Papers considered: 1. Order to Show Cause filed September 29, 2023; Affidavit in Support of Sofia Merino Hernandez, dated September 26, 2023 with Exhibits A-K; Affidavit of Catalino Hernandez Maldonado in Support dated September 26, 2023; Affidavit in Support of Antonio Claret Cardona dated September 27, 2023; Affirmation of Emergency of Mark J. Alonso, Esq., dated September 27, 2023 with Exhibit L; and Memorandum of Law in Support. 2. Affidavit in Opposition of Eduardo Romero-Jimenez dated November 20, 2023, with Exhibits A-J; Affidavit in Opposition of Fred Muller dated November 21, 2023; and Memorandum of Law in Opposition. 3. [Reply]Affidavit in Support of Sofia Merino Hernandez dated December 18, 2023, with Exhibit A; Affirmation in Further Support of Karine Ter-Grigoryan, Esq., dated December 18, 2023, with Exhibits B-C; Affidavit in Support of Peter Kavakos dated December 18, 2023; and Memorandum of Law in Further Support. DECISION/ORDER In this action to impose a constructive trust on real property, Plaintiffs, Catalino Hernandez Maldonado, (“Maldonado”), and Sofia Merino Hernandez, (“Hernandez”), seek a preliminary injunction preventing Defendants, Eduardo Romero-Jimenez, and John Doe, as owners of record from selling, conveying, or otherwise transferring title to the subject real property. Romero-Jimenez opposes. BACKGROUND Plaintiffs, Maldonado and Hernandez, migrated to the United States, in 2005 and 2009, respectively. They were married in Greene County in 2010. Neither Plaintiff can read or write English. Hernandez was working at a store when she met Romero-Jimenez’s parents. Thereafter, Plaintiffs became friendly with them, and they began to socialize outside of work. In 2013, Plaintiffs required an automobile but could not register one in their names as undocumented immigrants. As a favor, Defendant’s parents purchased a vehicle in their name for Plaintiffs’ exclusive use. Plaintiffs paid all expenses and maintenance for the vehicle until they could register it in their names, at which time Defendant’s parents transferred the vehicle to Hernandez. In late Spring of 2017, Plaintiffs were distressed upon being advised by their landlord that they and their six children must vacate the premises by November 2017. They sought advice from Defendant’s parents, who were also their pastors. Defendant’s parents advised them that, as non-citizens, they could not purchase real estate in the United States and also advised that they would consult a real estate broker to explore how the Plaintiffs might acquire a new home. In so doing, Defendant’s father advised that he would need to bring with him Maldonado’s Mexican passport, his social security number, and his employment authorization card. Plaintiffs requested Defendant’s parents assist them in purchasing a home as with the purchase of the vehicle. They declined to do so. In early Summer of 2017, when Plaintiffs were visiting Defendant’s parents, Romero-Jimenez offered to purchase a house in his name for them. He would allow them to live in the home, treat it as if it were theirs, and eventually transfer it to their name, or to their children’s names when their American-citizen children reached the age of majority, with the understanding that Plaintiffs were to pay all the carrying costs, including the mortgage. Working with realtor, Fred Muller, Hernandez and Romero-Jimenez looked at houses in the Summer of 2017. In or around July 4th weekend, Hernandez was advised by Muller that he had found a “perfect house” for them. Plaintiffs concurred and wished to start the process of purchasing same with Romero-Jimenez’s assistance. Plaintiffs claim they confirmed with Romero-Jimenez that they would purchase the home in his name; he would obtain a mortgage; Plaintiffs would pay the mortgage and all other carrying charges; and Plaintiffs would have all the rights and responsibilities of ownership. Once Plaintiffs legally could take title the home in their names, or when one of their American-citizen children reached the age of majority, ownership would be transferred to them. In October of 2017, the transaction closed as planned and Romero-Jimenez gave the keys to Plaintiffs. There was no discussion of a lease. Plaintiffs regularly paid Romero-Jimenez in cash for the monthly mortgage, taxes and insurance. From early 2018 through 2021, Plaintiffs invested approximately $100,000.00 on improvements to the house, including a total roof replacement, the replacement of flooring on the first floor, and substantial landscaping. After Plaintiffs had been living at the home for more than three years, Romero-Jimenez approached them to sign a lease written in English. He explained that he was trying to purchase a $290,000.00 home and the bank wanted him to demonstrate more income. Plaintiffs signed the lease as requested. The term of the lease began on March 28, 2021, and ran through March 28, 2022. On August 25, 2023, Romero-Jimenez requested that Plaintiffs sign a second lease. This one in Spanish. Plaintiff and Defendant signed this lease on August 25, 2023, although the lease was dated August 25, 2024, and purports to run for a term commencing August 25, 2022, through August 25, 2023. This lease actually terminates on the very day it was signed. Six days thereafter, Defendant listed the premises for sale. On September 5, 2023, Plaintiffs were served with a 14-day Notice to Quit and, on September 27, 2023, Plaintiffs commenced this action. PLAINTIFFS’ CONTENTIONS Plaintiffs seek a preliminary injunction preventing Romero-Jimenez from selling, transferring, conveying or further encumbering the premises until a final order of the Court. They assert a likelihood of success on the merits, an irreparable injury absent the granting of a preliminary injunction, and that the balancing of the equities is in their favor. To establish a likelihood of success on the merits, Plaintiffs aver that, not only have they paid the mortgage and taxes, they have made approximately $100,000.00 in improvements to the premises, an act so inconsistent with mere tenancy as to explain without reference to the alleged oral contract the constructive trust sought to be imposed herein. See, Woolley v. Stewart, 222 NY 347, 351 (1918). In support, they submit the affidavit of their previous landlord, who avers that they were good, responsible tenants but they did not perform any renovations on his property. The uniqueness of any parcel of real property constitutes the irreparable injury. As they stand to lose their significant investment in the property, they assert that the equities balance in favor of granting the preliminary injunction. They further submit the affidavit of Antonio Claret Cardona, who avers that he was told of the purchase of the home for Plaintiffs’ benefit by Romero-Jimenez and his mother. Cardona also claims that Romero-Jimenez was aware of the ongoing renovations by the Plaintiffs because he and Romero-Jimenez discussed it at church. ROMERO-JIMENEZ’S CONTENTIONS Romero-Jimenez denies that there is any agreement to transfer the property to the Plaintiffs. His submission includes an affidavit from the realtor, Fred Muller, who denies ever having met with Hernandez to discuss any plan or agreement involving her purchasing a house with Defendant acting as some kind of straw purchaser for her benefit. Romero-Jimenez avers that Hernandez’s version of the events is false. He states that he was in the market for a rental property. The 2-story house he purchased would allow Plaintiffs to live on one floor at a reasonable rent, enough to cover the mortgage and taxes, while allowing him to rent out the other apartment for income. He notes that Hernandez claims she paid him $8,400.00 cash for the downpayment and $5,000.00 for closing costs, but the contract called for a downpayment of only $1,000.00 and closing costs of $5,026.37. Romero-Jimenez claims that he allowed Plaintiffs to use the second apartment for family only, but if the second apartment ever generated income, he would receive that income. The Plaintiffs specifically were advised not to perform any major renovations without advising Romero-Jimenez. In and around March 2021, Romero-Jimenez started receiving violation notices from the town regarding unlawful renovations and construction garbage. He then discovered that Plaintiffs were doing major construction and renovations. He was infuriated by the prospect of being responsible for any fines, damages, or injuries caused by improper or unlawful construction/electrical work. At this time, to protect himself from any damage claims, Romero-Jimenez changed his insurance coverage from a homeowner’s policy to a landlord’s insurance policy. Romero-Jimenez asked Plaintiffs to sign an English-language lease to memorialize the fact that the Plaintiffs are tenants. On or about August 25, 2023, Romero-Jimenez learned that Plaintiffs were charging rent for the upstairs apartment. He went to the premises and had Maldonado sign a second lease, this time in Spanish to avoid any confusion or misunderstanding. Romero-Jimenez avers that he wanted the tenants on the second floor to sign a lease, but he was prevented from doing so. DISCUSSION/PRELIMINARY INJUNCTION The New York standard for granting a preliminary injunction is well established: a movant must show (1) the likelihood of success on the merits; (2) irreparable injury absent the granting of a preliminary injunction; and (3) a balancing of the equities that favors the movant’s position. Aetna Ins. Co. v. Capasso, 75 NY2d 860, 862, 552 N.E.2d 166, 552 N.Y.S.2d 918 (1990); W.T. Grant Co. v. Srogi, 52 NY2d 496, 517, 420 N.E.2d 953, 438 N.Y.S.2d 761(1981). The Court finds that Plaintiffs have demonstrated a likelihood of success on the merits. “The elements of a constructive trust are a confidential relationship, a promise, a transfer in reliance on that promise and unjust enrichment. As a constructive trust is an equitable remedy, courts do not rigidly apply the elements but use them as flexible guidelines. In this flexible spirit, the promise need not be express, but may be implied based on the circumstances of the relationship and the nature of the transaction. Similarly, courts have extended the transfer element to include instances where funds, time and effort were contributed in reliance on a promise to share in some interest in property, even though no transfer actually occurred” Baker v. Harrison, 180 A.D.3d 1210, 1211-1212 (3d Dept., 2020), quoting Moak v. Raynor, 28 AD3d 900, 902 (3d Dept., 2006); see also, Henness v. Hunt, 272 AD2d 756, 757 (3d Dept., 2000). Here, the alleged agreement to purchase the home for the benefit of the Plaintiffs and its subsequent purchase create the confidential relationship. See, Sinclair v. Purdy, 235 NY 245, 253 (1923). Defendant is the son of the Plaintiffs’ friends and pastors. The absence of a formal writing grew out of that very confidence and trust and was occasioned by it. Id. The promise is to eventually turn title over to the Plaintiffs. The approximately $100,000.00 in renovations satisfy the elements of transfer in reliance and unjust enrichment. Thus, Plaintiffs have set forth sufficient facts to meet the four elements of a constructive trust, as well as an unjust enrichment. Plaintiffs’ likelihood to succeed on the merits is established by the purchase of a vehicle on their behalf by Defendant’s parents, which has not been denied by Romero-Jimenez. The Court further finds Plaintiffs are likely to succeed because no lease was required by Romero-Jimenez for the first three years of their alleged tenancy. The fact that Romero-Jimenez’s insurance policy was a homeowner’s policy, not a landlord’s policy, for those first three years is also corroborative of Plaintiffs’ allegations. The second lease, on its face, appears to be a sham, as its term ends on the day it was signed. Romero-Jimenez claims he found out about the renovations being done by Plaintiffs because he received violation notices from the town, but he has not provided copies of any such notices on this motion, nor has he provided an affidavit from the town’s code enforcement officer. Plaintiffs’ version of the facts is supported by the affidavit of Antonio Claret Cardona, who claims he was told of the purchase of the home for Plaintiffs’ benefit by Romero-Jimenez and his mother with Plaintiffs present. Cardona claims to have witnessed Hernandez provide Romero-Jimenez with cash while telling him “this is for the mortgage money”. Cardona avers that Romero-Jimenez was aware of the ongoing renovation work because they would speak about it at church. Finally, Romero-Jimenez fails to explain how he was prevented from having the second-floor tenant sign a lease, in view of his position that he is the owner. While Romero-Jimenez strongly denies Plaintiffs’ claims, the presence of issues of fact does not require denial of the motion. See, Moy v. Umeki, 10 AD3d 604 (2d Dept., 2004); Egan v. New York Care Plus Ins. Co., 266 AD2d 600, 601 (3d Dept., 1999). The function of a preliminary injunction is not to determine the ultimate rights of the parties, but to maintain the status quo until there can be a hearing on the merits. See, Gambar Enterprises, Inc. v. Kelly Services, Inc., 69 AD2d 297, 306 (4th Dept., 1979); Heisler v. Gingras, 238 AD2d 702, 703 (3d Dept., 1997). Furthermore, denial of the motion for a preliminary injunction would be inconsistent with the purposes of the equitable doctrine of constructive trust. Hightower v. Reid, 5 AD3d 440, 441 (2d Dept., 2004). Finally, CPLR §6312(b) mandates that the Court condition the granting of a preliminary injunction upon the posting of an undertaking by the Plaintiffs. This condition is mandatory. Moy v. Umeki, supra. Neither side has addressed the issue of an undertaking in their papers. Accordingly, it is hereby ORDERED, that Plaintiffs’ motion for a preliminary injunction is granted, pending submissions on the issue of the amount of an undertaking; and it is further ORDERED, that pending a final determination of this action, the preliminary injunction enjoins the Defendants, Eduardo Romero-Jimenez and John Doe, their employees, agents, representatives, and any persons or entities acting in concert with Defendants, (a) from taking any action in furtherance of eviction of the Plaintiffs or any other action to recover possession of 842 Main Street, Cairo, NY 12413, Lots #326 to #328 in the Town of Cairo, County of Greene, State of New York; (b) from obstructing, preventing, or impeding the Plaintiffs’ access and/or use and occupancy of the premises; (c) from terminating, interfering with, preventing or obstructing any service, including, but not limited to, utilities, water, and fuel for the premises; and (d) from offering for sale, selling, liquidating, further encumbering, leasing or otherwise transferring any rights related to the subject real property and improvements thereon ORDERED, that each party, within ten days of the date of this Decision/Order, shall submit, by affirmation or affidavit limited to no more than three pages, their argument and support for an amount of the undertaking; and it is further ORDERED, that pending the posting of the undertaking, the temporary stay set forth in the Order to Show Cause filed September 29, 2023, remains in full force and effect, with Defendants granted leave to move for relief from the temporary stay and preliminary injunction should Plaintiffs fail to post the undertaking after the amount is determined. This shall constitute the Decision/Order of the Court. The Court is e-filing this Decision/Order, satisfying the provisions of CPLR §2220 regarding filing and entry thereof, but that does not relieve the parties relative to service upon opposing counsel/parties with notice of entry thereon. Dated: February 7, 2024
