10 Cardinal Lane, LLC v. N.K.T. Land Acquisitions, Inc.

117 A.D.3d 1133, 985 N.Y.S.2d 174
Appellate Division of the Supreme Court of the State of New York·Decided May 1, 2014·Published·Cited by 8 cases

Opinion

Stein, J.

Appeals from an order of the Supreme Court (Ferradino, J.), entered February 8, 2013 in Saratoga County, which, among other things, granted defendant James G. Doyle’s motion for summary judgment dismissing the complaint against him and denied defendant David M. Lenney’s cross motion for, among other things, summary judgment dismissing the complaint against him.

Defendant N.K.T. Land Acquisitions, Inc. (hereinafter NKT) owned real property in the Village of Stillwater, Saratoga County that was subject to a $400,000 mortgage held by Harold Cowles. Cowles commenced a mortgage foreclosure action against NKT, and defendant David M. Lenney was retained to serve as its counsel in that action. Plaintiff engaged defendant Scott M. Ronda, NKT’s transactional counsel, in negotiations to purchase the property, which ultimately resulted in the execution by NKT’s president of a “Contract For Purchase And Sale Of Real Estate” (hereinafter the August 2011 contract). The sale never proceeded to closing, which plaintiff asserts was due in part to difficulties reaching an agreement over the payment of monies owed to Cowles as required by the contract and in part to Ronda’s displeasure over an attorney disciplinary complaint made against him by one of plaintiffs members. Ongoing negotiations between plaintiff and NKT regarding the sale of the property were initially handled on NKT’s behalf by Ronda, and then by Lenney. The transaction was never completed and, in April 2012, the property was transferred to defendant James G. Doyle.

After learning of NKT’s sale of the property to Doyle, plaintiff [1134] commenced this action seeking cancellation of the conveyance and specific performance of the August 2011 contract. Plaintiff also asserted claims for damages and alleged, among other things, collusion by Ronda, Doyle and Lenney and that Ronda, Lenney, NKT’s president and Doyle had tortiously induced NKT to breach the August 2011 contract. Doyle served an answer and moved for summary judgment dismissing the complaint against him, contending, among other things, that he took title to the property as a bona fide purchaser for value. Ronda and Lenney each moved for summary judgment as well. Supreme Court granted Doyle’s motion, but denied the motions of Ronda and Lenney, finding that questions of fact existed as to whether the August 2011 contract was a binding contract and as to the nature of the later negotiations between the attorneys for plaintiff and NKT. Upon plaintiffs and Lenney’s appeals, we affirm.

Initially, we reject plaintiffs assertion that Supreme Court erred in finding that Doyle was a bona fide purchaser as a matter of law. “A bona fide purchaser—one who purchases real property in good faith, for valuable consideration, without actual or record notice of another party’s adverse interests in the property and is the first to record the deed or conveyance—takes title free and clear of such adverse interests” (Panther Mtn. Water Park, Inc. v County of Essex, 40 AD3d 1336, 1338 [2007] [citations omitted]; see Real Property Law §§291, 294 [3]; T & V Constr., Inc. v Calapai, 90 AD3d 908, 908 [2011]; Sprint Equities [NY], Inc. v Sylvester, 71 AD3d 664, 665 [2010]). In support of his motion, Doyle averred that he purchased the property for $455,000, recorded the deed on April 20, 2012 and “was unaware of any contract to purchase [the property] between [NKT] and anyone” prior to doing so. He also denied having ever heard of either plaintiff or its principal prior to filing the deed. Ronda confirms that he did not inform Doyle of the negotiations with plaintiff—or even of plaintiff’s existence—prior to the sale of the property. Further, the recording page accompanying the deed—which indicates a purchase price of $455,000 and reflects payment of a transfer tax commensurate with that amount— corroborates Doyle’s allegation regarding the consideration paid for the property (see Tax Law § 1402 [a]). Given this evidence, the burden shifted to plaintiff to raise a question of fact as to whether Doyle “ha[d] knowledge of any fact, sufficient to put him on inquiry [notice] as to the existence of some right or title in conflict with that he [was] about to purchase” (Williamson v Brown, 15 NY 354, 362 [1857]; see Ward v Ward, 52 AD3d 919, 920-921 [2008]).

In opposition, plaintiff argues that issues of fact exist both as [1135] to whether Doyle had inquiry notice of plaintiffs interest in the property and as to whether he actually paid consideration therefor. Plaintiff points to particular aspects of the deed filed in April 2012 which transferred title to Doyle—specifically, that the deed is dated January 9, 2011 and contains a signature of NKT’s president that was acknowledged on January 9, 2012, well before the conveyance to Doyle. Plaintiff also notes that the execution page is essentially identical to that contained in a deed in lieu of foreclosure that was executed previously by NKT’s president as part of the ongoing negotiations between NKT and plaintiff. However, even assuming that there is some significance to these facts, plaintiff fails to demonstrate that Doyle ever saw the previous deed or offer any explanation beyond mere speculation as to how the dates, alone, would have placed Doyle on inquiry notice to suspect that plaintiff had a conflicting interest in the property.1 Nor has plaintiff submitted any competent evidence to counter Doyle’s proof with respect to the consideration he allegedly paid. Accordingly, even when we view the evidence in a light most favorable to plaintiff and give plaintiff the benefit of the reasonable inferences that can be drawn therefrom (see McColgan v Brewer, 112 AD3d 1191, 1193 [2013]), we find that plaintiff has failed to demonstrate the existence of triable issues of fact with respect to Doyle’s status as a bona fide purchaser in good faith for value (see Panther Mtn. Water Park, Inc. v County of Essex, 40 AD3d at 1338-1339; Foster v Piasecki, 259 AD2d 804, 805-806 [1999]; W.I.L.D. W.A.T.E.R.S. v Martinez, 152 AD2d 799, 800-801 [1989]; compare Nagavi v Newcomb, 305 AD2d 904, 906-907 [2003]).

Also unavailing is plaintiffs assertion that the deed conveying title to Doyle was void because it was either a “forgery or obtained by false pretenses.” Notably absent from the record is any assertion by either NKT or Doyle that the deed did not represent their intentions to convey title or that they otherwise contest its validity. In fact, a month after the challenged deed was recorded, Doyle recorded a corrective deed, countering any suggestion that the transfer did not reflect their true intent. Under these circumstances, plaintiff’s speculative claims are insufficient to render the deed void and Doyle’s motion for summary judgment dismissing the complaint against him was properly granted.

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10 Cardinal Lane, LLC v. N.K.T. Land Acquisitions, Inc., 117 A.D.3d 1133, 985 N.Y.S.2d 174 (N.Y. Ct. App. 2014).

117 A.D.3d 1133 (10 Cardinal Lane, LLC v. N.K.T. Land Acquisitions, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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