Court Opinion

ID: 4084195
Source: CourtListenerOpinion
Date Created: 2016-10-07 23:51:53.913336+00
Date Added: 2024-06-11T14:35:01.049846
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

915
CA 13-00228
PRESENT: SMITH, J.P., CARNI, SCONIERS, AND VALENTINO, JJ.

CATHY TUMINNO, PLAINTIFF-RESPONDENT,

                    V                             MEMORANDUM AND ORDER

MARJORIE WAITE, DEFENDANT-APPELLANT-RESPONDENT,
JAMES FLAGELLA, DEFENDANT-RESPONDENT-APPELLANT,
ET AL., DEFENDANTS.

ERICKSON WEBB SCOLTON & HAJDU, LAKEWOOD (PAUL V. WEBB, JR., OF
COUNSEL), FOR DEFENDANT-APPELLANT-RESPONDENT.

JAMES FLAGELLA, DEFENDANT-RESPONDENT-APPELLANT PRO SE.

GROSS, SHUMAN, BRIZDLE & GILFILLAN, P.C., BUFFALO (LESLIE MARK
GREENBAUM OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

     Appeal and cross appeal from an order of the Supreme Court,
Chautauqua County (James H. Dillon, J.), entered April 25, 2012. The
order directed a sale of real property under certain circumstances.

     It is hereby ORDERED that the order so appealed from is
unanimously vacated on the law without costs and the matter is
remitted to Supreme Court, Chautauqua County, for further proceedings
in accordance with the following Memorandum: In this action seeking,
inter alia, the partition and sale of real property and a
determination that the sale of the property extinguishes a certain
“option to purchase,” defendant Marjorie Waite appeals and defendant
James Flagella cross-appeals from an order that directed the sale of
the property in the event that Flagella and the remaining defendants
did not exercise their “option to purchase” the property within 60
days of entry of the order.

     Plaintiff and Waite are tenants in common and acquired the
property at issue by an executor’s deed pursuant to the settlement of
their mother’s estate. In settling that estate, plaintiff, Waite and
the other named defendants signed a settlement agreement providing
that plaintiff and Waite “agree to grant to [each of the other named
defendants] the option to purchase the . . . property, in the event
that [plaintiff and Waite], either jointly or severally, determine to
sell, assign or transfer the . . . property to someone other than each
other. The option price shall be [$120,000] plus the costs of any
improvements made by [plaintiff and Waite] to the premises subsequent
to [their] purchase of the premises. Said option may be prepared in
recordable form by any or all of the [other named defendants] at their
                                 -2-                           915
                                                         CA 13-00228

own cost and expense, and [plaintiff and Waite] will execute any said
recordable option. Upon receipt of an offer to purchase the premises,
except from [each other], [plaintiff and Waite] shall notify each of
the [other named defendants] then living, in writing of the proposed
sale of the premises, and the [other named defendants] shall have
sixty (60) days to exercise their option as granted herein.”

     The settlement agreement thereafter was reduced to a document
executed by plaintiff and Waite (hereafter, recorded document), and it
provided that “[w]e give and grant to [each of the other named
defendants] the option to purchase certain real property . . . The
option price for the property will be [$80,000] plus any improvements
made by . . . Waite and [plaintiff]. If at any time . . . Waite and
[plaintiff] desire to sell the premises and receive an offer they
shall communicate said offer to [each of the other named defendants,]
who shall then have sixty (60) days to purchase the premises upon the
same terms and conditions as the other offer.”

     We conclude that the right bestowed by the settlement agreement
and the recorded document is a right of first refusal, not an option
to purchase, despite the use of the term “option” therein (see LIN
Broadcasting Corp. v Metromedia, Inc., 74 NY2d 54, 60; Metropolitan
Transp. Auth. v Bruken Realty Corp., 67 NY2d 156, 163), and thus that
Supreme Court mistakenly treated the contractual right as an option to
purchase. “A right of first refusal is a dormant right that is
triggered when an owner decides to sell the property to a third party
at an agreed-upon price” (Markan Corp. v Plane’s Cayuga Vineyard,
Inc., 24 AD3d 1264, 1265), and those are the applicable facts set
forth in the settlement agreement.

     We agree with Waite on her appeal that the court erred in
determining that the contractual right was triggered upon plaintiff’s
commencement of the instant action, for partition and sale. It must
first be determined in a partition action whether the property may be
partitioned, i.e., divided among the owners in some fashion, without
great prejudice to them, and “partition sale” is a secondary
consideration only in the event that partition greatly prejudices the
owners (see RPAPL 901 [1]; Bentley v Dox, 12 AD3d 1187, 1187; Grossman
v Baker, 182 AD2d 1119, 1119). Thus, commencement of the partition
action did not trigger the right of first refusal inasmuch as a
partition, as opposed to a partition sale, would not result in a
transfer of the property to a third party. Furthermore, no offer of
purchase from a third party triggered either the right of first
refusal or the contractual obligation of plaintiff or Waite pursuant
to the settlement agreement or recorded document.

     We further agree with Waite that, under the circumstances of this
case, the court erred in ordering the sale of the property without
first resolving the accounting issues and adjusting any equities (see
Colley v Romas, 50 AD3d 1338, 1340; Sampson v Delaney, 34 AD3d 349,
349), thereby “ensur[ing] that the parties’ rights are fixed in such
manner that a decree ‘may work full and complete justice between
[them]’ ” (Grossman v Baker, 182 AD2d 1119, 1119).
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                                                         CA 13-00228

     Moreover, in some circumstances the right to partition pursuant
to RPAPL 901 (1) must yield to the well-recognized exception that
“equity will not award partition to a party in violation of his [or
her] own agreement” (McNally v McNally, 129 AD2d 686, 687; see Chew v
Sheldon, 214 NY 344, 348-349). “[W]here an action for partition would
tend to defeat the performance of a contract,” an agreement not to
partition is implied (24 NY Jur 2d, Cotenancy and Partition § 130; see
Tramontano v Catalano, 23 AD2d 894, 894; see generally Bessen v Glatt,
170 AD2d 924, 925). Here, partition that results in plaintiff and
Waite each having a portion of the property defeats the right of first
refusal, which applies to the entire property. Thus, partition
appears to be unavailable as a remedy (see McNally, 129 AD2d at 687),
unless the equities are adjusted such that either plaintiff or Waite
receives the entire property and the other is awarded owelty as
compensation for the unequal division of the property (see RPAPL 943;
24 NY Jur 2d, Cotenancy and Partition § 116), if equity so requires
given the claims of expenses and waste and the condition of the
property. We therefore vacate the order and remit the matter to
Supreme Court for an accounting and an adjustment of the equities
between plaintiff and Waite in a manner consistent with our decision
herein, prior to the entry of an order granting partition of the
property. We note that, upon remittal, the court may appoint a
referee.

     On his cross appeal, Flagella contends that the court erred in
determining that the purchase price was $120,000 without allowing
further proof on the issue. Inasmuch as the record establishes that
plaintiff and Waite relied on the recorded document signed only by
them as opposed to the settlement agreement, which was signed by all
of the parties, we conclude that plaintiff and Waite thereby reduced
the purchase price of $120,000 in the settlement agreement to $80,000
in the recorded document. The reduced purchase price in the recorded
document is an enforceable term against plaintiff and Waite (see
generally United States Fid. & Guar. Co. v Delmar Dev. Partners, LLC,
14 AD3d 836, 838).

Entered:   October 4, 2013                     Frances E. Cafarell
                                               Clerk of the Court