2014, Pl.'s Ex. 5, Dkt. 36-7; R. & R. dated Jan. 6, 2015, Pl.'s Ex. 6, Dkt. 36-8; Order dated Feb. 26, 2016, Pl.'s Ex. 7, Dkt. 36-9; Order dated Feb. 17, 2017, Pl.'s Ex. 8, Dkt. 36-10; Order dated July 19, 2017, Pl.'s Ex. 9, Dkt. 36-11; NYS Division of Corporations Entity Information, Pl.'s Ex. 11, Dkt. 36-13.[4]

         Although defendant failed to convey to plaintiff a 50% interest in 176 West Street Corp. prior to its dissolution, on February 26, 2016, he did, pursuant to a court order, convey to plaintiff a 50% interest in the property that the corporation had previously held. Pl.'s 56.1 ¶ 13; Order dated Feb. 26, 2016. However, while defendant signed the Deed, he did not execute New York State and New York City transfer tax returns and other documents required before the Deed could be filed in New York State; plaintiff was accordingly required to return to the Florida Court to obtain permission to sign the documents necessary for filing the Deed, and finally did so on July 19, 2017. Pl.'s 56.1 ¶¶ 14-16.[5]

         B. Defendant's Version

         Defendant submits additional facts in his Rule 56.1 Statement that he contends present genuine issues to be tried.[6] Plaintiff generally claims that she has insufficient knowledge or information to confirm or deny defendant's factual contentions, but any instance where plaintiff specifically denies a factual assertion made by defendant is noted below.

         Defendant states that he paid the full purchase price of the property-$264, 000-in June of 2000. Def.'s 56.1 Suppl. ¶ 1. According to defendant, the property consists of four apartment units; defendant resides in one of the units and operates his business out of the property as well. Id. ¶¶ 2, 32-33. As of January of 2006, the property, then solely owned by 176 West Street Corp., required extensive renovations. Id. ¶¶ 3-4.[7] Defendant intended to fund the renovations with a construction bond but learned he could not obtain one on behalf of a single-shareholder corporation. Id. ¶¶ 5-7. Defendant therefore prepared and delivered a Share Certificate to plaintiff for the purpose of transferring a 50% interest in 176 West Street Corp. to her. Id. ¶¶ 8- 11; Aff. of Christopher A. Gorman, Esq. in Opp'n to Def.'s Mot. for Summ. J. and Related Relief (“Gorman Aff.”), Ex. 2 (“Share Certificate”), Dkt. 38-6.[8] Defendant submits a letter of plaintiff, transmitted through her counsel to defendant's former counsel on or about June 25, 2013, claiming that plaintiff was at that time a 50% shareholder of 176 West Street Corp. and demanding to see the company's books and records. Def.'s 56.1 Suppl. ¶ 17; Gorman Aff., Ex. 1 (“June 25 Letter”).[9] Defendant indicates that plaintiff has not renounced or corrected any statement reflecting her interest as a shareholder made in the June 25 Letter. Def.'s 56.1 Suppl. ¶ 18.[10]

         After obtaining a construction bond, defendant financed the renovations without any contribution from plaintiff. Id. ¶¶ 12-13, 28.[11] Nor, according to defendant, has plaintiff made any contribution towards payment of the mortgage secured by the property, insurance expenses, utility expenses, taxes, maintenance and repair costs, or other carrying costs, other than by purchasing a few cans of paint on one occasion, despite an oral agreement to split costs evenly with defendant. Id. ¶¶ 19-20, 22-27.[12]

         Defendant claims he paid off the mortgage in full on August 11, 2015. Id. ¶ 21. Defendant also contends that plaintiff interfered with his access to the property and efforts to show the property to prospective investors and tenants, and “consistently acted in a way towards [defendant] which could be described as ‘acting in bad faith, being harassing and oppressive.'” Id. ¶¶ 14-16.[13]

         Defendant states that the property has been appraised at a value of $3, 000, 000 as of July 26, 2018. Id. ¶ 29.[14] Defendant attributes much of the value of the property to the renovations and repairs he funded and oversaw. Id. ¶ 30. Defendant also opines that the building's apartments could be converted into separate condominium units and that doing so would substantially increase the property's value. Id. ¶¶ 34-35.[15]


         I. Legal Standards

         A. Summary Judgment

         A court may grant summary judgment if the moving party shows that “there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute as to a material fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also Mitchell v. Shane, 350 F.3d 39, 47 (2d Cir. 2003). “In deciding whether there is a genuine issue of material fact as to an element essential to a party's case, the court must examine the evidence in the light most favorable to the party opposing the motion, and resolve ambiguities and draw reasonable inferences against the moving party.” Abramson v. Pataki, 278 F.3d 93, 101 (2d Cir. 2002) (internal quotation marks and citation omitted).

         On the other hand, “[t]o survive summary judgment . . . the non-moving party must come forward with ‘specific facts showing that there is a genuine issue for trial.'” Reiseck v. Universal Commc'ns of Miami, 2012 WL 3642375, at *2 (S.D.N.Y. Aug. 23, 2012) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586 n.11 (1986)). “Conclusory allegations, conjecture, and speculation . . . are ...

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