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  • Michael Ruotolo v. Linda Terracciano a/k/a Linda Ruotolo, Robert Bonfiglio Other Matters - Contract Non-Commercial document preview
  • Michael Ruotolo v. Linda Terracciano a/k/a Linda Ruotolo, Robert Bonfiglio Other Matters - Contract Non-Commercial document preview
  • Michael Ruotolo v. Linda Terracciano a/k/a Linda Ruotolo, Robert Bonfiglio Other Matters - Contract Non-Commercial document preview
  • Michael Ruotolo v. Linda Terracciano a/k/a Linda Ruotolo, Robert Bonfiglio Other Matters - Contract Non-Commercial document preview
						
                                

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FILED: WESTCHESTER COUNTY CLERK 10/30/2019 04:18 PM INDEX NO. 58184/2017 NYSCEF DOC. NO. 112 RECEIVED NYSCEF: 10/30/2019 To commence the statutorytime for appeals as of right (CPLR 55 13(a]), youare advised to servea copy of thisorder,with notice of entry,upon all parties. SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER ---------.---------------------------.-----.---------~.----------------)C MICHAEL RUOTOLO, , Plaintiffs, Index No. 5818412017 CORRECTED .against- DECISION and ORDER Motion Sequence Nos. 3&4 LINDA TERRACCIANOa/k/a LINDA RUOTOLO ROBERT BONFIGLIO, Defendants. -------.-----------.----------7-----------------------------------~----)C RUDERMAN, J.: The following papers were considered on the motion by defendant Linda Terracciano a/k/a Linda Ruotolo pursuant to CPLR 3212 for an order dismissing the complaint as against her (sequence 3), and the cross-motion by plaintiff Michael Ruotolo pursuant to CPLR 3212 (b) for summary judgment on his complaint, alleging, a breach of contract 'and seeking injunctive relief and a declaratory judgment that plaintiff is entitled to specific performance of his right of first refusal to purchase the premises located at 30)Cridge Road, Greenburgh, New York, and for related relief (sequence 4): J Papers Numbered Defendant's Notice of Motion, Affirmation, E)ChibitsA - H, and Memorandum of Law 1 Plaintiff s Notice of Cross-Motion, Affirmation, E)Chibits A - L, and Memorandum of Law 2 Plaintiff s Affirmation and Memorandum of Law in Opposition to Defendant's Motion 3 Defendant's Affirmation and Memorandum of Law" in Opposition to Cross-Motion 4 Defendant's Reply Affirmation and Memorandum of Law on the Motion 5 Plaintiffs Reply Affirmation and Memorandum of Law on the Cross-Motion 6 1 of 9 FILED: WESTCHESTER COUNTY CLERK 10/30/2019 04:18 PM INDEX NO. 58184/2017 NYSCEF DOC. NO. 112 RECEIVED NYSCEF: 10/30/2019 Factual Background Plaintiff Michael Ruotolo ("Ruotolo") and Linda Terracciano a1k/a Linda Ruotolo ("Terracciano") are former spouses who were divorced by a judgment of divorce dated April 15, 2013. Defendant Robert Bonfiglio ("Bonfiglio") is defendant Terracciano's father. This action concerns the parties' respective rights relating to the residential real property that was the marital residence, located at 3 Oxridge Road, in Greenburgh, New York. The property, which had previously been owned jointly by Robert Bonfiglio and Louise Bonfiglio, was transferred by a deed dated August 11, 2000, to Louise Bonfiglio, Michael Ruotolo and Linda Ruotolo, as joint owners with a right of survivorship. In the process of obtaining a divorce, Ruotolo and Terracciano entered into a Settlement Agreement and a Rider thereto, both of which were executed on December 20,2012, which included provisions for the disposition of the marital residence. Specifically, this action concerns the provisions contairied in Article XXIX of the Settlement Agreement, and section E of the Rider, amending Article XXIX of the Agreement. The original form of the Settlement Agreement gave Ruotolo exclusive occupancy of the marital residence until the parties' youngest child reached the age of 18, and provided that thereafter, the parties would cooperate in the sale of the property, and divide the net proceeds evenly. Rider section E amended the initial Agreement in several ways. It provided that the marital residence would not be sold until the youngest child attains the age of 28, and included a provision that "At the end of the Husband's exclusive use and occupancy ... the Husband shall have the right of first refusal to purchase the marital residence[,] ... [and must] exercise his right of first refusal thirty (30) days prior to the youngest child attaining 28 years of age (or any other 2 2 of 9 FILED: WESTCHESTER COUNTY CLERK 10/30/2019 04:18 PM INDEX NO. 58184/2017 NYSCEF DOC. NO. 112 RECEIVED NYSCEF: 10/30/2019 event that terminates the Husband's' exclusive use and occupancy)." The Rider goes on to specify the procedure for determining the price at which the husband would buyout the wife . . Notably, these documents explicitly recognized that Ruotolo and Terracciano were not the sole owners of the property, Article XXIX of the Agreement begins with the acknowledgment that "The parties are part owners of an improved parcel of real property which previously served as the marital residence, situated at 3 Oxridge Road, Elmsford, NY" (emphasis added). The Rider also employs language that seems to recognize that the couple did not oWn 100% of the properly, given its direction that "After the parties' (sic) agree on a purchase price, . . . the Husband shaH pay the Wife 50% of the Husband and Wife's share of the marital residence as set forth in the deed of the net proceeds of the purchase price of the property (less certain costs]" (emphasis added). In 2016, when theiryoungest child, who was born in 1998, was not quite 18 years old, Terracciano transferred her interest in the marital residence to her father, defendant Bonfiglio, by deed signed on June 20, 2016 and recorded October 21, 2016. Previously, Louise Bonfiglio had transferred her interest in ~he property to defendant Bonfiglio, by deed executed August 19, 2015 and recorded February 24,2016. In response to Terracciano's transfer of her interest in the marital residence to Bonfiglio in contravention of the above-cited Settlement Agreement and Rider provisions, this action was commenced by summons and complaint filed May 25,2017. Ruotolo alleges that Terracciano's transfer of her interest in the marital residence was a breach of the Settlement Agreement, and seeks an order voiding the transfer from Terracciano to Bonfiglio and directing specific performance of Ruotolo's right of firstrefusal; the complaint also seeks an award of attorney's \ 3 3 of 9 FILED: WESTCHESTER COUNTY CLERK 10/30/2019 04:18 PM INDEX NO. 58184/2017 NYSCEF DOC. NO. 112 RECEIVED NYSCEF: 10/30/2019 fees pursuant to Article XII of the Settlement Agreement. Following the completion of discovery, defendant Terracciano now moves for summary judgment dismissing the complaint as against her, claiming that the provisions upon which .Ruotolo relies must be set aside, because they were the result of a mutual mistake of material fact. She reasons that because there was a third co-owner, she and Ruotolo couid riot have sold the former marital residence without the co-owner's consent, and would not have been entitled to the entirety ofthe net proceeds upon a sale .. Because their performance of that provision of the Settlement Agreement . and Rider was impossible, and those provisions . must be set aside, she cannot be said to have violated the Agreement by her transfer of her interest. Terracciano further argues that the provisions of section E of the Rider are void ab initi? because they are manifestly unfair or patently unconscionable. Finally, she contends that plaintiff has not established that he was damaged by the claimed breach of the Agreement. In cross-moving for summary judgment on his complaint, Ruotolo relies on the undisputed fact that Terracciano transferred her interest in the marital residence in contravention of the terms of the Settlement Agreement, particularly his right to first refusal contained therein. Analysis "Stipulations of settlement are favored by courts and are not to be lightly set aside .... Only where there is cause sufficient to invalidate a contract, such as fraud; collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation" (Bethea v Thousand, 127 AD3d 798, 799 [2d Dept 2015], quoting Hallock v State of New York, 64 NY2d 224,230 [1984]). "Generally, a contract entered into under a mutual mistake of fact is . voidable and subject to rescission" (Matter of Gould v Board of Educ. of Sewanhaka Cent. High 4 4 of 9 FILED: WESTCHESTER COUNTY CLERK 10/30/2019 04:18 PM INDEX NO. 58184/2017 NYSCEF DOC. NO. 112 RECEIVED NYSCEF: 10/30/2019 School Dist., 81 NY2d 446, 453[1993]). "The mutual mistake must exist at the time the contract is entered into and must be substantial. The idea is thatthe agreement as expressed, in some material respect, does not represent the 'meeting of the minds' of the parties" (id:). Where a mutual mistake rendered a portion ofthe parties' settlement agreement impossible or impracticable, the relevant provisions may be set aside (see Banker v Banker, 56 AD3d 1105, 1107 [3d Dept 2008]). In Banker, one provision of the parties' stipulation of settlement provided that the parties would subdivide a parcel of marital property, but it was later discovered that the parcel was encumbered by a restrictive covenant against further subdivision. Since that property could not be disposed of as contemplated, the Court proceeded to determine the correct manner of arriving at a new means of appraising the property and dividing its value (id at 1107-1108). Here, Terracciano has not established the existence of a mutual mistake of material fact ~uch as would invalidate the entire property disposition provision, Article XXIX of the Settlement Agreement and section E of the Rider. The evidence shows that at the time of the Settlement Agreement, Ruotolo and Te'rracciano were both aware that Louise Bonfiglio was also ajoint owner of the propertyl, based on theirdeposition testimony, as well as on the words of the Agreementreferring to Ruotolo and Terracciano as "part owners" of the property, and the language of the Rider providing'that the purchase price for the husband's exercise of the right of first refusal would be half of "the Husband and Wife's share." 1 Terracciano's memorandum of law in support of her motion inaccurately states that Ruotolo and Terracciano "jointly owned the former martial residence with co-Defendant Bonfiglio at the time the Settlement Agreement and the Rider were executed," when, in fact, co- defendant Robert Bonfiglio was not a co-owner at that time; he did not become a co-owner until Louise Bonfiglio deeded her interest to him in 2015. 5 5 of 9 FILED: WESTCHESTER COUNTY CLERK 10/30/2019 04:18 PM INDEX NO. 58184/2017 NYSCEF DOC. NO. 112 RECEIVED NYSCEF: 10/30/2019 Terracianoemphasizes that the couple could not have legally sold the property at the time they entered into the Settlement Agreement without the consent of the third co-owner, and could not have simply split the sale proceeds just between the two of them in any event, as the Agreement provided. Nevertheless, while those facts may rerider invalid the particular portions of the provisions which dictate that the couple would alone sell the property and split the proceeds, they do not render the other parts of Article XXIX and Rider section E, including the "right of first refusal" provision, impossible of performance. Grounds to invalidate the primary substance of the Settlement Agreement's property disposition provision, based on mutual mistake, have not been demonstrated. Nor has Terracciano established that those provisions of the Settlement Agreement are manifestly unfair or patently unconscionable (see Christian v Christian, 42 NY2d 63, 73 [1977]). In view of the foregoing, Terracciano has not established grounds for summary judgment dismissing the complaint. As to Ruotolo's cross-motion, he has established that Terracciano breached the Settlement Agreement, and Terracciano has not shown the existence of any dispute of fact on that point. By executing a deed transferring her interest in the mariJal property to her father, she has prevented compliance with Ruotolo's contractual right of first refusal, by which he was entitled to buyout Terracciano's share of the property. He was damaged by his loss of the eventual right to obtain Terracciano's share under the agreement. Ruotolo is therefore entitled to the only viable remedy for that breach of contract which will restore to the parties all the rights and obligations they possessed at the time they entered into the Settlement Agreement, namely, an 6 6 of 9 FILED: WESTCHESTER COUNTY CLERK 10/30/2019 04:18 PM INDEX NO. 58184/2017 NYSCEF DOC. NO. 112 RECEIVED NYSCEF: 10/30/2019 order voiding the transfer from Terracciano to her father, Robert Bonfiglio, .2 It must be noted, however, that his contractual right of first refusal does not give Ruotolo the right to purchase a 100% interest in the property. The only real property Ruotolo and Terracciano ever had the right to divide in the context of their divorce was their share of the ownership interest in the property. Of course, they never had any right to dispose of Louise Bonfiglio's share. Therefore, the right of first refusal provision must be understood to provide for a procedure by which Ruotolo could buyout Terraciano's share. Similarly, the right . of exclusive possession could not give. Ruotolo what Terracciano did not possess. It could only provide that, as between the two of them, Terracciano would cede to Ruotolo the right to possession, until their youngest child turned 28. They never had any right to exclude the co-owner. While Ruotolo is entitled to an order voiding the transfer from Terracciano to Bonfiglio, so as to enable a future exercise of Ruotolo's right of first refusal, he is not currently entitled to an order directing the specific performance of that provision. Under the Agreement and Rider he is only entitled to exercise the right of first refusal "[ a]t theend of the Husband's exclusive use and occupancy ...thirty (30) days prior to the youngest child attaining 28 years of age." Ruotolo contends that since Terracciano breached the agreement, and he is entitled to a judicial determination voiding the deed transfer to her father, he is entitled to relief that includes 2 In contrast, the transfer from Terracciano to Bonfiglio did not breach the Agreement's provision giving Ruotolo the right to exclusive use and occupancy. Terracciano has not done anything that ousted Ruotolo from the property, nor has she transferred her interest to someone who did not already had a right to partial possession of the property, namely Robert Bonfiglio, based on the legitimate ownership interest in the property that he obtained from co-owner Louise Bonfiglio. 7 7 of 9 FILED: WESTCHESTER COUNTY CLERK 10/30/2019 04:18 PM INDEX NO. 58184/2017 NYSCEF DOC. NO. 112 RECEIVED NYSCEF: 10/30/2019 an award of attorney's fees. His claim for an award of attorney's fees is based on Article xIi of the Settlement ~greement, which provides that "in the event that either party defaults with respect to any obligation set forth in this agreement, the injured party shall send written notice, by certified mail, return receipt requested, to the defaulting party, which notice shall specify the nature of the default and, if relevant, any amount due which remains unpaid. If the payment is not made, or the default otherwise cured, within 30 days of receipt of said notice, and the injured party incurs attorney's fees and related expenses or costs in commencing and maintaining an action or proceeding to enforce this agreement, the defaulting party shall pay all such fees and costs.". Included as an exhibit to the cross-motion is a copy of a letter to Terracciano from Ruotolo's counsel dated September 2,2016, explaining the transfer of her interest in the property would breach the Settlement Agreement. This satisfies the predicate for a right to an award of attorney's fees. The amount of reasonable fees for enforcing the agreement must be addressed at a hearing. No other relief sought in Ruotolo's complaint or his cross-motion is warranted. Accordingly, it is hereby ORDERED that the motionby defendant Terracciano for summary judgment-dismissing the complaint is denied; and it is further ORDERED that the cross-motion by plaintiff Ruotolo for summary judgment is granted to the extent that it is hereby declared that Ruotolo has the right of first refusal to purchase Terraciano's interest in the property located at 3 Oxridge Road in Greenburgh, New York, and that the deed transferring the property from Terracciano to Robert Bonfiglio is void; and it is further ORDERED that the deed executed on June 20, 2016 and recorded in the office of the 8 8 of 9 FILED: WESTCHESTER COUNTY CLERK 10/30/2019 04:18 PM INDEX NO. 58184/2017 NYSCEF DOC. NO. 112 RECEIVED NYSCEF: 10/30/2019 Westchester County Clerk on October 21,2016, under control number 561033409, transferring Terracciano;s interest in the property located at 3 Oxridge Road, in Greenburgh, New York from Linda Ruotolo to Robert Bonfiglio, is void, and the Westchester County Clerk shall take such steps as are necessaty to. effectuate this order; and it is further ORDERED that the parties are directed to appear on Tuesday, September 24,2019 at 9:30 a.m., in the Settlement Conference Part of the Westchester County Supreme Court, 111 Dr. Martin Luther King Jr.~6ulevard, White Plains, New York 10601, to schedule a hearing regarding the reasonable counsel fees to be awarded to plaintiff for the need to bring this action to enforce the Settlement Agreement. This constitutes the Decision and Order of the Court. Dated: White Plains, New York October3D,. 2019 9 9 of 9