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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
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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.
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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
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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
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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
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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
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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.
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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
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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
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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.
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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
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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
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