State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: December 8, 2016 522886 

________________________________

HENRY J. KROL JR.,

Respondent,

v

KATHERINE YAGER-KROL,

Individually and as MEMORANDUM AND ORDER

Executor of the Estate of 

JULIA YAGER, 

Appellant,

et al., 

Defendants.

________________________________

Calendar Date: October 14, 2016

Before: McCarthy, J.P., Garry, Lynch, Devine and Clark, JJ.

__________

Robert M. Winn, Granville, for appellant.

Harlem & Jervis, Oneonta (Richard A. Harlem of counsel),

for respondent.

__________

Garry, J.

Appeal from a corrected order of the Supreme Court (Burns,

J.), entered June 26, 2015 in Otsego County, which denied

defendant Katherine Yager-Krol's motion for summary judgment

dismissing the complaint.

Plaintiff and defendant Katherine Yager-Krol (hereinafter

defendant) were married in 1989. During the marriage, defendant

inherited property known as the Yager Farm from her mother, Julia

Yager, who died in 2005. Plaintiff commenced a divorce action in

2010, and the parties were divorced in 2012. The divorce
-2- 522886 

judgment incorporated stipulations by which the parties resolved

various issues, including their agreement that Yager Farm was

separate property for purposes of the divorce litigation but that

plaintiff reserved any claims to the property that he might have

"under a theory of constructive trust or otherwise exclusive of

any claim because of the marriage directly." 

Thereafter, plaintiff commenced this action seeking to have

a constructive trust placed upon Yager Farm on the ground that he

had expended funds and made improvements to the property in

reliance upon defendant's promise to share ownership with him. 

Following joinder of issue, defendant moved for summary judgment

dismissing the complaint against her. Supreme Court denied

defendant's motion, finding, as pertinent here, that the claim

was not barred by res judicata and that there were questions of

fact as to whether a constructive trust should be applied. 

Defendant appeals, and we affirm.

Ordinarily, principles of res judicata preclude a party

from separately litigating issues of title to property that were

or might have been raised in a matrimonial action, as such

matters are closely interrelated with the core objective of

dissolving the marital relationship (see O'Connell v Corcoran, 1

NY3d 179, 184-185 [2003]; Boronow v Boronow, 71 NY2d 284, 290

[1988]; Eickhoff v Eickhoff, 12 AD3d 741, 741-742 [2004]; see

also Rainbow v Swisher, 72 NY2d 106, 110 [1988]). However, when

a party's right to maintain a cause of action has been expressly

reserved in a prior action, "[i]t would be inequitable to

preclude [the] party from asserting [the] claim under the

principle of res judicata" (Landau, P.C. v LaRossa, Mitchell &

Ross, 11 NY3d 8, 14 [2008] [internal quotation marks and

citations omitted]; see Travelers Prop. Cas. Co. of Am. v Sanco

Mech., Inc., 126 AD3d 527, 527-528 [2015]). Here, the parties

freely agreed to the stipulation by which plaintiff reserved his

constructive trust claim, which is contractually binding upon

them (see Barlette v Barlette, 95 AD3d 1624, 1624 [2012]; Hoyt v

Hoyt, 307 AD2d 621, 622 [2003]). Defendant has made no claim of

any unfairness, inequitable conduct or other reason to question

the knowing and voluntary nature of the stipulation (see Varriale

v Varriale, 160 AD2d 1121, 1122-1123 [1990]). We thus agree with

Supreme Court that res judicata does not preclude plaintiff from
-3- 522886 

raising the constructive trust claim (compare Xiao Yang Chen v

Fischer, 6 NY3d 94, 102 [2005]; Partlow v Kolupa, 122 AD2d 509,

509-510 [1986], affd 69 NY2d 927 [1987]).1

We further reject defendant's contention that Supreme Court

erred in denying summary judgment because plaintiff did not

submit evidence that defendant promised to convey an interest in

Yager Farm to him. A constructive trust may be imposed upon

proof of "(1) a confidential or fiduciary relation, (2) a

promise, express or implied, (3) a transfer made in reliance on

that promise, and (4) unjust enrichment" (Bankers Sec. Life Ins.

Socy. v Shakerdge, 49 NY2d 939, 940 [1980]; accord Consumers

Union of U.S., Inc. v State of New York, 5 NY3d 327, 347 n 14

[2005]). "In the marital context, constructive trusts have been

imposed when the party seeking this relief has demonstrated a

transfer of funds or expenditure of effort, in reliance upon a

promise, over and above that which could normally be attributed

to the give and take of the marital relationship" (Tidball v

Tidball, 93 AD2d 954, 955 [1983] [citation omitted]).

Defendant asserted that neither she nor her parents – the

prior owners of Yager Farm – ever agreed to convey an interest in

the property to plaintiff, and that she never made any express or

implied promise to develop or utilize the farm for plaintiff's

benefit as co-owner. She further asserted that defendant made

few expenditures of money or time for the benefit of the

property, and that the costs he did cover were nothing more than

typical marital expenses. In opposition, plaintiff asserted that

he and defendant had frequent conversations throughout their

marriage regarding their plans to move to Yager Farm after its

ownership passed to defendant and to renovate it as co-owners. 

He further asserted that, in reliance upon these conversations,

he invested substantial amounts of time, labor and money for the

property's benefit throughout the marriage, including purchasing

various pieces of farm equipment, paying taxes and insurance,

1 Defendant's further argument that res judicata bars

plaintiff's claims of unjust enrichment and quantum meruit was

not raised in Supreme Court and is thus unpreserved for appellate

review (see Matter of Ramos v Goord, 309 AD2d 1096, 1097 [2003]).
-4- 522886 

performing haying and lumbering operations and repairing and

renovating farm buildings and a log cabin, and helping to pay

counsel fees, expenses and the cost of settlement of certain

litigation involving the property. He further produced a 2010

written communication from defendant to plaintiff in which, among

other things, she stated that she hoped that his business address

would soon be that of Yager Farm, as well as an affidavit from

the parties' son stating that he recalled family discussions

between plaintiff and defendant about their plans to renovate and

move into Yager Farm, and that he had never heard defendant state

that she did not intend to convey an ownership interest to

plaintiff. 

The elements of a constructive trust are applied flexibly,

"and, as an equitable remedy, a constructive trust may be imposed

whenever necessary to satisfy the demands of justice" (Cinquemani

v Lazio, 37 AD3d 882, 882 [2007]; see Booth v Booth, 178 AD2d

712, 713 [1991]). Here, the parties' contradictory claims as to

whether defendant intended to share ownership of the farm with

plaintiff present credibility issues for factual resolution. We

agree with Supreme Court that defendant's submissions established

triable issues as to whether plaintiff's labor and expenditures

were made in reliance upon an express or implied promise and

whether a constructive trust should be applied (see Marini v

Lombardo, 39 AD3d 824, 825-826 [2007]; Moak v Raynor, 28 AD3d

900, 902-903 [2006]; Leire v Anderson-Leire, 22 AD3d 944, 945-946

[2005]). Accordingly, defendant was not entitled to summary

judgment dismissing the complaint.

McCarthy, J.P., Lynch, Devine and Clark, JJ., concur.
-5- 522886 

ORDERED that the corrected order is affirmed, with costs.

ENTER:

Robert D. Mayberger

Clerk of the Court