Melnick et al v. Press
Filing
205
MEMORANDUM AND OPINION. For the reasons set forth in the attached Memorandum and Order, the Court concludes, after carefully considering the evidence introduced at trial, the arguments of counsel, and the controlling law on the issues presented, that : (1) the property at 15 Ohio Avenue should be partitioned and sold and the proceeds should be divided equally between Melnick and Press, after payment of any remaining liens or encumbrances; (2) neither Press nor Melnick is entitled to reimbursement for any payments of carrying costs or other expenses associated with 15 Ohio, or for any rental income allegedly received from the property; (3) Press did not oust Melnick from 15 Ohio; (4) the Delray Beach property should be partitioned and sold an d the proceeds should be divided equally between Melnick and Press, after payment of any outstanding mortgages, liens, or encumbrances; (5) Press is not liable to Melnick for conversion of insurance proceeds related to the Delray Beach property; (6) Press is not liable to Melnick for conversion of funds from a home equity line of credit on the 15 Ohio property; and (7) plaintiffs are not entitled to a constructive trust on the property located at 16 Nevada Avenue. Moreover, given the Court's findings, plaintiffs' claim for punitive damages regarding the fraudulent taking of the Delray Beach insurance proceeds and the 16 Nevada property is rendered moot. Ordered by Judge Joseph F. Bianco on 8/12/2011. (Graves, Kelly)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 06-CV-6686 (JFB) (ARL)
_____________________
GERALDINE MELNICK AND LONNIE SCHWIMMER,
Plaintiffs,
VERSUS
CARY PRESS,
Defendant.
___________________
MEMORANDUM AND ORDER
August 12, 2011
___________________
A bench trial was held on September 20,
22, and 23, 2010, and on November 12,
2010. Having held a bench trial, the Court
now issues its findings of fact and
conclusions of law, as required by Federal
Rule of Civil Procedure 52(a), and
concludes, after carefully considering the
evidence introduced at trial, the arguments
of counsel, and the controlling law on the
issues presented, that: (1) the property at 15
Ohio Avenue should be partitioned and sold,
and the proceeds should be divided equally
between Melnick and Press, after payment
of any remaining liens or encumbrances; (2)
neither Press nor Melnick is entitled to
reimbursement for any payments of carrying
costs or other expenses associated with 15
Ohio, or for any rental income allegedly
received from the property; (3) Press did not
oust Melnick from 15 Ohio; (4) the Delray
Beach property should be partitioned and
sold and the proceeds should be divided
equally between Melnick and Press, after
payment of any outstanding mortgages,
Joseph F. Bianco, District Judge:
Plaintiffs
Geraldine
Melnick
(“Melnick”) and Lonnie Schwimmer
(“Lonnie”) (collectively “plaintiffs”) bring
this diversity action against Cary Press
(“Press” or “defendant”), seeking, inter alia,
a partition of certain properties that Melnick
claims to own jointly with defendant, the
imposition of a constructive trust on another
property, damages for defendant’s alleged
wrongful conversion of certain funds, a
judgment in favor of plaintiff for the fair
market rental value of defendant’s use and
occupancy of certain property after
defendant’s alleged ouster of plaintiff from
that property, and punitive damages
resulting from defendant’s alleged wrongful
conversion of funds and fraudulent taking of
certain property. These claims each stem
from the termination of Melnick’s and
Press’s quasi-marital relationship in August
2006.
1
liens, or encumbrances; (5) Press is not
liable to Melnick for conversion of
insurance proceeds related to the Delray
Beach property; (6) Press is not liable to
Melnick for conversion of funds from a
home equity line of credit on the 15 Ohio
property; and (7) plaintiffs are not entitled to
a constructive trust on the property located
at 16 Nevada Avenue. Moreover, given the
Court’s findings, plaintiffs’ claim for
punitive damages regarding the fraudulent
taking of the Delray Beach insurance
proceeds and the 16 Nevada property is
rendered moot.
for wrongful conversion of property from
the Delray Beach property.1
On October 30, 2009, plaintiffs filed a
motion for summary judgment.
Press
opposed the motion and cross-moved to
dismiss plaintiffs’ claim for the imposition
of a constructive trust on 16 Nevada. On
April 14, 2010, the Court held oral argument
on the motions and denied both motions for
the reasons set forth on the record. On April
28, 2010, Press moved for reconsideration of
the Court’s denial of his motion to dismiss
the constructive trust claim. The Court
denied Press’s motion for reconsideration in
an oral ruling made on June 10, 2010. On
July 29, 2010, Press filed a motion for
partial summary judgment. The Court orally
denied defendant’s motion on September 20,
2010 and memorialized its rulings in a
written order issued on October 1, 2010.
The Court conducted a bench trial on
September 20, 22, and 23, 2010, and on
November 12, 2010.
I. BACKGROUND
On December 20, 2006, plaintiffs filed
the complaint in this case, seeking: (1) a
partition of real property known as and
located at 15 Ohio Avenue, Long Beach,
New York (the “15 Ohio” property); (2) a
partition of real property known as and
located at 914 Foxpointe Circle, Delray
Beach, Florida (the “Delray Beach”
property); (3) an accounting for both of the
aforementioned
properties;
(4)
the
imposition of a constructive trust on real
property known as and located at 16 Nevada
Street, Long Beach, New York (the “16
Nevada” property); (5) the partition of the
16 Nevada property; (6) an accounting for
the 16 Nevada property; and (7) damages for
defendant’s alleged wrongful conversion of
insurance proceeds and financing placed
upon the properties. Defendant answered on
February 16, 2007, and counterclaimed
against Melnick for: (1) 50% of the
maintenance expenses paid on 15 Ohio, on
property located at 17 Ohio Avenue, Long
Beach, New York (“17 Ohio”), and on the
Delray Beach property, and (2) an
accounting of monies expended by Melnick
for the maintenance expenses at 15 Ohio, 17
Ohio, and Delray Beach. Defendant also
counterclaimed against Melnick and Lonnie
II. FINDINGS OF FACT
The following section constitutes the
Court’s findings of fact2 pursuant to Federal
1
The Court notes that neither the counterclaim
for reimbursement of payments made in
connection with 17 Ohio nor the counterclaim
for conversion of property from Delray Beach
were included in the pre-trial order, and the
Court deems both of these counterclaims to be
abandoned. In any event, the Court finds that
Press has not submitted sufficient credible
evidence to support either of these claims.
2
To the extent that any finding of fact reflects a
legal conclusion, it shall to that extent be
deemed a conclusion of law, and vice-versa. For
example, in order to avoid repetition and for
ease of reference by the reader, the Court has
elaborated on certain findings of fact in the
Conclusions of Law section to explain its
reasoning.
2
Rule of Civil Procedure 52(a)(1). These
findings of fact are drawn from witness
testimony at trial (“Tr.”), the parties’ trial
exhibits (“Tr. Ex.”), and undisputed facts
submitted by the parties in the joint pre-trial
order (“PTO”).3
The Court finds that Melnick and Press
had a quasi-marital relationship based upon
the testimony cited in this section, which the
Court found credible. For example, Melnick
testified that she cooked for Press, cleaned
the house, and assisted Press after he was
injured in several accidents, including by
taking him to the doctors, dressing his
wounds, putting on his shoes and socks,
helping him into the shower, and getting his
medicine.
(Id. 110:8-111:1.)
Press
acknowledged that Melnick performed many
of these activities and that she helped to
maintain the household at 15 Ohio. (Id.
37:24-38:13; 39:9-14.) Press, Melnick, and
Melnick’s children spent all holidays
together,
including
Thanksgiving,
Hanukkah, Father’s Day, Mother’s Day, and
birthdays, and both of Melnick’s sons
testified that they considered Press to be a
father-figure to them.
(Id. 70:5-71:19;
192:24-193:1.) Lonnie Schwimmer testified
that he brought Press gifts for Father’s Day
and that Press was part of Lonnie’s wedding.
(Id. 71:25-72:14, 75:12-19.) Press also
testified that he bought many gifts for
Melnick (id. 36:5-8), and Melnick described
that they had “a typical married relationship
even though we didn’t have the papers. We
did everything together as a family with and
without my children. We acted like a
regular married couple.
We went on
vacations together, we went to affairs
together, we went out, we had friends, we do
everything I guess regular people do without
the ring.” (Id. 104:16-22.) During their
relationship, Melnick was listed as the sole
beneficiary of Press’ last will and testament.
(Id. 36:25-37:9.)
A. Melnick’s and Press’s Relationship
Melnick and Press began dating in or
around the early 1980s. (Tr. 104:23-105:13;
Prior to dating Press,
306:18-307:7.)4
Melnick was separated from her husband,
whom she later divorced and with whom she
had two children, Eric and Lonnie
Schwimmer. (Id. 105:1-13.) In or around
1994, Melnick and Press began living
together at the 15 Ohio property (id. 106:2122, 109:16-110:3, 308:14-17), which Press
had purchased in or around 1985. (Id.
307:21-22.) During the twelve years that
they lived together, Press and Melnick were
more than mere roommates—Press testified
at trial that their relationship was sexual in
nature (id. 387:15-18), and Melnick
described that they “lived like a married
couple,” including sharing the same bed,
socializing together, and interacting with
each other’s families. (Id. 257:21-258:8.)
3
The Court notes that the parties here each
submitted a separate Proposed Joint Pre-Trial
Order. Defendant’s PTO, however, incorporated
much of plaintiffs’ PTO, and, therefore, unless
otherwise indicated, the undisputed facts cited
herein are drawn from plaintiffs’ PTO.
4
Press testified that, after a period of dating and
seeing other people, he and Melnick got “back
together” after Hurricane Gloria. (Tr. 306:22307:7.) The Court takes judicial notice, pursuant
to Rule 201 of the Federal Rules of Evidence, of
the fact that Hurricane Gloria occurred in
September
1985.
See
http://www.hpc.ncep.noaa.gov/tropical/rain/glori
a1985.html.
Melnick also helped Press’ family
members, including Press’ brother, his
brother’s girlfriend, and his mother, by, for
example, bringing them food and helping
them through medical treatments.
(Id.
112:2-13; 418:8-20.) In addition, when
Melnick’s son, Eric Schwimmer, was
3
undergoing cancer treatment, Press cleaned
Eric’s wounds and helped to take care of
him. (Id. 37:10-19; 111:23-112:1.) Press
also took care of Melnick after Melnick had
back surgery. (Id. 111:22-23.)
Ultimately, on August 29, 2006, after
living together for twelve years, Melnick
decided to end her relationship with Press
and move out of the house at 15 Ohio. (Id.
232:3-6.)
Melnick testified that this
decision was prompted by a change in
Press’s behavior after he was involved in
several accidents and began taking pain
medication. Specifically, Melnick described
that Press had become irrational and
verbally abusive in the final two years of
their relationship, and that he “constantly”
screamed, was “very angry at the world,”
and had become a recluse. (Id. 232:14233:6.) Thus, according to Melnick, “I left
him because at this point I saw that all his
erratic behavior, and all his craziness, and
all his mood swings, and all his drug taking
was making him very irrational, and I was
very afraid of him.”
(Id. 232:8-11.)
Similarly, Eric Schwimmer, Melnick’s son,
testified that Press was “very nasty” and
“put everybody down,” (id. 202:25-203:2),
and Harriet Kovel (“Kovel”), a long-time
friend of Melnick’s, testified that
defendant’s personality had changed and his
behavior was “erratic.” (Id. 169:20-23.)
With regard to their finances, both Press
and Melnick paid a portion of their living
expenses, but neither kept track of precisely
which bills or what amounts were paid by
whom. (Id. 34:3-8; 39:12-14; 112:19-24;
222:14-22.) Melnick also helped Press pay
off a mortgage that Press held on real
property he owned at 17 Ohio Avenue in
Long Beach, New York (“17 Ohio”). By
way of background, at some point during
their relationship, Press transferred a 50%
interest in the 17 Ohio property to Melnick.
(Id. 36:9-15.) Melnick did not pay Press any
money for this transfer, which Melnick
testified, and the Court credited, was made
as a gift.5 (Id. 106:25-107:2; 254:9-15.)
Press also held a $121,790 mortgage on the
17 Ohio property, which Press took out to
pay for renovation of the property at 15
Ohio. (Id. 370:19-371:7.) After Melnick
became a co-owner of the 17 Ohio property,
she made approximately $40,000 in
payments toward this mortgage. (Pl.’s Tr.
Ex. 15; Tr. 215:22-24; 221:11-22; 314:19315:1.) Subsequently, however, Melnick’s
name was taken off of the deed at 17 Ohio
because, as described by Melnick, “[Press]
wanted me to take my name off the deed
because he said my credit wasn’t good, since
we did all the renovations at 15 Ohio and I
built up all of these debts and if he wanted to
purchase something else for us together,
then it would be better for me to have my
name off of this house.” (Tr. 222:2-8;
38:11-19.)
Prior to Melnick’s move, she packed
many of her belongings, including her
summer clothing, her art supplies, and her
bike, and had those belongings brought
down to Florida by truck. (Id. 237:14-16;
266:6-10; 266:18-267:1.) In addition, the
record is clear that on the day of Melnick’s
move, Melnick did not leave by herself but
instead had Press drive her to her friend’s
house. (Id. 237:17; 266:14-16; 339:14-25.)6
6
As discussed in more detail in the Conclusions
of Law, although Press’s mood may have
become more erratic as a result of his accidents
and need for pain medication, the Court finds
that the facts and circumstances were not
sufficient to constitute ouster; rather, the Court
finds that Melnick left voluntarily because of
5
Notably, Press did not provide any evidence or
testimony disputing the characterization of this
transfer as a gift.
4
B. 15 Ohio
and that she did not pay this amount on the
day she signed the deed, but instead gave
Press the money sometime thereafter. (Id.
113:11-22; 254:20-23.) Melnick denied that
Press promised he would put her on the deed
if she paid him half of the value of the
property and, instead, claimed that Press told
her he was giving her a half interest in the
property as a gift. (Id. 254:16-23; 260:912.) In particular, regarding the reason why
Press transferred an interest in 15 Ohio to
her, Melnick testified:
Press purchased the home located at 15
Ohio in or about 1985 for approximately
$185,000. (Id. 18:11-17) At the time of
purchase, Press paid a 10% down payment
and took out a mortgage on the property for
approximately $164,000. (Id. 21:13-22:4.)
Subsequently, in 1994, Melnick and
Press decided to move in together at 15
Ohio.
(Id. 106:20-22; 109:16-110:4.)
According to Melnick, she and defendant
made the decision to cohabitate because
Melnick’s children “were older and they
were out and basically almost on their own,
and we felt that it would be better to live in
one place.” (Id. 110:24-110:3.) Up until
that point, Melnick had been living in her
home in Woodmere, New York, which she
sold prior to moving in with defendant. (Id.
106:21-24; 308:4-17.)
Cary told me that he wanted me to
have security and he wanted to give
me half and it was the day before his
birthday. He wanted to give me half
because we sold my house and didn’t
want to live there and he needed
money, I know, for the renovation.
But it had nothing to do with the
financial deal. . . . There was never
an agreement that I was going to pay
him any money for it.
Approximately two years later, in April
1996, Melnick became a co-owner of the 15
Ohio property with Press. (Id. 106:13-21.)
Specifically, as reflected on the deed of 15
Ohio, Melnick and Press are joint tenants
with rights of survivorship. (Pl.s’ Tr. Ex.
13; Tr. 18:4; 107:11-22.) The deed also
states that Melnick was placed on the deed
in consideration of $157,630. (Pl.’s Tr. Ex.
13; Tr. 113:5-8.)
Although Melnick
admitted that she never gave Press $157,630
“in that exact amount,” (Tr. 113:9-10), she
testified at trial that she gave Press $70,000
in cash and then additionally paid over
$200,000 for renovations of the 15 Ohio
property.
(Id. 113:18-22; 136:22-24.)
Regarding the $70,000 payment, Melnick
noted that this money was intended to go
toward the renovation of the 15 Ohio house
(Id. 297:17-298:1.)
In contrast, Press
acknowledged that Melnick paid him
$70,000, but he testified that he understood
that Melnick was paying him for a 50%
interest in the property and that he
considered them to be business partners in
the deal. (Id. 308:24-309-18; 387:25-388:2.)
Press also testified that he understood that
Melnick would pay half of the expenses for
the property and would pay for half of the
renovation costs. (Id. 309:15-16; 310:1517.)
As to the renovation payments, Melnick
introduced a number of checks at trial made
payable to a variety of contractors and
workers involved in the construction and
renovation of the 15 Ohio property. (Pl.’s
Tr. Ex. 6.) The parties do not dispute that
the total cost of the renovations was
approximately $204,000, or that Melnick
wrote checks totalling this amount. (Tr.
these problems in the relationship. In short,
there is insufficient credible evidence of verbal
or physical abuse to warrant a claim of ouster
against Press.
5
who contributed most of the money, Press
nevertheless
admitted
that
Melnick
contributed “some money” to the
renovations and that, in fact, he was “not
exactly sure where she got what” money.
(Id. 50:5-14.) Moreover, Press stated that
some of the funds he gave back to Melnick
came from the $70,000 that she had paid to
him. (Id. 312:19-24; 319:12-16.) Melnick
similarly acknowledged that Press gave her
“some money” for the renovation of 15
Ohio, although she could not recall how
much Press gave her. (Id. 251:11-17.) Press
also submitted a number of checks as
evidence at trial demonstrating that he gave
funds to Melnick. (Def.’s Tr. Ex. Z.)
However, only four of these checks were
written in 1996 and 1997, when the
renovations took place. (Id. at Tab 9; see
also Tr. 295:23-296:2; 310:3-14; 312:2-6.)
Additionally, even assuming arguendo that
each of these checks were considered
reimbursement for renovation costs, the
checks only total $39,000, which is far short
of the $204,000 total cost for the renovation
at 15 Ohio.7
219:5-9.) Press also does not dispute that
the $204,000 in renovation-related payments
were separate from, and in addition to, the
$70,000 that Melnick paid directly to Press.
(Id. 219:18-25.) However, the parties do
dispute where the $204,000 came from and
who contributed which amounts to the
renovation. Specifically, Melnick testified
that she put approximately $80,000 to
$90,000 worth of charges for the
renovations on eight to ten different credit
cards, and that she also contributed to the
renovation from her savings, from money
she received through the sale of her
Woodmere house, and from her work salary.
(Id. 137:5; 250:1-14; 251:3-10.) Press, in
contrast, claims that he paid “a couple
hundred thousand” dollars for the renovation
and that he “was putting in most of the
money.” (Id. 312:15-24; 59:14.) These
funds, he testified, came from settlements
from several accidents he was in, as well as
from his savings, from money he borrowed
from others, and the $70,000 that Melnick
had paid him. (Id. 312:15-24.) He also
contends that while Melnick may have
written checks from her account for the
renovation, those payments were made using
money that Press gave Melnick. (Id. 50:911; 318:3-319:11.)
7
Press also submitted a number of checks that
he wrote to himself and claimed were payments
to Melnick. Other than Press’s testimony,
however, there is no evidence that these
payments were actually made to Melnick—the
memo lines in the checks are blank, and the
checks were not correlated to any specific
renovation payments. In addition, two of these
checks were written prior to the time that
Melnick was placed on the deed for 15 Ohio.
The Court finds the testimony of Press on this
issue insufficient to enable the Court to conclude
that these payments were made to Melnick.
Therefore, the Court has not considered any
checks made payable to “Cary Press” in its
analysis above. In any event, even if the Court
were to credit Press’s testimony that these
payments were intended for Melnick, the postApril 1996 checks only total $4,800, which is
still below the total cost for the renovation.
After carefully considering the evidence
introduced at trial, the Court finds that both
parties contributed at least some amount
toward the renovation, but that neither party
kept sufficient documentation (or provided
detailed enough testimony) in order for the
Court to accurately determine their precise
contributions. Instead, the Court finds that,
because of the quasi-marital nature of the
relationship, both Melnick and Press were
contributing towards renovations and other
expenses for 15 Ohio without keeping track
of such contributions.
For example,
although Press claims that Melnick wrote
checks for the renovation with money that
Press gave her and that Press was the one
6
of credit so that if we needed the money to
live on because I wasn’t able to work, that
we would have access to it. And while my
credit was still very good and things were
okay, I didn’t have any problems, to do it at
that point.” (Id. 313:10-16.) Press also
credibly testified that while some funds from
the HELOC were used to pay off the preexisting mortgage that Press held on 15
Ohio (Id. 28:18-29:2; 312:25-313:3), most
of the funds were used for living expenses.
(Id. 313:4-6.) Press also noted, and the
Court credited, that Melnick received some
of the home equity line funds. (Id. 39:1518.)
Furthermore, both Melnick and Press
admitted that they did not keep track of
money coming into or out of the property,
and neither kept a log as to who made which
payments.
(Tr. 59:6-17; 112:19-24.)
Indeed, Melnick testified that, as a general
matter, “we lived as a couple and I helped. .
. . I never watched the money. If he wanted
something and I had it, I gave it to him. If I
needed something and he had it, he gave it
to me.” (Id. 222:17-22.) Finally, despite his
testimony to the contrary, Press testified that
he was “positive” that plaintiff had paid for
her interest in 15 Ohio. (Id. 58:23-59:1.)
C. 15 Ohio Home Equity Line of Credit
Melnick, however, introduced evidence
that Press also used some of the funds to pay
for racehorses and related expenses.
Specifically, Melnick introduced a number
of checks written by Press to pay, for
example, veterinary bills, a horse trainer,
racing authority fees, and insurance for a
racehorse.
(Id. 51:22-54:23.)
Press
acknowledged that he was spending
thousands of dollars from “a home equity
line of credit” on racehorses (id. 56:7-10),
but he claimed at trial that these payments
were made from a HELOC that he took out
on property located at 16 Nevada. (Id.
376:17-20.) The Court finds that there is
insufficient credible evidence in the record
for the Court to conclude that the funds for
racehorses and related expenses came from
the HELOC for 15 Ohio, rather than 16
Nevada.8
In 2005, Press took out a $250,000
Home Equity Line of Credit (“HELOC”) on
the 15 Ohio property. (Id. 22:5-12; 23:1124.)
Melnick was a co-owner of the
property at that point, and, as such, Press
testified that Melnick had to approve the
HELOC since her name also appeared on
the deed for the property. (Id. 22:5-12;
64:3-9.) Although the HELOC paperwork
admitted at trial did not contain Melnick’s
signature (Pl.’s Tr. Ex. 2; Tr. 23:8-10),
Melnick admitted during her testimony that
she signed for the HELOC on the 15 Ohio
property. (Tr. 256:12-18.) Specifically,
testimony elicited by Melnick’s attorney
revealed that, although Press was the only
one who signed the note for the HELOC,
Melnick did, in fact, sign the mortgage for
the home equity line. (Id. 373:22-374:1.)
Prior to taking out the HELOC, Press
had a discussion with Melnick wherein he
explained that the reason he wanted to take
out the HELOC was to pay for day-to-day
living expenses because Press was not
working at the time and was receiving
federal Social Security Disability benefits.
(Id. 55:19-24; 66:22-67:23.) In particular,
Press credibly testified that he told Melnick
that they “should take out a home equity line
Finally, Melnick never paid any money
back on the HELOC because she “never
8
In any event, as noted in more detail in the
Conclusions of Law, even assuming arguendo
that these expenditures were from the HELOC
for 15 Ohio, the Court finds that Melnick was
aware of the HELOC and the use of the funds
for various housing and other expenses incurred
by both Melnick and Press.
7
for the property, including taxes and utility
payments. (Id. 273:11-18; 356:7-13; 357:616; 390:8-11; Def. Tr. Ex. H; PTO 7.XIX.)
Indeed, Lonnie testified that “everything
was handled by [Press],” and Lonnie was
not even sure whether there was
homeowners’ insurance on the property.
(Tr. 90:13-15.) Lonnie also acknowledged
that every payment he ever made in
connection with 16 Nevada was reimbursed,
and he did not have any out-of-pocket
expenses for the property. (Id. 91:24-92:6.)
For example, although it is disputed whether
Lonnie did or did not loan Press $10,000 for
the down payment (id. 83:25-84:1; 273:1116; 356:4-6),9 even if such money was
loaned, plaintiffs acknowledge that this
amount was repaid by Press within eight
months to one year of the purchase of the
property. (Id. 88:1-5; 274:16-20; 95:2496:7.) Finally, it is undisputed that three
years after purchasing the property, Lonnie
transferred 16 Nevada to Press on March 5,
2002. (Id. 354:9-355:4.)
could even write a check on that loan” and
“never saw a bank statement on that loan.”
(Id. 257:5-7.)
D. 16 Nevada
In or around 1995 or 1996, Lonnie
Schwimmer rented an apartment located at
16 Nevada. (Id. 77:24-78:7.) While he was
living there, Lonnie claims to have told the
then-owner of 16 Nevada, Patrick Healy
(“Healy”), that he was interested in buying
the property if Healy wanted to sell it. (Id.
81:19-23.) Similarly, Press also claims to
have been interested in purchasing 16
Nevada for many years. (Id. 352:16-18.)
In or around late 1998 or early 1999,
Healy called Lonnie and offered Lonnie the
property. (Id. 82:6-9; PTO 7.XV) Lonnie
was “very excited about the opportunity,”
and approached the CFO of his company to
help him “double-check what I thought
seemed like a great deal.” (Tr. 82:10-18.)
Lonnie also called his mother to inform her
about the deal. (Id. 82:24.) Approximately
thirty minutes after Lonnie spoke with his
mother, Press allegedly called Lonnie in a
panic, stating that Lonnie couldn’t buy the
property because 16 Nevada was for Press
and Melnick for their retirement. (Id. 82:2483:7.) Lonnie testified that he “kind of like
threw my hands up there,” and that the
discussions between Press, Melnick, and
Lonnie continued for several days. (Id.
83:8-10.)
Plaintiffs and Press dispute, however,
why Lonnie transferred the property solely
to Press (and not to both Press and Melnick)
and what, if any, promises were made by
Press to Lonnie prior to the purchase of the
property. Specifically, plaintiffs claim that
Press promised that he would transfer an
interest in 16 Nevada to Melnick and that
the only reason the transfer was not made
initially to both Press and Melnick was
because Press said that Melnick’s credit was
not good enough to be on the deed. (Id.
87:18-25; 269:5-15.) As to the initial
promise allegedly made by Press prior to
Lonnie’s purchase of 16 Nevada, Lonnie
Ultimately, on July 28, 1999, Lonnie
purchased the property on Press’s behalf.
(Id. 85:11-86:1; 353:18-22.) It is undisputed
that, although Lonnie held a mortgage for
the property in his name, Press reimbursed
Lonnie for all mortgage payments and
Lonnie did not, in fact, make any payments
himself toward the mortgage. (Id. 47:7-14;
84:4-7.) Press also paid Lonnie $65,000 for
closing costs and paid every other expense
9
Press claims that the $10,000 loan from Lonnie
was for the renovations at 15 Ohio, not for the
down payment at 16 Nevada. (Tr. 355:24356:6.)
8
common. (PTO 7.VII; Tr. 223:11-20.) As
with the property at 15 Ohio, Press testified
that he saw his co-ownership of the property
with Melnick as a “business deal” and that
he told Melnick to “put up half” of the costs
for the purchase of the home if she wanted
to be “partners” in the deal. (Tr. 320:21321:4.) Both Press and Melnick were listed
as insureds for the property. (Id. 41:8-12;
228:23-24.) Although Melnick did not pay
for half of the purchase price of the home,
Melnick did contribute $9,000 toward the
purchase of the property (id. 224:6-11;
325:7-10; 386:8-10) and made five
payments between February 2004 and June
2004 toward the mortgage on the property,
for a total of approximately $10,000. (Pl.’s
Ex. 14; Tr. 279:22-280:1; 386:11-13.)
Melnick also testified that she paid certain
bills for the property, including electric,
telephone, cable, and housekeeping bills,
although she did not testify regarding how
much money she paid toward these bills.
(Tr. 280:21-281:1.)
Press paid the
remaining expenses for the property,
including various closing costs associated
with the purchase of the property, such as
homeowners association dues and various
initiation fees. (Id. 322:7-16.) However, the
last payment made toward the mortgage on
the property was made in or around March
2007, and the property is currently going
into foreclosure. (Id. 324:15-16; 325:6-9.)
testified that he was willing to forgo
purchasing the house for himself because:
[B]asically I was getting out of the
way of the house for my mother, and
he said to me that he promised me
that he would put my mom’s name
on the deed after their credit cleared
up because there was always some
type of credit issue, and take it back
in their name and everything and
they were going to retire off the
property.
(Id. 85:11-20.) Lonnie further claimed that
this promise to add Melnick to the property
at a later date was reiterated at the time that
Lonnie transferred the property to Press,
when Press stated again that the reason
Melnick was not on the deed was because of
her poor credit. (Id. 87:18-25; 92:19-94:11.)
Press, however, denies ever having made
any agreement with either Lonnie or
Melnick regarding the future transfer of 16
Nevada to Melnick. (Id. 358:4-16.) Thus,
Press denies that Lonnie transferred 16
Nevada to Press in reliance on Press’s
promise to add Melnick to the deed and, in
support of this argument, points to the fact
that Press paid all expenses in connection
with the property at 16 Nevada. (Id. 353:18358:19.)
Having carefully considered the trial
evidence (and as described in more detail in
the Conclusions of Law), the Court finds
that plaintiffs have failed to provide credible
evidence that a promise or agreement
existed regarding the future transfer of 16
Nevada to Melnick.
In October 2005, Hurricane Wilma
caused severe damage to the house, thus
requiring Melnick and Press to undergo
extensive renovations and repairs on the
property. (Id. 41:13-15; PTO 7.VIII.) After
Melnick and Press submitted insurance
claims for the damage, their insurance
companies
issued
checks
totaling
10
$214,168.53. One check for $105,657.07
E. Delray Beach Property
On January 21, 2004, Melnick and Press
purchased a house at 714 Foxpointe Circle
in Delray Beach, Florida as tenants in
10
Although Melnick testified that the insurance
companies paid approximately $240,000 on the
claims for damage to the property (Tr. 229:11-
9
was made payable not only to Press and
Melnick, but also to CitiMortgage, who, as
the mortgagor for the property, kept
possession of these funds and paid out
checks from this amount as reconstruction
on the property was completed. (Tr. 65:2066:7; 285:4-9.) In addition, one check for
$78,311.46 from Florida Insurance Guaranty
Association was inadvertenly issued only to
Press, even though both Press and Melnick
were insureds for the property. (Pl.’s Tr. Ex.
6; Pl.’s Tr. Ex. 7; PTO 7.XII.) Although the
insurance company sent a letter requesting
that Press return this check so that it could
be made payable to both Press and Melnick,
Press claims to have never received this
letter, given that it was sent to the Florida
address, and admits that he deposited this
check into his personal checking account.
(Pl.’s Tr. Ex. 6; Tr. 46:4-10.) Press testified
that he used these funds to pay bills for the
repairs of the Delray Beach house. (Tr.
46:11-12.)
Of the remaining $30,200,
Melnick deposited one check for $7,600 in
her account (Id. 229:18-19) and gave the
remaining checks—which were issued to
both Press and her—to Press, who deposited
them into his account. (Id. 229:20-23;
43:15-17; 44:14-16.)
estimation and, in fact, admitted that she had
“guesstimated” this figure based on having
seen “a lot of the bills” for the repairs when
she was down in Florida. (Id. 230:8-15;
284:3-16.) Press did not provide an estimate
for the total cost of the reconstruction during
his testimony, but he did provide receipts
totalling approximately $85,325 that he
testified represented “not half” of the
expenses he incurred in connection with the
repairs. (Def. Ex. Z; Tr. 467:4-6.) Press
also testified regarding the extensive repairs
that were necessary at the Delray Beach
property as a result of water and wind
damage, including mold and mildew
mitigation,
replacing
the
sheetrock,
insulation, and air conditioning ductwork,
and repairing the roof. (Tr. 328:12-15;
332:24-333:23; 334:17-335:20.)
Having
carefully considered the evidence at trial, the
Court finds credible Press’s testimony that
all of the insurance proceeds were used to
pay for extensive repairs to the home after
the hurricane. Other than sheer speculation,
Melnick has provided no credible evidence
that the proceeds were used for other
purposes or to Melnick’s detriment.
Neither Melnick nor Press provided
conclusive documentary evidence at trial
regarding the exact total cost of the repairs
of the Delray Beach property. Although
Melnick claimed that the total cost of the
reconstruction was approximately $110,000,
she submitted no receipts to corroborate this
A. Partition of 15 Ohio and Delray Beach
Properties
III. DISCUSSION
Melnick is seeking a partition of the 15
Ohio and Delray Beach properties and
argues that she should receive 50% of the
proceeds of the sale and should not be
responsible either for reimbursing Press for
the costs of any repairs or expenses or for
any outstanding liens or encumbrances on
the properties. Press does not dispute that
the properties should be partitioned by sale,
but he does dispute that the sale proceeds
should be divided evenly between Melnick
and him. Press does not propose what the
division of the proceeds should be, but
instead argues that the Court must conduct
14), plaintiff submitted checks totaling only
$214,168. Indeed, in the pre-trial order, the
parties stipulated that the insurance proceeds for
the property equaled $214,168.53. (PTO 7.X.)
Therefore, the Court does not credit Melnick’s
testimony that Press received insurance checks
for $240,000, and, instead, the Court finds that
the total amount of insurance proceeds paid by
the insurance companies was $214,168.53.
10
an accounting to determine the parties’
respective contributions to the property.
Press contends that he is entitled to
reimbursement to the extent that his
contributions were greater than those of
Melnick.
jointly, with equal rights to share in its
enjoyment during their lives, and creating in
each joint tenant a right of survivorship.”
Goetz v. Slobey, 908 N.Y.S.2d 237, 239
(N.Y. App. Div. 2010) (internal quotation
marks and citation omitted). There is a
“strong presumption . . . that joint tenants
hold the property in equal interests.” In re
Roswick, 231 B.R. 843, 854 (Bankr.
S.D.N.Y. 1999) (citations omitted). Indeed,
as explained by the New York Court of
Appeals, “[i]n contrast to individual
property, a joint tenant is entitled to an
immediate one-half interest in the joint
property.” In re Estates of Covert, 761
N.E.2d 571, 576 (N.Y. 2001) (citations
omitted). “This interest is immediately
vested, entitling either tenant to a half
portion, even though only one tenant may
have established and contributed to the
asset.” Id. (citations omitted). Likewise,
tenants in common “share a rebuttable
presumption that each holds an equal
undivided one-half interest in the subject
premises.” C.Y. v. H.C., No. XX07, 2007
WL 1775506, at *1 (N.Y. Sup. Ct. May 30,
2007) (citing Lang v. Lang, 705 N.Y.S.2d
295 (N.Y. App. Div. 2000)). However, in
contrast to a joint tenancy, a tenancy in
common “represents interests in property
held individually by two or more persons in
which no right of survivorship exists.”
People v. Rosenfeld, 844 N.Y.S.2d 587, 595
(N.Y. Sup. Ct. 2007) (internal quotation
marks and citation omitted).
As an initial matter, as to defendant’s
request for an accounting, the Court
recognizes that an accounting is a necessary
incident to a partition action and,
accordingly, has reviewed all of the
financial information and other evidence
regarding expenditures for the property
submitted by both parties in reaching its
decision. Having reviewed this financial
data, as well as the other evidence presented
at trial, the Court finds, first, that defendant
has failed to rebut the presumption that the
property at issue here should be divided
equally, and, second, that defendant is not
entitled to reimbursement for any expenses
incurred by him in connection with either
property.11 Thus, Press and Melnick each
are entitled to a 50% share of the proceeds
from the sale of the 15 Ohio and Delray
Beach properties. Further, the Court rejects
Melnick’s argument that she should take her
portion of the sale proceeds free of any liens
or encumbrances and finds, instead, that any
monetary liens or judgments must be
satisfied equally between Melnick’s and
Press’s share of the sale proceeds.
1. Legal Standards
Under New York law, “[a] joint tenancy
is an estate held by two or more persons
Pursuant to Section 901 of the New
York
Real
Property
Actions
and
Proceedings Law (“RPAPL”), a person who
holds property as a joint tenant or as a tenant
in common may bring an action for the
partition and sale of real property “if it
appears that a partition cannot be made
without great prejudice to the owners.”
McKinney’s R.P.A.P.L § 901(1).
The
tenant seeking the partition need not be in
actual possession of the property to bring
11
The Court notes that even where the parties
did not direct the Court to specific documents or
pieces of evidence regarding their claims, the
Court conducted its own extensive and
independent review of the financial and other
documentary evidence submitted by the parties
in order to ensure that the accounting in this case
is as accurate and equitable as possible.
11
which, upon partition, requires an equal
division of the property or the proceeds of
any sale. The difficulty with the defendant’s
case is that [this] presumption is [not]
absolute and may be rebutted.” (citations
omitted)).
The presumption of equal
interests among tenants in common similarly
is rebuttable upon partition. See Laney v.
Siewert, 810 N.Y.S.2d 436, 437 (N.Y. App.
Div. 2006) (evidence that defendant paid
“virtually all of the apartment’s purchase
price and carrying costs is sufficient to rebut
the presumption that the parties are entitled
to an equal number of shares on partition”).
such an action, but instead need only have a
right to possession of the property pursuant
to the property’s title. See Donlon v.
Diamico, 823 N.Y.S.2d 483, 484 (N.Y. App.
Div. 2006); Kurpiel v. Kurpiel, 271
N.Y.S.2d 114, 115 (N.Y. Sup. Ct. 1966).
“A partition action, although statutory, is
equitable in nature and an accounting of the
income and expenses of the property sought
to be partitioned is a necessary incident
thereof.” Worthing v. Cossar, 462 N.Y.S.2d
920, 922 (N.Y. App. Div. 1983) (internal
citations omitted); accord Deitz v. Deitz, 664
N.Y.S.2d 868, 869 (N.Y. App. Div. 1997).
Moreover, because an action for partition is
subject to equitable considerations, the
Court “may compel the parties to do equity
as between themselves and may adjust the
equities of the parties in determining the
distribution of the proceeds of the sale.”
Worthing, 462 N.Y.S.2d at 922 (internal
citations omitted); see also Hunt v. Hunt,
788 N.Y.S.2d 219, 221 (App. Div. 2004)
(“[P]artition is an equitable remedy in nature
and Supreme Court has the authority to
adjust the rights of the parties so each
receives his or her proper share of the
property and its benefits.”).
Stated
otherwise, “[i]n a partition action, this Court
sits both as a court of law, which must
evaluate the wording of the deed, and as a
court of equity, which must consider issues
of fairness and the respective contributions
of the parties.” C.Y., 2007 WL 1775506, at
*1. Thus, while joint tenants each own an
undivided one-half interest in their joint
property during their lifetimes, Covert, 761
N.E.2d at 576, this presumption of equal
interests is rebuttable upon partition of the
property when the Court must weigh
equitable considerations and, as stated
supra, may compel the parties to do equity
among themselves. See, e.g., Koehler v.
Koehler, 697 N.Y.S.2d 478, 485 (N.Y. Sup.
Ct. 1999) (“[T]he designation of the parties
as joint tenants creates a unity of estates
As a general matter, “expenditures made
by a tenant in excess of his obligations may
be a charge against the interest of a
cotenant.” Worthing, 462 N.Y.S.2d at 922
(citations omitted). Likewise, where one
party has received “more than his or her
proper share of rents or profits derived from
the property,” the Court may “adjust the
rights of the parties” accordingly. Deitz,
664 N.Y.S.2d at 869. However, while an
accounting is necessary where, for example,
“there is evidence that one party has
received a disproportionate share of the rents
or profits from real property, there must be
evidence that the party from whom an
accounting is sought actually received the
rents and profits.”
Wawrzusin v.
Wawrzusin, 623 N.Y.S.2d 255, 257 (App.
Div. 1995) (emphasis added) (citations
omitted). In addition, reimbursement for
repairs and improvements is warranted only
where the repairs and improvements “were
made in good faith and were necessary to
protect or preserve the property.” Worthing,
462 N.Y.S.2d at 923 (noting that the “mere
fact that the defendant has made
improvements or repairs upon the property
does not in itself necessarily give a right to
an equitable allowance,” and that “[t]here
must be proof of the circumstances and need
for the restoration work” (internal quotation
marks, citations, and alterations omitted));
12
see also Wawruzusin, 623 N.Y.S.2d at 257
(denying reimbursement for repairs where
there was insufficient evidence to support a
claim for a credit and denying
reimbursement for cost of an addition to the
property because “a co-tenant is not entitled
to an allowance for improvements which are
not in the nature of repairs or restoration and
are made for the co-tenant’s own purposes
without the agreement or consent of the
other co-tenants”).12
(Bankr. E.D.N.Y. May 3, 2010) (quoting
C.Y., 2007 WL 1775506, at *1). In other
words, while the Court should consider the
parties’
“separate
contributions
to
acquisition and improvement of the
property,” Quattrone v. Quattrone, 619
N.Y.S.2d 773, 774 (N.Y. App. Div. 1994),
the Court also “must consider the
relationship between the parties and whether
the co-tenant who paid for such expenditures
intended his disparate contributions to be a
gift.” In re Schroeder, No. 327294, 2008
WL 1724006, at *4 (N.Y. Surr. Ct. Mar. 26,
2008) (citation omitted).
Ultimately, in determining the equitable
division of property, “the Court may
consider the nature of the parties’
relationship, disparities in down payments
and mortgage payments, whether any such
disparate contributions to the property were
intended to be a gift, the reasonable value of
improvements and repairs to the property
and the reasonable value of rental payments
with regard to an ousted co-tenant.” In re
DeVanzo, Nos. 8-08-75665-reg, 8-0908128-reg, 2010 WL 1780038, at *5-6
2. Application
a. 15 Ohio
As noted supra, Melnick and Press own
the property at 15 Ohio as joint tenants.
Accordingly, the strong presumption that
“joint tenants hold the property in equal
interests” applies here. In re Roswick, 231
B.R. at 854. In addition, because this is a
partition action, the Court has evaluated the
equitable factors at issue and has considered
not only the parties’ respective financial
contributions to the acquisition and
improvement to the property, but also the
parties’ relationship and whether any alleged
disparate contributions by one party could
reasonably be construed as a gift to the
other.
12
The Court notes that although the above-cited
cases regarding reimbursements for repairs and
improvements involved tenants in common,
rather than joint tenants, the same legal
principles have been applied by New York State
courts in cases involving joint tenants. See, e.g.,
Sharpe v. Raffer, 893 N.Y.S.2d 674, 676 (N.Y.
App. Div. 2010) (noting that “[i]n fashioning an
award in a partition action, a court may consider
the amount of any down payment and any
mortgage payments, as well as the reasonable
value of repairs and improvements made to the
property” and upholding lower court’s decision
crediting one joint tenant with full amount of
repairs and improvements made to the property);
Grishaver v. Grishaver, 225 N.Y.S.2d 924, 93334 (N.Y. Sup. Ct. 1961) (“As a joint tenant
plaintiff is entitled to an equal share of the
income and profits from the jointly owned
property, and equity will afford relief to a joint
tenant where the co-tenant entrusted with the
common assets has usurped more than his just
proportion.” (internal citations omitted)).
Regarding the nature of the parties’
relationship, the Court finds it clear from the
record that, despite defendant’s effort to
characterize his relationship with Melnick
regarding 15 Ohio as a business partnership,
Press and Melnick were involved in a longterm, quasi-marital, romantic relationship
for over twenty years. Indeed, Press and
Melnick already had been dating for
approximately ten years and cohabitating at
15 Ohio for two years at the time that Press
put Melnick on the deed for the property.
13
relationship, only four of these checks were
written in 1996 and 1997, when the
renovations took place, and these checks
only totalled $12,200. (Def. Ex. Z, Tab 9.)13
In any event, even assuming arguendo that
each of the payments from Press to Melnick
was intended as reimbursement for
renovation costs, these checks only total
$39,000, which represents less than a quarter
of the $204,000 in total renovation costs.
Furthermore, Press acknowledged at trial
that some of the money he gave to Melnick
as “reimbursement” came from the original
$70,000 that she had paid to him for the
renovations—clearly, Press should not
receive credit for paying Melnick with funds
that
originally
were
Melnick’s.
Accordingly, the Court does not credit
Press’s testimony that he paid for most of
the renovations and that Melnick did not pay
for her share in 15 Ohio and, as such, finds
that Press had failed to rebut the
presumption that the property should be
divided equally between Melnick and Press.
In addition, the Court finds that, although
Melnick may not have paid $157,630 “in
that exact amount” for her share in 15 Ohio
(Tr. 113:5-10), she contributed a substantial
sum toward the property between the
$70,000 payment and her payments for the
renovation. Further, the Court also notes
that plaintiffs introduced evidence at trial
that, in 1996, the fair market value of 15
Ohio was approximately $220,000. (Id.
182:12-16.)
Defendant introduced no
evidence that this estimation was inaccurate
Although they were never officially married,
Press and Melnick shared the same bed,
spent holidays together, took care of each
other’s families, and socialized together as
any married couple would.
Melnick’s
children viewed Press as a stepfather, and
Press listed Melnick as the sole beneficiary
of his will. Moreover, neither Press nor
Melnick made any effort to keep track of
who paid which bills or how much money
either had contributed to the property. As
described by Melnick, “[W]e lived as a
couple and I helped. . . . I never watched the
money. If he wanted something and I had it,
I gave it to him. If I needed something and
he had it, he gave it to me.” (Tr. 222:17-22.)
Press similarly acknowledged that he did not
keep a log regarding any payments made by
either Melnick or him. (Id. 59:6-17.) Thus,
although Press and Melnick did not hold a
joint bank account, the quasi-marital nature
of their relationship and their lack of effort
to maintain any distinctions between their
respective contributions to the property are
equitable considerations that weigh strongly
in favor of a 50/50 division of the property.
This conclusion is further supported by a
review of the evidence presented at trial
regarding
the
parties’
respective
contributions to the acquisition and
improvement of the property.
As to
Melnick’s contributions, although the
$70,000 that Melnick gave Press was given
after she was put on the deed and was not
intended as payment for her “acquisition” of
an interest in 15 Ohio, it is undisputed that
this sum was put toward the renovation costs
at 15 Ohio and, thus, represents a substantial
investment by Melnick in the property.
Moreover, of the additional $204,000 in
renovation costs, the Court finds that Press
has failed to substantiate his claim that he
paid more of these costs than Melnick did.
Specifically, while Press put in checks
demonstrating that he gave money to
Melnick during the course of their
13
Press also submitted checks made payable to
himself that he claimed were actually cash
payments that he gave to Melnick. Even if the
Court were to credit this testimony—which, as
noted supra in note 7 the Court does not—two
of these five checks were written before April
1996, when Melnick was put on the deed.
Moreover, the remaining three checks only total
$4,800, which is far short of the total cost of the
renovations at 15 Ohio.
14
or to suggest that the value of the property
was greater than $220,000.14 Consequently,
based on this figure, Melnick need only have
paid
approximately
$110,000—not
$157,630—to obtain a 50% interest in 15
Ohio. Under these circumstances, the Court
finds that a 50/50 division of the 15 Ohio
property is equitable and appropriate.
January to November 2003. Press also
failed to submit evidence of mortgage
payments made by him for nine months in
1998, or in March 1999, July 1999, May
2000, June 2001, June 2005, November
2005, or December 2005. Thus, Press has
failed to substantiate his claim that he is
entitled to reimbursement for his payment of
carrying costs associated with 15 Ohio. See
Kiernan v. Martin, 852 N.Y.S.2d 351, 35152 (N.Y. App. Div. 2008) (upholding order
directing that sale proceeds be divided
equally and holding that “Supreme Court
properly determined the equities between
the parties” where, “[b]ased upon the trial
testimony and documentary evidence, the
plaintiff failed to substantiate his entitlement
to a greater share of the sale proceeds as
reimbursement for mortgage and tax
payments he allegedly made on the subject
real property, and for expenses he allegedly
incurred for improvements to the subject
real property”); Frater v. Lavine, 646
N.Y.S.2d 46, 47 (N.Y. App. Div. 1996)
(finding that plaintiff “failed to put forth any
evidence, other than conclusory allegations,
to substantiate her claim that she is entitled
to reimbursement for money she allegedly
gave the defendant toward the down
payment and purchase of the property”).
Likewise, as to carrying costs for the
property, the Court finds that Press has
submitted
insufficient
evidence
to
demonstrate that he is entitled to a greater
share of the sale proceeds as reimbursement
for his alleged payment of these costs.15 For
example, although Press submitted evidence
that he made a number of utility bill
payments (Def. Ex. Z, Tab 6), there are
months and even entire years for which he
submitted no such checks, and, thus,
defendant’s evidence fails to establish that
Press paid more than his share of the
expenses for 15 Ohio. For example, Press
submitted no evidence that he paid any
utility bills from 1999 through 2004, or from
2005 through 2006, other than one payment
in December 2005. In addition, for the 33
month period from April 1996 (when
Melnick became a joint tenant) through
December 1998, Press only submitted
evidence that he paid utility bills for 20 of
those months. Similarly, as to mortgage
payments, Press failed to submit any
evidence indicating that he made payments
on the mortgage in 1996, 1997, 2006, or
between February to December 2002 or
In any event, even assuming arguendo
that Press paid a greater proportion of the
carrying costs than Melnick, the Court finds
that it would be inequitable to require
Melnick to reimburse Press for these costs.
As already discussed, Press and Melnick
were involved in a quasi-marital relationship
that spanned two decades, and, given the
absence of any credible evidence that Press
expected to be repaid for his contributions to
the property, the Court finds that any
payments made by Press toward the property
in which they cohabitated were gifts to
Melnick.
Cf. Rettig v. Holler, No.
126865/02, 2003 WL 22976599, at *3 (N.Y.
Sup. Ct. Sept. 16, 2003) (noting that “the
14
In fact, when asked whether he was “charging
[Melnick] $157,630 in 1996 for a property that
was only worth $220,000 in total,” Press
admitted “[t]hat is correct.” (Tr. 363:2-5.)
15
As stated on the record during trial, in
reaching its decision here, the Court has not
considered any payments made by Press for the
15 Ohio property prior to the time when Melnick
became a co-owner of the property in April
1996.
15
admittedly earned more money and
therefore contributed more money,
took no steps to contemporaneously
record who paid which bills and
from whose account they were paid.
Nor is there any evidence that she
kept any contemporaneous records to
suggest that the parties contemplated
anything other than a 50/50 division.
. . . In fact, [plaintiff] credibly
testified that, after they moved into
the townhouse, there was no
consideration given as to whose
money was whose. If [plaintiff]
needed more money for household or
townhouse expenses, she would ask
[defendant] or she might pay the bill
herself if she had the funds.
Although [defendant] now claims
that the parties had an oral agreement
that any disparate contributions for
the townhouse would be “equalized”
in the event of a breakup, the Court
does not credit that testimony.
requisites for a valid gift inter vivos are [i]
intent on the part of the donor to give; (ii)
delivery of the property given, pursuant to
such intent; and (iii) acceptance on the part
of the donee”). Furthermore, during the
course of their relationship, Press and
Melnick made no effort to keep track of who
was making which payments, and Press
cannot now retroactively claim that he
intended to maintain a business-like
relationship with Melnick with regard to the
property and intended to keep his
contributions to the property separate from
Melnick’s. In so holding, the Court finds
instructive the decision in C.Y. v. H.C. In
that case, plaintiff and defendant were a
same-sex couple who owned the townhouse
that they lived in as tenants in common.
2007 WL 1775506, at *1. As an initial
matter, unlike in this case, defendant was
able to establish a significant disparity in the
parties’ contributions toward the down
payment which, the court held, warranted an
unequal division of sale proceeds. Id. at *2.
However, the court nevertheless found that
defendant was “not entitled to a credit for
any disparities in payments made by the
parties to carry and maintain the townhouse
after the couple moved in and before
[plaintiff] left.” Id. at *3. In so holding, the
court noted explained, inter alia:
Id. at *3. This Court agrees with the
reasoning of the court in C.Y. and finds that
a 50/50 division of the property without
reimbursement for carrying costs paid
during the course of the relationship is
appropriate in this case. See also Hufnagel
v. Bruns, 542 N.Y.S.2d 652, 654 (N.Y. App.
Div. 1989) (award to respondent for
reimbursement of maintenance payments
made during time parties cohabitated was
unwarranted
where
“[t]he
evidence
establishe[d] that during the time that
appellant and respondent lived together,
respondent voluntarily paid all of appellant’s
expenses, including those associated with
the cooperative loft. Respondent continued
to do so even after he had left the apartment
until the time he was locked out by appellant
. . . . There is no evidence that appellant ever
agreed or was expected to reimburse
In terms of how they lived their
lives, they essentially considered
themselves married and operated as a
couple. They lived together with
[defendant’s] two children from a
previous relationship and [plaintiff]
gave birth to a child before the
parties separated.
They held
themselves out as, and were, in all
respects, a family. . . . During the
parties’ relationship, neither party
made any attempt to keep track of
exactly how much money each was
contributing to the running of the
household.
[Defendant], who
16
respondent for
expenses.”).16
her
living
and
other
Furthermore, as to any payments
allegedly made after the end of their
relationship, although the Court finds that
Press has presented sufficient credible
evidence to demonstrate that there were tax
obligations for which he received no
contribution from Melnick and which were
paid using the rental income from the
apartment at 15 Ohio, Press has failed to
demonstrate through credible evidence
whether he incurred any additional
expenses—including mortgage, tax, or other
expenditures—for which he would be
entitled to reimbursement. In particular, the
Court finds that Press is not entitled to
reimbursement because he has not submitted
sufficient evidence to demonstrate that he
made any such mortgage or other payments
after the time that Melnick moved out that
were in excess of the $1,000 in rental
income he has been receiving since April
2008. Cf. Wawruzusin, 623 N.Y.S.2d at
257.18 Instead, the only post-2006 receipts
submitted by Press pertained to repairs made
to the property in 2007 and 2008. However,
the Court finds that Press is not entitled to
reimbursement for these expenses beyond
the rental income amount because he has
failed to demonstrate that all of these
repairs—which included replacing the living
room floor, renovating the kitchen counter,
repairing cracks on the sidewalk, and
repairing stucco on the outside of the house
(Tr. 349:12-351:23)—were “necessary to
protect or preserve the property.” Worthing,
462 N.Y.S.2d at 923. Indeed, many of these
renovations appear to be cosmetic repairs or
However, the Court finds that Melnick is
not entitled to a share of the monthly rental
income that Press has received from a tenant
living in an apartment at 15 Ohio after
Melnick vacated the property. Although
defendant admitted that he had received
$1,000 per month in rental income from this
tenant (Tr. 385:16-19), the Court notes that
Melnick voluntarily abandoned the property
in August 2006 when she decided to end her
relationship with Press and has not made
any payments toward the property since that
time. (Id. 256:3-11.) Press also credibly
testified that he used the rental income to
pay the taxes on the property since Melnick
left. (Id. 385:16-22.)17 Therefore, in light of
the use of the rental income to pay taxes on
the jointly held property, the Court finds that
it would be inequitable to require Press to
pay Melnick a portion of the rental proceeds
he has received on the property.
16
The conclusion that the parties never intended
anything other than an equal division of property
between them and that Press never intended to
be reimbursed for his expenses is further
supported by the fact that Press also gifted
Melnick an interest in 17 Ohio. (Tr. 106:25107:2; 254:9-15.) Indeed, it is undisputed that
Melnick paid $40,000 toward the mortgage at 17
Ohio and that the mortgage was taken out to pay
for the renovations at 15 Ohio. (Id. 215:22-24;
221:11-22;
314:19-315:1;
370:19-371:7.)
Although Melnick ultimately transferred her
interest in 17 Ohio back to Press, this transfer of
property and comingling of funds between the
properties further supports the Court’s
conclusion that a 50/50 division of property here
is both warranted and equitable.
18
The Court notes that Melnick did admit that
she has not paid any bills or made any other
payments in connection with 15 Ohio since she
moved out in August 2006. (Tr. 256:3-11.)
However, the fact that Melnick has not made
any such payments does not necessarily
establish that Press made payments that were in
excess of the rental income he has obtained from
the property since April 2008.
17
In addition to Press’s testimony, there is also
documentary evidence in the record reflecting
certain taxes that were owed on 15 Ohio. (See
Def.’s Ex. 17; Tr. 450:2-5.)
17
repairs intended to fix minor problems with
the property, and the Court finds that Press
has failed to provide for some of them
“proof of the circumstances and need for the
restoration work.” Id.19 In fact, many of
these payments (such as utility payments)
may have simply related to his ongoing,
personal use of the house, expenses for
which
Press
is
not
entitled
to
reimbursement. In any event, with respect
to any mortgage payments he continued to
make or these other expenditures, Press has
failed to demonstrate that the rental income
from the tenant living at 15 Ohio was
insufficient to cover such payments and
expenditures.
his share and that she is entitled to her 50%
share free of any liens or encumbrances. As
discussed in greater detail infra, the home
equity line of credit is attached to the entire
property at 15 Ohio, and although Melnick
did not sign the note for the HELOC—and
therefore had neither a right to access the
line of credit nor any obligation to re-pay
it—the evidence shows that Melnick did
sign a mortgage in connection with the
HELOC, which gave the bank the right to
foreclose on the property should Press
default on his repayment obligations. In
fact, as a deeded co-owner of the property,
Melnick not only was aware that Press was
taking out a HELOC on the property, but
also had to approve the attachment of the
HELOC to the property. Moreover, the
Court finds that the funds from the HELOC
were used to pay for expenses at the 15 Ohio
property and other day-to-day expenses
during Press and Melnick’s quasi-marital
relationship,
and
Melnick
therefore
benefitted directly from these funds and
knew such funds were being used for those
purposes. Under these circumstances, the
Court finds that it would be equitable for
any remaining balance on the HELOC to be
repaid equally from Melnick’s and Press’s
shares of the sale proceeds from 15 Ohio.
Accordingly, having evaluated the
equitable considerations in this case and the
financial evidence submitted by the parties,
the Court finds that Press has failed to rebut
the strong presumption that the sale
proceeds of 15 Ohio, which Press and
Melnick own as joint tenants, should be
divided equally between them.
Thus,
Melnick and Press are each entitled to 50%
of the proceeds derived from the partition
and sale of the property, without
reimbursement for any alleged carrying
costs, payments, or rental income paid or
received by the parties. The Court also
rejects Melnick’s contention that Press must
satisfy the HELOC on the property out of
Finally, the Court rejects Melnick’s
argument that she was ousted from the
property by Press and is entitled to rental
income from Press for his exclusive
occupancy of 15 Ohio since August 2006.
As a general matter, upon the ouster of one
co-tenant from the property by the other cotenant, the remaining tenant becomes liable
for all charges assessed against the property
and owes the ousted co-tenant one-half of
the reasonable rental value of the property.
See C.Y., 2007 WL 1775506, at *5;
Hufnagel, 542 N.Y.S.2d at 654. Here,
Melnick alleges that Press’s abusive and
threatening behavior toward her caused her
to be ousted from the 15 Ohio property.
19
Melnick also argued that Press should not be
entitled to reimbursement for payments made
after Melnick moved out in August 2006
because Press ousted Melnick from the property
and, accordingly, “became responsible for
paying all charges assessed against the property,
including the reasonable value of [his] exclusive
use and occupancy.” C.Y., 2007 WL 1775506,
at *5 (citations omitted). However, as set forth
infra, the Court finds that Press did not oust
Melnick. Accordingly, the Court declines to
rely upon this alternative ground for finding that
Press is not entitled to reimbursement.
18
described that, when Press saw Melnick, he
became very upset and began screaming
words to the effect of “What the F are you
doing here? You didn’t have to come here.
You could have stayed home. I don’t need
you here.”20 (Id. 154:22-155:1.) Notably,
however, Denker—a self-admitted “very
nervous type of a person” (Id. 156:10)—did
not call the police because, in her words, “I
didn’t feel that I had to call . . . [T]hey were
just – you know, he was just yelling and
all.” (Id. 155:9-11.) Additionally, Melnick
told Denker shortly after the incident that
“everything’s fine” and that “everything
[had] quieted down.” (Id. 156:5-8.) In fact,
based on Denker’s testimony, it appears that
Denker was more upset about the incident
than Melnick was at that time. (Id. 156:1-12
(“[S]he said, don’t worry. I’ll be okay. . . . I,
like, drove slow waiting to see if she’ll call
and then I called her back and she said
everything’s fine, you know, everything
quieted down. You know, she didn’t want
me, I guess, to get involved because I’m a
very nervous type of a person. So I was
very upset over it because I never seen
anything like this.”).) Thus, even if Press
did become angry as described by Denker,
the Court finds that the incident, when
considered in light of the totality of the
evidence, certainly does not rise to the level
of abusive behavior that could result in an
ouster.
However, the Court rejects this argument
and finds that plaintiff left 15 Ohio
voluntarily and of her own volition and was
not ousted or constructively evicted because
of Press’s allegedly abusive behavior.
Specifically, although the Court credits
Melnick’s testimony that Press’s personality
had changed in the final years of their
relationship due, in large part, to Press’s use
of pain medication, the Court did not find
credible the testimony presented regarding
Press’s abuse of Melnick and finds, instead,
that even if Press had become “nasty” and
“erratic,” his behavior and Melnick’s
resulting decision to leave him did not
constitute an ouster.
As an initial matter, much of the
testimony regarding Press’s abuse was
largely conclusory, and when witnesses
were asked to corroborate their allegations
with specific examples, they either were
unable to do so, or provided examples of
minor fights that did not involve any
threatening behavior toward Melnick. For
example, Eric Schwimmer recounted one
incident wherein Press broke a door trying
to get into the lower apartment at 15 Ohio
because “he needed to get water because he
kept his water bottles in the refrigerator
downstairs in the basement.” (Tr. 195:722.) Even assuming that this incident
occurred as described, there is no evidence
that Press directed this alleged anger toward
Melnick.
Furthermore, although Harriet Kovel
testified that Press “tortured” Melnick and
Melnick was “terrified” of him (id. 167:3-5;
168:1-3), she was unable to provide any
details as to why she had come to this
conclusion, other than to testify that Press’s
behavior was “erratic” (id. 169:20) and that
Likewise, Gail Denker (“Denker”), a
friend of Melnick’s, was able to describe
only one incident when she saw Press
become “very agitated” at Melnick. (Id.
154:15-16.) Specifically, Denker testified
that, in the fall of 2005, when Press was at
the Delray Beach property supervising
repairs to the home after Hurricane Wilma,
Press became angered at Melnick when
Melnick arrived unannounced at the house
in Florida. (Id. 153:20-154:17.) Denker
20
Press testified that he became angry because
he had left Melnick in charge of renovations at
15 Ohio to fix an on-going leak and she had
abandoned the house and left the workers
unsupervised.
19
reasons to stay with him. I was 61. I didn’t
want to give up on him.” (Id. 237:6-8.)
Indeed, as further evidence that Melnick was
not involuntarily ousted from the property,
Melnick explained that she never went back
to retrieve her other belongings not because
she was afraid or frightened or did not have
access to the house, but instead merely
because she “didn’t want to go back”
because “[t]hey were only things.” (Id.
238:2-5.)
Melnick had come to Kovel’s house on
several occasions to spend the night. (Id.
167:7-8.) With regard to one night when
Kovel found Melnick sleeping on Kovel’s
front porch, Kovel only stated that Melnick
was “afraid to go home,” but provided no
additional explanation as to why Melnick
had left her house that evening. (Id. 167:1624.) In fact, Melnick herself could not even
remember the exact reason why she had
chosen to sleep on Kovel’s porch and
testified that she might have done so after
Press yelled at her for attempting to clean
the house. (Id. 235:16-236:2.)
Finally, although it is clear that Press
changed the locks for the property at some
point after Melnick moved out (id. 383:722), there is no evidence as to why Press
decided to change the locks. Further, there
is no evidence that Press ever affirmatively
denied Melnick access to the property or
that he informed her that he was excluding
her from the house. In fact, Melnick
admitted that she was not even aware that
the locks for the house had been changed
until either her lawyers or her broker told
her. (Id. 238:20-24.) In addition, when
Melnick came by the property unannounced
sometime in 2008—after the current action
had been initiated—Press indicated to
Melnick that she could enter the property,
but requested that she contact his attorney
first to make arrangements to do so. (Id.
341:9-342:10.) Press credibly testified that
he asked Melnick to make arrangements
with his attorney because “after everything
that had transpired, I was afraid that she
would say that I did something. I hit her or I
threatened her or did something.” (Id.
342:11-13.)
In addition, the testimony regarding
Press’s behavior and Melnick’s decision to
leave him was internally inconsistent in
material respects. By way of example,
although Melnick testified that she “left with
nothing, not even my own furniture,” she
later admitted that, in or around July 2006—
approximately one month before she moved
out—she began to pack many of her
belongings, including her summer clothing,
her art supplies, and her bike, and later had
those belongings brought down to Florida by
truck. (Id. 237:14-16; 266:6-10; 266:18267:1.) It is also undisputed that, when
Melnick told Press she was leaving, it was
Press who drove Melnick to her friend’s
house that evening. (Id. 237:17; 266:14-16;
339:14-25.) Thus, far from fleeing her
home to escape Press’s allegedly abusive
behavior, Melnick’s decision to leave was
methodical and planned—she not only took
the time to pack some of her belongings and
have those belongings picked up by movers
and shipped to Florida, but also requested
that Press, her alleged abuser, drive her to a
friend’s house when she was leaving. In
fact, Melnick’s own testimony revealed that
she made the decision to leave the home
voluntarily, after her efforts to salvage her
relationship with Press failed. In particular,
Melnick testified “I said to go to therapy
with me. I asked him to try and give me
Accordingly, under these circumstances,
the Court finds that Melnick has failed to
establish that she was ousted from 15 Ohio,
and Melnick therefore is not entitled to
rental income from Press for his occupancy
of 15 Ohio since August 2006. See Perkins
v. Volpe, 536 N.Y.S.2d 845, 846 (N.Y. App.
Div. 1989) (finding no ouster where even
20
though defendant exclusively occupied
premises and changed the locks in cotenant’s absence, testimony was inconsistent
as to why the locks had been changed and
defendant “never interfered with the
plaintiff’s right to possess the property nor
did he ever communicate to her his claim of
sole ownership”).
Melnick and Press own the Delray
Beach property as tenants in common and,
as such, they “share a rebuttable
presumption that each holds an equal
undivided one-half interest in the subject
premises.” C.Y., 2007 WL 1775506, at *1.
As with the 15 Ohio property, the Court
finds that Press has failed to rebut this
presumption and, accordingly, Melnick and
Press are each entitled to 50% of the sale
proceeds of the house.
Specifically,
although the record reveals that Press put
down most of the money for the purchase of
the home and made a number of payments
toward carrying costs for the property, he
did so after he and Melnick had been dating
for approximately fifteen years and
cohabitating
for
eight
years
and,
accordingly, the Court finds that any
disparate contributions made by Press were
gifts to Melnick. Moreover, the Court
recognizes that Melnick contributed $9,000
toward
the
down
payment
and
approximately $10,000 toward the mortgage
payments for the property. Further, as with
the 15 Ohio property, Press and Melnick
made no effort to separate the payments they
made in connection with the property or to
keep track of whether one owed the other
money. Therefore, the Court finds that the
equitable outcome is to evenly divide the
proceeds from the sale of the Delray Beach
property between Press and Melnick.
However, the Court notes that this
conclusion may be rendered moot by the
fact that no mortgage payments have been
made on the Delray Beach property since in
or about March 2007 and, accordingly, the
property is going into foreclosure.22
b. Delray Beach21
21
Although the Delray Beach property is located
in Florida, both plaintiffs and defendant rely
upon New York law in their arguments, and
neither argues that Florida law should apply to
the partition of the Delray Beach property. In
any event, the Court notes that, as in New York,
actions for partition in Florida are equitable in
nature and the applicable law is substantially
similar between the two states. See, e.g., Fla.
Stat. § 64.011 (“All actions for partition are in
chancery.”); Fla. Stat. § 64.071 (setting
procedures for sale of property for which
partition cannot be made without prejudice to
the owners); Schroeder v. Lawhorn, 922 So.2d
285, 293 (Fla. Dist. Ct. App. 2006) (“An
unequal division of the property may even be
justified where one cotenant has improved the
property to be divided without contribution by
the other cotenant or cotenants. Under these
circumstances, the party who made the
improvements should receive the benefit of the
enhancement he or she has made to the value of
the property if this result can be achieved
equitably.”); O’Donnell v. Marks, 823 So.2d
197, 199 (Fla. Dist. Ct. App. 2002) (“To
determine the allocation of the proceeds of the
partition sale, the court must apply this court’s
two-step procedure set forth in Biondo v.
Powers, 743 So.2d 161 (Fla. 4th DCA 1999).
The first step is to determine each party’s
percentage of ownership of the property. The
trial court found the split to be 50/50 and,
therefore, each had an interest amounting to
$105,000, half the $210,000 value determined
by the trial court. The next step requires the
court to determine the reimbursable expenses
incurred after closing and calculate each party’s
proportionate share using each party’s
percentage of ownership, i.e., fifty percent for
each party. That amount is then subtracted from
appellant’s one-half interest in the property and
given to appellee.”).
22
Moreover, as with the 15 Ohio property, the
Court finds that Press has submitted insufficient
21
B. Constructive Trust on 16 Nevada
1. Legal Standards
Melnick and Lonnie argue that a
constructive trust should be imposed in
either one or both of their favors on the 16
Nevada property. Specifically, plaintiffs
contend that, first, Lonnie only transferred
the 16 Nevada property to Press in reliance
on Press’s alleged promise that he would put
Melnick on the deed at a later date, and,
second, that because Press reneged on that
promise, allowing Press to keep the property
would unjustly enrich Press. For the reasons
set forth below, the Court disagrees and
finds that no promise was made by Press to
Lonnie with respect to the property and, in
any event, Press—who paid for all expenses
associated with the house—would not be
unjustly enriched if he were allowed to keep
the property solely in his name. Moreover,
because the Court finds that a constructive
trust should not be imposed on the property,
plaintiffs’ additional request for the partition
of the property is rendered moot.23
A constructive trust is an equitable
remedy that 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.” Watson v. Pascal, 886
N.Y.S.2d 440, 441 (N.Y. App. Div. 2009)
(internal quotation marks, alterations, and
citations omitted); see also Marini v.
Lombardo, 912 N.Y.S.2d 693, 696 (N.Y.
App. Div. 2010) (“A constructive trust is an
equitable remedy and its purpose is to
prevent unjust enrichment.” (internal
citations omitted)). Under New York law,
the requisite elements of a constructive trust
are: “(1) a confidential or fiduciary
relationship; (2) a promise, express or
any time, funds, or effort in connection with the
property, and, accordingly, does not have a
sufficient interest in the property to succeed on a
claim for a constructive trust. Cf. Lester v.
Zimmer, 542 N.Y.S.2d 855, 856-57 (N.Y. App.
Div. 1989) (constructive trust may be imposed
where plaintiff did not relinquish actual interest
in property but nonetheless contributed funds,
time and effort toward construction of property);
Washington v. Defense, 540 N.Y.S.2d 491, 492
(N.Y. App. Div. 1989) (where plaintiff had not
held actual title but had expended money, labor,
and time in construction of house, imposition
constructive trust was proper).
However,
plaintiffs have not restricted their constructive
trust claim to Melnick or claims on her behalf,
but instead have requested that the Court impose
a constructive trust in favor of Melnick and/or
Lonnie. Lonnie, here, was not a stranger to the
transaction and, in fact, held actual title to the
property prior to its transfer. Accordingly, the
Court construes plaintiffs’ claim for a
constructive trust as being raised by Lonnie on
behalf of himself as the transferor of the
property, a claim for which Lonnie has standing.
In any event, for the reasons stated herein, the
Court finds that plaintiffs’ claim for a
constructive trust fails on the merits.
evidence to demonstrate that he paid more than
his share of the maintenance and carrying costs
for the property, and, accordingly, the Court
finds that Press is not entitled to reimbursement
for any such payments.
23
Defendant raised a standing issue with respect
to this claim in his reply papers on summary
judgment. However, because this issue was
raised for the first time in reply, the Court
declined to reach this issue in its order denying
summary judgment. Here, the Court notes that,
to the extent Lonnie is seeking to impose a
constructive trust solely for the benefit of his
mother, he does not have standing to do so. See
In re Schick, 246 B.R. 41, 46 (Bankr. S.D.N.Y.
2000) (“The personal nature of the equitable
right prevents someone other than the
beneficiary from using it offensively or
defensively. Thus, a stranger cannot sue to
impose a constructive trust for the benefit of a
defrauded party.”). Moreover, Melnick neither
held actual title to the property nor expended
22
Mortg. Grp., Inc. v. Luca, 584 F. Supp. 2d
479, 486 (E.D.N.Y. 2008) (promise
sufficiently alleged where plaintiff claimed
that defendant “promised not to utilize
[plaintiff’s] resources for purposes other
than [plaintiff’s] interests”).
implied; (3) a transfer made in reliance on
that promise; and (4) unjust enrichment.” In
re Koreag, Controle et Revision S.A., 961
F.2d 341, 352 (2d Cir. 1992) (collecting
cases). However, these elements serve only
as “guideline[s],” and “a constructive trust
may still be imposed even if all of the
elements are not established.” Marini, 912
N.Y.S.2d at 696; accord In re Koreag, 961
F.2d at 352 (“Although these factors provide
important guideposts, the constructive trust
doctrine is equitable in nature and should
not be ‘rigidly limited.’” (quoting Simonds
v. Simonds, 380 N.E.2d 189, 194 (N.Y.
1978)) (additional citations omitted)).
2. Application
The parties here do not dispute the
existence of a confidential relationship
between Press and Lonnie. However, as to
the second element of a constructive trust,
the Court finds that plaintiffs have failed to
prove the existence of a promise between
Press and Lonnie with respect to 16 Nevada.
As an initial matter, the Court recognizes
that a promise for purposes of a constructive
trust need not be express, but instead may be
an implied promise inferred from the
circumstances surrounding the transfer of
the property. See Brand v. Brand, 811 F.2d
74, 78 (2d Cir. 1987). However, in this
case, the Court finds that plaintiffs have
failed to present sufficiently credible
evidence to establish by a preponderance
that Press made a promise to Lonnie that he
would ultimately give an interest in the
property to Melnick, or to allow the Court to
infer as much from the circumstances
surrounding the transfer. First, Melnick—
who is alleged by plaintiffs to be the
ultimate beneficiary of the transfer of 16
Nevada—was a stranger to this transaction.
She paid no money to the purchase of the
property, paid no funds toward expenditures,
and, other than one possible conversation
with Lonnie, appeared to play no role in the
negotiations leading up to the transaction.
Second, not only did Melnick not expend
any funds in connection with the acquisition
or transfer of 16 Nevada, but Lonnie also
admitted that he, too, had no out-of-pocket
expenses in connection with the property.
Indeed, even the $10,000 that Lonnie claims
he loaned Press for the down payment—a
claim which Press denies—was repaid by
A plaintiff is not required to have had an
actual interest in a property to assert a claim
for constructive trust. See Kasan v. Perlin,
877 N.Y.S.2d 851, 856 (N.Y. Sup. Ct. 2009)
(“The Court has considered the defendants’
argument that the plaintiff is required to
have an interest in the property prior to the
imposition of a constructive trust, but finds
that this is not a prerequisite.” (citing
Henness v Hunt, 708 N.Y.S.2d 180 (N.Y.
App. Div. 2000))). Instead, courts have held
that a constructive trust may be imposed
where “funds, time and effort are
contributed in reliance on a promise to share
in the result.” Lester v. Zimmer, 542
N.Y.S.2d 855, 856 (N.Y. App. Div. 1989);
see also Washington v. Defense, 540
N.Y.S.2d 491, 492 (N.Y. App. Div. 1989)
(imposition of constructive trust was proper
even where plaintiff “never had actual title”
because, nevertheless, “plaintiff’s interest in
the
property
[was]
overwhelmingly
established by virtue of [her] expenditure[]”
of money, labor, and time in the
construction of the house). Thus, the law of
constructive trusts is “not confined to
reconveyance situations,” Lester, 542
N.Y.S.2d at 856, where a party transferred
property to which he held title solely in
reliance on a promise to reconvey that
property at a later time. Cf. Fairfield Fin.
23
property. Although Lonnie stressed that he
could have been held liable if someone had
been injured on the property or if Press had
missed a mortgage payment, neither of these
hypothetical possibilities materialized, and,
at the time of transfer, Lonnie had expended
no money whatsoever for the acquisition or
maintenance of 16 Nevada. Moreover,
Lonnie enjoyed the benefit of possessing the
property for three years, while Press paid for
all of the property’s expenses.
Press within eight months to a year of the
purchase of the property. Press, in other
words, funded the entire purchase and paid
for the maintenance of the property. Finally,
the Court did not find Lonnie’s testimony
regarding the details of the promise to be
credible. In particular, Lonnie’s description
of the alleged promise was vague and
provided few details about what Press had
actually said to Lonnie to lead Lonnie to
believe that his mother would ultimately
acquire an interest in 16 Nevada.
Accordingly, given the credible evidence —
including Melnick’s complete absence from
the transaction and Lonnie’s lack of any
financial exposure—the Court rejects
plaintiffs’ contention that they expected to
have a future interest in the property and that
Lonnie only transferred the property because
of a promise that Press would later transfer
an interest to Melnick.
Under these circumstances, where Press
paid for the purchase of the property and its
upkeep—including mortgage payments,
taxes, and any other expenses—and where
Lonnie ultimately had no exposure, financial
or otherwise, in connection with the
property—and, in fact, admitted that
“everything was handled” for the property
by Press (Tr. 90:13-15)—the Court finds
that it would not be against equity or good
conscience to allow Press to retain the
property. In fact, if Lonnie were permitted
to impose a constructive trust on 16 Nevada,
he would receive an unjustified windfall for
an investment that he did not pay to either
purchase or maintain. Indeed, at least one
court found unjust enrichment to exist where
a party in an analogous position to plaintiffs
in this case was allowed to retain an interest
in a property and, thus, found a constructive
trust in favor of the defendant. In Hornett v.
Leather, 535 N.Y.S.2d 799 (N.Y. App. Div.
1988), the defendant, a married man, had
been dating plaintiff for several years when
he purchased a home for them to live in
together. Id. at 800. Defendant paid for the
acquisition of the property, acquired a
mortgage, and paid for all expenses
associated with the property. Id. Three
years later, defendant transferred the
property to himself and plaintiff as joint
tenants, with the understanding that, if their
relationship ended, plaintiff would reconvey
her title in the property to defendant. Id. at
800-01.
During the course of their
Moreover, the Court also finds that
plaintiffs have failed to establish that Press
would be unjustly enriched if he were
allowed to retain sole possession of 16
Nevada. Under New York law, “to prevail
on a claim of unjust enrichment, a party
must show that (1) the other party was
enriched, (2) at that party’s expense, and (3)
that it is against equity and good conscience
to permit the other party to retain what is
sought to be recovered.” Marini, 912
N.Y.S.2d at 697 (internal quotation marks,
citations, and alterations omitted).
As
explained by the Second Circuit, this
element “lies at the heart of the equitable
remedy of a constructive trust,” and “‘[i]t is
not the promise only, nor the breach only,
but unjust enrichment under cover of the
relation of confidence, which puts the court
in motion.’” Brand, 811 F.2d at 80 (quoting
Sinclair v. Purdy, 139 N.E. 255, 258 (N.Y.
1923)). Here, it is undisputed that Press
paid for all financial expenditures related to
16 Nevada and that Lonnie ultimately had
no financial exposure in connection with the
24
argues that Press should be responsible for
re-paying any obligations on the 15 Ohio
HELOC because Press wrongfully converted
those funds for his own use. Second,
Melnick contends that the Court should
enter a judgment in her favor in the amount
of $32,084.26 for Press’s wrongful
conversion of Melnick’s share in the
insurance proceeds received for the
hurricane-related damage of the Delray
Beach property. For the reasons set forth
below, the Court rejects both of these
arguments and finds in favor of defendant
on these claims.
relationship, defendant also paid for
vacations and automobiles for plaintiff, and
supported plaintiff while she attended law
school.
Id.
Ultimately, plaintiff and
defendant ended their relationship, but
plaintiff refused to reconvey her interest in
the property, and defendant sued to impose a
constructive trust.
In holding that a
constructive trust should be imposed, the
court explained that allowing the plaintiff to
retain her interest in the property would be
unjust:
Plaintiff received one-half ownership
in a valuable piece of property for
which her financial contributions
were, if anything, minimal. . . . The
fact that the transfer allegedly
resulted in plaintiff becoming liable
on the mortgage does not create a
situation where unjust enrichment
cannot be found where, as here,
plaintiff has never been requested to
assume any of the mortgage
payments and the debt is current.
1. Legal Standards
“A conversion takes places when
someone,
intentionally
and
without
authority, assumes or exercises control over
personal property belonging to someone
else, interfering with that person’s right of
possession.” Colavito v. N.Y. Organ Donor
Network, Inc., 860 N.E.2d 713, 717 (N.Y.
2006) (citation omitted); see also Thyroff v.
Nationwide Mut. Ins. Co., 460 F.3d 400,
403-04 (2d Cir. 2006) (“According to New
York law, ‘[c]onversion is the unauthorized
assumption and exercise of the right of
ownership over goods belonging to another
to the exclusion of the owner’s rights.’”
(quoting Vigilant Ins. Co. of Am. v. Hous.
Auth., 660 N.E.2d 1121, 1126 (N.Y. 1995))).
A claim for conversion includes a “denial or
violation of the plaintiff’s dominion, rights,
or possession” over her property, Sporn v.
MCA Records, Inc., 448 N.E.2d 1324, 1326
(N.Y. 1983) (internal quotation marks and
citation omitted), and “requires that the
defendant exclude the owner from
exercising her rights over the goods.”
Thyroff, 460 F.3d at 404 (citing New York v.
Seventh Regiment Fund, Inc., 774 N.E.2d
702, 710 (N.Y. 2002)). Thus, “[t]wo key
elements of conversion are (1) plaintiff’s
possessory right or interest in the property
and (2) defendant’s dominion over the
Id. at 801-02 (citations omitted). Similarly,
plaintiffs in this case are asking for the
Court to impose a constructive trust on a
property for which their financial
contributions were minimal (considering
that the only money allegedly contributed by
Lonnie was repaid), and for which they have
no liability and have never been requested to
assume any of the payments. Thus, in this
case, not only is it not unjust to allow Press
to retain his interest, but it, in fact, would be
unjust to provide plaintiffs with an interest
in the property through the imposition of a
constructive trust. Accordingly, plaintiffs’
request for a constructive trust on 16 Nevada
is denied.
C. Conversion
Melnick has brought two claims based
upon a theory of conversion. First, Melnick
25
racehorses and other related activities.
Accordingly, the Court rejects Melnick’s
claim for conversion of the HELOC and
holds that both Melnick and Press are jointly
liable for paying any outstanding balances
owing to Bank of America.
property or interference with it, in
derogation of plaintiff’s rights.” Colavito,
860 N.E.2d at 717 (citations omitted).
2. Application
a. HELOC Funds
b. Insurance Proceeds
Melnick contends that she should not be
responsible for paying any portion of the
remaining obligation on the HELOC
because Press wrongfully converted these
funds for his own use by using these funds
to pay for racehorses and related expenses.
In support of this argument, Melnick notes
that the HELOC was not taken out in her
name and that Press was the only one who
had the ability to write checks using the line
of credit. (PTO 7.V.) Press, in contrast,
argues that Melnick is jointly liable for any
outstanding balances or obligations owed to
Bank of America in connection with the
HELOC. For the reasons set forth herein,
the Court agrees with Press and rejects
Melnick’s claim for conversion.
Melnick argues that Press should be held
liable to her for failing to provide Melnick
with her share of the insurance proceeds that
were not used to repair the Delray Beach
property. Specifically, Melnick contends
that, although $214,168.53 in insurance
proceeds were issued to Melnick and Press,
only approximately $110,000 of those
proceeds were used for renovation of the
Delray Beach property, and she alleges that
Press wrongfully deposited the unused
proceeds into his account and has refused to
provide Melnick with her 50% share of
those funds.24
Having reviewed the evidence presented
at trial, the Court finds that plaintiff has
failed to establish that a portion of the
insurance proceeds was not used for repairs
on the Delray Beach property or that Press
has retained any of those proceeds to
Melnick’s detriment. Specifically, the Court
does not credit Melnick’s testimony that
only approximately $110,000 of the
proceeds were used for renovations of the
Specifically, as already explained supra,
the Court finds that Melnick and Press are
jointly liable for the HELOC, and Press did
not take any such money without Melnick’s
authorization. Melnick was fully aware that
Press was taking out a HELOC against 15
Ohio and she not only approved of the
HELOC but, in fact, signed the mortgage in
connection with the line of credit. The
HELOC funds were also used to Melnick’s
benefit, given that they were used in large
part to pay for carrying costs for the
property that she lived in and co-owned with
Press. Finally, the Court finds that Melnick
failed to establish that she did not approve of
Press’s use of the funds for racehorses and
related expenses. Press testified credibly
that, during their relationship, Melnick was
aware of Press’s use of the funds for
racehorses and that she not only approved of
this use but also engaged in betting on
24
Melnick notes that Press gave her $20,000 in
or around the time that she moved out of 15
Ohio, and she contends that this amount was a
partial payment of the outstanding insurance
proceeds allegedly owed to her.
Press
acknowledges that he gave Melnick $20,000, but
he claims that this amount was a loan requested
by Melnick and that this payment was unrelated
to the insurance proceeds. In any event, because
the Court finds, as set forth supra, that Melnick
has not established a claim for conversion, the
Court need not resolve this dispute.
26
property. Melnick’s only basis for this
belief was the fact that she had seen “a lot of
the bills” for the repairs while she was in
Florida. (Tr. 284:3-16.) However, she
provided no specific details regarding what
those bills were, and the Court has no
assurance that the bills Melnick saw
represented the entirety of all bills for the
reconstruction. Moreover, Melnick herself
admitted that she had “guesstimated” this
figure. (Id. 230:8-15.) In addition, Press
testified regarding the extensive repairs that
were needed after the hurricane, and the
Court found credible Press’s testimony that
all of the proceeds received were used to
complete reconstruction of the property.
Accordingly, the Court rejects Melnick’s
claim that Press wrongfully converted the
Delray Beach insurance proceeds.
line of credit on the 15 Ohio property; and
(7) plaintiffs are not entitled to a
constructive trust on the property located at
16 Nevada Avenue. Moreover, given the
Court’s findings, plaintiffs’ claim for
punitive damages regarding the fraudulent
taking of the Delray Beach insurance
proceeds and the 16 Nevada property is
rendered moot.
IV. CONCLUSION
***
Plaintiffs are represented by Gerard
Schiano-Strain, Wagner, Davis P.C., 99
Madison Ave., 11th Floor, New York, NY
10016. Defendant is represented by David
H. Perlman, 186 Montague Street, 4th Floor,
Brooklyn, NY 11201.
SO ORDERED.
______________________
JOSEPH F. BIANCO
United States District Judge
Dated: August 12, 2011
Central Islip, New York
For the reasons set forth herein, the
Court concludes, after carefully considering
the evidence introduced at trial, the
arguments of counsel, and the controlling
law on the issues presented, that: (1) the
property at 15 Ohio Avenue should be
partitioned and sold and the proceeds should
be divided equally between Melnick and
Press, after payment of any remaining liens
or encumbrances; (2) neither Press nor
Melnick is entitled to reimbursement for any
payments of carrying costs or other expenses
associated with 15 Ohio, or for any rental
income allegedly received from the
property; (3) Press did not oust Melnick
from 15 Ohio; (4) the Delray Beach property
should be partitioned and sold and the
proceeds should be divided equally between
Melnick and Press, after payment of any
outstanding
mortgages,
liens,
or
encumbrances; (5) Press is not liable to
Melnick for conversion of insurance
proceeds related to the Delray Beach
property; (6) Press is not liable to Melnick
for conversion of funds from a home equity
27
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