Scotto v. Georgoulis, N.Y. App. Div., Judgment, Law, casemine.com

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Attorney(S)

The Coffinas Law Firm, PLLC, New City, N.Y. (George G. Coffinas of counsel), for appellants.Longo & D'Apice, Brooklyn, N.Y. (Mark Longo of counsel), for respondent.

Judges

William F. Mastro
Plummer E. Lott

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Smart Summary

Factual and Procedural Background

The defendants—Chris Georgoulis, Jim Tampakis, Thomas Tampakis, and John Tampakis—formed a corporation in 1985 to purchase a building in Brooklyn (the "Building"). The corporation conveyed the Building to the defendants as tenants in common, with Georgoulis owning 40% and each Tampakis owning 20%. Georgoulis was also a partner in Pentada Properties ("Pentada"), another real estate investment entity.

In 1986, Georgoulis and the plaintiff, Raphael F. Scotto, both attorneys, formed a law partnership. That same year, Georgoulis signed a handwritten contract agreeing to sell Scotto one-half of his interest in both the Building and Pentada for $50,000. Georgoulis stated in an affidavit that he shared income from these investments with Scotto thereafter and provided Scotto with K–1 tax forms as proof of income. Scotto received 20% of the proceeds from a refinancing of the Building as late as 2000.

Upon dissolving their law partnership in 2001, Scotto requested a deed for his 20% interest in the Building, which Georgoulis refused to provide. Scotto then commenced this action, among other claims, to recover damages for breach of contract. Scotto moved for summary judgment on the issue of liability for breach of contract, while the defendants cross-moved for leave to amend their answer to assert a statute of limitations defense. The Supreme Court granted Scotto’s motion and denied the defendants’ cross motion. The defendants appealed.

Legal Issues Presented

Whether the plaintiff was entitled to summary judgment on the issue of liability for breach of contract based on the handwritten agreement to sell one-half of Georgoulis’s interest in the Building and Pentada.
Whether the defendants should be permitted to amend their answer to assert the defense of statute of limitations.

Arguments of the Parties

Appellants' Arguments

The defendants argued that the contract only granted Scotto a security interest in the Building, in exchange for a $76,000 loan from Scotto to Georgoulis, rather than an ownership interest.
They sought to amend their answer to assert the statute of limitations defense, claiming the claim was time-barred.

Respondent's Arguments

Scotto contended that the handwritten contract unambiguously granted him one-half of Georgoulis’s interests in the Building and Pentada for $50,000, creating an equitable ownership interest despite no deed being conveyed.
He argued that the breach occurred in 2001 when Georgoulis refused to transfer the deed, and the action was timely commenced within the six-year limitations period.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Brad H. v. City of New York, 17 N.Y.3d 180, 185–186	Interpretation of written agreements: clarity and ambiguity determined within the four corners of the document; extrinsic evidence considered only if ambiguous.	The court found the contract unambiguous, enforcing the plain language granting Scotto one-half of Georgoulis’s interests.
Riverside S. Planning Corp. v. CRP/Extell Riverside, L.P., 13 N.Y.3d 398, 404	Whether an agreement is ambiguous is a question of law for the court.	The court determined the contract was not ambiguous as a matter of law.
Ray v. Ray, 61 A.D.3d 442, 444	Equitable title passes upon execution of a valid contract even without deed conveyance.	Applied to hold that Scotto’s equitable interest arose by operation of law upon contract execution.
Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324	Standard for summary judgment: plaintiff must make a prima facie showing; defendant must raise a triable issue of fact.	Scotto made a prima facie case; defendants failed to raise triable issues, justifying summary judgment.
Schwartz v. Sayah, 83 A.D.3d 926, 927	Statute of limitations defense must have merit to warrant leave to amend pleadings.	The court found the statute of limitations defense meritless and properly denied leave to amend.
Ely–Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399, 402	Statute of limitations for breach of contract begins to run at the time of breach.	The breach occurred in 2001; the action was commenced within six years, so the defense was untimely.

Court's Reasoning and Analysis

The court began by applying the principle that a clear and complete written agreement must be enforced according to its plain meaning, with ambiguity determined solely within the four corners of the document. The court found the handwritten contract unambiguous in granting Scotto one-half of Georgoulis’s interests in the Building and Pentada for $50,000.

Although no deed was conveyed, the court held that equitable title passed to Scotto upon execution of the valid contract, citing established precedent that equitable interests arise by operation of law in such circumstances.

Scotto established a prima facie entitlement to summary judgment on liability, and the defendants failed to raise any triable issue of fact in opposition. The court therefore affirmed the grant of summary judgment in Scotto’s favor on the breach of contract claim.

Regarding the defendants’ cross motion to amend their answer to assert a statute of limitations defense, the court found the defense meritless. The breach occurred in 2001 when Georgoulis refused to transfer the deed, and the lawsuit was timely commenced within the six-year limitations period. Consequently, the court properly denied leave to amend.

The defendants’ other contentions were also found to be without merit.

Holding and Implications

The order of the Supreme Court, Kings County, dated June 4, 2010, is affirmed, with costs.

The court’s decision confirms that a clear, handwritten contract transferring ownership interests can give rise to equitable title without formal deed conveyance, enforceable by summary judgment when uncontested. The refusal to transfer the deed constituted a breach occurring within the applicable statute of limitations period, precluding the defendants’ statute of limitations defense. This decision directly resolves the parties’ dispute regarding ownership and liability but does not establish new precedent beyond reaffirming established contract and property law principles.

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Raphael F. SCOTTO, respondent, v. Chris GEORGOULIS, et al., appellants.

WILLIAM F. MASTRO, J.P., DANIEL D. ANGIOLILLO, ARIEL E. BELEN, and PLUMMER E. LOTT, JJ.

The Coffinas Law Firm, PLLC, New City, N.Y. (George G. Coffinas of counsel), for appellants.Longo & D'Apice, Brooklyn, N.Y. (Mark Longo of counsel), for respondent.

WILLIAM F. MASTRO, J.P., DANIEL D. ANGIOLILLO, ARIEL E. BELEN, and PLUMMER E. LOTT, JJ.

In an action, inter alia, to recover damages for breach of contract, the defendants appeal from an order of the Supreme Court, Kings County (Schmidt, J.), dated June 4, 2010, which granted the plaintiff's motion, in effect, for summary judgment on the issue of liability on the cause of action alleging breach of contract and denied their cross motion, among other things, for leave to amend their answer to assert the defense of statute of limitations.

ORDERED that the order is affirmed, with costs.

The defendants, Chris Georgoulis, Jim Tampakis, Thomas Tampakis, and John Tampakis, formed a corporation in 1985 for the purpose of buying a building in Brooklyn (hereinafter the Building). The corporation then conveyed the Building to the defendants as individual tenants in common, with Georgoulis owning 40%, and each of the Tampakises owning 20%. Georgoulis was also a partner in Pentada Properties (hereinafter Pentada), another real estate investment corporation.

Georgoulis and the plaintiff, Raphael F. Scotto, are both attorneys who formed a law partnership in 1986. Also in 1986, Georgoulis signed a handwritten contract agreeing to sell to Scotto one-half of his interest in the Building and Pentada for $50,000. Georgoulis stated in an affidavit that he split his income from the real estate investments with Scotto from that point forward, and that he gave Scotto copies of K–1 forms for the Building as documentation of income received. As late as 2000, Scotto received 20% of the proceeds from a refinancing of the Building. Upon the dissolution of their law partnership in 2001, however, Scotto asked Georgoulis to give him a deed for his 20% interest in the Building, and Georgoulis refused.

Scotto subsequently commenced this action, inter alia, to recover damages for breach of contract, and moved, in effect, for summary judgment on the issue of liability on the cause of action alleging breach of contract. The defendants cross-moved, inter alia, for leave to amend their answer to assert the defense of statute of limitations. In an affidavit submitted in support of the defendants' cross motion, Georgoulis stated that the subject contract gave Scotto only a security interest in the Building, in exchange for a $76,000 loan that Scotto had given him. The Supreme Court granted Scotto's motion and denied the defendants' cross motion. We affirm.

“A written agreement that is clear, complete and subject to only one reasonable interpretation must be enforced according to the plain meaning of the language chosen by the contracting parties ... Ambiguity is determined within the four corners of the document; it cannot be created by extrinsic evidence that the parties intended a meaning different than that expressed in the agreement and, therefore, extrinsic evidence may be considered only if the agreement is ambiguous” ( Brad H. v. City of New York, 17 N.Y.3d 180, 185–186, 928 N.Y.S.2d 221, 951 N.E.2d 743 [citations and internal quotation marks omitted] ). “Whether an agreement is ambiguous is a question of law for the courts” ( Riverside S. Planning Corp. v. CRP/Extell Riverside, L.P., 13 N.Y.3d 398, 404, 892 N.Y.S.2d 303, 920 N.E.2d 359 [internal quotation marks omitted] ). Here, the contract states unambiguously that Georgoulis gave Scotto one-half of his interests in Pentada and the Building in exchange for $50,000. Although no deed was conveyed to Scotto, the equitable title passed to him upon the execution of a valid contract, and Scotto's “interest in the real property thus came into existence by operation

of law” ( Ray v. Ray, 61 A.D.3d 442, 444, 876 N.Y.S.2d 383). Thus, Scotto made a prima facie showing of his entitlement to judgment as a matter of law on the issue of liability on the cause of action alleging breach of contract, and in opposition, the defendants failed to raise a triable issue of fact ( see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572). Accordingly, the Supreme Court properly granted Scotto's motion, in effect, for summary judgment on the issue of liability on the cause of action alleging breach of contract.

The Supreme Court properly denied that branch of the defendants' cross motion which was for leave to amend their answer to assert the defense of statute of limitations, as the defense is totally devoid of merit ( see Schwartz v. Sayah, 83 A.D.3d 926, 927, 920 N.Y.S.2d 714). The contract was not breached until 2001, when Georgoulis refused to turn over the deed at Scotto's request. This action was commenced well within six years of that date ( see Ely–Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399, 402, 599 N.Y.S.2d 501, 615 N.E.2d 985).

The defendants' remaining contentions are without merit.

Scotto v. Georgoulis