Decision/Order Chantel Hampton (“Petitioner”) commenced holdover proceedings against Stanley Hampton (Index Number 55878/19) and Andre Hampton (Index Number 55879/19) (collectively, “Respondents”) seeking possession of the 1st and 2nd rooms in the basement floor located at 176-16 Sayres Avenue, Jamaica, New York. Petitioner served identical Notices of Termination pursuant to RPAPL 713(7), dated February 8, 2019, to terminate Respondents’ licenses to occupy their respective rooms and their use of the kitchen and the bathroom on the 1st floor of the subject premises. Respondents appeared by counsel and each interposed an Answer in their respective proceeding containing affirmative defenses of lack of personal jurisdiction, ownership rights, and constructive trust. On consent, the parties consolidated both proceedings for traverse and trial. On June 4, 2019, the proceedings were transferred to Part Q for traverse and trial, which was adjourned to July 2, 2019. On July 2, 2019, Stanley Hampton (Index Number 55878/19) withdrew his personal jurisdiction defense and this Court held a hearing solely on Respondent Andre Hampton’s (Index Number 55879/19) personal jurisdiction defense and reserved decision. As only one party elected to challenge service, the Court declined to consolidate the proceedings at that juncture as different results were potential for Respondents. On the same date, at the conclusion of Respondent Andre Hampton’s traverse hearing, trial ensued as to the proceeding against Stanley Hampton (Index Number 55878/19). Stanley Hampton Trial (Index 55878/19) Prior to start of the trial, Respondent’s counsel made an oral application to dismiss the proceeding based on the allegation that Petitioner did not have standing to commence the proceeding as her deed was invalid. As counsel did not produce a subsequently recorded deed, nor is there a stay of this proceeding from another Court of competent jurisdiction, her oral application was denied without prejudice pending trial. At trial, Petitioner Chantel Hampton testified on her prima facie case. She testified that on December 7, 2016, she purchased the subject two-family house with her now deceased mother, Linda Hampton, as tenants in common with right of survivorship. A certified copy of the deed was admitted into evidence. (P. Ex. 1). Ms. Hampton further testified that she granted permission for her brothers Stanley Hampton and Andre Hampton to occupy the premises and that she now seeks to terminate their licenses. On cross-examination, Ms. Hampton testified that she did not see the deed prior to the closing. When the deed was presented at the closing, Ms. Hampton testified that the title company requested to add the clause of “right of survivorship” to the deed. Ms. Hampton testified that her mother was present at the closing, that they both agreed to the deed being amended to include said clause, and that at that time they both understood what the clause “right of survivorship” meant, which was that in the event of death the house will pass to the survivor in its entirety. Ms. Hampton testified that Respondents Andre Hampton and Stanley Hampton are her brothers and that they both moved into the house after the purchase. Ms. Hampton testified that it was her mother who allowed her brothers to reside at the premises, and that when her mother was alive, expenses for the house, including the mortgage and bills, were divided equally between her and her mother. However, since her mother’s death, Ms. Hampton testified that she pays the entire mortgage and all expenses associated with the house. Ms. Hampton further testified that her brothers gave money to her mother, but that she is unaware how much money they gave and whether it was for the needs of the house or for rent, as she did not get involved in the arrangement between her mother and brothers. On redirect, Ms. Hampton testified that the purchase price of the house was $775,000.00, that the $50,000.00 down payment was paid out of her funds, and that she worked seven days a week to make sure she was able to purchase the house. Ms. Hampton testified that her brothers did not contribute any money toward the down payment of the house, that only her mother’s name and her name appear on the mortgage, and that her brothers made very few payments to her since her mother died. Ms. Hampton testified that Stanley Hampton gave her three payment approximately of $500 each, and that Andre Hampton gave her approximately two payments. Ms. Hampton’s direct testimony concluded at that point. Next, Respondent Stanley Hampton took the stand and testified on his behalf. Stanley Hampton credibly testified that prior to purchase of the house his family always rented their housing accommodations and that he always gave money to his mother for his share of the rent. Stanley Hampton testified that his mother worked for the Metropolitan Transit Authority (hereinafter MTA) for over thirty years, that it was always her dream to purchase a house for her family, and that his mom was always concerned about the entire family. Stanley Hampton testified that when his mother told him that she was purchasing the house in her and his sister’s names alone, he immediately had concerns, but his mother reassured him that she was making the purchase for the benefit of the entire family and said that she would never do anything for only one of her children and that he had nothing to worry about. Stanley Hampton testified that he did not contribute to the down payment of the house and that he was not aware of the purchase price until it was stated at the trial, but he knew that the down payment was $10,000.00. Stanley Hampton further testified that he moved into the house with his mother immediately after the closing and started contributing toward the mortgage from the very beginning by giving his mother $500.00 toward the mortgage every month until she passed away. Stanley Hampton testified that he did not think of himself as a tenant and always thought of the house as a family property. After his mother passed away, his sister asked for payment and he gave her three money orders. Stanley Hampton concluded by stating that he started giving his sister money orders rather than cash because he did not trust her and that he stopped making payments after she served him with Court notices. At the completion of Stanley Hampton’s testimony both sides rested, and the proceedings were adjourned to July 30, 2019 for determination of the personal jurisdiction claim as to Andre Hampton (Index Number 55879/19) and or for trial. Andre Hampton Trial (Index Number 55879) By Decision/Order, dated July 12, 2019, this Court overruled traverse and the trial continued on July 30, 2019 as to the proceeding against Respondent Andre Hampton (Index Number 55879/19). Prior to start of the trial, both parties consented to consolidate both proceedings for the remainder of the trial. Andre Hampton testified on his own behalf at the trial. Andre Hampton credibly testified that his mother purchased the house with his sister for the benefit of the family. Andre Hampton testified that his mother was in poor health when she contemplated purchasing the house, and that she asked him and his brother if they were planning on going on their own or whether they will join her. Andre Hampton testified that his mother wanted a house where the entire family would be able to live together and that she purchased a two-family house for that purpose. Immediately after the purchase, Andre Hampton testified that he started contributing money to his mother toward the mortgage and that his brother also gave her money toward the mortgage. Andre Hampton testified that his mother did not disclose how much each brother was contributing, but he was aware that his mother and sister were splitting the bills in half. Andre Hampton credibly testified that on the day of his mother’s funeral, the family had a meeting regarding paying the bills for the house and the mortgage payments which was attended by his aunt Barbra Jackson, his uncle Roger Mcllaren, his brother Stanley Hampton and his sister Chantel Hampton. Andre Hampton testified that Chantel Hampton told him to start paying her $850.00 per month, that he paid her what she asked twice from his checking account, and that he stopped making payments after she gave him a notice that she was taking him to Court. Andre Hampton testified that he paid his sister via personal check because he did not trust her, that he did not know exactly how much the down payment or the mortgage was for the house, but that his mother’s credit was used to obtain the mortgage for the house because his sister did not have good credit at the time of the purchase. Andre Hampton testified that his mother worked for the MTA for over 30 years, that it was her desire to purchase a house for the family, and that the sole reason why his 62 years old mother, in poor health and post stroke, decided to purchase a two-family home was for it to be a “generational house” a “safe house” for the benefit of all of her children. Lastly, Andre Hampton stated that he did not think of himself as a guest or a tenant and always thought of it as a family home. Both sides rested after completion of Andre Hampton’s testimony. Findings of Fact and Conclusions of Law At trial, Petitioner demonstrated that ownership of the entire subject property vested to her upon her mother Linda Hampton’s demise pursuant to the last recorded deed which contained a “right of survivorship” clause. It is undisputed that Respondents are Petitioner’s brothers and that they both resided at the premises with the Petitioner and Linda Hampton, their late mother, from the date of purchase to the present date. It is also agreed that Linda Hampton died intestate and that she did not have any written instructions as to the distribution of her property. The crux of the dispute is whether Respondents are licensees of Petitioner or whether they reside at the premises pursuant to an interest which is not subject to summary disposition. To that end, Respondents allege that even if upon their mother’s death the deed to the premises vested to Petitioner, they are not licensees and that Petitioner was entrusted to hold the premises for their benefit as co-owners and as distributees of their late mother. The Court notes that Respondents did not interpose a familial exception1 as a defense to the licensee proceeding. To that end, the Court makes the following findings of fact and conclusion of law. Pursuant to RPAPL 713(7), a special proceeding may be maintained after service of a ten day notice to quit on Respondent if Respondent is a licensee of the person entitled to possession of the property at the time of the license and (a) Respondent’s license has expired, or (b) Respondent’s license has been revoked by the licensor, or (c) the licensor is no longer entitled to possession of the property. As to the allegation of a licensee status, Petitioner failed to prove her prima facie case under theory of licensee pursuant to RPAPL 713(7). Petitioner’s testimony contradicted her case in chief. Petitioner’s Notices of Termination allege that she, as licensor, gave licenses to her brothers to occupy the premises. By her own admissions, she testified that it was her mother, not she, who allowed her brothers to occupy the premises. Therefore, the Notices and the Petitions as plead are defective warranting dismissal of both proceedings. However, the Court’s analysis does not stop here. Assuming arguendo that Petitioner properly terminated Respondents’ licenses, the Court turns to Respondents’ affirmative defenses of constructive trust and allegation of ownership. “Because the gravamen of a summary proceeding is the present right to possession, where ‘any legal or equitable defense, or counterclaim’ overcomes the assertion of title as determinative of the question of petitioner’s standing to evict respondent, the court must consider its merits even if the court’s jurisdictional limitations means that its findings are not res judicata but merely an ‘incidental disposition’ of the matter to adjudicate the summary proceeding [internal quotations omitted].” (Murphy v. Baldari, 2003 N.Y.Misc. LEXIS 394 [App Term, 2nd Dep't 2003]). Constructive Trust It is well settled that title cannot be determined in the context of a Housing Court summary proceeding, but that the Court is empowered with the jurisdiction to determine any “legal or equitable” defense for purpose of determining a right to possession. (Chopra v. Prusik, 9 Misc.3d 42 [App Term, 2nd Dep't 2015] citing, Nissequogue Boat Club v. State of New York, 14 AD3d 542 [2nd Dep't 2005]; see also, Decaudin v. Velazquez, 15 Misc.3d 45 [App Term, 2nd Dep't 2007]; RPAPL §743). Hence, even though parties are unable to challenge title in a summary proceeding, a licensee may defeat a summary proceeding by establishing an equitable affirmative defense such as constructive trust. (See, Paladino v. Sotille, 15 Misc.3d 60 [App Term, 2nd Dep't 2007]. Additionally, the statute of frauds is not applicable if the imposition of a constructive trust has been shown to be warranted. (Panetta v. Kelly, 17 A.D. 3d 163 [2005]; see also, Paladino v. Sotille, 15 Misc.3d 60 [App Term, 2nd Dep't 2007].2 Therefore, the Court now turns to Respondents’ affirmative defense of constructive trust. A constructive trust is a cause of action seeking to equitably assert an interest in real property. (A.G. Homes, LLC v. Gerstein, 52 AD3d 546 [2nd Dep't 2008]; see also, Scivoletti v. Marsala, 97 AD2d 401 [2nd Dep't 1983]). A “constructive trust may be imposed when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest.” (Sharp v. Kosmalski, 40 NY2d 119,121 [1976] citing, Beatty v. Guggenheim Exploration Co., 225 NY 380,386 [1919] rev’d on other grounds). To satisfy the constructive trust doctrine four elements must be established: (1) a confidential or fiduciary relationship; (2) a promise, express or implied; (3) a transfer in reliance thereon; and (4) unjust enrichment. It has long been settled that although all four elements must be present, the elements are to be applied flexibly to satisfy the salutary purpose of preventing unjust enrichment to a transferee. (See, Giammona v. 72 Mark Lane, LLC, 143 AD3d 941 [2nd Dep't 2016]; see also, Bankers Sec. Life Ins. Society v. Shakerdge, 49 NY2d 939 [1980]; (Sharp v. Kosmalski, 40 NY2d 119 [1976]). To that end, to avail the defense, the burden of proof rests with the party asserting the constructive trust theory to prove all four elements of the defense. (See, Fireman’s Fund Ins. Co. v. Farrell, 57 AD3d 721 [2nd Dep't 2008]; see also Suissa v. Barron 24 Misc.3d 1236(A) [Dist Ct, Suffolk County 2009]). Constructive Trust: Confidential Relationship As the Court of Appeals in Sharp opined, “it is the existence of a confidential relationship which triggers the equitable considerations leading to the imposition of a constructive trust.” (Sharp v. Kosmalski, 40 NY2d 119,121 [1976]). A marital or other family relationship, although frequently present, is not an essential element to establish a confidential relationship. Instead, the moving party needs to demonstrate “a relationship of trust and confidence” to trigger the imposition of the obligation not to abuse that trust. (Id.) Here, the parties are siblings and children of the deceased, and by the nature of their relationship, are entrusted with trust and confidence to each other. Therefore, the family relationship between the parties, coupled with joint possession of the property from the inception of the ownership, dictates that a confidential relationship existed between the parties. (Id.) Constructive Trust: Transfer and Promise Unquestionably there was a transfer of property as ownership in its entirety vested to Petitioner upon her mother’s demise. The center of the dispute is whether there was a promise made to Respondents by their mother that they have an interest in the subject premises and whether Petitioner was entrusted with holding the deed for her own benefit and that of her brothers. For purposes of forming a constructive trust, a promise does not need to be in writing and does not even need to be expressly made. Court have imposed constructive trusts from implied promises, or a promise inferred from the transaction itself. (See, Paladion v. Sotille, 15 Misc.3d 60 [App Term, 2nd Dep't 2007]; see also, (Sharp v. Kosmalski, 40 NY2d 119,122 [1976]). It is undisputed that Linda Hampton died intestate and that she did not leave any written instructions regarding the distribution of her interest in the subject property. The Court, however, credits Respondents’ undisputed testimony that Linda Hampton told both Respondents that she is purchasing a two-family house for the benefit of the family, that she asked both sons whether they would like to be part of the family enterprise, and once they agreed they all moved into the house from inception of its purchase.3 At the time of purchase, Linda Hampton was 62 years old, recovering from a debilitating stroke, and Respondents credibly testified that it was her lifelong dream to purchase a home for her entire family. Both Respondents testified that after the purchase they assumed their role in the family enterprise by contributing money to be applied toward the mortgage. Particularly relevant is the undisputed credible testimony that Linda Hampton assured her sons that although the deed for the premises did not contain their names, they had nothing to worry about because she would never do anything for the benefit of one child. Furthermore, Respondents testified that their mother’s employment with the MTA, her credit, and her income, contributed to secure the down payment for the house and mortgage approval because Petitioner’s credit or income alone was insufficient to secure the purchase. Although Petitioner testified that it was her employment and her personal finances that secured the down payment for the house, she did not rebut Respondents testimony by way of documents or testimony to substantiate her claim that the purchase was made for her sole benefit. Petitioner admitted that the “right of survivorship” clause in the deed was not something that was contemplated by the parties prior to the closing, and that the language was added by hand at the closing at the suggestion of the title company, possibly for the purpose of ensuring the loan commitment by the financial institution. Additionally, even though both Respondents conceded that they did not contribute toward the down payment, Petitioner acknowledged that both Respondents financially contributed toward the house by giving money to their mother. Petitioner testified that she did not know how much money Respondents contributed or how their mother applied the contributions, but that she and her mother equally split the expenses associated with the house up until she passed away. Finally, Petitioner did not offer testimony or any evidence to rebut Respondents’ claim that although their names did not appear on the deed, the purchase was made with an implied promise that they have an interest in the purchase. Therefore, based on the testimony and the evidence provided, the Court find that a promise existed as an element of a constructive trust. Constructive Trust: Unjust enrichment Unjust enrichment exists where the retention of a benefit received from a transaction would be unjust. (See, Sharp v. Kosmalski, 40 NY2d 119 [1976]).). Here, without the imposition of a constructive trust, Petitioner would benefit from ownership and possession of the entire property. In turn, Respondents would lose any possessory interest they have in what they call a “family home,” including losing their financial interest based on contributions made toward the mortgage and any beneficial interest in the property as distributees which stems from their late mother’s ownership interest. Therefore, Respondents have demonstrated unjust enrichment and Respondents have satisfied all four elements of their defense of constructive trust. Accordingly, both licensee proceedings are dismissed with prejudice as Petitioner has failed to prove a cause of action pursuant to relevant provisions of the RPAPL. As discussed, although Respondents have established their affirmative defense of constructive trust, this Court does not have jurisdiction to determine issues of title or the division of interests in the property. This is without prejudice to both parties seeking appropriate relief in a Court of competent jurisdiction. This constitutes a Decision/Order of this Court. Dated: November 29, 2019 Queens, New York
