DLK, LLC v. Kireland-B LLC

1

2023 NY Slip Op 31160(U)

DLK, LLC, Plaintiff, v. KIRELAND-B LLC,MEDRITE MIDTOWN WEST LLC D/B/A MEDRITE, ALEXANDER CONDOMINIUM Defendant.

Index No. 155811/2020, Motion Seq. No. 001

Supreme Court, New York County

April 13, 2023

Unpublished Opinion

PART 33M

MOTION DATE 07/26/2022

DECISION + ORDER ON MOTION

HON MARY V. ROSADO, JUDGE

The following e-filed documents, listed by NYSCEF document number (Motion 001) 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41,42 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72 73, 74, 75, 76, 77, 78, 79, 80, 81 were read on this motion to/for JUDGMENT - SUMMARY.

Upon the foregoing documents, and after oral argument, which took place on January 24, 2023, where Lavinia Acaru, Esq. appeared for Plaintiff DLK, LLC ("Plaintiff') and Robyn Fearon, Esq. appeared for Defendant Kireland-B ("Defendant" or "Kireland"), Kireland's motion for summary judgment is granted and Plaintiffs cross-motion for summary judgment is denied. The other Defendants have not appeared.

I. Background

This action arises out of the placement of a demising wall between two commercial condominium units which are immediately adjacent to one another. The units and are owned by Plaintiff and Kireland. Plaintiff initiated this action on July 28, 2020 (NYSCEF Doc. 1). The demising wall at issue is in the basement of the building located at 250 East 49th Street a/k/a the Alexander Condominium (the "Building") (id. at ¶ 6). Plaintiff owns commercial unit 4 ("Unit 4"). Kireland owns commercial unit 2 ("Unit 2").

In the original condominium declaration, dated June 18, 2009, there was one commercial unit located on portions of the basement, ground floor, and second floor (NYSCEF Doc. 39). The offering plan and declaration were amended in June of 2010 to reflect the subdivision of the commercial unit into four separate commercial units (NYSCEF Docs. 40 and 43). In August of 2010, the sponsor of the Condominium leased Unit 2 to Defendant Medrite Midtown West LLC d/b/a Medrite ("Medrite") (NYSCEF Doc. 44). At the time the Medrite Lease was signed, the sponsor was still in the process of constructing portions of the building, including physically subdividing the four commercial units (NYSCEF Doc. 35 at ¶ 3). The undisputed evidence reflects that the Demising Wall was constructed by the sponsor between August 16, 2010, when the Medrite Lease commenced, and February 15, 2011, when Kireland acquired Unit 2 (id. at ¶¶ 3 and 5).

Plaintiff alleges that the wall separating Unit 2 and Unit 4 was incorrectly placed, and that the wall encroaches on Unit 2 by an area of at least 4 feet and 10 inches in depth by 27 feet in length to the benefit of Unit 4 (NYSCEF Doc. 1 at ¶ 10). Plaintiff alleges this encroachment deprives it from the use of its property (id. at ¶ 11). Plaintiff alleges that the encroachment has existed for less than ten years, thus adverse possession does not apply (id. at ¶ 12). Plaintiff therefore seeks a declaration that the demising wall encroaches on its premises and seeks an order directing Defendants Kireland and Medrite to remove the encroachment (id. at ¶ 16). Plaintiff also seeks money damages (id. at ¶¶ 17-19).

On October 30, 2020, Defendant Kireland filed its Answer with counterclaims (NYSCEF Doc. 9). In its Answer, Kireland asserted as an affirmative defense that pursuant to its deed, it was granted an easement permitting it to maintain any encroachments that may exist (id. at ¶ 11). Kireland also asserted as an affirmative defense that pursuant to Plaintiffs deed, it took title subject to easements in favor of adjoining units for the continuance of all encroachments of such adjoining units existing as a result of the construction or rehabilitation of the building, and that any such encroachments may remain so long as the building stands (id. at ¶ 12). Kireland further asserted that at the time Kireland took title to Unit 2, the demising wall between Unit 2 and Unit 4 was already erected as part of the construction of the Building (id. at ¶ 13). Kireland asserted as an affirmative defense that when Plaintiff took title to Unit 4 subject to any encroachments existing at the time of its purchase, Plaintiff waived and/or ratified any alleged encroachment (id. at ¶ 14).

Kireland further alleged that the sponsor of the condominium deeded Unit 2 to Kireland on February 15, 2011, with an easement for the continuance of all alleged encroachments on adjacent units, while on March 1, 2012, the sponsor of the condominium deeded Unit 4 to Plaintiff subject to an easement for the continuance of all alleged encroachments from adjacent units (id. at ¶¶ 3738). Kireland seeks a declaration from the Court that it is entitled to maintain the demising wall in its present location (id. at ¶ 40). Kireland also asserted crossclaims for indemnification and contribution against Defendant Alexander Condominium^[1] ("the Condominium").

On July 18, 2022, Kireland moved for summary judgment (NYSCEF Doc. 31). Kireland seeks dismissal of Plaintiff s Complaint and summary judgment on its first counterclaim declaring that pursuant to the deeds to Unit 2 and Unit 4, Unit 2 has an easement over Unit 4 permitting the demising wall to remain in its present location (NYSCEF Doc. 31). Kireland argues that the clear and unambiguous language contained on the deeds of Unit 2 and Unit 4 - namely that any alleged encroachment by one unit onto any other unit resulting from construction or rehabilitation of the building is permitted to remain "so long as the building may stand" - entitles it to summary judgment (NYSCEF Doc. 33 at ¶ 5).

DLK purchased Unit 4 from the condominium sponsor on January 18, 2012 pursuant to a purchase agreement (NYSCEF Doc. 46). Kireland highlights that in paragraph 20 of the purchase agreement, DLK acknowledged that it was purchasing the property based solely upon its inspections and investigations, and that it was purchasing the property "as is" and "with all faults" based upon the condition of the property as of the date of the agreement (id. at ¶ 20). At the deposition of Karina Sagiev ("Sagiev") who testified on behalf of DLK, she confirmed that the demising wall at issue was in the same location now as when DLK purchased Unit 4, and that it never obtained a survey or measured its dimensions prior to closing (NYSCEF Doc. 47 at pages 29-31). According to Sagiev, DLK only learned about the encroachment after an architect measured the dimensions of Unit 4 in late 2015 or early 2016, well after DLK had already taken title. Kireland argues there are no triable issues of fact, and that pursuant to the clear and unambiguous terms of the deeds of Unit 2 and Unit 4, Kireland was granted an easement allowing for the encroachment at issue.

On September 12, 2022, DLK cross-moved for summary judgment (NYSCEF Doc. 61). DLK argues that it was a bona fide purchaser of real property who took Unit 4 free and clear of any prior conveyance or encumbrance (NYSCEF Doc. 62). DLK argues that the easement Kireland seeks to enforce was never recorded against Unit 4 (id.). DLK argues, therefore, that "there is absolutely no evidence that Plaintiff had notice of the alleged easement" (id. at ¶ 28). DLK also argues that notice could not be imputed through the Amended Condo Declaration, as the floor plans in that declaration shows the demising wall in a location that does not encroach on Unit 4. DLK also argues that the conveyance was made "subject to the provisions of the Declaration, ByLaws, and Floor Plans of the Condominium" (id.). DLK asserts that Kireland is not entitled to summary judgment as there is no evidence when the demising wall was erected. DLK argues that the affidavit of Samuel Fisch should not be considered as Kireland never identified Samuel Fisch as a witness with knowledge of this case.

On October 3, 2022, Kireland filed its reply and opposition to DLK's cross-motion (NYSCEF Doc. 77). Kireland argues that DLK's attempt to preclude Fisch as a witness is belied by the fact that he is the sole member of Defendant Medrite, and Kireland stated that the parties to this action are all relevant witnesses. Kireland also argues that DLK has not provided any evidence rebutting Kireland's prima facie evidence that the demising wall was built by the sponsor as part of the construction in subdividing the four commercial units. Kireland argues that DLK is not a bone fide purchaser since it was notified that the units would be conveyed subject to easements permitting encroachments by adjoining units. Kireland further argues DLK was on notice of potential easements because the Amended Declaration stated that Unit 2 and Unit 4 were being separated on the cellar level by the demising wall. Kireland also argues that DLK had inquiry notice of the encroachments based on facts available at the time of its purchase.

IL Discussion

A. Standard

Summary judgment is a drastic remedy, to be granted only where the moving party has tendered sufficient evidence to demonstrate the absence of any material issues of fact." (Vega v Restani Const. Corp., 18 N.Y.3d 499, 503 [2012]). The moving party's "burden is a heavy one and on a motion for summary judgment, facts must be viewed in the light most favorable to the nonmoving party." (Jacobsen v New York City Health and Hosps. Corp., 22 N.Y.3d 824, 833 [2014]). Once this showing is made, the burden shifts to the party opposing the motion to produce evidentiary proof, in admissible form, sufficient to establish the existence of material issues of fact which require a trial. See e.g, Zuckerman v City of New York, 49 N.Y.2d 557, 562 [1980]; Pemberton v New York City Tr. Auth., 304 A.D.2d 340, 342 [1^st Dept 2003]). Mere conclusions of law or...