New York State Court of Claims

New York State Court of Claims

NUZZI v. THE STATE OF NEW YORK, #2000-015-079, Claim No. 101199, Motion Nos. M-61757, CM-62025


Synopsis


Landowner's attempt to renege on contact for sale of land to DEC in light of more lucrative offer from the County of Suffolk in claim seeking multiple forms of equitable relief denied for lack of subject matter jurisdiction.

Case Information

UID:
2000-015-079
Claimant(s):
NUZZI FAMILY LIMITED LIABILITY COMPANY
Claimant short name:
NUZZI
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
101199
Motion number(s):
M-61757
Cross-motion number(s):
CM-62025
Judge:
FRANCIS T. COLLINS
Claimant's attorney:
Somer & Heller LLPBy: Stanley J. Somer, Esquire
Defendant's attorney:
Honorable Eliot Spitzer, Attorney General
By: Martin RowleyAssistant Attorney General
Third-party defendant's attorney:

Signature date:
September 13, 2000
City:
Saratoga Springs
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

The motion of the defendant for an order pursuant to CPLR 3212[1] granting summary judgment dismissing the claim for lack of merit is granted, and the cross-motion of the claimant for an order pursuant to Court of Claims Act § 10 (6) permitting it to serve and file a late claim is denied. During 1995, Armand and Carmela Nuzzi owned two parcels of vacant real property totaling approximately 38.1 acres located in the ecologically significant Pine Barrens in East Quogue, Town of South Hampton, Suffolk County, New York. The Nature Conservancy, a non- profit corporation dedicated to preserving sensitive environmental areas, was interested in acquiring the two parcels for the benefit of New York State and its State Pine Barrens Acquisition Program. On November 9, 1995, a representative of the Nature Conservancy wrote to Mr. and Mrs. Nuzzi expressing its interest and advising that the New York State Department of Environmental Conservation (DEC) had custody of appropriated funds for the purchase of land located in the Long Island Pine Barrens. The letter advised Mr. and Mrs. Nuzzi that DEC intended to carry out the acquisition program on a willing buyer - willing seller basis and that the Nature Conservancy would be acting as DEC's agent in preparing an offer based upon an independent appraisal of the fair market value of the parcels. The letter further advised that the offer was subject to approval by the Attorney General, an environmental inspection, and funds being available from the State. The appraisal commissioned by the Nature Conservancy determined a value of $363,000. By letter dated August 22, 1996, the Nature Conservancy offered Mr. and Mrs. Nuzzi the sum of $307,000 for the entire property based on a value of $8,058 per acre.

The Nuzzi's retained attorney Roy List to convey their acceptance of the offer and represent them in the sale of the property. On October 4, 1996, a legal assistant employed by the Nature Conservancy wrote to attorney List enclosing a draft land purchase agreement. By letter dated March 13, 1997, attorney List advised the Nature Conservancy that Mr. and Mrs. Nuzzi were eager to complete the sale but first wanted to transfer the property into a family limited liability company for tax purposes.

A land purchase agreement for the conveyance of the two parcels dated September 8, 1997 was entered into between the Nuzzi Family Limited Liability Company and the Nature Conservancy. Paragraph 16 of the contract provided, "[t]his Agreement may be assigned by the Purchaser to the State of New York, acting through its Department of Environmental Conservation, at any time prior to delivery of deed. . . . All terms and conditions of this Agreement shall remain in full force and effect upon assignment". The contract further provided that the purchaser's obligations were subject to the approval of the Comptroller and the Department of Law. Of importance to this litigation are paragraphs 20 and 21 of the contract which provide as follows:
20. The Closing of title hereunder shall occur within six (6) months of the date this Agreement is fully executed by the parties hereto, and shall occur at the Suffolk County Center, Riverhead, New York or at such other date and such different time and place as may be mutually agreed upon by the parties. The delivery to and acceptance of the deed by Buyer and the subsequent disbursement of the Purchase Price to Seller shall constitute the "Closing."

21. The seller's obligation to deliver the deed to the purchaser is expressly conditioned on the assignment of this agreement to the State of New York and the assumption of the obligations of the purchaser by the State of New York. In the event that this agreement is not assigned to and assumed by the State of New York then the seller's obligation to deliver the deed shall be expressly conditioned upon the receipt by the seller of the purchase price at a Closing to be scheduled within six (6) months from the date this agreement is fully executed by the parties hereto.
On September 18, 1997, the Nature Conservancy and DEC Commissioner John P. Cahill executed an assignment of the land purchase contract from the Nature Conservancy to the State of New York. The Department of Law approved the assignment on March 23, 1998 and the Comptroller approved the assignment on May 6, 1998.

On November 7, 1997, the Associate Director of Land Protection and Government Relations of the Nature Conservancy wrote to DEC to advise that the final survey showed that the actual acreage involved was 38.291 acres resulting in a contract purchase price of $308,548.88. On November 19, 1997, attorney List forwarded to the Nature Conservancy the articles of organization of the Nuzzi Family Limited Liability Company, its operating agreement, and a copy of the deed transferring the two parcels from Mr. and Mrs. Nuzzi to the Limited Liability Company. On June 3, 1998, DEC's Region I Bureau of Real Property Regional Supervisor sent a letter to Mr. List requesting that the deed, voucher in triplicate, affidavit of title, tax and finance forms TP-584 and RP-5217 be completed and signed. On July 13, 1998, attorney List wrote to DEC acknowledging receipt of the documents and stating that prior to executing and returning the documents the sellers had several questions concerning the procedures to be followed in consummating the sale. In particular, the sellers feared that a missing signature upon the assignment from the Nature Conservancy to the State of New York might affect its validity and wanted to know when they would receive payment. Mr. List set forth a further concern of the sellers as follows:
Paragraph '20' of the land purchase agreement provides 'the Closing of the title hereunder shall occur within six (6) months of the date this agreement is fully executed by the parties hereto...' Since more than six (6) months have occurred since the execution of the land purchase agreement, it would seem to me that there should be some writing extending the closing so that the contract continues to be enforceable.
Peter Hallenbeck, an attorney in the Real Property Division of the Office of the Attorney General, discussed the seller's concerns with Mr. List who, by letter dated July 23, 1998 from Mr. List to Mr. Hallenbeck, advised Mr. Hallenbeck that "the sellers [sic] have several concerns relating to the land purchase agreement which you have addressed and satisfied". The concern regarding the validity of the assignment was cured by Mr. Hallenbeck agreeing to send to Mr. List a fully signed copy of the assignment. The concern relative to timely payment was addressed by an agreement providing that if payment was not made within sixty days following delivery of the deed the Limited Liability Company would maintain an action against the State to recover the purchase price with appropriate interest. With respect to the closing date, Mr. List stated:
Second, paragraph '20' of the land purchase agreement provides, 'the Closing of the title hereunder shall occur within six (6) months of the date this agreement is fully executed by the parties hereto. . . ' Since more than six (6) months have occurred since the execution of the land purchase agreement, the sellers want to be satisfied that the contract will continue to be enforceable. You expressed that because the date is not a time of the essence date and because neither party has unilaterally set a date for closing the contract will continue in full force and effect until some future action by one of the parties.
In the concluding paragraph of his letter, attorney List stated, "If the above correctly memorializes your understanding of the law and procedure with respect to this land purchase contract, please sign and fax to me a copy of this letter. Then immediately upon receipt of a copy of the fully signed assignment I will forward to you signed originals of all the transfer documents sent to me by Patricia B. Zielenski". Mr. Hallenbeck countersigned the letter agreeing to the stated terms. Thus, as late as July 23, 1998, the attorney for the claimant took the position that the contract was still in full force and effect and that either party could unilaterally set a date for the closing. The executed closing papers were not delivered and on October 16, 1998 Ms. Zielenski recorded the September 8, 1997 land purchase agreement and the September 18, 1997 assignment with the Clerk of Suffolk County.

On August 11, 1998, claimant met with representatives of the County of Suffolk to discuss the purchase of the property for the Suffolk County Drinking Water Protection Program. By letter dated August 13, 1998, Suffolk County offered to purchase the parcels for a total sum of $578,195. On October 5, 1998, the Limited Liability Company and Suffolk County entered into contracts of sale in accordance with the offer. On January 8, 1999, the Land Management Specialist of Suffolk County wrote to claimant's present attorney stating that unless the cloud upon the title to the parcels created by the filing of the assignment and purchase agreement was cleared, Suffolk County would not go forward with the sale. During March of 1999, the Nuzzi Family Limited Liability Company commenced an action in Suffolk County Supreme Court against the Nature Conservancy and DEC seeking to set aside the September 8, 1997 land purchase agreement and expunge that document and the assignment from the records of the Clerk of Suffolk County. The instant claim was filed with the Clerk of the Court on October 4, 1999. A notice of intention to file a claim was received by the Attorney General on August 3, 1999 and the claim itself was received by the Attorney General on September 28, 1999. The verified answer with affirmative defenses was filed with the Clerk of the Court on October 20, 1999.

In support of the dismissal motion, defendant argues that the Court lacks subject matter jurisdiction to entertain the first cause of action seeking a declaration that the contract and assignment "should be declared null and void as of March 9, 1998" because the relief sought is purely equitable. Defendant makes the same argument with respect to the second cause of action asserting that "[t]he assignment of contract should be expunged from the record to remove the cloud on the title" and additionally argues that there is another action pending between the same parties for the same relief in Supreme Court, Suffolk County. Finally, defendant argues that claimant has failed to join a necessary party, the Suffolk County Clerk.

The third cause of action proceeds upon a theory of unjust enrichment and requests that the defendant be required to pay the claimant the sum of $271,000 in the event that the claimant is required to transfer title to the State of New York. Defendant argues that there is another action pending between the same parties for the same relief, that claimant cannot recover on a quasi-contractual theory when there is a valid contract in place between the parties, and that the third cause of action fails to state a viable cause of action.

The fourth cause of action sounding in slander of title is based on the October 16, 1998 recording of the contract and assignment. Again, defendant argues that there is another action pending between the parties for the same relief in Supreme Court. Further, defendant argues that slander of title requires allegations of malice and special damages which are not alleged in the claim. Defendant points out that the punitive damages requested in this cause of action may not be recovered against the State. Finally, it is contended that since the notice of intention was not received until August 3, 1999, more than 90 days after the accrual of the tort on October 16, 1998, the claim is not timely as neither a notice of intention to file a claim nor a claim was served upon the Attorney General within 90 days of accrual as required by Court of Claims Act § 10 (3).

The fifth cause of action proceeds upon a theory of tortious interference with contract and the defendant asserts that it should be dismissed for the same reasons posited with regard to the fourth cause of action.

The position of the claimant is set forth at page nine of its memorandum of law as follows: "The lynch pin of Claimants [sic] claims is that there was no timely assignment to the State and that the contract expired by its terms on March 9, 1998". At point IV of its memorandum of law the claimant argues that this Court has subject matter jurisdiction over the slander of title, tortious interference and reformation causes of action, apparently conceding a lack of subject matter jurisdiction with regard to the first cause of action for a declaratory judgment and the second cause of action for a judgment directing the expungement of the contract from the records of the Suffolk County Clerk. To the extent that the third, fourth and fifth causes of action may not have been timely pursued the claimant seeks late claim relief.

The Court will first address the dismissal motion. The first cause of action set forth in the claim seeks a judgment declaring the purchase contract to be null and void as of March 9, 1998. No money damages are sought with respect to the first cause of action. The law is settled that except for a limited range of cases involving insurance disputes (Court of Claims Act § 9 (9-a)), an issue not present in this claim, the Court of Claims lacks authority to render a declaratory judgment (Wikarski v State of New York, 91 AD2d 1174). The test is whether the primary relief sought is equitable or monetary in nature (Ozanam Hall of Queens Nursing Home v State of New York, 241 AD2d 670). Here, the first cause of action seeks only equitable relief in the form of a declaratory judgment; the unavailability of which in this Court requires its dismissal.

The second cause of action alleges that the Nature Conservancy had the right to assign the contract to DEC at any time prior to the delivery of the deed and that an assignment was executed by the Nature Conservancy on September 18, 1997. It is alleged that DEC did not execute the assignment until March 19, 1998 and that approval by the Department of Law and the Comptroller did not occur until March 23, 1998 and May 6, 1998, respectively. It is alleged that the six month period within which the closing was required to take place under the contract expired on March 9, 1998 and, therefore, the purported assignment of the contract was untimely. Claimant avers that the recording of the assignment of the contract made after the expiration date for the closing is a cloud upon claimant's title that should be given no legal effect. The requested relief is a judgment directing that the assignment of contract be expunged from the record to remove the cloud on title.

If the vendee of a contract for the sale of real property fails to close within a reasonable time causing the contract to be canceled, and later files the contract causing it to be a cloud upon title, the remedy of the contract vendor is an action to expunge the contract from the record of the appropriate County Clerk's office (Kitching v Browne, 119 Misc 513). An owner in possession may invoke a court of equity to discharge a cloud on title and the procedural vehicle to secure that relief is article 15 of the Real Property Actions and Proceedings Law (Hibiscus Harbor v Ebersold, 53 Misc 2d 868). Since it has waived its immunity pursuant to RPAPL § 1541, the State is an appropriate defendant in an RPAPL § 1501 suit brought in a court other than the Court of Claims, and the relief afforded may include the rescinding of any improperly filed instruments creating a cloud upon title (Hurley v Hurley, 50 NY2d 78). On this motion, the Court is particularly concerned that while "an action under RPAPL article 15 to compel a determination of a claim to real property is a statutory action, it has been described as a hybrid one in which the relief awarded is in large measure equitable in nature" (Dowd v Ahr, 168 AD2d 763, 765, revd on other grounds, 78 NY2d 469; New York and Brooklyn Suburban Inv. Co. v Leeds, 100 Misc 2d 1079, 1085). As stated earlier in this opinion with respect to the first cause of action, the Court of Claims does not have subject matter jurisdiction to award purely equitable relief. Here, there are no money damages sought with respect to the second cause of action, only the equitable relief of expunging the assignment of contract. Consequently, the Court of Claims lacks subject matter jurisdiction of the second cause of action set forth in the claim and, accordingly, the second cause of action is dismissed.

The allegations of the third cause of action are as follows:
22. By virtue of the purported assignment between the Nature and Respondent, DEC, DEC has assumed all the obligations of THE NATURE.

23. Upon information and belief the Respondent, DEC and the State, knew or should have known, that the fair market value of the subject property on or about September 8, 1997 was $578,000.00.

24. That should Claimant be required to transfer title to the subject property to Respondent, DEC and the State, that Respondent DEC and the State would be unjustly enriched in the sum of $271,000.00.

25. That as a result of the foregoing, Respondents should be required to pay Claimant the sum of $578,000.00 for title to said property.
A cause of action contained in a claim that has not yet ripened must be dismissed as premature (Park v State of New York, 226 AD2d 153). Here, the relief requested in the third cause of action is based upon an event which has not yet occurred, i.e., claimant being required to transfer title of the subject property to DEC and the State. Such event would occur only if a court ordered specific performance of the contract. This Court does not have subject matter jurisdiction to grant the equitable remedy of specific performance (Amberge v State of New York, 186 AD2d 962). Unless, and until, that event occurs, the third cause of action is premature and must be dismissed.

The rules of law governing the availability of the quasi contractual cause of action for unjust enrichment were set forth by the Court of Appeals in Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 388 as follows:
Turning to plaintiff's cause of action sounding in quasi contract, we conclude that it was properly dismissed. The existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter (Blanchard v Blanchard, 201 NY 134, 138; see also, 66 Am Jur 2d, Restitution and Implied Contracts, § 6, at 949). A "quasi contract" only applies in the absence of an express agreement, and is not really a contract at all, but rather a legal obligation imposed in order to prevent a party's unjust enrichment.
Here, paragraph 24 of the third cause of action makes clear that the defendant will only be unjustly enriched if the claimant is required to transfer title to the subject property. That event will only occur pursuant to a Supreme Court determination that the contract is valid and enforceable. A determination that there exists a valid express written agreement requiring the conveyance of property requires the dismissal in this Court of any claim seeking to vary the contract price under an implied contract theory (Dominick P. Massa & Sons v State of New York, 147 AD2d 799, 800). Finally, the third cause of action lacks merit because the Comptroller never gave his approval of a contract to purchase the claimant's property for the price of $578,000. The pertinent portion of State Finance Law § 112 provides:
2. (a) Before any contract made for or by any state agency, department, board, officer, commission, or institution, shall be executed or become effective, whenever such contract exceeds ten thousand dollars in amount, it shall first be approved by the comptroller and filed in his or her office. . .
"The statute's purpose is to protect the public from governmental misconduct and improvidence" (City of New York v State of New York, 87 NY2d 982, 985). Any person contracting with the State is chargeable with knowledge of the terms of State Finance Law § 112 (SHLP Assoc. v State of New York, 262 AD2d 548), and the "Comptroller's approval may not be waived nor can the State be estopped to assert the statute's protection" (Edward C. Flaherty Corp. v State of New York, 102 Misc 2d 438, 440). Section 112 applies to a contract whereby the State purchases an interest in real property (Berliner v State of New York, 204 Misc 448; Long Island R.R. Co. v State of New York, 185 Misc 646). The operation of the statute requires the dismissal of any cause of action seeking reimbursement in an amount beyond the contractual price approved by the Comptroller (Rosefsky v State of New York, 205 AD2d 120). Section 112 of the State Finance Law will bar a recovery upon an implied contract theory if the claimant is seeking to enforce a contract but upon terms other than those approved by the Comptroller (Parsa v State of New York, 64 NY2d 143; Nevins Realty Corp. v State of New York, 240 AD2d 480).

Here, paragraph nineteen of the land purchase agreement specifically states that the purchaser's obligations under the agreement "are subject to the approval of this agreement by the Comptroller of the State of New York". On May 6, 1998, the Comptroller approved the assignment of the land purchase contract to the State of New York at a purchase price of $307,000 based upon a value of $8,058 per acre with the final purchase price to be adjusted upon a survey establishing the exact acreage involved. The Comptroller never approved the purchase of the 38.291 acres at a price of $578,195, the price offered claimant by the Suffolk County Drinking Water Protection Program. For claimant to recover upon the allegations of the third cause of action there would have to be specific performance of the land sale contract but at a price $271,000 higher than the terms approved by the Comptroller. Such relief is prohibited by State Finance Law § 112 and the unavailability of such relief requires the dismissal of the third cause of action.

The fourth cause of action seeks to recover upon a theory of slander of title due to the action of Patricia B. Zielenski in filing the land purchase contract and assignment in the Suffolk County Clerk's Office on October 16, 1998 which allegedly created a cloud upon claimant's title resulting in the County of Suffolk threatening to cancel its two contracts to purchase the property for the sum of $578,195. Defendant seeks dismissal of the fourth cause of action upon several grounds. First, defendant argues that the cause of action accrued on October 16, 1998 when the contract and assignment were recorded. Court of Claims Act § 10 (3-b) requires that a claim to recover for the intentional tort of a State employee must be preserved by the service and filing of a claim within 90 days of accrual or the service upon the Attorney General of a notice of intention to file a claim within the same time period. The defendant argues that since the Attorney General did not receive the notice of intention to file a claim until August 3, 1999, more than 90 days after accrual, the fourth cause of action must be dismissed. In addition, defendant argues that the pleading fails to state a cause of action in that there is no allegation of malice, a necessary element. The Attorney General further contends that the Court lacks subject matter jurisdiction of that portion of the claim seeking punitive damages. Finally, it is argued that there is another action pending for the same relief in Suffolk County Supreme Court.

The tort of slander of title is based upon statements or actions that render title to real property unmarketable by casting doubt upon the validity of the owner's title to the property (Hirschhorn v Town of Harrison, 210 AD2d 587, 588). "The elements of slander of title are (1) a communication falsely casting doubt on the validity of a complainant's title, (2) reasonably calculated to cause harm, and (3) resulting in special damages" (Brown v Bethlehem Terrace Assoc., 136 AD2d 222, 224). "An action for slander of title is maintainable only on a showing of malice" (Regan v Lanze, 42 AD2d 831). The wrongful filing of an unfounded claim to the property of another casting doubt upon the owner's title is actionable as slander of title (Hanbidge v Hunt, 183 AD2d 700, 701). The cause of action is available in this Court against the State of New York and special damages should be pleaded (Mink Hollow Dev. Corp. v State of New York, 87 Misc 2d 61).

The first issue for determination is whether the notice of intention received by the Attorney General on August 3, 1999 was timely. Defendant contends that the claim accrued at the time the contract and assignment were filed with the County Clerk. Claimant argues that slander of title is a continuing tort arising anew each day upon the State's refusal to voluntarily withdraw the filed contract and assignment. Both parties are in error as to the accrual date of this claim. A claim in this Court generally accrues when damages are ascertainable (Flushing Natl. Bank v State of New York, 156 Misc 2d 979, affd 210 AD2d 294). In the case of Hanbidge v Hunt, supra, 701, the Appellate Division quoted the applicable rule stating, "[i]t has generally been held that the cause of action to recover damages for slander of title based upon the recording of an unfounded claim to the property of another does not arise until damages actually result, so that the period of limitations begins to run, not from the date of the initial recording, but from the time a prospective sale is lost because of the cloud on plaintiff's title". Here, the claim accrued on January 8, 1999 when the County of Suffolk advised claimant's attorney that the County would not go through with the sale due to the filing of the September 8, 1997 land sale contract and the September 18, 1997 assignment. Since the notice of intention to file a claim was not received by the Attorney General within 90 days of the time the claim accrued, the fourth cause of action must be dismissed (Mallory v State of New York, 196 AD2d 925, 926).

Even if the fourth cause of action was not dismissed for failure to comply with the time requirement of Court of Claims Act § 10 (3-b), it would have to be dismissed for failure to state a cause of action as there is no allegation that Ms. Zielenski acted with malice, and there is no allegation of special damages. Finally, this Court does not have subject matter jurisdiction of a cause of action against the State of New York for punitive damages (Sharapata v Town of Islip, 56 NY2d 332).

The fifth cause of action proceeds upon a theory of tortious interference with the contract between the claimant and the County of Suffolk caused by the filing of the assignment of the land purchase contract. The only damages sought upon the claim are punitive damages. The elements of a cause of action for tortious interference with contract are the existence of a valid contract, defendant's knowledge of that contract and intentional interference with it, resulting in a breach and damages (Hoag v Chancellor, Inc., 246 AD2d 224). Since intentional conduct is required, the time in which the claim must be pursued is governed by Court of Claims Act § 10 (3-b). A cause of action for intentional interference with a contract will accrue at the very latest at the time that the injured party learns of the wrongful acts (German v Pope John Paul, II, 211 AD2d 456). Claimant concedes that it learned of the defendant's interference with its contract with Suffolk County no later than January 9, 1999. Since the notice of intention to file a claim was not received by the Attorney General until more than 90 days after that date the fifth cause of action must be dismissed (Mallory v State of New York, supra. Furthermore, since only punitive damages are sought this Court lacks subject matter jurisdiction to entertain the fifth cause of action (Sharapata v Town of Islip, supra).

Turning to the cross-motion, the cross motion papers do not contain a proposed late claim. The granting of a late claim motion where the moving papers are not accompanied by a proposed claim is reversible error (Davis v State of New York, 28 AD2d 609). As a result, the cross-motion is denied.


September 13, 2000
Saratoga Springs, New York

HON. FRANCIS T. COLLINS
Judge of the Court of Claims

The Court considered the following papers:
1. Notice of motion dated May 15, 2000;
  1. The affirmation of Martin Rowley dated May 15, 2000, with exhibits;
  2. Affidavit of Patricia B. Zielenski sworn to May 11, 2000, with exhibits;
  3. Affirmation of Peter Hallenbeck dated May 10, 2000, with exhibits;
  4. Notice of cross-motion dated July 11, 2000;
  5. Affidavit of Anthony Nuzzi sworn to July 13, 2000, with exhibits;
  6. Reply affirmation of Martin Rowley dated July 19, 2000, with exhibit.


[1]Although the notice of motion refers to CPLR 3211, the Court is treating the motion as made pursuant to CPLR 3212 since the defendant has joined issue by the service of its answer dated October 18, 1999.