Court Opinion

ID: 9964064
Source: CourtListenerOpinion
Date Created: 2024-04-26 20:09:44.807673+00
Date Added: 2024-06-11T08:25:09.353155
License: Public Domain

Take v 267 Goldie Partners LLC
               2024 NY Slip Op 31410(U)
                     April 22, 2024
             Supreme Court, Kings County
         Docket Number: Index No. 535152/23
                 Judge: Lawrence Knipel
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
  FILED: KINGS COUNTY CLERK 04/22/2024 04:34 PM                                                                                                                                           INDEX NO. 535152/2023
  NYSCEF DOC. NO. 106                                                                                                                                                               RECEIVED NYSCEF: 04/22/2024

                                                                                                                                                      Atan IAS Part57 of the Supreme Courtofthe State
                                                                                                                                                      ofNewYork,he;id in and for the County of Kings,
                                                                                                                                                      at the Courtho1.1-se, at Civic Center, Brooklyn,
                                                                                                                                                      NewYork, on th¢ 22. nd day.of April, 2024     ·

           PRE SENT:

           HQN. LAWRENCE KNIPEL,
                                                                                                                       Justice.

           - .- -      -   -   -     .... -       -   -   -    -   -   -   -   -   ·- ·- -· -   '" -   -   -   -   -   -· -   -   -   -   -   ·C.. · - -   -   X
           EKANEMTAI<.E, individually and derivatively
           ONBEHALFOF267 GOLDIEPARTNERS,LLC,

                                                              Plaintiff,                                                                                                      ORDER
                                   - against -                                                                                                                                Index No.: 535152/23

          267 GOLDIE PARTNERS LLC, DONALD M
          MATHESON, MELISSA BENJAMIN,
          ELLIOT BERMAN, CITIZENS BANKN.A
          PARKING VIOLATIONS BUREAU,
          COMMISSIONER OF LABOR STATE OF
          NEWYORK '.           . .

                                 Defendants.
           - - ,. - - - - - - - -· - - - ·- - - - - - - - .., .- .., - - - ·- - - - - - - X

                                                                                                                                                                        ;
                                                                                      '
                               Defendants Melissa Benjamin
                                                      .
                                                           and Elliot Berman move
                                                                               .
                                                                                  by order
                                                                                      '    to show cause to cancel the notice

          ofpendency filed by plaintiff and, in effect, for summary judgment 4ismissing plaintiffs claim to void and
               .                              .                                                                                                                    ..   i       .
                                                                                                                                                                        ;

          rescind the deed from defendant 267 Goldie Partners LLC (LLC}dtted October 19, 2021, for the property

          located at 267 Putnam A venue, Brooklyn, N i::w York.

                               In September 2021 , defendant Donald Matheson provided· !an affidavit to. the moving defendants
                                                                                                                                                                        I;

          stating that he was authorized to c.ohvey the subject property1 that t~ere was no provision prohi bi ting him
                                                                                                                                                                        ;
                                                                                                                                                                        i
          from sel Hng the property, and tha{ he was the sole member of LLC)
                                                                                                                                                                        I'
                               However, in her-complaint, plaintiff alleges that she and M~theson
                                                                                          f
                                                                                                  formed LLC, and agreed
                                                                                                                   . .
                                                                                                                         to an
                                                                                                                                                                        '

          Operating Agree1hen t that would control thei t j ointventure for rede~elopiiig the prop¢rfy. Pursuant to their

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  FILED: KINGS COUNTY CLERK 04/22/2024 04:34 PM                                                       INDEX NO. 535152/2023
  NYSCEF DOC. NO. 106                                                                         RECEIVED NYSCEF: 04/22/2024

           operating agreement, plaintiff allf:ges she had a 40¾ interest in LLC, and that the sale         of the property
           required a unanimous decision      of all members. Plaintiff contet)ds that· since Matheson did not have
           unanimous consent of the members of the LLG to transfer to the n1oving defendants, the purported

           conveyance is null and void and the LLC should be declared the sf le owner of the property.

                   Defendants, however,·contend that they purchased the suljject premises fot its appraised value of

           $1,500,000, and that they have undertaken major renovations and e;xpended over $600,000 to date to make

           the premises their pdmaryresidence. In addition, they have a $2l875,COOO mortgage with a $1.4 million
                                                   '                              '

           construction loan. Because of the notice of pendency, their tonsttifdion loan was "frozen''_, their property
                                                                                  ;
                                                                                  '
           is gutted andthus subject to deterioration and vandalism,and the)i areliablc for mortgage payments over

           $7000amonth.

                  In this motion, the moving defendants contend that plaintiffs argument thatthe deed here is void
                                                                                  ;

           ab initi_o is misplaced. A deed is void ab initio if the signaturepurporting to be the _grantor's is forged. Here;

           however, while there may be issues as tothe grantor's authority to fign the deed, there is ho issue as to the

           gtantor' s authenticity, and the de eel is merely voidable. And, by wai}ing over twoyears to bringthis lawsuit,
                                       ••                                         I

           the moving defendants argue that they are entitled to the equitable !defense of laches which would prevent

           plaintiff from seeking to void it now. This is especially so here, in[ light ofthe great expenses incurred by

           the moving defendants who entered into an arms Iepgth transact19n, paid fair value -for the property and

           incurred substantial financialobligations torenovatetheirhome. Pfaintiff argues in opposition that forgery

           is but one species .of fraud; and that using the fake operating agreei'µent for the purpose of fraud and deceit

           against the other partner should make this transaction void ab    initip.
                  A forged deed is void at its inception, a legal
                                                              . :
                                                                  nullity that   is not enthled to legal effect and cannot
                                                                                  l

           convey good title (see Morden v Dorthy, 160 NY 39 [1899]; Faisbn v Lewis, 25 NY2d 2015 [20l5J). In
                                                       .                          t

           contrast, a deed where the signature and authority for conveyancre are acquired by fraudulent means is

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  FILED: KINGS COUNTY CLERK 04/22/2024 04:34 PM                                                      INDEX NO. 535152/2023
  NYSCEF DOC. NO. 106                                                                        RECEIVED NYSCEF: 04/22/2024

           voidable, and until it is set aside it has the effect of transferring tit!~ to the grantee (Faisonv Lewis, supra;

           Matter ofShau Chung Hu v Lowbet Realty Corp,, 161 AD3d 986 i[2d Dept 2018][Subjectdeed was ortly

           voidable, not void ab initio, since petitioner alleged that the signat4re in question and authority to convey

           were acquired by fraudulent means but did not allege that the signrturc was forged]).

                   "The essence ofthe equitable defense oflaehes is prejudiciaUdelay in the assertion ofri ghts (citations

           omitted)" (Stein v Doukas, 98 AD3dl026 [2d Dept 2012][In order for !aches to apply to the failure ofan

           owner of real property to assert his or her interest, it must be show* that the plaintiff inexcusably failed to

           act when he or she knew or should have known that there was a problem with title]), "Moreover:, as the
                                                                                  ;

           effect of delay may be critical to an adverse paity, delays ofeven le~s than oneyear have been sufficient to

           warrant the application of the defense'' (Stein v Doukas, supra 198 AD2d at 1028; see Schulz v State (~[New

           York, 81 NY2d; 336, 348 [1993]).

                  Herc, M athesonmisreprescnted to the moving defendants that
                                                                           .
                                                                              he was authorized to sell the property, .

           that there was no reason he could not sell and that he-Was the sole Il}cmbcr ofLLC. But he did not forge the

           signature ofai1other individual who in truth owned the property. His signatme was authentic and he was a

           majority partner in LLC. Because ofthe allegedfraud on plaintiff: h9wever, thedeedwas voidable. Plaintiff

           could have moved in immediately to cancel the sale and restore title to the LLC, butshe did not. The moving
                                                     .                            .

           defendants were bona fide purchasers, paid valuable consideratio~, lacked knowledge of any fraud in. the

           conveyance or of any facts that would lead are<1sonably prudent putchaser to inquire about possible fraud.

           Their reliance on the appearance of Matheson' s apparent authority :Was reasonable. In the two yeats since

          purchasing the subject premises they embarked oh gut renovation~, an enhanced mortgage to finance. the

           renovations and a construction loan that is apparently
                                                        .
                                                                  frozen due to !the filing ofthenotice ofpcndericy and
                                                                                                             .

           this litigation. In addition,underthese circumstances, the moving defcndants ate entitled to use the equitable
                                                                               i

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  FILED: KINGS COUNTY CLERK 04/22/2024 04:34 PM                                                   INDEX NO. 535152/2023
  NYSCEF DOC. NO. 106                                                                     RECEIVED NYSCEF: 04/22/2024

           defense of laches to prevent plaintiff from voiding the sale at this *me. Plaintiff can pursue other options,

           including seeking money damages from the party that caused her tp sustain those damages.
                                                                               ;

                  According} y, the motion, in effect, for summary judgmqnfdismi ssing the claim to void or rescind

           the deed tp the moving clefendants is granted, andthe complaint is 4ismissed againsttherh. In addition, the

           notice of pendency shall be vacated within one. week after the dat~ of this order.

                  The foregoing constitutes the decision and orderofthis covrt.

                                                                 E NT E R, fb«T1iLl.' lfli

                                                                               .;
                                                                               ;

                                                                HON. tAWf=itNCE KNlPEL
                                                                ADMINl6TRATIVE.JUDGE

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